Cameroon - Third Education Project

Document of FILE COPY The World Bank FOR OFFICIAL USE ONLY Report No. P-179 7-CM REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE TERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO THE UNITED REPUBLIC OF CAMEROON FOR A THIRD EDUCATION PROJECT April 7, 1976 This document has a restricted distribution and may be used by recipients only In the performance of their official duties. Its conitents 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$ 4.4 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 THIRD WINDOW REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO THE UNITED REPUBLIC OF CAMEROON FOR A THIRD EDUCATION PROJECT 1. I submit the following report and recommendation on a proposed loan to the United Republic of Cameroon, for the equivalent of US$17.0 million to help finance the T'hird Education Project. The loan would be made on Third Window terms of twent:y-five years, including a seven-year grace period, with interest at 4-1/2 percent per annum. PART I - THE ECONOMY 1/ 2. The report, "The Recent Economic Development of Cameroon"(No. 72- 247), was distributed to the Executive Directors on November 27, 1972. A special economic mission visited the country in February and November 1975, to review the GovernTaent's investment plan for FY1977-1981 and its conclu- sions are reflected in the following analysis. Economic Potential 3. Cameroon's natural resources are varied, but not always easily accessible. Soils and climatic conditions permit cultivation of a wider range of crops than [s commonly found in West Africa. The forest areas of the southeast contain large untapped timber resources, and the north holds promising potential Eor livestock development. 4. While the inain opportunities for development lie in the expansion of agricultural production, Cameroon also has potential for expanding pro- duction of import substitutes needed for a growing domestic market, and the processing for export of alumina and agricultural and forestry products. A bauxite project is in the early stages of preparation, while offshore oil and gas exploration has so far yielded only modest results. 5. Commerce, transportation and transit services are important economic activities: Cameroon is a relatively large country with its main economic centers separated by vast underpopulated areas, and the country serves as a main export route for landlocked Chad. As a result, large investments in port and inland transport infrastructure are prerequisites to promoting agriculture, forestry and industry, and strengthening Cameroon's role as a regional trade center. 1/ This text is substantially similar to that in the President's Report on the Small- and Medium-Scale Enterprise Project, dated June 16, 1975. 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- 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 internal political and social tensions. GDP at constant prices grew at a satisfactory rate of nearly 7 percent a year. Cash crop production rose steadily due to good export prices and favorable weather conditions, and manufacturing pro- duction increased as a result of the liberal investment climate that attracted substantial foreign private capital. 7. During the 1960s gross total investment averaged about US$200 mil- lion annually (in constant 1974 dollars), i.e. 14 percent of GDP. Public in- vestment accounted for about 57 percent of total investment with the largest part devoted to the transportation network, the most immediate development constraint, while substantial effort was also directed at expanding education and diversifying agriculture. Significant increases In fiscal revenues, com- bined with stringent expenditure controls, produced sizeable budget surpluses that made it possible to finance a large part (up to 40 percent) of public investments out of local revenues as well as to accumulate reserves. How- ever, this policy also imposed excessive restraint on much needed current expenditure in such areas as road maintenance, public health, and education. 8. In the early 1970s, economic growth slowed down to less than 3 per- cent p.a. or little more than population growth. This was mainly caused by (i) low export prices for cocoa and coffee during 1971-72 and a drought in the north, and (ii) a decline in private investment induced by the rela- tive stagnation of the agricultural sector and by the completion of the most obvious import substitution projects during the preceding decade. 9. The Government reacted to these developments by stepping up public investment, whose volume increased by 50 percent to reach annual averages of about US$180 million in constant 1974 dollars during the Third Develop- ment Plan (FY72-76), and resulted in a substantial drawdown of Treasury reserves and a major increase in foreign borrowing. Fortunately, the avail- ability of well-prepared, high priority projects enabled Cameroon to obtain most of the increased inflow of foreign capital from public aid donors on concessionary terms. For this reason, as well as the country's low foreign debt before the 1970s, Cameroon's external debt service has remained modest (about 4 percent of export earnings in 1974). 10. During the 1970-1974 period, low economic growth had significantly reduced import demand, while exports maintained a remarkable growth and pro- fited from higher prices in 1974. Therefore, the balance of payments was not under excessive pressure and the large inflow of foreign capital remained sufficient to cover the current account deficit. However, the situation worsened in 1974/75; the combined effect of a 50 percent increase in import prices with a 45 percent decline in timber exports (mainly due to depressed construction activity in Europe), resulted in a high trade deficit and a sharp decline in foreign exchange reserves during the first half of 1975, announc- ing an era of more severe balance of payments problems.  - 3- Prospects and Development Strategy 11. As a resuli: of the current and projected deterioration of Cameroon's terms of i-rade, exports will play a less dynamic role in econo- mic expansion, while domestic demand is still too small to take up the slack. Therefore, overall growth in the next decade might run well below the rates achieved during the 1960s, in spite of Government efforts to maintain a high volume of public investment and to develop the country's considerable opportunity for diversification, particularly within the rural sector. 12. Steady economic growth will depend largely on the extent to which the Government comes to grips with several structural problems: (i) rural production (except forestry) suffers from a lack of financial and technical assistance particularly for small farmers, who produce nearly 90 percent of the country's agricultural output; (ii) despite heavy investment in recent years, the basic transport infrastructure is still insufficient; the Douala port and the Douala-Yaounde corridor (the main transport route) require increases in capacity and the road system in general needs better main- tenance as well as adaptation to traffic growth especially for the develop- ment of new agricultural and forestry zones; (iii) the education system still is not responding adequately to the country's changing needs; and (iv) serious economic imbalances persist among regions, between the towns and countryside, and between modern and traditional sectors. 13. To meet these challenges, the Government must strengthen its ability to choose, prepare, and implement projects, particularly in the rural sector. Progress is being made in this direction. Special planning units are gradually being established within the technical ministries. A para-public consulting firm - SEDA - was created under the Planning Ministry to accelerate project preparation. Commercially oriented pubLic corpora- tions are also serving to strengthen the project implementation capacity of the public sector. Nevertheless, further improvements are needed, par- ticularly in the management of public finance, and in strengthening and coordinating rural development institutions. 14. 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 implementation of projects in the other sectors, particularly for rural development, future total public investment is likely to exceed US$270 mil- lion annually (in constant 1974 dollars) during the Fourth Development Plan (FY77-81). Budgetary revenues already reach 20 percent of GDP, and cannot be expected to increase much faster than the economy as a whole, while surpluses 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 -n transport, education, and health, as will public debt  service charges. Furthermore, savings of public enterprises are expected to decline since debt service will absorb a higher share of their operating surpluses. As a consequence, in the next five years, public savings after debt service will probably not exceed 25-30 percent of public investment, as compared with about 40 percent over the past few years. Hence Cameroon will have to rely on external financing for the bulk of its public investment, and on average, foreign lenders should be prepared to finance more than two-thirds of total project costs. Particularly for rural development projects this would imply some local cost financing. 15. Increasing reliance on foreign borrowing will require careful for- eign debt management during a period of relatively slow economic growth and poorer terms of trade. If, however, borrowing on conventional terms does not exceed 50 percent of foreign public capital inflow, the foreign debt service ratio could be maintained around 10 percent by the early eighties. Cameroon's ability to make effective use of external resources and the Government's dedication to development are reasons for increased external support. To avoid further rapid buildup of debt service, lenders, including the Bank Group, should provide a substantial part of their assistance on concessionary terms. Taking these factors as well as the country's relative poverty into account, Cameroon is considered eligible for Third Window loans. The proposed Third Education Project would be the first Third Window operation in Cameroon. PART II - BANK GROUP OPERATIONS IN CAMEROON 16. The Bank Group's commitments in Cameroon now amount to US$200.7 million and cover fifteen projects: six in agriculture, five in transporta- tion, two in education, one in public utilities and one small- and medium- scale enterprise project. Transportation represents the largest share (53 percent) of our past commitments followed by agriculture (33 percent). Annex II contains a summary statement of Bank loans and IDA credits as of February 29, 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 seeking and applying satisfactory solutions. 17. For the future, the Bank Group's strategy is to support the Gov- ernment in its efforts to create productive employment in rural and urban areas, to upgrade and improve operation and maintenance of the country's infrastructure, to stimulate investment by local entrepreneurs, and to increase the efficiency of Cameroon's institutions. 18. 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 will modernize cocoa growing by smallholders and raise rural productivity in an area south and west of the capital. The rubber project approved in June 1975 would develop the south- west coastal region. Identification work for rural development projects in  populated but poor regions, mainly the north and the western highlands, is underway. Besides promoting much needed foodstuff production, increased Bank Group lending to agriculture will support the Government's effort to organize itself and focus on rural development in order to correct geograph- ical and economic imbalances in Cameroon's development. 19. Recognizing the crucial importance of transportation to economic growth in Cameroon and in neighboring countries, the Government has devoted the largest portion of public investments to this sector. The Bank Group together with bilateral institutions, has substantially helped Government develop adequate transport facilities. The second highway project of 1973 will help bring the establishment of the basic trunk road system near comple- tion. The second railway project of 1974 has focussed on some improvements to the tracks and on the equipment needed to maintain and augment the railway's overall carrying capacity. Given sharp traffic increases and the backlog of required investments, massive injections of capital will still be necessary in the years ahead, particularly for the expansion of the port of Douala and some major related facilities such as the rail station and marshalling Yard to be built outside the port area. A proposed Bank loan will help complete the engineering of this station and marshalling yard. [mprovement of the Douala - Yaounde transport corridor will also require substantial investments. A second Douala port project was appraised in mid-1975 and is scheduled to be presented to the Executive Directors in early FY 77. Future road investment will mainly be for road maintenance and feeder roads to provide links to local markets and facilitate exploitation of Cameroon's forests, a major area for future development. In other sectors, the small- and medium-scale enterprises project approved in 1975 will mainly help develop local entrepreneurship. 20. In all our projects, we will as in the past include training, tech- nical assistance, and c,ther provisions necessary for strengthening institu- tions 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, 2nd on particular matters such as economic management, problems of urban migration and manpower development. 21. Our lending to Cameroon has been closely coordinated with other donors; in ten of our fifteen projects, joint or parallel co-financing arrange- ments have been made. 22. Over the second half of the last decade disbursements of foreign aid 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 has been slowly increasing. A major part of external assistance was provided by France and concentrated in infrastructure 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 Grcup disbursements were small during this period. From 1972 to 1974 disbursements of foreign aid increased to about US$60 million with one third as grant:s. The Bank Group's share of these inflows amounted to about 25 percent. E'ublic debt outstanding and disbursed as of December 31,  - 6 - 1974 amounted to US$280 million and is projected to reach US$1,300 million in 1980. Public debt service as a proportion of export earnings amounted to about 4.0 percent in 1974 and is projected to reach 10 percent in 1981. At that time disbursements may be over US$250 million with only 15 percent in grants. At present Bank debt outstanding and disbursed amounts to nearly 11 percent of all public debt and 10 percent of public debt service. IDA credits outstanding and disbursed amount to nearly 13 percent of public debt outstanding and 0.9 percent of public debt service. Bank Group lending is expected to account for nearly 12.5 percent of public debt service in 1980. 23. In October 1974, Cameroon became IFC's 100th member and, in a first operation approved on May 22, 1975, the Corporation will invest in the equity of Bata - a foreign owned shoe complex - and assist in the sale of its shares to local private investors. PART III - EDUCATION IN CAMEROON Government Policies 24. Since independence, the Government has concentrated on increasing enrollments in primary education (from about 680,000 students in 1964 to 970,000 in 1972) and in general secondary education (from 25,600 to 73,000 in the same period). Nevertheless, educational opportunities remain re- stricted and unequally distributed, particularly at the primary level. A simultaneous objective has been to train the technicians and skilled workers needed to replace expatriates and to cater for the growing demands of local industry. The Government's education policies increasingly take account of the training requirements of agricultural and rural communities. A major concern is the high rate of unemployment among school graduates that has been exacerbated by the migration of school leavers from rural to urban areas. 25. Major objectives of the Government's Third Plan are the achieve- ment of balanced regional and sectoral development in an effort to improve rural living conditions. Investments in rural areas are increasing, par- ticularly in Northern Cameroon, an area lacking infrastructure and ser- vices. As a result, Cameroon will require more and better trained man- power to serve in rural areas. The Government also intends to improve secondary level education and to expand technical and higher education. In response to the Government's investment priorities and in an effort to assist the Government bring education and training in line with expected manpower needs, the proposed Third Education Project includes technical education and rural health training components and a major program to expand and improve agricultural education. Administration of Education 26. The Ministry of National Education (MOE), as the government agency primarily concerned with education, is responsible for all levels of general  - 7 - and technical education and for all higher education. Other Ministries, principally Agriculture, Health, Livestock and Telecommunications, are also involved in educatLon and training but mostly at the secondary level in fields related to their activities. This division of responsibility calls for close cooperation in educational planning and management; the need for such cooperation is evident in agricultural education, on which the proposed project places its emphasis (para. 36 of this report). 27. The Government plans to upgrade and expand its agricultural ex- tension services, which are the responsibility of one of the services of the Directorate of Agriculture and Rural Development of the Ministry of Agriculture. It has or will allocate in each province a "Poste Agricole", which is responsible for assisting farmers by disseminating information about improved agricultural practices. The Government plans to strengthen these units by improving the qualifications of extension agents, increasing their number and delegaiting more responsibility for development schemes to field staff. Concurrently, the Government plans to strengthen the Ministry of Livestock by increasing the number of its animal health and production agents. Furthermore, the Ministry of Health has initiated an innovative program to improve ruraL health conditions by reducing the incidence of endemic diseases, through the integration of preventive and curative health care in eleven demonstration zones. 28. These programs are already placing heavy demands on the small and inadequately trained staffs of the Ministries of Agriculture and Live- stock. Moreover, extension work is expected to become more demanding in the future as it shifts from that of a single-crop farming advisory service to providing comprehensLve mixed farming services, covering cash and food crops as well as livestock production. This increased sophistication calls for upgrading the extension service's present staff and improving training for new staff. Education Costs 29. Greater emphasis on agricultural education and training, on the expansion of technical and higher education, as well as on the improvement of general secondary education and of primary education in rural areas, will have to be effected through increased efficiency in existing systems and reallocation of resources, since the already high allocations to educa- tion cannot be increased appreciably. In 1971/72 total education expendi- tures amounted to CFAF 19.3 billion (US$85.8 million), or 5.9 percent of GNP; the Government's share (including its subsidies to private teaching institutions) amounted to CFAF 11.8 billion (US$52.4 million), or about 20 percent of its total expenditures. Total current expenditures were mostly for general education (;2 percent), the University of Yaounde (18 percent) and technical education (7 percent). Agricultural education accounted for only 2 percent of the total. 30. The unit cost of primary education in Cameroon (CFAF 6,000 or US$27) is low relative to that in other West African countries. The scope for improvements in efficiency is less in primary education than in second- ary and higher educatioa, and the measures for expanding and improving it  - 8 - will lead to higher unit and total costs. The unit costs of secondary education (CFAF 38,000 or US$169) and of higher education (CFAF 500,000 or US$2,200), however, are high and could be reduced through such measures as reducing repeater and dropout rates. The Government will need to allocate a larger share of education resources for vocational and professional educa- tion and training than it has in the past, if education and training are to be brought in line with expected manpower needs. Technical Education 31. The main characteristics of technical education in the early years following independence were its inability to meet the country's need for trained manpower, the low quality of training, and the structural differences caused by the different education systems that were inherited at independence in East and West Cameroon. Starting in the late 1960's, the Government's effort to resolve some of the problems of technical education was assisted by IDA's First and Second Education Projects. This effort, which is not completed yet, emphasizes the reform and adaptation of technical education curricula, the improvement and expansion of several existing institutions for training skilled workers and technicians, and the construction of new technical schools. 32. A major issue for this subsector is the lack of a development plan establishing training targets and standards based on an assessment of the country's needs. The Ministry of Education (MOE) has at its disposal the necessary resources to undertake this task which should be accorded high priority as an objective to be pursued in future educational development. Until such a plan is developed, new investments can be evaluated best against well-defined local needs. North Cameroon is a case in point. This region's economy will be growing faster with the opening of the railway to Ngaoundere, and the demand for technicians and skilled workers is expected to increase. The ongoing Second Education Project is assisting in meeting this region's need for technicians through the construction of a technical lycee at Garoua, and the proposed Third Education Project would assist it by financing a school at Ngaoundere to train skilled workers. This region has a cumulative shortfall of about 300 skilled workers, mainly in mech- anical maintenance, diesel mechanics, metalwork and electronics, and by 1980 it will require about 75 skilled workers annually. Rural Health Training 33. The training of physicians, nurses and other health technicians is conducted in Cameroon at the "Centre Universitaire des Sciences de la Sante" (CUSS), one of the faculties of the University of Yaounde. CUSS's approach to medical and paramedical training has been very innovative when compared to the rest of West Africa, and particularly appropriate to health conditions in Cameroon. The main innovative aspects are: (a) chang- ing health education from a largely urban orientation and placing greater emphasis upon the health problems of the rural population; (b) balancing the roles of curative and preventive health care by paying greater attention to the preventive aspects of health training; and (c) emphasizing the need  - 9 - of health personnel to work as merbers of an inter-disciplinary team rather than as individuals. Agricultural Education 34. The present system of agricultural education comprises the follow- ing: (a) a university program at the "Ecole Nationale Superieure Agronomique" (ENSA) with an enrollment of 56 students and 33 teachers, at a cost per student/year of CFAF 2.5 mil- lion (about: US$11,000); (b) two National Colleges of Agriculture (Dschang and Bambili) with an enrollment of 120 in the technician program and 15 teachers,at a cost per student/year of about CFAF 0.5 million (US$2,200); (c) four lower secondary agricultural schools (Maroua, Ebolowa, Bafang and Abong-Mbang) with an enrollment of 60 and 31 teachers, at a cost per student/year ranging from CFAF 0.7 million to 0.8 million (US$3,100 - 3,600); and (d) two veterinary training centers (Maroua and Jakiri) with an enrollment of 40 in the assistant veterinarian and 5 in the technician program and 7 teachers, at a cost per student/ year ranging from CFAF 0.5 million to 0.7 million (US$2,200- 3,100). 35. The system suffers from four major problems: (a) the lack oE up-to-date training facilities and equipment; (b) poor planning and management; (c) a shortage of qualified agricultural teachers; and (d) inappropriate curricula. The very high unit costs of these training institutions are attributable to: the wide dispersion of the schools; student/teacher ratios that are far lower than those of similar institutions in other countries; generous student allowances; and an unnecessarily large number of daily workers on the school farms. 36. Planning and management problems are aggravated by the divided responsibilities for agricultural education. The 14OE through ENSA is re- sponsible for university-level agricultural education, the "Direction des Programmes et Etudes"' of the Ministry of Livestock (MOL) is retsponsible for carrying out secondary-level livestock education, and the Ministry of Agri- culture (MOA) for secondary agricultural education. However, the responsi- bilities of MOL and MOA are limited to the operational administration of  - 10 - the institutions concerned and do not include curriculum development and diploma and certificate awards, tasks which have been given to the Division of Rural Pedagogy of ENSA's Department of Agricultural Education and to MOE respectively. For the purpose of establishing targets, standards and policies for the higher technician training program and for the lower and upper sec- ondary agricultural schools, the Government has agreed to establish by December 31, 1976, a National Committee for Agricultural and Rural Education (section 3.07 (b) of the draft Loan Agreement). 37. The shortage of qualified teachers for the training schools is a major weakness of agricultural education in Cameroon. A permanent system for training agricultural teachers has not yet been established, nor are the conditions of work conducive to attracting the best candidates for this field. Most of the practicing teachers have had no formal pedagogical train- ing other than short in-service seminars. There is a need, therefore, to establish at ENSA an agricultural teacher training course leading to a teach- ing certificate for students recruited from among the staff of the Ministries and other agencies involved in agriculture, who are qualified and who have had several years of field experience. 38. The problem of inappropriate curricula for existing agricultural schools cannot be resolved until ENSA establishes a formal curriculum dev- elopment process and expands the limited efforts of its Division of Rural Pedagogy to develop agricultural education curricula adapted to conditions in Cameroon. This Division has substantially completed the revisions and reform of the curricula for the lower secondary agricultural schools, and is planning to do so for the upper secondary agricultural schools and to develop new curricula for the higher agricultural technician training program. The main needs are for (i) emphasis on field work through the "learn-by-doing" methods; (ii) greater coordination in agricultural and livestock education; (iii) integration of the different levels of training -- lower secondary, middle-level technician and new higher technician; and (iv) use of the agricul- tural training institutions as rural development and demonstration centers for the regions in which they are located. Funds provided under the proposed Third Education project would assist the MOA to improve agricultural educa- tion planning and teaching methods in schools below the university level. 39. The inadequacies of the present agricultural education system will become more acute as the MOA implements its plan to improve the ratio between extension agents and farm families from the present level of about 1,500 families per agent to 500 per agent in 1990. Demands generated by this plan, plus the needs of other government agencies to 1990, are shown below:  Agriculture Livestock University graduates 370 75 Higher technicians 550 135 Middle-level technicians 2,300 435 Extension agents 2,400 360 Allowing for attrition of present staff, the required average annual output of extension agents over the period 1975-1990 is estimated as follows: Agriculture Livestock University graduates 25 5 Higher technicians 40 10 Middle-level technicians 150 30 Extension agents 160 25 This output will be provided by the proposed project and through other invest- ments planned by Government. PART IV - THE PROJECT Background 40. IDA has assisted the development of education in Cameroon through two projects. The First Education Project (Credit 161-CM, signed in September 1969) provided US$10.5 million, mainly for expanding and improving primary and secondary teacher training and general secondary education. After some delays in the early stages of its execution, the project is now nearing completion and most of the institutions have admitted students for their first courses. In 1975 IDA provided supplementary financing (US$1.2 milion) for this project to cover a cost overrun caused by the US dollar devaluation. The main thrust of the US$9 million Second Education Project (Credit 320-CM, signed in June 1972) is on investments and curriculum reform for technical education. Its implementation was delayed by about two years because of hold- ups in selecting architects and agreeing on designs, but is now proceeding satisfactorily. This project has, however encountered cost overruns of about 60 percent (US$7.2 million), attributable to the US dollar devaLuation (US$2.2 million) and a higher rate of price increase (48 percent) than was foreseen at appraisal (20 percent), the impact of which has been compounded by the im- plementation delays. As a consequence, the lower secondary technical school in Douala cannot be financed under this project and is therefore proposed for financing as part of the proposed project.  - 12 - 41. The proposed Third Education Project is based upon pre-investment studies financed under the Second Education Project. Project identification was undertaken by IDA with the assistance of FAO. Project preparation was completed in November 1974, and appraisal was undertaken by a Bank mission in February/March 1975. Negotiations for a Third Window loan were held in Washington from February 24 to March 2, 1976, with a Cameroonian delegation headed by Mr. Eric Dikoko Quan, Charge d'Affaires, a.i., of the Embassy of the United Republic of Cameroon in Washington. Proposed Third Education Project 42. The proposed project would be implemented over the five year period 1976-1980 and would comprise: (a) Construction, equipment and furniture for: (i) a lower secondary technical school (College d'Enseignement Technique) in Douala, including a training section for lower secondary workshop teachers; and (ii) a lower secondary technical school (College d'Enseignement Technique) in Ngaoundere; technical assistance for a deputy director would also be provided for this item; (b) Technical Assistance (11.5 man-years of specialist services) to strengthen the MOA's capacity to develop programs of agricultural education and to supervise their implementation. The MOA would manage all schools for agricultural education and other related fields below the university level. (c) Construction, equipment and furniture for administrative, academic and dormitory buildings and staff housing, and technical assistance for: (i) expanding and improving two existing lower secondary agricultural schools at Ebolowa and Maroua and establishing a lower secondary agricultural school at Bambili; (ii) expanding and improving the regional upper secondary agricultural school at Bambili; and establishing two regional upper secondary agricultural schools at Ebolowa and Maroua (all such schools to be located on the same sites as those of the schools referred to in (c) (i) above); and  - 13 - (iii) establishing the Institute for the Training of Higher Technicians in Agriculture and Livestock (Institut des Techniques Agricoles) on the ENSA campus at Nkolbisson for training higher technicians in agriculture and live- stock, including the development of a 25-hectare farm and three field stations at sites acceptable to the Government and the Bank. (d) Construction, equipment and furniture for three rural clinics, with dormitory facilities for the medical teams of the University Center for Health Sciences (Centre Universitaire des Sciences de la Sante - CUSS), in the regions of Bambili, Batouri and Ngaoundere, for improving the rural health train- ing program cf CUSS. (e) Technical assistance for: (i) pre-investment studies and preliminary design work for a further education project; and (ii) project implementation - a procurement specialist, an arch:itect and a civil engineer. Purposes 43. The proposed Third Education Project would assist the Government in continuing its efforts to develop the country's technical education system and in achieving the objectives of the Second Education Project financed by IDA. Specifically, the project would assist technical education by: financ- ing the lower secondary technical school in Douala originally included in the Second Education Project; improving technical education planning; and financ- ing a new lower secondary technical school at Ngaoundere to train skilled workers. To ensure that the formal technical training system will be res- ponsive to the actual needs of local industry and business, a Governing Board will be established for each of the two lower secondary technical schools in Douala and Ngaoundere. 44. Through appropriately designed programs in new or expanded institu- tions and through improvement in student/teacher ratios, the proposed project would also make agricultural and health education a more effective and cost efficient tool for agricultural and rural development. These programs would supply the qualified manpower that would introduce improved agricultural methods and would help to change attitudes towards agriculture. Specifically, the project would assist in: (a) improving the management of agricultural and rural education through measures to strengthen the MOA's current capacity in agricultural education planning, teaching methods and media resources for agricultural education and extension services, thus also laying the basis for a rural information system;  - 14 - (b) upgrading extension services by increasing the number of trained agents and improving the training of extension personnel at all levels; (c) supporting rural health training; (d) regionalizing agricultural training to cater for the varied agri-ecological regions in Cameroon; (e) filling a gap in the agricultural manpower structure by starting a new program for training higher technicians within the ENSA campus, but with budgetary and administrative autonomy (Section 3.08 (a) and (b) of the draft Loan Agreement); and (f) integrating livestock and agricultural training at the higher technician level. Project Execution 45. The MOE would be responsible for supervising the execution of the lower secondary technical schools, the rural health training program of CUSS, and the pre-investment studies. The MOA would be responsible for the tech- nical assistance to that ministry, the lower and upper secondary agricul- tural schools, and for the institute for the training of higher technicians in agriculture and livestock. Targets, standards and policies for the higher agricultural technician training program and the lower and upper secondary agricultural schools would be established by the proposed National Committee for Agricultural and Rural Education (para. 36 of this report). The day-to-day supervision of construction, procurement and loan administra- tion of the proposed Third Education Project would be the responsibility of the Project Unit established in the MOE for the First and Second Education Projects. In addition to the technical assistance for project implementation proposed in the loan, this Unit would be supported by designated representa- tives from each of the Ministries concerned with the project. The staff member designatd by the MOA would be on a full-time basis. The Director of the Project Unit would be responsible for (a) coordination with the Government Ministries and Agencies involved, (b) supervision of project implementation, and (c) liaison with the Bank (Section 3.01 (b) of the draft Loan Agreement). Procedures for the selection of consulting architects for project design are well advanced. However, to reduce the risk of long delays in project imple- mentation similar to those that occurred in the Second Education project (para. 40), the signing of a contract for project design between the Govern- ment and the architects, including a timetable acceptable to the Bank, would be made a condition of loan effectiveness (Section 5.01 b) of the Loan Agree- ment). Project Costs and Financing Arrangements 46. The total cost of the project, net of taxes and customs duties, is estimated at about CFAF 5.6 billion, or US$24.9 million, with a foreign exchange component of US$17.0 million equivalent, or about 68 percent of the total. Taxes and customs duties are estimated at CFAF 1.3 billion or  - 15 - US$5.7 million. The cost estimates are based on recent work undertaken by both the public and private sectors, including a detailed analysis of the actual costs of the First Education Project and the bid results for some of the institutions of the Second Education Project. The project cost includes an allowance of 10 percent for physical contingencies for all categories of expenditure. The allowance for both local and foreign price escalation is calculated on the project's estimated base cost as of March 30, 1976, and amounts to about 31 percent of the base cost estimate plus physical contin- gencies. Unit costs for selected project components compare favorably with those in neighboring countries. Site development has been estimated at about 10 percent of the cost of civil works, and furniture between 4 percent and 14 percent, depending upon the type of institution and facil- ity. The distribution of costs by category is as follows: civiL works, 49 percent; furniture, 3 percent; equipment, 23 percent; consulting archi- tects, 3 percent; and other professional services, 22 percent. Retroactive Financing 47. Retroactive financing in the amount of US$300,000 is recommended to cover: (a) the Bank's share of the cost of expenditures prior to Loan signature on the lower secondary technical school in Douala (up to a maximum of US$250,000);and (b) the cost of the services of the consulting architects who would be working oni the sketch drawings for the project institutions (up to a maximum of US$50,000). Procurement and Disbursements 48. Contracts for building works (US$12.1 million), furniture (US$0.7 million) and equipment (US$5.8 million) would be awarded following inter- national competitive bidding in accordance with the Bank's guidelines. The building works are witnin the capacity of Cameroon's construction industry. Local contractors would be given a domestic preference of 7-1/2 percent in bid evaluation. Contracts for furniture and equipment would be let in pack- ages of at least US$20,000. Furniture and equipment manufactured in Cameroon and in countries which are a party to the Union Douaniere et Economique de l'Afrique Centrale (UDEAC) would be allowed a preference equal to the lower of a) 15 percent of the c.i.f. price on imported goods, or b) the prevailing duties generally applied to non-exempt imports. Farm animals, small agricul- tural implements, and other equipment, which are not suitable for competitive bidding or cannot be grouped in packages of at least US$20,000 equivalent, would be procured locally on the basis of quotations and accordLng to local procedures acceptable to the Bank. The total of all such purchases should not exceed US$300,000 over the duration of the project. 49. The funds from the Loan Account would be disbursed as follows: (a) 100 percent of the foreign expenditures (c.i.f. costs) for imported equipment, or 75 percent if this is pur- chased locally;  - 16 - (b) 100 percent of the foreign expenditures (c.i.f. costs) for imported furniture, or 75 percent if this is pur- chased locally; (c) 60 percent of the total expenditures for architectural consultants; (d) 75 percent of total expenditures for technical assistance and fellowships; and (e) 57 percent of the costs, representing the foreign exchange component, of civil works. Disbursements would be made against contracts or certificates of expenditure; documentation for the latter would not be submitted for review, but would be retained by the Government and would be available for inspection by the Bank during the course of project supervision. Any funds remaining undisbursed at the completion of the project would be cancelled. Construction is expected to be completed in about three years after the signing of the Loan Agreement. Recurrent Costs of the Project 50. In 1982, the first year when all the project schools become fully operational, the total recurrent costs, which would be met by the Government, would amount to an additional CFAF 380 million (US$1.7 million). The increase in the budget of the MOA would account for CFAF 145 million (US$0.6 million) of this total and that of the MOE for CFAF 235 million (US$1.1 million). There would also be annual increases in the budget of the MOA for hiring the graduates of the project schools. The increase is estimated (at 1974/75 prices and salary scales) to be about CFAF 115 million (USS$0.5 million) annual- ly for the MOA. This is not expected to impose an undue burden on Government finances. PART V - LEGAL INSTRUMIENTS AND AUTHORITY 51. The draft Loan Agreement between the United Republic of Cameroon and the Bank, the Report of the Committee provided for in Article III Section 4 (iii) of the Articles of Agreement and the text of a draft resolution ap- proving the proposed loan are being distributed to the Executive Directors separately. 52. Special conditions of loan effectiveness (Section 5.01 of the draft Loan Agreement) would be: (a) the expansion of the Project Unit responsible for supervising the execution of the First and Second Education Projects to enable it to supervise the implementation of the proposed proj- ect, and the assignment to it of staff and responsibilities acceptable to the Bank;  - 17 - (b) the signing of a contract between the Government and the consulting architects, including a timetable acceptable to the Bank, for undertaking project design. 53. Conditions of disbursement for specific project components include: (para. 4 (b), (c), (d) and (e) of Schedule 1 of the draft Loan Agreement): (a) the establishment of a Governing Board for the two lower secondary technical schools in Douala and Ngaoundere; the definition of the Governing Boards' responsibilities, powers and composition shall be satisfactory to the Gov- ernment and the Bank (para. 43 of this report); (b) the implementation of measures, satisfactory to the Bank, to strengthen the MOA's capacity to develop and carry out programs of agricultural education (para. 44 (a) of this report); (c) the establishment within ENSA of the Institute for the Training of Higher Technicians in Agriculture and Live- stock (Institut des Techniques Agricoles) under terms and conditions acceptable to the Bank and the issuance of regulations that give the Institute budgetary and administrative autonomy (para 44 (e) of this report); (d) agreement between the Government and the Bank on the terms of reference for the pre-investment studies (para. 42 (e) i of this report). 54. I am satisfied that the proposed loan would comply with the Articles of Agreement of the Bank and with the established criteria for Third Window Loans. PART VI - RECOMMENDATIONS 55. I recommend that the Executive Directors approve the proposed loan. Robert S. McNamara President Attachments April 7, 1976   mpX o f pae.. CAMEROON SOCIAL INDICATOM DATASIN CAJMID8 R131900 C0UNTRIES (1970) 1960 1970 ESTIMATE (1) (BlAN IVORY COAST 140602AY 5 ARMA (THvnan 50khZ KM.) 475.4. 475.14 Wr. ~4 238.5 320.5 332.6 SOUT 0 (SI- n- - , FGM L-LI on) 4.8 5.8 6.2 8.6 5.1 10.9 POPUI.ATIOO (DENSITY) PER 232AMRE0M. 10.0 12.0 13.0 36.0 26.0 33.0 PER S32AME 04. ARABLE LAND 2.. .. 6.0 0GRP FES CAPITA (US$) 100.0 190.0 020.0 24O.0. 300.0 370.0' CRUJDE 2081 R H ATE PEB THOUSAND .. 43.0 40.0 47.0 46.0o 314.0 / 08UDE DEATH RATE PEB THOUaND .. 23.0 22.0 06.0 23.0 7.0 I IMPAIRT ISHTAMITY 0TE UTHOU1).. 140.0 i56.o 140.0 41.0o7 LIPE I EXPETANCY ATRA8I0H (TM) .. 1.0 4.1.0 4.6.o 41.0 614.0o 08000P8010CTION BtATH 2.37 2.) 0.7 3.0 3.1 2.8 POFOTATION GROW*TH RATE (%( TOTAL 2.4 2.0 2.0 2.6 3.4 3.1 UR364 . 6.o ..5.0 9.0 URBAN PO200LATI0N (9 OP TOTAL) 15.0 /b 00.0 ..29.0 o6.0 09.0 7 AGE STRUICTUBE (PERCENT) 0 TO 14 CERs2 4o.o 43.0 .147.0 42.0 150 7 15 TO 61. CR0s 56.o 54..o ..49.0 55.0 50.0 / 65 70011 Am04 ovED 4.0 3.0 ..4.o 3.0 3.0 7 AGE DEPEN*DENCY RA0I0 0.4 0.9 .. .0 0.8 0.9 7 100801.00 DEPENDENOY 007r0 1.0 1.1 i.~.4 1.07 1.67 FAMILY0 PLANNING0- ACCOEPTORS (COUMITIVE, THOU) ....01. 0 .2 20.0 0U120 (% OF 0010R012 W081N) ... .2.0 . 0.o7 OMPLOYMEIIT TOTAL L0B02 FORCE (THOUSAND) 241.o0. 0000.0 . 3300.0 0400.0 20000.0 7 IABOO FORCE IN AGRICULTURE (9) 88.o 9.0 82.0 4.o 79.0 . 7.0 I UNEMPL*OYED (4 OF LABO8 FORCE) . .. 5.0 7 9.0 6 0 4OF PRIVATE INCO EC020 BY- 0308E0T 5% OF POPUL.ATTON ...... 0.0/ 40001ST200% OF POPULATION ... . 9.0 b/9, LO200T 20% OF PO T000 ... .. .0 7 108100S 1.0% OF POPUIATI00N ... .. 1.0 71 010T00BUTI02 OF LAND OWNEBSHIF O OWNED BY TOP 10% OF 0OWNERS . HEALTH 000 OOUTRITION POPULATION PER PHYS10IAN 300000.0 / 2 5960.0 26o2o.0- 10950.0 /0 :o40.E 3460.0 1a d POTPULATIOON PER 7NU002 010008SO 48oo. 71 2470.0 2070.09 107.071 240. /0 l(60. POPET.ACON 010 HOSPUTAL 000 390 0 b17 142o 0 760.0 .40. 0 79 0.07 PER CAPETA SUPPFLY OF -I9 CALOR0D (4 OF RE00UI44E*O() 96.0 96.o 104.00 96.0 109.0 *Lo 0, 0000101 .001 0)5. 9064.0- 46.o 60.0 a'o77 -OF W0I02 00NIMA1 AMD FU0.SE 2.3.201 . 10.0 71 o.0 7d 00.0 b17 2KA7. SATE (/TH100) AG000 1-4 ... .. .4.0 PRIMARY UCHOOL 66.o 70.0 40.0 49.0 77.0 o9.0A/ 01008D025 00200OL 0.0 9.0 11.0 5.0 11.0 34.0 79 CR011 OF 0S90H14* I P D0E0D (FIRST 0AND UECON LEVEL) 14.0 /ao 14.0 71 014.07 15.0 13.0 13.0 7 EOCArIOO0AL ENROL00100T (4OF. 2EUDAY3.0 20.0 25.071b 03.0 7.0 304 ADULT 10TE0000 RATE (2 .. .. 0.07 77. PERSONS PER 0200 (AVERA01) ... .. .2.0 OCCUPIED DWELL0NGS 00I010UT PIPED WAITER (4) ... . ..5.0 7h AC0120 TO ELECTRI0CIT (4 OF ALL DWELLINGS). ...... 43.0 20000. DWELLINGS CONNfECTED TO ELECTRICITY (9 .... . .3.0 00000 RECEIVERS (PER TH100 POF) 3.0 36.0 96.o 74.0 17.0