r - part - usaid
r - part - usaid
r - part - usaid
You also want an ePaper? Increase the reach of your titles
YUMPU automatically turns print PDFs into web optimized ePapers that Google loves.
preventing that labour from working overseas and earning foreign<br />
exchange, which would be considerably higher than the market<br />
rate used here.<br />
At must well sites, significant tcntributions were made by<br />
the comaunity in the construction of the well. This consisted<br />
of food ~~pplied to the drilling and civil works crews, and<br />
village labour and materials provided during site preparation<br />
and construction. The value of these inputs should be included<br />
in a t ~ economic e appraisal, but have not been included here.<br />
These issues are discussed more fully in Section 2.5 and 3.0.<br />
4,3,1.2, Currency Exchange Rate<br />
Labour costs form the major <strong>part</strong> of local currency costs in<br />
well construction, operation and maintenance. Once a set of<br />
shadow prices for labour has been determined, a shadow exchange<br />
rate should be used to provide an economic analysis. This is<br />
often claimed to be properly represented by the "free-marketw,<br />
or "black markettq, cost of foreign currency.<br />
The situation in Somalia is confused by the existence of<br />
three exchange rates, as discussed in Section 4.1.1.1. At the<br />
tine of writing, it appears to be the intention of the<br />
Government ta eventually bring the "official" rate, now at<br />
So.Sh-61 to the U.S. dollar, up to the wcommercialn rate, now<br />
at So.Sn.83 to the U.5. dollar. A "free-marketw rate exists<br />
which is currently operated at between So.Sh.105 and Ss.Sh.120<br />
to the U.S, dollar, In deference to the Govementrs wish that<br />
all three rates should converge, a rate of Sa.Sh.81 has been<br />
used throughout this report- The difference made to the basic<br />
well constxxction costs applicable to the Bay Region, for<br />
example (Table 2.4.11, are, as shown below, not significant.<br />
- sxch. Rate Cost of Diesel Di f ferenc<br />
Sa.Sh./U,S. Well Installation from mode<br />
Official rate<br />
Model<br />
Commercial<br />
Free market low<br />
Free market high