Cameroon - Second Douala Port Project

FILE COPY Document of The World Bank FOR OFFICIAL USE ONLY Report No.P-1901-CM REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT AND THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT AND LOAN FOR THE SECOND DOUALA PORT PROJECT IN CAMEROON August 20, 1976 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.  CURRENCY EQUIVALENTS Currency Unit - CFA Franc (CFAF) US$1 = CFAF 225 1/ CFAF 1,000 = US$4.44 CFAF 1,000,000 = US$4,444 FISCAL YEAR July 1 to June 30 1/ Floating exchange rate.  FOR OFFICIAL USE ONLY INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT AND LOAN FOR THE SECOND DOUALA PORT PROJECT IN CAMEROON 1. I submit the following report and recommendation on a proposed development credit to the United Republic of Cameroon for the equivalent of US$10.0 million on standard IDA terms and a proposed loan to the National Ports Authority of Cameroon (NPA) with the guarantee of the United Republic of Cameroon, for the equivalent of US$15.0 million, both to help finance the Second Douala Port Project. The proceeds of the credit would be relent to NPA for twenty years, including four and a half years of grace, with interest at 8.9 percent per annum. The loan would have a term of twenty years, including four and a half years of grace, with interest at 8.9 percent per annum. The African Development Bank (AfDB); the Arab Bank for Economic Development in Africa (BADEA); the Kreditanstalt fur Wiederaufbau (KfW), the European Economic Community (EEC); and the Canadian and French aid agencies would participate in the financing of the project with loans and grants amounting to about US$71.0 million. The Government of Cameroon and NPA would provide the balance of about US$24.4 million. Annex III contains the finan- cing plan. PART I - THE ECONOMY 2. The report, "The Recent Economic Development of Cameroon" (No. 72-247), was distributed to the Executive Directors on November 27, 1972 and another report, "Proposals for a Medium-Term Public Development Program. A Special Study Cameroon" (No. 1097a-CM) was distributed to the Executive Directors on May 11, 1976. Economic Potential 3. Cameroon has a eopulation of about 6.5 million (mid-1975) and cov- ers an area of 475,000 km , about the size of France. The country's natural resources are varied, but not always easily accessible. Soils and climatic conditions permit cultivation of a wider range of crops than is commonly found in West Africa, and the forest areas of the southeast contain large untapped timber resources. The north holds promising potential for live- stock development. 4. While the main opportunities for development in Cameroon lie in the expansion of agricultural production, including forestry, the country has the potential to increase production of import substitutes needed for a growing domestic market, and to process alumina and agricultural and for- estry products for export. A bauxite project is in the early stages of preparation, and offshore oil and gas exploration is being carried out but has so far yielded no significant results. 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.  - 2 - 5. Commerce, transportation and transit services are other important economic activities. Cameroon's main economic centers are separated by vast underpopulated areas. The country moreover serves as a main export route for landlocked Chad. As a result, large investments in port and in- land transport infrastructure are essential to promoting agriculture, for- estry and industry, and strengthening Cameroon's role as a regional trade center. Past Performance 6. During the first decade of independence (1960-1970), the Govern- ment's primary objective was to unify the nation and to ease serious inter- nal political and social tensions. Output of agriculture and industry grew rapidly and, along with high world prices for cocoa and coffee, resulted in a 7 percent per annum real growth rate. Gross investment averaged about 14 percent of GDP, slightly over half in the public sector, with the largest part devoted to the transportation network, the most immediate development constraint. A major effort was also directed at expanding education and diversifying agriculture. Significant increases in fiscal revenues combined with stringent expenditure controls produced sizeable budget surpluses that made it possible to accumulate reserves and to finance a large part (up to 40 percent) of public investment out of local revenues. However, this pol- icy also imposed excessive restraint on much needed current expenditure in such areas as road maintenance, public health, and education. 7. During the period 1971-1975, growth of real GDP slowed to less than 3 percent per annum or little more than population growth. This was caused by factors largely outside Cameroon's control such as: (i) low ex- port prices for cocoa and coffee during 1971 and 1972, and several years of drought in the north; (ii) a drastic decline in private domestic and foreign investment triggered primarily by the relative stagnation of the agricultural sector and by the completion of the most obvious import sub- stitution projects during the preceding decade; (iii) a drop in 1974-1975 in world demand for both cocoa and timber; and finally (iv) rapidly rising import prices. 8. The Government reacted to these developments by stepping up pub- lic investments, which has increased by 50 percent to reach annual averages of about IUS$190 million in constant 1974 dollars during the Third Develop- ment Plan (1972-1976). At the same time, greater emphasis has been placed on agricultural output. Within a public investment program averaging 9 per- cent of GDP, rural development has comprised about 18 percent, transport and communications 42 percent, energy 6 percent, and education 9 percent. Since nearly 3/4 of public investment has been in sectors where its con- tribution to domestic output is both indirect and delayed, the immediate impact of this substantial investment effort on economic growth has re- mained limited. In addition, physical realizations have been in many cases less than projected due largely to substantial cost increases and the subsequent need to reduce the scope of projects or defer them. 9. The balance of payments has not been a major constraint until recent years; however, imports increased rapidly in 1974 and 1975 as a re- sult of worldwide inflation and the heavy public development expenditure,  especially in capital goods. At the same time agricultural exports declined, particularly exports of timber, causing sizeable current account deficits. Together with a decline in private capital inflows this resulted in a fall in reserves from a level equal to 66 days of import requirements in 1970 to 17 days in mid-1975. Prospects and Development Strategy 10. Cameroon's development effort over the next five years will be carried out under the Fourth Plan (1977-1981). The last economic mission reviewed its recommendations on the level and composition of public invest- ment with the Government in November, 1975, and agreed on overall priorities. It is anticipated that growth of GDP will be 5 to 6 percent per annum in real terms, slightly lower than achieved during the 1960s. This will compel the Government to maintain a high volume of public investment and further expand and diversify the country's production base so as to come back to more satis- factory rates of growth in the early 1980s. Increased and improved exploita- tion of forestry resources is expected to contribute substantially towards economic development over the next decade. 11. To meet these challenges, the Government must strengthen its ability to choose, prepare, and implement projects, particularly in the rural and transport sectors. Some progress is being made in this direction. Special planning units are gradually being established within the technical ministries. A Government-owned consulting firm (the Societe d'Etudes pour le Developpement de l'Afrique) was created under the Planning Ministry to accelerate project preparation. Commercially-oriented public corporations are also serving to strengthen the project implementation capacity of the public sector. Neverthe- less, further improvements are needed, particularly in the management of public corporations and in strengthening and coordinating rural development institu- tions. 12. Completing the overall transport infrastructure program already underway will absorb a high proportion of future public investment. If the Government succeeds in its present efforts to accelerate preparation and im- plementation of projects in the other sectors, particularly for rural devel- opment, future total public investment is likely to exceed US$270 million annually in constant 1974 dollars, and US$400 million in current dollars, during the Fourth Development Plan (1977-1981). 13. This is about the maximum Cameroon can possibly hope to finance. Budgetary revenues already reach 17 percent of GDP and cannot be expected to increase much faster than the economy as a whole. At the same time sur- pluses of the stabilization funds are likely to stagnate or even decline, considering the depressed price outlook for most export crops. Current expenditures, on the contrary, will expand as a result of recent increases in public investments in transport, education and health. Furthermore, public debt charges will grow rapidly, absorbing an increasing share of public savings, particularly concerning public enterprises. Consequently, in the next five years, public savings after debt service will probably not  -xceed US$100 milLien, or some 25 oercent of total public investment, as compared with 38 percent annually over the past few years. Cameroon will thus have to rely on external financing lor the bulk of its public investment. An increasing reliance on foreign borrowing during a period of relatively slow economic growth, and unfavorable terms of trade, will require careful for- eign debt management. On the reasonable expectation, however, that at least 50 percent of foreign public capital inflow will be on concessionary terms, the foreign debt service ratio could be maintained below 10 percent by 1980. 14. Cameroon's proven ability to make effective use of external re- sources, and the Government's dedication to development are reasons for added external support. To avoid further rapid buildup of debt service, lenders, including the Bank Group, should provide a large part of their as- sistance on concessionary terms. They should also be prepared to finance a high proportion of project costs, including when necessary, a part of local costs. PART II - BANK GROUP OPERATIONS IN CAMEROON 15. The Bank Group's commitments in Cameroon now amount to US$220 million and cover seventeen projects: six in agriculture, six in transpor- tation, three in education, one in public utilities, and one small- and medium-scale enterprise project. Transportation represents the largest share (50 percent) of our past commitments followed by agriculture (30 percent). Annex II contains a summary statement of Bank loans and IDA credits as of July 31, 1976 and includes notes on ongoing projects. Although delays and setbacks have been occasionally encountered in the execution of projects, the Government has consistently shown willingness to collaborate with the Bank in finding solutions to such problems. 16. For the future, the Bank Group's strategy is to support the Gov- ernment in its effort to increase agricultural production, including export- oriented crops, in the process creating productive employment in rural areas, to upgrade and improve the operation and maintenance of the coun- try's infrastructure, to stimulate investment by local entrepreneurs and increase employment in urban areas, and to increase the efficiency of Cameroon's institutions. 17. In agriculture, we have been able to help the Government further diversify production by financing its oil palm and rubber plantations in the east and west, and rice irrigation and livestock in the north. The cocoa project approved in September 1974 is helping to modernize cocoa growing by smallholders and to raise rural productivity in an area south and west of the capital. The rubber project approved in June 1975 will develop the southwest coastal region. Identification work for rural de- velopment projects in populated but poor regions, mainly the north and the western highlands, is underway. Besides promoting much needed foodstuff  - 5 - production, increased Bank Group lending for agriculture will support the Government's effort to focus on rural development in order to improve in- come distribution and better balanced regional development. 18. Recognizing the crucial importance of transportation to economic growth in Cameroon and in neighboring countries, the Government has devoted the largest portion of public investment to this sector. The Bank Group, together with bilateral institutions, has substantially helped develop ade- quate transport facilities. The Second Highway Project of 1973 has been designed to help complete the country's basic trunk road system. The proj- ect has encountered severe cost overruns partly alleviated by a recently approved Supplementary Credit. The Second Railway Project of 1974 has focused on track improvement and expansion of the equipment needed to main- tain and augment the railway's overall carrying capacity. Given projected sharp traffic increases and the backlog of required investments, substantial capital outlays are still necessary particularly for the proposed expansion of the port of Douala, which is presented in this report, and some related facilities such as a railway station and marshalling yard to be built outside the port area. An engineering loan, approved in May 1976, will help complete the engineering of this station and marshalling yard. Improvement of the Douala-Yaounde transport corridor will also require substantial investment. A study, financed by the Bank and scheduled to be completed in FY77, will help determine an economically optimal investment strategy for this corridor. Future road investments will mainly be for road maintenance and feeder roads to provide links to local markets and facilitate exploitation of Cameroon's forests. In other sectors, the Small- and Medium-Scale Enterprise Project approved in 1975 will focus mainly on developing local entrepreneurship. A Third Education Project, approved in April 1976, places special emphasis on rural education and training. 19. In all our projects, we will include, as needed, training, technical assistance, and other provisions necessary for strengthening institutions and improving sector policies. In addition, through our economic work we will continue to advise the authorities, at their request, on development questions in general, and on particular matters such as economic management, problems of urban migration, and manpower development. 20. Our lending to Cameroon has been closely coordinated with other donors; ten of our seventeen projects included joint or parallel financing. Seven multilateral or bilateral development agencies will join us in financ- ing the proposed Second Douala Port Project. 21. During the second half of the sixties, overall disbursements of foreign aid to Cameroon amounted to about US$40-45 million a year. While at the beginning of this period 65 percent of aid funds were grants, the proportion of loans slowly increased as grants declined. A major part of external assistance was provided by France and was concentrated in infra- structure and productive sectors. The aid-giving agencies of the EEC (European Development Fund and European Investment Bank) directed their lending mainly to agriculture, with infrastructure in second place. Bank  Group disbursements were small during this period. From 1972 to 1974 for- eign aid disbursements increased to about US$60 million with one-third as grants. The Bank Group's share of these inflows amounted to about 25 percent. Public debt outstanding and disbursed as of December 31, 1974 amounted to US$295 million and is projected to reach US$1.5 billion in 1981. Public debt service as a proportion of export earnings amounted to 4.5 percent in 1975 and is projected to reach 9.5 percent in 1981. At that time disbursements may be over US$400 million with only 9 percent con- sisting of grants. At present IBRD debt, outstanding and disbursed, amounts to about 13 percent of all public debt and 10 percent of public debt ser- vice. IDA credits, outstanding and disbursed, amount to about 13 percent of public debt outstanding and 0.1 percent of public debt service. The Bank Group is expected to account for about 25 percent of total public debt and 14 percent of public debt service in 1980. 22. In October 1974, Cameroon became IFC's 100th member. IFC's first operation in Cameroon, a US$450,000 underwriting to bring domestic share- holders into a previously wholly foreign-owned shoe manufacturing company, was approved in May 1975. IFC will soon submit to the Executive Directors a proposed investment of almost US$900,000 in a foreign-owned rubber estate, with the intention of diversifying the enterprise and to facilitate partici- pation by domestic shareholders. PART III - THE TRANSPORT SECTOR Background 23. Adequate transportation is a vital factor in Cameroon's economic growth due to the country's large size and its dependence on exports and imports. Moreover, its location on the Gulf of Guinea makes it an important gateway for the land-locked neighbors Chad and the Central African Republic (CAR). 24. By and large, the basic transport network in Cameroon is adequate for the present needs of the economy, but with projected Gross Domestic Product (GDP) growth of 5 to 6 percent during the next decade, pressures on the system will increase, especially in areas where development potential is still untapped. In recent years, the need to remedy the lack of basic tran- sport infrastructure through difficult terrain and over long distances has caused the transport sector (including communications) to absorb some 42 percent of total public investment. The critical issues now are to remedy some of the remaining deficiencies in the existing transport systems and to properly maintain them without allocating a disproportionate share of the country's limited resources for this purpose.  -7- The Transport System 25. Douala is the focal point of Cameroon's transport system. Its port handles nearly 90 percent of the country's external trade, and a sig- nificant share of the external trade of Chad and C.A.R. It is the starting point for the two main axes of road and rail transport to West Cameroon, and to Yaounde and the north respectively. 26. Douala port has three main forms of traffic: bulk (alumina, clinker, petroleum), timber and general cargo, including other agricultural exports. The general cargo and timber berths are currently over-utilized. With forecast increases in both import and export traffic, particularly of timber, congestion would rapidly occur. The proposed Second Douala Port Project would help improve the operation of the port, and provide the ca- pacity necessary for timber and general cargo until at least 1985. 27. The railway system comprises two lines. The one serving West Cameroon is of minor economic importance. The other, the Transcameroon system, comprises the old central line from Douala to Yaounde (300 km), which carries the bulk of the railway's traffic, and the recently completed extension to Ngaoundere (600 km), which at present carries little traffic except timber from Belabo (300 km from Yaounde). The marshalling yard at Douala is operating at capacity and is in a poor location; new facilities will be necessary to handle future traffic growth and improve railway operating efficiency, and are under study. 28. The road system between Douala and West Cameroon competes with the old railway line and serves local markets. Between Douala and Yaounde it largely complements the railway with roads feeding into the railway system. Growing traffic congestion in this corridor has led to an ongoing study of alternative investment policies. In the north, an extensive road system continues the Transcameroon route towards Chad, and has adequate capacity to serve local market requirements for many years. Transport Planning and Coordination 29. The Ministry of Transport is formally responsible for transport planning, but the Ministry of Economy and Planning has considerable influ- ence on sector investment priorities. The Ministry of Equipment, respon- sible for roads, acts largely as an executing agency. These Ministries are not adequately staffed, and the overall long-term development strategy and system of project preparation and evaluation have not been firmly es- tablished. Although this situation has not led to a significant misallo- cation of resources in the past, current transport problems - such as the choice between road and rail investment in the Douala-Yaounde corridor, road upgrading versus network expansion, and the inter-relationship between transport investment and regional development as well as the possible estab- lishment of a separate highway authority - require a marked strengthening of the machinery for policy-making and coordination within the sector, and the expeditious implementation of studies and preinvestment work in a number of areas.  - 8 - 30. Past attempts to reinforce the organization and machinery of planning have not been very successful, but there are now indications of growing Government awareness of departmental weaknesses. A UNDP-financed expert has been recently appointed as an advisor to the Ministry of Trans- port. Steps are also being taken to recruit experts in transport planning and coordination provided for under the Second Highway Project (Loan 935/ Credit 429 CM). Besides playing a major role in reinforcing the staff of the ministries concerned, these experts will assure on-the-job training for their Cameroonian counterparts. Beyond this assistance, however, the planning capability of the Ministries of Planning and of Transport will still need to be further strengthened, and their respective planning roles reviewed and an agreed work program established. Accordingly, during nego- tiations the Bank has reached agreement with the Government on the steps needed to assure this, and on a timetable for an appropriate plan which would include determination of staff requirements, including the possibil- ity of further technical assistance; the training to be provided both in Cameroon and, if necessary, abroad; definition of any consulting studies necessary; and financing requirements for implementation of the plan (Sec- tion 3.05 of the draft Guarantee Agreement). Government Objectives and Achievements 31. During the Third Plan (1972-1976), public investments in the trans- oort sector in 1974/75 prices are estimated at over CFAF 80 billion (out of total public investment expenditures of about CFAF 200 billion). The primary objectives have been to substantially improve the transport links between Yaouride and the north, and to take the initial steps to improve east/west communications in the country. The Government has been largely successful in these efforts. 32. Investments envisaged during the Fourth Plan (1977-1981) include expansion of the Douala Port and of transport capacity in the Douala- Yaounde corridor. One-third of the road program is devoted to completion of ongoing projects; greater emphasis will be placed on road maintenance and secondary road development. 33. These investments are essential to achieving the Government's Fourth Plan and longer-term objectives. However, the strategy and espe- cially the transport implications are yet to be fully developed. While the tendency to concentrate transport investment on the Douala-Yaounde corridor is currently appropriate, the long-term transport needs of the region to the south of the corridor may require development of port facil- ities in the Kribi area in the mid-1980s. Accordingly, towards the end of the 1970s, when the studies now underway or planned on the Douala- Yaounde corridor, forestry road development, and the Kribi master plan are expected to be completed, steps should be taken to produce a systema- tic long-term program for transport investment in the southern part of Cameroon as a whole. Discussion with the Government on this issue has already been initiated, and will be one of the subjects to be critically examined by the transport economist technical assistant assigned to the Ministry of Transport.  - - 34. The Government has been slow in establishing the appropriate strategy, policy, and institutions for utilization of forestry resources. However, in recognition of the importance of sound forestry policies to the successful development of roads, of the proposed port project, and indeed of almost the entire transport investment program, the Government and the Bank have recently agreed on the terms of reference for technical experts to assist the Ministry of Agriculture in the formulation of forestry policy and legislation. The Government has contacted consultants to provide these experts. PART IV - THE PROJECT Introduction 35. A report entitled "Cameroon - Appraisal of Second Douala Port Project" (No. 1123-CAM dated August 17, 1976) is being circulated separately. A loan/credit and project summary is provided in Annex III of this report. The project is based on information prepared by consultants 1/, the National Ports Authority of Cameroon (NPA), Regie des Chemins de Fer du Cameroun (Regifercam), and Bank missions. Negotiations for the credit and loan were held in Washington from June 21 to June 25 with a Cameroonian delegation headed by Mr. Eric Dikoko Quan, Charge d'Affaires, of the Embassy of the United Republic of Cameroon in Washington, and in Douala from July 5 to July 10 with a Cameroonian delegation headed by Mr. Assiga Ahanda, Director of Programming in the Ministry of the Economy and the Plan. Background and Purpose 36. The proposed project would be the second port project financed by the Bank Group in Cameroon. A first Douala Port Project was financed by the Association (Credit 229-CM, US$1.5 million in 1971) and has been satis- factorily completed. This project increased port capacity to meet require- ments pending completion of studies that analyzed the most suitable long-term development for Douala, which is now the subject of the proposed Second Port Project. 37. Douala is Cameroon's principal city and major port, lying at the head of the Wouri estuary about 30 km from the open sea. The other ports are of much less importance and serve limited hinterlands, whereas Douala is a focal point for both the road and rail systems of the country. Douala possesses the basic infrastructure needed for a port, but the limited depth of water in the long entrance channel is a handicap to port development in view of the trend towards deeper drafts of vessels; moreover, there is very 1/ Organisation Controle Conception Realisation (OCCR); Deutsche Sozietat Beratender Ingenieure (DSBI); Societe Grenobloise d'Etudes et d'Appli- cation Hydraulique (SOGREAH); Ecocentre.  - 10 - limited room for expansion because the port is largely hemmed in by the city. The feasibility study carried out as part of the First Port Project analyzed the costs and benefits of development at various sites along the Wouri, and concluded that because of the high additional infrastructure costs which would be associated with the development at other sites, expansion of Douala is the most economic means of providing the increased port capacity now required. Project Description 38. The proposed project would satisfactorily overcome the two major obstacles to development of the port of Douala, namely, the limited channel depth and space for growth, to cover requirements at least for the next decade. Under the project, the entrance channel to the port would be dredged, and some of the dredged material used in reclamation. Road and rail access to the port would be improved. The existing port would be rehabilitated and restructured to permit seaward expansion, and to provide facilities for log exports and a deepwater berth for containers and general cargo. Fishing 'berths and cold storage facilities would be provided upstream. Cost Estimates and Financing 39. This extensive development and restructuring of the port area which is necessary to ensure adequate general cargo and timber capacity for the next decade, would be undertaken in conformity with development plans for both the city and the railway. The project is estimated to cost about US$120 million equivalent net of taxes, of which about US$71 million is foreign costs. These costs include price and physical contingencies, and are based on consultants' estimates and on the lowest evaluated bid for the main civil works contract. 40. The Government of Cameroon and NPA have asked the Bank to assist in financing the project. They have also invited other donors to participate, and the financing plan is approximately as follows in US$ equivalent: Bank Loan US$15.0 million, IDA Credit US$10.0 million, Canadian International Development Agency (CIDA) US$29.0 million, African Development Bank (AfDB) US$12.4 million, Arab Bank for Economic Development in Africa (BADEA) US$10.0 million, Kreditanstalt fur Wiederaufbau (KfW) US$8.0 million, French Fonds d'Aide et de Cooperation/Caisse Centrale de Cooperation Economique (FAC/CCCE) US$6.6 million, Fonds Europeen de Developpement (FED) US$4.9 million. The balance of about US$24.4 million equivalent would be met by the Government and NPA. The Borrower 41. NPA is the authority for administrating all Cameroonian coastal and river ports, under the responsibility of the Ministry of Transport and Communications. NPA was established on April 16, 1972 with the cooperation of the Assocation under the terms of the First Douala Port Project.  - 11 - 42. NPA's organization and administration have been reviewed, and although found to be generally satisfactory, there is a weakness in the control of port operations. The proposed project therefore provides for the appointment of an experienced Director of Operations (Section 4.06 of the draft Loan Agreement) who would examine the efficiency of cargo-handling operations now undertaken largely by shipping companies under lease agree- ments, as well as port regulations and charges to ensure that they provide incentives for optimum cargo throughput. NPA has recently engaged consultants under French technical assistance to review its management structure, and has agreed that recommendations of the study would be discussed with the Bank, and the agreed plan of action implemented (Section 4.02 of the draft Loan Agree- ment). 43. In view of the need to minimize the heavy expense of maintaining the enftrance channel to the port, NPA has arranged for observation of the siltation behavior of the dredged channel during the project construction period, so that a plan could be devised within one year of the channel deepening, for the best method and equipment for maintenance dredging; this plan would be subject to Bank approval (Section 4.03(b) of the draft Loan Agreement). The proposed project provides for training of NPA staff in the operation of a dredger to be supplied by CIDA for the channel deepening. 44. NPA would have to prepare lease agreements for operation of the new general cargo/container berth, as well as for the new cold store and other fishing port facilities. NPA has provided assurances that these lease agreements would be prepared after consultation and agreement with the Bank on the underlying policy objectives; this arrangement is intended to ensure that the berth is operated with adequate cargo-handling equipment as a common user facility, and that the fishing port facilities are managed by experienced lessees (Section 4.07 of the draft Loan Agreement). Finances 45. NPA has achieved only a modest rate of return on assets since its establishment in 1972, but its cash flow has been satisfactory due to a low debt/equity ratio. NPA has agreed to take the necessary measures, includ- ing tariff increases, to achieve a minimum rate of return on fixed assets in use of 3 percent from 1977 through 1980 and 5 percent thereafter (Section 5.04 of the draft Loan Agreement). Thus, tariff increase proposals, which have been accepted in principle by port users, will virtually double tariffs by 1985. The large loan component (over 70 percent) in financing of the proposed project will increase the debt/equity ratio to a high 53/47 during project construction, but with rising revenues it is expected to decline to an accep- table 33/67 by 1984/85. Project Execution, Procurement and Disbursement 46. The project would be undertaken under several contracts, as agreed by co-donors and in accordance with the agreed financing plan, which would ensure the coordination of construction works and the earliest start on the most urgent components. The two principal items in the project are the main  - 12 - civil works contract and major channel dredging. International competitive procedures in accordance with Bank Group guidelines would apply to this main contract with the exception of equipment and materials for the workshop to be procured in France amounting to about 3 percent of the main civil works contract. The major channel dredging would be undertaken with a dredger and key crew provided by CIDA under tied bilateral financing arrangements, and with the remaining crew and other costs borne by Cameroon. CIDA would also finance a subsidiary civil works contract and some equipment. Procurement procedures for the CIDA-financed items would be decided by CIDA and NPA. 47. The main civil works contract has been put to international tender and the lowest evaluated tender has been selected in accordance with Bank guidelines. About 62 percent of this contract representing mainly downstream port development and port rehabilitation will be financed and disbursed jointly by IBRD/IDA (53 percent), KfW (17 percent), FAC (7 percent), FED (10 percent), and the Government (13 percent). The remainder of the civil works contract will be financed by BADEA, AfDB and FAC/CCCE and will be disbursed according to their procedures. 48. Supervision of construction of the project would be the responsi- bility of NPA, assisted by CIDA-financed consultants DSA/Tamcon/CDA under terms and conditions acceptable to the Bank and the other co-donors. Agreement has been reached with the Government, NPA, and the co-donors, that the Bank would undertake its customary role in the supervision of the entire project. Construction work is scheduled to start in 1976 and to be completed by 1980, with completion of channel deepening by 1983. Economic Justification 49. A critical element in the justification of the project is timber export potential. The prospects for development of forestry sectors both in West Africa as a whole and specifically in Cameroon were studied in depth, and it was concluded that potential exports through Douala would reach about 1.1 million tons in 1985. This takes into account forecasts of Cameroonian timber to be evacuated through the secondary port of Kribi, and via the Congo transport system Agence Transcongolaise des Communications (ATC). The exist- ing Douala port facilities are incapable of handling either this projected volume of timber, or the specialized log carriers which are expected to account for an increasing proportion of timber traffic. This will be catered for by creation of the log port, channel dredging, and improvements in road and rail access to the port. The project envisages a progressive increase in the volume of exports of sawn timber and timber products, with a corresponding reduction in the proportion of log traffic. 50. The proposed development of fishing berths, and of the cold store and allied facilities, has been decided after an assessment, by consultants Ecocentre/OCCR, of fish resources along the West African coast, and the demand for both frozen and fresh fish within Cameroon where fish forms an essential staple diet.  - 13 - 51. The project is expected to produce benefits through avoidance of congestion as traffic develops, reduction in delays to shipping caused by the present limited channel depth, economies arising from the use of specialized log carriers now unable to use the port, and added value from the expansion of fishing and ship-repair activities. The economic return on the project is estimated to be 17 percent, comprised of 18 percent on the downstream facilities, 19 percent on channel dredging, and 10 percent on the upstream facilities (in which Bank Group participation is limited to dredging and reclamation). The three components account for 46, 30 and 24 percent respectively of the total estimated project cost. The bidding on the main civil works contract has established the bulk of the costs; however even with an increase of 50 percent in costs of items for which bids have not yet been submitted and a reduction in benefits by 20-35 percent, the return is still expected to be 9.5 percent. Cameroon will retain about 80 percent of total benefits through increased tariffs, avoidance of potential shipping surcharges, and the employ- ment generated by expansion of fishing activity. Risks Inherent in the Project 52. The main project risks are that timber traffic will fail to expand as forecast because of slowness in forestry sector development and that capacity constraints in the Douala-Yaounde corridor will inhibit transport of traffic to the port. To minimize the former possibility, arrangements have been made to appoint two experts to the Ministry of Agriculture to assist in formulating forestry policies. The latter will be dealt with by the Douala Railway Station and Marshalling Yard Engineering Project (Loan S 4-CM) and investment proposals resulting from the Douala-Yaounde corridor study. Additional safeguards are required to ensure proper coordination as the project comprises several components and is being financed from various sources. NPA has, however, already appointed an Assistant Director General acceptable to the Bank who will be responsible for the overall coordination of the project. He will be assisted by a small unit within NPA and the CIDA- financed consultants responsible for supervising the project. PART V - LEGAL INSTRUMENTS AND AUTHORITY 53. The draft Loan Agreement between the Bank and the National Ports Authority of Cameroon (NPA), the draft Guarantee Agreement between the United Republic of Cameroon and the Bank, the draft Development Credit Agreement between the United Republic of Cameroon and the Association, the Report of the Committee provided for in Article III, Section 4 (iii) of the Articles of Agreement of the Bank, the recommendation of the Committee provided for in Section 1 (d) of Article V of the Articles of Agreement of the Association, and the text of draft resolutions approving the proposed Loan and Development Credit, are being distributed to the Executive Directors separately.  - 14 - 54. Features of Development Credit, Loan and Guarantee Agreements of special interest are referred to in paragraphs 30, 42, 43, 44, 45 and 48 of this report. The additional conditions of effectiveness of the Loan and Development Credit are that: (i) co-financing agreements (except for the FAC grant, the CCCE loan and the Second AfDB loan) have been signed and condi- tions precedent to their disbursement have been fulfilled; and (ii) assur- ances satisfactory to the Bank have been received on the FAC grant, the CCCE and Second AfDB loans (Section 7.01 (a) and (b) of the draft Loan Agreement; Section 5.01 (a) of the draft Development Credit Agreement). Another condi- tion of effectiveness of the Development Credit is that the agreement for onlending the proceeds of the Credit to NPA shall have been concluded (Sec- tion 5.01 (b) of the draft Development Credit Agreement). 55. I am satisfied that the proposed loan and credit would comply with the Articles of Agreement of the Bank and the Association. PART VI - RECOMMENDATION 56. I recommend that the Executive Directors approve the proposed Loan and Development Credit. Robert S. McNamara President Attachments August 20, 1976  ANNEX I TABLE 3A Pope I ,f a CANEROON - SOCIAL INfICATaRS DATA SHEET LAND AREA (THOU lN21 M CAMEROON REVERENCE COU9TIRIES ( 1970) TOTAL 4r5.4 MOST RECENT AGRIC. _, 1960 19?O ESTIMATE GHANA IVORY COAST MALAYSIA GNP PER CAPITA CUSS) 125.0 230.0 329.0 /c 340.0 3L0.o0 ho.o POPULATION AND VITAL STATISTICS POPULATION (MID-YR. MILLION) 4.8 5.8 6.5 a 8.6 5.4 O.L POPULATION DENSITY PER SQUARE KM. 10.0 12.0 114.0 j 36.0 17.0 32.0 PER SQUARE KN. AGRIC. LAND .. 37.0 .. 62.0 26.0 291.0 virtAL STAtISTICS CRUDE BIRTH RATE PER THOUSAND h.35 42.1 hO.o h9.8 L6.1 42., CRUDE OEATH RATE PER THOUSAND 27 9 23.9 22.0 21.14 23.3 12.9 INFANT MORrALiTY RATE (/THOU) 142.0 156.0 1o.8 /a Llft EXPECTANCY AT BIRTH tYRSI 35.9 61.0 41.0 141.5 41. C 56.7 GROSS REPRODUCTION RATE 2.3 2.7 Z.? 3.2 3- 1 2.6 a POPULATION GROWTH RATE CX3 TOTAL 2.4 2.0 Z.0 ad 2.6 3. 4/e 2.6 URBAN 6.0 .. 5.0 8.7 a 3.6 URBAN POPULATION CZ OF TOTAL) 15.0 /-b 20.0 ,, 29.0 28.0 27.8 AGE STRUCTURE CPERCENN) 0 TO 14 YEARS *0.0 43.0 * 46.9 L2.5 h41,. L 15 1O 64 YEARS 56.0 54.0 ,, 49.5 54.8 52.1 j 65 TEARS AND OVER 4.0 3.0 3.6 2.7 3.2 Li MCGE OEPENDENCY MATI0 0.8 0.9 . 1.0 0.8 0.9 / ECOIOMIC DEPENDENCY RATIO 1.0 1.2 .. 1.4 0..9 6.b 1 FAMILY PLANNING- ACCEPTORS (CUMULATIVE. THOU) .. .. .. 10.9 .. 2C.2 a USERS (l OF MARRIED WOMEN) .. .. .. 2.0 8.0 /a EMPLOYMENT TOTAL LABOR FORCE (ThOUSAND) 2400.0 2800.0 . 3300.0 2600.0 2900.0 /a LABOR FORCE IN AGRICULTURt (Z) 86.0 82.0 .. 54.0 82.0 43.0 C UNEMPLOYED (Z OF LABOR FORCE) .. .. .. 5.0 /a 6.0 6.0 /ab TICOME DISTRIBUTION I OF PRIVATE INCOME RECID BY- JlGt&Si 5Sa OF iUSEHOIDS .- . 28.3 HIGHEST 20% OF HOUSEHOLDS .. -* IWM=S 20% OF HCOUSE1HIMW . . . - '3:? LWNEST 1It% OF DUSElOLDS .. .. .. ,, ., 11.2 DISTRIBUTION OF LANDO OWNERSHIP .._________...._____.________. I OWNEO BY TOP 10l or OWNERS I OWNED BY SMALLEST 102 OWNERS . .. .. .. HEALTH AND NUTRITION POPULATION PER PHYSICIAN 30000.0/b 25960.0 26220.0 12950.0 /b 12140.0 POPULATION PER NURSING PERSON 4800.o X 2470.0 2270.0 1070.0 7i 2480.0 /S 1080.0 Igac POPULATION PER HOSPITAL BED 390.0 M 480.0 '' X60.0 680.0 a 270.0 a PER CAPITA SUPPLY OF - CALORIES Il OF REQUIREMENTS) 96.0 96.0 L04.0 96.0 108.0 93.0 /a d PROTEIN (GRAlNS PER DAY) 59.0 59.0 64.0 46.0 60.0 49 7 -OF WUhCH ANINAL ANO PULSE .. /a.Ot .. 10.0 /c 18.0d 20o.o0 DEATH RATE (/THOU) AGES 1- .. .. .. .. 5.5 EDUCATION ADJUSTED ENROLLMENT RATIO PRIMARY SCHOOL 66.0 1O8.D .. 58.0 T7.O 89.0 /a SECONDARY SCHOOL 2.0 9.0 11.0 34.0 /a YEARS OF SCHOOLING PROVIDOO (FIRST AND SECOND LEVEL) 14.O/e 14.0/b 14.0 / 15.0 13.0 13.0 /a MOCATIONAL ENROLLMENT IX OF SECONDARY) 23.0 22.0 25.0 /b 23.0 7.0 3.0 a ADULT LITERACY RATE IX) . 12.0 - 25.0 20.0 7r.0 1e HOUSIMG PERSONS PER ROOM (AVERAGE) .. .. .. .. .. 2.3 OCCUPIED DWELLINGS WITHOUT PIPED WHtER tS) .. .. .. .. .. 65.0 a/ ACCESS TO ELECTRICITY (X OF ALL ONELLINGS) .. .. .. .. .. 43.0 RURAL DWELLINGS CONNECTED TO ELECTRICITY IS) .. .. .. .. .. 30.0 CONSUMPTION RADIO RECEIVERS (PER THOU POP) 3.0 36.0 36.0 78.0 7.0 141.0 PASSENGEtR CARS (PER THOU POP) 1.0 6.0 .. 4.0 10.0 23.0 W ELECTRICITY (KRHITR PER CAP) 198.0 201.0 338.0 1ZO.0 382.0 7 NEWSPRINT (CIC/R PER CAPI .. .. 0.6 0.2 14.0 7 SE____NOTES ____AND ___DE ___INIT___ONS_._ON___REVERSE___ - - - _---- _________________________________ SEE NOTES AND DEFINITIONS OH REWERSE  ANNEX I Page 2 of 4 pages NCTtS Salee othe-isenated, data fat 1960 refer to any yeat betwee 1959 med 1961, inc 1970 betwee 1960 and 1970, end for Mast tRra.l t6etmae etee 1971 sad 1973. an Malaysia has been oriented as the anly na-OPEC of a i.e sioilar to Casere, whir0, eadnsd ith a diversified trepica1 pradortion, te...h.e the COP par rapito target (US $400 ta b0g). CAMEROON 1960 I West Catror.- lb 1962; /r Ioloding nidives assis.tant midwive and assIstant nase d C-e-e rt hoopitala. total heepitais end sedir1 renters; In 13 yeats far fEet Cesrea 1970 / 1964-66; /b 13 yeats for fast Camcoan. MOST RECENT ESTiIKATE: /a 13 years for Eaee Ceanroa, lb Earloding tesohet training, It 1975, /d 1970-75. GHOANA 1970 I Registered aatloyrd. /b Registered, not all prartioing In the reetry, It 1966'h0. IVORY COAST 1970 Ia1965-70; lb Ratio of paroistian onder 15 and 65 aed -ne to total labor forre, It Gavenaen ary, /d 1964-66, T. Dion so lmigratias, paplistion gruth rate is higher then the rate of natural iarreasoe. MIALAYSIA 1970 Ia West Malaysia, lb Rsogiltrrd appliosats far work; It tavrtset anly. Id 196.4-66, /a 1967, /f Inside army Rl, July 20, 1976 DEF lNlITItsS OP SOCtAL INISRCATORS Lard Area (thor 0021 Perolatlan ret .catll,a rorea - PapsI.iana divided by amber of prartiotog Total -Totl1 snrf.. area romptioog lead eras and inland satet, male and femal gradoatoess "trained" or 'cettifled" navIe, sad Agril. M-crn r-erot ooha of sgrrotoa .0 -sd tanp-atily Or_oiliary Parsanel ith traimiag at eaperi-crs perno,e-rly for traps, pootoors, narket 6 kirthe- gadrden or to i ltPoerlatiom ant hespita1 hod - Pepelatian divided by aomhr of hospital bode Cellar, ava~~~~~~~~~~~~~~ilable is pablir and private general od speolalited hospital amA rehahilitatian rntors; -1oldes -orelg h-.e and eatahOLslhets for CI;? par taPirs (U0$) - CNP per capita estsa reset market peto..., ..lo- rastodial med pr-evntio- rare. lated.by soar . r rvers le tlrkd as World Bank (1973-75 basis); 1960, Per rerita suepl ofvlarles C of resoiremetal - Compoird from energy 197adI1975 dar. eavltofnt food sopplies a-ilable is reentry per repita per day; avilable soppIitee roprOs ..doaestio prodartion, Importslee I..ports, PortIa tias ad vita ertsisad chegna i. er.rk; net oppites etlode animal fend, seeds, ati porulr ionbid-y. oil lee -A9 vf loly fIIt I ttaviabe ties rend Is feed prneasieg ad L.an I die-rblOot o, =eoiemot average of too rod-year as tlrav.., 1960, 1970 ead 1975 dar.tweoo tiasated by F60 base.d an physiologiral nerds for normal ativity andhelh o inedrrg nnlomatal teape-stote, body weights, age end see hdintlbotn of p ipala, aed sl11-ig 101 for vastest heese- Porolatio, densit -C Per "goaro ad 'Mid-yost .p.ap tiari pot sqoa- kilo- hold level. lene (,.h betrs fttlae.Per ..Pt.r sorely at reti rasrtdy) - Protein oant-n of per PPor Iiara d-oity-rt sonta e- fgsrir. land - Compared as shee for rair e opyof frd par day,mat soppyofedidfeda agrlroltrrl. land rely. shov, reqnir.emets far all rastries estab1lshedfby USDAd Rosmi SiteS Itarletins ~~~~~~~~~~~~~Reestlih S.r-ice. provide for a sinh.i alnar of 60 groos of total vit.1 sr.ci.li.. ~~~~~~~~~~~~~PloreIn pot day,t and 20 gramo of animal and po,ise, ptaieie of abrrh Crodr birth Itar Perr th-osnd4- Annoa Ire birtho pe theesed of mid- 10 gram' shaidthetaelast1proton, ,these standard are taro then thooe ynar ypoa'tis teeye ratlde to' averages ending in 1960 and 1970, of75 graeof ttlpoenad 23gat f animal protei1ea red five-year v-rag erdiog to 1971 5For most roet etiate, average for rho world,proposed by FgAr in the Third Wonld toad Survey. Cindy t ra e re thoosad - sta doab pe -tosd at aid-year Pa rra,Poi srly from a Ima ad raIse-_"'otein _opplyof food popuatio, t n-yar titbotl avrac sedi I.o 1960 and 1970, end drivd fra asial endMplo a grn pat da. floe-year avrgr ndisg In 1970 for mast .eveor estimate. Death rtS/hSages 1-4 - ssnol deahs pr rheey' s g gap Infant mvrrltir.y rate (/tha) - oA-I deaths of Ise.ts onder one year of i-_yers to " oldr.. in this age grasp,Tsggeited eanidarrof ageper h.o.ad live births. ma1otrirtan. Life ne tat t birth (y Anerage nethe of yeroflermang at birth, -11ay ft r-year oegaendgin160, I197 med 197 a drt Grdvolping teetrie. Adiasted enr1iinet ratio - primary arheel - Essollmant of all agesa Oroo reeodooianrare- Ar-rge ombrs of live daoghtereawmsao will per-tange of primary sehaol-age pe ata , isrdes nhildr- aged brat n ho noraIrprodortiv- period if ohn o ine present age- 6-1 years hat adjoated for drffereo lengths of prlmery edortc s sperifir fertility rates, osoa11y fiv-yea -orages eading In 1960, for c nntries with onb .r.a ednlift, enoi -tmy enrod 1002 1977 ad' 177 .fo dvvoloplsgtonottte. eLioe some oils ate hel-or abvo the offinia1 schorl agr Poul -onoreh tst 7, -ltotal - C_po..d annua gI -rh rates of mid- pd ed:_ p-tri ...yc.l-Cp. ~be y, r I.r 191C-111, '96"_"' " 1911-71. ...-asoadary doratian roqo iree at lrat feet yeao of approved primary, onat ar_thb rote (%) - orin - Canpored like greet brats oftoa insctrioan provides gene ral, vortuaaj or t..nher training poylatias difft-rnt defoirilana of arba areas may effent .ispat- issorontian for popile of 12 to 17 yea- of age. r-rrespando- bilIry o aaanguotIe. te tees. a generall1y ...rlodod. Orb-n prprsiaraL fttl - Ratio of orban to total popnlaias, fears of rhasling erovided (first and se.rad IboIe) - Total years of dlff-rent def-tsiaol of urban ara nay effort rompaability of data orhooling, as seredary love, -oatrana1 itutlsmy he Par- anog yout...o. tially or reapleetly eanioded. Age n-vrure fprertonr - Childro- (0-14 ynovs) , nothing-age (15-64 year), , _ ratianal _nrolmat ft of s.canda-yl - VoratianI inatirotiasa ad;ria (65 yer and over) as parenanao md-er `popo1ti- jorlode terbn-Ir itduarria1 or Other progra,s ohinh oporote Age deredenny rati - Iaioo popaio "der ~15 and 635 sdp as tioneednl ra eaessss eadr sttro rho o agro I5 throogh 64. Adoit lterary rate SI) - Litreraredo1re (able or read end write) a irroi dredealy rario - R.tio rf popo'tio ardor 15 asd 65 and avr aargeo tota adult popoatian aged 15 year and oer. to the labo forne in ago grasp of 15-64 years. a_ily elam_ing _ _aretore iru_altivo. thee) - C,aslati-e somer of H- ,igg -rrptors of bieth-oantre1 d-ni..e aeer a.. pines of nationa Really pasn et roo Ca-erge - Average somber of pero-e pot rom Or plenieg prog_ sisre ireptian. ornopied nanveeian1 dwellings Ia orb-a res d.aIliirgn nrinde Patily laoaln -aort CT of sarrtd eal-Pertenrtges .of married =o-pea-e otttores mad -nrmPied parts. o tof obild-braring age (15-44 yeats) who bs htrh-noarol- deviros Soo.pied dsssllag withont tired water (71 -tOrropied --tverana1 to all married u-a is sea ago grasp. drelliega is oba md -ruaars w -h nide or ontaide piped wtr.foliis spaetge of all csrpiod duellisgi. oEplesment Arreas to ole trioty ft at all dwelings) - Conetlano1 dwellings Total 1aber ferns ithaaad - Ernm-ire11y arrive peron, -Iiding with sletrrtrity im lIvigquarters as por n of total dwsIlingo Is aemd foresae omoplyd hot emldm bs -wve tsdesits, ate.; sea Id aalaes defniton innatou eseatOe ate sact rerarble. gRa-I dwlling .r.a.mented to electtricity () - Competed as sh,av for LbrR tori! gioloeC)- Agriro1tutaI labor Forte (is farming, trura dwellings only. f=retry 7hutisg mad fiahing) me perreeago of teta1 labor Raes geme edfto lbor forcel LI-ihmp leyd ate masaly dafimd as personaatif who are able med wrlling to take a Job, sot of a job o groo day, Radis r-ti--r fret - tapo -All types of reorsfor radio brmad- rataine ant o a is,med seking work far a spetfid WiniS potted e..sts te gemoal pbl petho-asad of ppelatin; ...olodes met nereedingon wrb ay mt ha roparabla ber-eom oma-tri dese to omi sdrerai-er In tatries med In years wham registration of differert definitions of onmeplIyed sod -astr at data, e.g., eploy- radio sets wa In effect, data far rect years may mat bo ronpcable _et of fire e"taitnios,Ismple soteya, ropelsory -m ploy-at iaatssinne meat -atries bh1iahed lrm tar- dirtcib.tion - Parneatage of pri-ate isriete (both is rash med kid) Pesemeroas re that PoeS - Pasasaer oars rmprlse meter rata aasisg less that eight panam; etlodee mebolamos, hearses med reregand by rirhost 5%, rirhest 20%, pau-t 20% aed pooret 40% of mii tary ehiole. hm-.hold.. Eleetr~init fk /tae ate cae) - Aama-I romaptiom of industrial, - attrb.i lea1d arorhit - Percontages of bond onmd by ilthiast g_etia, peblie med priests e1-trcity In kilmett hart pet .apita, Riattibotion gonerally base~~~~~~~~~~_d onprdutio data, ithsn latmeRorlae in I0X aod p-aea 102 ef lead matgida hat elaimg fo i.pert ad aspects of eletiy. eraith aW rutrition -ese at(gy e a)-Prepita Iaa eema.piio in kigl estmaedfrn dnseprdurtion plus mar imparts f ae ~apit. P2 =Psoisio er i cria - Ppelatton di,,idd by mashe at prartiriIf PtItagpl phmtam ulified from a medinl cobmal at nivrersty reve.  ANNEX I ff0 wp~~~~~~rr I~~~~TA ~page 3 of 4 Pages ed ~~1967.. 1972 - 1974 - 1976- 1967 1974 1981 1 _67 _ 1972 19 L74 1976 198 - - NATIONAL ACCO~M - - 3-Year Average at 1967.. 1969 Prices & Exchange Rates Average Annual Growth Rates As Percent of GDY Gross Domestic Product 799.4 1109.9 1195.5 1266.1 1363.8 1798.8 6.8 3.8 6.8 5.7 101.2 104.0 103.6 Ga.ins from Terms of Trade (+) -__2.5 - - 38.2 - 41.2 - 62.9 . . . .12 -40 -36 Gross Domestic I!ncome 789.9 1088.5 1149.5 1237.9 1-32-2.6 17735.9 6.6 2.8 7.3 5.6 100.0 100.0 100.0 Import (cine. RFF) 234.0 325.0 344.5 364.3 387.4 516.6 6.8 3.0 6.0 5.9 29.6 30.0 29.8 Exports (import capacity) 213.2 290.6 328.4 325.0 336.1 469.0 6.4 6.3 1.2 6.9 27,0 28.6 27.0 Resource Gap 1- nTEI-7T 3L.3 41 10.6 -46.2 78.5 -1.5 2.8 Consumption Expenditures 682.1 951.2 1013.7 1084.0 1145.2 1445.6 6.9 3.2 6.3 4.8 86.4 88.2 83.3 ITovestment (mncl. stocks) 128.7 171.7 169.2 183.2 220.1 337.7 5.9 - .1 14.0 8.9 16.3 14.7 19.4 DDmestic Savings 107.8 T37.4 153.0 143.9 170.7 290.2 5.0 5.5 5.6 11.2 13.6 13.3 16.7 National Savings 87.9 114.0 102.7 110,0 151.2 249.8 5.3 - 5.4 21.3 10.6 11.1 8.9 14.4 MERCHANDISE TRADE Annual Data at Current Prices As Percent of Total Imports169 82 34 202 27 239 54 Capital goods 40.8 89.1 104.3 143.2 177.5 444.4 169 82 3. 20217 2.9 54 Intermediate goodg s (;3fue1s) 87.3 133.6 198.3 254.3 297.6 533.7 8.9 21.8 22.5 12.4 46.4 45.5 42.5 Fuels and related materials 8.3 15.2 38.3 52.3 61.8 109.8 12.9 58.7 27.0 12.2 4.4 8.8 8.7 of which: Petroleum 8.3 15.2 38.3 52.3 61.8 109.8 12.9 58.7 27.0 12.2 4.4 8.8 8.7 Cons tion ,W ~~51.6 64.9 95.0 112.7 128.9 169.3 12.2 21.0 16.5 5.6 27.4 21.8 13.5 roa Mrch. orts (cif) TFF7T 3=T r379 3rY r 3T T27 10.0 20.0 23.6 13.6 13 1 To Exports Primary prodlucts ~cI. fuels) 143.7 199.9 4.46.7 398.1 461.0 885.8 6.8 50.0 1.6 14.0 90.8 93.5 86.8 F'uels and related materials - - - - - - . . of vhich: Petroleum - - - - - -. . Manufactured goods 14.6 20.9 3141 53.9 68.3 134.5 7.4 22.0 48.2 14.5 9.2 6.5 13.2 Total Nerch. Exports (foh) 411.8~7:S ~ 7 27 -Tu7!T7 6.9 47.1 5.2 14.0 rcfl7D Muuo TUD Tourism and Border. Trade . .. . .. . . Merchanclise Trade Indices Average 1967- 69 -100 Export Price Index 94.0 114.1 172.1 189.2 212.6 303.0 4.0 22.8 11.1 7.3 Import Price Index 94.8 127.6 186.0 218.0 239.3 343.7 6.1 20.7 13.4 7.5 Terms of Trade Index 99.1 89.4 92.5 86.8 88.9 88.2 -2.1 1.7 - 2.0 - .2 Exports Volume Index 94.0 123.8 163.9 147.0 164.0 229.0 5.7 15.1 - 6.9 VALUE ADDED BY SECTOR Annual Data at 1967-69 Prices end Exchange Rates Average Annual Growth Rates As Percent of Total Agriculture 2 72. 2 352.1 380.1 417.5 432.8 540.7 5.3 2.9 6.7 4.6 38.5 37.4 34.4 Industry and M4ining 170.9 233.2 230.8 258.8 271.8 371.2 6.4 - .1 8.5 6.4 24.2 22.7 23.6 Service 26, 401.6 405.4 46..AD...3 488.1 658.3 8.7 .1 9.7 6.2 37.4 39.9 41.9 Total 707.4 986.9 1016.3 1136.8 1192.7 1570.2 6.9 1.5 8.3 5.6 100. 100.0o o- 100.0 PUBLIC_FIffAN_ As_Percent_of_GDP (Central Government) (in CFAF billion) Current Receipts 31.9 56.6 68.4 79.6 103.8 201.1 12.2 9.9 23.2 14.1 16.4 16.4 17.0 Curren Epniues 32.1 46.6 60.9 7L1. 6 93.9 165.9 7.7 14.3 24.2 12.1 16.5 14.6 14.0 Budgetary Savings .2 10.0 7.5 8.0 9.9 35.2 152.7 -15.5 14.9 28.9 - . . . Other Public Sector Savings 4.6 ~1.0 13.4 10.9 12.5 19.8 35.7 266.1 - 3.5 9.6 2.4 3.2 1.7 Pablic Sector Investment 13.5 27.5 43.4 44.2 49.9 124.7 15.3 25.6 7.2 20.1 6.9 10.4 10.6 US $ million CURRENT EXP NDITSJRE DETAILS Actual Prelim. Eat. Proj. DITAL ON At 1974-1975p Pand ER As TtalCretEpn. 1967 1972 19 74 1975 1976 PUBLIC S3ECTORThrPln %oTta Education ~~~~~ ~~~~14.4 17.1 16.9 17.1 17.4 INVES'TMENT PROGRAM (19 71 / 72- 19 75 /76) Other Social Services .7 10.7 9.7 10.0 10.3 Social Sectors 247.6 26.6 Agriculture 5.0 5.6 5.9 6.1 6.6 Agriculture 167.5 18.0 Olther Economic Services 11.6 8.7 11.2 12.3 13.5 Industry and Mining 1. . Administration and Defense 59.5 45.3 42.6 41.8 40.3 Power 56.8 6.1 OYther 8.8 12.6 13.7 12.7 12.1 Transport and communmications 38 7. 2 41.6 Total Current Expenditures (in Olther 5 7. 7 6.2 CFAF billion) 32.1 46.6 60.9 71.6 93.9 Total Expenditures io9o.o 101 SELECTED INDICATORS 1960- 1967- 1972- 1977- FIIIAIClE (Calculated from 3-year averaged data) 1965 1971 1976 1981 ulcSto 2/ Average ICOR -T-2 - -40 3 1Pbi etrSavtngs - 3183. Import Elasticity . .968 .789 1.010 Local Borropwing 55.8 6.0 Marginal Domestic Savings Rate . .023 .239 .289 Foreign Financing 523.2 56.2 Marginal National Savings Rate .. .137 .151 .239 Total Financing 9 TO- 100.0 IABOR FORCE AND Total Labor Force Value Added Per Worke (1967-g69 Pricles &-Exc. Rates) OUTRIT PE WORKER %, of Total 1967 - 71 In U.S.Dollar Irercent edAverage 1961- 71 6j7 19 71 12._j7 12.. Growth Rate +96 7 1971 167 91 GrwhRt 3/ _n 9 7 197 GothRt Agriculture- 22,200 31,700 18.5 19.7 9.3 4,585.6 4,186.1 118.9 107.7 - 2.6 Industry3, ~~~~~~ 29,210 41.360 24.3 25.7 9.1 1,064.7 1,090.4 27.6 28.1 .6 ServicIdsr3/4 27,328 34.427 22.7 21.4 6.0 5.027.8 5,420.4 130.3 139.5 1.9 Government 41,494 53,486 34.7 33.2 6.5 4,752.5 4,848.0 123.2 127.4 .5 Total - --3 1-60,97T3 - 100.0 1 00-.0 T7 ~ 1T837T.T -T3T-867 1600.0 100. 0 .2 not applicable - nil or negligible 1 Estimaated actual disbursements 4L Excluding governmant not available --less than hal1f the 2/ Net of debt service smallest unit shownm 3/ Modern sector only  Annex I Page 4 of 4 pages CAMEROON BALANCE OF PAYMENI8. EXTEFXAL ASSISTANCX AND DLBT PROJECTIQRS (amounts in millions of U.S. dollars at current prices) Average Annual Actual Estimated Projected Growth Rate 1971 1972 1973 1974 17 1976 1977 1978 1979 2 19 1975 - 1980 SUMMARY BALANCE OF PAYMENTS Exports (incl. NFS) 309 340 533 693 648 766 937 1095 1228 1358 16.o Imports (incl. NF 357 425 520 657 71 943 1071 1217 1382 1566 14.6 Resource Balance7X-M) 85 13 36 -3 -177 -133 -122 -155 -207 7.7 Interest (net) -5.5 - 6 -11 -16 - 17 - 21 - 34 - 42 - 49 - 59 28.3 Direct Investment Income -1.7 - 2 -14.5 - 7.7 - 8 - 8 - 11 - 15 - 21 - 28 28.5 Workers'Remittance -17.0 -21 -24 -33 - 34 - 39 - 45 - 52 - 59 - 68 14.9 Current Transfers (net) 15.5 15 11 20 24 30 3 _5 8 141 44 12.9 Balance on Current Accounts - L 1 0 -178 -2m -a - -23 -Ta 12.4 Private Direct Investment 12 -25.6 4.6 -13.3 - 4 18 22 27 31 36 109.1 Official Capital Grants 7 6.8 7.2 13 24 26 28 31 34 37 9.0 Public M&LT Loans Disbursements 28 72.4 51.5 60 78 118 150 191 253 317 32.4 -Repayments - 8 - 8.8 -12.4 -16 -18 -18 -24 -32 -140 -60 27.2 Net Disbursements 20 3.6 39.1 -_ -0G lo0 iT2 159 213 257 33.8 Other M&LT Loans Disbursements . . . . . . . . -Repayments . . . . . . . . Net Disbursements . . . . . . . . Capital Transactions n.e.i. 2 11.8 -18.7 44 Change in Net Reserves 11 42.6 -15.9 0 GRANT AND LOAN COMMITMENTS Actual Estimated Official Grants Grant-like 25.8 24.0 25.2 .. 24.0 1970 1971 1972 1973 1974 Public M&LT Loans DEBT AND DEBT SERVICE IBRD - - 1.7 51.6 7.5 Public Debt Outs.&Disbursed 130.3 159.8 194.5 239.9 295.1 IDA 1.5 12.7 - 24.0 18.2 Other Multilateral 3.5 .1 19.0 - 9.0 Interest on Public Debt 5.7 6.5 9.9 9.8 12.3 Repayments on Public Debt 7.5 9.1 15.7 16.5 19.7 Governments 8.2 24.4 72.1 47.7 75.0 Total Public Debt Service 13.2 15.6 25.6 26.2 32.0 Suppliers 3.4 4.7 .6 16.8 20.0 Other Debt Service (net) .. .. Financial Institutions - 15.6 - 22.0 - Total Debt Service (net) .. .. Bonds -- -- -- 14.8 - Public Loans n.e.i. - - - .. - Burden on Export Earnings (%) Total Public M&LT Loans 16. 57.5 93.4 176.9 129.7 Public Debt Service 4.7 5.3 7.9 4.8 4.9 Total Debt Service .. .. Actual Debt Oustanding on TDS + Direct Invest.Inc. .. .. Dec. 31. 1974 EXTERNAL DEBT Disb. Only Percent Average Terms of Public Debt World Bank 26.8 9.1 Int. as % Prior Year DO&D 5.3 5.0 6.2 5.0 5.1 IDA 31.3 10.6 Amort. as % Prior Year DO&D 7.0 7.0 9.8 8.5 8.2 Other Multilateral 38.0 16.9 Governments 153.8 52.1 IBRD Debt Out. Disbursed 3.4 7.7 13.8 23.1 26.8 Suppliers 8.5 2.9 as % Public Debt O&D 2.6 4.8 7.1 9.6 9.1 Financial Institutions 36.6 12.4 as % Public Debt Service 3.8 6.4 5.5 8.4 8.4 Bonds Public Debts n.e.i. - IDA Debt Out. Disbursed 8.9 ll.o 18.4 30.1 31.3 Total Public M&LT Debt 295.1 100.0 " as % Public Debt O&D 6.8 6.9 9.5 12.6 10.6 as % Public Debt Service - 0.1 0.1 0.1 0.1 Other M&LT Debts Short-term Debt (disb. only) not applicable e staff estimates not available - nil or negligible ... not available separately -- less than half the but included in total smallest unit shown  ANNEX II Page 1 of 7 pages THE STATUS OF BANK GROUP OPERATIONS IN CAMEROON A. STATEMENT OF BANK LOANS AND IDA CREDITS (as of July 31, 1976) Amount (less cancellations Loan or and refunding) Credit No. Year Borrower Purpose Bank TW IDA Undisbursed 100 1967 Cameroon Oil Palm, Rubber 11.0 - 490 1967 CAMDEV Oil Palm, Rubber 7.0 0.0 593 1969 SOCAPALM Oil Palm 7.9 0.0 604 1969 SNEC Water Supply 4.9 - 161 1969 Cameroon Education 10.5 - 161 1975 Cameroon Education 1.2 0.5 180 1970 Cameroon Roads I 7.0 0.0 180 1975 Cameroon Roads I 1.0 0.0 663 1970 Cameroon Roads I 12.0 0.0 663 1975 Cameroon Roads I 1.0 0.0 687 1970 REGIFERCAM Railways 5.2 _ 229 1971 Cameroon Ports 1.5 - 302 1972 Cameroon Rice 3.7 0.0 320 1972 Cameroon Education II 9.0 7.8 886 1973 SOCAPALM Oil Palm 1.7 - 429 1973 Cameroon Roads II 24.0 5.3 4291/ 1976 Cameroon Roads II 15.0 15.0 935 1973 Cameroon Roads II 24.0 24.0 983 1974 Cameroon Livestock 11.6 10.0 1038 1974 REGIFERCAM Railways 16.o 2.7 1039 1974 Cameroon Cocoa 6.5 5.1 574 1975 HEVECAM Niete Rubber Estate 16.o 15.2 575 1975 Cameroon DFC, Small Scale Enter- 3.0 3.0 S41/ 1976 REGIFERCAM Railways prises 2.3 2.3 .245-TI/ 1976 Cameroon Education III 17.0 17.0 1/ Not yet effective Total 100.1 17.0 102.9 107.9 of which has been repaid 1.1 0.0 0.0 Total now outstand- ing 99.0 17.0 102 .9 Amount sold 0.2 of which has been repaid 0.2 Total now held by Bank and IDA a/ 99.0 17.0 102.9 Total undisbursed 44.1 17.0 46.8 107.9 B. STATEMENT OF IFC INVESTMENTS (as of July 31, 1976) 311 1975 BATA Equity Investment in Shoe Factory 0.4 a/ prior to exchange adjustments.  ANNEX II Page 2 of 7 pages C. PROJECTS IN EXECUTION 1/ Cr. No. 100, Ln. No. 490 CAMDEV Project: US$11 million Credit of March 28 1967; Effective Date: July 7, 1967; Closing Date: June 30, 1972 and US$7 million Loan to CAMDEV of same date; Effective Date: July 7, 1967; Closing Date: June 30, 1977 (Original Closing Date: December 31, 1974). The planting programs are now nearly completed, satisfactorily, and the company is entering into a much needed consolidation period. High level management is now Cameroonized, and the take-over from the expatriate General Manager went smoothly. However, the new General Manager, a capable person with a financial background, needs technical support for some time. The project is now running on a sound basis and, with some managerial improve- ment, the prospects are good. Ln. No. 593 and Sp. Ln. Oil Palm Project: US$7.9 million Loan to SOCAPALM No. 886 of April 15, 1969; Effective Date: August 14, 1969; Closing Date: December 31, 1976 and US$1.7 million Supplemental Loan of April 9, 1973; Effective Date: October 19, 1973; Closing Date: June 30, 1979. The project is progressing satisfactorily and the planting of 8,500 ha of oil palm is nearly completed. The establishment of the last 600 ha due to be planted in 1975 will, however, be deferred until the 1976 planting season because it was necessary to use available planting stock to replenish young palms destroyed by rodents. The second mill, at Eseka estate, was commissioned in May/June 1975. The estate housing improvement program is underway. Early yields are in line with appraisal projections; palm oil prices are higher than expected but so are production costs because of general inflation; nevertheless, the financial prospects are good. Ln. No. 604 Water Supply Project: US$5 million Loan to SNEC of June 2, 1969; Effective Date: November 4, 1969; Closing Date: December 31, 1974 (Original Closing Date: May 31, 1972). This project was completed on schedule with savings which have been approved for investment in further water distribution works; however, disbursements lagged due to the strong working capital position of the Borrower and the closing date was postponed three times in order to allow remaining funds to be disbursed. SNEC and Government (Guarantor) have 1/ 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 under- standing that they do not purport to present a balanced evaluation of strengths and weaknesses in project execution.  ANNEX II Page 3 of 7 pages accepted the Bank's proposal for closure of the loan as of December 31, 1974 and the Bank has cancelled the unused balance of US$70,000. Cr. No. 161, 161-1 First Education Project: US$10.5 million Credit of September 23, 1969; Effective Date: April 29, 1970; Closing Date: December 31, 1976 (Original Closing Date: June 30, 1974, first postponement December 31, 1975) and US$1.2 million Supplementary Credit of July 30, 1975; Effective Date: October 30, 1975; Closing Date: December 31, 1976. The implementation of this project was slow, especially in the initial years. This resulted from delays in (i) selecting the consultants, (ii) reaching agreement on schedules of accommodation, (iii) revising the bidding documents, (iv) starting construction work for which over-priced initial bids had to be cancelled, and (v) awarding contracts. The project is now well managed and near completion. With the exception of additional site-works, the construction of the project schools is completed. Almost all furniture has been delivered and equipment delivery will soon be completed. All the schools are in operation. The technical assistance program is about 30 months behind schedule due to slow selection process; hence the closing date has been extended from December 31, 1975, to December 31, 1976. In May 1975 a supplementary Credit of US$1.2 million was approved to cover cost increases due to currency realignments. Loan No. 663, Cr. No. 180 First Highway Project: US$12 million Loan of March 27, 1970; Effective Date: June 1, 1970; Closing Date: December 31, 1973 and US$7 million Credit of same date; Effective Date: June 1, 1970; Closing Date: December 31, 1973. The entire project has been completed. Construction of the Tiko- Victoria road was satisfactorily completed in April 1973. Construction of the Ngaoundere-Garoua road was temporarily stopped in 1973 when failures occurred on some newly-built sections because of drainage problems. The road design was then partially improved, and construction was completed in June 1975. Because of the need for these design improvements, and also due to the effects of inflation, final project costs amounted to US$35.2 million as compared with the original estimate of US$25.1 million. Original Bank Group financing of US$19 million was increased by US$2 million in May 1975 to match currency realignments. Loan/Credit funds are now fully disbursed. Ln. 687 First Railway Project: US$5.2 million Loan of June 9, 1970; Effective Date: September 15, 1970; Closing Date: June 30, 1974. Project execution has been satisfactory for track renewal work and delivery of motive power and rolling stock. However, unforeseen tech- nical difficulties such as extremely bad subsoil conditions made lengthy studies necessary before selecting the site and the optimum design of the  ANNEX II Page 4 of 7 pages new railway bridge at Japoma, near Douala. Bids were called at the com- pletion of these studies, and results showed that the Loan funds allocated to this item would be insufficient to cover the full construction costs of the new bridge. Supplementary financing was provided under the Second Rail- way Project. (Loan 1038-CM). Cr. No. 229 Douala Port Project: US$1.5 million Credit of January 14, 1971; Effective Date: April 14, 1971; Closing Date: December 31, 1974; (Original Closing Date: June 30, 1973). The Douala Port Project commenced in July 1972 and physical work under the Credit was satisfactorily completed in November 1974. Covenants and undertakings agreed during Credit negotiations have been reasonably fulfilled, but financial targets were not achieved. Remedial financial measures are included in the proposed Second Douala Port Project. Cr. No. 302 SEMRY Rice Project: US$3.7 million Credit of April 26, 1972; Effective Date: July 28, 1972; Closing Date: June 30, 1976. The project started in mid-1972 and is progressing satisfactorily. Implementation is on schedule and the Credit has been virtually disbursed. Results achieved by the project in the fields of production yields and agri- cultural practice improvements have largely exceeded targets. The project has been less successful in attracting qualified Cameroonian staff and es- tablishing an adequate financial management but these shortcomings are being corrected. The devaluation of the US dollar and additional works have increased costs by about 34 percent. The Government, CCCE and FAC are financing the cost overrun. Cr. No. 320 Second Education Project: US$9 million Credit of June 28, 1972, Effective Date: February 27, 1973; Closing Date: June 30, 1979. Due to difficulties in selecting architects and agreeing on the designs, project implementation is delayed by twenty-four months, but no extension of the closing date of June 30, 1979, is expected. The project is generally well managed, but faces severe cost overruns due to currency realignment and the accelerated price increases which have occurred since 1973 the impact of which has been compounded by the implementation delays. Consequently one item is to be financed under the Third Education Project. (Loan 1245-T). Cr. No. 429, Ln. No. 935 Second Highway Project: US$24 million Credit of September 26, 1973; Effective Date: December 20, 1973; Closing Date: December 31, 1978 and US$24 million Loan of same date; Effective Date: December 20, 1973; Closing Date: December 31, 1978.  ANNEX II Page 5 of 7 pages The Government has awarded civil works contracts for all three roads, and construction began in December 1974. Contractors started work slowly on the Douala-Pont du Nkam (161 km) and Pont du Noun-Foumban (50 km) roads, and delays of six months to one year are expected. Construction of the Garoua-Mora (260km) road is progressing satisfactorily. The project was re-appraised in September 1975 and the total cost was estimated to have almost doubled. In view of the unexpected magnitude of the cost overruns and the absence of additional financing from new donors, the Government agreed to postpone construction of one road section (90 km) to reduce total project cost. A supplementary credit of US$15 million was approved in March 1976 to help alleviate the burden imposed on the Government by the project's cost overruns. Ln. No. 983 Livestock Project: US$11.6 million Loan of May 14, 1974; Effective Date: September 16, 1974; Closing Date: June 30, 1980. Project implementation is generally good and appointment of project staff has been completed. Results obtained at one of the project ranches are exceptionally good, but a second ranch has encountered serious start-up dif- ficulties. Bids for the construction of the two slaughter plants were invited in early 1976 and have been received. About 70 livestock credits are expected to be processed during 1976, and the tsetse-fly eradication campaign is likely to start in December 1976, as scheduled. Disbursements have been slow, but are expected to accelerate when the construction of the slaughter plants begins. Ln. No. 1038 Second Railway Project: US$16.0 million Loan to REGIFERCAM of September 18, 1974; Effective Date: December.18, 1974; Closing Date: December 31, 1977. Procurement of main project items is satisfactory. The track mate- rial has been delivered and final delivery of rolling stock items is underway. Although problems were encountered in the construction of the foundation for the Japoma bridge, the works are expected to be completed by April 1977. Due to the fluctuation in exchange rates during project implementation, additional financing was required to cover the cost of the equipment already ordered and of the reconstruction of the JAPOMA bridge. Consequently, the railway has obtained a supplier's credit of US$890,000 to supplement Bank financing for the rolling stock, and the foreign exchange cost of the consulting services (US$925,000) originally included in this Second Railway Project have been transferred to the Third Railway Project financed under Loan No. S4 which is not yet effective. Due to the world slump in the timber market and recent substantial increases in staff costs, REGIFERCAM experiences difficulty in attaining the financial covenants included in the Loan Agreement. During the  ANNEX II Page 6 of 7 pages negotiations of the Third Railway Project, the Second Railway Project finan- cial targets were retained and the Government and REGIFERCAM undertook to take the necessary measures including tariff increases to achieve the target set for 1978/79. A first tariff increase averaging 12.4% has been implemented, effective June 1, 1976, and subsequent tariff increases will be implemented on July 1, 1977 and 1978, respectively. Ln. No. 1039 Cocoa Project: US$6.5 million Loan of September 18, 1974; Effective Date: February 26, 1975. Closing Date: June 30, 1981. The Project has made continuing progress in establishing its structure as well as organizing the training program and field development. The management is still somewhat weak and, as a result, efficient coordina- tion of the various activities is lacking. No serious cost overruns are expected, except for a small shortfall during the Project's first two years which has been estimated at about US$0.3 million; Government's contribution will be increased by this amount. The roads program component of the Project is, however, not progressing well. Measures envisaged by the Bank are: (a) enlisting RMWA's help in organizing a mission of the Highway Engineer to review the situation and to make recommendations for the setup of an opera- tional Feeder Roads Department, and (b) exploring the possibility of having an expatriate Highway Engineer put at the head of this Department. Project implementation in the field is proceeding satisfactorily. The project's planting program is carried out in line with appraisal forecasts. Supply of inputs has been satisfactorily organized and nurseries properly developed. Credit No. 574 Niete Rubber Estate Project: US$16.0 million Credit of June 3, 1975; Effective Date: December 1, 1975; Closing Date: December 31, 1980. Activity at the Niete Rubber Estate got under way immediately upon the arrival of management personnel on-site in August 1975. Some plant- ing has already been done in advance of schedule, and a first village for laborers is under construction. The management team, provided under con- tract by a plantation firm, SAFACAM, is highly competent having had exten- sive experience in Asia. Despite lateness by one Government agency in sub- scribing its share of a necessary HEVECAM capital increase, all documents related to credit effectiveness were received on time, and effectiveness was declared, December 1st, 1975, as scheduled. Credit No. 575 Small- and Medium-Scale Enterprise Project: US$3.0 million Credit of July 1, 1975; Effective Date: July 30, 1976 (original effectiveness date: December 1, 1975; first postponement: February 2, 1976; second postponement June 2, 1976); Closing Date: December 31, 1980.  ANNEX II Page 7 of 7 pages Credit effectiveness was declared on July 30, 1976 after two postponements. Delays were caused mainly by difficulties with the selec- tion and appointment of three experts as technical assistance to the Banque Camerounaise de Developpement (BCD). Their appointment was a condition of effectiveness of the credit. Loan No. 1245-T Third Education Project: US$17.0 million Third Window Loan of July 2, 1976; Projected Effective Date: October 4, 1976; Closing Date: December 31, 1981. The Loan is not yet effective. Loan No. S4 Douala Railway Station and Marshalling Yard Engineering Project: US$2.3 million Loan of June 25, 1976; Projected Effective Date: September 27, 1976; Closing Date: October 31, 1978. The Loan is not yet effective.   ANNEX III Page 1 of 5 pages CAMEROON SECOND DOUALA PORT PROJECT LOAN/ CREDIT AND PROJECT SUMMARY Borrower: Credit: United Republic of Cameroon Loan: National Ports Authority of Cameroon (NPA) Guarantor (Loan): Government of Cameroon Amount: Credit: US$10.0 million Loan: US$15.0 million Terms: Credit on standard IDA terms. Loan to be amortized over 20 years including four and a half years of grace, at an annual interest rate of 8.9 percent. On-lending terms Relent to NPA for twenty years including four and half of Credit years of grace, with interest at 8.9 percent per annum. Co-Financing Co-financing arrangements are detailed on page 3 of this Annex. Project Description: The Project comprises the following principal elements: (a) upstream port development, including new fishing berths, cold storage and market facilities, new dockyard and floating dry dock; (b) downstream port development, including an area for handling logs, three moorings for log carrying vessels, a berth for containers and general cargo and a transit shed; (c) dredging the entrance channel; (d) road and rail access and other port improvements; and (e) consulting services for supervision of construc- tion. Construction is expected to start in 1976 and be completed in 1983. Estimated Cost: Total project cost, derived from 1976 bid prices and estimates (including physical and price contingencies but net of taxes and using an exchange rate of US$1 = CFAF 225) is as follows:  ANNEX III Page 2 of 5 pages Local Foreign Total