Report No. 666a-IVC

Appraisal of aTourism Development ProjectIvory CoastApril28, 1975 FILE COPYTourism Projects Department

Not for Public Use

Document of the international Bank for Reconstruction and DevelopmentInternational Development Association

This report was prepared for official use only by the Bank Croup. It may notbe published, quoted or cited without Bank Croup authorization. The Bank Group doesnot accept responsibility for the accuracy or completeness of the report.

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IVORY COAST

APPRAISAL OF A TOURISM DEVELOPMENT PROJECT

CURRENCY EQUIVALENTS

'ICurrency Unit: CFA Franc (CFAF)US$1.00 = CFAF 225CFAF 1 = US$0.00444CFAF 1,000 US$4.44

ABBREVIATIONS AND ACRONYMS

BCEAO = Banque Centrale des Etats de l'Afrique de l'OuestBNDA = Banque Nationale de Dëveloppement AgricoleBIDI = Banque Ivoirienne de Développement IndustrielCAA = Caisse Autonome d'AmortissementCCCE = Caisse Centrale de Cooperation EconomiqueCCI = Credit de la Cote d'IvoireCOFINCI = Compagnie Financiere de la Cote d'IvoireEIB = European Investment BankEECI = Energie Electrique de la Cote d'IvoireICTA = Ivory Coast Travel AgencyONAA = Office National d'Artisanat et d'ArtSIETHO = Société Ivoirienne d'Expansion Touristique

et HoteliereSICOGI = Société Ivoirienne de Construction et de

Gestion ImmobilièreSONAFI Société Nationale de Financement

FISCAL YEAR

Borrower : January 1 - December 31C C I : October 1 - September 30

1/ The CFA Franc is tied to the French Franc in the ratio of 1 FrenchFranc to 50 CFAF. The French Franc is currently floating.

IVORY COAST

APPRAISAL OF A TOURISM DEVELOPMENT PROJECT

TABLE OF CONTENTS

Page No.

SUMMARY i-ii

1. INTRODUCTION 1

2. BACKGROUND 1

A. The Economy 1B. The Tourism Sector 2C. Financial Environment 5

3. THE PROJECT 5

A. Introduction 5B. Line of Credit 6C. Technical Assistance 8D. Market Study 9E. Procurement and Disburser,-nt 10

4. THE COMPANY 10

A. Introduction 10B. Board, Management and Staff ilC. Appraisal and Follow-up 12D. Disbursement and Procurement Procedures 12E. Resources, Operations and Portfolio 12F. Profitability, Financial Condition and Audit 15G. Prospects 16

5. JUSTIFICATION 17

A. Market 17B. Investment Climate and Additional

Hotel Requirements 17C. Economic Aspects 18

6. AGREEMENTS REACHED AND RECOMMENDATION 19.

This report is based on the findings of an appraisal mission whichvisited the Ivory Coast in November 1974. The mission consisted ofMessrs. Christie, Bauer, Benbrahim (Tourism Projects); Nouvel andBloom (DFC, Africa); Fresco (Consultant); and Koenig (Programs,West Africa).

TABLE OF CONTENTS (Cont'd)

LIST OF ANNEXES AND MAPS

ANNEXES

I : Market Demand and Hotel DevelopmentII : The Tourism SectorIII : Financial EnvironmentIV Crédit de la Cote d'Ivoire, Tables and ExhibitsV : Suggested Checklist for CCI's Hotel AppraisalVI Profiles of Adviser and ConsultantsVII Selected Hotel Projects under PreparationVIII Estimated Schedule of Disbursements

MAPS

Map l : Main Existing Hotels and New Projects in Abidjan(IBRD 11392)

Map 2 : Areas of Existing and Potential Tourism Development(IBRD 11393)

IVORY COAST

APPRAISAL OF A TOURISM DEVELOPMENT PROJECT

SUMMARY

i. This report appraises a tourism development project designed

to provide long-term credit for the construction of new hotels and tech-

nical assistance for strengthening the tourism sector in the Ivory Coast.

ii. Between 1970 and 1973 international arrivals in Ivory Coast

hotels increased from 45,000 to 71,000, equivalent to a growth rate of

17% per annum. Arrivals are expected to reach about 157,000 by 1980.

These arrivals would comprise about 85% business visitors and 15% tourists.

iii. In Abidjan, even though the number of hotel rooms has doubled

since 1970, hotels are fully booked (annual room occupancy 75-85%), for

long periods of the year. It is estimated that approximately 1,200 addi-

tional hotel rooms will be necessary by 1980. The total cost of these

hotels is estimated to be CFAF 10,800 million (US$48 million). Of this,

CFAF 4,320 million (US$19.2 million) would be required as long-term debt.

The Bank loan would finance about half of this long-term debt requirement.

iv. The proposed project would include a line of credit to provide

long-term loans for the construction of new hotels (US$9 million), a tech-

nical assistance component (US$0.45 million), and a market study (US$0.25

million). Creédit de la Cote d'Ivoire (CCI), as the intermediary, would

channel Bank funds, assist in investment promotion and appraise and super-

vise subprojects. The technical assistance component would provide an

adviser to CCI and two consultants (in marketing and hotel engineering/

architecture) to the Ministry of Tourism to assist the Government in

analyzing the tourism sector and appraising hotel projects. The main

objective of the market study would be to develop a tourism marketing

plan for the Ivory Coast.

v. The Government has for several years given priority to the

tourism sector. In the 1960s, it invested about US$30 million equivalent

in hotel facilities and tourism infrastructure. Upon completion of this

initial investment, the Government decided to leave construction of new

hotels to the private sector. It will encourage such investment by pro-

viding infrastructure in certain areas and by awarding selected fiscal

incentives to entrepreneurs.

vi. 1 A major constraint to the continuing development of the hotel

sector is the lack of adequate sources of long-term debt financing on

suitable terms. The Banque Ivoirienne de Developpement Industriel (BIDI),

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the only Ivorian financial institution which bas committed signifîcantfunds to the tourism sector, intends to limit its participation in thefuture. No international source of financing at terms suitable for theorderly development of the hotel sector is available to the Ivory Coastthroughl conventional channels in sufficient amounts.

ViL CCI is a multipurpose development bank owmed principally bythe Government. Its Director General for the past eight years is an ablemanager who has assembled a competent team of experienced executives andstaff. CCI's portfolio appears sound with approximately 42% of totalamounts outstanding in housing loans, 37% in industry, commerce and tradeand 217, in consumer loans. It has diversified its sources of funds andhas obtained loans from Caisse Centrale de Coopération Economique (CCCE),the Banque Centrale des Etats de l'Afrique de l'Ouest (BCEAO), USAID andthe Caisse Autonome d'Amortissement (CAA), which manages the country'sexternal debt.

-ziii. The project is suitable for a Bank loan of US$9.7 millioneçuivalent with a flexible amortization schedule conforming substantiallyto the aggregate amortization schedules of subprojects, none of which inprinciple should exceed 20 years. The loan would be made to the govern-ment and passed through CAA to CCI at the same interest rate as the Bankloan. The technical assistance and marketing study would be amortizedover the first 5 years of loan repayment. CCI would charge 10.5% on itshotel loans, plus a fee of 1% on behalf of the Governnent to cover theforeign exchange risk. The free limit would be US$500,000 equivalent,with an aggregate of US$2.5 million.

IVORY COAST

APPRAISAL OF A TOURISM DEVELOPMENT PROJECT

1. INTRODUCTION

1.01 In 1974 the Ivorian Government requested Bank assistance to

develop its tourism industry. A project identification and preparation

mission in June 1974 formulated the present project. It would consist

of a line of credit to CCI to provide long-term loans for hotel construction

and technical assistance to develop tourism.

1.02 CCI was founded in 1955 as a multipurpose development bank.

It now has a majority Government shareholding (75%); CCCE and BCEAO hold

the remainder, 17% and 8% respectively. The proposed loan, together with

the proposed small-scale enterprise loan currently under preparation,

would be the Bank Group's first loans to CCI.

1.03 This would be the first Bank loan for tourism in the Ivory

Coast.

2. BACKGROUND

A. The Economy

2.01 An analysis of the Ivory Coast's economy is given in the

report, "Current Economic Situation and Prospects of the Ivory Coast"

(296-IVC) dated April 11, 1974.

2.02 During the Ivory Coast's first decade of independence, 1960-70,

GDP grew at 7.5% per annum in real terms. The rate of growth declined to

6% in 1971 and 1972, which is still a strong performance. The rate of

inflation was below 5% until 1973; it has increased since then but is

expected to remain below 10% for the next few years.

2.03 The economy is based on agriculture, which employs 75% of the

labor force and contributes about one-third to GDP. The three traditional

exports, coffee, cocoa and timber account for 75% of total exports.

Since independence, the country has generally maintained a trade surplus.

2.04 In order to maintain a high growth rate and reduce its dependence

on traditional agricultural exports, the Government is taking measures to

diversify the economy. New crops (palm oil, cotton, sugar, bananas, etc.)

have been introduced and are expected to contribute significantly to

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exports, leading to a decline in the relative importance of traditionalexports from 757e to 60%/c of total exports by 1980. Manufacturing, whichnow accounts for 12% of GDP, is also being encouraged.

2,05 Tourism is seen in the context of the program of diversifi-cation as an additional source of income, employment ,and foreign exchangeearnings. Further, the creatiora of new hotels particularlv in Abidjanwould stubstantially improve the general business climate by providingsuitable accommodations for the international visitors who are increasinglyattracted to the Ivory Coast because of the country's stable ecunomicrecord and good future prospects.

B. The Tourism Sector

2.06 The Ivorv Coast has only recently emerged as a tourism desti-nation principally because of its modern capital, Abidjan, a leadingmetropo-Litan city in West Afrîca. The city enjoys a fine location on alagoon, a beautiful network of calm, protected waters stretching forabout 100 kms. Its numerous restaurants and nightclubs offer varied,high quality, international cuisine and entertainment. Abidjan is alsofast becoming a center for African art which is abundant in the colorfulmarkets of the city. The tropical vegetation of the interior is brilliartin season and provides an intriguing contrast to the lagoon areas ofAssinie and Grand Bassam. Finally, an asset of considerable importanceis the friendly and receptive attitude of the Ivorian people towardsvisitors.

2.07 In spite of these attractions, several obstacles to tourismdevelopmient have kept the Ivory Coast little known among pleasure tourists.Transportation costs are high not only because of the country's relativedistance from the main tourism-generating markets but also because of lowtraffic densities. The climate is hot and humid from May to September,and although there are fine beaches the sea can be dangerous for swim-ming. Lastly, efforts to promote the country and develop a favorabletourism image abroad have been inadequate.

2.08 During 1970, the first year in which tourism statistics werekept, there were an estimated 45,000 foreign arrivals in the Ivory Coast.During the ensuing 3 years arrivals increased at an average annual rateof 17% to reach 71,000 in 1973. By 1980, arrivals are forecast to reachabout 157,000 led by the continued expansion of business traffic and amodest growth in pleasure travel (Annex I).

2.09 In 1973 business-related traffic dominated the market (85%of total arrivals). Consequently, the country enjoys a fairly even flowof traffic throughout the year with a slight dip in the level of arrivalsfrom May to August. Pleasure tourists accounted for 15% of internationalarrivals. About one-half of these were on circuit tours of West Africawhich iucluded one or two nights in Abidjan; the balance stayed at thebeach resorts of Assinie and Assouindé, mostly in the high season fromOctober to April, which corresponds to the off season in many other countries.About 70% of hotel arrivals are foreign. Of these, about 50% are French; 12%

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are from African countries; 10% from the United States; of the remainder,

Italy and Germany are the most important with 5-6% each. Domestic travel

accounts for 30% of the total number of arrivals in hotels. The

average length of stay for foreign business visitors is four or five nights

and for beach tourists six to eight nights (Annex I, Tables 1 to 5).

2.10 Total hotel capacity in the Ivory Coast has doubled since 1970

to 2,844 rooms in 1974, with 56% in Abidjan, 19% on the beach and 35% in

the interior of the country. In Abidjan, hotels of international standard

(1,150 rooms) operate at close to maximum room occupancy (75-85%). The

high occupancies in the capital city have been one of the factors limiting

the growth of vacation traffic. Most of the international hotels in Abidjan

and about half of all hotels in the country are run by international hotel

management companies. The public sector owns 60% of the hotels, including

the Hôtel Ivoire and those of the Société Ivoirienne d'Expansion Touristique

et Hôteliere (SIETHO). (Annex II, Tables 2 and 3).

2.11 Tariffs in the Ivory Coast hotels are high; average room rates

range from about US$24 in luxury hotels, to US$13-15 in three star hotels,

to US$16-17 for hotels in the interior. Operating costs, however, are

also high since a great deal of food, beverages, supplies and fuel for

energy is imported. In addition, payrolls have been increasing rapidly

in recent months. On balance, the mission estimates that well-conceived

hotel projects should reach acceptable profit levels with gross operating

profits of 25-35% of sales and breakeven room occupancy of 60-62% (after all

financial charges).

2.12 Construction costs have varied considerably in the past,

depending on the purpose, style, size and category of hotel. Hotels built

during 1970-73 (Annex II, Table 4) averaged about CFAF 5.5 million

(US$24,500) per room. Since no hotel has been completed within the last

18 months, recent data on hotel costs are unavailable; the latest cost

estimates for city projects currently under consideration are shown in

Annex VII and range from CFAF 4.8 million (US$21,300) per room for a three-

star business hotel in Abidjan to CFAF 10 million (US$44,400) per room for

a four-star deluxe hotel in Abidjan.

2.13 In 1973 gross foreign exchange receipts from tourism amounted

to approximately US$14 million (excluding transportation) compared to an

estimated US$8 million in 1970. The hotel industry employs an estimated

3,000 people at the present time, exclusive of those in construction; an

equal number is estimated to be indirectly employed in tourism-related

services.

2.14 Between 1964-1974 the Government invested US$60 million in

superstructure and infrastructure in the tourism sector. These expenditures

comprised direct investment in infrastructure at Assinie, hotel investments

including the Hôtel Ivoire (47%), operating subsidies (19%) and direct

loans (34%). Now that the major infrastructure is in place in Abidjan and

Assinie a constraint limiting growth of the sector is removed. Accordingly,

the Government's current policy is to leave hotel construction to private

initiative. To encourage private investment, a Tourism Incentive Code was

introduced in 1973 (Law No. 73-368), administered by the Ministry of

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Planning with the cooperation of the Ministries of Tourism and Finance.The incentives under this code include exemption from customs, exciseand value added taxes on imported materials and equipment required forthe construction of the project; and up to seven years' exemption fromincome tax, real estate taxes, sales tax, license fees and several otherlocal taxes (Annex II). These incentives (similar to those offered underthe Ivorian industrial incentives code) are considered reasonable andless objectionable in terms of resource misallocation than other alter-natives such as grants and interest rebates common in other tourismdestinations. Moreover, now that the Governnent has turned hotel invest-ment over to the private sector, the incentives may play a role in stimu-lating investment during the transitional period for both business andvacation hotels. The incentives will be selectively awarded based onthe merits of individual projects on a case by case basis (para. 4.26).

2.15 The Government intends to encourage tourism development onlyin zones assigned priority by the Ministry of Tourism, currently limitedto Abidjan and the Assinie-Grand Bassam region, In these areas the Govern-ment will continue to provide minor infrastructure (through the BudgetSpécial pour l'Investissement et l'Equipement) for tourism projects whichare awarded assistance under the Incentive Code. The coastal areas (ofwhich Assinie and Grand Bassam comprise only a small section) all havethe same building regulations which are sound and provide good environ-mental protection.

2.16 Land in these coastal areas is owned by the State. The Govern-ment leases hotel sites on a long-term basia to developers who file arequest with the Minister of Tourism. The rates are attractive to investorsand the system of leasing avoids land speculation. In urban areas, landis privately owned, and real estate titles are freely transferable(Annex II).

2.17 The Ministry of Tourism is responsible for the development oftourism. Created in December 1971 (Annex II), its functions are toidentify zones for tourism development, promote the Ivory Coast as atourist destination, regulate and control the sector and coordinate publicand private activities in tourism. The Ministry has four departments whichcover the above functions and also supervises the hotel-owning and manage-ment company SIETHO, the Ivory Coast Travel Agency (ICTA) and the NationalHandicrafts Organization (ONAA).

2.18 An important aspect of the Ministry of Tourism's work is thetechnical evaluation of projects to ensure that architectural, engineeringand environmental aspects are sound and that all permits necessary forconstruction have been obtained. The Ministry grants the "agré'ment profes-sionnel" or government approval which is necessary before a promoterproceeds with any tourism project (Decree No. 72-488, By-law 8/MET/DR) andbefore an application for incentives under the Tourism Incentive Code isconsidered.

2.19 There are no formal hotel-training facilities in the IvoryCoast. Operational staff are trained on the job; candidates for manage-ment positions must go to hotel schools abroad. The Government is awareof the importance of training and is now negotiating with the CanadianInternational Development Agency for the construction and operation of a

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hotel traîning center. The school will train operational staff for lower-level jobs and will graduate 120 students annually starting in 1976.

C. Financial Environment

2.20 The Ivory Coast is a member of the West African Monetary Unionestablished in 1962 and composed of seven countries with a common centralbank, the Banque Centrale des Etats de l'Afrique de l'Ouest (BCEAO).Financial institutions (Annex III, Table 1) in the Ivory Coast include fourcommercial banks, three development banks, two leasing institutions, CAAwiich manages the public debt, the Socieée Nationale de Financement (SONAFI)which participates directly in projects of national interest, and a GuaranteeFund which guarantees credits to small enterprises.

2.21 Tourism projects are financed by the commercial and developmentbanks. The commercial banks make short- and medium-term loans, those tohotel projects (usually for equipment) for two to seven years (currentinterest rate, 8-9%) rediscountable at BCEAO. The only development bankwhich has invested significantly in the hotel industry is BIDI, a DFC esta-blished in 1965 in which IFC holds 7.1% of the equity. BIDI's hotel loanshave been for 10 to 12 years at interest rates of 10-11%. BIDI also makesmedium-term rediscountable loans at 7.5-8.25% suitable for financing hotelequipment. The few nondiscountable medium-term loans made carry an interestrate of 11% fixed by BCEAO. The appraisal mission was informed that BIDI isreducing its activity in the hotel sector (now over 11% of its loan approvals),in order to concentrate on industrial projects.

2.22 In the absence of other institutions willing to finance hotelssuch as insurance companies, pension funds or mortgage banks, the remainingsource is the Eurodollar market. This provides mostly medium-term financeat currently high interest rates and may well require a government guarantee.Potential sources of long-term hotel financing in the Ivory Coast are there-fore quite limited.

2.23 Tlie financial environment is covered more fully in Annex III.

3. THE PROJECT

A. Introduction

3.01 The proposed project would include:

(a) a line of credit (US$9 million) to providelong-term loans for the construction ofnew hotels;

(b) technical assistance (US$0.45 million) inthe form of one technical adviser to assistCCI in implementing the project and twoconsultants attached to the Ministry ofTourism, one of wlhom woul.d be responsible

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for technical evaluation of hotel projectsand the other for marketing; and

(c) a market study (US$0.25 million).

3.02 The loan amount would thus be US$9.7 minlion equivalent. Itis proposed that the Bank loan be made to the Government through CAA, whichwould channel funds to the executing agencies on the same terms as theBank loan. The Bank would enter into a project agreement with CCI whichwould receive the hotel credit funds and part of the technical assistancefunds; the Ministry of Tourism would receive the balance of the funds fortechnical assistance and the marketing study.

B. Line of Credit

3.03 The line of credit would be used to provide long-term debtfinancing for a portion of the foreign exchange cost of hotel constructionwhich is estimated at between 50% and 60% of total cost. It is expectedthat hotels would range in size from about 15 to 400 rooms and that atotal of roughly 1,200 hotel rooms would be financed under the projectin the period 1975-80 (para. 5.03). Commitment of the funds is expectedto be completed by the end of 1978. Agreement was reached'during nego-tiations that proceeds of the Bank loan would be used for constructingnew hotels only in the priority areas of Abidjan, Assinie an& Grand Bassam(para. 2.15) which have building regulations acceptable to the Bank unlessprior agreement to the contrary is obtained from the Bank.

3.04 Of the 42 hotel projects already submitted to the Ministry ofTourism for the agrement professionnel, several are in an advanced stateof preparation and are likely to materialize (Annex VII). It is estimnatedthat the first project (a 400-room business/tourism hotel in Abidjan) couldbe ready for construction by late 1975. The availability of Bank funds isexpectecl to stimulate preparation of additional projects.

3.05 Most hotels under the project are expected to be managedinitially by expatriate companies, although plans to "Ivorianize" opera-tions wculd be part of any management contract. Hotels built in Abidjanwould likely be international business facilities of three to five starcategory' with the revenue potential necessary to cover both managementfees and returns to investors and lenders. Several international manage-ment companies of good reputation are currently seeking management contractsin the Ivory Coast and are working with identifièd Ivorian and foreigninvestors. It is expected that smaller properties would be promoted andmanaged directly by Ivorians.

3.06 In order to ensure reasonable prospects of fair returns toinvestors, managers and lenders, agreement was reached during negotiationson the following points: Projects would be sponsored predominantly bylocal and foreign private promoters (in line with the Government's policyol leavinlg hotel development to the private sector), although this does

not preclude some Government participation. Elotel zafiagers wou'd bc exe-

rienced hotellers and would be encouragea to cake an equity participation in

the hotels they manage. Financing plans would be as follows:

% ofSource Total Term Total Cost

Less than 100 rooms;

Equity Promoters 20-40%

Long-term loans C C I Up to 20 yrs. 40-60%Medium-term loans Commercial & Up to 7 yrs. 20%

and/or supplier developmentcredits bar.ks, local

& foreign;suppliers

More than 100 rooms:

Equity Promoters 40%/Long-term loans CCI and other Up to 20 yrs. 40%

institutionsMedium-term loans As above Up to 7 yrs. 20%

and/or suppliercredits

Large hotels, say those over 175 rooms, will require complementary sourcesof long-term debt financing because of CCI's exposure ceiling of CFAF 635

million (para. 4.18). For such projects, CCI would use Bank funds to pro-

vide an average 50% of long-term debt (the exact percentage would be

determined by the size of an individual project, its classification and

cost per room). To obtaîn additional deDt financing for such projects

the Government and the Bank have approached other international agencies.CCCE and the European Investment Bank (EIB) have expressed interest inparticipating in individual subprojects but not before 1976. IFC is

reviewing the first subproject with a view to possible participation.

3.07 The terms of the subloans would vary according to the type ofproject (beach or city), and specific financial and economic considerations.

Loans would be tailored to such hotel characteristics as long construction

periods and economic life, and slow build-up of revenue in the early years

of operation. Agreement was reached during negotiations that matu-rities would not exceed 20 years and that grace periods would not exceed

5 years (that is, the construction period and first 2 to 3 years of opera-tion). The proposed interest rate on subloans would be as follows:

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% per annum

Cost of Bank loan 8.5CCI spread 2.0

10.5

Foreign exchange risk (fee to Government) 1.0Cost to subborrowers 11.5

This is somewhat above current long-term rates in the Ivory Coast (para. 2.21lbut given the longer maturities of the Bank loan for hotel construction,it should still be attractive. CCI's spread of 2.0% should give adequatecompensation for its costs and risks (para. 4.20). Given expected inflationrates, the effective cost of funds is expected to be positive over the lifeof the project.

3.08 Subloans would be made on the basis of appraisals prepared byCCI. A suggested outline for appraisal reports on large hotels is givenin Annex V; appraisal of small subprojects would be more suînAry. Agree-ment was reached during negotiacions on economic appraisal ot sub-projects in accordance with Bank guidelines for DFCs. CCI's appraisalcapabilities would be strengthened by the addition of an adviser to theOperations Department (para. 3.10). As all promoters are expected toapply for incentives offered under the Tourism Incentive Code, CCI'srepresentative on the committee which grants these incentives (para. 4.26)would ensure its involvement in potential subprojects at an early stage._An individual subproject free limit of US$500,000 equivalent would permitCCI to approve small subprojects of up to 40 rooms; the aggregate freelimit would be US$2.5 million to permit the Bank to review subprojectsamounting to 72% of the total credit component. Subprojects shove thislimit would be subject to approval by the Bank. Agreement was al8oreached during negotiations on procedures for regular reports as well asthose on the status of subprojects from their identification throughimp lementation.

3.09 Effective follow-up procedures would be established. Subbor-rowers would be required to set up accounting and control procedures basedon the Uniform System of Accounts for Hotels (copies of which have beengiven to CCI) or on another accounting and control system acceptable tothe Bank. A quarterly review would be made by CCI of financiql statementsand key operating statistics for each of its hotel borrowers, and hotelswould be required to submit annual financial statements audited byindependernt auditors acceptable to CCI. CCI would follow eloselythe Ministry of Tourism's reports on standards of service in the hotelsit finances.

C. Technical Assistance

3.10 It would be a condition of effectiveness that an adviser(Cow!cei1er Technique) with qualificatwons and experience satisfactory to

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the Bank be recruited by CCI for a period of up to two years. Require-

ments for the position and a summary job description are given in Annex

VI. The adviser's primary function, absorbing perhaps two-thirds of his

time, would be to assist in the promotion, organization and appraisal of

hotel subprojects, introduce follow-up procedures and advise the Ministry

of Tourism on financial aspects of hotel projects. The balance of his

time would be devoted to the proposed small-scale enterprise project

currently under appraisal by the Bank. He would help establish appraisal

and supervision policies and procedures and coordinate CCI's activities

with the technical assistance agencies. Eighty percent of the cost of the

adviser would be financed under the proposed loan, and CCI would service

this debt.

3.11 Appointment of two consultants in the Ministry of Tourism,

with qualifications and experience satisfactory to the Bank, for up to

two years would be a condition of loan effectiveness. They would work

with Ivorian counterparts and would considerably bolster the Ministry of

Tourism's capability in two key areas. A hotel architect/engineer would

be responsible for technical evaluation of hotel projects submitted to the

Ministry and would codify the standards and procedures for such evaluation.

He would also supplement CCI's existing expertise in real estate and

construction by advising it on technical aspects of hotel projects submit-

ted for financing under the line of credit. The second consultant would

implement the marketing program (para. 3.13) and advise CCI on promotion

of tourism in general and of specific projects submitted for financing

under the line of credit. The consultants would be assigned to the Projects

and Promotion Departments; the marketing consultant would assist in imple-

menting the marketing study. Assurances were received during negotiations

that these arrangements would be implemented. These experts and related

expenses would be financed 80% by the Bank loan and the Government would

service this debt. Requirements for the positions and summary job des-

criptions are given in Annex VI.

3.12 The mission explored the possibility of bilateral and multi-

lateral financing for the technical assistance with no positive results.

UNDP was approached but funds under the Indicative Planning Figure for

1975-76 are fully committed.

D. Market Study

3.13 The objectives of the market study proposed under the project

are to define the tourism potential of the Ivory Coast (including regions

for priority development) and the country's tourism product; review the

marketing effort currently carried out by the Ministry, SIETHO and ICTA;

develop a tourism marketing program for the country and recommend the

administrative structure and budget to achieve marketing goals. The

study would be carried out by the Ministry of Tourism by consultants

acceptable to the Bank and would take an estimated 36-40 man months

to complete (6 to 8 calendar months). Terms of reference acceptable to

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the Bank have been prepared and invitations to bid sent out. It is pro-

posed that the Bank retroactively finance the study up to US$100,000equivalant.

E. Procurement and Disbursement

3.14 Procurement would be according to CCI's procedures which are

acceptable to the Bank but since CCI has rarely lent for such large

independent projects, its established procedures do not cover the larger

contracts expected under the project. Normally, building contracts would

be awarcled on the basis of competitive bidding advertised locally. However,

for contracts estimated to be in excess of US$1 million equivalent, assurances

were received during negotiations that international competitive bidding

in accordance with Bank guidelines would be used. It is expected thatmost corntracts would be awarded to Ivorian firms.

3.15 Because of the diversity of items, and also the brand preferencesof hotel promoters, it is expected that equipment and furniture contracts

would be made up of small packages. Equipment and furniture for a 100-room

hotel, for example, would cost between an estimated US$600,000 and 800,QOO,made up of 6 to 10 small packages. Contracts for the supply of furniture

and equipment would be awarded either on the basis of competitive biddingadvertised locally or on the basis of prudent shopping in accordance withCCI's procedures. It is expected that most furniture contracts would be

won by local manufacturers and most equipment contracts by foreign manu-facturers.

3.16 The loan would finance only foreign expenditures and wouldbe disbuirsed to meet:

(a) 35% of the contract price for civil worksand construction contracts;

(b) 100% of the c.i.f. cost of imported equipmentand furniture and of the cost of the marketingstudy;

(c) 40% of the cost of locally purchased equipmentand furniture; and

(d) 80% of the cost of technical assistance.

4. THE COMPANY

A. Introduction

4.01 CCI is a multipurpose development bank established in 1955.It now has a majority Government shareholding (75%); CCCE holds 17% andBCEAO the remaining 8%. CCI finances housing, industry, trade, artisans,small household equipment and automobiles; it may provide short-, medium-

and lolg-tcm ioans, ecîulty partJicLpaLions anG guardantee( C OrivatL Grpublic corporationis and inaiviiuais.

4.02 At _he time the proposed project was conceived, tnere was somtequestion as to wnether CCI or BIDI should serve as the intermedîary. BIDI,however, wished to reduce its exposure in hotel loans and was unwilling toundertake a major effort in the sector. Having determined that CC! is awell-managed independent institution with expertise in financing constructionprojects the Bank agreed with the Government that CCI is suitable as theintermediary. CCI is also expected to serve as intermediary for a proposedsmall-scale enterprise Bank project currently under appraisal.

B. Board, Management and Staff

4.03 The Board of Directors consists of nine Government-appointedofficials, two representatives of CCCE and one from BCEAO (Annex IV,Exhibit B). The Board meets about every two months and considers in fullsession only the largest loans or those which present policy issues; thefull Board discussed some 100 loans accounting for 607e of all amounts approvedin fiscal 1974. A "select committee" approves most routine loans, andthose below CFAF 2.5 million are approved by the Director General. AGovernment Commissioner, named by the Minister of Finance, has a veto overBoard decisions but has never exercised this power.

4.04 Appolnted by the Board, the present Director General has beenat CCI almost since its founding and has spent the last eight years in hispresent position. He has managed the institution well and is supported bythree department heads, each of whon has over eight years' experience atCCI. In 1974 the staff numbered 154 including 19 professionals and 135nonprofessionals (Annex IV, Table 1); 2 staff members, who are currentlybeing trained at CCCE's training institute, will rejoin the OperationsDepartment in 1975. In addition, of the nonprofessional staff, about25-30 are well-trained and experienced in executing the more routinelending worK at CCI.

4.05 CCI has three main departments (Annex IV, Exhibit C). TheFinance and Administration Department is charged with accounting andadministration. The Operations Department is divided into three divisions:the Technical Division which supervises construction financed by CCI; theExecution Division which prepares legal documents, controls disbursementsand executes guarantees when necessary; and the Credit Division which isresponsible for preparation and appraisal of loans. Lastly, the fourbranch offices are grouped administratively as the third department underthe Inspector General.

4.06 CCI's operaLillg policies are set out in its By-laws (ReglementIntérieur) which are approved by a three-quarters majority of the Board.The By-laws establish minimum and maximum balance sheet relationshipsbetween categories of assets and liabilities and set terms and conditionsof loans (including spread, maturities, minimum equity, use of proceedsand acceDtable guarantees). Although these are generally satisfactory,assurances were obtained at negotiarions that certain modifications whichwere suggested during appraisal (paras. 4.18 and 4.21) will be incorporatedin the revised By-laws.

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C. Appraisal and Follow-up

4.07 Appraisal of small loans for housing, household equipment andautomobiles consists of a routine check of the proposed purchases andsecurity offered; the sheer number of these loans (over 12,000 in fiscal1974) gives CCI a reasonable basis for judgment of individual applications.Applications for larger loans to housing corporations, industry, commerceand communities are subject to thorough review and, if necessary, modifi-cation by the Credit Division. These appraisals are generally competentlyexecuted, but the economic evaluation is restricted to verifying Govern-ment approval of the project. There is little follow-up after disburse-ment due to staffing constraints. Under the proposed project the adviserand the Ivorian staff assigned to the project would help alleviate thissituation; the additional staff in the Operations Department (para. 4.04)should improve CCI's overall follow-up and appraisal capability.

D. Disbursement and Procurement Procedures

4.08 CCI's control of disbursement and procurement is good.Disbursement to suppliers or construction contractors is only effectedafter the Technical Division verifies prices and work performed. In thepast, procurement was restricted to approved suppliers from whom borrowerscould select. Although this system has lapsed, procurement for goodsfinanced under smaller loans is still limited in practice to a smallnumber of suppliers and contractors who maintain reasonable competition.For larger loans, CCI reviews borrowerst procurement plans and adequatelyensures that proper goods are obtained at reasonable prices.

E. Resources. Operations and Portfolio

4.09 CCI's resources at September 30, 1974 were as follows:

CFAF billion

Share capital and reserves 2.28Borrowings: Long-term (over 7 yrs.) 6.34

Medium-term (2-7 yrs.) 11.46Short-term (up to 2 yrs.) 0.84

Total 20.92

Less: Fixed assets (net) 0.29Equity investments (net) 0.02Outstanding loans (net) 13.11

Total 13.42

Resources available for disbursement 7.50J.e'p'ss: Undisbursed commitments 1.16Renources available for commitment 6.34

TUncommitted approvals 6.34Aesources available for approval

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The large accumulation of uncommitted approvals is due to: (a) the normallylong period required to process and commit housing loans; (b) the approvallate in the fiscal year of a large loan to SICOGI (para. 4.11); and(c) the processing period necessary for large industrial loans. Sourcesof borrowed funds include CCCE, CAA, USAID and BCEAO. The loans fromCCCE are long term, each of about CFAF 100 million in the form of "globaladvances" for projects for single-family housing. Loans from CAA includeshort-, medium- and long-term funds split between global advances forhousing and industry and special advances. The USAID loan is a subloanfrom the Entente Fund for Ivorian enterprises. The loans from BCEAO aremedium- and short-term rediscountable funds. All funds (Annex IV, Table 3)cost between 5.5 and 7% except those from USAID which cost 3.5%. CCI alsomanages housing and commercial programs (CFAF 928 million) for the account ofthe Government. Although it bears no risk on loans made from these funds,CCI has short term free use of them. These operations impose littleadministrative burden in CCI and it receives a fee of 2% of amountsdisbursed.

4.10 The following loan approvals summarize CCI's operations forthe fiscal year ending September 30, 1974 (CFAF million):

Short Medium Longterm term term Total

Housing 2 2,823 539 3,364Consumers 1,727 - - 1,727Enterprises 54 2,724 238 3,016

1.783 5 547 777 8,107

4.11 Housing loans are divided into two categories. The firstincludes Government guaranteed loans to lower and middle income housingdevelopment corporations - primarily Société Ivoirienne de Construction etde Gestion Immobilière (SICOGI), a parastatal company - rediscounted atBCEAO with a spread of 1.5%. The second category includes 600 medium-and long-term loans to individuals, each ranging from CFAF 2.0 to 3.5million, secured by mortgages, personal guarantees and-liens on rents asappropriate. Interest rates range from 6.75 to 11%.

4.12 Consumer loans approved in the fiscal year ending September 30,1974, included 600 loans averaging CFAF 700,000 for the purchase of privateautomobiles and almost 11,500 loans averaging CFAF 100,000 for householdequipment. These loans are granted primarily on the basis of the borrowers'sdisposable income.

4.13 About 150 small loans granted to artisans and traders infiscal 1974 totaling about CFAF 600 million ranged from artisanal loansas small as CFAF 300,000, to loans to truckers of CFAF 5 million, tosmall-scale industrial loans of about CFAF 10 million. These loans rangefrom 2 to 7 years and most carry interest rates of 9 to 10%/.

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4.14 Until recently, by tacit agreement, CCI left large-scaleindustrial lending to BIDI. In its most recent fiscal year, however, CCIgreatly expanded this type of financing. It granted 13 loans totalingCFAF 2.4 billion (90% at medium term) to the quasi-public electric utility,Energie Electrique de la Cote d'Ivoire (EECI), to textile companies, andto processing and manufacturing concerns. Most of these loans were inconsortium with BIDI and the commercial banks. Terms ranged from 5 to 10years at interest rates of 7.5 to 11%. In future CCI is expected to con-tinue to participate in such lending without normally taking a leadingrole; hence, BIDI is expected to remain the primary medium- and long-termfinancier of medium- and large-scale industry.

4.15 A detailed breakdown of CCI's operations and its borrowingand lending rates by sector and term are given in Annex IV, Tables 2 and 3.

4.16 At September 30, 1974, outstanding loans in CCI's portfoliototaled CFAF 13.6 billion (US$60.4 million), broken down as follows(CFAF million):

Long Medium Short Total Internm term term "normal" Doubtful litigation Total

Housing 3,405 4,330 1 7,736 344 217 8,297Enterprises 1,137 1,254 13 2,404 36 29 2,469Conmmunities 1,049 123 - 1,172 - - 1,172Consumers - - 1,477 1,477 20 18 1,515Others 13 23 2 38 75 - 113

Total 5 604 5 730 1,493 12,827 475 264 13 566

In addition, undisbursed loans totaled some CFAF 1,400 million at long termand CFAF 6,100 million at medium tern.

4.17 Loans with payments of interest and/or principal more than 6months overdue are classified as "doubtful"; such loans amounted to CFAF475 millien, 3.5% of the total portfolio, including interest accrued tothe date cf classification as doubtful. As eventual recoveries averageabout 50% on doubtful loans, CCI makes provisions of 50% of doubtful loans.Arrears over 12 months will generally cause legal action to be started tocollect the loan; the loans "in litigation" amounted to CFAF 264 millionor 1.9% of the total portfolio. Although losses average 75% of suchloans, CCI conservatively provides for 85% coverage. A few small loansare simply written off after arrears are more than 12 months old as legalcosts to realize the securities provided may exceed the loan; such write-oafs have amounted to CFAF 2 to 3 million annually in recent years. CCIhas , in dcition, a general reserve fund which amounted to CFAF 464

ri lo '% of "normal" oans); allocations to tChis fund serve to reduceMa1- aDe come (para. 4.20). Moreover, "internal guarantee funds" of CFAF

<- llin represented rebates from suppliers of consumer goods acquiredunder C 1oans and contributions from the social security fund. Thesemor s arr, eamarked for financing, respectively, new consumer loans and

housîng loas ,o .r-vate sect-:r mpiloyees; they are niot provision- -oridentifiud bac debts but segregated fur.ds for operations consideredunusuaL'ly risky, despite the low rate of write-offs.

4.18 CCI's largest current exposures are loans to SICOGI (fullyGovernment guaranteed) and to EECI which represent approximately 100% and30% respectively of CCI's net worth; as the former loan is fully guaranteedand the latter is to a parastatal utility, they give no cause for concern.However, to protect CCI's financial independence, a revision of the By-lawswas agreed upon at loan negotiations limiting CCI's normal exposure to anyone client to 25% of its net worth; this would limit exposure to privatesector or nonguaranteed public sector borrowers. Under this formula, CCI'sexposure ceiling is CFAF 635 million (25% of projected net worth of CFAF2,540 million) in 1975 and will rise to CFAF 800 million in 1979 (when networth is projected to be CFAF 3,200 million). CCI will therefore be ableto finance 100% of long-term debt (that is, 40% of project cost) for hotelsup to about 175 rooms (depending on individual subproject cost).

4.19 CCI's equity investments have been limited to a total of CFAF30 million in 7 companies (Annex IV, Table 4). They include a CFAF 15million participation in Compagnie Financière de la Côte d'ivoire (COFINCI),a new bank associated with the Banque Nationale de Paris but not yet inoperation and an investment of CFAF 2 million in SIETHO.

F. Profitability, Financial Condition and Audit

4.20 Like most public sector development banks in French-speakingAfrica, CCI is not profit-oriented and income in excess of a nominal levelis transferred to tax-free general reserve accounts. Such transfers arelimited in any one year to 5% of loans outstanding and cumulatively to 10%of loans outstanding, but at present reserves are well below these limits.Including such allocations in net income, CCI's net in its latest fiscalyear was 5.87/ of year-end share capital or 2.6% of average equity includinggeneral reserves. Spreads on various categories of loans range from 1.0%to over 16%, but CCI's overall margin between its yield on loans and costof borrowings has remained between 3.0-3.5%.

4.21 CCI's shareholders have agreed to an increase of subscribedshare capital from CFAF 1 billion to CFAF 1.5 billion; it is expected thatthis will be paid in during 1975-76. Although CCI's debt/equity ratiohas been between 4:1 and 5 1 in the recent past, it is expected to reachbetween 6:1 and 7:1 by 1977. Given CCI's portfolio of residential andcommercial mortgage loans, agreement was reached during negotiations on alimit to CCI's term debt/equity ratio of 8.3:1, in line with BCEAO's rulesconcerning development banks. It was further agreed, for purposes of thisratio to include only debts of financial subsidiaries. Balance sheets,income statements and financial ratios in Annex IV, Tables 5, 6 and 7 detailCCI's financial condition.

4.22 CCI is not subject to an annual independent audit. However,two accounts commissioners, representing the Government and CCCE as thelargest shareholders, annually examine CCI's books to verify the accounts,certify the regularity of transactions between CCI and its shareholdersor directors, and bring to the sharehoiders' attention any noteworthy

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items in the accounts. Although more limited than a full audit, thissupervision is a useful review of CCI's operations and financial condi-tion, serving to focus the attention of management and the Board onpossible problem areas. Under the project, CCI would engage independentauditors and be subject to an annual audit. The audit of accounts forthe fiscal year ended September 30, 1974, was substantially completedprior to Board presentation.

G. Prospects

4.23 Financial projections and the assumptions on which they werebased are given in Annex IV, Tables 8-11 and Exhibit A. These projectionsinclude the proposed hotel credit project and the proposed small-scaleenterprise project presently under consideration. CCI's operations areexpected to grow steadily but moderately, led by housing loans to individualsand companies.

4.24 CCI is considering the construction of new headquarters adjacentto its present site to alleviate crowding of its customer facilities andenable expansion of deposit business. Current proposals for the buildinginclude some 8,000 m2 of rental office space for the growing Abidjanmarket. Present estimates indicate a cost of some CFAF 3 billion whichCCI expects to finance 80% from local institutions. The expanded servicefacilities should complement CCI's ongoing operations and anticipatedrental income should offset the cost of ownership. The building is notexpected to impose an untoward financial burden on CCI.

4.25 To finance its operations CCI will require borrowings (net ofrepayments) of CFAF 11 billion through its fiscal year ending September 30,1979. BCEAO will finance about 40%, CAA and the proposed Bank loans about30% each. Net income is expected to remain adequate, while the debt/equityratio, as already noted, is expected to remain below the proposed 8.3:1 limit.Given the composition of its lending and its competent management, CCIshould remain financially sound while executing the project.

4.26 CCI would set up a Hotel Division in its Operations Department(Annex IV, Exhibit C) headed by an experienced Ivorian professional.Arrangements are being made at CCI to send him to a suitable institution,Crédit Immobilier et H8telier (CIH) in Morocco,for a period of two monthsof practical training in hotel credit procedures prior to loan effective-ness. The technical adviser recruited for the project would work closelywith the hotel division manager and would visit the Bank for two to fourweeks to familiarize himself with Bank procedures. The hotel divisionmanager or the technical adviser would sit on the interministerial committee(Conseil Restreint des Investissements Touristiques) which considers allapplications for incentives and would advise on the financial aspects ofuro ects requesting exemptions under the Incentive Code. Assurancesoer; reqeived during negotiations that these arrangements would be imple-

m.en t -dc .

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5. JUSTIFICATION

A. Market

5.01 There is an urgent need to expand hotel accommodation capacity

in the Ivory Coast. Demand has been strong over the past few years (para.

2.08); average room occupancies are high (75-85%) in Abidjan, and have

not dropped as new hotels appeared. One leading new hotel, for example,

opened its doors recently with an 80% occupancy. There is thus great

pressure on supply and indications of a significant amount of turnaway

demand - i.e., those who are obliged to postpone, shorten or cancel visits

or to accept accommodation in lower category hotels. Most of the demand

is business-oriented (80-85%) and is nonseasonal, thus obviating the

problems associated with alternate periods of high and low occupancies.

5.02 As shown below, prospects for the continued growth of the

travel market are good. International tourist arrivals are projected to

increase as follows (000's):

1973 1976 1980(Actual)

Visitors

Vacation:Beach 6 10 17

Circuit 5 5 8

Total Vacation il 15 25

Convention - 1 3

Business 60 87 129

Total Visitors 71 103 157

The main assumption in these projections is that business traffic will con-

tinue to expand as the economy grows and diversifies. The outlook through

1980 is for an overall GDP rate of growth of about 6%, down slightly from

1970-72 levels (para. 2.02). Growth rates for business tourism are pro-

jected to drop slightly from 17% (1970-73), to 13% (1974-76), to 10%

(1977-80). Growth in beach tourism is expected to be modest in absolute

terms; also, only small amounts have been included for convention and

circuit tourism, pending results of the market study proposed under the

project. The development prospects for these markets are limited because

of the Ivory Coast's distance from major generating countries but should be

favorably affected by implementation of the marketing program.

B. Investment Climate and Additional Hotel Requirements

5.03 On the basis of these projections of demand, it is estimated

that by 1980, about 1,000 rooms for business visitors and about 200 for

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beach tDurists will be needed (Annex I). This estimate embodies assumptionsas to length of stay and room occupancy which are conservative in comparisonwith recent experience in the Ivory Coast. On the assumption of a CFAF 9.0million (US$40,000) per room cost, a total of CFAF 10,800 million CUS$48million) would be required by 1980 in the following form:

CFAF US$million million

Equity 4,320 19.2 40MT debt 2,160 9.6 20LT debt 4,320 19.2 40

lO,800 48.0 100

5.04 Substantial equity has already been identified for proposedcity hotels (para. 3.05). Several hotel management companies, bothdomestic and foreign, are interested in investing in the equity of hotelsthey would manage. Finding local investors for beach hotels will be moredifficuLt. It is more likely that a foreign group such as a tour operatoror speci.al interest group will ultimately invest in a vacation village.Medium-term debt is unlikely to pose a problem since funds are availablethrough BCEAO's rediscount facility.

5.05 The critical constraint in meeting these objectives is theavailability of long-term finance, particularly since the Government willno longer undertake hotel investments directly. BIDI is the only Ivorianfinancial institution that has been making long-term loans of ten years ormore in the hotel sector, and due to what it considers overexposure there,it is restricting further hotel Loans. It is difficult to find long-termdebt capital in today's international market, and in any case the hotelsector in the Ivory Coast has not established a reputation which mightattract such foreign participation. When available, foreign participationis likely to be medium term (7-10 years) at high interest rates andunsuitaLle as the principal debt instrument for hotel credit. Thus despitethe needt to increase the country's hotel facilities there is no assuredsource of long-term credit to enable the sector to expand. The proposedBank loan would substantially remove this obstacle by providing about 50%of the long-term debt requirement. In addition to helping finance newhotels, the Bank loan would stimulate participation of other lenders inthe field.

C. Economic Aspects

5.06 Since the project consists substantially of a line of credit,the number, classification and timing of subprojects is not known in advance.Consequently, it is impossible to calculate an economic rate of returnfor the project.

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5.07 Gross foreign exchange earnings from tourism are estimated toreach a level of US$36 million equivalent by 1983, compared to a totalof US$14 million in 1973. Foreign visitors to the hotels under the projectwould generate an estimated US$10 million in 1980 when two-thirds of thehotels will be open and US$15 million in 1983 when all the hotels will befully operational. Over 805% of the visitor expenditures in these hotelswould represent foreign exchange revenues.

5.08 Rotels in the Ivory Coast average 1.2 employees per roomaccording to recent studies. On this basis, it is estimated that hotelsfinanced under the project would create approximately 1,400 new jobs inthe hotels (excluding jobs in the construction industry over the 3-5year disbursement period). Indirect employment would likely account foran additional 1,400 jobs, giving a total of 2,800 jobs created under theproject.

5.09 It should be emphasized that not all the foreign exchangerevenue and employment from the project is incremental, since some ofthe business visitors would come anyway and would stay in older and lower-category hotels or private homes, if necessary. For business visitorsthe additional hotel space will have a pronounced effect especially interms of expenditures, reflecting the fact that they will stay in newerand more expensive accommodation, and will plan longer visits when thesupply constraint is removed. The addition of new facilities will sti-mulate vacation travel, since it will enable tour operators and travelagents to include the country in their itineraries and programs to anincreasing extent.

6. AGREEMENTS REACHED AND RECOMMENDATION

6.01 During negotiations agreement was reached and assurancesobtained with respect to the following principal points:

(a) use of proceeds of the Bank loan forconstruction of new hotels in priorityareas with building regulations accept-able to the Bank (para. 3.03);

(b) subprojects would be sponsored bypredominantly private promoters, withoutexcluding participation by the publicsector, with hotel management andfinancing plans acceptable to theBank (para. 3.06);

(c) onlending of proceeds of the Bankloan for a maximum of 20 yearsincluding a grace period of 3-5 yearsat an interest rate of 10.5% plus a £%fee to cover the foreign exchangerisk (para. 3.07);

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(d) the methodology for appraisal and follow-upof hotel subprojects (paras. 3.08 and 3.09);

(e) procedures for regular reports as well asthose on the status of subprojects fromtheir identification through implementation(para. 3.08),

(f) arrangements for adviser to CCI to assistthe Ministry of Tourism in financial aspectsof hotel projects (para. 3.10);

(g) arrangements for two consultants at theMinistry of Tourism to assist CCI in appraisalof hotel projects (para. 3.11);

(h) the marketing study would be carried outon terms and conditions by consultants allacceptable to the Bank (para. 3.13); and

(i) arrangements for a representative of CCI tosit on Conseil Restreint des InvestissementsTouristiques (para. 4.26).

6.02 Conditions of effectiveness would be:

(a) employment of an adviser acceptable to theBank for CCI (para. 3.10), and

(b) employment of two consultants acceptableto the Bank for the Ministry of Tourism(para. 3.11).

6.03 The project is suitable for a Bank loan of US$9.7 millionequivalent with a flexibTe amortization -schedule conforming substantiallyto the aggregate amortization schedules of the subprojects none of whichshould in principle exceed 20 years. The technical assistance andmarketing study would be amortized over the first five years of repayment.

ANNEX I

Page 1

IVORY COAST

APPRAISAL OF A TOURISM DEVELOPMENT PROJECT

MARKET DEMAND AND HOTEL DEVELOPMENT

A. Market Demand

Market Characteristics

1. According to the official statistics collected by theMinistry of Tourism (Tables 1 and 2), 71,000 foreign visitors arrivedin the Ivory Coast in 1973. This number includes only those who regis-tered in 13 hotels which represent 80% of total hotel capacity in the

country and excludes visitors who stayed with friends and relatives.

Adjustments have been made to avoid double counting. Expatriate staff

residing temporarily in hotels are also excluded from this total; these

numbered 27,128 in 1973 and accounted for over 100,000 bednights.

According to these official statistics foreign arrivals have increased

by 17% per annum since 1970. The total number of bednights has increased

by 24%, reaching 374,500 in 1973 from 197,000 in 1970. There is little

seasonal variation in tourist traffic to the Ivory Coast except for

declines in May, June and August (Table 3 and 4).

2. Four distinct categories of tourists are attracted to the

Ivory Coast: (a) businessmen to Abidjan; (b) vacation tourists to the

beach resort areas of Assinie; (c) vacation tourists to Abidjan and the

interior on multiple-stop tours covering a West African regional circuit;

and (d) convention visitors primarily to Abidjan.

(a) Business tourism

Business visitors dominate the tourism market in the

Ivory Coast, accounting for 85% of total internationalvisitor traffic. In recent years, business travel to the

Ivory Coast has grown rapidly, largely because of thegrowth and increasing diversification of the countryT seconomy. The expansion of hotel accommodation in Abidjan

has not kept pace with business demand, and room occupancylevels are high, averaging 80%. The length of stay has

also risen in recent years from 4.3 days in 1970 to over 5in 1973.

French business visitors account for more than 40% ofthis market and U.S. visitors 15%. The daily expenditureof business visitors on hotel accommodations, food,

ANNEX IPage 2

transportation and miscellaneous items is estimated to rangebetween US$45 and US$66 and average US$51.

(b) Beach tourism

Beach tourism is confined to the Club Mediterranee andthe Hôtel les Palutuviers, both in the làgoon area of Assinie.They are open for an eight-month period each year, withJanuary to April the peak season. In 1973, 6,000 tourists,mostly from France on package tours, visited Assinie stayingon average 7 days. Occupancy of the two villages was 57%during the season from September 1972 to April 1973 and isexpected to improve particularly as Hotel les Palutuviers(opened in 1972) becomes better known. Expenditure of guestshere ranges between US$35 and US$43 daily.

(c) Circuit tourism

Vacation tourists from Europe on circuit tours of WestAfrican states accou-nt for 7% (5,000 arrivals in 1973) ofthe total international visitor traffic. Such visitorsnormally have high incomes since circuit tours are of neces-sity expensive and this segment of the market has held upbetter than others in the last 18 months as prices haveincreased sharply. These exclusive tours are paid for priorto departure, and land costs typically include hotel accom-modation, meals, transfers and excursions. The dailyexpenditure of circuit tourists in the Ivory Coast rangesbetween US$30 and IJS$35 and the average length of stay is2 to 3 nights.

(d) Convention market

There is good potential for development of conventionbusiness in the Ivory Coast. Abidjan has extensive, modernfacilities for groups up to 4,000 and is well located tobecome an important meeting place for both African and worldconventions.

B. Future Foreign Visitor Traffic to the Ivory Coast

Constraints

3. Pleasure tourism in the Ivory Coast is still limited and theshort-term prospects for its expansion remain moderate, primarily becauseof the high cost of transportation from the relatively distant tourism-generating countries. A direct parallel cannot be drawn with many desti-nations (e.g., Mediterranean) comnpeting for the European market becauseof the Ivory Coast's different seasonal appeal and characteristics.When the Ivory Coast is compared to other West African countries (e.g.,Senegal`) with similar seasonal appeal but greater proximity to generatingmarkets. however, the high cost of transportation is a distinct dis-advantage. This constraint along with the high cost of ground services,

ANNEX IPage 3

is an important consideration in view of the general slowdown in tourismelsewhere in the world. The development of circuit tourism is hinderedby the absence of a cohesive organizational structure at national andregional levels to promote the assets of each country on a planned andintegrated basis. With continuing unilateral marketing efforts on thepart of the Ivory Coast, however, circuit tourism will continue tosupplement the business market. It will also be a high income marketwith a good potential for high profit margins. The season for circuittours peaks between June and August when business tourism is slowest, andthus helps hotels maintain high occupancy levels year round.

4. Convention business depends largely on the geographical con-venience of a locality and/or its political importance. The city ofAbidjan has had extensive modern convention facilities since 1972, butthere has been no promotional activity despite the fact that the highlycompetitive nature of the conference business makes marketing a prere-quisite for success.

Prospects

5. Before assessing the flow of tourists to the Ivory Coastover the next few years it is important to examine the factors under-lying the recent rapid growth of business tourism.

6. Though the Ivory Coast's economic performance has beenimpressive since the early sixties, the take-off year for businesstourism was 1970, coinciding with the start of the economic diversifi-cation policy. Agricultural diversification includes the successfulpromotion of several new crops (palm oil, rubber, cotton, copra, sugar,bananas, etc.) in addition to the three traditional exports (coffee,cocoa and timber). In industry small enterprises enjoyed similar growthmainly in import substitution and the processing of agricultural andforestry products.

7. With the outlook through 1975 for an overall GDP growthrate of 6.3% in constant prices and 6% for the rest of the decade, theprospects for continued growth of business-motivated tourism remainfavorable. If as expected, the Government continues to diversify theeconomy, a favorable growth rate may in the longer run bring even greaterexpansion of business tourism. Export-oriented diversification includesseveral projects in an advanced stage of preparation: a chocolatefactory, a cocoa-butter plant and two vegetable-oil mills. The establish-ment of a synthetic fiber plant and a major textile plant is underconsideration as well as the expansion of an important textile factory.Other projects contemplated include a pulp and paper plant, a tirefactory and an iron ore project.

8. While tourism in general is a recent phenomenon in theIvory Coast, pleasure-motivated tourism is even more recent. Therewere 6,000 arrivals in the seaside resorts of Assinie during 1972, thefirst year facilities were in operation. So far the Ivory Coast hasdrawn group visitors from only a single source, France, and the absenceof a wider geographical marketing strategy has resulted in a loss ofpotential income from other major tourist generators. The high price

ANNEX IPage 4

of the Ivorian tourism product will continue to hamper growth of pleasuretourisrn in the short term. In the long run, however, with a more diver-sified marketing base, the country is expected to attract a greatershare cf the winter vacation traffic.

Market Projections

9. Improved marketing techniques may encourage vacation tourismto the Ivory Coast, though the effects will be limited by high trans-portation costs. Circuit tourism is expected to stagnate at presentlevels unless neighboring countries exhibit greater interest in promotingit. Because of the highly competitive nature of convention tourism, itis assumed the Ivory Coast will not significantly tap this market untilthe latter part of this decade.

10. The mission estimates that the Ivory Coast will receiveabout 129,000 business visitors by 1980 -- an average annual growth rateof 11% over the rest of this decade compared with an observed growthrate of 17% since 1970. This projected increase in business visitortraffic assumes a growth rate of 137e between 1973 and 1976 and a reducedgrowth rate of 10% thereafter until 1980. The implications of thesegrowth rates, along with projections of rates of growth of the othermarket segments under varying assumptions, are detailed below:

Projected Number of Foreign Arrivals at Hotelsin the Ivory Coast

Estimated a/ AveLage Annual1973 1976 1980 Average 1980 Growth Rate % a/

Low-High

Vacation visitorsBeach 6 10 17 17 16Circuit 5 5 5-12 8 8Total vacation il 15 22-99 25 13

Convention visitors - 1 2-4 3 -

Business visitors 60 87 119-138 129 il

Total visitors 71 103 143-172 157 11.5

a/ Using mid range of projected figures.

11. These projections are considered reasonable in the light ofthree considerations:

(a) Constrained demand

The rapid growth in the number of businessvisitors to the Ivory Coast in recent years has

ANNEX IPage 5

been accompanied by a similar expansion of hotelaccommodation suitable for international visitors.Although hotel capacity in Abidjan increasedrapidly since 1970, it was insufficient to sustaina growth rate in demand higher than the 17%observed between 1970 and 1973; occupancy levelshave been averaging 80% during the past three years. 1/This shortage of hotel space has resulted in afrustration of demand. 2/

(b) Trends of business-motivated tourism to the Ivory Coast

There are several indications that in the Ivory Coastbusiness tourism will continue to grow until 1980.

(i) Business tourism in the Ivory Coast isrecent and its growth has been dynamie. 3/

(ii) The diversification program of the economyis in its initial phase.

(iii) The potential for diversification particularlyin export-oriented industrialization isexcellent and the economic outlook for theIvory Coast remains favorable.

(c) Exogenous factors

Although, economic difficulties in Europe will affectthe growth of tourism in general, the business-orientedmarket for the Ivory Coast is less volatile in the face ofchanging economic conditions than vacation-oriented markets.

Hotel Development

12. The additional hotel capacity required by 1980 was determinedon the basis of the demand projections under the following assumptions:

(a) Present hotel capacity in the interior ofthe country is adequate for both presentdemand and any increases in the foreseeablefuture.

1/ Indicative of this inadequacy, the Hotel Tiama in Abidjan whichbegan full operation in 1973 averaged about 90% occupancy.

2/ It should also be noted that the high occupancy levels remove theneed for hoteliers to market and promote their establishments.

3/ The increase in the number of room nights each year in both absoluteand percentage terms has been consistently greater than the precedingyear.

ANNEX IPage 6

(b) The number of "lodger" 1/ nights will at mostremain at existing levels (100,000 bednightsin 1973) because more housing will be availableespecially when the first phase of the AfricanRiviera project in Abidjan is completed.

(c) Domestie room nights will increase at the rateindicated in the Plan (7%).

(d) Average length of stay will remain unchanged;five days for business visitors to Abidjan,seven days for seaside tourists in the coastalareas and two days in Abidjan for circuit tourists.The average length of stay of convention visitorsto Abidjan is assumed to be three days.

(e) The expected number of suitable international-class hotel rooms available in 1980 is assumedto be 1,400, compared to 1,200 in 1973. Thisincludes 2 hotels (434 rooms) to be financedoutside the proposed project and allows forthe obsolescence of 3 hotels comprising230 rooms.

(f) Double occupancy factors are assumed to be 20%for business visitors, 80% for seaside visitors,60% for circuit visitors and 10% for conventionvisitors. 2/

13. Tests to determine the need for additional capacity werecarried out for three acceptable occupancy levels (65%, 70% and 75%)of total available supply, including hotels expected to be built by1980. The following table surmarizes the results:

1/ Resident expatriate staff from France on fixed appointments lodgein hotels either on a permanent basis or for a short period priorto finding suitable accommodation.

2/ It should be noted that the double occupancy factor assumed forbusiness visitors represents that observed presently in the IvoryCoast. This will likely increase, along with the average length ofstay, as more accommodation space become available and as the appealof the country becomes more vacation-oriented.

ANNEX IPage 7

Total Number of Rooms Required

Estimated1976 1980 Average 1980

Assinie

75% occupancy (8-month season) - 214 20080% occupancy (8-month season) - 170

Abidjan

65% occupancy 790 1,150-1,440 1,00070% occupancy 650 970-1,33575% occupancy 530 810-1,150

Total 530-790 980-1,654 1,200

ANNEX ITable 1

IVORY COAST

TOURISM DEVELOPMENT PROJECT

Tourism Growth Rates for Abidjan and Assinie

International TouristsAverage Annual

1970 1971 1972 1973 Growth Rate

Arrivals

Number 44,826 48,722 52,503 70,935Growth Rate (%) - 8.9 7.8 35.1 16.5

Room Nights

Number 197,194 209,344 265,464 374,471Growth Rate (%) - 6.2 26.8 41.1 24.0

Average Length of Stay

Number (nights) 4.3 4.3 5.2 5.3Growth Rate (%) - ° 18.6 3.9 7.0

Sources: Ministry of TourismMission Estimates

NOVEIBER :L974

ANNEX ITable 2

IVORY COAST

TOURISM DEVELOPMENT PROJECT

Arrivals and Room Nights at HotelsAbidjan and Assinie

(1973)

Arrivals Room NightsNo. No. %

International Tourism

Business 60,935 85 59 314,471 84 64

Pleasure 101000 15 10 60,000 16 12

Total International 70,935 100 69 374,>471 100 76

Domestic Tourism

Ivorian 5,742 17 5 11,502 10 2

Foreign Resident 27,128 83 26 101,840 90 22

Total Domestic 32,870 100 31 113,342 100 24

TOTAL TOURISM 103 ,805 100 487,813 100

Source: Ministry of Tourism

NOVEMEER 1974

ANNEX ITable 3

IVORY COAST

TOURISM DEVELOPMENT PROJECT

Seasonal Distribution of International Tourist Businessat Hotels in Abidian and Assinie

A. Arrivals (%) 1970 1971 1972 1973

January 8.7 7.9 9.8 9.4February 7.8 8.3 9.1 9.3March 8.5 8.1 9.6 9.0April 7.3 8.5 7.0 8.7May 7.4 9.1 7.2 6.9June 8.2 8.5 7.7 7.4July 10.1 8.3 7.2 6.6August 7.9 6.9 6.4 6.9September 8.1 9.0 7.5 7.3October 7.7 7.4 8.1 7.7November 9.1 8.0 9.0 9.0December 9.2 10.0 11.3 11.8

Total Arrivals 100.0 100.0 100.0 100.0

B. Room Nights (%)

January 8.1 9.6 10.8 11.1February 8.5 8.7 10.5 10.6March 8.9 7.5 10.4 10.3April 7.8 8.1 8.2 9.6May 6.9 8.2 6.9 6.8June 6.7 6.9 5.8 5.8July 7.8 6.9 5.6 5.1August 6.6 6.4 4.8 6.2September 9.7 7.1 5.8 5.2October 8.8 8.3 7.8 8.4November 10.2 10.0 12.2 9.2December 10.0 12.3 11.2 11.7

Total Room Nights 100.0 100.0 100.0 100.0

C. Average Length ofStay (Nights)

January 4.1 5.0 5.6 5.9February 4.8 4.5 5.8 6.1March 4.6 4.0 5.5 6.0April 4.7 4.1 5.9 5.8May 4.1 3.9 4.9 5.2June 3.6 3.5 3.8 4.1July 3.4 3.6 3.9 4.1August 3.7 4.0 3.7 5.0September 5.3 3.4 J.9 3.7October 5.0 4.8 4.9 5.9November 5.0 5.3 6.8 5.4December 4.8 5.4 5.0 5.2

Annual AverageLength of Stay 4i.3 4.3 5.1 5.3

Source: Ministry of Tourism

NOVEMBER 1974

ANNEX ITable 4

IVORY COAST TOURISM DEVELOPMENT PROJECTMonthly Distribution of International Tourist

Arrivals and Room Nights at Hotels in Abidjan and Assinie

ARRIVALS ROOM NIGHTS

8,750 - 47,250

7,500 - 40,500

6,250 33,750

5,000 - CD 27,0

3,750 - - 20,250

2,500 - - 13,500

1,250 - - 6,750

J F M A M J J A S O N DMONTHS

ArrivalsRoom nights

Worid Bank-9620November 1974

ANNEX ITable 5

IVORY COAST

TOURISM DEVELOPMENT PROJECT

Comparison of Arrivals, Room Nights, and Average Lengthof Stay of Tourists by Nationality

Nationality Arrivals Room Nights

French 47.3 46.5 - 0.8 48.8 47.3 - 1.5

African 11.6 11.5 - 01 8.7 8.8 + 0.1

U.S.A. 10.1 8.7 - 1.4 6.7 8.6 + 1.9

German 4.9 7.0 f 2.1 5.2 7.5 + 2.3

Italian 4.9 4.3 - 0.6 6.0 4.9 - 1.1

Other 21.2 22.0 + 0.8 24.6 22.9 - 1.7

Total 100.0 100.0 - 100.0 100.0 -

Arrivals Room Nights Average Length of Stay1972 1973 Ch 1972 1973 Chane 1972 Un ChanRe(absolute number) ( %absolute number) % I

French 24h866 32q961 + 32.6 129,798 177J162 + 36.5 5.22 5.37 + 0.15

African 6,071 8,179 + 34.7 23,072 33,064 + 43.3 3.80 4.04 + 0.24

U.S,A. 5,319 6,196 + 16.5 17,954 32,146 + 79.0 3.38 5.19 + 1.81

German 2,574 4,977 + 93.4 14,008 28,246 +101.6 5.44 5.68 + 0.24

Itallan 2,577 3,037 + 17.9 15,876 18,191 + 14.6 6.16 6.oo 0 0.16

Other 11,096 15.585 + 40.5 64,756 85.662 + 32.3 5.84 _5o - o.

Total 52,503 70-9M + 35.10 265.464 374.471 + 41.1 5.06 5 + 0.22

Source: Ministry of Tourism

NOVEMBER 1974

IVORY COAST

TOURISM DEVELOPMENT PROJECT

Projected Demand for Accommodation in Abidian

Assumption I - 75% Occupancv Assumption Il - 70% Occupancy Assumption III - 65% Occupancy

1 9 7 6 1 9 8 0 1 9 7 6 1 9 8 0 1 9 7 6 1 9 8 0

Projected foreign visitor room nights

1. Business 366,700 495,800-577,100 366,700 495,800-577,100 366,700 495,800-577,100

2. Convention - 5,500- 10,900 - 5,500- 10,900 - 5,500- 10,900

3. Circuit 6,300 5,000- 12,000 6,300 5,000- 12,000 6,300 5,000- 12,000

4. Total 373,000 506,300-600,000 373,000 506,300-600,000 373,000 506,300-600,000

Projected domestie visitor room nights

5. Foreign residents 100,000 100,000 LOO,OOO 100,000 100,000 100,000

6. Projected total nuaber of room nights (4+5) 473,000 606,300-700,000 473,000 606,300-700,000 473,000 606,300-700,000

7. Room nights available at 75% occupancy _! 328,500 384,345 306,600 358,700 284,700 333,100

8. Room nights required (6-7) 144,500 221,955-315,655 166,400 247,600-341,300 188,300 273,200-366,900

9. Room nights required at 75% occupancy 192,700 295,940-420,470 237,700 353,700-487,600 289,700 420,300-564,500

10. Number of rooms required 530 810- 1,150 650 970- 1,335 790 1,150- 1,440

a/ Projected foreign visitor room nights- projected number of visitors x length of staydouble occupancy factor

b! Room nights available - number of rooms available x number of days x occupancy level

Source: UBRD Estimates

ANNEX ITable 7

I.VORY COAST

TOURISM DEVELOPMENT PROJECT

I. PROJECTEI DEMAND FOR ACCOMMODATION 1 9 7 6 1 9 8 0

In Assinie

1. Projec:ted foreign-visitor room nights 38,900 66,100

2. Room nights available at 75% occupancy 46,800 46,800

3. Room rLights available at 80% occupancy(4-month season) 49,920 49,920

4. Room rights required (1-2) - 19,300

5. Room nights required (1-3) (4-month season) - 16,180

6. Room nights required at 75% occupancy - 25,700

7. Room nights required at 80% occupancy - 20,225

8. Number of rooms required (75% occupancy) - 214

9. Number of rooms required (80% occupancy) - 170

II. RECAPITULATION OF PROJECTED DEMAND FOR ACCOMMODATION

1. In Assinie

75% occupancy (8-month season) - 214

805/ occupancy (8-month season) - 170

2. In Abijian

65% occupancy 790 1,150-1,4-40

70% occupancy 650 970-1,_35

75% occupancy 530 810-1,150

3. Total

Assinie - -

Abidjan 530-790 980-1,654

ANNEX IIPage 1

IVORY COAST

APPRAISAL OF A TOURISM DEVELOPMENT PROJECT

THE TOURISM SECTOR

A. The Ministry of Tourism

1. As successor to several less important agencies, the Minis-tere d'Etat Charge' du Tourisme (Ministry of Tourism) was created under

Decree No. 71-675 of December 12, 1971. Its major functions are:

(a) identification of zones for tourism developmentand planning proposals for their implementation;

(b) marketing and promotion of the Ivory Coast;

(c) regulation and control of the tourism sectorin general and the hotel industry inparticular; and

(d) coordination of public and private activitiesin tourism.

Organization and Staffing

2. The Ministry is divided into four departments (see OrganizationChart), regional offices in Man and Korhogo and an office in Paris. Thefour departments are the Regulations Department which covers classifi-cation and inspection of hotels and establishes standards; the ProjectsDepartment which is responsible for tourism studies, development pro-jects, and infrastructure and administers the agre'ment professionnel;the Promotion Department responsible for promotion, statistics andtraining; and the Administration and Finance Department. In addition,the Ministry supervises the Societé Ivoirienne d'Expansion Touristiqueet Heteliére (SIETHO), the Ivory Coast Travel Agency (ICTA) and theOffice National d'Artisanat et d'Art (ONAA). A new department (Marketingand Project Review) would be created for the two experts and themarketing study proposed under the project.

Policies and Practice

3. In general the Ministry's development has been handicappedby the smallness of its budget and, although department heads arecompetent, by its lack of support personnel with the required profes-sional ability. If tourism is to be further developed to any extent,

ANNEX IIPage 2

it will be necessary to strengthen the Ministry particularly in the areasof marketing and technical planning.

4. A major task of the Projects Department has been to identifypriority tourism development areas. At the request of the Ministry, theBureau National d'Etudes Techniques (in the Ministry 'of Public Works) hascarried out a number of regional studies ("schémas directeurs") to providea basis for the physical planning of tourism infrastructure and super-structure. Studies have already been done for Assinie, Grand Bassam, theSan Pedro area and the Grand Lahou lagoon region near Abidjan. They haveno legal status but indicate land use and road infrastructure in broadterms.

5. The Projects Department also reviews hotel projects submittedfor technical approval (agrement professionnel); currently over 40 requestsare on file. The Bank missions found that approval is granted after asomewhat cursory review, due in part to a shortage of personnel and inpart to unsuitable procedures. One of the consultants proposed under theBank project would have the task of raising the standards of the reviewprocedure.

6. At present, marketing activities are restricted,by thePromotion Department's small budget (US$36,000 equivalent in 1974) andlimited staff. If the Ivory Coast is to develop tourism the PromotionDepartment must be strengthened by additional funds and a strongermarketing policy. The consultants and study to be financed by the Bankunder the project would provide the basis for more effective promotion.

7. The Regulations Department has a fairly effective tool inthe decree classifying hotels (No. 72-488, By-law 81), but it appearsthat the decree is applied somewhat haphazardly, with anomalous results.Several hotels, for example, have received very high ratings when infact their size, services and staffing do not mernt it. The Ivorianauthorities must recognize that for visitors the classification system isthe only guide to hotel standards in the Ivory Coast and it must be appliedrigidly and equitably. In addition, it must be recognized that inspectionand control of hotel standards is an ongoing process, with hotels reviewedregularly and their status revised, if necessary, either upward or down-ward according to an objective evaluation. In terms of the physicalstandards for hotels the classification system is quite complete; itsstaffing requirements are weak, however, in part because an effectivehotel training scheme has not yet been implemented.

Operating and Capital Budgets

8. The Ministry operates on a limited budget, reflecting itsyouth and small size. The operating budget (Table 1), including expensesfor the 3 supervised agencies has risen from CFAF 227 million (US$1 million)in 1970 to an estimated CFAF 422 million (US$1.9 million) in 1974. Capitalexpense over the same period decreased annually from a total of CFAF 1,357million (US$6 million) to CFAF 697 million (US$3.1 million), reflectingthe Government's policy of reduced participation of the public sector intourism superstructure.

ANNEX IIPage 3

iotel Training

9. At present, the Promotion Department of the Ministry is res-ponsible for hotel training but vocational education and management trainingfor hotel staff are in fact carried out on the job or in institutionsabroad. The Governnent (Ministries of Technical Education and Tourism)is preparing a hotel training project with Canadian technical assistanceconsisting of a 120-place school and practice hotel.

B. Additional Sectoral Data

Air Access

10. The major routes to the Ivory Coast are by air from Europeand other African countries. Air Afrique, the multinational West AfricanStates' airline headquartered in Abidjan, serves the country along with15 other international airlines. From Abidjan there are domestic flightsby Air Ivoire to other regions of the country. The main internationalairport (Port Bouet) in Abidjan is well equipped to handle all moderncommercial aircraft. In addition, a large new airport at Yamoussoukro iscapable of handling international flights and there is a network of 26other regional airports.

Incentives

11. To encourage private investment, a Tourism Incentive Code waspromulgated in 1973 (Law No. 73-368) which gives exemptions from valueadded tax and duties on imported materials and equipment used forconstruction. Depending on the nature and importance of the investment,an investor may benefit from a priority status which entitles him to thefollowing exemptions for a period up to seven years from the first yearof operation:

(a) Government (excluding local) real estate taxes;

(b) local taxes;

(c) license fees and related expenses;

(d) tax on rental space;

(e) income tax;

(f) employer's contribution for benefits basedon employees' salaries;

(g) sales tax; and

(h) certain other minor taxes.

Alternatively, if an enterprise is big enough or considered of nationalimportance, the Governmnent may negotiate a special agreement grantingincentives for up to 25 years. The incentives are awarded on an individualbasis, depending on a project's relative merit.

ANNEX IlPage 4

12. The granting of incentives goes through different stagesfollowing procedures defined in Decrees No. 72-488 (By-law 8/MET/DR) andNo. 73-401. Investors first submit applications for approval (agré'mentprofessionnel) to the Ministry of Tourism, which analyzes and approvesthe site as well as architectural and other technical aspects and ensuresthat all licenses and permits are in order.

13. After approval by the Ministry of Tourism, investors' appli-cations are submitted to the Ministry of the Plan (agrement prioritaire),which is subject to the recommendations of a special committee representingthe Ministries of Tourism and Finance as well as the Plan. The committeemakes an evaluation of the investors, the proposed management and staffing,the marketing strategy and the financial and economic aspects of the project.

14. The Governnent will also connect individual hotel sites withprimary infrastructure lines via "branchements" (e.g., access roads,electricity, water, teleconnunications, sewerage). Such connecting infra-structure will be financed out of the Ministry of Financet s Special Budgetfor Investment and Equipment (BSIE) once the applicant's project hasreceived final approval. All requests for infrastructure are reviewedduring the month of November and approved the following January, followingnormal budgetary procedures.

15. As part of its program to stimulate the interest of privateinvestors, the Government has launched an investment promotion campaignin major European capital markets and has retained the Banque de Paris etdes Pays Bas to assist in this endeavor.

Land Policy

16. Land acquisition can be a complicating factor because thereare three categories of ownership which fall under different Governmentland policies:

(a) public domain of the State for land within 100meters of the sea or the lagoon and 25 metersof a river;

(b) private domain of the State for land (such asforest, savannah, etc.) which is not exploited;and

(c) land with real estate title (titre foncier)usually private property.

Land in the public domain of the State to be used for construction isrented for a period of 30 years, renewable for periods of 10 years. Fortourism projects the rent is on a per bed per year basis as follows:

ANNEX IIPage 5

CFAF per bed/per yearFirst seven Eighth and

years subsequent years

Urban area 2,500 5,000

Rural area 1,000 2,000

Land in the public domain of the State on the seacost and between theocean and the lagoon is nontransferable. Land, either agricultural(cultivated) or urban, with real estate title can be bought and sold bynormal real estate transactions. In exceptional cases urban land underthe private domain of the State can be bought.

17. In the cities, where land is usually privately owned, a quickdecision is possible since title to the land is not complicated andbuilding sites can be approved by the Ministry of Finance. In countryand beach locations where land belongs to the State, building sites mayte approved only in priority zones established by the Ministry of Tourism.The land question in this case is considerably more complex and may requirea longer period of time for approval to be granted. Although the systemof ground rents does avoid land speculation, the present rates for beachsites (ostensibly calculated at 105/ of market value) are quite low forhotel use.

ANNEX IITable 1

IVORY COAST

TOURISM DEVELOPMENT PROJECT

Ministry of TourismOperating and Capital Budget

(CFAF million)

Operating Budget

a/1970 1971 1972 1973 1974

Central Administration 72 74 34 85 874 Departments 33 12 75 36 453 Supervised Companies 122 243 217 219 390

Total 227 329 326 340 422

Capital Budget

Vacation Villages 140 964 700 360 -Motels 1,198 1,109 1,388 562 514Infrastructure - 19 19 200Studies 19 - 6 - 8

Total 1,357 2,073 2,113 941 722

a/ Estimated

Source: Ministry of Tourism

ANNEX IlTable 2

IVORY COAST

TOURISM DEVELOPMINT PROJECT

Hotels în Abid Ian

Government Classified Hotels by Category

(April 1974) Room Rate JUS$)

CateRzory Hotel No. Rooms Single Double

sStars Ivoire a/ 680- 25 35

4 Stars Palm Beach a/ 60 14 16Tiama a! 145 21 25

885

3 Stars Relais Aériens a! 82 15 17Liberte 57 10 14

Du Parc a/ 86 17 22De France 48 13 17International 47 13 17Grand Hotel a! 100 10 14Hibiscus 25 13 17

445

2 Stars Mediterranée 17 8 13

SUBTOTAL 10 1,347

Unclassified Hotels of 10 + Rooms

Terminus 27Piscine des Tourelles 12Pergola 19Palmyre 69Humante 10Beau Séjour 27Desert 30Batafoc 17Phoenicia 17Atlanta 24

SUBTOTAL il 252

GRAND TOTAL 21 19

Total Hotels of internationalStanding in Abidjan 6 1,153

a/ Hotels of international standi-ig.

b! Hotels received Gover-ment approval ta raise their room rates by 20'/ in May 1974.

c/ There are 711 at the Hotel Ivoire but only 680 are available for rent.

Sources: IBRD, Ministry of Tourism

NOVEMBER 1974

ANNEX IlTable 3

IVORY COAST

TOURISM DEVELOPMENT PROJECT

Hotel Management and Ownership Patternsfor Hotels Operating during 1974

Number of Number ofManagement Hotels Rooms % of Rooms

A. InternatiQnal Management Companies

Intercontinental Hotels Corporation (PanAm) 1 680 24U. T. H. (UTA) 3 361 13Me'ridien (Air France) 1 82 2Club Mediterranee (Vacation Village Chain) 2 500 18

Total International Management Companies 7 1,623 57

B. Local Management Companies

SIETHO (a parastatal agency) 8 243 9

Total Management Companies 15 1,866 66

Non-affiliated Management 46 978 34

Total Hotels 54 2,844 100

Ownership

A. Public Ownership

Number ofLocation Hotel Rooms % of Rooms

Abidjan Ivoire 680 24Assinie Club Mediterranee 200 8Assinie Assouindé 300 10Interior 8 SIETHO Hotels 243 9Yamoussoukro Président 130 4San Pedro ARSO 57 2

Total Public Ownership 1,610 57

B. Private Ownership

1. International Rooms

AGIP 21Mobil 12ESSO 12Shell 12

Total International 57 57 2Ownership

2. Local Entrepreneurs 1,177 41

TOTAL HOTEL ROOMS 2,844 100

Source: IBRD Mission

NOVEMBER 1974

ANNEX IITable 4

IVORY COAST

TOURISM DEVELOPMENT PROJECT

Principal Hotels Constructed 1970-73

Number ofHotel Location Rooms Date Investment Investment/Room

(million CFAF) (million CFAF)

Ivoire (3rd addition) Abidjan 250 1971/72 1873 7.5Tiama Abidjan 145 1971/72 607 4.2Hibiscus Abidjan 25 1973 40 1.6Le Fromager Gagnoa 40 1970 160 4.0Le Mont Zanzan Bondoukou 30 1971 202 6.7Les Frontières Odienné 30 1972 195 6.5Ile Bambou Aboisso 20 1972 110 5.5Arso San Pedro 57 1972 91 1.6L'Eléphant Bouaké 27 1972 43 1.6Président Yamoussoukro 150 1973 1500 10.0Le Dala Boundiali 25 1973 88 3.5Caristofanis San Pedro 12 1973 28 2.3Nango Agninilekro 20 1973 25 1.2Nikoa Jacqueville 22 1973 180 8.2Les Cascades Man 48 1969/70 220 4.6Sitour Assinie 64 1970/71 64 1.3Club Mediterranee Assinie 209 1970/71 1683 8.0Assouindeé Assinie 300 1971/72 1030 3.4

NOTE: Investment figures are actual cost at time of investnent.

Source: Ministry of Tourism.

NOVEMBER 1974

IVORY COASTTOURISM DEVELOPMENT PROJECT

MINISTRY OF TO0)111SM - OnGANIZATION CHART

|~MtNISItfr/

CENTFIAI ADMINIS rRATION SUPERVISED COMPANtESI Cal»;eF ) TUTELLE

I X r , , - . . - . [ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~SIETHO -

REGULATION HGTLri. UNST4IOAN| Of TOURIStu INDUSTRY l l AND TOURIISM tXr)lots | | I Hl)MDflON ADMINISTI/ATION ANDI|)0F TO*JRISM INOUSTRiY FN OAS ~JCSPf<MTU INANJCE

REGULATION

(HOTET INSPECtION STUDI ES INFRASTRUCtURE ACCOUNTING INVESTMENTS PERSONNEL NAACLASSIFeCATION &_CONTROL & ENVI RONMEN&TC.>

STATISTICs TRAINING PROtOTION

Woard SwIb-9St9

ANNEX IIIPage 1

IVORY COAST

APPRAISAL OF A TOURISM DEVELOPMENT PROJECT

Financial Environment

The Institutional Framework

1. The Ivory Coast is a member of the Western Africa MonetaryUnion established in 1962 and composed of seven countries with a commoncentral bank, the Banque Centrale des Etats de l'Afrique de l'ouest(BCEAO). Banking and credit institutions in the Ivory Coast include fourcommercial banks, three development banks and two leasing institutions(Table 1). In addition, there is a public institution, Caisse Autonomed'Amortissement (CAA) which manages public debt,-holds and manages publicdeposits and mobilizes local resources through issuing of tax-free bonds.Another public institution, the Socieét5 Nationale de Financement (SONAFI)was set up in 1962 to make direct participation in undertakings of nationalinterest and also to make available quasi-equity to small Ivorian enter-prices through its Participation Fund. Finally, the Government establisheda Guarantee Fund in 1966 to provide guarantees for credits granted tosmall Ivorian enterprises.

2. The financial sector has been progressively Ivorianized. TheGovernment's share in BIDI is 21.1%, in CCI 75% and in BNDA 100%. Althoughthe commercial banks are still dominated by French, American, German andItalian interests, about a third of their capital is Ivorian, 1/ mostlythrough SONAFI's participation. On the management side, all these bankshave an Ivorian either as general manager or as deputy manager and thereis progressive Ivorianization of professional staff.

Types of Financing

3. The commercial banks provide short- and medium-term financeto all sectors of the economy and have branches in 37 towns throughoutthe country in addition to Abidjan and its suburbs. SGB is the largest,with 34% of the commercial banks' total assets of CFAF 145 billion, asof September 1974 and a total staff of 450.

4. The development banks lend at short, medium and long term.BIDI, established in 1965 and sponsored by Lazard and Chase, with a 7.1%IFC participation, specializes in medium- and long-term lending tomedium- and large-scale enterprises in industry and tourism. Its

1/ Except BIAO which is not registered in the Ivory Coast.

ANNEX IIIPage 2

outstanding equity and loan portfolio was CFAF 6.8 billion as of October1973. BIDI's staff consists of 32 persons, all working in Abidjan. CCI,in which CCCE has a 16.7% share and BCEAO 8.3%, is mostly engaged inhousing loans, financing of vehicles and small equipment .for consumers,and financing of craftsmen and small entrepreneurs. CCI's staff totalsabout 154 persons; it presently operates one main agency in Abidjan andthree branches and plans to open three other branches soon in Man, Korhogoand Abengourou. BNDA specializes in agricultural lending.

5. The two leasing institutions mainly offer hire purchase schemesfor automobiles, trucks and public works equipment. Their operations haveexpanded fast in recent years.

Interest Rates and BCEAO's Rules

6. Interest rates and credit distribution are controlled by BCEAOthrough a rediscount system. The rediscount rate was raised from 3.5% to5.5% in 1973. Rates of interest charged by banks are determined by addinga spread to the rediscount rate, which varies according to the nature andterm of credit extended. Interest rates for deposits (except cash depositsunder CFAF 200,000 which do not receive any interest) are determined byadding to a basic rate (2.5%) a spread varying from O to 4%, dependingupon the amount and the term of the deposit. The volume of'credit iscontrolled by allocating to each bank a ceiling for short-term rediscountoperations and a "commitment potentiality" for their medium- and long-term operations. In addition, the banks can rediscount their loans toborrowers only according to specific rules and after study by BCEAO ofeach application. Since all nonrediscountable loans under BCEAO's rulesare made at an 11% interest rate, rediscountable loans have a majoradvantage with interest rates varying between 6.5% and 9.5%.

7. Short-term rediscountable loans may be granted to productiveenterprises if their financial structure is sound, in particular if theirnet working capital represents a minimum of 5% (trade activities) or 10%(industrial activities) of their current assets. In addition, their totaldebt/equity ratio should be below 10:1.

8. The same conditions apply to medium-term (2-7 years) redis-countable loans. In addition, enterprises must themselves finance aminimum of 20% of the project cost, and as a general rule loans cannotrepresent more than 50% of the project cost (65% for agricultural andindustrial enterprises or 80% for loans to small- and medium-scale enter-prises guaranteed by the Guarantee Fund). Loans for purchase of enter-prises on used equipment cannot be rediscounted.

9. BCEAO indirectly controls the allocation of long-term loansthrough the commitment potentiality it determines for every financialinstitution and through its directorship in BIDI's and CCI's Boards.

10. To the extent that leasing operations are rediscountable atBCEAO through a commercial bank, they are controlled along the same lines.

IVORY COAST

TOURISM DEVELOPMENT PROJECT

Financial Institutions(As at September 30, 1974)

(CFAF billion)

Loans and Advances Total Assets/

Development Banks Short term Medium term Long term Liabilities

Crédit de la Cote d'Ivoire (CCI) 1.5 5.7 5.6 15.1

Banque Ivoirienne de Developpement - 2.1 6.6 9.6

Industriel (BIDI)Banque Nationale de Developpement

Agricole (BNDA) a/ 3.0 0.9 1.1 7.0

Commercial Banks

Banque Internationale de l'Afriquede l'Ouest (BIAO) 20.5 1.9 - 33.1

Banque Internationale du Commerceet de l'Industrie (BICI) 22.0 4.2 - 34.5

Société Ivoirienne de Banque (SIB) 21.7 1.1 - 28.3

Sociéte Genérale de Banque (SGB) 37.4 3.7 - 49.4

Leasing Institutions

TAW Leasing International n.a n.a n.a n.a

Société Africaine de CréditBail (SAFBAIL) n.a n.a n.a n.a

a/ As at September 30, 1973.

DFCDJanuary 20, 1975

ANNEX IV

IVORY COAST

APPRAISAL OF A TOURISM DEVELOPMENT PROJECT

CREDIT DE LA COTE D'IVOIRE

List of Tables and Exhibits

Table

Personnel 1

Loan Approvals 1969-74 2

Interest Rates 3

Equity Investments at 9/30/74 4

Balance Sheets 1969-73 5

Income Statements 1969-73 6

Actual and Projected Financial Ratios 1970-79 7

Projected Loan Approvals 1975-79 8

Projected Balance Sheets 1974-79 9

Projected Income Statements 1974-79 10

Projected Sources and Uses of Funds 1974-79 il

Exhibit

Assumptions for Financial Projections A

Board of Directors B

Organization Chart C

ANNEX IVTable 1

CREDIT DE LA COTE D'IVOIRE

Personnel(As at June 30, 1974)

Professional Nonprofessional Total

Director General 2 1 3

Operations DepartmentDirector 1 1Credit Division 2 15 17Execution Division 1 8 9Technical Division 1 2 3

5 25 30

Finance and Administration DepartmentDirector 1 - 1Recovery Division 2 16 18Accounting Division 1 17 18Administration Division 1 37 38Data Processing Division 2 10 12

7 80 87

Inspection Department and BranchesInspector General 1 i 2Bouake 1 il 12Daloa 1 8 9Korhogo 1 7 8Abengourou 1 2 3

5 29 34

Total 19 135 154

DFCDJanuary 14, 1975

CREDIT DE LA COTE D'IVOIRE

Loan Approvals(CFAF million)

1969 1970 1971 1972 1973 1974No. Amt. No. Amt. No. Amt. No. Amt. No. Amt. No. Amt.

Short term (up 2-yrs,)Auto - private 586 241 673 261 971 409 701 367 562 379 601 410Au.to - truckers - - - - - - 68 263 30 155 8 41

Household equipment 9,297 636 9,566 687 11,752 878 9,719 810 7,483 648 11,438 1,317Commerce & artisans 9 7 16 10 19 5 49 14 66 22 29 13Industry - - - - - - - - - - - -

Housing - individual - - 2 1 - - 5 2 1 1 5 2

9,892 884 10,257 959 12,742 1,292 10,542 1,456 8,142 1,205 12,081 1,783

Medium term (2-7 yrs,)Housing - individuals 227 429 68 288 225 505 399 672 915 1,440 347 1,224Housing - companies 4 56 2 623 32,225 5 1,546 1 1,194 3 1,599Commerce & artisans 16 44 61 123 53 94 77 198 78 136 121 573Industry 3 125 1 215 1 160 1 204 - - 10 2,151

250 654 132 1,249 282 2,984 482 2,620 994 2,770 481 5,547

Long term (over 7 yrs.)Housing - individuals 429 643 331 542 287 502 522 753 840 1,056 288 539Commerce & artisans - - 3 9 - - - - 4 32 - -

Industry 1 158 2 75 1 10 2 250 - - 3 238Communities 3 275 3 318 2 342 1 200 2 360 - - (

433 1,076 339 944 290 854 525 1,203 846 1,448 291 777

TOTAL 10,575 2,614 10,728 3,152 13,314 5,130 11,549 5,279 9,982 5,423 12,853 8,107

DFCDDecember 11, 1974

CREDIT DE LA COTE D'IVOIRE

Interest Rates(percent per annum)

(As at September 30, 1974)

Primary Cost to Spread to Lending

Source CCI CCI Rate Remarks

Short term (up to 2 yrs.)Automobile BCEAO (CAA) 6.50 9.50-13.50 16.00-20.00 ) ( Fixed commission of 8% for 1 yr.

Household Equipment BCEAO 5.50 10.50-16.50 16.00-22.00 ) ( and 10 or 11% for 2 yrs.

Medium term (2-7 yrs) a/

Housing - individual BCEAO 5.50 1.25-5.50 6.75-11.00 Rate varies according to locationand use, lower outside cities and

for owner-occupied, higher incities and for rental. Rateusually initially set at 11% and

reduced as appropriate..

Housing - companies BCEAO 5.50 1.50 7.00 Guaranteed by Government.

Commerce, artisans ( BCEAO 5.50 ) a/

and industry ( CAA 6.50 ) 1.00-7.50 6.50-11.00 Lower rates for largest private

( USAID 3.50 ) and parastatal firms.

Long term (7-10 yrs.)Housing - individual CAA 7.00 1.00-4.00 8.00-11.00 Usually blended with medium-

term loan.

Industry CAA 7.00 1.00-3.00 8.00-10.00 Usually blended with medium- C X

term loan.Communities CCCE 6.50 2.00 8.50

a/ Individual housing loans generally and small industrial loans occasionally include in the principal the

processing costs of outside legal and architectural services. Since such costs may be 5-10% of the loanamount, effective lending rates may be that much highér than stated.

DFCDJanuary 19, 1975

CREDIT DE LA COTE D'IVOIRE

Equity Investments (As at September 30. 1974)(CFAF million.)

% or Share capital CCI %

Company Activity Subs¢ribed Disbursed portfolio Provisions Dividends of coeimany caDital

SATMACI Technical consulting 4.00 4.0o 14 1.80 - 40 10

CAPRAL Food prooessing 2.50 2.50 9 - 4.93 50 5

SIETHO Notel management 2.00 2.00 7 1.80 - 5 h0

SICOGERE Property management 3.94 3.94 13 - 0.07 10 39

SICOGI Rousing o.95 o.95 3 - 0.05 600 -

sIDI Development bank 1.00 1.00 3 - - 700 -

COFINCI Development bank 15.00 15.00 51 - - 300 5 X

29.39 100Total --

DFCDJANUARY 19, 1975

ANNEX IVTable 5

CREDIT DE LA COTE D'IVOIRE

Balance Sheets (as at September 30)(CFAF million)

1970 1271 1972 1973 1974

ASSETSCash and bank deposits (48) 23 210 221 163Receivables 24 9 15 6 6Other 20 24 28 2Total ourrent 26

Short-term loans 706 997 1,204 1,204 1,494Medium-term loans 1,369 2,490 3,513 3,853 5,730Long-term loans 4.926 4,960 4862 4.960 5,603Subtotal 7,001 n,h7 9 579 10,017 12,527

Doubtful and in litigation 278 404 480 647 741

Less: Provisions 5) (238) (266) (358) (461)

Net portfolio 7,094 B,613 9,793 10,306 13,107

Equity investments 16 16 16 10 24Less: Provisions ) { th (4)

Net equities 10 9 18 20

Other investments 17 21 26 43 55

Land 4 4 5 5 5Buildings (net) 30 65 55 60 164Equipment (net) 15 24 36 33 52TJnder construction 2 2 1 71 1

Total fixed 9 F997- 3

TOTAL 7,168 8,794 10,177 10,780 13,680

LIABILITIESBCEAO - - 266 286 392

CAA 90 250 325 207 324Sight deposits 5 5 10 13 13Security deposits 98 152 296 201 121Payables and other 75 114 126 180Total current 202 ?01 1,011 533 1,031

BCEAO 943 2,124 3,022 3,205 4,833CCCE, 3,982 3,790 3,471 3,469 3,454CAA 636 828 823 1,123 2,005Government 29 - - - -

USAID ___ - 67

Total long/medium borrowings 5,590 U,772 7,316 7,797 10,367

General reserves 206 257 377 414 461Internal guarantee funds 214 279 348 605 687Other 7 il 12 12

Total general reserves a/ 736 7-3 1,031 1,160

Share capital (paid in) 800 900 1,000 1,000 1,000Reserves and accumnulated earnings 8 10 114 119 123Total equity U un 1.115 1.119 jdj2TOTAL 7,168 8,794 10,177 10,780 13,680

Operations on Government AccountDisbursed - 179 508 898 908TJndisbursed 100 6 1l 0

Total 100 27h 19 92 9i7U=

a/ These provisions are considered as part of equity.

DFCDMarch 21, 1975

ANNEX IVTable 6

CREDIT DE LA COTE D'IVOIRE

Income Statements (Year ending September 30)(CFAF million)

1970 1971 1972 1973 1974

REVENUES

Loan interest and commissions 440 551 647 684 871Inmcoe on investments 4 7 6 17 19Interest on deposits 10 5 8 10 ) 89Other 21 3 76 6 )

Total revenue 7 597 737 775 979

EXPENSES

Personnel 95 116 132 145 182Administrative 69 86 130 136 175Depreciation 22 15 20 19 30Interest on borrowings 180 234 287 326 432Provisions a/115 1 1 150

Total expenses 439 56 728 767 969

Operating income 36 31 9 8 10

Extraordinary income (net) (9) - 1 3 (5)

Tax il il 1 1 1

Net income a/ 16 20 7 4 h

a/ Of these provisions, the followingamounts were allocated to generalreserves to minimize taxable income. 49 51 120 37 47Consequently, net income can berestated as follows: 65 71 127 41 51

DFCDMarch 21, 1975

CREDIT DE LA COTE D'IVOIRE

Actual and Projected Financial Ratios

Years ending September 30 Actual Prolected1901971 1972 1973 194 175 17 1977 1978J 1979IZL97 7L 7217 1974 17

Income Statement Elmeents as% of Average Total Assets

Gross Incaee 7.2 7.5 7.8 7.4 8.0 7.8 7.6 7.3 7.6 8.2

Less: Financial Excpenses 2.7 2.9 3.0 3.1 3.5 3.7 3.9 4.1 4.2 4.5Administrative Ecpenses 2.8 2.7 3.0 2.9 3.2 2.8 2.7 2.5 3.1 3.3

Gross profit 1.7 1.9 1.8 1.4 1.3 1.3 1.0 0.7 0.3 0.4

Less: Provisions for losses a/ 0.4 0.8 0.4 1.0 o.8 0.8 0.5 0.3 0.2 0.1

Tax & extraordinary items 0.3 0.1 .. .. .. .. .. .. ..

Net profit b!/ 1.0 1.0 1.4 0.4 0.5 0.5 0.5 0.4 0.1 0.3

Income from Loans & Cost of Debt

!ield on term loans as % of averageterm loans 6.9 7.1 7.2 7.0 7.4 7.5 7.6 7.7 7.8 8.0

Cost of debt as % of average debt 3.5 3.7 3.9 4.0 4.5 4.6 4.7 4.8 4.9 5.1

Net profit and dividends

Net profit b/ as % of year-endshare capital 8.1 7.9 12.7 4.1 5.1 6.4 6.5 5.7 3.0 6.2

Net profit b/ as % of averageequity c/ 5.2 5.0 7.5 2.1 2.3 3.4 3.4 2.8 1.5 3.0

Dividends as % of year-endshare capital - - - - - - - - - -

Payout ratio - - - - - - - - - -

Debt/equity c/ ratio

Long- and medium-term debt/equity 4.3 4.3 4.0 3.6 4.5 4.9 5.3 6.3 7.0 7.3All debt/equity 4.3 4.5 4.3 3.9 4.9 5.1 5.5 6.5 7.2 7.5

Debt coverageInterest coverage 1.5 1.4 1.5 1.2 1.1 1.1 1.1 1.1 1.3 1.4

Interest and principal coverage - - - - 1.1 1.1 1.1 1.0 1.0 1.1

a/ Excludes allocations to general reserves.b! Includes allocations to general reserves.c/ Includes general reserves as equity.

DFCDMarch 21, 1975

ANNEX IVTable 8

CREDIT DE LA COTE D'IVOIRE

ProJected Loan Ap-plrovals (Tear ending September 30)(CFAF million)

1975 1976 1977 1978 1979

Short-termHousehold equipment 800 900 1,000 1,100 1,200Auto 00 600o _ 650 700 750

1,300 1,500 l,O5 0 9 1,950

Medium-termHousing - individuals 1,400 1,550 1,700 1,850 2,000Housing - cempanies 1,500 1, 600 1,700 1,800 2,000Commerce, artisans and industry 1.250 1.400 1.500 1.500 1 600

4.,150 4,550 li,OO 5',150 5,0

Long-termHousing - individuals 750 800 850 900 950Commerce, artisans and industry ?50 300 300 300 350Communities 200 250 250 300 300Hotels - 770 770 770 -S3E project 250 I00 475 525

1! 2,370 2,57

TOTAL 6,650 8,420 9,120 9,695 9,675

DFCDMarch 21, 1975

ANNEg IVTable 9

CREDIT DE LA COTE D'IVOIRE

Pro.iected Balance Sheets (as at September 30)(CFAF million)

(7Actual 1976 1977 1978 1979(Actual) L

ASSETSCash and bank deposits 163 883 444 435 258 172

Other Q2 4 60 65 65-262 928 4991 97 323 237

Short-term loans 1,494 1,132 1,141 1,225 1,308 1,391

Medium-term loans 5,730 7,355 8,625 9,361 9,748 9,999

Long-term loans 5 603 6 432 _7391 8 581 10 522 12.084

Subtotal 12,827 iÇ 919 17,157 19,167 21,578 23,3474

Doubtful and in litigation 741 983 1,142 1,241 1,322 1,390

Less: Provisions (461) (545) (63 (688) _733) (770)

Net portfolio 13,107 15,357 17,666 19,720 22,167 24,094

Investments 75 70 70 70 70 70

Fixed assets (net) 234 300 1,425 2925 3,300 3.100

TOTAL 13,680 16,655 19,660 23,210 25,860 27,501

LEABILITIES

BCEAO 392 400 400 400 400 400

CAA 324 325 325 325 325 325

Deposits 134 200 225 250 250 275

Other 180 110 120 130 140 150Total current 1,031 1,035 1,070 1,105 1,115 1,150

BCEAO 4,833 6,277 7,394 8,434 9,102 9,698

CCCE 3,454 3,508 3,371 3,031 2,703 2,427

CAA 2,005 2,967 3,762 4,207 4,822 5,352

USAID 67 237 237 237 237 237

IBRD - Hotels - - 215 730 1,66o 2,l4O

IBRD-SSE Project - - 125 450 890 1,365

Building finance - - 625 2,125 2,275 1,975Unidentified - - - - - -

Total long/medium borrowingslO,367 12,989 l5,729 19,214 21,689 23,194

General reserves a 1,160 1,238 1,330 1,410 1,450 1,538

Share capital 1,000 1,300 1,500 1,500 1,500 1,500

Reserves and accumulatedearnings 123 130 135 140 145 150

Total equity 1,123 1,430 1,635 1,640 1,645 1,650

TOTAL 13,680 16,655 19,660 23,2L0 25,860 27,501_= u _ __ _ - '--= z

a/ These reserves are considered as part of equity.

DFCDMarch 21, 1975

ANNEX IVTable 10

CREDIT DE LA COTE D'IVOIRE

Pro.iected Income Statements (Year endinR September 30)(CFAF million)

197 1975 1976 1977 1978 1979(Actual)

REVE;NUES

Loan interest and commissions 871 1,070 1,255 1,440 1,630 1,870Income on investaents 19 20 20 20 20 20Rents - - - - 125 200Other 89 100 100 100 100 100

Total revenue 979 1,190 1,375 1I,560 1,875 2,190

EXPENSES

Personnel 182 210 255 290 310 355Administrative 175 195 215 235 255 275Depreciation 30 20 20 20 185 240Interest on borrowings 432 560 700 875 1,035 1,190Provisions a/ 0 200 180 135 125

Total expenses 969 1,185 1,370 1, 1, 2,185

Operating income 10 5 5 5 5 5

Net income a/ 4 5 5 5 5 5

a/ In order to be consistent withCCI's past and current financialreporting (Annex IV, Table 6),these provisions includeallocations to general reservesas follows: 47 78 92 80 4h 88(See nAssumptions for FinancialProjections", Annex IV,Exhibit A, assumption II.D).Consequently, net income canbe restated as follows: 51 83 97 85 45 93

DFCDMarch 21, 1975

ANNEX IVTable 11

CREDIT DE LA COTE Dt IVOIRE

Projected Sources and Uses of Funds (Year ending Sertember 30)(CFAF million)

SOTIRCES 1975 1976 1977 1978 1979

BorrowingsBCEAO:Short-term 1,267 1,333 1,400 1,467 1,533Medium-term 0 3 810 4 020 4 220 4 420

CAA- w,.3o7 5,420 ~~~~~~~~~5,953Medium-term 500 500 355 5oc 500Long-term 1.100 1.100 1.035 1,100 1 100Subtotal 1,600 1,600 1,390 1,600 1,60

CCCE: Long-term 520 405 240 29o 380

USAID: Long-term 170 - - -

IBRD: SSE Project, Long-term - 125 325 440 500

IBERD: Hotels, Long-tern - 215 515 930 480Building finance - 625 1,500 375 -

Unidentified _- - -

Total borrowings 7 ,1-27 8I 9,390 9,322 8,913

Loan collectionsShort-term 1,720 1,470 1,550 1,700 1,850Medium-term 2,4o4 3,129 3,564 4,334 4,685Long-term 701 824 887 774 846Total 2 5,h23 6,001 6 7,381

Share capital subscription 300 200 - - -

Cash from operationsNet income 5 5 5 5 5Depreciation 20 20 20 185 240Provisions (net of losses) 78 92 80 4o 88Total 103 117 107 230 333

Other accounts (net) 55 25 30 5 35

TOTAL SOURCES 12,410 13,878 15,526 16,365 16,662

USESDebt repayments

BCEAO 3,385 4,026 4,380 5,019 5,357CAA 638 805 945 985 1,070CCCE 466 542 580 618 656Building finance - - - 225 300Unidentified - - - - -

Total 1,49- 5,373 5,905 6fl4 7,383

Loan disbursementsShort-tenm 1,350 1,480 1,635 1,785 1,935Medium-term 4,165 4,510 4,375 4,755 4,950Long-tenm 1,620 1 830 2,100 2,760 2,L60

Total 7,135 7,8 8,110 9,300 9,345

FIXED ASSET EXPENDITURE 66 l,145 1,520 395 20

TOTAL USES 11,690 14,338 15,535 16,542 16,748

CASE SURPLUS (DEFICIT) 720 (460) (9) (177) (86)

DFCDMarch 21, 1975

ANNEX IVExhibit A

CREDIT DE LA COTE D'IVOIRE

Assumptions for Financial ProJections

I. Forecast of Operations

A. Approials: See Annex IV, Table 8.

B. Diabursements and Maturities:

% Disbursed Term

YA A+, Yk+2 Total of which:

Short tr - years graceHonsehold equipment and

auto 90 10 - -

Medium termHousing - individuals 15 45 40 5 -

Housing - coepanies 30 60 10 4 -

Coemerce, artisans andindustry 30 70 - 5

Long termHousing - individuals 25 50 25 10 ' 6Coemerce, artisans and

industry 40 50 10 10 6Connunities 30 50 20 10 5Hotels 25 ho 35 15 4

II. Revenues and ExDenses

A. Interest rates,,cost, spread and sources; see Annex IV, Table 3.

B. Administrative expenses grow 12% per annum.

C. After new headquarters building is completed in 1978, rentalincome will eventually reach CFAF 400 million per year.

D. Provisions projected at maximum tax-free allowable, approximatelyequivalent to 2% of annual disbursements or 1% of year-end loansoutstanding; provisions for identified bad debts maintained at 55%of loans classed as doubtful or in litigation and general reserves atapproxiuately 7.5% of loans outstanding.

a/ YA: Year of approval.

IFCDFebruary 24, 1975

ANNEX IVExhibit B

CREDIT DE LA COTE D'IVOIRE

Board of Directors(As at September 30, 1974)

Chairman M. KONE ZOUMANA, General Manager, Société pour l'Or-ganisation de la Distribution des Produits Agricoleset Alimentaires (AGRIPAC)

Vice Chairman CAISSE CENTRALE DE COOPERATION ECONOMIQUE, representedby M. Michel Penent, Resident Representative

M. AMANLAN KASSY Georges, Union Leader

BANQUE CENTRALE DES ETATS DE L'AFRIQUE DE L'OUESTrepresented by M. Jean Charpentier, Director

M. BLEDOU Konan, Manager of the Société de GestionFinancière de l'Habitat (SOGEFIHA)

LA CAISSE AUTONOME D'AMORTISSEMENT, represented byM. André Hovine, Director

M. DIOULO Edmond, Ministry of Construction and Ur-banism

M. KOFFI N'GUESSAN André, General Secretary, Fondsde Garantie des Crédits aux Entreprises Ivoiriennes

M. KOUASSI N'TE, Chef du Cabinet, Ministry of Planning

M. LECLERC Jacques, Chief of the Mission d'Aide et deCoopération

M. TIEBA OUATTARA, Député-Questeur, National Assembly

M. YAPOBI Guillaume, Economic and Social Adviser

GovernmentCommissioner M. COULIBALY Alassane, State Controller, Ministry of

the Economy and Finance.

CREDIT DE LA COTE D'IVOIREOrganization Chart

BOARD OF DIRECTORS

Oirector General

i2)

Director of Operations l Director, Finarnce & Admin.l

(proposed)

Hotel Credit Eection Technical Accounting Recovery Administration Data Processing

{1) ~~ ~~(2) ()()1)(2) (1) (2)

Inspector-General

(1)~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~-

l ~ ~ ~ ~ ~ ~ ~ ~~ ~~~~~~~~~~~~~~~~~r H

Branches: [ ouae Daloa KOrhogo Abengouro

Worid Bank-9618(R)

( ) Refers to number of professional employees in department.

ANNEX VPage 1

IVORY COAST

APPRAISAL OF A TOURISM DEVELOPMENT PROJECT

Suggested Checklist for CCI's Hotel Appraisal

The following model is presented as a guide to those preparingand appraising hotel projects for financing under CCI's proposed line ofcredit. Since each project will differ in size, location, management,financial plan, market, etc., it is impossible for any outline to befollowed religiously. The present annex is intended merely as a guide orchecklist to be adapted with flexibility to the individual project.

ANNEX VPage 2

CREDIT DE LA COTE D'IVOIRE

Checklist for Hotel Appraisal Reports

I. Summary and Reco=mendations

Brief description of the projectIdentification of promoters and managersEvaluation of technical and commercial feasibilityItemized capital cost by foreign exchange and local componentsFinancial planEconomic justification, profitability and evaluation

of risk for CCICCI's participation

- conditions to be included in legal documents- special recommendations

II. The Promoting Company

Sponsors, description of their activities and hotel experiencePlace of incorporation, place of business and telephone numberOwnership and actual control, main shareholders, foreign

participationBank references and others if necessaryBoard of DirectorsHistory of company and audits (with qualifications, if any)Financial statements for at least three years, trends and

measures of profitability, stock pricesPending claimsConsultants and professional advisers including legal counsel,

auditors and management consultants, with details ofqualifications and experience

III. Management Company

Same information (as necessary) as in II

IV. The Project

Concept and objectives of proposed hotelRegion

- geographic situation, climate, tourist attractions,proximity of towns, etc.

Location- exact location- description and size- real estate status (statut foncier)

ANNEX VPage 3

- evaluation of the site- availability of land for expansion

Map showing location and significant data (access,other hotels, etc.)

Proposed services (restaurants, bars, nightclubs, public space,rooms, etc.)- buildings and space allocations by type- equipment list- utility requirements- possible extensions

Types of infrastructure necessary and those responsible forfinancing, timing and execution

Sketches showing various aspects- general plan

- plan de masse (?)- cross-sectional plans- room layouts by type

Management- contracts and main features

- ground rent- management contract- lease- subleases- technical assistance

- organization chart- staffing

- sources and quality- number of employees by department with salaries- seasonal aspects- need for foreign staff by category- hiring policies- training program

- evaluation of other management systems- pre-opening program- operational manuals and procedures- accounting and control

Legal aspects- operating licenses- construction permits- insurance regulations and coverage- other

Project timetableEngineering and construction

- bidding and contracting conditions- contractors' and subcontractors' names, experienceand technical competence

- suppliers' names, experience and technical competenceTechnical assistance

- advisers and consultants (names, description of services,duration of contract, guarantees and penalties)

- access to technical material and innovation, patents, etc.- research in process

ANNEX VPage 4

V. Project Cost

Breakdown by foreign, local and total costs of:

LandSite improvementsCivil engineering

- buildings- mechanical equipment

- plumbing and sanitation- heating, ventilation and air conditioning- passenger and freight elevators- sewage treatment and filtration plant- other equipment

- electrical equipment- furniture, fixtures and equipment

- furniture and furnishings- kitchen- cold storage- laundry- linens- restaurant and kitchen utensils- sports and playground- vehicles- other

- engineering and other fees- pre-opening expenses- interest during construction- working capital

Cost per room and per square meterInvestment schedule over time

VI. Financial Plan

Summary plan with amounts and ratios- share capital by investors- senior loans- junior loans- contingent financing (if any)- other

CCI financing (loan, equity (?), WBG participation)- purpose and currency- terms of financing- security- repayment schedule- schedule of investments- conditions of financing (restrictions on issuance of newdebt or securities, distribution of dividends, stockoptions, etc.)

Other sources of permanent financing (same detail as above)- internally generated funds- sponsor's contribution- deferrèd payments (e.g., supplier credits)- equity, quasi-equity and loans by third parties

ANNEX VPage 5

Short-term financing- overdraft and other privileges- advances from tour operators

VII. The Market

Review of pertinent tourism studiesDemand for tourism in past with trends broken down by

- arrivals- guest nights (nuitees)- length of stay- hotel occupancy

Supply of facilities- types, capacity and services of existing accommodation- competitive analysis of existing supply vis-a-visproposed hotel

- other planned accommodations- accommodations to be closed down

Projection o5 demand and supplyClientele for proposed hotel with descriptionSales forecast for proposed hotel

- market share- occupancy curve- tariffs and average room rates by category and season

Promotion- advertising, sales promotion media and budget- selection of sales channels- contracts with travel agents, tour operators, airlines,etc., with summary features

VIII. Governient and Incentives Awarded

Approval by regulatory agenciesLicenses concerning foreign exchange dealing and

contracting abroadRole as owner, client, supplier or competitorPrice and profit control, profit remittances and

capital repatriationIncentives awarded

- infrastructure- construction period- operating period

IX. Financial Aspects

Assumptions for projection of financial statements, based onUniform System of Accounts for Hotels or other acceptableformat- sales

- rooms- foods- beverage- other

ANNEX V,Page 6

- cost of sales- food- beverage- other

- labor cost- wages- benefits and related taxes

- other direct expenses (supplies, etc.)- undistributed expenses

- administration- promotion- utilities- repairs and maintenance

- management fees- rental and/or lease fees- depreciation schedules- amortization of pre-opening expenses and otherexpenses capitalized

- amortization schedule of loans (interest and principal)- taxes

- local and municipal, real estate

- income taxes- sales tax- other

- replacement of equipment scheduleBased on above projections (for life of CCI's loan)

- income statements- balance sheets- sources and application of funds

Presentation of financial indices- profitability ratios

- gross operating profit/sales- net profit after tax/sales

- leverage ratios- long-term debt/equity- gross operating profit/interest (timesinterest covered)

- debt service/cash flow (times debtservice covered)

- break-even analysis- discounted financial rate of return (over project'slife) with sensitivity tests on changes in occupancy,cost and delays in starting

- dividend rate and policy

X. Economic Aspects

Priority and importance of project for countryProjected expenditures by hotel guests outside hotelForeign exchange earnings of projectEmployment created, direct and indirect

- effects on income distribution, standard of living,consumption

Inflation, devaluation and other hazards of project

ANNEX VPage 7

Other effects- on country's development program- economies of scale- linkages with other industries or sectors- transfer of technology

Benefit/cost analysis, including external costs and benefitsEconomic rate of return on project based on estimated

economic life- sensitivity tests

Value added

XI. Social Aspects

Social impactPlanning and enviromnental considerations

- zoning- land use- building regulations

XII. Recommendation

Recommendation on financing of project noting particularadvantages and disadvantages

ANNEX VIPage 1

IVORY COAST

APPRAISAL OF A TOURISM DEVELOPMENT PROJECT

Profiles of Adviser and Consultants

Introduction

1. TUnder the proposed project, there will be three appointments.The appointees' objectives will be to help improve techniques for theappraisal and evaluation of tourism projects presented to the Governmentand CCI for approval and to strengthen the country's tourism marketingeffort. These assignments are critical for tourism development, andselection of appropriate professionals is considered vital for the successof the project. It is with this in mind that the following job descriptionsand profiles of candidates are proposed.

A. Adviser (Conseiller Technique) at CCI

Job Description

2. The adviser would be responsible for the hotel and tourismsector and for small-scale enterprises at CCI, spending about two-thirdsof his time on hotel projects. A major function would be to train Ivorianstaff and his duties would include: promotion of projects, search forinvestors and managers, financial analysis, follow-up on projects andadvising various ministries on investments in the subject sectors.

3. In his role of advising on promotion, the adviser wouldparticipate in organizing subsidiary projects; to determine the scale ofinvestment, the financing of the project, the search for equity funds andinvestors with emphasis on Ivorian participation, the market and theselection of management companies. He would also advise on and be presentat negotiations involving the above.

4. The adviser would appraise dossiers presented ta CCI forfinancing, giving his opinion particularly on financial and economic aspects.He would be responsible for developing follow-up procedures and carryingout periodic studies of the businesses financed and reviewing theiroperations.

5. The adviser would also work with the Ministries of Finance,Planning and Tourism on financial and economic matters for projectspresented to the Goverument for approval and benefits under the TourismIncentive Code. In this capacity, he would sit on the interministerialcommittee (Conseil Restreint des Investissements Touristiques) whichreviews hotel projects.

ANNEX VIPage 2

6. The adviser would be assigned to the Operations Department of

CCI and report directly to the General Manager.

Profile

7. Ideally, the person appointed will have Vide experience indevelopment finance in general and in tourism and small-scale enterpriseprojects as well. He should preferably have French as his mother tonguetogether with a good knowledge of English. He should demonstrate soundknowledge of and relevant experience in:

(a) financial and economic analysis ofprojects from a lender's viewpoint;

(b) negotiation of projects;

(c) relations with merchant banks andinternational financing institutions;

(d) underdeveloped countries, particularlyWest Africa;

(e) characteristics of tourism projects andsmall-scale enterprises; and

(f) negotiation at high level in both thepublic and private sectors.

Since the adviser will occupy a key position in the Ivorian tourismindustry, he should have sound decision-making ability within the frame-work of his role.

B. Consultant Architect/Engineer

Job Description

8. The consultant will be an architect and/or engineer specializingin the hotel industry. His functions would include: technical analysisof tourism and hotel projects, following up projects granted incentivesand reporting on their status, advising the Ministry of Tourism onmaintenance and control of publicly-owned tourism facilities and advisingCCI on technical matters related to its hotel investments, recommendingtechnical changes and reviewing bid documents where necessury.

9. Before a promoter can proceed with a tourism project, he must(among other things) obtain the approval of the Ministry of Tourism. Theconsultant would develop standards and procedures for evaluating theseprojects. In addition, he would advise on technical aspects of hotelclassification. Other important functions would be to give a technicalopinion on each project presented to the Ministry, to complement the workof the Projects Department to thoroughly evaluate the cost estimates forthe project and to train Ivorian staff.

ANNEX VIPage 3

10. The consultant will work in the Projects Department andreport to the Minister.

Profile

il. The person appointed must have an extensive background inhotel architecture, layout and design and engineering. He should be anative French speaker or at least have a sound working knowledge of it.He must have relevant experience in and thorough knowledge of

(a) constructing, furnishing and equipping hotels;

(b) executing hotel projects for both chains andsmaller companies;

(c) conditions peculiar to the tropics. includinglocal materials and maintenance problems;

(d) knowledge of labor and material costs;

(e) underdeveloped countries, preferably includingWest Africa; and

(f) feasibility studies, bid documents andevaluation of contractors' and suppliers'bids.

This consultant must be constructive and able to work in harmony withothers.

C. Consultant in Marketing

Job Description

12. The consultant will be a marketing specialist familiar withthe tourism industry. His job would be closely linked with the marketstudy proposed under the project, and it would be his responsibility toimplement the findings of the study. He should therefore become familiarwith each stage of the study, follow its progress and make reconmmendations. 1/In addition to training Ivorian staff, his functions will be: to advise onredefining the Ivorian tourism product; to integrate culture, folklore andhandicrafts into the tourism effort; to establish a marketing program forthe Ivory Coast in accordance with the proposals of the market study; andto advise CCI on marketing aspects of projects submitted for financingunder the line of credit.

13. The redefiniton and integration of all aspects of the Ivoriantourism project is a major assignment that includes not only evaluatingthe touristic assets of the country but also working with the variousagencies (e.g., ONAA, ICTA, SIETHO, Folkdance Federation, etc.) and

1/ He may in fact be recruited from the firm entrusted with the market study.

ANNEX VIPage 4

coordinating their promotional efforts for different markets (pleasure,business, circuit, conference). The consultant would also review theentertainment value of projects presented to the Ministry for approval.

14. To introduce the market program the consultant must not onlysecure the cooperation of ICTA, SIETHO and the private sector but aboveall establish an effective network of relations with the travel industryin market areas. He must constantly test and monitor the program tomeasure its success and will also advise CCI on all marketing aspects ofprojects submitted for financing.

15. The consultant will work in the Promotion Department andreport to the Minister.

Profile

16. The person appointed will have broad experience as a practicinRmarketing executive. He should be multilingual with good command of French,English and another European language, if possible. He should be a business-school graduate and have sound experience in and knowledge of the following:

(a) marketing in advertising agencies and/orhotels or other travel-related enterprises;

(b) the structure and characteristics of thetravel industry, including ground arrangementsand air travel;

(c) preparation of tourism projects and theirimplementation;

(d) marketing tropical and developing countries; and

(e) dealing with high-level officials in the publicand private sectors.

This consultant must be self-assertive but still able to secure thecooperation of his associates. His is a high exposure assigument thatrequires top professionalism.

IVORY COAST

SELECTED HOTEL PROJECTS UNDER PRZPARATION (Novmb-r 1974)

RAME L O C A T I O N N-ob-r of Cstegory Prelininamy Cnet E.tim5tee COST PER ROOM PROMOTER NANAGEZENT STAGE OF OBSERVATIONSMME S 1T E CHLOCARISICON -Sta-rs FUDILASCA U OLR PREPANATIONS I T E CHsRACTRRrSTICS (billions) (millionr) '(000)

notel de 1a Abidjsn ERcellent loction 300 (1974) AMOS DJORO ProjactBsie Rsnco overlooking lagoon + 100 4 4.0 17.8 10,000 44,400 SIPILA AERHOTEL prep.r.tio. residenne5 minutes to center AERHOTEL (Italy) advsnaad tourien

Hotel Abidjsn Good oneerni.1 lo- (1973) Under pre-SCOA Plstea. nation in the city 400 4 3.5 15.6 8,750 38,900 SCOA SHERATON p-ration Busin..apontons site vve._ (USA) d.l.yedlooking lseoon

Hotel du - eélient location (1972) Under pre- BEsineasPlateau Abidj.a overlooking blvd 250 4 1.2 5.3 4,800 21,300 Fidcidire RAKrADA INN p-ration ConventionSODIT Plateau de Gaulle Ig neaire .- nner (USA) dalayed

Hntel Abidjas Gond panormic l- (1973) TlebHOTAPRIC Platea. cation in th. city 150 4 0.8 3.6 5,300 23,600 (privait ROTAPRIC trlayed BusinessArms too t oop-at bnsassmen) (Iv-ry Coast)

Notel Abidjan In ths city, poor (1973) FnkhriHOLIDAY INN Plîteat but caemernisl 1o- 110 4 1.05 4.70 9,550 42,400 (priv-te IOLIDAY INN D lIyed Businesscation businesasen) (USA)

Hatal du Abidjan Pnor-min l.a.tion (1974) Mafit INTERCONTINENTAL Und-r cons- BEminesaGOLF Cocody far from the ~ity 300 4 2.75 12.2 9,160 40,700 Gov-rneet (USA) truction Convention

HNta1 Abidjsn On th. b..ch (1974) Ivrian Group SODETEL Under Cons-ARWABA Vridi far fro,, the City 150 4 0.8 3.6 5,300 23,600 50NAFI (Belgivn) tutimn Tontin

HotaS de Abidj.nl'AEROPORT Port Bouet At ths irport 250 4 1.5 6.7 6,000 26,700 Ivorisa Group -Delayed usinss3

MAS BASO Besoh/iagoon Nsturi.t 300 3 0.9 4.0 3,000 13,300 MAS F ench rasl SOGERAT Fesaibility Taois..asate Co. tudy oeplete

ANNEX VIII

IVORY COAST

APPRAISAL OF A TOURISM DEVELOPMENT PROJECT

Estimated Schedule of Diabursements

Calendar Year Disbursement Cumulative

1975

Fourth Quarter 0.1 0.l

1976

First Quarter 0.1Second Quarter 0.1Third Quarter 0.1Fourth Quarter 0.2 0.6

1977

First Quarter 0.3Second Quarter 0.5Third Quarter 0.7Fourth Quarter 0.7 2.8

1978

First Quarter 0.8Second Quarter 0.8Third Quarter 0.9Fourth Quarter 0.9 6.2

1979

First Quarter 0.8Second Quarter 0.7Third Quarter 0.6Fourth Quarter 0.5 8.8

1980

First Quarter 0.3Second Quarter 0.3Third Quarter 0.2Fourth Quarter 0.1 9.7

IBRD 11392

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IVORY COAST

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