Cameroon - Semry Rice Project

P~T1iRH T~ ERN ARICASTRI CTE D X C v t. AkMCTER This report is for official use only by the Bank Group and specifically authorized organizations or persons. It may not be published, quoted or cited without Bank Group authorization. The Bank Group does not accept responsibility for the accuracy or completeness of the report. INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE FEDERAL REPUBLIC OF CAMEROON FOR A RICE IRRIGATION PROJECT January 12, 1972   INTERMATIONAL DVELPIENT ASSOCIATION REPORT ANID RECOIENDATION OF THE PRESIDENT TO THE EXECUTIVE DRECTORS ON A PROPOED CREDIT TO THE FEDERAL REPUBLIC OF CAMEROON FOR A RICE IRRIGATION PROJECT 1. I submit the following report and recormendation on a proposed credit to the Federal Republic of Cameroon for the equivalent of $3.7 million on standard IDA terms to help finance a rice irrigation project.* PART I - INTRODUCTION 2. The Bank Group's commitments in Cameroon now total $67.1 million and cover seven projects in four sectors of the economv. Most lending has been for agriculture and transport and was evenly distri- buted between these two sectors. Consistent with the findings of our economic mission and our discussions with the Government (see Part II below), Bank operations in Cameroon over the next few years are expected to focus more on transport, with agriculture ranking second in the amount of assistance contemplated. Such a program would support the country's Third Five Year Plan which allocates a major portion of investment to infrastructure, while also reserving a "privileged place" for agricultural development. The emphasis on infrastructure, and particularly the transport sector, is required if Cameroon is to realize its export potential in forest products, minerals, and diversified cash crops. In FY-73 this approach will be specifically reflected in the presentation of projects for cocoa development, ports, and roads. 3. A summary of the existing Bank Group projects is given in Annex I. The implementation of these projects has been generally satis- factory, though there are some difficulties worth noting. Disbursements for the CAMDEV plantation project (IDA $11.0 and Bank $7.0 million) are slightly bedhina schedule, but neither the delays nor their causes are serious; management requires strengthening and CAMDEV has had considerable difficulty in recruiting a small number of foreign experts required on The attached Appraisal Report (PA-103) shows a proposed IDA credit of $3.5 million and a total project cost of $7.4 .million. The IDA $3.7 million now recommended, with a total project cost of $7.6 million, reflects the upward adjustment required due to the general re-alignment of exchange rates. The dollar value of the CFA franc has recently been increased from CFAF 278: US$1 to CFAF 256: US$1, and this new exchange rate is the basis for the figures shown in this report.  - 2 - a medium-term basis. The Sopame oil 22lm ro4ect (Bank $7.9 million) is almost on target in its disbursements, but it is now apparent that significant cost over-runs are to be expected, due primarily to higher land clearing and establishment costs; a detailed analysis of estimated expenditures required to complete the project is being made and con- sultation with the co-lenders, Fonds dtAide et de Cooperation (FAC) and the Caisse Centrale pour la Cooperation Economique (CCCE), is under way. The water supEly project (Bank $5.0 million) was completed ahead of scihdule with substantial savings which have been approved for invest- ment in further water distribution works; disbursements, however, have lagged due to the strong working capital position of the borrower; the Bank has emphasized that an acceleration of disbursements must take place. The education project (IDA $10o5 million) was delayed in starting and work is about four months behind the revised implementation schedule. The roads projet (Bank $12.0 and IDA $7.0 million) is about fifteen months behind schedule, due primarily to administrative delays on the part of the implementing agencies, This problem has been reviewed with the Government on several occasions, and three contracts for construction and two contracts for consultant services are due to be signed shortly so that work can begin forthwith. The rail4Xa proect (Bank $5.2 million) is being implemented satisfactori2y and full disbursement by the closing date of June 30, 1974 is expected. The first port development project (IDA $1.5 million) is about six months behind schedule because of institutional changes required and time-consuming government procedures involved; a revised disbursement schedule has been set up. The Government's preparation of the major port development project, integrally linked to the first project, is also behind schedule by six months. 4. The proposed rice irrigation credit is the first Cameroon project to be presented to the Executive Directors during FY-72 and is due to be followed by an education project at the end of this fiscal year. PART II - THE ECONOIfY 5. The most recent report on the Cameroon Economy , "Current Economic Situation and Prospects of the Republic of Cameroon" (in five volumes) (AlW-21a), was distributed to the Executive Directors on December 21, 1970. The report of the updating mission which visited Cameroon in October-NIovember 1971 will be distributed shortly. A Country Data Sheet is attached as Annex II. 6. Cameroon is endowed with diversified although not abundant natural resources. Its development potential is favorable. A variety of climates and soils has permitted cultivation of a large number of export crops, making Cameroon less vulnerable to external price fluctua- tions than many other countries producing primary commodities. The rivers have good bydro-electric potential. There are also indications of oil, copper, natural gas, and bauxite but, thus far, no definite prospects of commercial exploitation, The lack of an adequate transport network is a major problem and has hindered economic development. Mich of past and  - 3 - current development efforts, including those of the Bank Group, have therefore been devoted to improving transport. 7. Economically, Cameroon has done well in its first decade of independence. Throughout the 1960's the econoniy grew rapidly well ahead of the 2.1 percent population growth rate. During the last three to four years real GDP increased by about 7 percent a year, chiefly due to favorable export prices. GDP per capita for 1968/69 was estimated at $145, and our latest estimates now show 1970/71 GDP per capita of $157 at constant 1966/67 prices. The main factors of growth have been the diversification of agricultural exports, rapid growth of industry and conmerce, and large infrastructure investments, particularly in transport. A further important factor was the liberal investment climate which encouraged foreign firms, usually French, to invest in Cameroon. 8. A further factor which has boosted economic growth was favorable world marlket prices for the most important export products, cocoa and coffee. During 1965 - 1969, Cameroonts terms of trade improved annually by 9 percent. This factor largely accounted for the 10 percent annual growth M government revenues during 1965-1969 and for the increase during those years of foreign reserves (from $27 million in 1965 to $91 million in June 1971, equivalent to four-five months of imports). Since the beginning of 1970, however, ten-s of trade have been deteriorating, particularly due to the still continuing decline in cocoa prices (from 46 cents per lb. in 1969 to 25 cents in November 1971). I4oreover, cotton and groundnut crops were disappointing due to the effect of drought. Economic growth has also been affected by the decline in foreign investment. GDP growth in 1970/71 is provisionally estimated at less than 4 percent in real terms and the prospects are that the growth rate will drop during 1971/72 as well. As a result of declining export prices, the balance of trade has shifted from a surplus of $20 million in 1969/70 to a deficit of $30 million (about 12 percent of imports) in 1970/71. Gross foreign assets have been declining since mid-1971. 9. The worsening of the terms of trade since the beginning of 1970 puts into relief some of the major problems of Cameroon's economyW: the backward state of agriculture, nh_Thcrease in urban unemployment, and transport bottlenecks. As far as human resources are concerned, the number of professionals and skilled workers is still low. Much progress has been made in the Cameroonization of the civil service, although foreign technical advice remains vital. Foreign experts still largely manage and own the private modern sector. 10. Agriculture remains the mainstay of the economy, accounting for 37 percent of GDP and about three-fourths of employment. Agricultural equipment is not modern and techniques are largely traditional; the plots are small, and credit and extension services are seldom available. !'ile development efforts to increase some export crops have been effective, the Government has not yet come to grips with the problem of increasing  production of domestic food stuffs and livestock, on which a large part of the population depends for its livelihood and which is becoming - increasingly important in view of the rapidly growing needs of the cities. This lack of government action is in part due-to the absence of a federal Ministry of Agriculture and Livestock. At present, agriculture is the responsibility of the state governments of East and lWest Cameroon, which however neither dispose of the necessary funds nor the qualified manpowier to launch an effective agricultural development effort. For the same reasons, the institutional framework has also remained weak. Concentration of decision-making and establishment of agricultural organizations for credit, instruction, land reform and extension services will probably have to await the establishment of a federal Ministry of Agriculture and Livestock. 11. Among food crops, rice is the crop deserving priority because of-an expected increase in demand by the rapidly growing urban population. Experience in other liest African countries (Senegal, Ivory Coast) has shown that rice consumption is apt to increase rapi,ly with the increase in the urban population. Since rice production provides farmers with substantial income and employment, increases in consumption should be satisfied primarily from increased domestic production. Cameroon has favorable growing potential, both in the North (where the proposed project is located) and in the South. However, surveys and pre-investment studies are urgently needed to select favorable sites in the South, in rain-forest areas and on irrigation sites. 12. With regard to domestic food production, the Government will furthermore need to undertake projects aimed at increased meat and fish production and at improved conservation and marketing of traditional staples. For export crops, further action is required to raise the efficiency of coffee and cocoa production. 13. Expansion of forestry production depends crucially on improvements in transport -- roads, railways, ports. Investments in transport have accounted for 45 percent of public investment during the past five years and are expected to continue on a large scale. The Bank Group is vigorously assisting the Government's efforts to improve the transport network. In spite of improvements in recent years, the movement of goods and people is still retarded by bottlenecks in the Douala port, on the Douala-Yaounde railway and on a number of roads. 14. Partly due to the slow economic development of rural areas, people are moving to the cities. The urban population has been increasing by 6 percent a year and is expected to reach 3.0 million by 1985. This would be 38 percent of population as compared to only 16 percent in 1963 and 22 percent in 1970. This increase has been far more rapid than the expansion of employment in Cameroon's secondary and tertiary sectors. Urban unemployment is likely to increase further in the next decade and to become a source of political and social unrest. Employment creation- is thus becoming the most important objective. Since effective agricul- tural development might slow down but could not possibly stem the rural exodus, the Government will need to give urgent attention to increasing  5- urban employment in industry, transport, trade and other services. 15. The Governmentts success in this endeavor will to a large extent depend on maintenance of the favorable climate for private investments, both foreign and domestic. In recent years, however, Governmentts relations with the private sector became strained by bureaucratic interventions while efforts to identify and promate industrialization possibilities remained inadequate. The Government has become increasingly awiare of these shortcomings and the President is personally directing an effort to improve communication with the business community. Future industrialization will principg6lly depend on the ability of Cameroon to attract foreign capital and expertise which can produce intermediate products for the local econony and process local goods for export. 16. The major development problems discussed in the preceding paragraphs find adequate recognition in the Government's development plan 1971/2 - 1975/6. However, action in the crucial areas of agricultural and industrial development needs more precise definition and thus more resources (including foreign technical assistance) for project preparation. The pipeline of directly productive projects is small and without determined attempts to step up project preparation much of the plan will remain unrealized. Although Camroon's administrative ability has increased remarkably, it needs more foreign technical assistance than is presently available to help work out the practical problems of agricul- tural and industrial development. 17. The Government announced the development plan at a-time when prospects for domestic resource mobilization were poor. The plan calls for total investment of CFAF 280 billion (US$1.1 billion) of uhich half would be public. This amount is-a 70 percent increase over investment in the last five years (1966/6 - 1970/1). Vihile it is doubtful whdether the project content of the plan is sufficiently worked out to permit the plan's full implementation, financial difficulties are likely to be even more of a constraint. In spite of the plan's optimistic calculations of foreign aid disburseinents, the need for public savings was nevertheless estimated at CFAF 10 billion a year, about 35 percent of proposed public investment. 18. To realizd this amount of savings will require a very determined effort. During the recent period of rising export prices (1965-70), Government revenue increased rapidly and in spite of rising current expenditures, budgetary savings averaged CFAF 3 billion, about 8 percent of revenue and 1.5 percent of GDP. Public savings moreover increased through large surpluses of the agricultural stabilization funds, The more recent decline in export prices has however led to a much less favorable situation. In 1970/71 the Government realized only a small budgetary surplus and the present fiscal year is likely to show a current deficit. 19. At the same time, prospects for the agricultural stabilization funds have become unfavorable. The cocoa fund budget calls for price  -6- support payments during 1971/2 6f CFAF 3.7 billion plus CFAF 1.5 billion in arrears frma the past year. These payments would virtually exhaust the reserves of the fund, which was heavily depleted last year by a special investment budget of CFAF 10.5 billion. Before long, the Government will probably have to lower the cocoa producer price. At present international prices, the Government is paying the private sector CFAF 24 per kg exported. The recent increase in value of the CFA franc (from 278: US$1 to 256: US$1) and the prospect for further decline in world market prices would lead to even larger payments by the Government. To mitigate the effect of last year's drastic decline in cotton production, the cotton stabilization fund has also been paying maintenance subsidies to farmers. Only a partial recovery of cotton production is expected this year. 20. In order to improve prospects for savings during the plan period, the Government will have to curtail first of all the growth of current expenditureso The Government is aware of this need; the plan foresees current expenditures growth at 6 percent a year as compared to about 10 percent a year in the past five years. However, if export income remains depressed, the Government may have to contemplate an even lower' growth rate of current expenditures. The Government may moreover have tQ reduce the cocoa and perhaps other agricultural producer prices in spite of the serious consequences for farmerts incomes and the risk that export volume wo4d drop. 21. Ever since independence the Cameroon Government has followed sound financial policies and there is every reason to expect that the Government will attempt to reduce low-priority expenditures to free resources for economic development. However, the Government recognizes that a reduction in the development plan may also be required. Meanwhile, international aid agencies can soften the impact of the export price decline on domestic savings by providing a high proportion of aid on concessional terms, and of a high proportion of project cost,, including the financing of local currency expenditures. 22. Cameroon's external public debt has increased rapidly. It amounted to 233 million at the end of June 1971. The debt service ratio is likely to rise from 4 percent in 1970 to about 7 percent in 1975/76, taking into account service on existing and estimated new public debt. In making this projection it has been assumed that grant aid disburse- ments will remain substantial, that Cameroon's traditional aid donors will continue to offer relatively favorable terms on official loans and that meanwhile Cameroon, in order to avoid rapid exhaustion of its debt servicing capacity, iLll keep supplier credit financing within strict limits. The forecast debt service ratio is still not very high and a modest increase in conventional debt would therefore appear justified. However, in view of the country's poverty and modest growth prospects, Cameroon's needs for external capital are expected to extend over a considerable length of time. A continued rapid build-up of external debt should be avoided and it is therefore desirable that most foreign assistance be on concessional terms.  - 7 - PART III - THE PROJECT 23. The agricultural sector is paramount in Cameroon and about three-fourths of the population earns its livelihood from farming and related activities. The export of an increasing variety of agricultural commodities produces over 80% of the country's foreign exchange earnings; two crops, however, cocoa and coffee, still account for about three- fourths of agricultural exports. The Bank Group's two previous agriculture projects (CAMDEV and Sopame) were to promote the production on large government-owned plantations of a variety of cash crops other than cocoa and coffee. Looking to the future, the cocoa project under preparation will be aimed at assisting small holders to improve their yields and increase income. After FY-73 there are plans for assisting projects in livestock and other cash and food crops. Representing this shift in emphasis, the proposed rice irrigation project would provide benefits for small farmers, increase the modest exports of rice to adjacent countries, and help meet the growing domestic demand for rice. 24. Rice consumption in Cameroon is low compared with that in other African countries: about 17,000 tons per year or 2.9 kg per capita. Urban centers in the South are the main markets for rice. Urban population is increasing by 7 percent per year, and so is rice consumption, in line with the trend in evidence in other African countries. Some 7,000 tons of rice are produced domestically, of which about 70% is grown in the Yagoua district in Northern Cameroon. From this area 1,000 tons of rice are exported each year to nearby markets in the Central African Republic, Northern Nigeria, and Chad. Cameroon imports far exceed exports, however, as around 11,000 tons of rice are imported annually in the South to satisfy urban consumption. The proposed project would cover about one quarter of future domestic requirements and also permit an expansion in rice exports, although Cameroon will remain a substantial net importer of rice. 25. The project is in Cameroonts largest rice-growing area, the Yagoua district, located along the west bank of the Logone River. At this point the Logone constitutes the border with Chad. Flooding, drainage, climate, and soils are favorable to the growing of rice, as has been amply proven by the "Societe d'Expansion et de Modernisation de la Riziculture a Yagoua"(SEMRY). Established by the Cameroon Government in 1957, SEMRY was reorganized in February, 1971 as a Societe de D4velop- pement under the Federal Ninistry of Flanning. SENRY is now the sole owner of some 6,100 ha of irrigated rice fields bordering the Logone River, including all buildings and installations and guarantees the continued right of usufruct to farmers who follow sound practices and deliver their paddy to it. SEMRY operates and maintains all hydraulic and road works, carries out mechanical cultivation for farmers and supplies inputs to them, purchases the paddy for cash and processes it through a rice mill with an annual capacity of 6,000 tons; SEMRY then sells approximately 20% of its output in local markets, 20% in neighboring countries, and 60% in Yaounde. At the present time SEIRY is exploiting about 4, 200 ha, of which 1,300 ha are located in the area selected for the proposed project. (For details on SENRY's operations see paras 3.01 to 3.10 and  - 8 - annexes 1 to 4 of the Appraisal Report). 26. The proposed project was identified in 1967 under the FAO/IBRD Cooperative Program and was prepared to the feasibility stage by consulting firms financed by FAC. The project would consist of the following: (a) reinforcement of the 49 km Logone dike and improvement of a parallel road; (b) construction of four pumping stations; (c) rehabilitation of irrigation and drainage networks to serve 1,300 ha; (d) construction of new irrigation and drainage networks to serve 3,000 ha; (e) on-farm development works on 3,000 ha; and (f) construction of a rice mill with an annual capacity of 10,000 tons of paddy and storage for 7,800 tons. Tha project would also finance the purchase of farm machinery and expansion of the management and extensinn services offered by SEIRY. A consulting firm would be engaged to assist in the design, construction, and supervision of civil works and on4&rm development wiorks, (For further details on project components see paras 4h02 to 4.o8 of Appraisal Report). 27. Project costs, including taxes, are estimated at US"07.6 million with a foreign exchange component of US$h43 million. The main cost elements are as follows: US$ millions Civil works (dike, roads, irrigation system) 2.3 On-farm development 0.8 Rice mill and storage 0.5 Farm equipment 0.4 I4anagement and extension services 1.5 Consultants 0.8 Contingencies 1.3 7.6 23. The project would be financed by the proposed IDA credit, French aid, and a Government contribution as shown in the following table:  - 9 - Source of funds Form of financing - Purpose (US$ million) Government to SEMRY (US$ million) $3.7 IDA credit ($0.5 grant Local cost of construc- ( tion of civil works and on- ( farm development works ( ($3.2 credit: Foreign cost of civil term 35 years, works, on-farm develop- including 5 years grace ment, rice mill and interest 3-1/2 % equipment $1 .3 grant Cost of consultant servi- FAC grant ces and foreign experts $1.1 ($0.7 equity Contribution to SEMRY CCCE loan ( capital term 15 years ( interest 3-1/2 % ($0.4 grant Local cost of research and extension services $1.5 ($0.7 equity Contribution to SENRY Government ( capital contribution ( ($0.8 credit: Remainder of local costs term 35 years, including 5 years grace interest 3-1/2 %  - 10 - 29. Responsibility for implementation would rest with SEMRY whose experience, legal authority, management, and staff are adequate to carry out the proposed project. The present share capital of CFAF 245 million is not adequate, however; prior to effectiveness of this credit the Statuts of SEMRY would have to be amended to increase the authorized capital tFoCFAF 645 million and, of this amount, not less than CFAF 100 million would have to be paid in. (See paras 5.03 to 5.11 of Appraisal Report). This increase in SEMRY's equity is shown in the table in para 28 above. 30. Procurement would be in accordance with Bank/IDA guidelines for the cost of (i)im_ported equipment ($1.3 million); and (ii) civil works contracts ($3.1 million) for the construction of the rice mill, storage, and the irrigation system including dike and road. The con- structicn of related buildings, whose cost would not exceed $155,000, would be tendered locally since the amount involved would not attract international competition. On-farm development would be carried out on force account by SEIRY with equipment purchased under the credit. All IDA funds would be disbursed within three years of effectiveness. 31. Costs would be recovered (i) by cash surpluses generated from SENRY's operations through the difference between the sale price of rice and cash payments for paddy to farmers, and (ii) by sales tax revenues on incremental rice production. These recoveries, when calculated at their present value using a discount rate of 9% over 40 years, amount to 511O of the project's total costs at present value. The subsidy element in the project, that is, the costs which cannot be recovered, is therefore 49%. A Government subsidy of this magnitude seems justified in view of the poverty of the local farmers. As beneficiaries, the 2,800 farm families within the project area would have a fourfold increase in cash income which, by 1980, is projected at $65 per person per annum -- still far below Cameroonts present average per capita GDP of 157 per annum (for details see paras 5.12 to 5.15 in the Appraisal Report). 32. The project iwould not alter the ecological situation. Bush clearing would not be required, and the use of pesticides would be limited by SEIRY to the minimum quantities needed for an adequate pest control programo Shistosomiasis (bilharzia) is highly prevalent and malaria is endemic. The Bank has employed an environmental consultant to examine the consequences of the project for public health. His findings were that the breeding grounds for malaria would be reduced, whereas the effect of the project on controlling bilharzia would be beneficial in some wiays and adverse in others. The consultant's recommendations on public health measures to be taken have been agreed to by the Government. 33. In summary, the project is a sound one because rice can be produced in Cameroon at economic costs comparable to those prevailing internationally. The project fits wvell into Cameroonts strategy for encouraging import substitution, since the expected increase in production by SEIMRY would equal, by 1980. about one-quarter of the country's domiestic  requirements for rice. At full development about 20% of the project's incremental production would be exported to nearby markets in Chad, the Central African Republic, and Northern Nigeria. The benefit of an increase in farmer's income has been mentioned in para 31 above. The project would also benefit other areas because of increased flood protection, and it would provide during the dry-season additional employment estimated at 17,000 man-days to about 1,000 farm families who are not involved in the project but who are living in the vicinity of SEH4RY. The internal econo; mic return of the project would be 11% (see paras 7.01 to 7.05 in Appraisal Report for details on economic justification). PART IV - IEGAL IM7STRUMENTS AMD AUTHORITY 34. The draft Development Credit Agreement betwneen the Federal Republic of Cameroon and the Association, the draft Project Agreement between the Association and SENRY, the Recommendation of the Committee provided for in Article V, Section 1 (d) of the Articles of Agreement of the Association, and the text of a resolution approving the proposed credit are being distributed to the Executive Directors separately. 35. The draft agreements conform to the normal pattern in credits for projects of this kind. The following covenants of the draft Development Credit Agreement are of special interest: Sections 1.02 (h), and 7.01 (i) refer to the Logone River Agreement between the Goverments of Chad and Cameroon; formal validity has been extended from 10 to 40 years insofar as this Agreement affects the SEERY project. Section 4.02 provides an assurance that the Government of Cameroon will undertake the necessary steps to monitor and protect the public health of the populatian living in the project area. 36. I am satisfied that the proposed credit would comply with the Articles of Agreement of the Association. PART V - RECOMMENDATION 37. I recommend that the Executive Directors approve the proposed credit. Robert S. HIclWamara President Attachment Wlashington D.C. January 12, 1972  ANNEX I SUMMARY STATEMENT OF BANK LOANS AND IDA CREDITS TO CAINEROON AS OF NOVEMBER 30, 1971 Loan/credit Fiscal Year Borrower Purpose Amount (US$ million) Number Bank IDA Undisbursed 100 CM 1967 Cameroon CAMDEV 11.0 1.0 490 CM 1967 CANDEV CAMDEV 7.0 6.9 593 CM 1969 Sopame Oil Palm 7.9 5.8 604 CM 1969 SNEC lWater Supply 5.0 1.9 101 CM 1970 Cameroon Education 10.5 10-3 180 CM 1970 Cameroon Roads 7.0 6.5 663 CM 1970 Cameroon Roads 12s0 11.9 687 CM 1970 Regifercam Railway 5.2 3.5 229 CM 1971 Cameroon Ports 1.5 1.5 Total now held by Bank . and IDA 37.1 30.0 Total undisbursed 30.0 19.3 49.3  ANNEX II COUNTRY DATA Area: 183,524 square miles (475,45o km2) Population: (1970 estimates) Total 5.8 million (of which 15,000 non-Africans) Density 12 per km2 Rate of growth 2.1 % per year Gross Domestic Product2V: (billion CFAF at market prices) 1966/67 1967/68 1968/69 1969/70 1970171d GDP at current prices 194.2 219.0 240.8 281.0 307.0 rate of growth 12.7% 10.0C 16.6% 8.9% GDP at constant 1966/67 prices 194.2 211.2 222.4 243.1 252.1 rate of growth 8.8% 5.3 % 9.3% 3.7% GDP per capita at constant 1966/67 1b2.O* 152.CP 157.0* prices (US$) Structure of 1970/71 GDP (constant 1966/67 prices) billions billions Sources: CFAF % Uses: CFAF % Agriculture 96.3 37.4 Private consumption 184.5 72.8 Mining, manufa,cturing Public consumption 44i6 17.9 and construction 48.1 19.3 Gross domestic investment 36.4 14.6 Public Utilities 2.5 1.0 Deficit on goods and Trade, transportation services -7.0 -2.8 and telecommunication 64.7 26.0 Gross domestic income (258.5) Government 30.4 12.2 Change terms of trade 6.4 -2.5 Other services 10.1 4.1 252.1 100.0 252.1 100.0 I/ These GDP figures vary slightly from those used in the SERY Appraisal Report, because they are calculated from recent revisions of the national accounts. / Preliminary estimates. * Based on 277.71 exchange rate.  - 2- Financing of Domestic Investments (in billions CFAF at constant prices) 1969/70 1970/71 Gross domestic investments 35.1 36.4 Gross domestic savings 27.9 23.0 Net capital inflow i/ 7.2 13.4 Central and Federated Government Finances (in billions of CFAF) 1968/69 1969/70 1970/71 1971/72- Current revenues 42.3 4701 53.5 59.9 Current expenditures 37.7 bl.8 52.1 52.2 Current balance 446 5 73 7.7 Capital expenditures 3eL 5m0 2.7 7.8 1.6. -.3 -2*3 0.1 Money and Credit Relations to monetary areas: Member Equatorial African Monetary Union and Franc Zone. (in billiosn CFAF) June June June 1969 1970 1971 Money 30.7 34.8 38.5 Qua,si money 3,9 5.2 7.4 Credits to private sector 37.3 44.5 45.8 Credits to public sector -9.3 -17.8 -15.3 Balance of ayments / 1968 1969 (US$ minllion) Total exports of goods 4 196X9 229.4 Total imports of goods 187.6 204.8 Goods and services balance -23.5 -11.6 Foreign aid disbursements 43.1 35 I/ Estimated as a residual. / Budget estimates. / Based on average exchange rate during the yea.r. The new official exchange rate for the CFA franc with the US dollar, effective 1972, is 255.8 2 Recorded and estimated unrecorded.  -3- External Trade Relationship to customs area: Equatorial African Economic and Custom Union (UDEAC); Associated Member of the European Economic Community 1968/69 1969/70 1970/71 Imports (in % of GDP) 20.5 21.7 22.7 Exports (in % of GDP) 21.5 23.6 20.1 Concentration of exports: 1969 1970 Cocoa. 38.0% 29e0% Coffee 20-00% 25.0 Aluminium 14.c% 9.0% International reserves December June 30, August -1969 1971 1971 Gross foreign assets (US$ million) 48.0 91.0 80.0 IVY Position (US$ million) Credit tranche position 6.5 12.6 12.6 Quota 6.5 12.6 12.6 World Bank Group Operations (US$ million, as of November 30,1971) Commitments Disbursements Bank 37.1 7.1 IDA 30.0 10.7 External Public Debt (US$ million) Total debt including undisbursed at June 30, 1971 232.9 Total debt excluding undisbursed 113.7 Total debt service 1970 9.0 Debt service relative to exports 4.2% Exchange rate: Before August 11, 1969 $ le00 = CFAF 2h6.85 After August 11, 1969 $ loOO = CFAF 277971  - 4 - Social Indicators Birth rate (per 1,000 population): 40.0 Death rate (per 1,000 population): 19.0 Male population (% of total): 48.0 Dependent population (% of total): 4 46.0 Urban population annual rate of growth: 6.o Urban population (settlements of 5,000 and over - % of total): 22.0 Primary school enrollment (% of 6-13 years age group): 70.0 Modern sector employment (% of total active employed): 2/ 7.0 - Public (2 of total): / 30.3 - Private (% of total): 69.7 of which: Primary: 24.4 Secondary: 20.2 Tertiary: 25.1 Foreign employment (as a, percentage of total private modern employment): 2.4 of which: Management (% of total) 85e5 Senior level technicians (% of total) 7306 Technicians (% of total) 3h48 Skilled (% of total) 6,0 2/ Population under 15 or over 60 years. 2/ Population employed between 20 and 55 years. 2 cExcludes armed forces.  ANNEX III CAAEROON CREDIT AND PROJECT SUNNARY Borrower: Federal Government of Cameroon. Beneficiary: "Societe d'Expansinn et de Modernisation de la Rizicul- ture de Yagoua" (SEMRY). Amount: $3.7 mi3llion equivalent. Amortization: In 50 years including a 10-year period of grace, through semi-annual installments of 1/2 of 1% from April 1, 1982 through October 1, 1991 and of 1 - 1/2% from April 1, 1992 through October 1, 2021. Service charge: 3/4 of 1% per annum. Re-lending terms: Borrower will make a grant to the beneficiary of the equivalent of approximately US$0.5 million; the remaining US$3.2 of the credit will be loaned to the beneficiary at the rate of 3 1/2% for 35 years, including a 5-year period of grace, wTith 3% of the principal plus interest repaid over the first 5 years of the amortization period and 97% of the principal plus interest repaid in 50 equal semi-annual installments over the remaining 25 years. Project: SEYRY RICE IRRIGATION PROJECT. -~~ ~ The purpose is to provide for (i) a controlled water supply for SEIPI?Y by reinforcing the Logone River dike, constructing pumping stations, rehabilitating and con- structing irrigation and drainage networks serving about 4h300 ha; constructing a rice mill, storage and related buildings; (ii) execution of on-farm development works; (iii) needed equipment, engineering and supervision for the above. Financing: Local Foreign Total Percent - ------- --US (millions)-------- IDA Credit o.5 3.2 3.7 49 FAC Contribution 0.2 1.1 1.3 17 CCCE Contribution ill - 1.1 14 Government Contribution 1.5 - 1.5 20 Total 3.3 77 100 The terms and conditions of financing and re-lending arrangements for SEIIRY are given in para 4.28 and 4.29 of the attached Appraisal Report.  - 2 - AI'NEX III Cost of Project: US $ (thousands) Items Local Foreign Total Civil Works 1,193 1,095 2,288 On-farm develop- ment 144 638 777 Rice Mill and Storage Facili- ties 191 284 475 Farm Equipment 18 356 374 Management and Extension Ser- vices 1,072 460 1,532 Consultants 144 676 820 Contingencies: Physical 234 180 414 Price 259 657 916 Total 3,255 4,341 7,596 Procurement: All equipment and civil cost contracts will be ten- dered on the basis of international competitive bidding. On-farm development works would be carried out by SEMRY, on force account with equipment procured under the credit. Disbursement: Cumulative disbursements will be as follows: (In US$ '000) By June 30, 1973 June 30,1974 June 30,1975 Sept30,1975 1,170 2,900 3,600 3,700 Consultants: Suitably qualified and experienced consultants to assist SENRY prepare final designs, tender documents and supervise-execution of civil work contracts and on-farm works. Benefits: (a) Rice Crops Cropped Area (ha) Production ('000 tons) Present 'Future Present Future Wet season rice (paddy) i,300 4,300 1.7 12.9 Dry season rice (paddy) - 1,500 - 4.5 (b) Annual Farm Income (net cash) The average farm size will be increased to= 3.0 to 3.7 ha while the average cash income per farm family will rise from 18,6CO CFAF to 67,600 CFAF, i.e. fro i $72 to $264 at the new rate of exchang6..  - 3 - A}IEX III Rate of return: Internal Economic Return estimated at 11%. Appraisal Report: Report Nlo. PA - 103; December 29, 1971 Agriculture Projects Department.