metadata: authors: 0: author: Sirleaf, Ellen Johnson
1: author: Nyirjesy, Francis
count: Africa
docna: 0: docna: The outlook for commercial bank lending to
            sub-Saharan Africa
docty: Policy Research Working Paper
subtopic: Mining & Extractive Industry (Non-Energy),Banks & Banking Reform,Financial Sector and Social Assistance,Commodity Risk Management
teratopic: Finance and Financial Sector Development
abstracts: cdata!: Since its peak in 1980-82, medium- and
            long-term commercial bank lending to sub-Saharan Africa has
            been declining - partly because of many banks'
            perception that lending to the African market represents
            high risks unjustified by the available returns.  The
            prospects for an appreciable increase in such lending are
            not promising.  Despite some progress under economic
            adjustment programs, banks are skeptical about sub-Saharan
            African governments' ability and willingness to
            continue with reform.  And in a time of tight regulation,
            most banks have ample opportunities in other parts of the
            world.  The purpose of this paper is to identify and examine
            key issues involved in the future of long-term commercial
            bank lending to Africa.  It presents the historical record
            and briefly reviews the nature of commercial bank lending
            and the changing profile of foreign commercial bank
            presences in the region.  It examines the constraints to and
            opportunities for increased commercial bank lending as
            perceived by a representative sampling of commercial banks
            in the United States, Europe, and Japan.  Finally, the paper
            presents a scope for action, a pulling together of ideas
            that could help remove constraints to lending to a select
            number of sub-Saharan African markets in the short-term,
            with a view to stimulation of lending to the entire region
            in the long-term.
repnme: repnme: The outlook for commercial bank lending to
            sub-Saharan Africa
display_title: The outlook for commercial bank
            lending to sub-Saharan Africa
listing_relative_url: /research/1991/07/699927/outlook-commercial-bank-lending-sub-saharan-africa
topicv3: Commercial Banking m1326069 1236,Mining Services m1326410 1701,Mining Sector m1327113 554,Commodity and Resource Prices m1503849 3034,Unsecured Lending m1505010 3859
publishtoextweb_dt: 2010-07-01T00:00:00Z
historic_topic: Finance and Financial Sector Development
origu: Policy, Research & Ect Affairs
no_of_pages: 51
model_extractions: [

**Policy, Research, and External Affairs**

# **Debt and International Finance**

# WPS 720

This paper- a product of thC Dcbt and International Finance Division, Intcrnational Economics Departnient --<sup>w as</sup> prepared for the Symposium on African External Finance in thc 1990s, **hield** September 18-19, 1990, at the<sup>World</sup> Bank. Copies arc available frce from the World Bank, 1818 H Street NW, Washington, DC 20433. Please conlact Sheilah King-Watson, room S8-040, extension 31047 (46 pages, with tables).

Since its peak in 1980-82, medium and long-term commercial bank lending to Sub-Saharan Africa has becn de.lihning -- partly becausc of many banks' perception that lending to the African market represents high risks unjustified by the available returns.

The prospects for an appreciable increase in such lending are not promising. Despite some progress under economic a(ljustlnenl programs, banks are skeptical about Sub-Saharan African govenmcnits' ability and willingness to continuc with reform. Many of those countries have been unable to cstablish creditworthincss and the ability to service commieircial debt - and are saddled with (lebts to multilateral agencies. And in a time of tight regulation, most banks have ample opportunities in other parts of the world.

On the positive side, the portfolio clean-up that has occupied commercial banks' resources for threce years should be nearing a close, making it possible for them to begin considering a rcsumption of lending to qualified borrowers under specified conditions.

Siricaf and Nyirjesy examine kcy issues in the luturc of long-term commercial bank lending in Africa, identify constraintis on and opportunities for increased commercial bank lending (as perceived by some commercial U.S., European, and Japanese bankers), and suggest special initiatives lor removing constraints on and stimnulating lending to these SubSaharan African markets. Among poinits they make:

- Private invesimcnt and linancing will not improve in the region without a satisfactory enabling environment, including an appropriate policy framework, tho protection of rights and properties, and - wider political participation and consensus con(litions thal lead to political stability and engender confidence among private decisionmakers.

**o** Scvcral steps can be taken to acceleratc debt reduction through conversion mechanisms. Special funds could be created for the investment of-debt, for example.

- Given the small share of African debt in most banks' portfolios and the conservative posture of those banks, a strong case can be made to the regulatory authorities to climinate mandatory provisioning regulations as quickly as possible.

***** Therc is scope tor rethinking the way risk is allocated in facilities cofinanced by commercial banks and official agencics.

- More open attitudes toward Lhe commnitmcnt of export cash flows appear to be important in accelerating resumcd lcnding, until a country has adopted an opcn foreign exchange regimc or has achieved full convertibility. Concerns about possible distortions could best be mitigated by setting a limit on the amount of funds that can bc so committed by a given country or borrower, and by improved appraisal of the underlying projects.

***** Commercial banks are at a disadvantage in analyzing or projecting a developing country's creditworthincss and fear of the unknown can be particularly acute in Sub-Saharan Africa. The indepth economic analyscs of the IMF and **the** World Bank are the closest the international community has come to establishing an "independent audit function." These are not available to the public unless the member government authorizes their releasc. Thcse authorizations should be routinely granted - at least for basic, accurate, qualitative, and quantitativc macrocconomic infomiation.

Thic lRE Working lPaper Series (isseminales thc findings of work under way in thc Bank's l'olicy. Res,earch, and Extemral AffifirsComplex. An objeclive ofthc scrics is to get thcsc findings out quickly, even ifpresentutions arc Iess than fully polished. Thc findings, intcrprctations, and conclusions in thesc papcrs do not neccssarilv represent<sup>official Baunk policy.</sup> Produced by the PRE Dissemination Ccnter
# The Outlook for Commercial Bank Lending to Sub-Saharan Africa

by Eiien Johnson Sirleaf and Francis Nyirijesy

# Table of Contents

# Introduction

1

# Chapter One: The Record of Commercial Bank Lending

|A.|Statistical Overview|3|
|---|---|---|
|B.|Nature of Commercial Bank Lending|10|
|C.|Foreign Commercial Bank Presences|13|
|Chapter Tw|o: Perceptions of the Commercial Banks||
|A.|Perceived Constraints|14|
|B.|Perceived Opportunities|18|
|Chapter Thr|ee: Scope for Action||
|A.|Opportunities and Commercial Borrowing Capacity|21|
|B.|Prospects and Proposals for the Alleviation of Constraints|24|
|C.|Potential Impact on Commercial Bank Lending|31|

# Statistical Annex
Page 1 In the past decade Sub-Saharan Africa<sup>has faced an unparalleled economic crisis</sup> that has threatened to reverse the progress<sup>achieved during two earlier decades</sup> of generally higher primary commodity<sup>prices and financial flows. In response,</sup> many countries have adopted stringent<sup>economic reform programs aimed at</sup> stabilizing the decline and putting<sup>in place the policy framework needed to</sup> achieve structural transformation and sustainable growth. A key element<sup>of these</sup> reform programs involves a shifting<sup>of the primary responsibility for</sup> intervention in the economy from<sup>the state to private enterprises. This shift</sup> requires not just support from<sup>the donor community, but also the mobilization</sup> of significantly higher levels of private<sup>financial and management resources--</sup> both domestic and foreign--to stimulate<sup>trade and investment.</sup> Since its peak at more than $4<sup>billion per year in disbursements between 1980-</sup> 82, representing annual net flows in<sup>excess of $2.5 billion, medium and long-</sup> term commercial bank lending to Sub-Saharan<sup>Africa has been declining. Although</sup> the statistics on short-term lending<sup>do not permit a quantitative analysis of</sup> stocks and flows by type of lender,<sup>it also appears that this important form of</sup> commercial bank credit for the region<sup>has been stagnant. The decline is due in</sup> part to the perception by a large number<sup>of banks that lending to the African</sup> market presents high risks that are not justified<sup>by the available returns.</sup> The prospects for a widespread,<sup>appreciable increase in commercial bank lending</sup> in the foreseeable future do not appear<sup>promising. Despite the progress made</sup> under economic adjustment programs,<sup>there is still skepticism among the banks</sup> regarding the ability and willingness<sup>of Sub-Saharan African governments to</sup> continue with the reform measures and the<sup>likelihood that they will result in</sup> a proliferation of viable lending opportunities.<sup>Moreover, the borrowing</sup> countries in partnership with the official<sup>agencies have been unable to restore</sup> the creditwortniness of Sub-Saharan Africa and the abiliLy of<sup>many countries to</sup> service commercial bank debt. At the same<sup>time, the loans of the multilateral</sup> agencies are being serviced to maintain<sup>their own ability to mobilize the bulk</sup> of Africa's external assistance. In<sup>addition, the banks are faced with a more</sup> stringent regulatory environment as<sup>regards lending to Sub-Saharan Africa at a</sup> time when there are emerging opportunities<sup>in other regions of the world.</sup> On the positive side, the portfolio<sup>"clean-up" that has employed commercial</sup> banks' resources for the past three<sup>years should be near4ng a close, making it</sup> possible for them to begin to consider<sup>a resumption o. lending to qualifying</sup> borrowers under specified conditions,<sup>primarily in successfully adjusting</sup> countries that can foresee an end<sup>to their economic and debt crises. Lending</sup> is likely to encompass innovative<sup>new banking products that engage banks,</sup> borrowers and official agencies<sup>in joint partnership arrangements, as well as</sup> traditional but more properly<sup>targeted and structured transactions.</sup> The purpose of this paper is to<sup>identify and examine key issues involved in the</sup> future of long-term commercial bank<sup>lending to Africa. Chapter One and the</sup> Statistical Annex present the historical<sup>record and briefly review the nature</sup>
Page 2 of commercial bank lending and the<sup>changing profile of foreign commercial bank</sup> presences in the region.

Chapter Two examines the constraints<sup>to and opportunities for increased</sup> commercial bank lending as perceived<sup>by a representative sampling of commercial</sup> banks in the United States,<sup>Europe and Japan, whose contribution to the study</sup> is gratefully acknowledged.

Chapter Three presents a scope<sup>for action, a pulling together of ideas that could</sup> help remove constraints to<sup>lending to a select number of Sub-Saharan African</sup> markets in the short term, with<sup>a view to stimulation of lending to the entire</sup> region in the long-term.
Page 3

# GHARXER ONE THE RECORD OF CO?hRCIAL BANK LENDING

Commercial bank lending to Sub-Saharan Africa over the past thirty years reflects to a large extent the changes in economic performance in various countries and the vagaries in external conditions that affected this performance or provided unusual opportunities for business. In the period 1960-1970, when commodity prices were strong and per capita incomes were rapidly rising, commercial bank lending was negligible. Between 1970 and the early 1980s, due to strong fluctuations in commodity prices and the need for petrodollar recycling, commercial lending increased exponentially; from less thani half a billion dollars in 1970 to a stock of $13 billion in long-term loans, on the strength of annual net flows peaking at nearly $3 billion in 1980. Since that time the level of stocks and flows has moved in response to a combination of factors, including new lending as a function of the perceived creditworthiness of individual borrowing countries or entities and the viability of particular forms of security for loans; the effect of a depreciated U.S. dollar on the value of debt stocks; the volume of debt reschedulings and debt service performance; and the development of activity in the secondary debt markets.

# A. STATISTICAL OVERVIEU

Unless otherwise stated, the data presented in the Statistical Annex and discussed below are drawn from the World Bank Debt Tables (WDTs). The aggregate statistics for the past few years are considerably overstated, since C6te d'Ivoire's private sector is shown to have received some $900 million per year in commercial bank medium-term loan disbursements in 1985-88, a significant portion of all new lending to the region. Since this statistic represents 10 percent of C6te d'Ivoire's GNP, it bears little relation to actual lending activities and must be heavily discounted.

Table 1 summarizes the WDTs' estimates of aggregate commercial bank long-term loan activity as measured by the following definitions: Lona-term loans: (a) commercial bank loans with original maturities of more than one year and (b) formally rescheduled interest arrears on both long-term and short-term loans.

Debt stocks: outstanding principal amounts on long-term loans.

Disbursements: actual drawings on loan commitments.

Principal reDavments: actual amounts of principal paid in foreign currency, goods or services during the year specified.

nterest paymnents: actual amounts of interest paid during the year specified.

Net_flows: disbursements minus principal repayments.
Pago 4 kfe =MfeKg: r net flows minus interest payments. Nogn-flows: changes in stocks le_s net flows.

At the end of 1988, Sub-Saharan<sup>Africa's total long-term dphtto all</sup> external lenders stood at $118 billion. According<sup>to the WDTs, commercial banks accounted</sup> for $22 billion of these stocks,<sup>as compared with $44 billion for official export</sup> credit agencies and suppliers, and<sup>$52 billion for concessional lenders and the</sup> JBRD (Tables 2-3).

Until 1970, commercial bank debt<sup>stocks had remained at relatively insignificant</sup> levels: governments relied mainly<sup>on donor credits and internally generated</sup> foreign exchange to finance economic<sup>expansion. The sharp increase in oil and</sup> primary commodity prices at different<sup>times in the 1970s reversed this trend.</sup> As the Sub-Saharan African countries<sup>were perceived to become generally more</sup> creditworthy and petrodollars more<sup>available, commercial credit expanded.</sup> The WDTs report that commercial<sup>bank long-term debt stocks, which stood at $430</sup> million in 1970, rose to $13<sup>billion in 1980 and to a further $18 billion in</sup> 1982. They remained relatively stable<sup>in the $17-18 billion range until 1987,</sup> when, largely due to a depreciation<sup>of the U.S. dollar and formal reschedulings</sup> of interest arrears in a number<sup>of countries, stocks increased to $22-23 billion</sup> (Table 4).

In sharp contrast, the Bank for International<sup>Settlements (BIS) places end-1988</sup> commercial bank long-term debt<sup>stocks at only Sll billion in its semi-annual</sup> reports on The Maturity and Sectoral<sup>DLstribution of International Bank Lending.</sup> The BIS statistics were derived by subtracting<sup>the column 'Cross-Border Claims-</sup> -Total" from the column "Cross-Border<sup>Claims--Up to and Including One Year".</sup> The ainual OECD External Debt Statistics<sup>of the Organization for Economic</sup> Cooperation and Development reports k16 biJlion of these stocks at en".-1988 (Table 12), entitled "Other Bank Claims--Long-Term".

The divergences shown in Table 12<sup>between these three statistical sources, due</sup> to the different methodologies and<sup>sources being used, are very substantial, both</sup> in the aggregate and on a country-by-country<sup>basis. For example, for C6te</sup> d'Ivoire, the OECD shows $2 billion<sup>outstanding at end-1988, the BIS reports</sup> $1.55 billion and the WDTs $6.8 billion.<sup>For Sudan the figures are $1 billion,</sup> $192 million and $1.8 billion<sup>respectively. Since the BIS relies on information</sup> supplied largely by the banks<sup>themselves, its figures should be taken more as</sup> an indication of (a) the book<sup>value of these assets after the provisioning</sup> exercises of recent years and<sup>(b) the extent to which the banks view their loans</sup> as African "country risk," than<sup>as a profile of legally outstanding obligations.</sup> In any case, there are many reasons<sup>for the divergences. Both the figures and</sup> some of the definitions provided<sup>in the various publications can be misleading</sup> to the casual reader.
Page 5 The WDTs report that the debt stocks were highly concentrated, with some 15 of the 44 Sub-Saharan countries accounting for 97 percent of the total. C6te d'Ivoire and Nigeria each accounted for nearly $7 billion, or a combined 60 percent; Sudan, Co%igo and Gabon accounted for another $4.6 billion, or 21 percent. An additional 13% represented the outstandings of Kenya, Mozambique, Zaire, Came'roon, Zimbabwe and Niger; while Liberia, Madagascar, Ethiopia and Tanzania, each with stocks of over $100 million, accounted for an aggregate 3 percent of the total.

Zambia is also considered to be a major debtor country, but most of its commercial bank debt stocks are classified as short-term debt, consisting in large part of non-rescheduled principal and interest arrears on short-term and long-term debt.

In addition, the commercial banks are believed to account for a major portion of Africa's estimated $13 billion in short-term debt stocks (section 5 below).

# 2. Long-Term Debt Flows

After averaging over $2.5 billion per year between 1980-1982, net flows of long term commercial debt declined sharply as of 1983, as both banks and borrowing countries began to feel the pinch of a global economic contraction and a growing international debt crisis. In the period 1985-1988 flows remained sluggish despite the improvement in the performance of both some Sub-Saharan African countries and the global economy.

# Disbursements

From a peak level of some $4 billion per year in 1980-82, the WDTs report that commercial bank long-term loan disbursements to Sub-Saharan Africa totalled $14.5 billion from 1983-88, or $2.4 billion per year (Table 5).

in addition to the overstatement resulting from C6te d'Tvoire statistics, the relatively high level of disbursements in recent years do not reflect a general maintenance of lending activities in the region. Disbursements were heavily concentrated in a few countries, primarily the oil exporters and those with a more vibrant private sector. During 1985-88, with COte d'Ivoire arguably in the lead, Kenya, Gabon, Nigeria, Cameroon, Congo and Zimbabwe each generated disbursements in the $100-200 million range. During this same period some 26 African countries are shown to have received no long-term commercial bank disbursements, Commercial banks received an average $1.5 billion per year in principal repayments for the period 1980-82, rising to an average $2.1 billion per year in 1983-88, for a total of $12.8 billion during this more recent period (Table 6).
Page 6 Net flows, the difference between disbursements and principal repayments, averaged $2.5 billion per year in 1980-82. They fell sharply to an average of less than $300 million per year in 1983-88, for a cunig4itv surplus of only $1.7 billion over these last six years (Table 8).

Net flows stwung from a surplus of $800 million in 1983 to a deficit of $965 million in 1985. Although some recovery was registered in 1987 and 1988, at an average annual $400 million, the results remained significantly below the level of previous years, and once again are distorted by reporting for Cote d'Ivoire.

Looking at the most recent 1985-88 period, net flows over the four years resulted in a cumulative surplus of only $200 million for all of Africa, with isolated surpluseL heavily concentrated in seven countries. Besides C6te d'Ivoire's private sector, for which $1.7 billion in net flows are reported, only Congo, Ethiopia, Gabon, Ghana, Mozambique and Niger experienced positive flows, for an additional cumulative surplus of $1.6 billion. This implies that all other borrowers in the region experienced negative cumulative net flows of $3.1 billion in 1985-1988.

# Net Transfars

Net transfers, the difference between disbursements and both principal and interest payments, amounted to an aggregate cumulative net cash outflow of some $5.5 billion from Sub-Saharan Africa to the commercial banks from 1983 to 1988. The banks disbursed $14.5 billion and received $20 billion in total debt service payments.

In the more recent period 1985-1988, only Congo, Ethiopia and Gabon experienced positive net transfers, totalling a cumulative $1.1 billion (Table 9).

Interest payments, which had remained steady at average annual $1.4 billion between 1980-1985, declined by 1987 to $800 million as a result of arrears buildups and debt reschedulings. They recovered slightly to $1.1 billion in 1988 (Table 7).

Partly as a result of arrears, and partly of grace periods on principal repayments and lower interest margins extended to borrowing countries through London Club reschedulings, the region's total annual debt service payments to commercial banks, which peaked at $4.5 billion in 1984-1985, experienced a sharp decline to $2.5 billion in 1987-1988.

# 3. lic Sector Lone-term Borroving

The World Bank Debt Tables distinguish between African public borrowers and guarantors ("public and publicly guaranteed debt") on the one hand and private borrowers ("private non-guaranteed debt") on the other.

Lacking information on the actual apportionment of credit between commercial banks and suppliers within individual transactions, the WDTs assume that the commercial banks have been the sol source of long-term external lending to the
Page 7 African private sector, with the exception of supplier credits in Sudan. The WDTs also narrowly define private non-guaranteed borrowers as entities that are majority privately-owned and have received no guarantees from public entities in the borrowing country. Because of this strict interpretation, which eliminates state-owned enterprises, including large local commercial banks and productive enterprises, private sector borrowing appears in only 12 of the 44 Sub-Saharan African countries during the 1980s.

Nevertheless, because long-term finance provided by suppliers is deemed to be marginal in relation to the banks' share, the WDTs' assumption is plausible. Moreover, other long-term lenders to private sector projects, with the exception of the International Finance Corporation, such as export credit agencies and other quasi-donor institutions, have only recently begun to modify policies that require sovereign or state guarantees, which would change the profile of longterm borrowing by type of borrower.

The share of private borrowers in total Sub-Saharan African commercial bank long term debt stocks remained steady at 25-30% between 1980-1988. However, partly on the strength of the WDTs' overstated figures on C6te d'Ivoire's private sector borrowing, by 1988 private borrowers accounted for 70% of new disbursements and 50% of the region's debt service payments. In the most recent period 1986-88, both net flows and net transfers to private borrowers were reported as positive, representing a cumulative $1.8 billion and $350 million, respectively. This contrasts sharply with the net flow deficit of $1.6 billion and net transfer deficit of $4.6 billiorn experienced by public borrowers for the same three-year period.

Nevertheless, these more robust flows to the private sector were also heavily concentrated. The Ivoirian private sector's net flows of $1.1 billion between 1986-88 must be discounted to a large extent, while the WDTs show that private borrowers in Kenya, Mauritius, Mozambique, Niger and Zimbabwe accounted for a cumulative net flows surplus of only $420 million. All other private borrowers experience **d** eficits in net flows, for a cumulative deficit of $180 million over the 3-year period.

The record on net transfers is similar. The Ivoirian private sector is shown to have received positive net transfers totalling $492 million in 1986-88. All other private borrowers in all countries except Kenya, Niger, Mozambique and Zimbabwe, which registered modest positive transfers, experienced cumulative deficits of $373 million. While Cameroon's private sector received substantial disbursements of $650 million in 1985-88, they were outweighed by over $1 billion in debt servicing.

Thus, while in aggregate terms private borrowers have fared much better than public borrowers and/or have performed better on their obligations, most of the modest surplus for the period under review was concentrated in five countries.

The Maturity and Sectoal DistributionL Reoots of the Bank for International Settlements (BIS) provide a more nuanced view of the pattern of commercial bank long-term and short-term lending (Table 11). Private sector borrowing appears in nearly every country and accounts for more than 50% of the total in 25
Page 8 countries. Overall, the BIS reports show the African private sector accounting for 38% of total commercial bank stocks and African comme._ial banks a further 16% in 1988.

# 4. _4mparisons with Other Lenders

Total long-term debt stocks from sources other than the commercial banks rose from $44 billion in 1983 to $96 billion in 1988 (Tables 2-3). This was due in large measure to exchange adjustments, rescheduled interest arrears and other non-flow factors which contributed an estimated $33 billion of the $52 billion increase.

Inclusive of 1984-85 data, not shown in the tables, long-term disbursements from all lenders other than the commercial banks totalled nearly $42 billion from 1983-88, as compared with principal and interest pavments of $23 billion. Net flows totalled $28 billion and net transfers $18.5 billion.

The commercial banks held 18% of total long-term debt stocks by the end of 1988, a percentage which rises to 35% when combined and compared solely with debt stocks of other non-concessional lenders (other than IBRD), such as export credit agencies, suppliers and investment agencies such as the International Finance Corporation and the European Investment Bank. This compares at the end of 1983 with 30% and 51% respectively. The decline reflected the declining share of nornconcessional lenders in total debt stocks.

While moving in tandem in so far as stocks are concerned, the record shows a marked difference in net flows from commercial banks vis-a-vis other quasicommercial lenders. Sub-Saharan Africa experienced a cumulative $5.5 billion net transfer deficit vis-a-vis the commercial banks over the 1983-88 period, while other non-concessional lenders provided marginally positive net transfers in all years except 1985 and 1988, yielding a cumulative net transfer surplus of $646 million for the same period. This suggests that since 1983 the commercial bank category has represented the largest net outflow of funds from Africa.

Nevertheless, since 1986 the WDTs indicate a narrowing in the flows gap between commercial and non-concessional lenders, subject to the overstated figures for C6te d'Ivoire. For instance, in 1986-1988, the commercial banks share of combined disbursements increased to an average annual 55% compared with 45% in 1983. During the same time, the commercial banks' share of debt service payments fell from 70% to 55%. In 1988, commercial banks provided some $1.9 billion in new long-term debt as compared with $1.5 billion by other non-concessional lenders. Representing the fourth consecutive yesr of decline, debt service payments to the commercial banks registered $2.5 billion in 1988, as compared with the $2 billion paid to non-concessional lenders. This resulted in net transfer deficits in excess of $600 million for both categories of lenders in 1988.

The statistical trends presented in the WDTs suggest that the commercial banks in the aggregate do continue to disburse fairly significant medium-term credit
Page 9 to the region relative to other non-concessional lenders, despite the subsidies available to the export credit agencies and the substantial profit margins on commercial transactions which motivate the suppliers, in those rare cases where they lend.

# 5. ShoTerm Lendig

According to the WDTs, Sub-Saharan Africa's short-term debt stocks, defined as loans with original maturities of less than one year and including only nonrescheduled interest arrears on this short-term debt ( i.e., non-rescheduled interest arrears on long-term debt not included), increased sharply between 1980 and 1983 but have remained fairly stable at around $13 billion since that time.

For lack of accurate information, the WDTs do not distinguish between types of short-term lenders and borrowers. However, it is believed that a major portion of the outstanding short-term debt is owed to the commercial banks.

The primary short-term debtors are Sudan, Congo, Nigeria and Zambia (all with stocks in excess of $1.3 billion), followed by a second tier of countries owing more than $500 million: Cameroon, Congo, Kenya, Tanzania and Zaire.

In general, short-term debt stocks are more evenly distributed than long-term debt stocks. Only 9 countries are shown to have stocks of less than $30 million in 1988, while 22 of the 44 countries had stocks of over $100 million.

The variations in short-term debt stocks over the 1980-88 period are due to actual increases or decreases in new lending and to performance on short and long-term debt.

Thus in many countries, such as Sudan, Congo, C6te d'Ivoire, Gabon, Liberia, Mala*i, Zaire, Uganda and Benin, the sharp increases were due to non-rescheduled interest arrears, some of which were reduced in 1988. The major drop in shortterm debt in Nigeria in 1987 is due to thie consolidation and long-term rescheduling of short-term debt in the London Club, preceded by an actual decline in short-term credit facilities in 1984-86.

In other countries, such as Guinea, Tanzania, Ethiopia and Burundi, the increase in short-term debt represents actual new lending.

# 6. Performance Record

According to World Bank statistics, of the approximately $10 billion outstanding in the London Club reschedulings of 18 Sub-Saharan African countries, about $8 billion, representing 35% of Sub-Saharan Africa's long-term commercial bank debt stocks, are owed by public and publicly-guaranteed borrowers in Nigeria and C6te d'Ivoire. Both countries have been attempting to renegotiate their London Club agreements on concessional terms and are starting to pursue buy-back and debt conversion options.
Page 10

**K**

Although all of the London Club agreements still carry market rates of interest (Libor plus a margin) and most are for relatively short terms (under 10 years), several borrowers have rescheduled several times, others have interrupted their payments, and a few arrangements have totally broken down. Nevertheless, some smaller borrowers have performed well on their restructured debt, e.g. Malabi, Madagascar, Senegal, Togo and Gambia.

There are few instances where short-term debt has been rescheduled (Nigeria, Madagascar, Sudan, and Zambia), but interest arrears have been rescheduled in just about every rescheduling country. Most countries that have had continued access to short-term trade finance facilities have performed well, with notable exceptions in countries such as C6te d'Ivoire and Congo whose local banks have experienced severe liquidity crises. However, the commercial banks' response to liberalized exchange controls, well-funded auctions and other improved payments systems in countries such as Nigeria, Madagascar, Guinea and Ghana has generally been disappointing, as much from lack of attention as from lack of confidence.

# B. NATURE OF COMMERCIAL BANK LENDING

The various forms of commercial bank cross-border lending are best categorized by the type of risk assumed, the type of borrower, the term of the loan and the nature of the underlying activity being financed. Four fundamental risk categories are briefly characterized below, with an indication of recent trends in the region: unsecured lending, exporc-secured lending, asset-based finance and secured lending.

While individual transactions often combine different forms of risks, all of the categories are typically counted as cross-border loans in the World Bank Debt Tables.

# 1. Unecured Lending

Unsecured lending encompasses loans that are extended on the basis of the borrower's ability to service the loan from resources generated within the borrowing country and transferred to the lending bank through the country's normal foreign exchange allocation system. The lender assumes both the "commercial" risk, i.e. the borrower's solvency and the 'political" risk, i.e. principally that of foreign exchange availability.

Under this category, the three most prevalent forms of lending to Africa have been the following: a) Short-term revolving facilities extended to central and commercial banks for the advance settlement of obligations to offshore suppliers of goods and services, typically through confirmation and negotiation of letters of credit or through short-term advances. As these advances are repaid by foreign exchange transfers from the borrowing country, new availability for further advances is created within the limits of the facility.
Page 11 b) Loans to non-bank borrowers (sometimes underwritten by local banks) in the form of guarantees to their offshore suppliers or through discounted purchases of suppliers' credits.

c) Medium-term loans, typically for specific private or parastatal investment projects, based on the borrower's creditworthiness, the viability of a project as established by cash flow projections, and confidence in the availability of foreign exchange for debt servicing.

The degree of risk in unsecured lending tends to increase in those cases where foreign exchange availability is regulated and/or constrained. Thus banks have continued to provide short and medium-term unsecured loans to profitable bank and non-bank borrowers in the CFA zone, given their automatic access to French Francs. Banks have also tended to be more active on an unsecured basis in countries with adequately funded auction systems - such as Guinea, Madagascar and Nigeria, though generally restricted to short-term financing, and in countries that have not experienced payment problems, such as Zimbabwe, Kenya, Ethiopia, Mauritius, Burundi and Rwanda, among others.

Increasingly, banks have been moving away from unsecured lending and for many countries now require some form of offshore security. This may take the form of cash deposits formally committed as collateral, or of revolving flows of export proceeds that are ultimately repatriated to the borrowing country. Thus, partly as a means of preserving commercial bank lending and services, since 1983 Zaire has required that all cross-border loans be fully secured by foreign exchange deposits with the lending bank.

# 2. n Lend

A variety of mechanisms are used to mitigate transfer risk by establishing liens on exports and/or export proceeds. Banks may require, ner, All, (a) assignment of title to exports, (b) the issuance of irrevocable instructions to a buyer to make payment directly to a lending bank, or (c) the establishment of foreign exchange escrow accounts which are held in the bank's or the exporter's name either with the lending bank, another offshore bank, or within the borrowing country's foreign exchange system.

A classic form of export-secured lending, and an area where there continues to be considerable activity and competition, is pre-export finance. Individual banks and syndicates have been providing substantial facilities, essentially for purposes of balance-of-payments support, to a wide range of countries, such as Angola, Cameroon, Tanzania, Uganda and Zimbabwe. The structure of the facilities ranges from single disbursements repayable in one 'bullet' (typically within less than one year) to multi draws/mult **i** nstallment repayments, revolving on a more or less permanent basis, but typically with terms of not more than three years. In addition, formal control over exports or export proceeds is used extensively by the oil and mining sectors to secure medium-term loans.

The private 4nsurance industry has played an important role in secured lending, both as facilitator and competitor to the banks. Typically the industry insures
Page 12 either suppliers or banks against<sup>non-delivery and export contract frustration.</sup> Some insurers provide coverage<sup>directly to banks, while in the case of others</sup> who generally do not (e.g., Lloyds<sup>of London), suppliers may assign their rights</sup> under these policies to their lending<sup>banks. On the other hand, a significant</sup> volume of African exports is financed<sup>directly by suppliers under insurance</sup> cover, without the intervention of<sup>banks. It isalso</sup> true that banks do not necessarily seek insurance coverage<sup>for large pre-export finance facilities,</sup> given the high cost of such insurance<sup>and the anticipated delays in making</sup> recoveries should problems arise.

# 3. Asset-Based Finance

Banks have demonstrated a willingness to finance high-value,<sup>moveable assets such</sup> as aircraft, vessels and mobile equipment,<sup>based on a lien on the asset typically</sup> for a reasonable percentage (50 to<sup>70 percent) of the asset's market value. The</sup> private insurance industry generally<sup>supports such transactions</sup> by providing loss and/or repossession coverage.

Except in the case of Liberia's vessel<sup>registry, asset-based loans tend to be</sup> recorded in the World Bank statistics<sup>as cross-border</sup> credits, unless structured as leasing arrangements, which often<sup>applies in the aviation sector.</sup>

# 4. Secured Lending

Secured lending encompasses loans that<sup>are collateralized by an offshore cash</sup> deposit or protected by an identified<sup>external irrevocable source of repayment.</sup> Unless guaranteed by an official agency<sup>(such as an export credit agency), these</sup> loans tend to appear in the World Bank<sup>statistics, but typically are not included</sup> in the BIS reports.

Typical security includes cash deposits,<sup>cross guarantees among suppliers, buyers</sup> and direct investors, commitments<sup>or undertakings from official agencies, most</sup> times conditional on borrower performance, and private political risk insurance.

Increasingly, commercial banks are involved in the<sup>intermediation</sup> of donor funds, which involves the provision of normal<sup>correspondent banking services against</sup> cash deposits or reimbursement guarantees<sup>from donors. To some extent, these</sup> facilities, which also can enable<sup>banks to take some form of "clean" risk with</sup> funded credit, are replacing the unsecured<sup>short-term credit lines that the banks</sup> have traditionally provided to their<sup>subsidiaries and to correspondents in a</sup> number of countries.

Another form of secured lending involves<sup>the provision of guarantees to the banks</sup> by offshore private entities, such as<sup>oil exploration and production companies.</sup> These guarantees can vary from "comfort<sup>letters" to legally-binding full or</sup> partial guarantees, depending on<sup>the nature of the relationship between the</sup> corporation and its bank, and the<sup>degree of risk associated with a given</sup> transaction.
Page 13

# C. FOREIGN CONNRCIAL AA-N PRESENCES

By the early 1980s, some 38 international banks had established and maintained a presence in at least 23 Sub-Saharan African countries in the form of branches or effective control of locally incorporated entities. The presence of several British, French and Belgian banks, such as Barclays, Standard Chartered, Grindlays, Banque Nationale de Paris, Banque Internationale pour l'Afrique Occidentale, Societe Gdndrale, and so on, go back many decades to traditional colonial ties. Many increased their presence over the years by expansion in branch networks nationally and regionally. A few local banks have also established branches outside their countries as a means of fostering intraregional trade.

A slow exodus of the international banks from Sub-Saharan Africa commenced in 1985. Some British banks reduced their local branch networks but most have remained in their traditional spheres of influence. The same was true of French banks until recently. Faced with severe illiquidity in several countries in the CFA Zone, they appear poised for further reductions in their presences there, while at the same time entering new markets, such as Guinea and Madagascar. Other than Citibank, all large American international banks, many of which operated through representative offices rather than full fledged branches, have left, including Bank of America, Chase, Bank of Boston, Manufacturers Hanover, and Chemical. However, most banks continue to do selected offshore risk-free business, such as the provision of correspondent services under donor funded programs.

Countries affected by the exodus of the banks include Cameroon, Congo, C6te d'Ivoire, Gabon, Kenya, Liberia, Mauritius, Niger, Nigeria, Senegal, Sierra Leone, and Sudan. Because these countries represent both good and bad economic performers, it appears that part of the reason for the banks' departure has to An with the chaneing nature of their business objectives and target markets. Departure of the banks has not gone without response. Some new banks, either branches of international banks from other regions of the world, or locally constituted institutions with or without foreign technical partners, have been filling the void. Ecobank, a privately-owned financial institution which operates in the Economic Community of West African States (ECOWAS); Meridien Bank, a subsidiary of the international trading firm ITH, with significant African holdings; and Equator Bank, a subsidiary of the HongKongBank Group, are typical of the financial institutions that continue to be active and to expand their activities in the region.
Page 14

# **CHPE TO** PFERCPIN **P H OMRCA AK**

In a series of informal interviews with commercial banks in France, the United Kingdom, the United States and Belgium that have been traditionally active in Sub-Saharan Africa, little optimism was expressed about the prospects for new medium-term lending to Africa on a wide scale during the 1990s. Nor did many banks foresee aggregate net increases in their short-term portfolios for the region in the immediate future.

## A. ERCEIVED COSAINT

The principal causes of this pessimism are summarized for the purpose of discussion into seven broad issue areas.

## 1. mantory Proinina

Host OECD iountries have imposed selective provisioning requirements or guidelines on the commercial banks in respect of their developing country exposure. These regulations, as well as voluntary provisioning practices of most banks, have generated significant losses on the affected LDC portfolios and have made it difficult to justify new lending to non-performing countries.

Beyond this inevitable consequence of the debt crisis, the extension of provisioning requirements to naglenin continues to be a major deterrent and for some banks an absolute bar to further activity since they can lead to immediate accounting losses. These policies are perceived as signals that many OECD banking authorities do not want banks to be active in the affected countries.

Many of these regimes, whether covering past loans or new loans as well, became more stringent in 1988-89: for example, the Bank of England issued a tougher "matrix" in January, 1990 and private sector/local bank risk in the CFA zone has come under tighter scrutiny in France and other lending countries. Some of the cases are viewed as excessive, such as the 100% provisioning on Zairean debt imposed in the United States, which normally **oiuwlwa wi4or** liberal and sclcct,ve policy than most other OECD countries.

## 2. CaI Adeauecv and RLsk:Revard Re1ationshJ9s

In the cases of relatively undercapitalized banks, portfolio growth is constrained generally, and higher risk lending most particularly. Not only must capital adequacy be strengthened to comply with regulatory targets, but some banks are particularly sensitive to the judgement of bank stock price analysts, who reportedly are quick to view any African lending as a negative. In response, the dominant tendency of these banks in the past 2-3 years, which is likely to continue into the future unless new mechanisms are found to mitigate risks, is to reduce aggregate LDC exposure (as well as activities in other poorly
Page 15 performing sectors), minimize<sup>and absorb current losses, and generally improve</sup> asset quality and streamline<sup>their operations.</sup> In this context, it has become<sup>more difficult to draw the attention of analysts</sup> and bank management to the potential<sup>of certain lending opportunities in Sub-</sup> Saharan Africa, an attention<sup>which is a prerequisite to mobilizing support for</sup> renewed wider-scale banking activities.

A related problem is the fact<sup>that the scope for adjusting pricing to reflect</sup> actual or perceived risks and to<sup>take advantage of the relative scarcity of long-</sup> term commercial bank financing<sup>has been declining, Decision-makers in the</sup> banking industry are strongly<sup>averse to lending at any price to non-performing</sup> borrowers, while some borrowers<sup>and external public officials appear to have</sup> difficulty accepting the high<sup>fees and interest margins that lenders consider</sup> commensurate with the perceived<sup>risks.</sup> It may be possible to establish<sup>a more realistic Irisk:reward" relationship in</sup> lending that is shifting to the<sup>private sector, perhaps more along the lines of</sup> venture capital support and more<sup>commercial activities that can generate far</sup> higher returns than traditional<sup>interest margins and fees on loans. However,</sup> in the present situation, commercial<sup>banks appear unlikely to pursue new</sup> strategies of this nature.

Instead, the primary approaches<sup>that are being used to improve risk:return ratios</sup> on African business appear to<sup>be the provision of no-risk, fee-based services,</sup> by means of fully secured letter-of-credit and other traditional trade-related facilities, intermediation and<sup>management of donor funds, representation of</sup> governments in debt negotiations,<sup>and general merchant banking or financial</sup> engineering services.

# 3. ExIROrt Credit AgAnen SuoD2rt

The WDTs' aggregate statistics<sup>suggest that the OECD export credit agencies have</sup> also been less active in Sub-Saharan Africa in recent years as they too<sup>face non-</sup> performing loans, budgetary discipline,<sup>more conservative borrowing practices</sup> and otherwise depressed demand<sup>in a number of countries. Many agencies have</sup> suspended or been slow to re-open<sup>or commit resources undervarious</sup> credit, guarantee and insurance programs.

Given the fact that a classic role<sup>of the commercial banks has been to provide</sup> funding and/or residual risk<sup>financing in conjunction with official export</sup> finance programs, the reduction<sup>in lending from this source has translated into</sup> fewer opportunities for the banks.

In some cases, the decline in<sup>export credit agency support may also be related</sup> to an increase in concessional<sup>financing. An increasingly critical event in</sup> country-donor relationships,<sup>the Consultative Group meetings, now generates</sup> virtually all of the long-term<sup>financing support for public investment programs</sup> that traditionally received<sup>some commercial bank and export credit agency</sup> support. Similarly, on the<sup>short-term side, balance-of-payments</sup> support in the
Page 16 form of structural adjustment facilities may have reduced the need for import financing by banks, suppliers and official export finance agencies.

# 4. Co-Financing Mechanismg and Other Security Arrangements

Given the foreign exchange constraints and debt servicing difficulties of many countries, commercial lenders are particularly wary of projects that generate no foreign exchange revenues. They are equally unenthusiastic about export projects in countries where export receipts and debt service payments have to transit through the host country's foreign exchange allocation system. Further, little or no interest exists for projects that involve lending to non-performing public borrowers and/or state-controlled entities.

Some banks expressing concern about mandatory provisioning rules indicate that they would participate to a significant degree in new lending only if the security is sufficiently enhanced to remove or reduce the "sovereign risk" component in loans to borrowers in the countries affected.

Three recurrent themes emerged clearly with respect to the perception of banks (not necessarily based on full information) regarding prospects for improving co-financing structures and enhancing of other security arrangements:

- Some of the co-financing mechanisms currently available in Africa do not appear to provide sufficient comfort to the banks. In particular, the banks would (a) like to share in a more formal sense in the "senior creditor status" enjoyed by multilateral co-financing agencies and (b) like to see the agencies take more responsibility for the political risk and/or the monitoring and enforcement of debt servicing obligations. The co-financing structures being offered by the International Finance Corporation (IFC) do generally meet these concerns, since IFC acts as the lender of record, with bank syndicates taking sub-participations.

- There is concern both about the lengthy process involved and about the pressure exerted on them by most sponsoring agencies to reduce pricing in co-financing transactions.

- Some donors and African policy-makers are perceived to be opposed to the assignment of export proceeds and royalties and to other project-related mechanisms that would reduce various political and commercial risks of lending, whether within or outside of co-financing arrangements.

While there is certainly a trend towards greater quality in transactions, more flexible and mutually satisfactory forms of donor-bank partnerships and more active marketing to banks by sponsoring agencies, it is still too early to consider that a sufficient framework exists for a major surge in bank lending through co-financing arrangements.
Page 17

# 5. Credit ExSerienco_and the Handling of the Debt Crisis

Some banks perceived a lack of political will to service debt in some<sup>African</sup> countries and expressed concern that donors and African governments underestimate the negative impact that undue pressure for outright debt forgiveness would have on future bank lending. The "forgive (debt) and forget (new lending)" theme was raised on a number of occasions.

While reschedulings and market-based reductiono--including discreet buy-back schemes in which the banks themselves are participating--are not as strongly opposed, the banks view these initiatives as seriously undermining the position of pro-African lending constituencies within their ranks. An aggravating factor for some banks is the perception that the official creditors and donors are overzealous in requiring commercial bank debt restructuring on terms similar to Paris Club creditors and/or in advocating sweeping debt forgiveness.

It was also perceived that an effort to differentiate between certain types of commercial bank lending could help mitigate negative reactions of banks to initiatives involving elements of debt forgiveness or particularly drawn-out rescheduling terms. In particular, it is argued that a renewed commitment to servicing responsible trade finance facilities and past loans to viable and healthy projects could yield long-term benefits in terms of restoring Africa's links to the private financial markets.

By their own admission the banks acted irresponsibly in contributing to Africa's debt growth, often citing the balance-of-payments loans (straight cash transfers) and "white elephant" projects of the late 1970s and early 1980s. However, some also opined that the official agencies have also extended questionable financing, whether in terms of the quality of the underlying activities being financed or the reality of corruption and/or weak economic management performance in some of the borrowing country governments.

Judging from comments such as these, the banks' role in debt relief on the one hand, and radical options such as debt forgiveness on the other, should be reviewed more carefully, with more bank involvement, in the context of<sup>a broader</sup> effort to revive prospects for new lending.

# 6. Project QOualty

All banks indicate their willingness to support important "corporate customers" doing business in Sub-Saharan Africa, and most expressed interest in financing profitable and economically justified investment projects undertaken by<sup>African</sup> enterprises. However, several raised the point that transactions of the scale, quality, or strategic importance to warrant the banks' attention are rarely available or brought to them for financing, sometimes due to lower-cost alternative sources of support from official agencies.

On the other hand, several banks expressed dismay at the number of solicitations that involve speculation in short-term trade activities and establishment<sup>of</sup>
Page 18 commercial monopolies in contravention of official<sup>policies in the borrowing</sup> countries.

Finally, the banks point out that<sup>few prospective</sup> private borrowers are able and/or prepared to take a reasonable proportion of project risk, even when they hold significant assets outside of their home countries.

# 7. Focus on Other J?3Xt

A handful of the traditionally active banks profess to have<sup>ceased focusing</sup> on Africa as a market for new lending in the foreseeable future, no matter how wellsecured or potentially profitable. In these institutions there has been a marked reduction in the number of professionals working in or visiting the Africa region. For a variety of strategic reasons, the banks are allocating a larger share of their resources to new<sup>domestic opportunities</sup> and to 'more stable" regional markets.

Other reasons cited by the banks<sup>for the poor prospects</sup> for commercial lending to Sub-Saharan Africa, albeit less frequently, included the following:

- rThe perceived weakness of<sup>African domestic banking systems and</sup>

- institutions, whether in terms of their financial condition or of the quality of services provided.

- A deep-rooted view that commercial banks are being largely ignored by the donor community as significant players in Africa in the 1990s.

- An insufficient recognition given to restructured or non-performing bank debt as a financial resource: policy-makers, designers of donor-sponsored projects, and private investors, whether African or non-African, are said to pay too little attention<sup>to the desirable</sup> objectives of maximizing local currency components in projects and of establishing appropriate debt conversion mechanisms to help finance these local costs.

- The exchange risk inherent in cross-border transactions with borrowers in countries likely to undergo<sup>progressive</sup> currency devaluations in the context of reform programs.

# B. PERCEI-VaED OPPORgITIE

There was some discussion of relative opportunities for bank lending in different Sub-Saharan African countries, and about the appropriateness and/or likelihood of different forms of lending. However spontaneous, there was some consistency in the views expressed, as summarized below.
Page 19

## 1. Secto

The mining sector is likely to attract the most support from commercial banks, due to better-known project and market variables, the scale of the projects, the importance and reputation of corporate investors generally undertaking such projects, and the quality of security that is likely to be obtained.

In part because of these factors, the oil, gold and diamond producing countries were! often pointed out as more likely candidates for new medium-term loan commitments during the next five years. This preference is already evidenced by the pattern of lending in the last two years. To illustrate, in addition to considerable lending for oil exploration and production, a major IFC co-financed syndication in Ghana was recently completed for a large gold project, and there have been a few smaller-scale commercial bank loans for other mining projects throughout the region.

Banks believe it unlikely that the models for lending to the mining sector could easily be extended to agriculture, industry, tourism and fishing, due to the higher project risks (climate, market, etc), the smaller project size, and the relative lacSk of aLttenton from corporate sponsors which characterizes these sectors. Only improved co-financing arrangements, expanded export credit agency activity and/or major corporate sponsor guarantees and relationships are likely to attract banks to these other sectors.

## 2. Asset-Based Financ

A number of banks are still competing for aircraft and major (e.g. mining) equipment financing in Africa, secured by the value of the underlying asset financed, but there is also no indication that these models could be stretched very far into the various economic sectors in Africa. Because other types of assets are less mobile and depreciate more quickly, they are not viewed as adequate security for loans, and the general perception is that the underlying economic activities are more vulnerable to changes in the policy and market environments.

# at J. malmal **a*.** eveloomnmentand Prolect

Several references were made to prospective improvements in the Southern Africa political climate and in South Africa's relationships with the neighbouring members of the Southern Africa Development Coordinating Conference (SADCC). It is perceived that closer economic links and more visible and substantial business relationships within the subregion could provide a heretofore missing stimulus for economic expansion which could lead to the development of high-quality investment projects, new intra-regional financial arrangements and a more attractive financing environment. To a similar but lesser extent, Nigeria could serve as a "growth pole" for the West Africa sub-region. However, some felt that resumed lending to South Africa could come at the expense of other African countries.
Page 20

# 4.

Banks pointed to the contributions<sup>that their subsidiaries operating in Sub-</sup> Saharan Africa have made over the<sup>decades. In recent years, this contribution</sup> has taken more the form of local<sup>currency working and investment capital</sup> financing, financial sector development,<sup>and training. Whether or not they had</sup> local subsidiaries or representation,<sup>many banks feel that the importance of</sup> their personal and institutional relationships<sup>in the various countries is being</sup> overlooked in the analysis of future<sup>bank roles in African external finance.</sup> There is also a wide-spread feeling<sup>that while they have a comparative advantage</sup> in evaluating private sector risk<sup>and in responding quickly to opportunities,</sup> few banks are presently prepared<sup>or have specific plans to expand their</sup> activities to take advantage of this<sup>experience and strategic posture.</sup>

# 5. Short-Term Lending

Short-term lending is viewed as the principal<sup>means for maintaining continuity</sup> in the banking industry's relationship<sup>with Sub-Saharan Africa, while efforts</sup> are made to rebuild confidence and renew<sup>the banks' understanding of the region's</sup> needs and opportunities.

The banks recognize that despite widespread<sup>skepticism, reform efforts and donor</sup> support are improving the creditworthiness of a number of countries and/or their private sectors, tiereby creating new<sup>opportunities for short-term lending. In</sup> particular, there appears to be increased<sup>attention to or at least some interest</sup> in developing new mechanisms to support<sup>Africa's export sectors through both</sup> short- and medium term lending. To<sup>some extent this interest is due to a</sup> perceived minimization of risks through<sup>security arrangements,</sup> but this does not negate the fact that in a general sense<sup>the banks are capable of designing</sup> innovative products to promote an expansion<sup>in Africa's export base and to start</sup> the process of resuming general lending<sup>to the regi4n</sup>
Page 21

# CHAPTER THECE-SCOPE FOR ACTION

Under what circumstances are commercial<sup>banks at all likely to resume normal</sup> lending to Sub-Saharan Africa, and<sup>what are the prospects that these conditions</sup> will materialize? What innovations<sup>might accelerate these changes and alter the</sup> context of the discussion? What<sup>particular opportunities are available to</sup> commercial banks and how are these<sup>constrained by the borrowing capacities of</sup> the African countries themselves?<sup>In considering the prospects for increased</sup> commercial bank lending to Africa,<sup>with an emphasis on long-term lending, a</sup> starting point would be to define<sup>the objectives of new lending and target orders</sup> of magnitude.

The statistical profile of Africa's<sup>long-term debt stocks and debt service</sup> payments over the next five years<sup>will depend largely on factors relating to</sup> current outstandings. Important<sup>in this determination will be the debt</sup> performance of the four sovereign<sup>borrowers (C6te d'Ivoire, Nigeria, Gabon,</sup> Congo) who hold the bulk of the<sup>region's long-term commercial bank debt.</sup> Totalling $12.5 billion, their debt<sup>represents 80 percent of long-term public</sup> and publicly-guaranteed debt of $16 billion, and 60 percent<sup>of the total long-</sup> term commercial bank debt of $22 billion<sup>reported by the World Bank Debt Tables.</sup> Non-flow factors such as more accurate<sup>debt information, exchange rate</sup> fluctuations, reschedulings of interest<sup>arrears, market-based debt reductions</sup> (through conversions and discounted<sup>trading) and negotiated debt cancellations</sup> may also have an impact on these statistics.

Without attempting to project the<sup>future profile of Sub-Saharan Africa's debt</sup> overhang, but using as a key measure<sup>of progress anticipated future levels and</sup> geoeraohical distribution of commercial<sup>bank disbursements, the following could</sup> form the minimum objectives for commercial<sup>bank long-term lending by the year</sup> *2000: double the aggregate level of annual<sup>disbursements to the private sector,</sup> as narrowly defined by the World Bank,<sup>from their present base of about</sup> $600 million per year (excluding the<sup>statistics for C6te d'Ivoire);</sup>

- achieve a broader distribution of<sup>disbursements to the private sector in</sup> more countries and economic sectors;

bring aggregate disbursements to public<sup>and publicly guaranteed borrowers,</sup> as broadly defined, at minimum to their<sup>1986 levels of $1.2 billion.</sup> Such a performance would bring<sup>the commercial banks to somewhat over half of</sup> their peak new lending level of $4<sup>billion achieved in 1980.</sup>

## A. QPPQORTNITIES AND_COMMERCIAL BORPOWIXG<sup>CAPAGITY</sup>

Sub-Saharan African governments have<sup>accepted the view put forth by the World</sup> Bank's Long Term Perspectives Study<sup>that future development strategies must</sup> emphasize the development of human<sup>resources and improvement in physical</sup>
Page 22 infrastructure, in addition to conventional policy reforms, as the means for providing an enabling environment for producers in the private sector. This implios a shifting of intervention in the economy from the state to private enterprises. Herein lies Africa's most important opportunity for increased commercial bank lending.

A large number of productive assets lie idle or operate at low capacity in the hands of discredited state agencies. The introduction of new productive assets is stymied by the lack of physical infrastructure to support their exploitation. These include mineral reserves which have yet to be explored. The region's fishing potential remains under-exploited or adversely exploited, while other natural resources lay fallow. The development of agriculture which has as a central focus the commercializati **o** f the millions n of subsistence producers is a clear and constant priority. A buoyant agriculture sector and the links that this would provide to an expanding manufacturing base represents a growth model which has succeeded in other regions. The potential for direct investment-local and foreign--supplemented by commercial bank lending to intrepreneu rs is well established.

In the authors' view, it is premature and it would be unfortunate to diminish the prospects for significant aggregate increases in commercial bank medium-term lending to Sub-Saharan Africa. Indeed, there are a number of advantages to be gained from increased commercial bank lending, as exemplified below.

- ° First, the growing emphasis on and support for private sector initiative raises the hope that high value-added, profitable projects, and in many cases focusing on export activities, will be developed more quickly than in the past and begin to proliferate in Africa.

Many such projects should be capable of supporting commercial borrowing terms and generating incremental foreign exchange earnings and/or savings for debt service. Frequently, the cost of borrowing directly from abroad is lower than local market rates of interest, particularly if there is no significant exchange risk or if this risk is mitigated by a local currency guarantee fund. Such guarantees are being offered in some of the mediumterm onlending facilities being offered to the private sector in a number of countries, including some of the World Bank "APEX" lines. Moreover, as comoared with the impact of foreign direct investment, a borrowing country's outflows on debt service over a limited number of years typically should amount to a fraction of the outflows on dividends and capital gains over the life of a project, assuming that the host countries are willing and able to respect commitments to dividend and capital repatriation.

- Second, equity investors seeking to leverage their capital with debt financing should have the widest possible range of institutions to turn to for this support. To the extent that they are at all interested in resuming lending or other forms of support for African projects, commercial banks have substantial human and financial resources that can be put to work and are capable of responding more quickly and with less red tape to sponsors of attractive projects than public agencies.
Page 23

- Third, private borrowers, particularly foreign investors, can take advantage of their traditional banks' existing relationships with African decision-makers and potential partners, the banks' local subsidiaries and other sources of financing (e.g. the private insurance industry) to accelerate the structuring of their projects and develop various support mechanisms for their development and ongoing management (including shortterm trade finance support).

- Fourth, the banks' rescheduled debt remains an important resource that can be constructively utilized to advance Africa's privatization, export diversification and infrastructure development objectives. Market-based debt reduction through conversion mechanisms should be heavily encouraged: as a form of balance-of- payments support for the region, as a discipline for more judicious use of local currency components in public and private investment projects, and as an incentive for the banks to renew their interest in Africa's economic potential and development strategies.

Despite the important role that the banks could be playing, much of the literature, as well as informal views expressed by African governments, donor agencies and others, suggests that under present conditions, the capacity of many African countries to borrow from commercial banks is extremely limited, given the fact that (a) overall external indebtedness is already far too high in relation to most of the countries' foreign exchange earning capacity and (b) the banks' credit terms (fees, interest rates and repayment schedules) are too onerous in relation to the grants and low-cost financing available from concessional and ECA-type sources.

The prevailing view is that commercial bank support will be required and provided essentially in the area of short-term trade finance and non-risk banking services during the 1990s and possibly beyond. Even with respect to financing for the private sector, much of the hope is pinned (a) on an increase in equity financing from foreign and local investors, whether individual entrepreneurs, corporations or public agencies and (b) on longer-term, fixed rate debt financing primarily from donor or export credit agencies, such as the APEX lines being established by the World Bank in a number of countries and new programs Deing aeveloped by IFC, DEG, FMO, PROPARCO and similar quasi-donor agencies.

However, it should be clear that ALL external sources of financing, even if providing support to Africa within the context of a satisfactory regulatory environment for productive enterprise, will not necessarily be capable of providing sufficient resources to help Africa exploit its considerable opportunities on a sustained basis.

The African countries ultimately will have to become creditworthy in their own right for sustained access to the international financial markets. Joakim Stymnel (IMF Working Paper WP/89/71) shows clearly in his 1989 simulation of Sub-Saharan Africa's payments capacity that export growth supplemented by debt 1 Stymne, Joakim, "Debt Growth and the Prospects for Debt Reduction." The Case of the Sub-Saharan African Countries." IMF Working Paper, September 1989.
Page 24 relief is the key to improvement in the borrowing capacity or creditworthiness of Sub-Saharan African countries.

Assuming a perhaps optimistic annual export growth rate of 7 percent and no debt forgiveness over a five-year period, Sub-Saharan Africa's composite debt ratio (total debt:total exports) would fall to 180 percent, implying a cumulative current account surplus of $30.6 billion and cumulative imports of $178.5 billion over the period. This compares with the composite debt ratio of 330 percent in 1987. If, however, export growth were only 3 percent per year, debt cancellation of $5 billion would be required to accomplish a comparable current account surplus and import figure. Because it is bound to be affected by such cancellations, commercial bank lending would be in clear jeopardy under the latter scenario, while the requirements for external support would also strain the international community's overall ability to bridge Africa's resource gaps.

Generally speaking, the banks should be pulled closer into the dialogue over African external finance in the 1990s, rather than marginalized on the basis of their own apparently diminished interest and the problem of Africa's commercial borrowing capacity. The challenge is to encourage all potential partners, including the commercial banks, to contribute their particular skills and resources to developing Africa's potential.

# B. PROSPECTS AND PROPOSALS FOR THE ALLEVIATION OF CONSTRAINTS

It was quite clear from the interviews that the scope of the commercial banks' activities and their future plans for Africa have never been narrower, as seen in the limited range of perceived opportunities represented in Chapter II. While the industry possesses the institutional skills to lend to Africa, as a whole its posture is a passive one, particularly with regards to medium-term lending. For have the banks been actively engaged by policy-makers in a search for innovative solutions. Having witnessed the deterioration in their Sub-Saharan portfolios over the past 3 years, however insignificant these amounts might be in comparison to the banks' total assets, on the whole the banks appear resigned to "waiting out the debt crisis" while re-focusing elsewhere the financial and human resources once devoted to Africa.

Policy-makers should not be overly discouraged by this passive situation. As evoked above, Africa's commercial potential is vast and there is scope for stimulating commercial bank lending during the 1990s. However, if the African and OECD government communities wish to see a resumption of lending to Africa, it appears that they will have to take much of the initiative for restoring genuine interest and confidence among the banks. A number of concrete suggestions are presented for discussion in this section.

An appropriate starting point would be to address the constraints cited by the banks (detailed in Chapter II), in conjunction with the broader initiatives underway to resolve the immediate debt crisis and restore economic growth. As the context improves, these efforts should be supplemented by a more direct, promotional approach that would encourage the banks to observe and analyze more
Page 25 carefully the changes taking place in the<sup>region which could lead to a resumption</sup> in wider-ranging marketing activities.

# 1. Mandatory Provisions on New Lending

Manidatory provisioning regulations generally imply an immediate loss on new<sup>loans</sup> extended to the affected African countries<sup>and thus represent a powerful</sup> disincentive to new lending. Some<sup>banks have already established excess</sup> provisions, or achieved a critical<sup>mass of "revolving provisions", where normal</sup> debt servicing permits past provisions<sup>to be reversed, offsetting provisions on</sup> new loans in the relevant accounting<sup>period. In these cases the provisioning</sup> requirements would not necessarily<sup>ifncrease</sup> their aggregate loan loss reserve expenses.

Given the small share of African<sup>debt in most banks' portfolios, and the</sup> extremely conservative posture of the banks,<sup>a strong case can and should be made</sup> to the regulatory authorities for<sup>the elimination of these provisioning</sup> requirements as quickly as possible.

As a positive development in this connection,<sup>the banking authorities in most</sup> countries, including France, the UK<sup>and the Netherlands, have ruled that co-</sup> financings with IFC and in some cases other<sup>multilateral lenders, under the types</sup> of structures currently offered by these<sup>agencies, are exempted from provisioning</sup> rules. Some jurisdictions accord similar<sup>treatment to other well-secured</sup> transactions (such as aircraft financings<sup>or cash-collateralized</sup> facilities), a practice which should be extended to an ever-increasing range of transactions, if not across-the-beard.

# 2. Co-Financing

The principal rationale for seeking commercial<sup>bank participation in co-financed</sup> facilities is to leverage the official agencies'<sup>risk and funds, bearing in mind</sup> that when donors are prepared to bear<sup>all of the risk, they are capable of</sup> obtaining lower-cost funding than that provided<sup>by the banks.</sup> Nevertheless, there is scope for rethinking the way that risk is allocated. Until now, it has been the practice of the<sup>major official co-financing agencies,</sup> excepting IFC with its "lender of record"<sup>system, to finance and/or guarantee</sup> a certain portion of the principal, leaving Lo<sup>Lhe</sup><sup>_oLhei_pa± Licipat-L</sup><sup>**t**s</sup> hLe balance of all risks inherent in the transaction. IHowever, some of the bilateral political risk insurance programs maintained<sup>by agencies such as the U.S.</sup> Overseas Private Investment Corporation (OPIC),<sup>do provide coverage for loans</sup> to eligible countries.

In countries where this appears necessary,<sup>it is not impossible from a technical</sup> standpoint to devise a formula whereby<sup>the sponsoring agency in "parallel</sup> financing" arrangements would take a larger<sup>portion of the sovereign and/or</sup> transfer risk on a transaction, while<sup>the private participants would bear a</sup>
Page 26 larger portion of the commercial .isk.<sup>The principal difficulty lies in drawing</sup> the line between political and commercial<sup>risk.</sup> A potentially simple and clear formula<sup>would be as follows:</sup>

- if the borrowing entity has the<sup>necessary local currency funds and has</sup> applied for a foreign exchange transfer,<sup>but for any reason the transfer</sup> is not made, the sponsoring institution's<sup>transfer risk guarantee of the</sup> commercial bank funded portion of<sup>the facility will be invoked; and</sup>

- if the borrowing entity for any reason<sup>does not have the local currency</sup> funds available to apply for a foreign<sup>exchange transfer, the commercial</sup> banks' commercial risk guarantee<sup>of the donor funded portion of the</sup> facility will be invoked.

While neither the agencies nor the banks<sup>are likely to provide such guarantees</sup> for 100% of the principal amount of<sup>a given loan, the concept recognizes the</sup> comparative advantage of the official<sup>agencies in assessing the transfer risk,</sup> providing balance-of-payments support<sup>to countries on a long-term basis, and</sup> encouraging debt service. In parallel,<sup>it would place more of the onus for</sup> analyzing project risk on the participating<sup>banks. The commercial banks would</sup> not obtain unfair advantage by such a<sup>procedure, as commercial risk can indeed</sup> be considerable, involving a wide range<sup>of variables from climatic and market</sup> conditions to management performance. I The suggested formula is not a panacea<sup>however, particularly for transactions</sup> in countries where banks have insufficient understanding of or confidence in the policy and political environment. Banks<sup>are aware that changes in the economic</sup> environment, even those changes that<sup>are necessary and beneficial, such as</sup> devaluation, as well as uncertainties<sup>relating to government ownership of or</sup> potential interference in the affairs of<sup>a borrowing entity, can be detrimental</sup> to the borrowers' local currency solvency,<sup>affecting debt service performance</sup> just as surely as any lack of foreign<sup>exchange availability.</sup> These issues are not easy to address, and<sup>are best resolved through the improved</sup> economic health, economic management and<sup>political performance of the borrowing</sup> country, as well as through continued<sup>fine tuning of improved risk-sharing</sup> mechanisms over the longer term. For more immediate results, a strict distinction between the foreign exchange<sup>and local currency performance of a</sup> given transaction, based on a reasonable<sup>"valuation" of each type of risk and</sup> limited to appropriate percentages of<sup>principal, seems more promising.</sup> Discussions or experiments concerning a<sup>more realistic allocation of risk should</sup> also be accompanied by heightened sensitivity<sup>to the banks' concerns about</sup> pricing and the time lags involved in completing<sup>co-financing packages. On the</sup> latter point, IFC's recently established<sup>"agency agreement" with the Dutch bank</sup> NMB provides one solution for reducing<sup>the processing time and costs, whereby</sup> the bank is conducting the bulk of the<sup>project appraisal and loan structuring</sup> work on behalf of both parties. Export<sup>credit agencies can also rely more or:</sup> the banks to accelerate appraisal and<sup>commitment processes, as exemplified in</sup> the "agency agreement" between the U.S.<sup>Eximbank and Standard Chartered initiated</sup>
Page 27 in 1987-88. A particularly promising area for further agreements of this nature would be involvement of banks traditionally active in Africa in the Intermediation of Japanese aid and official export credits.

Finally, there is no doubt that due to their small size many African projects have been outside of the range of typical bank lending actlvitles and cofinancing initiatives. A posslble solutLon in thls area may be to establish speclally-managed co-financed loan funds wlth some level of subsidy for development costs and operating expenses.

# 3. Transfer R k-tif iechanim ori t

The prinelpal model that stands out in the banks' perceptLons is that of pledges of and/or escrow accounts for the export earnings of a borrowing entity, preferably flowing through their own accounts wlth the right of offset. Various export retentlon schemes are in existence. Some are stlll managed through centralized foreign exchange management systems and partly for this reason have not necessarily generated new medlum-term lending from commercial banks. In some countries without generalized retention schemes or open forelgn exchange regimes, exporters have de facto preference in obtainlng forelgn exchange, whether due to their economic and political importance (e.g. a state petroleum company or national airline), to foreign exchange retention in the local banklng sector and the resulting competitlon for export clients, such as in Zaire, or other reasons. These systems generally have not stimulated medium-term lending, except through exceptional export retention arrangements.

Several countries have moved to more open foreign exchange regimes that may or may not involve systematic export retention schemes, with varyLng degrees of control as between the Central Bank and the local and offshore banking sectors over the external assets. Some of these systems still need fine-tuning in order to set the stage for medium-term lending. For example, some are restrtLeed to current account transactions, and alternative mechanisms for private borrowers to contract and service commercial bank long-term debt are not necessarlly clear and/or complete.

At the farthest extreme, the fourteen members of the CFA zone have partLally convertible currencLes, where any entlty can automatically use local currency to obtain French Francs and hold deposlts in France (except commerciai banks, who may only hold operatlng accounts). Term loans denominated ln French Francs can be contracted and serviced automatically, and simple procedures have long been in place for special approval of loans in other currencles. These loans are Lndeed being servlced, to the extent that the borrowing entity and the local banking system are sufficiently liquid in CFA terms.

The ultimate objective is for all African countries to achieve hard currency status, but complex multilateral approaches are required, implying a long-term process. Despite all assurances, there are even doubts about the sustaLnabilLty of the CFA zone as presently structured, given concerns about the overvaluation of the CFA franc in many countries, the capital flight that occurs when funds
Page 28 held in France are used to purchase other currencies, and the anticipated shift to a single European currency.

Yet the fact remains that an urgent objective of all African countries is to dramatically_ increase and diversJify_ =o through economically rational investment projects, and that the commercial banks dt show some willingness to support export projects, prpyis4Ls-gS cash flows are committed to servicing the debt. This is a prudent requirement applied in most other forms of commercial bank lending, both cross-border and domestic, but one that is difficult, timeconsuming and therefore costly to structure in the more regulated foreign exchange regimes within Africa.

Given the apparent opportunity to generate commercial bank support fairly quickly for export development, more open attitudes towards the commitment of export cash flows appear to be an important ingredient in accelerating resumed lending, until a given country has adopted a very open foreign exchange regime or achieved full convertibility. Concerns about potential distortions could best be mitigated by setting a limit on the amount of funds that can be so committed by a given country or borrower, and by improved appraisal of the underlying projects.

# 4. ZTh Exhange s-ak

The exchange risk faced by local currency earning entities (including exporters obliged to repatriate and convert export proceeds) who have obtained a crossborder loan is an important factor that enters into both lending and borrowing decisions. In a number of donor-sponsored projects and credit facilities aimed at the private sector, the borrowing country government has agreed to bear the exchange risk in local currency, partly because the ultimate borrowers were not prepared to accept this risk and the facilities were not being utilized. Similar coverage could be extended within appropriate limits to protect private borrowers seeking support from private banks. Many donors have accumulated substantial counterpart funds in the African countries that could be applied to supporting such arrangements.

## 5. luoed CreditL Informaton

Although not stressed in the interviews, commercial banks are at a major disadvantage in analyzing or projecting the creditworthiness of developing countries. They understandably have little confidence in statistics and public information, given the bewildering array of vastly different numbers and the superficiality of the press reports. They also have virtually no influence on the course of economic policy or foreign exchange management practices.

The in-depth economic analyses of the IMF and the World Bank are the closest that the international community has come to establishing an "independent audit function". However, they are not available to the public unless the member government authorizes their release. A positive development would be for these authorizations to be routinely granted, or at least for basic, accurate macroeconomic information, qualitative and quantitative, to be published more quickly
Page 29 in some form. Countries actively seeking commercial bank support for their public or private sectors should benefit from providing relevant information to their correspondent banks and other potential participants on a regular basis.

For quite different reasons, the IMF does not publish statistics on outstanding debt by types of lenders, and the World Bank does not distinguish between types of short-term lenders. In this regard Africa is handled no differently from the rest of the world. Whereas the rationale for the IMF practice is more one of confidentiality vis-a-vis those countries where it collects highly detailed information, the World Bank genuinely does not have adequate information (other than that obtained from the IMF on a confidential basis), in large part due to poor reporting practices by a number of member countries. However, these institutions and the governments and public agencies of both the lending and borrowing countries do have access to what information is available, whereas the private financial markets do not, unless authorized by the member country concerned or obtained informally.

**A-** it stands, banks cannot make a genuinely informed judgement about creditworthiness and accept a reasonable degree of risk without some sense of the short-term debt and near-term cash flow situation of the countries. This "fear of the unknown" can be particularly acute in those Sub-Saharan African countries with comparatively low levels of reserves and a chronic need for exceptional financing to achieve a positive overall balance-of-payments position.

Better access to information is once again not a panacea: the banks are more likely to become involved in projects that are insulated to the greatest possible extent from the foreign exchange situation of the borrowing countries. However, the information would be quite relevant in considering unsecured short-term lending, and would provide the banks with a better understanding of the various countries' economic objectives and strategies.

# 6. !mRrovina. Project Quality

A number of new private investment promotion and management assistance activities are underway, including the IFC-sponsored Africa Project Development Facility, Africa Management Services Company and Foreign Investment Advisory Service. These programs provide valuable expertise to private entrepreneurs and policymakers and are likely to expand throughout the decade, including permanent presences in the market. It is important that they persist in drawing the attention of private lenders to the higher-quality business opportunities and improving environments they see in Africa, and equally important that their efforts be supplemented from many other quarters.

# 7. SRecial Private Sector Initiatives

Given the seriousness of the constraints and the time it will take to raise levels of interest and confidence, a set of special initiatives for increasing and broadening commercial bank lending to the African private sector could be tested on an experimental basis to help develop momentum for the 1990s.
Page 30 Such initiatives could involve the following elements:

- v All African countries would be eligible for the program. Each participating country would establish an initial target or budget for commercial bank lending to private borrowers, to be replenished as targets are met.

- The transfer risk on loans made under this program would be secured by a combination of (a) zero-coupon bonds or escrow accounts financed by the borrowing country Government and held with a multilateral donor institution and (b) at least a matching guarantee by one or more multilateral donor institutions. These guarantees would be called whenever a debt service payment is missed for any reason, provided that the borrower has lodged the local currency equivalent with a local bank.

- Additional guarantees could be provided, to the extent practical, by the host governments concerning critical policy conditions that must be maintained in order for particular private borrowers to remain viable. Foreseeable policy changes, such as devaluations or price liberalization, would not be covered under the guarantees.

- The sponsoring multilateral agencies could also provide modest contracts or subsidies to banks to cover a portion of their marketing expenses. This component could take the form of brief technical assistance contracts or be modeled after the "marketing insurance" programs provided to exporters by many export credit agencies.

- Finally, the program could sponsor a multiplication of project development assistance programs, including funding for feasibility studies and market research.

A serious experiment of this nature appears to be required to remedy the fact that no commercial bank loan disbursements were reported by the World Bank for 26 African countries in 1985-88, and that private borrowers are shown to have received loans in only 12 countries. While the banks would bear the commercial risk, such a program would be providing them protections similar to those granted direct investors by the Multilateral Investment Guarantee Agency (MIGA), making for a stronger challenge to rebuild relationships with the African business community.

# 8. RDbt Cov_e_1si9 Initiative

Debt conversion in Africa continues to lag far behind the initiatives in Latin America for a number of reasons. In particular, countries have been slow to introduce mechanisms, banks have provided little impetus for them to do so, given the relatively small exposures in relation to Latin America, and several of the larger debtor countries are in the CFA zone, where the partial convertibility of the currency presents special conceptual problems to the policy-makers.
Page 31 Nevertheless, a significant amount of African debt has been sold at deep discounts by the original holders to institutions making speculative investments, and substantial provisions have been made on much of the non-traded debt. Thus the thresholds at which attractive returns could be generated on debt conversion activities have been lowered.

A variety of actions can be taken to accelerate debt reduction through conversion mechanisms:

- Special funds could be created for the investment of the debt. lhile several banks have created such funds in Latin America and have accumulated deeply discounted African debt, perhaps with such a program in mind, African governments and donors could encourage these banks to take action through a variety of incentives and promotional measures.

- The banks' perception that there is scope to increase local currency components in public investment programs and/or donor-funded development projects can be addressed. Moving beyond the traditional menu of debt conversion mechanisms pioneered in Latin America, commercial bank debt could be purchased with donor funds for conversion into local currency funding for such projects. The foreign exchange savings that would be generated by an increased and more judicious use of local resources could justify the payment of a premium over market value when the debt is purchased.

- Finally, the terms of debt conversion mechanisms (such as the length of grace periods on dividend remittances, or the level of fees earned by the borrowing countries' central banks) could be modulated so as to be more generous in the case of banks providing new foreign exchange financing in connection with their conversion activities.

# C. POTENTIAL G MPCT QCI RAM MORING

Progress in reviving commercial bank interest in medium-term lending to Africa can be measured in terms of the banks' awareness of changing conditions, their understanding of the implications, and their inclination to examine profitable lending opportunities in more than cursory fashion. Given the essentially passive posture of the banks, the respective borrowing countries and supporting donors should make a concerted effort to draw their attention to any improvements in the lending environment.

Some of the areas where increased lending may take place are briefly characterized below.

CQ-finanslng: A stepped-up interest in co-financing would be felt primarily in large-scale production and infrastructure projects, as exemplified by IFC's recent package for Ashanti Goldfields in Ghana or the as-yet unexplored rehabilitation of the Benguela Railway. IFC's recent syndication of a major onlending facility for the b&nking sector in Zimbabwe could be replicated as financial sectors continue to strengthen in various countries. Agencies other
Page 32 than IFC, both donors and export credit agencies, may step up their own<sup>efforts</sup> to develop attractive co-financing mechanisms, in keeping with the growing trend of providing financial support directly to private ventures. Generally,<sup>both</sup> the co-financing agencies and the banks are likely to seek out revenue-earning projects with secure repayment mechanisms, epitomized by petroleum production and marketing projects. However, co-financing could help attract commercial bank support even for non-commercial projects in countries that have suffered chronic balance-of-payments problems, provided that the countries are assured of longterm multilateral support and that the projects are of major<sup>strategic</sup> importance.

rivate sector initiative: New lending, both under present circumstances<sup>and</sup> under the protective umbrella of initiatives that could be designed to mitigate transfer and exchange risks is more likely (a) for highly profitable<sup>ventures</sup> only, in the case of projects oriented towards local sales, (b)<sup>for export</sup> projects involving known commodities, products and markets, (c) for projects involving some element of debt conversion by the lending bank,<sup>and (d) for</sup> projects put forward by important corporate customers.

New RartnershiDs: There may be increased cooperation, innovation and risk-sharing among commercial banks, private insurers and private investors, suppliers<sup>or</sup> buyers. As economic environments improve and private sector development<sup>gains</sup> momentum, highly profitable ventures may be developed on the basis<sup>of a more</sup> equal sharing of risks and returns by these three categories<sup>of actors.</sup> Typically, the banks have borne the larger portion of the risk for<sup>relatively</sup> small returns in the form of standard fees and interest margins, while insurers have rarely been involved in investment projects.

New trade Datterns: Trade patterns may continue to diversify in the 1990s,<sup>with</sup> a shift away from the OECD powers to Asia and possibly Eastern Europe<sup>and Latin</sup> America. This may encourage at least short-term secured and unsecured lending by banks from those regions. Part of the impetus might come from the 4 t of -. increased aid flows from Japan and other Asian capital surplus countries, providing their banks with more experience in Africa and<sup>confidence</sup> in their correspondents in certain countries. At minimum, if these<sup>aid flows</sup> increase as anticipated, there is likely to be more<sup>interest from suppliers to</sup> Africa, with consequent pressure on their banks to supplement aid<sup>money with some</sup> risk lending. Similarly, South African companies and banks may become<sup>more</sup> active in the greater southern African region and b^ycnd,<sup>as ceen in their</sup> competition for a lead role in the Lesotho Highlands Water Scheme and<sup>their</sup> participation in diplomatic initiatives.

EXRQrt orocessing zones: Export processing zone regimes are being established in a number of African countries. Typically the investors are granted full control over export proceeds (or the zones are located in convertible<sup>CFA</sup> countries, such as Togo and Senegal) and benefit from strong tax and<sup>tariff</sup> incentives. Many zones are to be managed by special<sup>purpose companies with</sup> mandates to develop infrastructure and to conduct vigorous promotion efforts. Although individual EPZ projects may be relatively small<sup>by commercial bank</sup> international lending standards, as well as labor-intensive, banks may be sufficiently attracted by the projected flow of funds to provide banking
Page 33 services, revolving trade facilities and potentially project loans to the larger projects, to groups of projects, or to the management companies.

As a final point, no matter what else is accomplished in the next few years, SubSaharan African countries will not achieve targeted rates of private investment or attract the desired level of commercial and even official financing unless there exists a satisfactory enabling environment in the broadest possible sense. This implies not only a policy framework that is conducive to investment, but broader dimensions including the protections of rights and properties and wider political participation and consensus. These are conditions, often overlooked in conventional approaches, that lead to political stability and engender confidence among private decision-makers.
-34-

STATISTICAL ANINEX
-35-

||(B|illions<br>of U.S.|Dollars)|||
|---|---|---|---|---|---|
||Sok|Disbursement|s<br>nsBa|||
|1970:|0.4|0.1|0.07|0.02|--|
|1980:|13.0|4.0|1.2|1.2|--|
|1983:|18.5|3.0|2.2|1.5|-|
|1984:|17.7|2.8|2.9|1.7|(0.07)|
|1985:|18.5|2.2|3.1|1.4|1.7|
|1986:|18.0|2.6|1.5|1.2|(0.9)|
|1987:|23.0|2.0|1.6|0.8|4.6|
|1988:|22.1|1.9|1.5|1.1|(1.3)|
|||....|---|....|--<br>-|
|1983-88<br>TOTAL||14.5|12.8|7.7|4.03|

Source: World Bank Debt Tables, 1989-1990.
-36

TABLE 2

|_AGfGEGATE_STATISTICS.-NONOCEc|SSWWAL<br>&LON|OING TO f|L18-SAIAR|AII APRtCA||||
|---|---|---|---|---|---|---|---|
|....................<br>...............<br>(U.S. DoltlareNiIlte|,...<br>ns,<br>Li-<br>T<br>|...........<br>erm neb.t<br> <br>|jIy)<br>|||||
||1970|<br>1980|<br>1983|<br>1986|<br>1967|<br>19U8|<br>1989|
|CommercialbankI<br>g-tarmltoae<br>t1)<br>||||||||
|^ Stocks<br>|632|l2,977|18,532|18,098|23.012|22,187|..|
|*<br>Change_from_provlom<br>year shotn<br>|n/a|12,565|,55|(434)|4,91|(325)|<br>...|
|*<br>Olsbursents|118|4,046|3,032|2,566|2.087|1,922|.|
|Of which private<br>borrowers<br> <br>|101|1,120|1,280|1,337|1,615|1,369|956|
|*<br>Prinscipal<br>repymints|68|1,223|2,224|2,511|1.608|1,49|*-|
|Of whichprivate<br>brroeers<br>|57|625|655|958|1,032|876|U8|
|-<br>Interest<br>pawwnts<br>|26|1,169|1,690|1,189|812|1,093||
|0f which private<br>borroers|16|264|270|380|310|428|199|
|Guaranteed banks andquaranteodAfWaaranteed<br>supptlers (2)<br>*<br>||||||||
|<br>Stocks<br>|903|5,858|8,550|12,599|15,541|16,275|..|
|-<br>change fran previous year shown<br>*<br>|na<br>|6,955<br>|2,692|4,069|2.962|3|...|
|<br>Osawrseants<br> <br>|162<br>|2,222<br>|2,065<br>|1,218<br>|1,08S<br>|<br>77<br>7<br>|..|
|-<br>Principt<br>repayments<br>*<br>|123<br>|716<br>|626<br>|666<br>|503|527|...|
|<br>Interest pavn:s|38|304|489|2"6|237|399<br>9||
|Direct offiefal expors credits and nonconcessifnaL toans (3)<br> <br>||||||||
|*<br>Stocks<br>|357|5,861<br>|9,297<br>|20,5<br>|26,6<br>|26,335<br>|..|
|eChae from provioua year_shom_<br>*<br>|ne<br>|5,506<br>|3,636<br>|11,267<br>|6,122<br>|(351)<br>||
|<br>Ofsburseaents<br> <br>|72<br>|911<br>|1,385<br>|532<br>|559<br>|716<br>||
|**-**<br>Prncipal<br>repayments<br>*<br>|29<br>|271<br>|256<br>|387<br>|296<br>|373<br>|..|
|<br>Interest payments|19|208|257|403|539|784||
||......|. ......|.. ......|....... ..|......|.. .....<br>|.. .....|
|7CVALSTOC%S**OF**LONG-TERMICOERCIAL**OEBT5**|**1,692**|26,696|36.379|51,261|65,219|64,797|**.***|
|TOTALMETCHAUCSSIN LCUG*TR*COORCIAL**OE3T-**|n/a4|23,00|11,683|14,82|13,978|("2)|...|
|OTHER<br>DATA:||||||||
|Cammercala banks,tongtorm,<br>puble<br>sector borrcwore<br> <br> <br> <br>|126<br>|10,008<br>|14,185|12,928|17,337<br>|16,0|*2|
|Casercall<br>banks, ltg-etrs,<br>private<br>sector berrmers|308|2,969|4,347|5,170|5,675|6,163|5,369|
|Percentage of private<br>sector<br>LY borrowfng provided by bakts<br> <br>|1002|100C|1O0|99S|1002|1O0:S|<br>...|
|Private<br>sector<br>LT borrowing/totat<br>LTcemerciat<br>bank loan<br>_(l)_<br>|71%|232|232|2|251X|<br>28|--|
|Private<br>sector<br>LT borerwing/totat<br>LT<br>commereial"<br>loa<br>()|232|162|162|172|15:|16:|.|
|Pr!vate sector prine.<br>repayiants/totat<br>cam. bank repayments<br> <br> <br>|"64|352|292|362|642|59%||
|Private sectorprfnc.<br>re"aynents/totat<br>crimeacltO<br>repayents<br> <br> t|262<br>|192<br>|21X<br>|272<br>|632<br>|3r7<br>||
|Privatesector (nterest paiaents/tetal<br>cam. bankmn._mes_|672|21|_18M_|322|382|392.||
|Private<br>sector<br>interest<br>payments/total<br>"camreral"<br>mnt.pyws|20X|t5X|122|202|20S|192||

SCUMs World lank Gebt Tables (1989-90) and omm catulafons from this souAce.

(1) Labeted 4omot total cercfat banks (2) Labeled "Othr private" (3) Labeled Iftatersat fius CmneesaCnal"
-37-

> WON 8AMM OM AMh EASTATIUTIlS T SFO A-M8A AFRICA

|0.........<br>**0**<br>....<br>**00.00**<br>....<br>0<br>(11..Dolla|...0U0....000.......000<br>rsNItIIIm)<br>|<br>|**0.00**<br> <br>|<br>|||
|---|---|---|---|---|---|---|
||197|<br>193|0<br>19w|<br>16|19|1988|
||**o0*a**|**0000**|**coca**|**000**|**0000**|**00**|
|TotalDebt StoOa||_56,201_|<br>79,3M|<br>112,19|9 137,88|6 139,26|
|Total LOV-1e0<br>Debt Stocks|5,678|43,67|62,172|<br>92,909|117,424|118,498|
|of which:|||||||
|**_o_**<br>Cmorleal<br>banks|432|12,977|18,532|18,098|23,012|22,187|
|*ICA<br>wrUwtaedSaIk<br>&Otedhtesd<br>Suppliofs|90M|<br>58,|8,550|12,59|15,54|116,275|
|*Dfrect ICA A lIlateratl<br>onsomessfotl|357|5,861|9,297|20,564|<br>26,686|26.335|
|o<br>OtherLogeou<br>Debt|3,96|<br>18,791|25,9|41,6"|52,18|5 53,701|
|Short-term Debt (AllLwner.eeptINF)|**000**|9,670|11,21|1 13,90|9 12,90|9 14,187|
|TotalIlon-Co(wefotl<br>**Looer.T**Debt_wd_Short-Tfo<br>Debt||26,6|36,379|51,261|653,29|6,797|
|Ceatudirq<br>Interest<br>arrears)|||||||
|Intert<br>Arrears<br>onLb-aTermOdbt(All<br>Ld)|o|188|867|2,381|4,22?|5,948|
|Total OiabursentO<br>(LT Debt,**not**fnltudingIMF)|1,177|10,436|10,415|<br>9,W|9.638|<br>8S.76|
|*<br>Ofwhchunguaraniteedouuiseralt<br>bwt<br>*<br>|118|4,0e<br>4|3,032|2,564|2,087|1,922|
|<br>ofW hih ECA& otkr<br>nmncrceanl<br>ad<br>tteed<br>siplpts|214|3,13|3,430|1,750|1,644|1,44|
|Total Princpalttepaymens(LT Debt, not tetudifngIW)|360|2,614|3,674|4,612|3,549|3,87|
|Ofwhichuwwrented<br>cuuurcal f<br>utbs|6|1,223|2,24|2,511|1,608|1,494|
|*<br>Of<br>haIh ICA<br>othernioncoanttl<br>andutmt<br>suppters|152|98t|8a0|1,051|799|900|
|Total<br>tterettPasmnts<br>(LT_aVW_StDebt,mot fcltuding<br>IM)P|184|2,174|2,761|2,853|2,745|3,556|
|*<br>Of whfchwaranteedcommrcal beak|24|1,-69|<br>1,490|<br>1.,19|812|1,93|
|OOf whfchECA A other<br>_rm-_<br>_egt_<br>_wd_unogteed<br>.lifers|19|208|237|403|59|734|
|Toalt oDe 8.r'fes (Prinuopul<br>S Interest,<br>Including<br>IMP)|S4|4,78|6,4|7,4|6.2M|7,426|
|**0**<br>Of which 'Uarnteed Comrcfal tbm<br> <br> <br> <br>|_91_|2,392|3,714|3,700|2,420|2,587|
|*<br>Of whichIcA A**otber**non-cocemnl<br>ai<br>ued<br>eWplpes|a2|1,500|1,626|1,720|1,576|2,082|
|otatl Net_Trafer_<br>(Olabursminmts<br>mfiswTotalDebtseNt..)|d|5,$8|3,930|2,068|3,34'|1,343|
|Of which ungwrenteed<br>cmmrc fat bue|_PA26_|_1,656_|(682)|(1,13|(333)|66|
|*****<br>**Of**which**CA**&othernonmesorsl<br>_wd_wu<br>supers|6|1,6|,S|2|6|(619|
|**ipOts**<br>ofGoods md**8ffv'GM**|9,527|41,130<br>|48,566|4349|46,597|52,049|
|_E1pes_ofGoods_ad_1ences|8,58<br>|57,179<br>|36,062|33,30|37,430<br>|38,651|
|Curret A1<br>o Blace.|(741)<br>|(S.427) (|10,110)|(5,43)|(6,551)|(8,118)|
|ntentft<br>nl<br>Reserves|2,02<br>|14,843|6,88|6,926|7.925|7,703|
|rossaf0at<br>Produ|41,100 1|99,607 1|80,593 1|49,0501|30,311 1|40,349|

> **ipOts** of Goods md **8ffv'GM** _E1pes_ of Goods _ad_ 1ences Curret A1 o Blace.

intentft nl Reserves Gross af0at Produ

**o0** 0000.......0... **oeoooo .......** 801=S World ank Debt Tables (1989*90) NO am calultatfmns frm this source
-38-

tAU 4

# _UMD_ UM Atfa UCO SUICIAI. LMA Wthh*-SM

|||ALL|UUSMIR<br>eL~|W.S. Bo<br>S<br>~<br>~|Urn'MItiU<br>PIBLI<br> <br>*S|m,<br>L'e-<br>C IRNaA.<br>k|T.<br>lb<br>S&SU|ymhuted<br>MAINTUI<br>nsPI^tRI|Only)<br> <br>|PRIVAT9|W3@IU|S<br>0sl|
|---|---|---|---|---|---|---|---|---|---|---|---|---|
||1985|<br>1986|<br>1987|<br>Igo|1915|<br>1916|<br>1987|<br>198|1915|<br>1986|<br>1987|<br>1988|
||....|....|....|....|.<br>....|....|.<br>....|....|.<br>....|....|. .<br>...|........<br>...*... o ..... v.....|
|S.S.AFRICA TOTAL|<br>18,472|18,101|23,015|22,188|13,066|13,086|17,361|_16,04_|5,406|5,017|5,654|6,4I"|
|Angola|||||...<br>~0|...<br>|...<br> <br>|...<br> <br>|...<br>|..<br>|..<br>|..<br>|
|shnfn|13O|<br>149|<br>172|157|130|<br>149|<br>172|<br>157|0|0|0|0|
|<br>sota.daA|<br>0|<br> <br>0|<br> <br>0|<br>0|<br>0|<br>0|0|0|0|0|0|0<br>|
|Bki<br>_fuo_|2|2|1|1|a|2|I|I|0|0|0|0|
|urna<br> <br>Suruwdl|<br>27|<br>26|<br> <br>23|<br>18|<br>7|<br>26|<br> <br>as|la|0|0|0|0|
|<br>Csroen|400|526|<br>Su|4f|27|21|la|69|381|505|520|426|
|CO" Verde|0|0|a|0|0|0|0|a|0|0|0|0|
|<br>C.A.f.||0|0|0|0|a|0|a|0|0|0|0|
|oCad|I|1|1|1|I|I|1|I|0|0|0|0|
|<br>Cwras|I|1|1|1|1|1|1|I|a|0|0|0|
|Como|1,111|1,360|1,709|1,5S5|1,111|1,360|1,709|1,58|0<br>|0<br>|0<br>|0|
|Cote d'lvof re|5,693|6,360|6.n9|6,882|3,126|3,40|3,475|3,18|,5S6<br>|92,9155<br>|3,264<br>|3,7100<br>|
|DJiboutI|6|5|3|1|6|5|3|I|0|0|0|0|
|<br>iquator'lt<br>Guinea|0|0|a|0|0|0|0|0|0|0|a|0|
|<br>Ethfopia|93|e1|141|188|9|81|141|1i|0<br>|0<br>|0|0<br>|
|Gabon|570|98|971|791|0|9g|97|791|0|0|a|0|
|<br>Gambia|<br>11|<br>11|<br>9|19|11|<br>11|9|19|0|0|0|0|
|_Ghmm_|40|113|131|9a|0|75|102|43|40|38|29|32|
|Gulnea|16|16|16|64|16|16|16|44|0|0|0|0|
|Guinea4ilssu|0|0|3|4|0|0|3|4|0|0<br>|0|0<br>|
|enya|633|609|621|_m_|1n2|150|125|102|511|459|496|627|
|<br>Lesotdo|0|0|0|0|0|0|0|0|0|0|0|0|
|Libarla|159|168|161|103|159|166|181|1s0|0|0|0|0|
|Nadag scar|225|217|227|170|225|217|227|In|0|0|0|0<br>O|
|<br>Nbaai|73|43|35|39|72|43|35|36|0|0|0|3|
|<br>K311|13|13|15|9|^.|13|15|9|0|0|0|0|
|marItanfI|12|10|9|10|12|10|9|10|0<br>|0<br>|0<br>|0<br>|
|Maiwtus|105|104|132|6|9O|82|85|29|15|22|47|ST|
|<br>Uoga*ique|<br>5oo|<br>S80|<br>622|<br>610|<br>340|<br>374|394|371|160|206|228|239|
|<br>Namibia|...|.||||...|...|..|0|0|0|0|
|**_ulgel_**|203|229|259|261|**_1n_**|146|5|5|38|81|_254_|256|
|<br>NfgerIa|5425|3,42|7,010|6,731|4,009|3,062|6,655|6.394|1,416|400|352|337|
|<br>Rwanda|,<br>~~|<br>0<br>0|<br>0|<br>0|<br>0|<br>0|<br>0|0|0|0|0|0|
|ao Tom|S|0|0|0|5|a|0|0|0|0|0|0|
|l|123|170|1S4|113|110|131|112|s0|13|39|42|33|
|song<br>Soydhellas|<br>13|<br>3|<br>28s|<br>as|<br>13|<br>as|<br>as||<br>0|<br>0|0|0|
|<br>Sira<br>Lee|<br>17|1?|17|17|17|17|17|17|0|0|0|0|
|<br> <br>Somele|0|0|0|0|0|0|0|0|0|0|0|0|
|<br>|1128|1511|2045|100|101|1267|1673|1426|24|24|373|37|
|_Suan_<br>saitIld|,<br>11|,<br>11|,<br>I|.<br>I|,<br>1|,<br>11|,<br>1|,<br>I|<br>0|<br>0|<br>0|0|
|<br>Tanrnls|<br>269|<br>188|<br>170|<br>121||166|1s|112|19|12|12|9|
|<br>|<br>||||||||||0|0|
|ToP|_7y_|0o|55|49|7|**0**|N|49|0|0|||
|uw|<br>37|3<br>St|||37|39|44|**4**|0|0|0||
|Zaire|627<br>|60<br>|574<br>|555<br>|17<br>|4i8<br>|574<br>|555<br>|0<br>|0<br>|0<br>|0<br>|
|zo.)ia|74|74|74|74|74|74|74|74|0|0|0|0|
|<br>21a_|435|3o|281|259|45|284|m|aoo|0|5|S9|S1|

_StMs Wwtd Bank_ DOW TablesC 119903
~~~~~-39T"LE 5 Se Y ATA CO#UAC, 1 Al WOt--@tYOM

|||||_(U.SB._Qo|tSellesag|m,Lui|gT-mu<br>_W_|<br>_gu..rums._|Only)|ES-S-|GUT||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
|;||ALL W<br>.~~~~~|SS@IL!S<br>~~~~~~....|<br>........|PWLIC<br>..............|S01t6 <br>...............|ts8_SUA_|_WMTORS_|<br>.|P1IVAT<br>................|U<br>in*MRS||
||1985|1986|17|198|195|1986|1987|1980|1|196|1987|1988|
||....|....|....|....|.<br>.* ....|.<br>....|....<br>|.<br>....|.<br>....|....|.<br>....|........<br>..... ..... ..... .....|
|5.3._AFRICA_TOTAL|<br>2.,N|2.61|2.0a,|1,93|828|1,Z57|625|523|1,610|1,33<br>|1, 63|1,400|
|Angtsa<br>|||||...|...||...|...|...|||
|Bonin|1|0|0|1|1|0|0|1|0|a|a|0|
|l@tsbu|0|0|0|0|0|0|a|0|a|0|0|0|
|BurkinaFeas|0|a|0|0|0|0|0|0|0|0|0|0|
|I&wufi|1|0|0|4|1|0|0|4|0|0|0|0|
|Comr.a|113|20?|216|168|1|0|1|52|112|207|213|116|
|cao Verde|a|0|0|0|0|0|0|0|0|0|0|0|
|C.A.l.|0|a|0|0|0|0|0|0|0|0|0|0|
|Chad|O|O|0|o|a|o|0|o|a|o|o|u|
|Cmros|0|0|a|0|0|0|0|0|0|0|0|0|
|Congo|311|653|366|146|311|453|_366_|14|0|0|0|0|
|Cote dlwiore|1,114|96|918|914|is?|86|18||97|900|900|850|
|Djibouti|1|0|0|0|1|0|0|0|0|0|0|0|
|uwtorialt<br>uInee|0|0|0|0|0|0|0|0|0|0|0|0|
|lithIepia|0|0|?1|6S|0|0|71|65|0|0|0|0|
|_05m1_|231|389|92|9|251|39|92|94|0|0|0|0|
|Gambia<br>|0|0|0|0|a|0|0|0|0|0|0|0|
|Omhn|8|79|8|9|a|79|8|9|0|0|0|0|
|Gufiwa|0|0|0|5|0|0|0|5|0|0|0|0|
|Gufnha*lIa8au|0|0|0|0|0|0|0|0|0|0|0|0|
|Oren"|175|116|90|196|6|66|0|0|169|o|90|196|
|Lesotho|0|0|0|0|0|0|0|0|0|0|0|0|
|Liberia|0|0|0|0|a|0|0|0|0|0|0|0|
|edaaa|1|7|2||1|7|2|4|0|0|0|0|
|Mtei|00||||0|0|0|9|0|0|0|0|
|mati|0|0|0|0|0|0|0|0|0|0|0|0|
|rautania|0|0|1|2|0|0|I|2|0|0|0|0|
|Na{f{u.g|8|13|36|21|6|6|15|5|6|7|21|16|
|- 01qLa|19|59|33|16|0|13|0|0|19|46|33|14|
|amibla|...-||||-<br>...|...|...|...|...||...|...|
|Ilew|29|66|0o|28|0|0|0|0|29|66|50|20|
|_mligede_|193<br>|130<br>|116|136|103|80|39|53|90|SO|5<br>_n_|3|
|ewwvm|~~0|<br>0|0|0|0|0|0|0|0|0|0|0|
|_SaoTcI_|a|0|0|0|0|0|0|0|0|0|0|0|
|sefgl|7|*0|9|8|I|35|3|0|6|5|6|8|
|seychelles|4|11|3|5|4|11|3|5|0|0|0|0|
|Slerra eLoo|0|0|0|0|0|0|0|0|0|0|0|0|
|$m<br>to|<br>0|0|<br>0|<br>0|<br>0|<br>0|<br>0|<br>a|<br>0|<br>0|<br>0|0|
|SuSn|0|0|0|0|0|0|0|0|0|0|0|0|
|SMuIMN|4|1|0|0|4|1|0|0|0|0|0|0|
|Tanaln<br>|12<br>|6<br>|3|0|a|1|0|0|4|3|3|0|
|Tags|0|0|0|0|a|0||0|0|0|0|0|
|<br>_utla_|6|0|u .|4|6|0|5|_4_|0|0|0|0|
|Zaire|0|a||1|0|_2_||1|0|0|0|0|
|Rebf1|0|0|0|0|0|0|0|0|a|a|0|0|
|Rifbdm|**...**|**...**|72|89|**...**|**...**|0|0|0|0|72|89|

SU,C rld S.k OM --Tabe. (196O.90)
_~~~~~-40-_

|||||~W<br>U<br>0<br>_(U.S._|<br>A~<br>16 09<br>hOiateaB|**SL4**<br>sem,_L_|_taB a_<br>**IEZ RRI**<br>_M-_<br>_o_|<br>**U6-.SSElg**<br> wnaruo|**P^*UFWA**<br>_GIV)_|_~_<br>**ItNS**<br>U|_~~~~-4_<br>-SM*MIU|_0-_<br>D|
|---|---|---|---|---|---|---|---|---|---|---|---|---|
|||AlL|Mams||PWLI|C IMS A<br>_a_|NlQ<br>_asaM_|_PASsu_||pMIVAI|l 090W||
||190|e<br>196|F 19|6l9||16|1967|10|l1|_196_|190|1908|
|S.S.AFRICATOTAL|<br>3,100|2,414|1.607|1,492|2,124|1.497|5F6|623|976|<br>97|1,031|869|
|Afzeot4D||||..|.|||||.|.|.|
|Ben in<br>|1<br>|1<br>||a<br>|I<br>|1<br> <br>|1<br>||0<br>|a<br>0<br> <br>|0<br> <br>|0<br>|
|*otawsm|0|0a||0|0|<br>0a|||0|<br>0|<br>0|0|
|SurkineFaso|0|0|0|0|a|0|0|0|0|a|0|0|
|ggnayi|4|6|a|7|6|6|8|7|0|0|<br>0|a|
|caroon|327|252|201|US|5|<br>6|4|0|322|26|197|_22B_|
|CM* V*"ft|0|0|0|0|0|<br>0|0|0|0|0|<br>0|0|
|C.A.S.|O|O|O|O|0|0|o||0|a||aa|
|Chad|0|0|0|0|0|0|O|0|0|<br>0|<br>0|0|
|_Comro8_|0|0|a|0|S|S|a|6|0|0|<br>a|S|
|Conqo|14|184|76|109|14|16|76|109|0|0|0|a|
|cotedh@fr@|474|637|64|4"|76|123|3|_51_|39|_Si._|591|414|
|Ojibouti|1|2|a|I|1|a|2|1|_0_|0|_0_|a|
|ql,Atorlatl<br>_Guine_<br>|0|0|0|0|0|a|_o_|0|_O_|_O_|<br>0|a|
|Ithiopla|13|12|12|17|I3|<br>12|12|1F|a|0|<br>0|0|
|<br>Gabo.|121|<br>66|5|10|121|<br>66|5|10|0|a|0|0|
|Cbi|0|0|2|0|0|0<br>|2<br>|0|0|0|0|S|
|han|0|6|23|45|0|0|15|38|0|6|8|7|
|Guirna|O|0|0|13|0|0|0|13|0|0|0|0|
|Cufnea-Uiaau|0|a|0|0|0|0|0|a|O|0|a|a|
|_Kenya_|165|143|90|82|s0|61|38|17|86|102|<br>52|65|
|LesothO|O|0|O|0|0|0|0|0|0|a|0|0|
|Liberia|0|0|0|0|0|0|0|0|0|0|0|0|
|Nadegasar|21|22|14|15|21|_22_|14|_15_|0|0|0|0|
|_NtaIa_<br>|30<br>|29||_6_<br>|30<br>|29<br>|a<br>|6<br>|0<br>|0<br>|a<br>|0<br>|
|Nai|1I||1|0|1|2|1|0|0|0|0|0|
|Naurftwa|2||||2<br>|4|2|0|0|0|0|0|
|PAitl m|26|17|17|4|_U_|14|14|60|4|3|3|4|
|wozfque|3|3|6|6|0|0|2|3|3|3|4|3|
|Naibia||-<br>-<br>...|...|...|||||...|...|...|.......|
|Niger|31|29|30||o6<br>0|0||o|31|29|_s3_|26|
|igeria|1,675|9|2|**250**|1.553|n|142|160|125|so|123|90|
|Avanda|0|0||0|0<br>S|0|0|0|0|0|a|0|
|Sao<br>e|0|0|0|0||0|a|0|0|0|0|0|
|Seegl<br>|9<br>|17?|3<br>|37<br>|S|is<br>|26<br>|29<br>|4|2|a|8|
|Se<br>ltl2es|2|3|2|S|a|3|2|S|0|0|0|0|
|Sl1|I||||1||0|<br>|0<br>0|0||0|
|erraLw<br>Somife|<br>0a||||<br>0|a<br>0|<br>0|a<br> <br>0|<br> <br>S|<br>0a|||
|S4dmn|0|5||0|0|0|0|0|S|a|0|0|
|Swaztla1|3|3||0|S|3|I|0||a<br>|0<br>O<br>||
|tu.mloa|||3a4||2|0||2|3|2|3|2|
|To9|||6|0|9|20|6|0|a|0|0|o|
|UPRg||2<br>|I0|0<br>|5<br>|2<br>|a|0<br>|0<br>|o<br>|O|O<br>|
|Zaire<br>|1|1|6|1<br>|21<br>|19<br>|6<br>|1<br>|1<br>|0<br>|a<br>|0<br>|
|Zaba<br>**2Ilbe**|**.***|**...**|1in|0<br>101|0<br>**...**|a<br>...|0<br>1|0<br>79|0<br>o|a<br>0|a<br>12|0<br>_U_|

0AUa _Wid __ S _?ds 6_
136 1 0W UP 0 M

|£<br>|£|0|0|I|Os|***o**|**.**<br>s||of|**a.**|**ooa**|- 53|
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|<br>*<br>|<br>0|<br>1<br>a|0|0|0||0|O|O|1|B|O|
|_2_|a|0|0|01||||0|B|1|Bf||
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|O|O|a|a|a|i|6|31|6|3|<br>6|31|S4SlflS|
|O|0|O|O|0|0|0|||0|0||t<br>1|
|a|a|a|a|||a<br>**e**|3||0|B||SIU<br>lII8|
|0|O|O|O|nt|lo|it|02|n|n|St|oa|-<br>s"|
|a|a|0|0|a|a|S|B|0|0|0|B|Isjij|
|O|O|0|0|0|0|0|0|0|3|9|01|e1-16|
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|0|a|0|0|0|0|0|_9_||0|0|0|Mul"Vifn|
|_3_|0|0|0|S|e|0|0||<br>ao||<br>0|wm<br>|<br>v|
|a|a|o|a||*|a||a|a|o|0|<br>vi|
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|3|3|3|O|St|_A_<br>5|1|kg<br>0|It<br>6d6lr||8|aa||
|O|a|0|0||B<br>0||a||B|a<br>o|0|So<br>imas|
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-1 S-
-42-

TABLE 8

|||||mm<br>Ba<br>tu.S. 0o|m DATA 88<br>IerY NIGIII|A!A.<br>I,<br>lctre|WA!t L<br>-Tatu|89U-.UI7<br>aamectd|I<br>F<br>Only)||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
|||ALL|ED||_wLIC_|<br>_WfA_|_DS_8_aT_<br>|AS1m S|P|QIVAT<br>3|O<br>ROAU||
||1988|1986|1i97|19ssa|191|193|1987|198|1915|1986|198|1985|
||....|....|....|....|.<br>....|....<br>.|....|....<br>.|....|....<br>.|....|..........<br>....-.................<br>..|
|S.S. AFRICA TOTAL|<br>(863|16?|681|631|(1.29)|(20)|69|(100)|436|_377_|632|531|
|ArQatO|v|-|b|4|---|C.;)|<br>-..|.-.|.<br>..|.<br>..|.<br>..|..|
|sernin|8|(1)|1)|I|0|(1)|(1|1|0|0|0|0|
|'||<br>O<br>0|<br>0|0|0|0||0|||||
|otsven||o<br>|||||||||||
|,gilVf|<(3)|(6)|(8)|(3)|(3)|(6)|(|3)0||<br>|0<br>|a<br>|
|<br>r'|C214|<br>(45)|1|(60)|(6|(6)|(3)|5|(210)|<br>(39)|16|(112)|
|cauo<br>capsv_va,4_||<br> <br>a|<br>a|<br>a|<br>a|<br>a<br>0<br>O0|||<br>a|<br> <br>a|0|a|
|<br>C.A.O.|00|||0|0|||a|S|0|S|S|
|d||0~|<br>a||||0||0||a||
|owe||a<br>a0<br>a|<br> <br>0<br>a|a|a|a||a|<br>o|<br>a|0|o|
|co|167|260|290|37|167|269|290|37|0<br>|0|a|a<br>|
|Ct dii|6"0|369|274|49|61|(37)|(35)|13|579|386|30|436|
|oo var<br>Ojibmat|<br>0|<br>2)|<br>(2)|<br>(1)|<br>0|<br>(2)|<br>(2)|<br>(1)|<br>a|a|0|0|
|<br>equatorialufneo|<br>0|<br>0|<br>0 a||a|<br>0|<br>a|<br>0|0|a|0||
|<br>Ethiopia|(13)|(12)|59|a8|(13)|(12)|59|48|0|0|0|0|
|<br>cabG|<br>110|<br>2||<br>a?|<br>110|<br>323|87|a'|n|o|a|0|
|<br>Ina|||(2@<br>C)||0<br>a|a|(2)|a|a|O||O|
|0||73|<br>(1S)|(36)|a|79|(7)|(29)|0|(6)|(8)|(7)|
|:nam<br>GuIres|a<br>0|<br>a|<br>a|<br>(8)|<br>a|<br>a|<br>0|<br>(8)|<br>0|<br>0|<br>0|0|
|<br>GuinOasYi3OU|<br>a|<br>0|<br>a|<br>0|0|a|0|<br>a|0|a|0|a|
||9|(29)|0|114|(74)|23|(38)|(17)|83|(52)|38|131|
|Kwt<br>Let tho|<br>0|<br>0|<br>0|<br>0|<br>a|<br>0|<br>0|<br>a|<br>0|<br>0|<br>0|0|
|<br>Librfo|<br>_a_|<br>0|<br>0|<br>0|<br>0|<br>0|<br>0|0|a|0|0|0|
|<br>tadteg<br>e|(80)|(15)|(12)|(11)|(20)|(15)|(12)|(11)|0|0|0|0|
|Mealaw|(30)|(29)|(a)|3|(30)|(29)|(8)|3|0|n|0|0|
|<br>Half|<br>(1)|<br>(2)|<br>(1)|0|<br>(1)|<br>(2)|<br>(1)|0|0|0|0|0|
|wuritanIs|<br>(2)|<br>(6|<br>(1)|a|(2)|(4)|Ci)<br>|a<br>|0<br>|0<br>|0<br>|0<br>|
|naulrfiu|(18)|(6)|19|(43)|1e8)|(C)|1|(55)|0|4|18|12|
|<br>nozes0 isua|<br>16|<br>54|<br>2?|<br>8|<br>0|<br>13|(2)|<br>C3)|16|63|29|11|
|<br> <br>S||||||-||||||...|
|U&MMIG<br>|.-|...<br>--|..|...|...||...|...|...|...<br>|...<br>||
|ole|(2)|37|0|a|0|0|0|a|CZ)|<br>37|20|2|
|gg<br>NIgeria|<br>(1*68)|<br>(803)|g<br>(151)|<br>(11)|<br>(1,6450)|<br>(80)|<br>(103)|<br>(107)|<br>(3S)|<br> <br>0|(48)|(7)|
|<br>**Awa1ts**|<br>a|<br>a|<br>a|<br>a|<br>0|<br>0|<br>0|<br>a|a|a|0|0|
|O tl|0|0|a|0|0|0|0|0|a|0|0|a|
|sa<br>s$a al|<br>(2)|<br>23|<br>(25)|<br>(29)|<br>(4)|<br>20|<br>C23)|(29)|2|3|(2)|a|
|<br>seycheltes|<br>2|<br>8|<br>I|<br>0|<br>2|a|<br>1|<br>0|a|0|0|a|
|<br>iL|1|0|0|0|(1)|0|a|0|0|a|0|a|
|Serrae <br>Sinlla|()<br>a|<br>0|<br>0|<br>0|<br>0|<br>a|<br>0|<br>0|<br>0|<br>0|0|0|
|<br>SU"|<br>~~~|<br>0<br>0|<br>0|<br>0|<br>a|<br>0|<br>0|a|0|a|0|0|
|siaftow|Cl)|(2)|**(111)**|<br>0|()|(2)|(11)||0<br>|0<br>|0|0|
|Tanawfa|7|a|0|(4)|6|1|a|C2)|1|1||Z<br>(2)|
|<br>fos|<br>(9)|<br>(20)|<br>(6)|<br>0|(9)|(20)|(6)||0||0|0|
|<br>Upena|<br>I|<br>(2)|<br>5|4|I|C2)|5|6|0|0|a|a|
|<br>_2a1ra_|(21)|(17|Cs|a|(21)|(17)<br>|_C5)_|0|0<br>|0<br>|_0_<br> <br>|_O_|
|ZEi|a|0|0|0|a|0|0|0|0|0|0<br>°||
|<br>sUd<br>0|...|..<br>(1219|M<br>|_12T_|...|...||_09)_|_*_||||

_IStU Iwd gO*ebt_ SZdde0 lI3V530
# TAkL 9

||||v|ow<br>Wm<br>(U.S._Oe_|OANA<br>U<br>_IwS_<br>MlIeu,|<br>UEICIh&<br> <br>LGw|OM<br>(j<br>Tem<br>W|.-<br>11<br>1u<br> <br>_rs"|I-MafUI<br>ead<br>oSAI)||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
|||ALL Sf|Re1U||V(SUC|ias|a QC|AIMMNS|P|hZVA1I|ShIRVAU||
|||...........|||<br>...............||.<br>o.¢hXs@"o.¢|*oe........|e<br>*|*.............|||
||198S|1906|10 7|lm|190|I9o|¶961|190|15|1906|lv|Igo|
||...|....|....|....<br>0|....|...<br>.|.*0|....|....|....|....|....|
|i.i.<br>AFRWA TOTAL|(2,270)<br>|(10014)|(331)|_C(2)_|(2,376)|(1,01)|(45T)|(77)|106|1|121|108|
|AlWo(U|...|...|...|...|...|...|...|...|...|...|...|...|
|s.in|0|(1)|(1)|1|0|(I)|(1)|I|0|a|0|0|
|*ogswfO|0|0|a|0|0|0|0|0|0|0|0|0|
|_gukrklFaso_|0|0|0|0|0|0|0|0|0|0|0|0|
|gwai<br>|(5)<br>|(8)<br>|(11)<br>|(5)<br>|(5)<br>|(a)<br>|(11)<br>|(5)|a<br>|0<br>|0<br>|0|
|Crtaou|(56)|(113)|(2)|(131)|(6)|(10)|(4)|n|(SC)|(10)|(2)|C20)|
|CapeVerde|a|0|0a|0|0|0|0|0|0|0|0|a|
|C.A.R.|0|0|S|0|a|0|0|a|0|0|0|0|
|Chad|0|0|a|0|0|0|a||0|a|a|a|
|Cfoav<br>|a<br>|0<br>|0a<br>|0|0|0|0|a|0|0|0|a|
|Co|104|2l|2m|7|104|211|211|7|0|0|0|0|
|Coto dlvlre.|156|(203)|M95)|<br>190|(229)|(355)|(229)|(18)|385|152|134|**28**|
|Ojibsai<br> <br> <br>|(1)|(3)<br>|(3)<br>|(2)|(1)|(3)<br> <br>|(3)<br>|(2)|a<br>|0<br>|0<br>|0<br>|
|Eq<br>flt<br>lIf lSO a|a|0|00|||0<br>n0o|a<br>||0|0|0|0|
|-Ethlopei|(24)<br>|(20)<br>|52<br>|33|(26)<br>|(20)<br>|52|33|0|0|0|0|
|Gabon|72|2|70|73|72|2|70|73|a|0|0|a|
|01ie<br>|0|0|(3)|0|0|0|(3)|0|0|0|0|0|
|Ghwu|0|09|(24)|(45)|a|77|(14)|(36)|0|(6)|(10)|(9)|
|_Guinea_|0|0|0<br>|<br>(13)<br>|0|0|<br>0|<br>(13|0|<br>0|<br>0|0|
|Gulnoea-issa<br>"|0<br>|0<br>|0<br>|0<br>|a<br>|0<br>|0<br>|0<br>|.0<br>*|a<br>|0<br>|0<br>|
|ga|(4W)|(66)|(45)|66|(89)|IS|(50)|(20)|S|(63)|5|b6|
|LeSoth|0|0|||0<br>0<br>0|0|00<br>0|||0||0|
|Liberia||0|0||a<br>0|o|0|<br>0|0<br>0|0|0||
|_adgaa_|()|(30)|(26)|(25|(40)|(30)|(26)|(25)|0|0|**a**|**0**|
|Malawi<br>|(40)<br>|(5)<br>|(11)<br>|0<br>|(40)<br>|(35)<br>|(11)<br>|0<br> <br>|0<br>|0<br>|0<br>|0<br>|
|Hall|(2)|(2)|(1)|0|(2)|(2)|CO1|<br>0|0|0|0|0|
|MauItanIa<br>|()<br>|(S)<br>|(1)<br>|a<br>|(4)<br>|(S)<br>|(1)<br>|2<br>|0<br>|0<br>|0<br>|0<br>|
|nItus|(31)|(13)|11|(52)|(31)|(17)|(7)|(4)|0|6|16|12|
|Mombique|12|55|a|4|(4)|la|(4)|(7)|16|43|29|11|
|_masibbl_<br>|o-||-<br>|.<br>..|.**..**<br>.<br>.|||...|...<br>...<br>.<br>|..|||
|IlWr|(14)|24|6|19)|0|0|0|0|(14)|24|6|(19)|
|_muscfe_<br>|(2,010) (1<br>|,087)<br>|(339)<br>|(41)<br>|(1,933)<br>(1<br>|,057)<br>|(262)<br>|CS")|(7<br>|(30)<br>|77<br>|(33)<br>|
|1awad|0|0|0|a0|0|0|0|a|0|0|0|0|
|S" TIaf|0|0|0|a0|0|0|a|0|0|a|0|0|
|Snwpl|(16)|1S|(30)|(41)|(17)|13|(33)|(39)|1|2|**(5)**|**(3)**|
|SewIwlta|1|7|(1)|(a)|I|7|(1)|(2)|0|0|0|a|
|Slam<br>ste|(2)|0|0|0|(2)|0<br>o|o||*<br>o|0||o|
|smlaf<br>|0<br>|0|0<br>|0<br>|0<br>|0<br>|0<br>|0<br>|0<br>|0<br>|0<br>|0<br>|
|_San_|(41)|a|0|0|(41)|0|0|0|0|0|0|0|
|Shllard|(2)|(3)|(12)|0|(2)|(3)|(12)|0|0|0|a|0|
|<br>_TanzamIs_|<br>6|<br>1|<br>(1)|<br>(6)|<br>6|<br>1|<br>0|<br>**(l)**|<br>**0**|<br>**0**|<br>**(1)**|**(4)**|
|**T**||||||||<br>|||<br>||
|**ow**|**(16)**|**(26)**|(10)|(6)|(164)|(6)|(10)|(4)|0|0|0|0|
|Uprad<br>|(il<br>|(R)<br>|5<br>||(1)<br>|(3)<br>|I<br>|4<br>|S<br>|S<br>|0<br>|0<br>|
|Zaire|(s0)|(49)|(3)|**(6)**|**(80)**|**(9)**|**()**|**(l)**|0|0|0|0|
|2o1<br>|0|0|0<br>|0<br>|0|0|<br>0<br>|0|S|0||O<br>|
|ll1bo|***..**|**'C**|()|3)|**...**|**.*.**|_(14_|)|**_*b-_**<br>**..**|**...**|**5**|**42**|
|....--..........||9|||||||||||
|=$ **Ward NAO_**|**ae**|ttg<br>Cl"|)||||||||||
-44-

TAKLE 10 **--** WOW RAWK DATA C 0411-111P MT3. ALL UNDRS

|||(U|.S. gotte|Ulttlo)||||
|---|---|---|---|---|---|---|---|
||1980|19|194|<br>195|1966|<br>19"?|<br>i|
|.18.AFRICA<br>TOTAL|9.,4|<br>11,212|12,590|<br>1,514|<br>12,94|3 127m|916,0|
|Awtd|...|...|...|...|...|...|...|
|mcnIn|68|83|86|142|166|<br>2|167|
|otavan|4|6<br>R||a|3|3|5|
|gurkfsFao|35|<br>27|26|43|<br>49|<br>67|<br>59|
|surwrd|12|10|12|31|23|37|32|
|Creowan<br>|270<br>|32|3W|529|TM|722|763|
|Caw Verde|0|0|0|0|0|0|0|
|C.A.A.|as|1S|14|19|29|31|39|
|_Chd_|11|5|3|20|31|38|30|
|_Cro_<br>|1|2|3|4|8|15|11|
|Como|24|174|201|**64**|**7or**|937|650|
|Cote d'tvofre|1.059|8|<br>639|<br>732|<br>800|<br>1.361|1.028|
|Ojibuti|6|12|24|46||29|26|
|EquatorialGuinea|r|12|23|7|8|11|10|
|Ethiopia|ST|63|67|77|83|96|133|
|<br>Gabcn|228|233|251|262|48|406|402|
|Gla|23|25|s5|36|29|24|2a|
|GhaaO|105|90|23|183|180|106|67|
|_Guinea_|80|105|102|142|97|138|190|
|Guinea-lSiss|5|37|so|41|23|30|32|
|Kcar|"I|40|33|475|376|608|56|
|Laeso|a|4_6_||4|4|4|6|
|Liberfa|81|ST|70|106|141|184|22|
|Madagsce<br>|264<br>|182<br>|150<br>|120<br>|156<br>|127<br>|95<br>|
|Natmai|116|73|42|8S|80|98|51|
|Nat1<br>|24|21|70|68|13|94|65|
|_ouritania_|65|107|127|108|117|120|1i3|
|Maulgiu.|647|49|39|51|38|34|49|
||...|**.e.**.|**00**|19?|205|207|**2r2**|
|laisbla|.||. **.oo**|...|...|...|...|
|uifer|159|67|3||122|75|105|
|Nfigera|3,553|5,056|S.744|4,974|3,718|<br>1,662|<br>1,752|
|owao|X26|16|37|27|27|39|4|
|S"Tm|0|0|1|0|2|6|8|
|S.atg|219|192|m|225|273|321|280|
|_Sergch.lles_|59|6|19|24|40|36|36|
|<br>SlerraLene|53|as|46|87|64|_11S_|108|
|**s_**ati|51|60|92|60|8|92|116|
||585|848|,a472|1.501|1,.30|<br>2,100|2.530|
|Suaaitow|15|37|7|15|17|17|8|
|TaIwnl|307|531|663|m|368|492|60|
|Tous|113|65|43|74|9|102||
|Usuia|6|_27_|44||72|66|_2n5_|
|zalure|296|210|266|405|414|560|675|
|2Ia|5u|514|4b|676|1,018|<br>1.089|1.36|
|_Zlalu_e_|90|_481_|34|s20|290|266|308|
|S<br>Wed<br>.......<br>.|69|||||||
|SC MS<br>R"td SoN Ddit|Tabts<br>C9-0|||||||
|**919919904**|<br>i90 E 909|l<br>919691|US<br>Is||0||||Stu|C|**91**|<br>**13**<br>|**9E**|**0**<br>|**,**<br>|ea<br>|**13**<br>|it<br>|9<br> <br>|2<br>||29||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|Mg gig|91909%|9029UN<br>*1|66|1.|69|I|0||2|61|St|61|fit|9|9|1*|*2|98|<br>0|Ott|go0t|eta||
|'.9 --- I|all<br>*---W|IV?2<br>...<br>6s|&|0|et1|6|0||£|Ii|0|1|92|||11<br>S|et|...|6|**29**|..|**92**|DM~|
|<br>'.9<br>WI<br>11|WI<br>9692991|9990211|69|$9|IE|91|I|f|61|90|9|it|91|O|f|99|Ss|61|E<br>*9|68|at|gig|1p10|
|'t.0..9.0..<br>9.0..||..<br>|..|..|1|..|.|.||.|.|...|I|1|9|**16**|**211**|**III**|**621**|**691**|**sa1**|<br>**922**|issm|
|9|0<br>9~|~<br>~~0<br>.....<br>z|0|0|0|0|0||C0||0|0|..||..|....||..|<br>fi|..|.|VI|90|
||.<br>9|..<br>_9..0_|0|aI|0|0|1|3||0|0|0|..||||..||2.2..<br>2.<br>z|..||2..<br>22|099090|
|962<br>UN21|901<br>u<br>CZ999|t0o us<br>2|1|A|1<br>El|<br>e||91|<br>**1**|**0**|a|I<br>I||1||9)|**9)**|it|22|at|2a|92|9=0=1|
|UV W<br>*92991|39sk%S<br>9011211lot199||2<br>1|4|el|91|I|s|11|ti|61|<br>61|60|9|6|09|Os|I1|<br>11f|691|CIa|I<br>1311||
|V2Nh<br>asolu;I|<br>aaul;a|99199<br>962<br>WI|s|to|In|*91||91|3<br>0 91||9<br>S|21oi<br> <br>**d0t**|**91**|*****|**62**|**WIC**|**90**|42|t<br>1391|EMt|929|=v||
|91901<br>9*i|1319*91|to999|21|a3|1|91||A1|<br>1|0|a|0|01|o||VI<br>**U**|13|I's|<br>**91**<br>|**159**|**91**|13|C1|
||†i<br>.<br>.u|..<br>9..0|0|0|191|0||0|To|13|0|<br>et31..||||||...|<br>19*||...||mz|
|909919911|K<br>_W_<br>21|Ur.99<br>91<br>99|6*|go0t|<br>et1|11||**_Is_**|<br>91|13|1|1|99|1|1|Os|121|la|_9*_|a*|191|<br>mg<br>98om||
|Iva Ws921%|<br>13Ws901921se|21to991|91|2|9|a||E|9|I|0|<br>1|I||E|I|$1||E|Is|13|13<br>|Cmioizo99<br>|
|961--- 99|911<br>---9|9<br>=<br>...<br>0|Ss|0|9|91||13|<br>0|0|0|0|61s|.|..||**_ft_**||I|is|..|1S2v|=<br>|
|1E<br>12<br>we<br>92|911982 92|909919 991|916|$10|'1<br>$1S9|920' I||89|01<br>lee|Ott's|<br>Z|*91<br>got,&|**_fl0'_**|<br>t|og91|gas|01$,1|<br>**;**|**W02**gee'2|_Aele_|**m1**|**%9**60E9|0lgc3<br>**0DM**|
|WO Su*19|0199|9Sn<br>tt219199|e36.|**EIo**|**'1l01**|**el**||61|3<br>**99ge**||G|21<br>t0131*|10|9<br>|68|gm3|131$|lot|s<br>09||an16<br>181|<br>1<br>a|<br>c|
|9*9Q 099|909090|911902922|2|9|1|||0|13<br>1||I|**1**||1|||I||C|||||
|9901=t<br>WI|90991|98to399|9|9|I|0||3|<br>1<br>0|a|3|0|9|1|||0||I~29||3|1||
|WI1 900UV0S|98390|9E<br>913Su|1|91|<br>0%|E|||0|$|&|<br>1|9s|<br>|9|131|6|El|<br>1|12<br>|91|iiB||
|913999.-.|99<br>SD<br>.--|909<br>l...|0|9|0|0||0|a|0|a|<br>0|I||.|.|0|1|0|I|a|..<br>*b|G=|
|to9UK<br>*2|11UR9 WI|909<br>1291|13|91|1<br>WI|0||du|3<br>IEI|0|1|91<br>111|90|<br>6|91|99|99|9|m9<br>20|69119|gas|'s9116|MU9<br>|
|999999|9011<br>m<br>3.390|9E199|It|02|<br>_EI_|I||1|<br>I|I|2|<br>1|9||91|As|II|it|**22**|At|a11||A|
|911919901|zn<br>e|u<br>ED9090Utz|9913|a|et|Zit||It|<br>9|9|I|<br>_9i_|It||el|as|at|a|a2|92|as|a61w||
|929gig<br>Mt,|91191MI|99296|02|E2|<br>As|Al||9|1<br>it|11|9|<br>E|II||12|02|at|**2**|**2**<br>**CE**|**09**|a9|e9|09 3l9iPo C013|
|<br>9194 96*919|O<br>Mt90|90 at19<br>Et|to3|69|1<br>113|1||9|2<br>02|et|G|1<br>E|is||991|To|19|go|t<br>Mt1|its||cm13|3<br>uIp1|
|..<br>gW|.<br>m E|*...WI6|13|11|3$ 922|0||9|22<br>**202**|**0**|**0**|**11113**|||Gv|0691|399 C...9|619|u106126|||||
|913 919 9WS|<br>M09 so9132|91ml~ as1|6891|3il|*'1_914¶*_|L9E|13|2|696 016s|610|1It|Q9<br>AWle|ato|lls|2.!1|1i 19131|911|311 1|9411u*911|W120|sno<br>69|<br>99091mm|<br>1032911*<br>-a's|
|9mMt36 gm6|<br>mm196Mt6|<br>130 1951ml6|mot|%*9|<br>921|no6|t|*0|61<br>MI0|mo|61*|0<br>Mt6|19|031|*MI6|<br>Mt96|139|6|Mt369161|Mt6|M|<br>916||
|||||||g|sI|P|o~a1'-IlII|_01110_|_13a_0|118||||||||||||

121619 Cl UBISII 10913 1VI21339..IC 1139028 9113... 11 011391
Table 12 DIVERGENCES IN DATA ON LONG-TERM COMMERCIAL BANK DEST (U.S. MMions - Not Guaranteed by OECD Agent9ds8

||O<br>|ECD<br>|||915||IB|RD (1)||tB|RD (2)||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
|gSub-Sawa Atrt<br>Total|1986<br>16587<br>|1987<br> <br>|1988<br>|1986<br> <br>|1987<br>|188S<br>|1986|1987|1988|1986|1987|188s|
|<br> <br>igwla|.<br>1<br>5.290<br>|4,636<br> <br>5,827|6.147<br>8.888|13.472<br> <br>4757|13,541<br>6324|11,014<br>5165|13,0841<br>|7.351 <br>|18,044<br>|18,101<br>|23,015<br>|22,188|
|Cole 8Ivare|<br>5.735<br>|<br>2,195|1.984|,<br>2366|.<br>2095|.<br>1550|3.062<br>|6,658<br>|6.394<br>|3,482<br>|7,010|8,731|
|Sudan|<br>577<br>|<br>1,115|<br>t054|,<br>378|.<br>309|,<br>192|3,405<br>|3,475<br>|3.182<br>|6.380<br>|8.739|6,882|
|Co|<br>558|<br>844|<br>992|<br>460|<br>414|<br>518|1.267<br>|1,673<br>|1,426<br>|1.511<br>|2,045<br>|1.00I|
|KenYa|447|689|659|<br>551|<br>789|<br>124|1.360<br>|1.709<br>|1.5s5<br>|1,360|1.709|1§535|
|CGnmGroon|166|<br>516|<br>633|<br>682|<br>856|.5<br>856|10<br>|125<br>|102<br>|09<br>|621|729|
|ZatlrS|426|557|<br>607|<br>508|<br>589|<br>577|21<br>|18<br>|69<br>|526<br>|53|495|
||*<br>146|397|<br>508|<br>459|<br>473|<br>0|605|574|555<br>|605|574|555|
||405|359|3871|<br>334||<br>|-<br>|_<br>|__ I<br>||||
|Gabon|100|<br>267|<br>382|<br>763|-|317|284<br>|222<br>|_208_<br>|340<br>|281|259|
||376|<br>454|<br>378|<br>145|174|_--<br>112|985<br>|971<br>|791<br>|985<br>|971<br>|71|
||122|236|<br>230|<br>240|<br>249|<br>204|148<br>|5<br>|5<br>|229|259|1|
|Zoff&a|162|83|<br>216|<br>203|<br>157|<br>|131<br>|112<br>|_80_<br>|170|154|113|
|Lasda|200|<br>141|<br>150|<br>113||178|74<br>|74<br>|74<br>|74|74|74|
||77|<br>96|<br>126|<br>81|_-<br>115|-<br>|168<br>|l8<br>|183<br>|I68|181|183|
|16gasm|206|<br>99|<br>104|<br>129|<br>137|50<br>112|374<br>|394<br>|371<br>|580<br>|622|610|
|mewam|92|98|<br>90|<br>|<br>|<br>|217<br>|227<br>|170|217|227|170<br>|
|evel|<br>187|<br>97|<br>89|44<br>105|35<br>|6<br>65|82<br>|85<br>|29<br>|104<br>|132|e6|
|Edfla|---||<br>83|<br>76|16<br>95|<br>125|149<br>|172<br> <br>|157<br>|149|12|157|
|mm|__<br>51|56|<br>70|<br>9||<br>|e181<br>|<br>141<br>|Ise<br>||W|Ise|
|Top|<br>54|<br>56|<br>59|<br>|-<br>|18<br>|13<br>|15<br>|9|13|15|9|
|<br>Mla0laJ|<br>42|<br>54|<br>.<br>55|57<br>47|43<br>3|52<br>|s6<br>|5s<br>|49<br>|60|5B|49|
|GuIna|<br>4|<br>22|<br>49|<br>38|9<br>|55<br>|43<br>|35<br>|36<br>|43|35|39|
|Tazana|<br>so50|<br>51|<br>43|<br>I1|56<br>8s8|so<br>59|16<br>|16<br>|64<br>|16|16|64|
|¢dw|1,144|378|<br>354|<br>927|<br>1035|<br>|168<br>|158<br>|112<br>|180|170|121<br>|
||||||,|609|389|421|317|439|441|358|

(1) Public and publicly-guaranteed borrowers. (2) All borrowers.
# PRE _WoL_ Paper **Seriea**

||I]tlQ|Author|I2ElQ|Contact<br>~~~~~~~~~~~~~~~for<br>paper|
|---|---|---|---|---|
|WPS70|2 Should Price Reform Proceed<br>Gradually or in a "Big B3ang?"|Sweder van Wijnbergen|<br>June 1991|M. Stroude<br>38831|
|WPS703|The Political Economy of Fiscal<br>Policy and Inflation in Developing<br>Countries: An Empirical Analysis|Sebastian Edwards<br>Guido Tabellini|June 1991|A. Bhalla<br>37699|
|WPS704|Costs and Finance of Higher<br>Education in Pakistan|Rosemary Bellew<br>Joseph DeStefano|June 1991|C. Cristobal<br>33640|
|WPS705|What Causes Differences in<br>Achievement in Zimbabwe's<br>Secondary Schools?|Abby Rubin Riddell<br>Levi Martin Nyagura|June 1991|C. Cristobal<br>33640|
|WPS706|Successful Nutrition Programs in<br>Africa: What Makes Them Work?|Eileen Kennedy|June 1991|0. Nadora<br>31091|
|WPS707|Population, Health, and Nutrition:<br>Fiscal 1990 Sector Review|Population, Health,<br>and Nutrition Division,<br>Population and Human<br>Resources Department|June 1991|0. Nadora<br>31091|
|WPS708|Nongovernmental Organizations and<br>Health Delivery in Sub-Saharan Afric|Jocelyn DeJong<br>a|June 1991|0. Nadora<br>31091|
|WPS709|An Empirical Macroeconomic<br>Model<br>for Policy Design: The Case of Chile|Luis Serven<br>Andres Solimano|June 1991|S. Jonnakuty<br>39074|
|WPS710|Urban Property Tax Reform:<br>Guidelines and Recommendations|William Dillinger|June 1991|V. David<br>33734|
|WPS711|Financial Reform in Socialist<br>Economies in Transition|Millard Long<br>Silvia B. Sagari|June 1991|M. Raggambi<br>37657|
|WPS712|Foreign Direct Investment in<br>Developing Countries: Patterns,<br>Policies, and Prospects|Thomas L. Brewer|June 1991|S. King-Watson<br>31047|
|WPS713|The Determination<br>of Wages in<br>Socialist Economies: Some<br>Microfou ndations|Simon Commander<br>Karsten Staehr|June 1991|0. Del Cid<br>39050|
|WPS714|Women in Forestry in India|Ravinder Kaur|July 1991|A. Sloan<br>35108|
|WPS715|Promoting Girl's and Women's<br>Education: Lessons from the Past|Rosemary Bellew<br>Elizabeth M. King|July1991|C. Cristobal<br>33640|
|WPS716|Financing Training: Issues and<br>Options|Christopher Dougherty<br>Jee-Peng Tan|July 1991|C. Cristobal<br>33640|
# BRE Working Paper Series

||rnitq|A~4bQAutho||Contact<br>for parl|
|---|---|---|---|---|
|WPS717|Does Financial Liberalization Really<br>Improve Private Investment in<br>Developing Countries?|Jacques Morisset|July 1991|S. King-Watson<br>31047|
|WPS718|Impact of Investment Policies on<br>German Direct Investment in Develo<br>Countries: An Empirical Investigatio|Andrea Gubitz<br>ping<br>n|July 1991|S. King-Watson<br>31047|
|WPS719|How Trade and Economic Policies<br>Affect Agriculture: A Framework for<br>Analysis Applied tu Tanzania and<br>Malawi|Ramon Lopez<br>Ridwan Ali<br>Bjorn Larsen|July 1991|M. Gunasekara<br>32261|
|WPS720|The OutlookforCommercial Bank<br>Lending to Sub-Saharan Africa|Ellen Johnson Sirleaf<br>Francis Nyirjesy|July 1991|S. King-Watson<br>31047|