Cameroon - Oil Palm and Rubber Consolidation Project

Document of FILE COPY The World Bank FOR OFFICIAL USE ONLY Report No. P-3305-C14 REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO THE UNITED REPUBLIC OF CAMEROON FOR AN OIL PALM AND RUBBER CONSOLIDATION PROJECT May 6, 1982 1b4 iqa hus 0 re*dei instibOd" Sad may be used by reciplers ouly i the peonmace of tbelrcW o tes. Its cq s ly zr otherwise be dilsase wt Wmd I w I  CURRENCY EQUIVALENTS Currency Unit = CFA Franc (CFAF) US$1 = CFAF 270 a! CFAF 1 million = US$3,704 WEIGHTS AND MEASURES 1 kilometer (km) 0.621 miles I hectare (ha) 2.471 acres 1 kilogram (kg) 2.205 pounds 1 metric ton (t) = 0.984 long ton ABBREVIATIONS CAMDEV Cameroon Development Corporation CCCE Caisse Centrale de Cooperation Economique (France) CDC Commonwealth Development Corporation (U.K.) EDF European Development Fund (Brussels) EIB European Investment Bank (Luxembourg) FONADER Fonds National de Developpement Rural (Yaounde) HEVECAM Societe Hevea Cameroun SOCAPALM Societe Camerounaise de Palmeraies FISCAL YEAR July 1 - June 30 a/ The CFA franc (CFAF) is tied to the French franc (FF) at the ratio of FF I to CFAF 50. The French franc is currently floating.  FOR OFFICIAL USE ONLY UNITED REPUBLIC OF CAMEROON LOAN AND PROJECT SUMMARY Borrower: United Republic of Cameroon Implementing Entities: SOCAPALM, CAMDEV, FONADER Amount: US$50.8 million, including capitalized front-end fee of US$0.8 million. Terms: 20 years, including five years of grace, at 11.6 percent interest per annum. Flow of Loan Proceeds: To SOCAPALM: US$12 million as loan on Bank terms; US$4.3 million as equity; US$4.1 million as grant for the smallholder component. To CAMDEV: US$21.9 million as loan on Bank terms; US$3.7 million as equity; US$4 million as grant for the smallholder component. Project Description: The proposed project, to be implemented with the parti- cipation of FONADER, would help SOCAPALM and CAMDEV to consolidate investments made under previous Bank Group- assisted projects. The project includes: (a) maintenance and limited planting and replanting of rubber and oil palm plantations; (b) provision or improvement of pro- cessing and storage facilities, social infrastructure, vehicles and equipment; (c) provision of technical assistance, training and studies; and (d) continued support to smallholder schemes. Benefits and Risks: The proposed project would help strengthen the financial situation of SOCAPALM and CAMDEV as yields and produc- tivity increase, and would also allow the structural * improvements needed to ensure success of the Government strategy for oil palm and rubber development. Addi- tionally, the project would help meet a growing domestic demand for oil palm, and would generate foreign exchange earnings. The main risk facing the project is that the sectoral strategy (based on parastatal companies, with a gradual increase in smallholder involvement) may not be effective due to continued labor and management problems or unfavorable price trends for oil palm and rubber. To offset those risks, the project includes specific measures for management strengthening and institution building, and these are expected to lead to improved efficiency and to the desired objective of lower costs. This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. _ _ _ _~~~~~  Estimated Costs: Local Foreign Total ----------US$ million--------- I. SOCAPALM A. Plantations 4.3 2.1 6.4 B. Facilities (buildings, equip- ment and vehicles) 5.9 13.6 19.4 C. Services, Technical assistance Training, Studies 0.2 0.5 0.7 10.4 16.2 26.6 II. CAMDEV A. Plantations 28.0 14.2 42.2 B. Facilities (building, equip- ment and vehicles) 9.3 16.5 25.8 C. Services, Technical assistance, Training, Studies 0.9 2.1 3.0 38.2 32.8 71.0 III. SMALLHOLDER PROGRAMS A. with SOCAPALM 1.6 2.4 4.0 B. with CAMDEV 3.1 1.7 4.8 4.7 4.1 8.8 TOTAL BASE COST 53.3 53.1 106.4 IV. CONTINGENCIES: - physical 2.7 2.6 5.3 - price 19.7 20.6 40.3 2 2. 2*4 23. 2 45.6 (TAXES) (7.8) (7.8) TOTAL PROJECT COSTS 67.9 76.3 144.2 Total Cost including taxes 75.7 76.3 152.0 Front end fee on Bank loan - 0.8 0.8 Total financing required (including taxes) 75.7 77.1 152.8  - iii - (continued) Financing Plan: Local Foreign Total -------- US$ million -------- IBRD - 50.8 50.8 CDC - 12.3 12.3 CCCE _ 7.4 7.4 EIB - 6.6 6.6 GOVT. (incl. SOCAPALM, CAMDEV and FONADER) 75.7 - 75.7 75.7 77.1 152.8 Estimated Disbursements from the Bank Loan: FY83 FY84 FY85 FY86 FY87 FY88 ---------------US$ million----------------- Annual 3.8 10.0 10.0 12.0 10.0 5.0 Cumulative 3.8 13.8 23.8 35.8 45.8 50.8 Rate of Return: (calculated on main productive components, representing about 93 percent of project costs): excluding costs incurred under previous projects, about 22.5 percent; including such costs, about 12.5 percent. Staff Appraisal Report: Report No. 3713-CM, dated May 5, 1982. Maps: IBRD 16005R IBRD 16006R .   INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO THE UNITED REPUBLIC OF CAMEROON FOR AN OIL PALM AND RUBBER CONSOLIDATION PROJECT 1. I submit the following report and recommendation on a proposed loan to the United Republic of Cameroon for US$50.8 million (including the capitalized front-end fee of US$0.8 million) to help finance an Oil Palm and Rubber Consolidation Project. The loan would have a term of 20 years including five years of grace, with interest at 11.6 percent p.a. The loan proceeds would be made available to SOCAPALM (US$20.4 million) and CAMDEV (US$29.6 million). The Commonwealth Development Corporation (CDC), the Caisse Centrale de Cooperation Economique (CCCE) and the European Investment Bank (EIB) would participate in the financing of the project with loans amounting respectively to the equivalent of US$12.3, 7.4 and 6.6 million. The CDC and CCCE loans would be on the same terms as the Bank's except for the annual interest rate which would be 11.5 and 10 percent respectively. The EIB loan would be for 15 years (including 2.5 years of grace) with interest at 8 percent p.a. PART I - THE ECONOMY _/ 2. A report entitled "United Republic of Cameroon--Economic Memorandum" (No. 2877-CM), was distributed to the Executive Directors on April 30, 1980. Since then two economic missions have visited Cameroon, as well as a number of sector review missions. The findings of these missions are incorporated in the following paragraphs. Annex I provides basic country data. Background 3. Cameroon was a federation from the time it gained independence in 1960, until the United Republic, which unified the anglophone western and francophone eastern parts of the country, was formed in 1972. The Government has concentrated on fostering a sense of national unity among the different parts of the country: the sparsely populated eastern region, the relatively small but densely populated western part of the country, the sahelian zone in the north with Muslim traditions, and the southern tropical regions. 4. Cameroon has a population of 8.4 million (1980) and covers an area of 475,000 km2. It is one of Africa's most diversified countries, with a wide range of climatic zones, ecological conditions, population densities, ethnic groups and traditional cultures. Its main opportunities for develop- ment lie in the expansion of agricultural, livestock, and forestry production; 1/ The text of this section is substantially the same as in the President's Report for the Forestry Project which was distributed to the Executive Directors on January 18, 1982.  - 2 - the exploitation of energy and mineral resources; and the processing of agricultural, forestry and mineral products for domestic consumption and export. Cameroon became an oil producer in 1978 and is believed to have exported about 4 million tons of crude petroleum in 1981. Further increases in crude petroleum production are expected. In 1981, Cameroon began producing refined petroleum products. The country also has unexploited gas potential. 5. Cameroon's main economic centers are separated by large areas of low population density and the country's port facilities and transport network also serve landlocked Chad and the Central African Republic. Adequate port and trunk transportation systems are essential for promoting agriculture, forestry and industry, and for strengthening internal and international communications. With the growth of industry, transportation, construction and services, Cameroon is becoming increasingly urbanized. About 30 percent of the population now live in towns, with the heaviest concentrations in Douala the major port and industrial center, and Yaounde the capital. 6. Cameroon subscribes to a philosophy of planned liberalism, and the country's economic development has been pursued within a five-year investment planning framework. The Fourth Plan period ended in June, 1981, and the Fifth Plan is now in effect. Cameroon's development and macro- economic policies have been rather cautious, with the result that, while until the late 70's growth has not been exceptionally rapid, the country has enjoyed noteworthy economic stability. 7. Growth. Over the past fifteen years Cameroon has experienced accelerating rates of output and population growth. The real GDP growth rate during the Second Plan Period (1966-71) averaged 4.2 percent; in the Third (1971-76), it rose to 4.5 percent; and in the Fourth (1976-81), it is estimated provisionally at 8.1 percent. Population growth in the three periods was about 1.8, 1.9 and 2.3 percent a year respectively. Per capita GNP rose between 1966 and 1980 at an annual rate of about 3.1 percent. 8. Within the overall pattern of accelerating growth, there was some unevenness in the performance of key productive sectors from one planning period to another. During the Third Plan in particular, both agriculture and manufacturing experienced periods of slowdown, although services grew strongly. Contributing to the agricultural slowdown were decreases in the output of two major export crops--cocoa and arabica coffee--related to declines in producer prices compared with food prices, and to the termination of a fertilizer subsidy program for arabica coffee. Forestry output dropped towards the end of the period because of reduced Western European demand and some transporta- tion bottlenecks. Growth of the manufacturing and mining sector slowed as a result of the declining momentum of import substitution activities, which had produced rapid increases in manufacturing output during the Second Plan years, and deteriorating terms of trade. The acceleration in growth during the Fourth Plan was helped by rapidly rising construction output, reflecting sharply higher levels of investment, by recovery in cocoa and robusta coffee production, as farmers responded to higher producer prices, and by recovery in forestry output. Since 1978, the start-up of oil production has contributed significantly to aggregate growth.  - 3 - 9. Investment and Savings. Underlying the longer term rise in GDP growth have been rising proportions of investment. The investment/GDP ratio averaged over 15 percent during the Second Plan, about 19 percent during the Third, and close to 24 percent during 1976-80. Investment priorities have shifted over time. The First Plan emphasized directly productive projects (53 percent), and the Second, infrastructure and social projects (58 percent). During 1976-80, directly productive activities were again favored (63 percent), with heavy emphasis on manufacturing, mining and energy (52 percent). Despite the rising investment/GDP ratios, the mobilization of domestic savings more than kept pace, due largely to increased public savings. Gross domestic savings rose from about 84 percent of total investment under the Second and Third Plans to about 87 percent during 1976-79. After allowing for net factor service and current transfers and the amortization of foreign medium- and long-term loans, reliance on foreign financing fell from about 33 percent of total investment during the Second Plan to about 30 percent during 1976-79. 10. Public Finance. Budgetary revenues amounted to about 15 percent of GDP during the Second and Third Plans and increased slightly during 1976-79. Public savings after debt service declined from about 39 percent of total public investment during the First Plan to about 36 percent during the Second; however, it rebounded to 55 percent during 1976-79, thanks to substantial contributions from the agricultural export stabilization funds. 11. Balance of Payments. Overall, the balance of payments has not posed particular problems, apart from some short-term deterioration during the 1974-76 period. In 1977-80, exports rose substantially (at an average annual rate of 26 percent) but imports also increased (at an average annual rate of 20 percent) because of more rapid economic growth and higher investment. International reserves were rebuilt in 1976-80, in part by the use of IMF credits, rising in 1980 to a gross level equivalent to about seven weeks of imports and to a net level of about five weeks. This was low by international standards, although still acceptable given Cameroon's membership in the Central African Monetary Union. Development Prospects and Issues 12. Short- and Medium-term Developments. Oil production is bringing with it significant changes in the Cameroonian economy. Historically, Cameroon has been dependent on the export of agricultural products for the bulk (72 percent in 1977/78) of its export earnings. Cocoa and coffee alone accounted for 53 percent of the value of 1977/78 exports. However, oil exports which represented about 1 percent of total exports in 1977/78, are estimated at about 28 percent in 1979/80, with the share of agricultural products dropping to close to 50 percent. Exports of oil have continued to rise sharply in 1980/81, further reducing the proportional importance of agricultural exports; this trend is expected to persist for at least two more years. 13. The outlook for agricultural and industrial growth in absolute terms during 1980-86 is nonetheless quite favorable. Agricultural growth expectations are based on some increase in cocoa output above 110,000 tons;  - 4 - recovery of robusta coffee; continuing expansion for arabica coffee; in- creased production of most food and other crops, as well as livestock; and expansion of forestry production. Growth of industrial and mining production is expected to result from existing and expanded manufacturing facilities (particularly those for food, beverages and construction materials), from some new industrial projects and from new mining ventures. An impact on the structure of the economy is expected from the Fifth Development Plan invest- ment program (1981-86). The proposed investment/GDP ratio under the Fifth Plan is 23 percent. The investment program stresses support to agriculture and expansion of the supply of technical and professional manpower, while energy, mining and industry are to receive diminished emphasis. 14. Longer-Term Developments. Cameroon's promising potential in areas outside agriculture implies a longer-term structural shift towards a more diversified industrial base. Agriculture will play a critical but less dominant role, and a shift in priorities towards increased food production for the growing urban population appears probable. The rate at which agricultural productivity increases will be a crucial determinant of the pace of economic development, and will call for an appropriate mix of public intervention and private initiative. External Borrowing and Creditworthiness 15. Total debt outstanding and disbursed rose from US$514 million at the end of 1976 to US$1.9 billion at the end of 1981. Debt service payments rose from US$39 million in 1976 to US$132 million in 1979, while exports increased from US$757 million to about US$1.7 billion during the same period. Notwith- standing a hardening of average loan terms in the 1970s, Cameroon's debt service ratio was still less than 10 percent at the end of 1979, and is projected to stay in the 12 to 14 percent range throughout the present decade. Borrowing on non-concessionary terms is expected to account for about two- thirds of total new commitments, and average terms are expected to harden during the period. Because of higher debt service payments, projected net disbursements will probably be less than in the past but, with Cameroon's favorable export and savings prospects, are expected to be sufficient to allow an investment rate above 25 percent of GDP, as well as the restoration of a strong foreign reserve position. PART II - BANK GROUP OPERATIONS IN CAMEROON 16. Bank and IDA commitments in Cameroon as of March 31, 1982 amounted to US$625.4 million and covered 39 projects: 18 in agriculture, 11 in trans- portation, 3 in education, 3 in public utilities, 2 small- and medium-scale enterprise projects and 2 technical assistance projects. Transport and agriculture each account for about 40 percent of these commitments. IFC has invested in five enterprises, with total net loan and equity commitments of US$12.7 million. Annex II contains a summary statement of Bank loans, IDA  credits and IFC investments as of March 31, 1982, including notes on the execution of ongoing projects. Although delays and setbacks have occasionally been encountered in implementation, the Government has consistently shown willingness to collaborate with the Bank in finding solutions to such problems. In the past, Cameroon's disbursement rate compared very favorably with that of most other countries. Recently, however, performance has deteriorated somewhat, which appears to be partly symptomatic of administrative difficul- ties that have become apparent, notably in the central procurement agency. Several steps, including the provision of technical support to expedite procurement procedures, are under consideration to improve the situation. 17. The Bank's initial investment strategy in Cameroon was to support the Government's development efforts in three main directions: (i) streng- thening and extending the road and rail trunk systems; (ii) raising agricul- tural output and net exports, with emphasis on the establishment of modern industrial plantations; and (iii) providing assistance to education. Through 1975, apart from one water supply project, Bank lending was concentrated entirely in the transport, agriculture and education sectors. Since 1975, lending has become more diversified, extending into other areas including development of small- and medium-scale enterprises and technical assistance. 18. For the future, projects are being prepared in agriculture to extend rural development efforts and strengthen agricultural research, and to rehabilitate and expand existing infrastructure in transport. Additional education and technical assistance projects are also planned, as well as further SME, urban and water supply/sewerage projects. The Bank has carried out sector studies in forestry, energy, industry and telecommunications, and additional projects in these areas have been tentatively identified. Thus, the trend towards further sectoral diversification of Bank lending, reflecting the growing complexity of Cameroon's development needs, will continue. 19. In addition to lending operations, the Bank will expand its program of economic and sector work, develop the planning and provision of technical assistance, and broaden its economic dialogue with the Government. In the short- and medium-term, this dialogue is expected to cover the pace and pattern of oil and gas development; the size and composition of the investment program; the role of the private and public sectors; technical and other skilled manpower constraints; training needs; improvements in the Government administration; development priorities for export and food crops; and poten- tial bottlenecks in infrastructure. The dialogue on longer-term issues would center on basic agricultural and industrial development policies. An agricul- tural sector study is being prepared and will be discussed with the Government shortly. Regarding industry, the Bank has recently completed a comprehensive study of industrialization and the system of incentives, which has been discussed with the Government and has led to the provision of technical assistance to strengthen the Government's capabilities for industrial policy analysis and reformulation. Issues for continued dialogue are the objectives, economic performance and accountability of public enterprises.  -6- Donor Activities 20. Disbursements of official development assistance during the second half of the 1960s amounted to about US$45.0 million a year, mostly in the form of grants. France provided most of the assistance, which was concentrated in infrastructure and some productive sectors. EDF and EIB directed most of their assistance to agriculture and infrastructure. Bank and IDA disbursements were small during this period. In the 1970s, foreign aid has increased to about US$90 million a year, with only one-fifth in the form of grants. Bank and IDA financing amounted to about 23 percent of total disbursements. Bank Group lending to Cameroon has been closely coordinated with that of other donors; in 18 of the 39 Bank projects, joint or parallel financing was arranged and expanded cofinancing is being actively sought for several projects under consideration. 21. Cameroon is now borrowing increasingly from private sources; such borrowing rose to over 40 percent of external financing in 1975-79, compared with only 11 percent in 1967-69. Public debt outstanding and disbursed as of December 31, 1980, amounted to US$2.0 billion, 7.6 percent of which in the form of Bank loans and 7.3 percent in IDA credits. Bank loans accounted for 9.2 percent of public debt service and IDA credits for 0.9 percent. By 1985, Bank loans and IDA credits are projected to account for about 26 percent of debt outstanding and about 14 percent of debt service. PART III - THE AGRICULTURAL SECTOR 22. Agriculture has traditionally been the mainstay of the Cameroonian economy, directly accounting, until recently, for about 70 percent of employ- ment, 70 percent of export earnings and 35 percent of tax revenues. The sector exhibits considerable diversity of output, varying from livestock, rice, millet, sorghum and other Sahelian crops in the north, to coffee, cocoa, tea and other tree crops and maize, manioc and other food crops in the rest of the country. Food and beverage processing is dominant in manufacturing and agriculturally-based activity plays a major role in trade and transport. 23. With rising petroleum output, the relative position of agriculture is quickly changing. Between FYs 1978 and 1980, the output of the primary sector (agriculture, forestry and fishing) fell from about 35 to 30 percent of GDP, and agricultural exports fell from about three-quarters to a half of total merchandise exports. These trends are expected to continue. Further, if present urbanization trends persist or intensify, urban food needs will be growing strongly, so that agricultural productivity will have to increase sharply if greater reliance on food imports is to be avoided. Thus, emphasis on domestic food production is called for, with only modest and regionally selective expansion of export crops. However, with a view to preserving the long-run viability of the various agricultural regions, as well as to a diversified export-earning capacity, Cameroon should retain agricultural activities with good long-term potential, even in areas where expansion is for the time being inappropriate.  -7 - 24. Cameroon's agriculture is dominated by smallholder farming, account- ing for about 93 percent of total agricultural output, mainly food crops for local markets, and cocoa, coffee and cotton for export. The remaining 7 per- cent of agricultural output is produced by plantations. The Bank has assisted in financing a growing number of smallholder projects (irrigated rice, cocoa, coffee, livestock and rural development projects) and will accord the sector highest priority in the future. Particular measures envisaged include: completion and discussion with the Government of an agricultural sector policy study, review of the structure of incentives; additional studies in specific problem areas (e.g., farm input delivery systems); and a project, covering both cash and food crops, to strengthen agricultural research and the related institutions. Overall progress in raising smallholder productivity has been slow, but continuing efforts are being made to identify successful approaches. The Oil Palm and Rubber Sub-Sector 25. Over the past two decades, the Bank has supported Government efforts to expand, in parallel with the smallholder sector, a parastatal estate sub-sector based essentially on oil palm and rubber. The objectives of this strategy were to: (i) diversify Cameroon's agricultural base; (ii) develop local expertise and techniques; (iii) ensure self-sufficiency in palm oil, an essential element of the local diet (thereby conserving foreign exchange); and (iv) exploit, in the case of rubber, ecological and market conditions favoring the development of a new and promising long-term source of export earnings. In addition, it was expected that these plantations would contribute to balanced regional development, foster the establishment of networks of roads, infrastructure and other public services in largely undeveloped areas, and serve as nuclei for smallholder production of palm oil and rubber drawing on support from the estates. In this connection, the Bank supported two projects under each of the three parastatal enterprises comprising the sub-sector (HEVECAM, SOCAPALM and CAMDEV) for a total, in loans and credit, of US$115.1 million. 26. At the completion of these projects, the Bank will have helped finance the creation of some 48,000 ha of industrial rubber and oil palm plantations (about 25,000 ha in rubber), plus some 4,000 ha of associated outgrower plantations. Results have been mixed. The value of palm oil and rubber output is still small - under 2 percent of that for agriculture as a whole in 1978 - but it will grow as young plantations reach maturity. However, the estates have been plagued by management, labor and productivity problems (para. 30). Furthermore, Cameroon appears unlikely to enjoy a competitive advantage in export markets for plantation palm oil, although long-term prospects for rubber are more promising. As noted, total smallholder acreage remains limited, but this is not surprising in view of the difficulty of mobilizing smallholder interest until the estates are more fully developed and the potential for rubber can be demonstrated. 27. In light of both the sector-specific problems and petroleum-related global uncertainties (para. 12) - inflation, pressures on real wages - it appeared preferable for the Government to limit expansion of oil palm and  - 8 - rubber, and to concentrate instead on consolidating and improving the effi- ciency of present operations so as to maximize returns on existing investments. Initially, Government intended to continue giving priority to expansion of the parastatal plantations, while testing and developing smallholder operations on a modest scale. This strategy could still be a viable one for the longer-term. However, its success will be heavily dependent on labor costs and availability, and in any case, it would initially require consolidating the operations and improving the efficiency of the parastatal enterprises involved. The Govern- ment eventually was persuaded to give priority to rehabilitation and renewal and to measures aimed at achieving optimum use of existing plantation assets, while fostering moderate expansion of smallholder activity. 28. Thus the Government has agreed to refrain from any expansion of these crops at HEVECAM, SOCAPALM and CAMDEV, while its proposed sub-sector strategy for the Sixth Plan is under review; the deadline for this review by the Bank is December 1984 (Sections 4.02 of draft Loan Agreement and 3.04 of draft Project Agreement). In addition, given the country's uncompetitive position on export markets for palm oil (paras. 26 and 46), Government is currently engaging consultants, to be financed under the ongoing CAMDEV II Project, to conduct a study of vegetable oil markets, which will help determine appropriate production levels and suitable arrangements for that crop. The Institutions 29. The parastatal oil palm and rubber sub-sector comprises three com- panies: HEVECAM, SOCAPALM and CAMDEV. HEVECAM and SOCAPALM are wholly state-owned, whille CAMDEV is jointly owned by Government and a public sector agency. HEVECAM has received about US$47 million in loans/credits from the Bank/IDA and has planted about 13,500 ha of rubber; its planting programs have consistently been on target and costs are now well controlled, after an initial period of overruns. The company is well managed, and does not, at this stage, need the kind of rehabilitation effort proposed for the two others under this project. SOCAPALM has planted 21,000 ha of oil palm, of which about 70 percent is under production and the remainder would be brought into bearing under the proposed project. Its investments in 1970-81 totalled about US$50 million, financed by the Government and external sources - CCCE, EDF, EIB and the Bank Group (for US$35 million). CAMDEV estates cover 39,000 ha: 21,000 under rubber, 16,000 under oil palm, the rest mostly under tea and banana. Its 1967-81 investment program, totalling about US$54 million, was financed by self-generated funds and long-term borrowing from CCCE, CDC and the Bank Group (for US$33 million). 30. At present, with deficits amounting, as of December 1981, to about US$4 million for SOCAPALM and US$6 million for CAMDEV, both companies face financial difficulties that jeopardize maintenance operations. Some of the underlying reasons are common to both: over-optimistic yield estimates at appraisal, long gestation periods of both crops, large areas of still unproduc- tive plantations, unfavorable world price trends particularly for palm oil, and insufficient capital base, which have forced the companies to resort to  - 9 - short-term overdrafts to meet their working capital needs. Other problems differ between the two corporations. Despite a team of experienced managers, SOCAPALI still suffers from an unstable labor force, with low productivity, high turnover and absenteeism, largely attributable to its location in a labor-scarce area, and to inadequate social infrastructure, so that it is mostly staffed with young, male unmarried workers. CAMDEV has been affected by internal management conflicts and insufficient delegation of authority, notably in personnel management; ineffective cost control has led to delays and cost overruns in its investment program; finally, its inadequate incen- tive system (poor rewards for outstanding performance and unattractive pension benefits, a particularly acute concern for a company largely staffed with middle-aged employees), results in low motivation and inefficiency and in a shortage of skilled personnel (mainly tappers), although there is no lack of unskilled labor. The combination of these factors resulted in a shortfall of self-generated funds, while investments substantially exceeded appraisal estimates. 31. The above issues would be addressed under the project. The finan- cial structure of both companies would be strengthened, and yields will improve as the young plantations mature. At SOCAPALM, although peak yields will not, for ecological reasons, exceed 13.5 tons of fresh fruit bunches/ha (compared to the 15 tons expected at appraisal), the company is viable in the medium- to long-term perspective, provided fresh capital is injected as a bridging measure. The Government therefore agreed to increase SOCAPALM's capital by CFAF 2 billion (US$7.4 million): CFAF 1 billion would be paid in as a condition of loan effectiveness and the balance not later than June 30, 1983 (Sections 6.01(e) and 3.02(a) of the draft Loan Agreement). Although uncertainties concerning labor remain, the project provides for improvements in living conditions (housing, schools, water supply, etc.) and a socio- ethnological study to define measures to stabilize the labor force. Better operating and administrative facilities are also expected to increase effi- ciency. 32. At CAMDEV, steps have been taken since June 1981 to cut costs and reduce staff, with notable results. In January 1982, the Government appointed a new Chairman of the Board and strengthened the authority of the General Manager, a move which should contribute materially to the restoration of sound management. To help the company overcome its temporarily tight liquidity position, the Government agreed to provide a CFAF 6 billion (US$22.2 million) capital increase: CFAF 4 billion would be paid in as a condition of loan effectiveness, and the balance in two equal tranches by June 30, 1983 and June 30, 1984 (Sections 6.01(e) and 3.02(a) of the draft Loan Agreement). In addition, Government confirmed its intention to grant to both companies income tax exemptions for the project period in order to strengthen their working capital. However, since the capital increases would be ineffective in the absence of more fundamental improvements, the Government also agreed to: (i) international recruitment of five management specialists in line positions for three years, to be employed as a condition of effectiveness and to be in their posts as a condition of disbursement against the CANDEV component  - 10 - (Section 6.01(d) and para. 4(e) of Schedule 1 of the draft Loan Agreement; and (ii) a consultant review of CAMDEV's organization, accounting system, and financial and management structure (financed under the ongoing CAMDEV II Project) to be submitted to the Bank no later than September 30, 1982. In addition, Government gave assurances that before December 31, 1983, it would propose to the Bank for review, new measures to improve incentives to the senior staff of both companies (Section 4.03 of the draft Loan Agreement). 33. FONADER is an autonomous agency funded by annual Government sub- sidies and stabilization fund transfers. Because it lacks field staff, it has not played a major role as a rural development body, and is now evolving into an agricultural credit institution. For that reason, FONADER would finance the smallholder credit subcomponent of the proposed project, while the other smallholders activities (extension services, road construction) would be undertaken directly by SOCAPALM and CAMDEV. Bank Involvement in the Sector 34. Bank Group lending to SOCAPALM and CAMDEV has amounted to US$67.6 million, provided under four different projects which have been relatively successful in establishing about 23,000 ha of oil palm and 12,000 ha of rubber industrial and smallholder plantations. OED Report No. 1752 (SecM77-736) on the SOCAPALM I and CAMDEV I Projects, issued in October 1977, concluded that these two projects had largely achieved their objectives, i.e., the establish- ment of a commercial oil palm estate in the Eastern Region (SOCAPALM), and an improvement of CAMDEV's financial position and management. The financial difficulties experienced by both projects were due partly to cost overruns caused by higher than anticipated inflation and technical problems, and partly to over-estimation of potential yields at appraisal. During implementation of the two follow-up projects, costs were well controlled and overruns small (less than 2 percent of the proposed project). Outside the Bank's projects, however, CAMDEV experienced large overruns in its replanting operations, attributable mainly to insufficient management control. For this reason the proposed project would cover the totality of SOCAPALM and CAMDEV activities (except CAMDEV's tea and banana operations), so as to ensure closer coopera- tion and coordinated planning. The Bank and other donors would thus be in a better position to promote a consistent overall approach to the oil palm and rubber sub-sector, and to help pave the way for sustained future development. PART IV - THE PROJECT 35. The proposed project was identified in 1980, when it became obvious that the low productivity of SOCAPALM and CAMDEV threatened their future, and impaired the success of the Government's estate-based strategy for the oil palm and rubber sub-sector. Both companies having already made the heavier part of their investment (land clearing and infrastructure establishment), what was needed was to improve their efficiency and to provide temporary financial relief until, with new plantings reaching maturity, they could  - 11 - generate sufficient funds to cover operating and capital costs. In anticipa- tion of a good return on the additional investment, the Bank and the co-donors agreed to consider extending assistance because these companies represent valuable assets that should be preserved, given the long-term potential of the sub-sector for the Cameroonian economy. The project was appraised in February 1981, with a follow-up mission in September 1981. During this period, exten- sive discussions were held with the Government which recognized the need for consolidation, agreed to address squarely the problems of the sub-sector, and made significant progress towards resolving them (para. 32). Negotiations were held in Washington on March 17-23, 1982. The Cameroonian delegation was led by H.E. Mr. Paul Pondi, Cameroonian Ambassador to the U.S. The main features of the proposed project are highlighted in the Loan and Project Summary, supplemented by Annex III. The Staff Appraisal Report No. 3713-CM is being circulated separately. 36. The objectives of the proposed project are: (i) to improve the efficiency and raise the productivity of SOCAPALM and CAMDEV; (ii) to achieve satisfactory returns on the substantial past investments in the two companies; (iii) to improve their production technology; and (iv) to encourage smallholder participation and development. The project, to be executed over five years, would consist of the following components: (a) Plantations: maintenance until full production of some 15,200 ha of existing oil palm and rubber plantations, and planting (on already cleared land) or replanting with rubber some 5,200 ha of existing plantations. (b) Facilities: improvement or provision of palm oil and rubber pro- cessing facilities, oil storage capacity, housing and social infra- structure (schools, water supply, electrification, roads), vehicles and equipment. (c) Technical assistance, training, studies: consultants' services and studies to (i) examine and formulate remedial measures for the labor problem at SOCAPALM; (ii) prepare its crop diversification program; (iii) strengthen, then reorganize CAMDEV; (iv) reexamine vegetable oil market prospects in the light of recent developments; and (v) provide management and staff training, and continue existing scholarship programs. (d) Smallholder schemes: Continuation of programs undertaken under the previous Bank Group projects, comprising (i) upkeeping until full production some 3,100 ha of oil palm and rubber plantations, (ii) planting with rubber an additional 2,500 ha (iii) providing road maintenance equipment and (iv) strengthening the smallholder unit of CAMDEV.  - 12 - Cost Estimates 37. The total cost of the project is estimated at US$152 million (March 1982 prices) including all identifiable taxes. Apart from import duties and levies on equipment, from which the project would be exempt, the tax element amounts to $7.8 million, leaving a net-of-tax total project cost of $144.2 million. The foreign exchange component is about 50 percent (US$76.3 million). A total of 15 staff-years of long-term technical assistance is provided for at an average all-inclusive cost of US$11,700 per man-month, in line with prevailing and projected rates for consulting firms operating in Cameroon. Total contingencies amount to 30 percent of total project costs: physical contingencies have been estimated at 5 percent on all costs except salaries; price contingencies for fertilizers, chemicals and gasoline were based on projected price increases for petroleum products (declining from 12 to 10 percent over FY82-87); other foreign exchange costs follow projected inter- national inflation (declining from 9 to 7 percent over the same period), and local cost increase is linked to expected domestic inflation (12 percent p.a.). Financing Plan 38. The proposed project would be financed by loans from the Bank - US$50.8 million, or 35 percent of net project cost; CDC (US$12.3 million equivalent, 10 percent); CCCE (US$7.4 million, 5.1 percent); and EIB (US$6.6 million, 2.8 percent). The domestic contribution would finance the local cost component, i.e., US$75.7 million, or about 50 percent of total costs, and consist of: (a) capital increases of US$29.6 million equivalent provided by the Government to SOCAPALM and CAMDEV (para. 31 and 32); (b) interest-free government loans (US$11.1 million) and loans by local bank (US$2.2 million) to SOCAPALM and CAMDEV; (c) self-generated funds of SOCAPALM and CAMDEV (US$28.3 million); and (d) for the smallholder component, a Government grant of about US$4.5 million. The Bank loan would be made to the Government for 20 years, including a five-year grace period. The CDC and CCCE loans are on the same terms as the Bank's, except for the interest rate which would be 11.5 and 10 percent respectively. The EIB loan is for 15 years (including 2.5 years of grace for SOCAPALM and 3 years for CAMDEV) at an annual rate of 8 percent. Except for the Dibombari and Mondoni oil mills and for 90 percent of CAMDEV's vehicles, which would be financed respectively by EIB and CCCE on a parallel basis, all cofinancing would be jointly undertaken on a pari passu basis. The Bank loan would finance: US$16.3 million to cover 44.5 percent of SOCAPALM's investment program, US$25.6 million or 25 percent of CAMDEV's investment program and US$8.1 million or 64 percent of the smallholder program. The Bank loan would be linked to the CDC, CCCE and EIB loans by a cross-effectiveness clause (Section 6.01 (c) of the draft Loan Agreement). Financial Arrangements 39. Given the vulnerability of estate companies to the vagaries of climate and to market fluctuations, it was deemed necessary to strengthen the financial structure of both beneficiaries by further increasing their equity  - 13 - position. Bank loan proceeds would therefore be made available to SOCAPALM and CAMDEV under separate financing agreements with the Government as follows: - US$12.0 million and US$21.9 million respectively as loans on the same terms as the Bank loan; - US$4.3 and US$3.7 million respectively as equity; and - US$4.1 and US$4.0 million respectively as grants for extension services, infrastructure and administrative costs of the smallholder units. The Government would bear the foreign exchange risk, as under the previous SOCAPALM and CAMDEV projects. Effectiveness of the two financing agreements, with terms and conditions acceptable to the Bank, would be a condition of Bank loan effectiveness (Section 3.01(b) and (c), 6.01(b) and 6.02(b) of the draft Loan Agreement). 40. As regards the smallholder component, Government will make available sufficient domestic funds through FONADER to finance credit requirements (US$3.7 million) of participating farmers (para. 33). To this end, FONADER would sign with the Government a financing agreement acceptable to the Bank, specifying, inter alia, an appropriate rate of interest on smallholder credit (the present rate is 9 percent). Funds for infrastructure and extension services would be passed on directly to SOCAPALM and CAMDEV. The smallholders component would be managed and supervised under separate credit administration agreements between FONADER and SOCAPALM and CANIDEV acceptable to the Bank, as under previous Bank assisted projects. Effectiveness of the FONADER financing agreement and of the two credit administration agreements would be a condition of disbursement against the smallholder component (Schedule 1, para. 4 of the draft Loan Agreement). 41. Based on past domestic inflation (11 percent in 1979/80), the pro- posed on-lending rate would be positive in real terms, but may not be so over the project period, given the uncertainties linked to the potentially inflationary impact of petroleum development. It would be higher than both the preferential rates available to public enterprises and small borrowers (5 to 10 percent) and the rates paid on savings deposits (7.5 percent) and in line with prevailing commercial rates (10 to 14 percent) in Cameroon. The subsidy element in the project is justified in the context of Government's efforts to promote smallholders' participation in the sub-sector so as to improve income distribution and slow down the rural exodus. Procurement and Disbursements 42. Except for vehicles financed by CCCE, all goods, works and services would be procured following Bank procedures. Contracts of US$100,000 or more for vehicles, equipment, fertilizer would be awarded through international competitive bidding (ICB); these purchases are expected to total about US$54.5 million, of which US$22.0 million would be financed by the Bank loan, and would be grouped whenever possible to derive maximum benefits from bulk  - 14 - procurement. Contracts worth less than US$100,000 but more than US$50,000 would be awarded through local competitive bidding procedures acceptable to the Bank; such contracts are not expected to exceed US$9.6 million (of which Bank: US$5.0 million). Contracts for civil works estimated under US$50,000, which are not appropriate for ICB because of their dispersion, would be awarded on the basis of quotations from at least three reputable contractors; such contracts, amounting to about US$16.3 million (Bank: US$7.0 million), may be undertaken by force account, if there are no bidders once they have been approved by the Bank. About 180 man-months of technical assistance would be provided under the project for a total cost of US$2.0 million (Bank: US$1.0 million). All consultants would be recruited following Bank Guidelines. The remaining expenditures (US$69.6 million, of which Bank: US$15.0 million) represent SOCAPALM and CAMDEV personnel and operating costs. 43. The Bank loan is expected to be disbursed over about six years, and would be applied as follows to eligible project expenditures: (i) for SOCAPALM, 50 percent of total expenditures (US$14.7 million), parallel finan- cing only; (ii) for CAMDEV, 36 percent for the field establishment costs (US$8.2 million) and for roads, water supply and buildings (US$5.6 million), and 63 percent for the heavy equipment and processing facilities (US$7.0 million) and for management team and scholarships (US$2.2 million), joint and parallel financing; and (iii) 95 percent of the costs of the smallholder programs at both SOCAPALM (US$3.7 million) and CAMDEV (US$3.6 million), no cofinancing. US$5.0 million would be unallocated. Disbursement would be fully documented except in respect of SOCAPALM's and CAMDEV's operating costs and works by force account, where certified statements of expenditures would be used. Supporting documentation would be retained for inspection by super- vision missions. Accounts and Auditing 44. SOCAPALM's accounting system is satisfactory. CAMDEV's, although basically sound, is costly and time-consuming; it would be modernized in line with the recommendations of the reorganization study. Both companies would, as in the past, appoint independent auditors, acceptable to the Bank. The audit reports would be submitted to the Bank within six months of the close of each fiscal year (Section 4.02 of the draft Project Agreement). Financial Analysis 45. Although the proposed project includes important measures aimed at strengthening the management and capital structure of SOCAPALM and CAMDEV, the combination of heavy debt service on past borrowings and revised yield and price projections as compared to Bank estimates during the 70s will result in a satisfactory (yet tight) working capital position over the next few years, particularly in the case of SOCAPALM. After 1988, as young trees mature and new plantations start producing, the situation should improve considerably and a boost in self-generated funds is expected, which would become available to finance maintenance and replanting operations.  - 15 - Markets 46. All the rubber produced under the project (35,000 tons p.a. at maturity) would be exported. The world market for natural and synthetic rubber is expected to continue growing until the end of the century, though at a lower rate than the recent 5.5 percent p.a. Prospects for natural rubber look favorable, and real prices are expected to rise through the 1980s and remain constant thereafter. Palm oil acounts for about 83 percent of domestic edible oil consumption, so that project output is intended basically for the local market. However, due to technical problems -- production response to moisture and short storage life -- Cameroon experiences seasonal surpluses of palm oil, and has traditionally exported about 22 percent of its total edible oil production. Therefore, it is expected that part of the project palm oil output (estimated at about 84,000 tons at maturity) will be sold mostly in neighboring countries, particularly Nigeria, whose import require- ments are growing rapidly. The export market-sharing arrangements developed by the estates would be improved as part of the sub-sector strategy review, and the project provides for additional capacity to alleviate the storage and distribution situation. Finally, Government will exchange views regularly with the Bank on a price setting formula which should ensure a fair remunera- tion to producers of both rubber and palm oil (Section 4.04 of the draft Loan Agreement). Benefits and Risks 47. The project would induce Government to make the institutional and operational improvements needed to support the long-term viability of its parastatal operations in the oil palm and rubber sub-sector. Increased effifiency of the estates would not only enhance the profitability and stability of SOCAPALM and CAMDEV, two major employers which provide a total of about 27,000 jobs, but would also stimulate the interest of smallholders in growing oil palm and rubber. The palm oil produced under the project, most to be sold domestically, would satisfy local demand for this important staple, which is expected to grow with increasing urbanization. Export of the remain- ing oil palm output, as well as of all the rubber produced, would bring at least US$79 million of foreign exchange p.a. in 1981 terms after 1987. Finally, the project would ensure annual cash earnings of up to US$1,500 per family for estate workers and up to about US$2,800 for some 1,500 smallholders families, mostly from low-income groups. 48. Because two-thirds of project costs are related to bringing young plantations into full production, the economic rate of return on the proposed consolidation project excluding sunk costs, is estimated at about 22.5 percent. However, a more conservative computation, including all previous investments, yielded an estimated average economic rate of return of about 12.5 percent. A 10 percent increase in the real cost of labor (resulting, say, from petro- leum-induced pressures on wages) would still leave the rate of return above the opportunity cost of capital (about 12 percent).  - 16 - 49. The main risk facing the project is that the Government strategy of estate-basedl sub-sector development may eventually not be as effective as expected due to continued labor and management problems, perhaps combined with unfavorable price trends for oil palm and rubber. The project is designed to counter those risks. The labor risk of SOCAPALM may be more serious, but it is expected to be reduced through improvements in living conditions and adoption of the recommendations of the socio-ethnological study. The manage- ment weaknesses affecting CAMDEV would be addressed by a range of specific actions (including recruitment of specialists to serve in line positions, and implementation of a reorganization study) to complement decisions which have already produced encouraging results since appraisal. A possible price decline is expected to be offset by reductions in unit output costs, once yields and mature areas increase and efficiency improves with the provision of new facilities and better incentives. For the smallholder program, the main risks are that inefficient extension work and inadequate producer prices may result in poor returns at maturity, causing farmers to abandon plantings and fail to repay credits. These risks would be reduced by the proposed strengthening of CAMDEV's smallholder unit, improvements in collection and marketing facilities, and introduction of a systematic exchange of views on a producer price fixing formula (Section 4.04 of draft Loan Agreement). PART V - LEGAL INSTRUMENTS AND AUTHORITY 50. The draft Loan Agreement between the United Republic of Cameroon and the Bank, the draft Project Agreement between the Bank, SOCAPALM, CAMDEV, and FONADER, and the Report of the Committee provided for in Article III, Section 4(iii) of the Articles of Agreement, are being distributed to the Executive Directors separately. 51. Special conditions of the project are referred to in this report and in Section III of Annex III. Special conditions of effectiveness would be: (i) signature and effectiveness of separate financing agreements between Government and SOCAPALM and CAMDEV; (Section 6.01(a) and (b) of the draft Loan Agreement); (ii) payment by Government of the first tranche of agreed capital increases for SOCAPALM and CAMDEV (Section 6.01(e) of the draft Loan Agreement); (iii) employment of the five consultants needed to strengthen CAMDEV's management (Section 6.01(d) of the draft Loan Agreement); and (iv) fulfillment of all conditions precedent to signature and effectiveness of the CDC, CCCE and EIB loans (Section 6.01(c) of the draft Loan Agreement).  - 17 - PART VI - RECOMMENDATION 52. I recommend that the Executive Directors approve the proposed loan. A. W. Clausen President Attachments Washington, D.C. May 6, 1982  ANNEX I -18 - Page 1 of 7 TABLE 3A CAMEROOK-- SOCIAL INDICATORS DATA SHEET CAMEROON REFEUNCE CROUPS (WEIGHTED AVE AGES LAND AUiA (ThOUSAND so. 1(31.) - MOST RECENT ESTINATE)L OUIAL 475.4 MOST RECENT MIDDLE ISCOHE MIDDLE INCOME AGRICULTURAL 156.9 1960 /Lb 1970 ib ESTIMATE /b AFRICA SOUXH OF SAHARLA LATIN AMERICA & CARI8BEAN UNP PER CAPITA (US4) 140.0 230.0 560.OL0 794.2 1616.2 ENERGY CONSUMPTION PE. CAPITA (KILUGRAMS UF CUAL EQUIVALENT) 86.9 111.3 147.5 707.5 1324.1 PUPULArIuN ANU VITAL sTAIISTICS PUPULATION. MIL-YEAP (THOUSANDS) 5680.7 6781.3 8245.0 URBAN POPULATION (PERCENT UF TOTAL) 13.9 20.3 33.0 27.7 64.2 POPULATIUN PRWECTIONS POPULATION IN YEAg 200U (MILLIONS) 13.8 STATIUNARY POPULATION (MILLIONS) 37.0 YEAR STATIUNARY POPULATIUN IS REACHED 2130 FuPULATION DENSITY PER Sq. LM. 11.9 14.3 17.3 55.0 34.3 PER Sq. EM. AGRICULTURAL LAND 36.0 44.0 51.3 130.7 94.5 PUPIULATIUN AGE STRUCTURE (PERCENT) 0-14 YRS. 38.9 40.5 41.5 46.0 40.7 L5-64 YRS. 57.0 55.4 54.4 51.2 55.3 65 YRS. AND ABOVE 4.1 4.1 4.1 2.8 4.0 FOPULAIloN GUOWTH RATE (PERCENT) ToTAL 1.4 1.8 2.2 2.8 2.4 URBAN 4.9 5.6 7.6 5.1 3.7 CRUUE BLRTH RATE (PER THOUSAND) 42.8 42.0 42.3 46.9 31.4 CRUDE DEATH RATE (PER THOUSAND) 26.8 22.0 18.7 15.8 8.4 GROSS REPRODUCTION RATE 2.8 2.8 2.8 3.2 2.3 FAMILY PLANNING ACCEPTORS. ANNUAL (THOUSANDS) USERS (PERCENT UF MARRIED WOMEN) .. .. FOUD ANU NUTRITION NIUEX oF FooD PRODUCTION PER CAPITA (1969-71-100) 89.0 101.0 110.0 89.9 108.3 PEl CAPITA SUPPLY OF CALUOIES (PERCENT UF REQUIREMENTS) 80.0 89.0 89.0 92.3 107.6 PRUTEINS (GRAMS PER UAY) 43.0 51.0 51.0 52.8 65.8 oF WHICH ANIMAL AND PULSE 11.0 13.0 15.0 16.1 34.0 CHILD (AGES 1-4) HORTALITY RATE 41.0 31.3 25.4 20.2 7.6 HgALTH LIFE EXPECTANCY AT BIRTH (YEARS) 37.2 42.5 46.9 50.8 64.1 INFANT MRITALITY RATE (PER THOUSAND) 172.0 *- 157.0 *- 70.9 ACCESS To SAFE WATER (PERCENT UF PuPULATION) TuTAL .. .. 26.0 27.4 65.7 URBAN .. .. 35.0 74.3 79.7 RURAL *- 22.0 12.6 43.9 ACCESS TU EXCRETA DISPOSAL (PERCENT UF PUPULATION) TUTAL .. .. .. .. 59.9 URBAN .. .. .. .. 75.7 3tURAL .. .. .. .. 30.4 POPULATION PER PHYSICIAN 48108.3 30139.0 16503.1 13844.1 1728.2 POPULATION PER NURSING PERSON 6151.0/d 2869.8 2228.1 2898.6 1288.2 POPULATION PER HOSPITAL BED TOTAL 535.7/J 563.0 370.1 1028.4 471.2 URBAN 329.0/J 302.0 199.9 423.0 558.0 RURAL 579.0/J 722.0 606.5 3543.2 AUMISSIUNS PER HOSPITAL BEU .. .. HOUSING AVERAGE SIZE UF HOUSEHoLD TOTAL .. .. 5.2 URBAN .. . 5.1. RURAL .. .. 5.2 AVERAGE NUMBER OF PERSONS PER ROOH TOTAL .. .. URBAN .. .. RURAL * -* ACCESS TU ELECTLLCITY (PERCENT OF DWELLINGS) TOTAL 6.7.. .. URBAN 22.6 RURAL .. .. 0.5  ANNEX I - 19 - Page 2 of 7 TABLE 3A CAMEROON - SOCIAL INDICATORS DATA SHEET CAMEROON REFERENCE GROUPS (WEIGHTED AVE ACES - MOST RECENT ESTIMATE)- MOST RECENT MIDDLE INCOME MIDDLE INCOME 1960 /b 1970 /b ESTIMATE /b AFRICA SOUTH OF SAHARA LATIN AMERICA & CARIBBEi EDUCATION ADJUSTED ENROLLMENT RATIOS PRIMARY: TOTAL 65.0 91.0 101.0 73.7 101.7 MALE 87.0 105.0 112.0 96.8 103.0 FEMALE 43.0 77.0 91.0 79.0 101.5 SECONDARY: TOTAL 2.0 8.0 16.0 16.2 35.3 MALE 4.0 11.0 21.0 25.3 34.9 FEMALE 1.0 4.0 11.0 14.8 35.6 VOCATIONAL ENROL. (D OF SECONDARY) 23.0 23.0 25.0 5.3 30.1 PUPIL-TEACHER RATIO PRIMARY *- 48.0 50.0 36.2 29.6 SECONDARY .. 24.0 26.0 23.6 15.7 ADULT LITERACY RATE (PERCENT) 19.0 12.0 .. .. 80.0 CONSUMPTION PASSENGER CARS PER THOUSAND POPULATION 3.0 4.9 7.7 32.3 42.6 RADIO RECEIVERS PER THOUSAND POPULATION 3.0 31.3 30.5 69.0 215.0 TV RECEIVERS PER THOUSAND POPULATION .. .. .. 8.0 89.0 NEWSPAPER ("DAILY GENERAL INTEREST ) CIRCULATION PER THOUSAND POPULATION 2.0 2.5 3.9 20.2 62.8 CINEMA ANNUAL ATTENDANCE PER CAPITA 0.1 .. 1.0 0.7 3.2 LABOR FORCE TOTAL LABOR FORCE (THOUSANDS) 2906.9 3299.2 3701.7 FEMALE (PERCENT) 43.0 42.7 40.6 36.7 22.6 AGRICULTURE (PERCENT) 87.0 85.0 83.0 56.6 35.0 INDUSTRY (PERCENT) 5.0 6.0 6.9 17.5 23.2 PARTICIPATION RATE (PERCENT) TOTAL 51.2 48.7 44.9 37.2 31.8 MALE 59.9 57.0 54.3 47.1 49.0 FEMALE ,42.9 40.6 35.8 27.5 14.6 ECONOMIC DEPENDENCY RATIO 0.8 0.9 1.1 1.3 1.4 INCOME DISTRIBUTION PERCENT OF PRIVATE INCOME RECEIVED BY HIGliEST 5 PERCENT OF HOUSEHOLDS .. .. HIGHEST 20 PERCENT OF HOUSEHOLDS .. .. LOWEST 20 PERCENT OF HOUSEHOLDS .. .. LOWEST 40 PERCENT OF HOUSEHOLDS .. .. POVERTY TARGET GROUPS ESTIMATED ABSOLUTE POVERTY INCOME LEVEL (USS PER CAPITA) URBAN .. .. 238.0 381.2 RLURAL .. .. 105.0 156.2 187.6 ESTIMATED RELATIVE POVERTY INCOME LEVEL (USS PER CAPITA) URBAN .. .. .. 334.3 513.9 RURAL .. .. .. 137.6 362.2 ESTIMATED POPULATION BELOW ABSOLUTE POVERTY INCOME LEVEL (PERCENT) URaAN .. .. 15.0 RURAL .. .. 40.0 Not available Not applicable. NOTES /a The group averages for each indicator are population-weighted arithmetic means. Coverage of countries among the indicators depends on availability of data and is not uniform. /b Unless otherwise noted, data for 1960 refer to any year between 1959 and 1961; for 1970, between 1969 and 1971; and for Most Recent Estimate, between 1976 and 1979. /c Fiscal year July-Junw; /d 1962, including ex-South Cameroon under British administration. /e The updated 1980 GNP per capita and population estimates which have been reflected in the 1981 Hay, 1981 World Bank Atlas are $670 Cat 1978-80 prices) and 8444 thousand.  ANNEX I -20 - Page3 Jof 7 DEFINITIONS OF SOCIAL INDICATORS 'oes ,h., c o ar - so fo soregnealy lodged nice- e Ia'aulote"I'l end real, I stoold a,le be oared tianteysp o bentr natonaly orpacc: n oaaof he ackofancdarine deici ita od oncpt,usd by diff.soastcootriee cc cIIoisoiu the data.Tedre. oe marfTh c aot I'll ia oeconr anny of the eobjaon co-ony and a,)Ico..nrry groP otih ro-ahen tior -vrge Jc..ce ;harh. ...Coutr group ofte. bco cnt rop.fr'aIta SurPIue Otil F.Porat'* to alterI'Midle rco North Arice end PIddle bar teoe . e.a. e o--I oogn ucclccoltral ff lonlee . C the reernttop data the aVergesar torlado nccghted eril1leCic ese-fo .co inictor cr0e:,t only stat11 Cocc cREA c,h .....d to. oottprhsItlOd-tnl sn.ad cora - Popolattr tnal oel- Tote1 -c face area oorelg ad ncs n oedonr.jhe n uetdrddb he epecctor Cooher adhcttlt - lecloaa of a gucalcore area oed teeparnl rp-erel nilable i publiC an1dptor deealudepceirdheptlso for cm7p., p.t.. , sr aoo: _ o1irc-c gadndnn i aln 95dn.hhlirincnea fsiasrerhihar eettl cfe by e ea arapyi a. ra..blietmant I.Proriding principally csa lop pic Ay Itts) - CNP par cap itt serotteaentoren eak prce. c- dial tare ar not iItladed. rlhsias ocs,Ioushat col1ced hbyas cotsritstlo as World tank Atle I17-9iea 90.adeonlcmr tar srmaatt- 9r-ffd b hsna h ocby a 1970. and 1979 dan.- meica .aeI_tn,vir nidnf,ac)oioh otte tnptet oc deion .an povidsI a limted rng f naica fotitea PrF. ei. Siitf It(PTiNIlFi Pi CA0O nI alcneApit ofteaoa nryaa italprpee ra hoaPinale ieciade Wibe prinaipal/ganralhoptnl ftriotny hr, kilores of o-l qivletpet -cpine; 1960. 1970, and 1979 osnes PanIieied hoepinale are. ioadd di Ats tonal. data. adisona. te Paritna1 led - dItlnahtr fadaaion noI on d isohargee f ran hnepinnie dtnided by the -b-r of bde.. POPULATION AN.D V11A. SlATISTICS ntel orlaio. id-Yea- cooo af-i f July 1; 1960. 1970, ned 1979 H0USING dilfteeedaiilaao oho-rt a affeo ccparh ny f dte sai their t seals hoarder in loote nay crny no bn inclotd"t argoonne;160. 197O, oud 1979 dana.th :houehc fc cticcl opAse PrrleCni P. parseer for enroa1y rensa teprien of threec leel ee- tCcopind parts to'ite a ennyeCit troignr orr epri iajcs Acser flcn to _n lrr t of derelita. -toa,uba,ad.on naner for ertulto rae elo hav rhre enea taIPigdcien f oa,oht v rura dn-linngeresyrrnioly fertility ac-odnrg ti IVnte levelIand pac f.asly jl-uing perorane nvd fetlt rnsfrvoeto upss d~o-td t-nrollenn tatnos the b,hirt - rnn teq1 to the denhrate and also theaertcIar I e- erlenofa geathepinaylee as prneges of r'capni- -J.coeneon. 'hi. i. achievd otly. afte fertltyeneor at picy ooo-g ppltin;to ly in-Iodeechildren aged b-Il the reylosen lre ovit tatM rtdution rats., ot ec eee o year ht adpuetnd for differs..tIVAnthe fprliaryedn-iaio;fo of _ ...o.re ..c. tree. asa tir Ir _toor caatnsr sccncr.iaeih onios- leoctnvenolet-p1edlO ecn eTteatd oc the ta f the pr-eutd oPrc.,tOeo h rrlno snete 'opI. r eo ona:r:trtc .aho I0e Is che yevr 2OIL. av the reta of dsolcns if derrils prun no re.ltebcodory nohool - onl ale and female - loaputed as chre sodory ei ba Nroren td.il Isio y f-11to-7 yhre f a 5;..nr_ynsnca oorce ae gner lly Per as. km. - MId-yea p pulncncreoecimtr (lIC h-otare Iof coanon....l.en Iceet of eaiontr)- lctoa vnttln toalcoa;I9I 197C snd 1979 dena. huluara-icl VIniatil. or other prnrs c1hubapreeioap Pe en. am ori-oltora I au - Coepurd e above for agricoltural lard enl r sOpnten of eccondaryCtonn. only; CYt6i . 170 ann 9)79 oIo ui-rna ai rar.ad eodr oa tdnenidi Iouaco onedt Ocutots loec..ac - Cboldrcu (0-li pears).orc-ge(- pri-ey n seodrylvl diodsd hytttr o erhr t h ho peers), a 0 retired 6h yearsand oe)a percen-gee of dO-rear opuP- o 'rsPriglne la_ter 1960. Io. d 1.979 dn.allieayrt rcetI-tereautscht. to rod an its) PorulatlnnGlrontt rte (--eti- 0 tl -. intca gro.nh rate of Itona aid- Iepreng f tonal adul oplt Io ged 15 years and ov.ee. perpp 'Iir Vot15-l 190-1,ed 1970-79. Ponatc Iot toeorcn ostn -,hm. goeoctee of ulb.n coP- conooPttiOc Ilet ov for 1900-ic, 1900-70, aa1970-79. Pa...enaen Cars(P. Oth ...o.n. ... ....eeaer as oprt eo linde tlrtt Oats liar ctoueato) - Oaaal inemIth. par thousand of aid-portas..ntg,e than cL,t esn;icue slaoe ere n opulattoc; 196O. 1970, -rd 199dt.elieny cettlse. Crudelan tae e iooeo) --'Iua aar pe tosad of el-ea ain eoin h.,tn ..tusr porltot-All typee of oclefin r.dc. popoacin; Op,107, acd 1079 deca. treceni eeriptic mr nuc,1Iasedo co ia Iflde m Irsadrrdcto In-rns.sme f dui a vea nl a inliene reevr nCnnIesad is yer ah-n Egtrinofadio hcar noma r-po-du-tiv- periodifhee sIF t ree ag-specifto far- casne nefet;dt for ret er cay too he io.psrable sands iliry .....; usually fitspee averges codin in 1960, 1970, and 1979. mAst c_utoeethlihedlcnig yamlrPlnoooocecnr. atsiitccaada -canul omte o scenh. fReec.r nerI tho...nd ppotnlC'te- rV oio for broadcasCt.n Foetlr PIanoiri-lUeere 'perc-s of armed nn -erntgof -rcid tn cone tris and iv areae regirranion.f PtensIntfo all nrIedot0Ossae 0.cltino "dely aecray Intrnetvesetper , define c ps iodca d I~~~~~~~~~~~~~~~uiiaindntdpiatot ardn eea er.I scniee mono now fThCtniniot 00 be 'daily Of It aposace so leset door~~~~~~~~~~~~' is ot calendar year basis. Cad0ns caner pniear ..da So. sagarc.n. and mabils nte inctad of sugar) tich are odihl end contain ounrins(..cfeed re r si: ce) ggeeePro dictta of aeon, countryis base on LABOR Pair toni_ _laeAna produet pIce1 neights;, 1961-61, 1970, ad 1979 data Tona Lahor force (,hcc....a - Scoems.-aly soni-s pcreons. 1idtludc Per oaota er,pl of alorie (cercent of _eorman)- Ceme,td fro ame forces no d unemployed buseld iaave,stdn.ec, oorgtqioal-o of Cet food euPplleaar-11sbla In Cranny per Ipa piacvrn nuaino l ge AOfnnoci si onre f pendy. cAvilable supplies compise comneic prodonnion. L.Po--- lenoieyrb;190 1 97 n 1.979data e-P"r" n oaosinso vafopie old sct ed, asd,rsl etni - I.sa lehr frc as erena i or tona Iaofre pcanttesoedin omaprcesing ad losses indeetain Require- kauonr s I-Labor fonts in dering forery. huntine and mavn ese es imred y P0 hbsn on physiological ten fo -oma ci fcatnhi se pecnne f rtallae fot;1 ,17 and 197 dne and e ditlbaino.ouato,adalwnIIVecn n assa e lcriiy aa n Ia.ptets f tnl Isa foocs; 1960. tou5s1hold leve; "iyt-6t 1970, ant 19I dets. :'IO end I97 ae Per onoihasyl o rni (arasa ost dat) - Pronsin eoo-ts of per tapit. Panonto aefscet-tnl ae n tel-a tiaieo Oct supply of ftod per dary. Oat snyply of fond is osfined ashv. c-5R- activity p e Ieptda total male, and feae eorfroo qocease nr ll rotis II slihdby 090k poide for cleon p Iooee fnri aean l oosino lage rsetively; alloeoc of 0 game f cral ronin pr dy aS20 ressof nima an 1960, 1970, sod 9199 dana The5 nt. based. or 10 peticipattot rtes pole.protet, o strIt 10sneesshoud Yeena roen.hs acasd- cflicoicag-e t Iotr f the oo.-ei dCt .,andion. ties tred orearloe tha the. of 75 gret of total prre.in and 023 gree f few estimate.ar fro ntina eo0ere.. autaIpotc 55enaerg fornb mar10 prpse y P0 In the Third E.....siC neen lanlo - ai f poprlanion unde 15 end 60 and oVer World fod Sinvy;196165, 1970 and 197dna.oth boalaoCfrs Pe alt ootinsol fro nmlad te-eti Ipuyy.iyf food de- Ciltd reese 1-cfItnflinv R-t (pertotedC A-;-,t deat.hs 'per choan L. Perenag ofPivae C.as (bth in cab havd kied) - Roeined hp liohese age grup 1- pare to cIdrn i thqis og9 geso; fo seer-enclpien coon- 1 oeosn.ricna10prtee, pooreat 20 percent, ad poorest 40 pso-tn tIes data derived fcom lIfe.ais;16.1970 andI99data of houtaho1da. Life iascnemarst limi iv.e. A7 .. Orrg. ome f years of life remaWin The fol1iomig estimates an. ver aypr...Iane sesos hpovertylels an bIrth; 90. 90aa17 dana. cod chruid he -tetrpatcdnith con..tderthla sni oaoseto ar Otar(rncnt f orulaloo-tin, ane, s rra -fit- anitio-ally adequate dis, pla ... eesra con-food tqles eis oat venereuply locladastreatedsurfac natnh or ntrate hu- tnosalm d hEciand heisni- Prnnrv Iecoe L.soeI (0S$ yen cs2ital - -rha ad rurl1 otter och as ten fromproteced boreolee, srints, nd santar elo oa reltt poetylcose isre is one-thind of aveag pecpita pec htaesoftoi respect.Ie popltoa nocrnraapbi yroa os fthe cotanr. oman. levelIs leie is h o IIIcerdnaho itvhit reaonble ro of tha Vhones Inrrlaea.eiee Poelatontel ....or .Irt linctg Levl rb rrnt--ura do t toa.. to pnndelseprI o epart of the day In fencblng Ide p-In. hestl I"!re needs. and- ner-atrh serhrt pts or thei usa of pIn Prve n tmnOooi ulyst and S rvlenntnes D sparriI cin ulified tlye a sed III IIIoo atoissylvl Ponlconnr rains Person - Popoloios. divided by n,cis o f p-enltogd tal sod fsmal arednans -ara, prannical -our..s,.end seisnatnic.  - 21 - Population: 8.4 million (mid-1980) ANNEX I GNP per capita: US$668 (1980) b / D'a-e 4 of 7 nages UNITED REPUBLIC OF CAMEROON ECONOMIC INLICATORS(1) /a