FILE COpy. The World Bank. Document of FOR OFFICIAL USE ONLY. Report No. P-3333-CM REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE

Transcription

1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Document of The World Bank FOR OFFICIAL USE ONLY REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO THE UNITED REPUBLIC OF CAMEROON FOR THE FIFTH HIGHWAY PROJECT May 26, 1982 FILE COpy Report No. P-3333-CM This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. I

2 UNITED REPUBLIC OF CAMEROON FIFTH HIGHWAY PROJECT CURRENCY EQUIVALENTS Currency Unit = CFA Franc (CFAF) US$1 = CFAF 270 a/ CFAF 1 million = US$3,703 a/ Floating exchange rate. The CFA Franc (CFAF) is tied to the French Franc (FF) at the ratio of FF 1 to CFAF 50. ABBREVIATIONS AND ACRONYMS AfDB - African Development Bank BADEA - Arab Bank for Economic Development in Africa EDF - European Development Fund FAC - Fonds d'aide et de Cooperation (France) LABOGENIE - National Civil Works Laboratory MINEQ - Ministry of Equipment MINT - Ministry of Transportation NCEEP - National Civil Engineering Equipment Pool NPA - Cameroon National Port Authority REGIFERCAM - National Railroad Company of Cameroon FISCAL YEAR July 1 - June 30

3 FOR OFFICIAL USE ONLY UNITED REPUBLIC OF CAMEROON FIFTH HIGHWAY PROJECT LOAN AND PROJECT SUMMARY Borrower: > United Republic of Cameroon Beneficiary: Amount: Terms: Ministry of Equipment US$70 million, including capitalized front-end fee of US$1 million 20 years including a five year grace period at an annual interest rate of 11.6 percent Co-financiers: Canada, Netherlands, consortium of Kuwait Fund/Islamic Bank/Abu Dhabi Fund Project Description: The project is designed to assist the Government in the construction of the Edea-Yaounde section of the Douala-Yaounde road; other objectives are to provide technical assistance to improve the management of the transport sector, and to help prepare a national transport plan and future projects. The project, to be implemented over a five-year period, would consist of the following main components: (i) construction of the Edea-Yaounde section (181 km) of the Douala-Yaounde road (246 km); (ii) supervision of construction of the Edea-Yaounde section; (iii) technical assistance to the Ministry of Equipment and the Ministry of Transport and fellowships for Cameroonian staff; (iv) strengthening of the National Civil Works Laboratory including provision of technical assistance and fellowships; and (v) pre-investment studies to improve national transport planning and maintenance of the paved road network. Benefits and Risks: The proposed road construction would provide a reliable all-weather access in the transport corridor linking the principal economic centers of the country. Principal quantifiable benefits consist of vehicle operating cost savings for road users. Unquantified benefits include time savings and improved traffic conditions resulting in increased economic This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

4 - ii - incentives and private sector activities. The project would also help improve transport planning and management. The project has no major or unusual risks except that the implementation of the technical assistance components could be delayed. To minimize this risk, planning and preparation for this component was advanced during project preparation by agreeing on terms of reference and early recruitment of consultants, and implementation will be closely monitored. Estimated Costs: US$ million Foreign Local Total 1. Construction Supervision of lots Technical assistance and fellowships Strengthening of Civil Works Laboratory Pre-investment studies Total base cost Physical contingencies Price contingencies Cost (net of taxes) Front End Fee on Bank Loan Total Financing Required Financing Plan: a/ US$ million Foreign Local Total IBRD Canada Consortium of Kuwait Fund/Islamic Bank/Abu-Dhabi Fund Netherlands Cameroon a/ Financing plan of the Edea-Yaounde Section (Section II) of the Douala-Yaounde road. Details of foreign financing of the Douala-Edea Section (I) are contained in Annex IV.

5 - iii - Estimated Disbursements from the IBRD loan: US$ million FY83 FY84 FY85 FY86 FY87 Annual Cumulative Rate of Return: 24 percent Staff Appraisal Report: Report No CM dated May 21, 1982 Maps: IBRD IBRD 15471R - Transport Network Douala-Edea-Yaounde Road

6

7 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO THE UNITED REPUBLIC OF CAMEROON FOR THE FIFTH HIGHWAY PROJECT 1. I submit the following report and recommendation on a proposed loan to the United Republic of Cameroon for the equivalent of US$70 million with a term of 20 years including five years of grace at an interest rate of 11.6 percent a year to help finance the Fifth Highway Project. The proposed project will be co-financed in parallel as follows: Canada, US$16.4 million equivalent; Netherlands, US$43.7 million equivalent; consortium of Kuwait and Abu-Dhabi Funds and Islamic Bank, US$31.4 million equivalent. Annex IV provides more detailed data on co-financing including lending terms. PART I - THE ECONOMY 1/ 2. A report entitled "United Republic of Cameroon--Economic Memorandum" (No CM), was distributed to the Executive Directors on April 30, Since then two economic missions have visited Cameroon, as well as a number of sector review missions. The findings of these missions are incorporated in the following paragraphs. Annex I provides basic country data. Background 3. Cameroon was a federation from the time it gained independence in 1960, until the United Republic, which unified the anglophone western and francophone eastern parts of the country, was formed in The Government has concentrated on fostering a sense of national unity among the different parts of the country: the sparsely populated eastern region, the relatively small but densely populated western part of the country, the sahelian zone in the north with Muslim traditions, and the southern tropical regions. 4. Cameroon has a population of 8.4 million (1980) and covers an area of 475,000 km 2. It is one of Africa-s most diversified countries, with a wide range of climatic zones, ecological conditions, population densities, ethnic groups and traditional cultures. Its main opportunities for development lie in the expansion of agricultural, livestock, and forestry production; the exploitation of energy and mineral resources; and the processing of agricultural, forestry and mineral products for domestic consumption and export. Cameroon became an oil producer in 1978 and is believed to have exported about 4 million tons of crude petroleum in Further increases in crude petroleum production are expected. In 1981, Cameroon began producing refined petroleum products. The country also has unexploited gas potential. 1/ The text of this section is substantially the same as in the President-s Report for the Oil Palm and Rubber Consolidation Project which was distributed to the Executive Directors on May 10, 1982.

8 Cameroon's main economic centers are separated by large areas of low population density and the country's port facilities and transport network also serve landlocked Chad and the Central African Republic. Adequate port and trunk transportation systems are essential for promoting agriculture, forestry and industry, and for strengthening internal and international communications. With the growth of industry, transportation, construction and services, Cameroon is becoming increasingly urbanized. About 30 percent of the population now live in towns, with the heaviest concentrations in Douala the major port and industrial center, and Yaounde the capital. 6. Cameroon subscribes to a philosophy of planned liberalism, and the country's economic development has been pursued within a five-year investment planning framework. The Fourth Plan period ended in June, 1981, and the Fifth Plan is now in effect. Cameroon's development and macro-economic policies have been rather cautious, with the result that, while until the late 70's growth has not been exceptionally rapid, the country has enjoyed noteworthy economic stability. 7. Growth. Over the past fifteen years Cameroon has experienced gradually accelerating rates of output and population growth. The real GDP growth rate during the Second Plan Period ( ) averaged 4.2 percent; in the Third ( ), it rose to 4.5 percent; and in the Fourth ( ), it is estimated provisionally at 8.1 percent. Population growth in the three periods was about 1.8, 1.9 and 2.3 percent a year respectively. Per capita GNP rose between 1966 and 1980 at an annual rate of about 3.1 percent. 8. Within the overall pattern of accelerating growth, there was some unevenness in the performance of key productive sectors from one planning period to another. During the Third Plan in particular, both agriculture and manufacturing experienced periods of slowdown, although services grew strongly. Contributing to the agricultural slowdown were decreases in the output of two major export crops--cocoa and arabica coffee--related to declines in producer prices compared with food prices, and to the termination of a fertilizer subsidy program for arabica coffee. Forestry output dropped towards the end of the period because of reduced Western European demand and some transportation bottlenecks. Growth of the manufacturing and mining sector slowed as a result of the declining momentum of import substitution activities, which had produced rapid increases in manufacturing output during the Second Plan years, and deteriorating terms of trade. The acceleration in growth during the Fourth Plan was helped by rapidly rising construction output, reflecting sharply higher levels of investment, by recovery in cocoa and robusta coffee production, as farmers responded to higher producer prices, and by recovery in forestry output. Since 1978, the start-up of oil production has contributed significantly to aggregate growth. 9. Investment and Savings. Underlying the longer term rise in GDP growth have been rising proportions of investment. The investment/gdp ratio averaged over 15 percent during the Second Plan, about 19 percent during the Third, and close to 24 percent during Investment priorities have shifted over time. The First Plan emphasized directly productive projects

9 (53 percent), and the Second, infrastructure and social projects (58 percent). During , directly productive activities were again favored (63 percent), with heavy emphasis on manufacturing, mining and energy (52 percent). Despite the rising investment/gdp ratios, the mobilization of domestic savings more than kept pace, due largely to increased public savings. Gross domestic savings rose from about 84 percent of total investment under the Second and Third Plans to about 87 percent during After allowing for net factor service and current transfers and the amortization of foreign medium- and long-term loans, reliance on foreign financing fell from about 33 percent of total investment during the Second Plan to about 30 percent during Public Finance. Budgetary revenues amounted to about 15 percent of GDP during the Second and Third Plans and increased slightly during Public savings after debt service declined from about 39 percent of total public investment during the First Plan to about 36 percent during the Second; however, it rebounded to 55 percent during , thanks to substantial contributions from the agricultural export stabilization funds. 11. Balance of Payments. Overall, the balance of payments has not posed particular problems, apart from some short-term deterioration during the period. In , exports rose substantially (at an average annual rate of 26 percent) but imports also increased (at an average annual rate of 20 percent) because of more rapid economic growth and higher investment. International reserves were rebuilt in , in part by the use of IMF credits, rising in 1980 to a gross level equivalent to about seven weeks of imports and to a net level of about five weeks. This was low by international standards, although still acceptable given Cameroons membership in the Central African Monetary Union. Development Prospects and Issues 12. Short- and Medium-term Developments. Oil production is bringing with it significant changes in the Cameroonian economy. Historically, Cameroon has been dependent on the export of agricultural products for the bulk (72 percent in 1977/78) of its export earnings. Cocoa and coffee alone accounted for 53 percent of the value of 1977/78 exports. However, oil exports which represented about 1 percent of total exports in 1977/78, are estimated at about 28 percent in 1979/80, with the share of agricultural products dropping to close to 50 percent. Exports of oil have continued to rise sharply in 1980/81, further reducing the proportional importance of agricultural exports; this trend is expected to persist for at least two more years. 13. The outlook for agricultural and industrial growth in absolute terms during is nonetheless quite favorable. Agricultural growth expectations are based on some increase in cocoa output above 110,000 tons; recovery of robusta coffee; continuing expansion for arabica coffee; increased production of most food and other crops, as well as livestock; and expansion of forestry production. Growth of industrial and mining production is expected to result from existing and expanded manufacturing facilities

10 - 4 - (particularly those for food, beverages and construction materials), from some new industrial projects and from new mining ventures. An impact on the structure of the economy is expected from the Fifth Development Plan investment program ( ). The proposed investment/gdp ratio under the Fifth Plan is 23 percent. The investment program stresses support to agriculture and expansion of the supply of technical and professional manpower, while energy, mining and industry are to receive diminished emphasis. 14. Longer-Term Developments. Cameroon's promising potential in areas outside agriculture implies a longer-term structural shift towards a more diversified industrial base. Agriculture will play a critical but less dominant role, and a shift in priorities towards increased food production for the growing urban population appears probable. The rate at which agricultural productivity increases will be a crucial determinant of the pace of economic development, and will call for an appropriate mix of public intervention and private initiative. External Borrowing and Creditworthiness 15. Total debt outstanding and disbursed rose from US$514 million at the end of 1976 to US$1.9 billion at the end of Debt service payments rose from US$39 million in 1976 to US$132 million in 1979, while exports increased from US$757 million to about US$1.7 billion during the same period. Notwithstanding a hardening of average loan terms in the 1970s, Cameroon's debt service ratio was still less than 10 percent at the end of 1979, and is projected to stay in the 12 to 14 percent range throughout the present decade. Borrowing on non-concessionary terms is expected to account for about twothirds of total new commitments, and average terms are expected to harden during the period. Because of higher debt service payments, projected net disbursements will probably be less than in the past but, with Cameroon's favorable export and savings prospects, are expected to be sufficient to allow an investment rate above 25 percent of GDP, as well as the restoration of a strong foreign reserve position. PART II - BANK GROUP OPERATIONS IN CAMEROON 16. Bank and IDA commitments in Cameroon as of March 31, 1982 amounted to US$625.4 million and covered 39 projects: 18 in agriculture, 11 in transportation, 3 in education, 3 in public utilities, 2 small- and medium-scale enterprise projects and 2 technical assistance projects. Transport and agriculture each account for about 40 percent of these commitments. IFC has invested in five enterprises, with total net loan and equity commitments of US$12.7 million. Annex II contains a summary statement of Bank loans, IDA credits and IFC investments as of March 31, 1982, including notes on the execution of ongoing projects. Although delays and setbacks have occasionally been encountered in implementation, the Government has consistently shown willingness to collaborate with the Bank in finding solutions to such problems.

11 In the past, Cameroon's disbursement rate compared very favorably with that of most other countries. Recently, however, performance has deteriorated somewhat, which appears to be partly symptomatic of administrative difficulties that have become apparent, notably in the central procurement agency. Several steps, including the provision of technical support to expedite procurement procedures, are under consideration to improve the situation. 17. The Bank's initial investment strategy in Cameroon was to support the Government's development efforts in three main directions: (i) strengthening and extending the road and rail trunk systems; (ii) raising agricultural output and exports; and (iii) providing assistance to education. Through 1975, apart from one water supply project, Bank lending was concentrated entirely in the transport, agriculture and education sectors. Since 1975, lending has become more diversified, extending into other areas including development of small- and medium-scale enterprises and technical assistance. 18. For the future, projects are being prepared in agriculture to extend rural development efforts and strengthen agricultural research, and to rehabilitate and expand existing infrastructure in transport. Additional education and technical assistance projects are also planned, as well as further SME, urban and water supply/sewerage projects. The Bank has carried out sector studies in forestry, energy, industry and telecommunications, and additional projects in these areas have been tentatively identified. Thus, the trend towards further sectoral diversification of Bank lending, reflecting the growing complexity of Cameroon's development needs, will continue. 19. In addition to lending operations, the Bank will expand its program of economic and sector work, develop the planning and provision of technical assistance, and broaden its economic dialogue with the Government. In the short- and medium-term, this dialogue is expected to cover the pace and pattern of oil and gas development; the size and composition of the investment program; the role of the private and public sectors; technical and other skilled manpower constraints; training needs; improvements in the Government administration; development priorities for export and food crops; and potential bottlenecks in infrastructure. The dialogue on longer-term issues would center on basic agricultural and industrial development policies. An agricultural sector study is being prepared and will be discussed with the Government shortly. Regarding industry, the Bank has recently completed a comprehensive study of industrialization and the system of incentives, which has been discussed with the Government and has led to the provision of technical assistance to strengthen the Government's capabilities for industrial policy analysis and reformulation. Issues for continued dialogue are the objectives, economic performance and accountability of public enterprises. Donor Activities 20. Disbursements of official development assistance during the second half of the 1960s amounted to about US$45.0 million a year, mostly in the form of grants. France provided most of the assistance, which was concentrated in

12 - 6 - infrastructure and some productive sectors. EDF and EIB directed most of their assistance to agriculture and infrastructure. Bank and IDA disbursements were small during this period. In the 1970s, foreign aid has increased to about US$90 million a year, with only one-fifth in the form of grants. Bank and IDA financing amounted to about 23 percent of total disbursements. Bank Group lending to Cameroon has been closely coordinated with that of other donors; in 18 of the 39 Bank projects, joint or parallel financing was arranged and expanded cofinancing is being actively sought for several projects under consideration. 21. Cameroon is now borrowing increasingly from private sources; such borrowing rose to over 40 percent of external financing in , compared with only 11 percent in Public debt outstanding and disbursed as of December 31, 1980, amounted to US$2.0 billion, 7.6 percent of which in the form of Bank loans and 7.3 percent in IDA credits. Bank loans accounted for 9.2 percent of public debt service and IDA credits for 0.9 percent. By 1985, Bank loans and IDA credits are projected to account for about 26 percent of debt outstanding and about 14 percent of debt service. PART III - THE TRANSPORT SECTOR Transport System 22. Cameroon's transport system is import/export oriented. The focal point of the network is Douala, the country's principal commercial center, main seaport, and site of the principal international airport. The main transport arteries are the Transcameroon corridor to the North (Douala-Edea- Yaounde-Chad border) and the axis to the West (Douala-Bafoussam-Foumban). An efficient transport system is important for the country's economic development and regional integration, as well as for the growing transit traffic to and from the landlocked neighboring countries Chad and the Central African Republic. 23. The transport system consists of some 65,000 km of roads; 1,070 km of railway; one principal and two secondary seaports; one seasonal river port; and two international and 13 smaller domestic airports. Road transport is the dominant mode. The road network comprises about 2,400 km of paved roads, 30,000 km of gravel and earth roads and some 32,000 km of unclassified earth tracks. The density of the road network varies considerably throughout the country, with concentration in the economically active and more populated areas. Paved roads represent only 4 percent of the network, but carry nearly 50 percent of the road traffic. Overall, the classified network's growth of about 6 percent per year since 1972 reflects the Government's priority for developing the road subsector as an important factor of economic development particularly for the agricultural sector. The condition of the network varies from good to poor. Unpaved or partly paved roads are frequently impassable during the rainy season, causing severe disruptions in communication and economic activity.

13 The railway is operated by REGIFERCAM, an autonomous state agency. Financially, REGIFERCAM is operating at a loss but steps are being taken to solve operational and managerial problems. External donors are financing the track realignment between Douala and Yaounde as well as the purchase of locomotives and rolling stock. However, realignment of the last section of the track between Edea-Maloume is still subject to a determination of its economic feasibility. The large investments involved would make debt servicing critical for the railway without giving it a competitive edge over road transport when the construction of the Douala-Yaounde road is completed by Consequently, the Government and the Bank agreed under the ongoing Fourth Railway Project (Loan 1734, US$27 million, and Credit 936, US$20 million of August 23, 1979) that the Edea-Maloume section would be realigned only if it was economically justified. Construction of the proposed road will result in some traffic diversion from rail to road. However, such a diversion has already been taken into account in the preparation of the Fourth Railway Project. Additionally, the Railway Project provides for measures to improve REGIFERCAM's operation, marketing, tariffs and finances as well as studies to review the pricing and regulatory environment of freight transport with the objective of attaining a competitive mechanism for the allocation and distribution of freight in the corridor. 25. Douala, the principal port, handles 90 percent of Cameroon's foreign and transit trade, with an annual turnover of 2.5 million tons. The Cameroon National Port Authority operates the port at a profit. The port's capacity has been expanded to about 6 million tons in view of rapid traffic growth at an average annual rate of 8.5 percent between The substantially completed Second Port Project (Loan 1321/Credit 657, US$25 million, 1976) assisted in the capacity expansion and port reorganization. A Third Port Project is being prepared aimed primarily at increasing productivity through the extension of the industrial berth for clinker handling, and transfer of fruit shipments to general cargo facilities. Transport Planning 26. The Government's principal objectives in the transport sector are to promote regional integration and foreign trade, improve access to agricultural areas and facilitate the marketing of foodcrop production. The Fourth Development Plan ( ) called for transport investment of some US$900 million or an increase of about one-third in real terms over the preceding Plan. While the proportion of transport investment was reduced from over 50 percent to 35 percent of total public capital outlays, its realization was still to a large extent dependent upon foreign financing. Also, the absorptive capacity in the transport sector is limited and actual investments lag behind planned levels. 27. The Ministry of Transport and the Ministry of Equipment are the principal Government agencies in charge of the planning and implementation of transport projects. However, their staffing is limited both in nlmbers and in their capacity to prepare and evaluate more complex investment programs. In the ongoing dialogue between the Government and the Bank on sector

14 - 8 - policies, steps are being taken to improve transport planning. MINT has created a Planning and Coordination unit which is being upgraded to increase the Ministry's capacity to carry out more complex sector planning. Under Bank-financed projects consultants have provided technical assistance and training to help improve coordination and planning of transport activities. Under the Third Highway project a Bank-financed economist helped MINT to conduct a comprehensive origin-destination study. Another economist, financed under the First Technical Cooperation Project, advised MINT on general planning, policy and coordination matters. MINEQ has created a Road Planning Unit and REGIFERCAM is improving its operational and planning capacity. These measures are designed to help improve efficiency and productivity of the transport sector. Although the Government has in the past been slow to initiate changes in the planning mechanism, it has come to recognize the increasing complexity of transport investment alternatives and the need for improved and more comprehensive planning. It has, therefore, requested assistance from the Bank, as part of the proposed project, to carry out an overall transport sector survey. The transport survey would provide longer-term perspectives on key sector issues such as intermodal choice, policy formulation, investment criteria and resource allocation. Road Subsector 28. While the Ministry of Transport has overall responsibilities for transport sector management, the Ministry of Equipment is principally in charge of planning, construction and maintenance of the road network. In the past, the Government has concentrated its effort on building and rehabilitating paved roads, actively supported by Bank Group operations. The completed First Highway Project included construction of the Ngaoundere-Garoua and Tiko-Victoria roads to paved standards and the preparation of preinvestment studies. Completion of the Ngaoundere-Garoua road was delayed by two years because of technical difficulties in particular insufficient drainage; this resulted in cost overrun that was financed by the Government and supplementary Bank financing. As explained in the Project Performance Audit Report, part of the delays was also attributable to poor coordination among various agencies responsible for implementation of the various project components. The Audit Report therefore recommended close monitoring of road conditions and careful maintenance of the road, as well as a better coordination of transport activities. The Second and Third Highway Projects helped finance construction of several priority roads to paved standards. The project completion report concluded that the impact of cost increases on the economic benefits was largely offset by higher than originally projected traffic. Therefore, the re-estimated rates of return for the two projects of 20 percent were essentially the same as projected during appraisal. The completion report noted that progress in institution building has been slow as compared to the considerable physical improvements in the transport system during the last decade. Technical assistance under the ongoing Fourth and proposed Fifth Highway Projects is aimed at improving project coordination and institution building. The Fourth Highway Project comprises mainly strengthening of institutions and training for road maintenance, maintenance of about 17,000 km and rehabilitation of 1,700 km of unpaved roads, technical assistance to the domestic construction industry and preinvestment studies for the proposed

15 - 9 - Fifth Project and for evacuation roads for forestry production. Project implementation is now in its second year and proceeding satisfactorily. An ongoing Feeder Roads project includes a construction program for some 2,200 km of feeder roads. The Government is preparing a modified program to be approved by the Bank, reflecting increases in construction costs and delays in project execution. 29. Road traffic growth during the 1970s is estimated to be around 11 percent a year or about twice the average GDP growth. However, paved roads linking significant economic and population centers have historically experienced even higher growth rates as confirmed by recently completed Bank projects in Cameroon. The country's road transport industry, which is subject to a minimum of regulation, is competitive and provides basic services in line with expanding domestic demand. The Government issued a revised Highway Code in 1979 restricting axle loads; it reviews tariffs periodically and is considering legislation to improve safety further and to control overloading. 30. During the 1970s road investment was predominantly financed by loans from foreign sources accounting for about half of total outlays of the sub-sector. The Government's contribution amounted to about 35 percent and the remainder was funded by local authorities. The Fourth Development Plan called for road investments of US$390 million or 43 percent of total transport investments. Current expenditure for road maintenance in the 1970s remained virtually unchanged in real terms, but outlays per kilometer decreased because of the expansion of the road network. Recently the Government has taken steps, however, to reverse this trend and the road maintenance budget is now adequate. Under the ongoing Fourth Highway Project, funding for maintenance operations has increased, and a reclassification of the network has been completed that should provide a more rational basis for the evaluation of needs and priorities as well as the allocation of resources. Under the proposed Fifth project studies will be undertaken to evaluate future maintenance needs for the paved road network. Road user charges in general are quite high, and estimated total outlays accounted for only about 70 percent of revenues during the last decade. Principal sources for road user charges are taxes and duties on vehicles, spare parts and tires. The other major source of revenue is tax on fuel which averaged CFAF 52/litre for gasoline and CFAF 36/litre for diesel, representing an overall average taxation rate of nearly 50 percent. These taxes generated about US$70 million in The Government plans to review tariff and taxation policies, within the framework of the national transport sector survey to be financed under the proposed project, with a view to implementing more appropriate road user charges. 31. Due to difficult topographic, geotechnical, and climatic conditions, the quality and price of construction works, timely project implementation, and the lack of qualified local firms, the Government generally prefers capital-intensive methods for the construction of large paved trunk roads. A study financed under the Fourth Highway Project has been prepared with the help of consultants to review the status and comparative advantage of domestic contractors, and their potential for further development. Based on the recommendations of the study, the Government has started to upgrade the local

16 construction industry including provision of easier access to credit under more favorable conditions, improved training, and award of small size Government contracts. The first Small and Medium Scale Enterprise (SME) Project and the ongoing Second SME Project provide financial and technical support for the Government's promotion efforts in support of local construction and building material firms. PART IV - THE PROJECT Background 32. The construction of the Douala-Yaounde road has been a high priority project of the Government. The existing road is in poor condition and virtually closed to traffic during the rainy season causing severe disruptions in communication and economic activities. Even in the dry season, the road is in poor condition and is difficult to maintain given the heavy traffic which calls for a paved surface. Construction of a paved road including realignment would reduce the length of the existing road from 288 km to 246 km. When the road is opened to traffic by 1986, about 1,700 vehicles a day are expected to use it. The proposed road is designed to serve as the main trunk road of the country, linking Cameroon's principal port of Douala with the industrial center of Edea and the nation's capital of Yaounde. The project was prepared by consultants financed in part under the ongoing Fourth Highway Project. 33. During project preparation, the general layout and design standards of the road have been extensively discussed with the Government. Initially, the Government intended to construct a limited access four-lane divided highway with separate grade intersections and a design speed of 120 km/h. In view of the current and projected traffic flows in the Douala-Yaounde transport corridor, a full-fledged expressway was not justified since traffic needs would be adequately served for an extended period by a two-lane paved road with appropriate standards. The Government, assisted by the Bank, reviewed various technical options and related financing requirements; it progressively agreed to consider design standards and financing schemes that would avoid over-dimensioned facilities and costly investments and an excessive burden on the country's financial position. In response to the Bank's suggestion, the Government finally selected the two-lane paved road option as retained under the project. Current traffic estimates suggest an upgrading of the road to a divided highway would be justified only by the year Based on appropriate design standards and related investment cost of the Douala-Yaounde road, the Government was able to atttract a large number of co-financing agencies thus limiting expensive contractor financing. The Government asked the Bank to play a leading role in mobilizing foreign financing from diversified sources. Three co-donors' conferences were held to put together the financing plan involving 12 co-lenders including four Arab funds. A special feature of the financing scheme for such an infrastructure investment is that some co-financing could be mobilized from private sources at market rates combined with public funds on concessionary terms.

17 35. Recognizing the existence of institutional bottlenecks and limitations on the sector's absorptive capacity, the Government also requested an extension of urgently needed further technical assistance and the inclusion of pre-investment studies. These project components were designed to improve in particular efficiency in sector planning and management, and to lay the groundwork for a comprehensive maintenance program for paved roads commensurate with the growing needs of the network. These components of the proposed project will, in part, follow up on the recently completed nationwide origin/ destination road survey, and complement ongoing maintenance operations for unpaved roads under previous Bank projects. 36. An appraisal mission visited Cameroon in October/November 1980 and brief follow-up visits took place during 1981 to refine technical data and update financing arrangements. Negotiations were held in Washington from March 25-29, At that time the Government had completed the bidding procedure for the Bank-financed lot and reliable cost estimates were available. The Cameroonian delegation was led by H. E. Paul Pondi, Ambassador to the United States. The Staff Appraisal Report No CM is being circulated separately. Project Objectives and Description 37. The project would assist the Government in constructing the Edea- Yaounde section of the Douala-Yaounde road. It would also provide urgently needed technical assistance to improve project preparation, coordination, and implementation in the sector, and to strengthen institutions. Finally, the project would help prepare a national transport survey and future projects. Specifically, the proposed project would consist of: (i) construction of the Edea-Yaounde Section (181 km) of the Douala- Yaounde road (246 km); (ii) supervision of construction of the Edea-Yaounde section; (iii) 19 staff-years of technical assistance to the Ministries of Equipment and Transportation and fellowships for Cameroonian staff; (iv) strengthening of Labogenie, the National Civil Works Laboratory including nine staff-years of technical assistance and fellowships; and (v) two pre-investment studies consisting of the preparation of a national transportation survey and the evaluation of the paved road network. Implementation 38. The Ministry of Equipment (MINEQ) will have overall responsibility for project execution. However, the Ministry of Transport (MINT) will be responsible for the preparation of the transport survey and the technical

18 assistance assigned to it. MINEQ will be assisted by consultants in project implementation. The project will take about five years to complete; it is expected to start in July 1982 and to be completed by December Road Construction and Supervision 39. For technical and financing purposes, the Government divided the Douala-Edea-Yaounde road into two sections: Section I from Douala-Edea (65 km) comprises lots 1 to 5; Section II from Edea-Yaounde (181 km) consists of lots 6 to 9. The Bank would finance construction of lot 7 (65 km) which represents 36 percent of the length of Section II. The road will have a pavement 7.4 m wide with 2 m shoulders and a design speed of 80 km per hour. The design standards for lot 7 and all other lots are based on a consultant's study financed under the Fourth Highway Project. They are consistent with the standards for Section I and other paved roads in Cameroon, and are appropriate for the projected traffic. During negotiations, the Government agreed to have all lots in Section I of the project under contract by December 31, 1982, and to inform the Bank of any proposed modification of design standards or extension of contract deadlines (Section 4.03(b) and (c) of the draft Loan Agreement). 40. To permit better coordination of road construction, the Government, with the consent of co-donors, has requested the Bank to finance the supervision of construction of all four lots of Section II. Supervisory consultants for lot 8 which is already under construction, have been appointed and recruitment for other consultants is underway. The appointment of all consultants for supervision of construction of Section II would be a special condition of loan effectiveness (Section 6.01(a) of the draft Loan Agreement). Technical Assistance 41. To increase MINEQ's capacity to process construction contracts including supervision of consultants, and to improve its efficiency, technical assistance is urgently needed. A team of three engineers will therefore be provided to the Highways Department of MINEQ for four years. The appointment of qualified consultants and the nomination of counterparts would be a special condition of loan effectiveness (Section 6.01(b) of the draft Loan Agreement). The project will also provide 24 staff-years of fellowships to staff of the Highways Department to help maintain and upgrade the quality of personnel. 42. The Government has expressed its intention to also upgrade and expand its planning capacity by strengthening MINT's planning and coordination unit. The unit will have increased responsibilities for transport planning, policy formulation and coordination. The project would, therefore, provide for five staff-years of consultants to support MINT's expanded role and for two additional staff-years of specialized short-term experts in accordance with an agreed work program. At negotiations, assurances were obtained that the Government will appoint qualified counterparts for the specialists before their arrival (Section 3.02(a) and (b) of the draft Loan Agreement).

19 Strengthening of Labogenie 43. To assist Labogenie with the first phase of its long-term expansion program, the project would provide for new buildings since existing laboratory and office facilities are too small and inefficient. Nine staffyears of technical assistance, eight one-year fellowships and urgently needed laboratory equipment would also be financed under the project. At negotiations assurances were obtained that the Government will prepare the list of laboratory equipment not later than June 30, 1983 (Section 3.08 of the draft Loan Agreement). Procurement for laboratory equipment will be subject to the substantial completion of new laboratory buildings (Section 3.09 (b) of the draft Loan Agreement). Pre-investment Studies 44. National Transport Survey. Following the completion of the origindestination survey financed under the Third Highway Project, MINT intends to prepare a national transport survey to strengthen investment and sector planning, and to improve policy formulation and implementation. The project will provide for nine staff-years of consultants to help carry out the transport survey. The Bank and the Government have agreed on the terms of reference for the experts and the Government is now recruiting consultants. Assurances have been obtained that the Government will discuss the results and recommendations of the survey with the Bank (Section 3.10 of the draft Loan Agreement). 45. Paved Road Survey. The ongoing Fourth Highway Project addresses the maintenance of laterite roads and routine maintenance of paved roads. The expanding road network and the increasing traffic necessitate the development of a maintenance policy for paved roads. The project would provide 12 staffyears of consultants to evaluate the road network, including laboratory testing in collaboration with Labogenie. The proposed study will recommend an optimum strategy for periodic maintenance, define the useful life of paved roads and determine when and to what standards existing paved roads should be rehabilitated or reconstructed. Cost and Financing 46. Total cost for the construction of the Douala-Yaounde road, net of taxes, is estimated at US$316.1 million, i.e.: Section I (Lots 1-5, from Douala-Edea): $124.0 million; and Section II (Lots 6-9, from Edea-Yaounde): US$192.1 million. Foreign sources, including the Bank, will provide US$245.4 million or 78 percent of total cost. External financing for Section I will be provided by a consortium of the African Development Bank and the Arab Bank for Economic Development in Africa (US$21.8 million equivalent), the European Development Fund (US$7 million), France (US$70.4 million), and the Netherlands (US$6.3 million). Annex IV provides data on co-financing including lending terms. To realize the economic benefits of the project construction components consisting of Section II of the Douala-Yaounde road, it is essential that Section I on which construction has already started, be completed at about the same time (para. 39).

20 The total cost of the project, net of taxes, is estimated at US$218.8 million consisting of US$192.1 million for construction of Section II and US$26.7 million for non-construction project components such as technical assistance and preinvestment studies. Foreign exchange cost is estimated at about US$169.5 million or 77 percent of total cost. The proposed Bank loan will finance the foreign exchange costs of the construction of lot 7 and of the other (non-construction) project components, as well as the front end fee. The Government has exempted all contracts for construction, consultants, and technical assistance from taxes. Project costs are based on January 1982 prices and for the road construction on actual bid prices. Physical contingencies are estimated at 10 percent for the construction works and equipment procurement of Labogenie, and price contingencies at an average rate of about 8 percent a year. The proposed loan would allow for up to US$1.5 million of retroactive financing for expenditures incurred after February 1, 1982 for urgently needed supervision of construction works and for technical assistance to MINEQ. The loan would provide for a total of 70 staff-years for construction supervision and 49 staff-years for technical assistance and studies at an average cost of US$12,000 per staff-month. These unit costs are in line with prevailing billing rates of consulting firms operating in Cameroon. 48. The proposed Bank loan of US$70 million would account for 32 percent of total project cost and 41 percent of the foreign exchange cost of the project. Various co-lenders would participate in project funding through parallel financing as follows: Canada (US$16.4 million equivalent for lot 9); Netherlands (US$43.7 million for lot 8); and a consortium of the Kuwait Fund, Islamic Bank and Abu Dhabi Fund (US$31.4 million in total, for lot 6). Thus, together with the proposed Bank loan of US$70 million, external financing would cover 95 percent of the project's foreign exchange component or 74 percent of total cost net of taxes. A special condition of loan effectiveness would be that all conditions precedent to the effectiveness of the loans of the co-financiers be fulfilled (Section 6.01(c) of the draft Loan Agreement). The Government would cover the remaining foreign costs of US$9.0 million, all local cost amounting to US$49.3 million equivalent, and would forego all taxes through a general tax exemption for this project. Procurement and Disbursement 49. The contracts for the construction of lot 7 as well as the purchase of the major items of laboratory equipment would be awarded on the basis of international competitive bidding. However,. laboratory equipment items not exceeding US$10,000 each or US$300,000 in total may be procured through limited international tendering on the basis of offers from at least three suppliers. Bids for lot 7 were opened and evaluated before negotiations. Construction of lots 6, 8, and 9, to be funded under parallel financing, will be carried out by contractors on terms and conditions and in accordance with procurement procedures acceptable to the co-lenders concerned. Contracts for building construction amounting to approximately US$2 million will, be awarded on the basis of local competitive bidding procedures, which are satisfactory. Consultants would be selected and recruited following Bank guidelines and appointed on terms acceptable to the Bank.

21 The Bank loan would be disbursed over five years to cover the following expenditures: (i) 77 percent of total cost of civil works; (ii) 80 percent of total cost of consultants and technical assistance; (iii) 90 percent of total cost of fellowships; and (iv) 100 percent of foreign cost of equipment. US$15.8 million would be unallocated. All disbursement applications would be fully documented. Project Benefits and Justification 51. The project is expected to have widespread beneficiaries since it would reduce transport operating costs and provide a reliable year-round all-weather access in the country's most important economic corridor linking the three principal economic centers. As the transport industry is competitive, most of the transport cost savings to road users are expected to be passed on to consumers in the form of lower prices and improved supply of goods, and to farmers through more favorable farm gate prices. Unquantifiable benefits of the project would include time savings and improved quality of traffic conditions resulting in increased economic incentives and private sector activities. The project would also help improve transport planning and management. 52. The overall economic rate of return is estimated at 24 percent. Sensitivity tests show that even in the event of a combined 20 percent cost increase and a 20 percent decrease of road user savings, the rate of return would still be 18 percent. Risks 53. Apart from possible quantity variations, the works have few technical risks as they are based on sound engineering principles and normal road construction practices, and would be supervised by competent consultants. There is a risk that the technical assistance component may not achieve its objectives in time due to slow implementation. To minimize this risk, planning and preparation for this component was advanced during project preparation by agreeing on terms of reference and early recruitment of consultants, and implementation will be closely monitored. PART V - LEGAL INSTRUMENTS AND AUTHORITY 54. The draft Loan Agreement between the United Republic of Cameroon and the Bank and the Recommendation of the Committee provided for in Article III, Section 4(iii) of the Articles of Agreement of the Bank, are being distributed to the Executive Directors separately. 55. Special conditions of the draft Loan Agreement are listed in Section III of Annex III.

22 Special conditions of loan effectiveness would be that consultants be appointed to: (i) supervise construction of lots 6-9 (para. 40); and (ii) assist the Ministry of Equipment, and that counterparts be nominated (para. 41); and that all conditions precedent to the effectiveness of the loans of the co-financiers be fulfilled (para. 48). 57. I am satisfied that the proposed loan would comply with the Articles of Agreement of the Bank. PART VI - RECOMMENDATION 58. I recommend that the Executive Directors approve the proposed loan. Attachments Washington D.C., May 26, 1982 A. W. Clausen President by Moeen Qureshi.

23 1 '7 - MANEX I Page 1 of 7 TASLE 3A CAiERON - SUCIAL INOICATDRS DATA SHEET CAlEMWUN IEIERENCE GROUPS (WEIHTED AVE CES &MD AKEA (THOUSAND Sq. K1M.) - M05T RECENT ESTIHATE) TuTAL lldst RECENT MIDDLE INCOME MIDDLE LNCOME ACRICULTDRAL J_ 1970 b ESTIMATE AFRICA L SOUTH OF SAHARA LATIN AMERICA * CARIS8EAN GOT FER CAPITA (USS) i IEYCY CONSUMPTION PER CAPITA (RLWUAAS OF LWAL EQUIVALENT) UPULATIUN AND VITAL STATISTICS PUPULATIUN, MID-YEAR (THOUSANDS) M PUPULATION (PERCENT UF TOTAL) POUPULATION PROJECTIONS PUPULATION IN YEAR 2000 (MILLIONS) 13.5 STATIONARY POPULATION (MlLLIONS) 37.0 YEAR STATIONARY PUPULATIUN ls REACHED 2130 PUPULATION DENSITY PER SQ. KM PER SQ. KM. AGRILULTU&AL LAND UPULATIUN AGE STRUCTURE (PERCENT) 0-14 YES U YRS YRS. AND ABOVE PUPULATION GROWTH RATE (PEKCENT) TUTAL UR&AN CRUDE BIRTH MATE (PER THOUSAND) CRUDE DEATH RATE (PER THOUSAND) CROSS REPROUUCTION RATE iayily PLANNING ACCEPTORS, ANNUAL (THUUSANDS).... USERS (PERCENT UF MARRIED WOMEN).... OEM) AND NUTRITION LIDEL OF FUJO FRODUCTION PER CAPITA ( ) PER CAPITA SUPPLY OP CALUOIES (PERCENT OF REQlUREKENTS) PROTEINS (CRAMS PER DAY) OF WLICH ANIMAL AND PULSE *2ILD (AGES 1-4) MORTALITY YATE HEALTH LIFE EXPECTANCY AT BIRTH (YEALS) WANT MORTALITY MATE (PER lwusaiw) * ACCESS TO SAFE WATER (PEYCENT OF POPULATION) TOTAL URBAN RUAL ACCESS TO EXCREtA DISPOSAL (PERCENT UF POPULATION) TTAL UUAN SLA POPULATION PER PHYSICIAN POPULATIUN PER NURSINC PERSON j L2 POPULATION PER HOSPITAL SEU ToTAL 535.7j/ UL / RURAL 579.Ot MUSSIONS PER HOSPITAL 8ED..... AVERAGE UF HUSSEHULD SIZE TOTAL UAM.... lal AVBAGE NURSER OF PERSONS PER ROOM TUOL..... URA WUL ta.... ACCESS TU ELECTRICITY (PERCENT or DWELLlNGS) TOTAL UKBAN RURAL

24 ANNEX I Page 2 of 7 CA TABLE 5A HCOON -- SOCIAL INDICATORS DATA 511CZT Palo 2 CAMIERoO UREFRNCE GROUPS (WECIMRTE AVRXC1S - MOST RECENT ESTIMATEz HDST RECENT INCOME MIDDLE INCOME 1960 Lb 1970 lb ESTIMATE lb APRICA SOUTH Of SAHJAA LATIN ANUICA 6 CAdSSW EDUCATION ADJUSTED ENROLLMENT RATIOS PRIMARY: TOTAL MALE FnKALE SECONDARY: TOTAL VALE FEMALE VOCATIONAL ENROL. (t or SECONDARY) PUPIL-TEACHER RATIO PRIMARY SECONDARY ADULT LITERACY RATE (PERCENT) CONSUMPTION FASSKNCER CARS PER THOUSAND POPULATION 3.0 LADIO RECEIVERS PER THOUSAND POPULATION H TV RECEIvERS FER THOUSAND POPULATION NEWSPAPER ("DAILY GENERAL INTEREST') CIRCULATION PER THOUSAND POPULATION EINEYA ANNUAL ATTENDANCE PER CAPITA LABOR FORCE TOTAL LABOR FORCE (THOUSANDS) FEMALE (PERCENT) AGRICULTURE (PERCENT) INIDUSTRY (PERCENT) PARTICIPATION RATE (PERCENT) TOTAL MALE FEMALE ICONOMIC DEPENDENCY RATIO INCOME DISTRIBUTION PERCENT OF PRIVATE INCOME RZCEIVED BY IGQIEST 5 PERCENT OF HOUSEHOLDS.. SIGQEST 20 PERCENT OF HOUSEHOLDS... west 20 PERCENT OF HOUSEHOLDS.. LO.WEST 40 PERCENT OF HOUSEHOLDS POVERTY TARGET GROUPS ESTIMUATED ABSOLUTE POVERTY INCOME LVEL (US$ PER CAPITA) URBAN. S RURAL ESTIHAT D RELATIVE POVERTY INCOME LEVEL (US$ PER CAPITA) IIN RURAL S2.2 ESTSIATED POPULATION BELOW ABSOLUTE POVERTY INCOME LEVEL (PERCZIIT) URBN,, RRILAL 40.0.lot available not applicable. MS /a The group averages for each Indicator ore populatio@-weihted aritluetic masa. Caverage of co ttime moog the indicatore depends on avallability of data and Is not uifoem. b Unlaes otherwise noted, data for 1960 refer to any year between 1959 and 1961; for between 1f9 sad 1971; and for Moat Recent Estimate. between 1976 and Le Fiscal year July-June; Id 1962, including ex-south Cameroon mder Brltish aduimietration. Le The updated 1980 GNP per capita and population estimates which have been reflected in the 1981 Hey, 1981 World Bank Atlas are $670 (at prices) and 8.4 million.

25 ANNX I Page 3 of 7 DEPINITIOMS OP SOCIAL. ICaIiTORy Nutas: Although the duts re d-ue fore generally judgad the eas -uhurittive od t.ible, it should al be totd that thay may tu be inteenit-nlly comprabla becaus of the lath of standardized de ifittlon cud concept rea.d by different coi re in c-liectittg the date. The de. cone-... theless,.. oeful to de..tothe ordne of cegntade, iudietet -red., and ohrretecranmjor dtffo...noee beteeni The reer-c grout 1 Ir the eeea -- ut group of the eubjact... touty d(2) to group with ermea high-e vrgetrn thau the I.tuntry grout of the buie- country (ruotfr eiu tu-us01 uotee.gop bo "Meddle I-om Ntooh Africa atd fiddeh e't hso ees fsrne _uoi-ulturaef. nlti e) I the rafetos ru dute rho aveage no population- ihn tti l _ean fr eui Idctrrd hn eywe saoct fth bedtefrthtin ootte oaenu rto unete oaas f roolsaon bncdfc hr ~deyaso h tstly ofh at andtontuifoe, aotonueneeerceeditelatogavoaga rvntndreuresurha. Taeeveageurnonyhefulcvodprtnt-caled oneledoetn t adnasnog he crutry end refernc groops. T.21Ptl(thouad q k. P_tul e c Tee -ite ur r ar compriing lend area andintend n-ner. ura,adrrl)dvddb IytL cd-ttl brrre ru,cdrrl-ppltr u uber of hopitu rrl badel rutuu-feitmt- of egricul.tona ers cead tempoaril or parm- -oty evallub1e iv public ed prlv-r general n-d apcilitd hospita endor crp., pasues. are...kle gender. orito lie falloc; t97 data. hbhiotcerv loyat erreabll Tets pemnatiy eteffrd fur by a nn r pys ician. tetbliebec proidlgptcalyut IMP PER CAPITA (US$) - INPpecniteeeae roltatdh. cnvnteetodbyee atc gydaratlee _et kalo ( haste); Irce, 1a- 19i0, dial and care are no- tldo. tlhospitals, edcl, rectors von perceclysta1ffed% honore, byaphsct inluda health (but by 170, and 1979 det. ndclataat us. IeI,rt. bi h f en in-patile -_om dantoo. -ud roovide a llelcd rang uc -edtca faiats fo eet emygly IuNlltTiOu PUR CAPITA -Atu cceetr f coterit cry rtcco purocene urban hoeptonle i- uld Mle ptnctpa/geeere b`spbtls.i end lignite, petroleum, naurlga ndbdro-, _utlear ad geothrelog o- ad rura hospitalt luc..l or tore1 hoepite.ls ad medica end aterelny IIloiny) to kilogrum tol of eqicae pot capita; 1990, 1970, and 19( cater. Spcialiaed heeplt.tle urn iinl ed oly undeo itotl. dana. Adisal lapitto1 tsd_ -.Tota nueo of uditesioe to of diloharta tru hopitate dio-de by the rtgar or beda. PPoUuTATIO AltD VITAL STATISTICS T.nal Poplation. Mid-Ter thuend) -As f JulY 1; , and 1979 tusnutn data. Avrg te fgcehl res er Ioood) -ttl urban an rra - Urban Ponlatton (poo-n of total) -Mani of ob ano toa popuaton otehold... iont fagnpof tudinlul ohoshrelifo qearer dfestdefn 'to Ic urban uraeay affect coparaili,ty of dataan their malt -eale. A border or loger cay yr -y nat ha included en 190, ad1979 thehuaodfreuit l puroe.. amngcoatte;1910, data. IL,an PoualaP nvetueaeae ubrr aen orru-ua.uba.. ad -1rl A.e.-ga IonuLet tol yea eeon Per roo It oil urbat,.ad cope cave1oa If Corret pvpultir prjccoa r L' edon1911 ben of mot ttlpopulution by age end sn end thar mortalityadfriiy Iine relae reetrl. Inllige Irbds ne-pnm... rer Inglf opercacy a it Iraignth IcttyePrruPita no A..set tlrrtlciitv rreto nlia(- oe.ubn o ua level femal llife epeta-y e-btitlug et 77.5 ye-ns. Tbrpr-Cuetoc h ellg elcrciyi qstosn eretg and lvn cf twyltngaresectiely astrs ori erty t rata also ha v theeleel _uingdelo iv toa I rat urrua fertilit ccicrse accordig leveland peetfanily pl_nrtg penford11eance.i 1 and fe-eility trende for P poviertlon proa...e.dfetlc rto ltaatoeary ptlto- Inaa:,tato rwhavnpimarye ApplttntrrIlc oo 1.. I tivo atadfml-osettl aeadfml the birtb rats Ia equal to tha et an,adac the.aga srucur te nclenofalageaitepiaylve epnenge fr tr and Inteya ol n h aeo oln ffrtiyot orpen eudn ce -1-ctal. mae-and fem-j II Companednchors;&' 6cra11r mant Inl.. euctin-rqure anlatfo er faprvdpiayisrtf slehe Petrecbd osnllycf 2 17 ft foa.rof ag 9th; pores -ndnc courses ar fg.,el Population henait f- eorlud gdp hi years). and retirad (6 year onr Tan aa e.tgn -... of_t eld-yat p- rprrspodtn.g... e.. -h,lt-y. lactas1 on 1l961j-l, 19O1-7 1,nd197-9 Peassuart Cars-) fre t nonulu.o.n -drn) -Paes.g. rare tomprtetmtr_ pepaltiun 191, 191, ad 197"daa. iliar deioc.~- -I1- h, d-d Crude ats each (ar chonnd) AChil detha er hor1 ud of s-iidg.. 1-pertdoa iesle thousan ppulation) pupelenan; 979 dat. 191, 197, and bouacaensr generl.% poblic~ per totean ld oppnaifa-b -Mlt-pa of t -to-var Iaua no andt 6oa. a`nroduriotirae-vergenuberofdautve cnna will yen inp. licnse reevn -d unrnsadi suneergsrte-a aa t-iiyraa; usually7, - fire-ear aeragd enigid90i90 ad17.mecuttraohdlcuig ramltr `laenlna -hrenos tenoaptore cul(toaee eca ubro T aciters t (re ahcueud P uruatton -~ T raetrtr, for bro dna It Family lantin - OeeS (rrn tmrre 19)-Prcnaeo atldt uno and- in yna l whenregltr-o of TO Yesta et tefet of td-ernag(1-0 t P-. years) who bio-rnr huee lb dcriset CONSUMPaOaNCruainIa huednolala iateecaant al atedenni saga age group. 9 roaito al ecalitne esae.det eeproia inted- fauer tih r ediblean rfodntgtn otie (e.g. bofe and.. t.s -1~l llt ten day Availa le-vrley- mne.domsic production.70 torelaeno e19a7r)11, 90 n 1979 data..t~ bl met atmtdb sr Plbse n hsalola ted- n omlett ibn as. perenag of1.h tal lbr- oos 96,170ad99 aa viny ad conaderinganrinomentf healh temperature body weighs '. age Indstr frtn'2 th9-dlhr oc inmnig fonen butt m dn atatn andantdiarhto: ftrbeo.adalslg1 ecnofrweea n ltnrn.ntradgea p.anrentage of noa labo d for.. 19, hoshl -i6.191 eel n 97 as 90ad 1979 dsas-.. II qutremenned tnt-i al contiesstabihd 10tantperbnn"gJ yu providefor of itonl,mae_n femal po1-ain efal geeektte PIlnwatca of 10gem f oalpotf prdaind1 gaaofaimlen ad199daa bdear osdowtieprtopatn ae polso of protein, which 10 gruma chould ho an~~~~ima,rttow he seand-:. reflcting age-se d enunr fth etlnon n agni asd a_l fund Surveyht; n 1977 d197td. 7 to1 thel toul labor-dot. -ebcnt nrn-ltansrlfrmnlladeue- Po l supl of food de rived gegmaleand from pole.. It gree per day; ) 1970 and 1177 dts. ictenfisthilytio triesdana erive neonlifepeblbal ted9179 daa.1ofhondeotds an bith 1960, Ad daa j,:d modyilg shou.ld aitrrte Ihtnirobntuin ofae o thena- ion irns. halt ovryinoelee c ht nn ee hl ihaa-ga Icnsto ifegan icdcet f1eruttun-ioit. ohn.endrual-ium ber.o we pmp netsupply(inclues (total, ble.. orhe, treted cud euf1c7 rural waere wihfoubeam.l oru77 rea ad bu1unconamldn1d97ffode to.eaf. ntiouly, edqut-dir tle lasenilntfndoqln si e C. it. l- Elti.. d.1) - ptlalntr Rlaiv.rtny ncmeleel(po ertuttl uba.md url p _ranatso fheinrsenfeppuains1onubnaraipolrp telintn uf= th ruo try rbnlee isdrvdfro the ura reeeblacesiud ml ta Iettsat o ehrso hebcehl n ral2-teomo of pultio. ubnedrnl h n eelt donthvi t pu Iieproput.biowehar b,usdth p-day in fetch1iug nbr p.for hoest fecrena0 Sterag (rrf a ofb. ovolatd - total 2 fran and rea I 9 the roftln u irne.wt or,without l Prat deb, Fof urt fua rnccedbra aaoosn tar installat 61l5ot97De.d U' cay 1991W-c clans from qualified a medtrat etboal.. anuiest2nl Puoulao oatusngpro -Ppltttdvdatytehto tetct Childandfea1 gr4 auat oures pracelca 196-"'. 90sIdauaadeeiatCCantSTRBM

26 Population: 8.4 million (mid-1980) ANNEX I GNP per capita: US$668 (1980) b/ Page 4 of 7 UNITED REPUBLIC OF CAMEROON ECONOMIC INDICATORS(l) /a _ _ NATIONAL ACCOUNTS (IN CURRENT CFAF BILLIONS) GDP at Market Prices /b , W135#41,356.2 Gross Donestic Savings , , Gross National Savings Current Account Balance , Exports of Goods and NFS Imports of Goods and NFS (As Z of GDP at harket Price) GDP at Market Prices Gross Domestic Savings Gross National Savings Current Account Balance Exports of Goods and NFS , B 25, , Imports of Goods and NFS , A (Annual Real Rates of Growth) GOP at Market Prices GROSS VALUE ADDED BY SECTOR (In Current CFAF Millions) Agriculture incl.livestock etc , , hining , , Manufacturing , Construction A Electricity. Gas, Water Transport and Communications 26,4 31, , Trade Public Administration Other Services Import Duties ,1 (As Z of Total) Agriculture incl,livestock etc , ,8 Mining , Manufacturing Construction 3, A Electricitv. Gas and Water Transport and Communications A Trade Public Administration Other Services Import Duties US $1.00= CFAF 265s , (Period Average) SOURCE:Data supplied bv the Cameroonian authorities with reclassification bv Staff. /a Fiscal Year (Julw 1- June 30) is used with End Year shown in the table. /b Unrevised WEST AFRICA CP2B 4/20/82

27 ANNEX I Page 5 of 7 Population: 8.4 million (mid-1980) GNP per capita: US$668 (1980) c/ UNITED REPUBLIC OF CAMEROON ECONOMIC INDICATORS(2) GOVERNMENT FINANCE SUMMARY /a (In CFAF Millions) Current Receipts 59,308 67,895 83,370 98, ,901162,331200s761218i865 Current Expenditure ,600 70,898 78,872 95, , Current Surplus with adjustments 8,718 9,295 12,472 19, ,736 57,954 76,518 Capital Expenditure ,293 18,929 26,246 32,343 45,275 53,846 58,481 External Assistance (Net) ,305 12,022 2,997-5,774 17,227 (As Percentage of GDP) Current Receipts Current Expenditure ' ' Current Surplus (or deficit) Capital Expenditure ,3 4, External Assistance (net) MONEY, CREDIT AND PRICES /a (In CFAF Millions-end Period) Money and Quasi-monee 59,530 78,550 94, t420194,808221,831288,391 Band Credito Government 3,470 3,960 5,510 6,551 9,853 14,149 16, Bank Credito the Economi , ,510119,970169, Y Percentages or Index Numbers -_ Money I Guasi-moneg I of GDP /b Yaounde Consumer Price Index /a (1970=100) Annual Percentage Changes in: Yaounde Ccnsuser Price Index ,6 9.8 l.b Bank Credito Government , Bank Credito the Econowy SOURCE:Data supplied by Cameroonian Authorities with Bank Staff estimates and melassification. /a Fiscal Year (Ju1Y 1-June 30) is used, Year indicates the end vear for each fiscal year, /b GDP is for Fiscal Year. lc Unrevised. West Africa CP2B 4/20/82

28 -22- ANNEX I Page 6 of 7 Population: 8.4 million (mid-1980) GNP per capita: US$668 (1980) a/ UNITED REPUBLIC OF CAMEROON ECONOhIC INDICATORS(3) _ ; BALANCE OF PAYMENTS (IN MILLIONS CFAF) Exports of Goods and NFS 80, ,563138,946156,750202, ,817410,764 Imports of Goods and NFS -98, , , , , ,69-427,173 Resource Gap (deficit-) ,080 14,123-17,437-16,600-16, ,753-16,409 Interest Payments (net) -1,905-2,279-5,835-8,572-10,196-9,292-12, ,824 Workers' Resittances ,160 1,993 2,557 3t254 4F675 4P665 Other Factor Payments (net) -6,919-7P498-10P ,374-9,266-6,510-6,366-7,010 Net Transfers 2,219 2,857 1,503 2, ,761 4, Balance of Current Account -24,032-17, , ,360-11,148-58,017-39Y885 Net Direct Foreign Investment 2,604-1,804 3,487 5i443 5,709 1,503 3,091 9, Total Net Medium and Long- Term Borrowing 13,657 21,552 9,188 13,978 28,613 32, P928 58,634 :Disbursements 16,351 25,071 13,749 20,988 36,458 43,093 51, ,239 :Amortization -2,694-3,519-4,561-7,010-7,845-11, ,252-21,604 Trade Credit (net) t343 3,768 2,290-3,532 2, ,006 Other Short Term Capital 1, ,984-1,200-2,287-2,789-11,225-10,070 Other Capital n.e.i ,677-3,365-1, Gross Official International Reserves 12,578 11,196 20,522 11,116 11, ,358 18,235 40,322 Net Foreisn Assets 10,400 9,970 18,760 8,110 6, ,890-9,300 22,770 US $1.00= CFAF (Period Average) , SDR 1.00= CFAF (Period Average) a/ Unre vised. SOURCE:Data suppied bv the Cameroonian authorities with Bank Staff reclassification and estimates. Fiscal Year (JulY 1- June 30) is used with End Year shown in the table. West Africa CP2B 4/20/ 82

29 ANNEX I Page 7 of 7 Population: 8.4 million (mid-1980) GNP per Capita: US$668 (1980) a/ UNITED REPUBLIC OF CAMEROON ECONOMIC INDICATORS (4) (millions US$ at current prices) EXTERNAL CAPITAL AND DEBT b/ Gross disbursements Official grants n.a. Concessional loans DAC OPEC IDA Other Non-concessional loans Official export credits IBRD Other multilateral Private External Debt Debt outstanding and disbursed Official of which: IBRD IDA Private Undisbursed debt Debt Service Total service payments Interest Payments as % of exports Average interest rate on new loans (%) Official Private Average maturity of new loans (years) Official Private As % of Debt Outstanding at End of Most Recent Year (1980) Maturity structure of debt outstanding Maturities due within 5 years 77.0 Maturities due wd thin 10 years Interest structure of debt outstanding Interest due within first year 7.3 a/ Unrevised. i End-of-period figures are shown. West Africa CP2B 4/20/82

30 -24- ANNEX II Page 1 of 8 THE STATUS OF BANK GROUP OPERATIONS IN THE UNITED REPUBLIC OF CAMEROON A. Statement of Bank Loans and IDA Credits (as of March 31, 1982) Loan or US$ million Credit Amount (less cancellations) Number Year Borrower Purpose Bank IDA/4 Undisbursed Eleven Credits and nine Loans have been fully disbursed 320-CM 1972 Cameroon Education II CM 1974 Cameroon Cocoa CM 1975 Cameroon Small- and Medium- Scale Enterprises T-CM 1976 Cameroon Education III CM 1977 Cameroon Technical Assistance CM 1977 Cameroon Rural Development Fund T-CM 1977 Cameroon SOCAPALM II CM 1977 Cameroon SOCAPALM II CM 1977 Cameroon Feeder Roads CM 1977 Cameroon Feeder Roads CM 1977 Cameroon CAMDEV II CM 1978 Cameroon Zapi East Integrated Agriculture CM 1978 Cameroon Western Highlands Rural Development CM 1978 Cameroon SEMRY Rice II CM 1978 Cameroon Highway III CM 1979 Cameroon Highway IV CM 1979 Cameroon Highway IV CM 1979 Cameroon Railway IV CM 1979 Regifercam Railway IV CM 1979 Cameroon Second Water Supply CM 1980 Cameroon Hevecam II CM 1980 Cameroon Hevecam II CM 1980 Cameroon Livestock II CM 1981 Cameroon Northern Province Rural Development CM/ 1981 Cameroon Small- and Medium-Scale Enterprises II CM 1981 Cameroon Northern Province Rural Development CM/51981 Cameroon Technical Cooperaion II CM/21981 Cameroon Post and Telecommunication Technical Assistance CM/ Cameroon Forestry TOTAL of which has been repaid TOTAL now outstanding Amount sold 7.72 of which has been repaid TOTAL now held by Bank and IDA / TOTAL UNDISBURSED I Signed on September 30, 1981, but not yet effective. /8 Signed on March 18, 1982, but not yet effective. /3 Approved but not yet signed. /4 Prior to exchange adjustment. /5 Signed on November 5, 1981, but not yet effective.

31 ANNEX II Page 2 of 8 B. Statement of IFC Investments (as of March 31, 1982) Investment Fiscal Number Year Obligor Type of Business Amount in US$ millions Loan Equity Total 311-CM 1975 BATA Shoe Factory CM 1977 SAFACAM I Rubber Plantation CM 1979 SAFACAM II Rubber Plantation CM 1979 ALUCAM Non-ferrous metal CM 1981 SCM Food and Food Processing CM 1981 SOCAVER Glass Bottle Factory CM 1981 SAFACAM III Rubber Plantation Total gross commitments Less cancellations, terminations, repayments and sales Total commitments now held by IFC Total undisbursed C. Status of Projects in Execution (as of March 31, 1982) 1/ Cr. No. 320 Second Education Project: US$9 million Credit of June 28, 1972; Effectiveness Date: February 27, 1973; Closing Date: June 30, All project-financed institutions are in operation. The adult vocational training center (CENAFOP) in Douala, recently transferred from the Ministry of Education to the Ministry of Labor, started training in March The project is expected to be completed by June 30, / These notes are designed to inform the Executive Directors regarding the progress of projects in execution, and in particular to report any problems which are being encountered, and the action taken to remedy them. They should be read in this sense, and with the understanding that they do not purport to present a balanced evaluation of strengths and weaknesses in project execution.

32 ANNEX II Page 3 of 8 Loan No Fourth Railway Project: US$27 million Loan of Cr. No. 936 August 23, 1979; Effectiveness Date: January 22, 1980; Closing Date: June 30, 1983; and US$20 million Credit of same date; Effectiveness Date: January 22, 1980; Closing Date: June 30, All contracts have been awarded except for the maintenance facilities near Yaounde and some modifications in the extensions in the workshop. The civil works for the new Douala station have progressed enough to expect completion in December, Detailed engineering studies for the new maintenance depots in Yaounde are behind schedule and the reports are expected by June, Contracts for Phase I of civil works in workshops and the depots have just been awarded. Procurement of equipment and materials is 75 percent completed. Remodelling the training school is in progress; training equipment is under procurement. Due to the excessive staffing and investments, the financial situation of the Regie continues to be serious, but traffic is increasing at 12 percent p.a. and this gives hope of some recovery in FY83. Government established a special Commission to review and make recommendations for improving the financial situation. Bank mission is expected to meet the Government and discuss the Commission's report in June Staff reduction and adequate tariff adjustments will have to be emphasized in this meeting. Though at present, the financial situation is disturbing, there are signs that with increased traffic and reforms in Government's policies, Regifercam can become a commercially viable entity within a few years. Loan No T-CM Third Education Project: US$17 million Loan of July 2, 1976; Effectiveness Date: December 31, 1976; Closing Date: December 31, The Closing Date is about two years behind schedule primarily due to weak management and problems in dealing with a 34 percent cost overrun (US$8.4 million) in civil works. The Government has made provision in its FY82 and FY83 budgets to cover part of this cost overrun. Construction work is completed or underway at 10 out of 12 project institutions. Bids for the two remaining institutions have been evaluated and construction should start soon. Equipment has been delivered to a secondary technical school and most bids have been evaluated for other institutions. A secondary technical school transferred from the previous project is the only one out of 12 project institutions in operation and the other institutions are expected to be operational by December 1982 and the remaining one by October In view of the progress of project implementation, the Closing Date has been postponed by one year and a detailed schedule for project implementation and reorganization of the project unit has been agreed with the Government. However, we are closely monitoring the main project implementation issues, and, unless these issues are satisfactorily resolved, the project is expected to be closed by December 31, Discussion has been undertaken about a new design for a possible fourth project which has been suspended until implementation progress of the third project has been made.

33 ANNEX II Page 4 of 8 Cr. No. 673 Technical Assistance Project: US$4.5 million Credit of June 15, 1977; Effectiveness Date: November 14, 1977; Closing Date: June 30, Project's funds have been fully committed and most pre-investment studies financed by it--largely in agriculture, transport and planning--have been completed. Long-term advisory consultants are continuing to assist Cameroonian staff to improve project generation and supervision capacity, which is being supplemented by on-the-job training and formal training courses. Cr. No. 723 Rural Development Fund Project: US$7 million Credit of August 4, 1977; Effectiveness Date: January 30, 1978; Closing Date: December 31, The Project's organization and progress continues to accelerate and to consolidate; construction standards of all but one sub-project are good, as are their planning, budgeting and accounting. It is expected that with the available funds about 60 percent of overall objectives will be achieved at completion. In May 1982 the SEDA - Halcrow - ULG (Joint Cameroonian/British venture) preparation report for a possible Phase II will be available and Government has asked the Bank to appraise the second phase. However, implementation has been slow, and the closing date will have to be extended for an additional year to make full use of the remaining funds, estimated at US$1.6 million. Ln. No Second SOCAPALM Project: US$18 million Loan and US$7 million Third Window Loan of August 25, 1977; Effectiveness Date: November 23, 1977; Closing Date: June 30, New plantings under the project continue to be satisfactory though implementation lags slightly behind schedule. Due to labor unrest, lower than forecasted yields and processing difficulties, production from earlier plantings falls short of the target by about 25 percent. The company's financial management has been strengthened by the appointment of an internal auditor and the financial situation has improved. The net positive cash balance as of June 30, 1981, of CFAF 230 million (US$0.9 million) however, was insufficient to cover operating expenditures and a further capital increase of some CFAF 2.00 billion (US$7.4 million) will be required under the oil palm/rubber consolidation project scheduled for Board consideration later in FY82. Cr. No. 749 Ln. No Feeder Roads Project: US$4.6 million Credit and US$6.5 million Loan of December 7, 1977; Effectiveness Date: March 7, 1978; Closing Date: December 31, Implementation of the Feeder Roads Project started in The project includes creation of the Central Feeder Roads Unit within the Department of Highways and a four-year construction program for 2,200 km of feeder roads. Project implementation is behind schedule because the organization in charge is understaffed and because of shortage of local funds. The Government is to submit for Bank approval a modified program for project execution reflecting considerable feeder road construction cost increases.

34 ANNEX II Page 5 of 8 Cr. No. 763 Second SEMRY Rice Project: US$14.5 million Credit Ln. No of February 1, 1978; Effectiveness Date: April 14, 1978; Closing Date: September 30, 1984; and US$14.5 million Loan of February 1, 1978; Effective Date: April 14, 1978; Closing Date: September 30, A satisfactory solution to the problems of dike erosion and piping has been found, and no new erosion or piping has occurred in a test zone that was protected. Permanent dike protection is now proceeding. Yields are now approaching appraisal estimates. Further irrigation works have been suspended until existing land is fully used. Thus funds from the original financial envelope appear to be sufficient to complete dike protection. The modest supplemental financing that is needed to complete the project would be provided by Government. The program of resettlement of farmers from neighboring, over-populated zones is proceeding at a rate consistent with SEMRY's ability to provide adequately serviced townsites near paddy fields. Ln. No Second CAMDEV Project: US$15 million Loan of February 1, 1978; Effectiveness Date: June 30, 1978; Closing Date: December 31, Although estate planting programs continue on target, the past two fiscal year 1979/80, 1980/81, showed substantial cost overruns, owing to this high planting/production costs and lower than forecasted yields per hectare. CAMDEV's overall financial position remains precarious. The company 's management effectiveness was seriously impeded by difficulties arising out of internal management conflicts. Government is aware of the company's problems and permanent solutions will be implemented under the oil palm/rubber consolidation project (SOCAPALM/CAMDEV) scheduled for Board consideration later in FY82. The measures include inter alia a reorganization of CAMDEV's management structure and a capital increase of some CFAF 6.0 billion (US$22.2 million). Ln. No Third Highway Project: US$16.5 million Loan of April 3, 1978; Effectiveness Date: October 17, 1978; Closing Date: June 30, Construction of the Garoua-Figuil road, the last section of the Trans-Cameroon rail and road route, was satisfactorily completed in Technical assistance to the Ministry of Transportation helped to carry out a comprehensive origin-destination survey with the final phase having been completed in mid Results of the origin-destination survey are expected to be available shortly. A transport advisor financed under the Project, is helping the Ministry of Planning evaluate and coordinate the transport component of the Fifth Development Plan and will finish his term in mid A US$5.6 million cost overrun, mainly due to exchange rate fluctuations, has been covered by the Government.

35 ANNEX II Page 6 of 8 Cr. No. 784 Western Highlands Project: US$13 million Credit of April 17, 1978; Effectiveness Date: December 8, 1978; Closing Date: June 30, The project is achieving its objectives and technical and financial management is good. Although physical execution was lagging behind appraisal schedules, owing to organizational problems encountered during the first project year, improvements have been made in all components with corresponding increases in procurement and disbursement rates. Government's contributions to project financing continue to be regular, and liquidity problems due to delays in preparation of withdrawal applications have been partly rectified. Government has requested Bank group assistance for a follow-up project extending coverage to the entire Western Province. Government with FAO/CP completed the preparation report in January 1982 and an appraisal mission is presently in the field. Ln. No. 776 ZAPI East Integrated Rural Development Project: US$8.5 million Credit of April 17, 1978; Effectiveness Date: October 4, 1978; Closing Date: June 30, The project continues to make satisfactory progress. Despite budgetary constraints, physical implementation of most components approached targeted levels for 1980/81. Crop production, processing, disease control, research and inland fisheries components are developing well. Reorganization of extension, credit and distribution services and ZAPI's management structure is proceeding. ZAPI's financial situation shows marked improvement. As a result of internal management reforms and a Government-authorized subsidy of US$2.1 million, ZAPI should be able to liquidate its long-standing deficit and resume program expansion in 1981/82. At midterm approximately 50 percent of the IDA credit has been disbursed. Cr. No. 926 Fourth Highway Project: US$10 million Credit of August 23, Ln. No ; Effectiveness Date: November 15, 1979; Closing Date: June 30, 1986; and US$38 million Loan of same date; Effectiveness Date: November 15, 1979; Closing Date: June 30, The project comprises training of staff and workers for road maintenance, maintenance of about 17,000 km of roads and rehabilitation of 1,700 km through force account and domestic contractors, technical assistance to the domestic construction industry, two permanent weighing stations, and preinvestment studies for the proposed project and forestry evacuation roads. Implementation of the Fourth Highway Project has started after initial difficulties with recruiting consultants, equipment procurements, setting up the training brigade and the training center.

36 ANNEX II Page 7 of 8 Cr. No. 975 Second HEVECAM Project: US$15 million Credit of April 18, 1980; Ln. No Date: September 16, 1980; Closing Date: December 31, 1985; and US$16.5 million Loan of same date; Effectiveness Date: September 16, 1980; Closing Date: January 30, The project took off well; the area planted in PY1, 2,390 ha exceeded SAR target by 11 percent and as of out of 2,200 ha for PY2 already 1,950 ha were planted. No problems are expected to complete the 250 ha remaining. Expenditures during both project years were well controlled and minor accounting problems sorted out. Disbursement is in line with SAR estimates and HEVECAM's financial situation is sound. The management team works harmoniously with their national colleagues. In mid-1981, the estate was plagued by some labor unrest which, however, were settled without major problems. Ln. No Second Water Supply Project: US$21 million Loan of December 11, 1979; Effectiveness Date: May 12, 1981; Closing Date: June 30, The aims of the project are to improve and extend water supply systems in 13 secondary centers and two major cities, Douala and Yaounde; lay the groundwork for organizing urban development planning for Douala and Yaounde; initiate a pilot public health educational project; and strengthen the organization of the water supply sector. Engineering studies and bidding documents have been prepared and the procurement process is underway. Cr. No Second Livestock Development Project: US$16 million Credit of June 20, 1980; Effectiveness Date: May 12, 1981; Closing Date: December 31, This credit has recently become effective. The project will support Cameroon's Livestock development through three major production components: a diversified credit program, continued eradication of tsetse flies from the grazing area of the Adamaoua Plateau, and a strengthening of veterinary field services. It will also support formal and informal training, and institutional reforms in aid of the productive components. Initial progress has been slow, due to difficulties in recruiting the necessary expatriate specialists. Ln. No Northern Province Rural Development Project: US$25 million Cr. No Loan of January 27, 1981; Effectiveness Date: June 1, 1981; Closing Date: June 30, 1986; and US$12.5 million Credit of same date; Effectiveness Date: June 1, 1981; Closing Date: June 30, Since effectiveness on June 1, 1981, this project has achieved remarkable results. Despite lower than normal rainfall during 1981, seed cotton production with 95 percent of the buying campaign completed, is expected to reach 47,000 tons or about 85 percent of the SAR target of 56,000 tons for PYI. Food crop production during the first year was negligible, for 1982/83, however, the project estimates to plant about

37 ANNEX II Page 8 of 8 1,200 ha and 250 ha, respectively, of improved maize and groundnuts. The project accounts are kept by computer and the system developed permits the Financial Controller monthly balances and comparison with annual budgets for each project component. Moreover, reimbursement applications are produced on a monthly basis by means of a simple program established by the project's Financial Controller. Key local personnel and expatriates have largely been recruited. Cr. No Second Technical Cooperation Project: US$10 million Credit of November 5, 1981; Not yet effective; Closing Date: December 31, The project aims at improving Government capacity to execute the Fifth Development Plan. It is expected to strengthen existing national planning and external debt management systems, to help define better policies and investment programs in key sectors, and to generate sound projects by stressing the training of Cameroonian experts. Ln. No Post and Telecommunications Technical Assistance Project: US$7.5 million loan of March 19, 1982; Not yet effective; Closing Date: December 31, The purpose of the project is to reorganize and strengthen the Post and Telecommunications entity so as to improve its financial situation and the quality of service and to pave the way for a sound long term development of the sector. It provides for establishment of a new operating entity, preparation of an investment program and improved technical training. Cr. No Forestry Project: US$17 million loan, not yet signed. Not yet effective. The project's objectives are to stregnthen the contribution of the forestry sector to the economy through the establishment of plantations for fuelwood and pulp industry raw material. It is also expected to increase the capacity of Government agencies to continue the regeneration of forests and to control the logging operations of forestry concessions.

38 ANNEX III UNITED REPUBLIC OF CAMEROON FIFTH HIGHWAY PROJECT SUPPLEMENTARY PROJECT DATA SHEET Section I. Timetable of Key Events (a) Time taken to prepare the project: 18 months (b) Project prepared by: consultants and partly financed under the ongoing Fourth Highway Project (c) Date of first Bank mission to consider the project: September 1979 (d) Date of departure of appraisal mission: October 1980 (brief followup missions took place in 1981) (e) Negotiations completed: March 29, 1982 (f) Planned date of effectiveness: December 1982 Section II. Special Bank Implementation Actions None Section III. Special Conditions A. The Government would: (a) contract the construction of Section I of the Douala-Yaounde road by December 1982, according to acceptable engineering standards; the Bank should be informed of any modification of design standards and extension of construction deadlines (para. 39); (b) prepare not later than June 30, 1983, list of the required laboratory equipment; and procure laboratory equipment only after substantial completion of new laboratory buildings (para. 43); (c) discuss the results and recommendations of the national transport survey with the Bank (para. 44); and (d) nominate counterparts to each expert for the technical assistance to MINT prior to their arrival (para. 42). B. Special conditions of loan effectiveness would be that consultants be appointed to: (i) supervise construction of lots 6-9 (para. 40); and (ii) assist the Ministry of Equipment, and that counterparts be nominated (para. 41) and that all conditions precedent to the effectiveness of the loans of the co-financiers be fulfilled (para. 48).

39 33 - ANNEX IV CAMEROON - DOUALA-YAOUNDE ROAD CONSTRUCTION - FOREIGN FINANCING Approx. Amount US5$ equiv. maturity Grata P. Interest Lot Finncing Agency Currency (million) (million) (years) (yearn) br rext Consortium of 1. - AD c , -LADRA re Total/Average DC France (see lot No. 5) 3. Netherlands - Government hfl Private Bank hfl ,0 Total/Average hfl a IDF ECU 6,71W/ 7.0W/ 40 l France (see let No. 5) S. France (lote ) - CCQ2 Fl S 7 5,5 - CCCO PAC n grant - Private CreditWl Fn 130oI 24.1!/ 5bj /. Total/Average A1 FE 38O0k' 70.4a/ 10. 4!13.W S"k AL SECTlON I (Douala-Edea) Conortium of 6. - Kuwait Ftud Dinar ±/ - Islamic Bank Dinar ll ,5 - Abu Dhabi Fund Dirha, Total/Average s IERD US$ 48.eJ 48.4S/ 20 5 (11.6) 8. Netherlands - Goveznent hfl Private Bank hfl f175 Total/Average hfl Canada Can.4 20@/ TOTAL SECTION 1I (Edea-Yaounde) GRAND TOTAL: TOTAL SECTIONS 1 & II (Douala-Yaounde) 24S.A si Foreign financing of the construction of the Douala-Yaounde road (excluding non-construction components such as techtical assistance and preinvestment studies). b/ provisional S/ Excludes Bank financing of US$21.6 million for non-construction project components and capitalized front-end fee. P Flua Can. $0.5 million (grant) for project monitoring. at Ixcludes fee of 0.5 percent p.a. for loan administration.

40

41 t~~~~mr - 'Nul DSAMBS/I W2ER _ I B R D M AIl ( JANUARY IBBi,. / N 4 ER C R N~~~ER A D ~ ' CHAD ~ ~ ~~~~~~~~ r hgffkw-ia i tytptf - i~~~kl CHA/,0 Lw,R f>>r. Ch~? SUiRAF N b H5Xc 44f tf a DR VOLTA ) E r - [ " 'r- C) 7. CANEROO AiM ; N G E R A NWOM12' t / C ONGOO Z A I RNE G E R IA A DD As'/wss',c GeoE, GAERON 51 \' 50AMRON 52 Z A I R Els, + / E/'7' rr PMoro UNITED REPUBLIC OF CAMEROON A V Bg FIFTH HIGHWAY PROJECT Project Road Rodd uunder cc.structsir 90- Roads construcmed urde Irt previoos projects EOsed Rood. - NotiioaHl Bo eh BR 'V R40 )t Unpaved Roads: -KLOMETenO f /M_ Nationaio 0, 20- HR 00 RB SOB *. rl Distsri YrLsG Railroads._._-. PRPRe,,,Parits IntRrIRofiRaI airports flnersrrtiofat bnsdarires 0~o..5< N I' G E IL A 0 / Mansopf _< ~~~~0 /BoS3n BOMEND F-1~~~~~~~~~2 4' u eo TO, 'I 4'h, \ ATLANTIrC OCEANE S- ;9>'MooJduP XEQUAT,ORL,, BSBINEOEOL U t,ar GAB N CONGO CGUINEA