Cameroon - Second Rural Development Fund (FSAR) Project

Document of E COP The World Bank FOR OFFICIAL USE ONLY Report No. 4780-CM STAFF APPRAISAL REPORT CAMEROON SECOND RURAL DEVELOPMENT FUND (FSAR) PROJECT May 10, 1985 H-|LECOUr Y West Africa Projects Department Agriculture D 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.  CIJRRENCY EQUIVALENTS Currency Unit CFAF 1/ US$1.00 = CFAF 490 WEIGHTS AND MEASURES I square kilometer (kmn) 0.3861 square miles I hectare (ha) = 2.4711 acres ABBREVIATIONS AND ACRONYMS CENEEMA Centre National d'Etudes et d'Experimentation du Machinisme Agricole (National Center for Study and Experimentation of Agricultural Machinery) DDC Departement du Developpement Communautaire (Department of Community Development) DEP Departement des Etudes et Projets (Studies and Projects Department) (MINAGRI) DPA Delegation Prov7inciale d'Agriculture (Provincial Agricultural Office) FED Fonds Europeen de Developpement (European Development Fund) FONADER Fonds National de Developpement Rural (National Rural Development Ftund) MIDEVIV Mission de De6veloppement des Cultures Vivri&res (Food Crop Development Agency) MINAGRI Ministere de l'Agriculture (Ministry of Agriculture) MINMEN Ministere des Mines et de l'Energie (1Iinistry of Energy and Mines) MINPAT Ministere du Plan et de l'Amenagement du Territoire (Ministry of Planning and Regional Development) PES Projet des Eaux Souterraines (Groundwater Project) (MINMEN) PMCU Planning Management and Control IUnit RDF Rural Development Fund RWS Rural Water Supply SEMRY Societ6 d'Expansion et de Modernisation de la Riziculture (Agency for the Promotion and Modernization of Rice Cultivation) SODECAO Societe de Developpement du Cacao (Cocoa Development Company) SODECOTON Socifte de Developpement du Coton (Cotton Development Company) SOFSAR Services des Operations du Fonds Special d'Actions P.urales (Operational Service of Rural Development Fund) FISCAL YEAR July 1 - June 30 1/ The CFAF is tied to the French franc (FF) in the ratio of CFAF 50 to FF1. The French franc is currently floating.  CAMEROON FOR OFFICIAL USE ONLY SECOND RURAL DEVELOPMENT FUND PROJECT TABLE OF CONTENTS Page No. DOCUMENTS CONTAINED IN PROJECT FILE ............................ iii-iv LOAN AND PROJECT SUMMARY .u ........................ v-viii INTRODUCTION ................................................... 1 I. BACKGROUND A. The Country . . B. The Economy .................. 1 C. The Agricultural Sector .. 2 D. Sectoral Institutions .. 3 E. Bank Group Involvement in the Sector. 4 Involvement and Lending Strategy. 4 The First RDF Project. 4 II. THE PROJECT AREA A. The Northern Region ........................... 6 B. Center and South Provinces. 8 III. THE PROJECT A. Project Objectives and Description. 9 1. Institutional Development ........................ 10 Strengthening of Agricultural Planning .... ..... 10 Strengthening of RDF Management .... ............ 10 Priority Studies ............................... 11 Line of Credit ................................. 12 2. Identified Sub-Projects ............ .............. 13 Bottomlands Development in the North ........... 13 Rural Water Supply .............. ............... 14 Bullock-Fattening .................... . 16 Groundnut Marketing and Shelling ............... 17 Functional Literacy Training ................... 18 Bottomilands Development Around Yaounde ......... 19 Access Roads ................................... 21 The report is based on the findings of an appraisal mission who visited Cameroon in May 1983, comprising Messrs. Honisch, Rychener, des Bouvrie, Meerman and Ms. Iwase of the West Africa Projects Department. It was updated following post appraisal missions by Messrs. Rychener and Falloux, of May and October 1984. The report was edited by Mrs. Layton and typed by Mesdames Wikramanayake and Parks. 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.  (ii? Table of Contents (continued) Page No. B. Technical Assistance and Consultancies .... ............. 22 C. Credit .................................................. 22 IV. PROJECT COST AND FINANCING ARRANGEMENTS A. Cost Estimates ......................................... 23 B. Proposed Financing ..................................... 25 C. Procurement ............................................ 27 D. Disbursement ........................................... 29 E. Financial Control, Audit, and Reporting .... ............ 29 V. ORGANIZATION AND MANAGEMENT A. General .. .............................................. 30 B. Rural Development Fund ................................. 31 C, Rural Water Supply Agencies ............................ 32 D. Other Implementation Agencies .......................... 35 SEIMRY ........... ..................................... 35 SODECOTON ............................................ 36 MIDEVIV .......... .................................... 36 SODECAO .......... .................................... 37 VI. PRODUCTION, MARKETS, PRICES AND FINANCIAL RESULTS A. Production ............................................. 38 B. Markets ........... ..................................... 38 C. Prices ............ ..................................... 39 D. Financial Results ...................................... 40 E. Government Cash Flow ................................... 41 F. Cost Recovery .......................................... 41 VII. BENEFITS AND ECONOMIC ANALYSIS A. Major Benefits and Beneficiaries ....................... 42 B. Economic Analysis ...................................... 43 C. Risks .................................................. 45 VIII. AGREEMENTS REACHED AND RECOMMENDATION ..................... 46 ANNEXES 4-1 Detailed Project Cost Estimates 4-2 Detailed Financing by Sub-Project 4-3 Estimated Disbursement Schedule of IBRD Loan 5-l Organization Chart (FONADER/RDF/Ministries/Executing Agencies) 5-2 Implementation Schedule 6-1 Yield Assumptions and Production 6-2 Summary Farm Budgets 6-3 Government Cash Flow 6-4 Recurrent Project Costs MAP: IBRD No. 17362: Cameroon - The Project Areas  CAMEROON SECOND RURAL DEVELOPMENT FUND PROJECT DOCUMENTS CONTAINED IN THE PROJECT FILE NO. 129.859 File Code A. Preparation Study for Rural Water Supply Component "Programme d'Hydraulique Villageoise du FSAR II", Volumes I and II; May 1983. (la,b) B. Preparation Study for Development of Bottomlands in the Northern Region BL. "Intervention et Amenagement des Bas-Fonds dans la Region du Nord"; March 1983. (2a) B2. "Intervention et Amenagement des Bas-Fonds dans la Region du Nord, Complement Agro-Economique du Bas-Fonds de Kamtchouki"; April 1983. (2b) C. Preparation Studies for Bullock Fattening Cl. "Project FSAR II, Fiche Technique du Sous-Projet Embouche Bovine"; 1981. (3a) C2. "La Recherche Embouche Bovine dans les Monts du Mandara Nord-Cameroun, Rapport Partiel"; 1981. (3b) C3. "Projet de Developpement de l'Embouche Bovine dans les Monts Mandara"; 1981. (3c) D. Preparation Report for Groundnut Marketing and Shelling Sub-Project "Sous Projet Decorticage et Stockage Arachide"; June 1983. (4) E. Preparation Reports for Functional Literacy for Village Groups El. "Sous-Projet Alphabetisation Fonctionelle dans les GVP"; November 1982. (5a) E2. "Groupements Villageois Pre-Cooperatifs"; October 1982. (5b) F. Terms of Reference for Vegetable Marketing Study "Projets FSAR II, Cultures Maratch6res, Fiche de Projet, Termes de Reference"; March 1983. (6)  (iv) Documents contained in the Project File (continued) File Code G. Preparation Report for Bottomlands Development for Vegetable Production Around Yaounde "Amenagement des Bas-Fonds pour la Culture Maralchhre autour de Yaounde"; March 1983. (7) H. Preparation Reports for the Access Road Sub-projcet HI. "Construction de Pistes de Desserte dans la Zone de la SODECAO"; March 1983. (8a) H2. "Construction de Pistes de Desserte dans la Zone de la SODECAO"; June 1983. (8b) I. Terms of Reference for Study to Train Modern Rural Blacksmiths "Formation et Installation des Artisans Ruraux"; 1983. (10) J. Detailed Project Cost Tables (1983) K. Staff Working Paper for Rural Water Supply (1983) (Includes draft organigram of proposed rural water supply institutions, draft terms of reference for proposed consultants, and draft contract for village borehole maintenance.) (11) L. Staff Working Paper for Bottomlands Devel the North (1983) (12) M. Staff Working Paper for Access Roads (1983) (13) N. Draft Operation Agreement Between FONADER/RDF and Project Executing Agency (1983) (Example of agreement with SEMRY for bottomlands development.) (14) 0. Detailed Farm Budgets (1983) (Bottomlands development North, bullock fattening, bottomlands development Yaounde, farms in feeder road area.) (15) P. Economic Analysis and Rate of Return Calculations (1983) ([6) Q. Organigrams of Main Executing Agencies (1983) (SEMRY, SODECOTON, SODECAO, MIDEVIV.) (17)  CAMEROON SECOND RTJRAL DEVELOPMENT FUND PROJECT LOAN AND PROJECT SUMMARY Borrower: Republic of Cameroon Beneficiary: Fonds National de Developpement Rural (FONADER) Amount: US$25.5 million. Terms: Standard IBRD terms Flow of Loan Proceeds: US$25.5 million as grant to FONADER's Rural Development Fund (RDF) account, of which US$22.4 million for appraised sub-projects, US$3.0 million as line of credit for as yet unidentified sub- projects, and US$0.1 million for studies. Project Description: The project would support two important Government objectives- a) strengthening rural development institutions at national, provincial and village levels; b) improving living conditions and incomes in rural areas through the implementation of selected high priority rural operations, not being undertaken under existing projects and programs and for which no alternative financing is readily available. To achieve these objectives, the project would provide financing for: - Institutional development, i.e., the strengthening of agricultural planning, project preparation and appraisal capacity at the regional level; the strengthening of RDF management at central and regional levels; three priority studies; and a line of credit for small-scale, high priority rural activities to be identified and designed to complement on-going rural development programs.  (vi) Identified sub-projects, i.e., bottomlands development in the north; rural water supply (drilling of 1,000 boreholes); bullock-fattening; groundnut marketing and shelling; functional literacy training; bottomlands development around Yaounde; and access roads construction and maintenance (350 km). Benefits and Risks The main benefits would be the further strengthening of Government's capability to prepare and execute small-scale rural projects; the creation of a sound institutional and policy framework for rural water supply; and substantial benefits from directly productive components. In addition, the rural water supply sub-project alone would provide some 350,000 beneficiaries with clean drinking water. The project has two sources of risk: (a) inadequate management, both in RDF and in sub-project executing agencies; to reduce this risk, agencies have been carefully selected on the basis of their satisfactory past performance and would receive technical assistance as appropriate; and (b) loss of momentum in the formulation and implementation of a rural water policy; to avoid this, technical assistance would be provided to the responsible sectoral institution, regular exchanges of views would take place with the Bank, and disbursements against borehole drilling and pump supply contracts would be conditional upon adoption of satisfactory measures for beneficiaries' participation.  (vii) Estimated Costs: Local Foreign Total % of ------- IS$ million ------ Base Costs Institutional Development Strengthening of Ag. Planning 0.4 0.8 1.2 3 Strengthening of RDF Management - Headquarters 0.6 1.0 1.6 4 - SOFSAR 3.9 5.5 9.4 22 Priority Studies 0.4 0.1 0.5 1 Line of Credit 3.0 3.0 6.0 14 Identified Sub-Projects Bottomlands Dev. in the North 0.4 0.4 0.8 2 Rural Water Supply 6.1 11.2 17.3 41 Bullock-Fattening 0.0 0.0 0.0 - Groundnut Marketing and Shelling 0.3 0.3 0.6 2 Functional Literacy Training 0.2 0.4 0.6 1 Bottomlands Dev. Around Yaounde 0.3 0.2 0.5 1 Access Roads 2.0 2.0 4.0 9 Total Base Costs 17.6 24.9 42.5 100 Contingencies - Physical 1.0 1.8 2.8 - Price 6.2 5.1 11.3 'Total Costs 24.8 31.8 56.6 Less: Operating Costs for the first RDF Project during Execution of the second project 5.9 6.3 12.2 Total Project Costs 18.9 25.5 44.4 (of which taxes) (3.3) - (3.3) Total Financing Required 18.9 25.5 44.4 Financing Plan Government 18.1 - 18.1 Beneficiaries 0.8 - 0.8 IBRD - 25.5 25.5 Total 18.9 25.5 44.4  (vii _) Estimated Disbursement (US$ million) FY86 FY87 FY88 FY89 FY90 FY91 FY92 Annual 1.6 5.8 6.1 6.0 4.0 1.7 0.3 Cumulative 1.6 7.4 13.5 19.5 23.5 25.2 25.5 Economic Rate of Return: 22% on directly productive sub-projects (representing 19% of project costs). Map: IBRD 17362  CAMEROON SECOND RURAL DEVELOPMENT FUND PROJECT INTRODUCTION The Government of the Republic of Cameroon has requested IBRD assistance in financing a second Rural Development Fund (RDF) project. This project would follow the basic philosophy of the First Rural Develop- ment Fund Project (Cr. 723-CM of August 4, 1977) which aimed at developing local capability to prepare, appraise, and finance small-scale, but high- priority rural development projects. The project area (Map IBRD 17362) would be extended from four departments to the entire northern region and would also include limited interventions in the Center and South Provinces as a cautious step toward eventually extending its operations nationwide. Identified sub-projects for RDF financing were prepared by Cameroonian institutions entirely or, in some cases, with technical assistance inputs, in consultation with the IBRD preparation missions of November 1982 and March 1983. Appraisal took place in May 1983, and negotiations (started in July 1984) were concluded in April 1985. I. BACKGROUND A. The Country 1.01 Cameroon is located on the gulf of Guinea and bordered by Nigeria to the West, by Chad and the Central African Republic to the East and by Equatorial Guinea, Gabon and Congo to the South. It covers 475,000 km2 with a population estimated at 9.3 million (1983), growing at an annual rate of 3.2%. The capital is Yaounde, with about 500,000 inhabitants; although about two-thirds of the total population lives in rural areas, it is expected that Cameroon's population will be equally divided between rural areas and urban centers by the year 2000. B. The Economy 1.02 Over the past 15 years, Cameroon has experienced rapid economic growth. The real Gross Domestic Product (GDP) growth rate during the Second Development Plan (1966-1971) averaged 4.2%; in the Third (1971-1976)t it rose to 4.6%; and in the Fourth (1976-1981), it is estimated at over 10.0%. The GDP is currently estimated at US$6.9 billion, representing a per capita income of UIS$880 in 1982. 1.03 The Cameroonian economy is also experiencing the most rapid structural transformation in its history as a result of rising production and export of petroleum. Prior to the exploitation of oil, Cameroon was dependent on agricultural products for the bulk of its foreign exchange earnings. Even as late as 1977/78, agricultural commodities accounted for  - 2 - 78% of all export earnings, with cocoa and coffee alone accounting for 53%. However, oil exports, which represented about 1% of total exports in 1977/78, rose to some 63% in 1983, while agricultural exports fell to about 37% in 1980/81 and 28% in 1983. Similar, although less dramatic, shifts have occurred in the structure of domestic production. Between 1978 and 1981, agricultural production (including forestry and fisheries) fell from 32% to 26% of GDP, while oil production rose from less than 0.5% of GDP to over 11%. These trends continued during 1982 and 1983 and have resulted in structural changes that are likely to persist well into the 1990s. C. The Agricultural Sector 1.04 Cameroon's diversified agricultural sector (including forestry and fisheries) provides a livelihood for about 70% of the labor force. The sector, divided in a rather dualistic manner between traditional agriculture and industrial plantations, covers approximately 2.5 million ha, or 16% of the country's cultivable area. Traditional agriculture, with its one million smallholdings of about 2 ha each, accounts for over 93% of agricultural production, grown both for subsistence and the domestic market. Cocoa, coffee and cotton are produced for export. Livestock production, mainly by nomadic and semi-nomadic pastoralists in the north and in the northwest, accounts for about 15% of the traditional agriculture production. The industrial plantations consist of several large, predominantly Government-owned plantations mainly producing palm oil and sugar (principally for domestic consumption) and rubber for export. 1.05 There are large regional variations in cropping patterns and population densities, leading to marked regional disparities in rural incomes. In the cocoa and coffee producing areas of the south, the average per capita rural income is about US$220. In the Western Highlands (maize and coffee) and parts of the Northern Province (mainly sorghum), where population densities rise to over 200/km2, it is only US$140. The average per capita income in agriculture is low compared to the national average income. These disparities are a source of increasing concern to Government which recognizes the importance of agriculture for the long-term stability of the economy. 1.06 Although Cameroon is largely food self-sufficient, cereal imports, mainly wheat and rice for urban consumption, have risen sharply since 1970. Potential may exist for increasing rice production, but climatic conditions do not favor wheat growth. Cameroon will, therefore, continue to import wheat, and this importation is expected to account for 25% of all cereals consumed by the year 2000. While there is in general no acute food problem in Cameroon, the demand will continue to increase due to urbanization. In the Fifth Development Plan (1981-1986) greater emphasis has thus been placed on foodcrop production. To avoid an adverse impact of growing oil revenues on agricultural production, Government's initial budget for the Fifth Plan increased the share of the agricultural sector to 24% of the total planned investment, thus reversing the relative shares of the agricultural and the energy/industrial sectors allocated in the Fourth Plan.  -3- D. Sectoral Institutions 1. Agriculture 1.07 Under Government's policy, the implementation of agricultural development is generally carried out by parastatal and Government agencies, while the central services of the Ministry of Agriculture ("Ministere de l'Agriculture" - MINAGRI) focus on policy-making, planning, budgeting, monitoring and evaluation. 1.08 Among the development agencies, some are crop and/or area specific: the Cocoa Development Company ("Soci6t6 de Developpement du Cacao" - SODECAO) is responsible for smallholder cocoa production and general development in the Center and South Provinces; the Cotton Development Company ("Socifte de Developpement du Coton" - SODECOTON) and the Agency for the Promotion and Modernization of Rice Cultivation ("Socifte d'Expansion et de Modernisation de la Riziculture" - SEMRY) are respectively responsible for cotton and rice production and integrated development in the northern region. Other agencies are specialized along functional lines: examples are the Foodcrop Development Agency ("Mission de Developpement des Cultures Vivri6res" - MIDEVIV) for foodcrop, seed multiplication and vegetable development, and the National Center for Study and Experimentation for Agricultural Machinery ("Centre National d'Etudes et d'Experimentation du Machinisme Agricole" - CENEEMA), for testing and extension of agricultural machinery and equipment, including intermediate technology and the training of mechanics. 1.09 The broadest mandate was given to the National Fund for Rural Development ("Fonds National de Developpement Rural" - FONADER), established in 1973 to organize and supervise both rural development programs and agricultural credit operations. FONADER is legally a separate financial entity, under the tutelage of MINAGRI, but with administrative autonomy. It operates from its Yaounde headquarters but has been decentralizing its activities since 1978. However, it still relies on other Government field services for supervision and execution of activities for which it provides direct and credit financing. 1.10 By contrast with these development agencies, which have financial and operational autonomy, the services of MINAGRI at the provincial and departmental levels are hampered by insufficient and inadequately trained personnel, and by the lack of coherent work programs and the means to implement them. A program for financing urgent, small and diversified rural needs which are not being met under existing projects and programs is essential to complement on-going activities by the rural development agencies. Creating a mechanism to that effect was a major objective of the first RDF Project. Under the mechanism set-up, funds are provided for small sub-projects (of a directly-productive, infrastructural or social nature) aimed at removing development bottlenecks.  -4- 2. Rural Water Supply 1.11 The rural water supply sector lacks a coherent national policy framework providing for (a) the efficient functioning of existing wate: points; (b) self-financing mechanisms to ensure replicability and eventcual countryside coverage; and (c) rational long-term development. Institutional responsibilities are split between three ministries, i.e., the Ministry of Planning and Regional Development ("Ministere du Plan et de l'Amenagement du Territoire" - MINPAT), the Ministry of Agriculture, and ithe Ministry of Mines and Energy ("Ministere des Mines et de l'Energie" - MINMEN) for construction, operation and maintenance. Government has been concerned with this situation and has established a National Water Committee ("Comit6 National de l'Eau" - CNE), a high level interministerial body with the dual mandate of (i) developing and implementing a rural water policy based on the principle of beneficiaries' contribution to the operation, maintenance and renewal costs of water points; and (ii) planning, coordination and supervision of all future rural water interventions. The second RDF project would support the technical work of the Committee and serve as a vehicle to implement its policy proposals (para 5.08). E. Bank Group Involvement in the Sector lnvolvement and Lending Strategy 1.12 Since 1967 the Bank Group involvement in agricultural projects amounted to 21 loans and credits (US$337.4 million). The largest single group of projects (11) have been in the tree crop subsector (oil palm, cocoa and rubber); the other projects have concerned rural development (4 projects), livestock (2 projects), rice production (2 projects), forestry (1 project) and the Rural Development Fund (1 project). Government's performance in implementing these projects has been mixed. The implementation of the Second Livestock, the ZAPI and the Oil Palm/Rubber Rehabilitation Projects was hampered by serious organizational, managerial and financial problems, but major improvements have been made last year. Government's performance in implementing the other projects has been generally good and achievements have been satisfactory. The lending program includes three new projects which have been appraised: the second RDF project, the National Agricultural Research project, and the Center-South Region Rural Development project; two are under preparation: a National Extension and Training project and the Littoral Province Rural Development project. The First RDF Project 1.13 The main objective of the first RDF Project was to help develop and strengthen the planning capacity within units of MINAGRI and to train staff involved in rural development to increase their capability of carrying out development projects. The main function of the RDF office was to administer and channel funds to small-scale priority rural development interventions in the four departments of Cameroon's northern region; it was nct supposed to concern itself with project execution but only with project  - 5 - financing. Well defined sub-projects were identified and costed, and funds were also provided for unidentified activities to be defined and prepared during project execution. The project was approved by the Board on June 30, 1977, and became effective on January 30, 1978. Due to early management problems and slow disbursements, the original Credit closing date of December 31, 1981, was extended to December 31, 1982, and then once again to December 31, 1983. 1.14 Despite initial delays in execution, the Project has achieved a satisfactory physical performance. At project completion 1,400 wells had been renovated (100%); 60 wells capped (100%); 230 positive boreholes drilled (53%); 315 manual pumps installed (64%); 4 small dams constructed (40%); 1,100 cattle fattening credits allocated (55%); 60 market garden loans made (100%); and 300 ha of bottomlands developed (100%). The fund for unidentified activities started being utilized in 1982 with the identification of several high priority interventions, mainly in vegetable production. Under the reasonably strong and generally well-organized FONADER's operational division ("Service des Operations du Fonds Special d'Actions Rurales" - SOFSAR), costs were tightly controlled. Bullock-fattening credit repayments have reached over 80% and the pump and well maintenance in the north has been satisfactorily carried out. 1.15 However, the creation of a regional agriculture planning and small project preparation capacity was less successful, as the Project concentrated mainly on physical activities and on the building of its management structure. Instead of following its original terms of reference as supplier and controller of funds, SOFSAR has become too deeply involved in sub-project execution (para 1.13). Although this was not the RDF Project intention, it was probably inevitable, since its executing agencies for sub-projects were mostly Government units, such as the Rural Works Department ("Genie Rural" - GR), the Ground Water Project ("Projet des Eaux Souterraines" - PES), and agricultural extension services. These units did not have the established financial management capacity required and, consequently, the Project became involved in the day-to-day operations of some of these units to ensure a better control of the use of funds, Clearly, these Government units for sub-project execution could not perform satisfactorily and important lessons have been learned to improve the implementation set-up of the second RDF project. However, the overall performance of the first RDF Project has been satisfactory and justifies the Bank's continued support to this important activity. 1.16 The first RDF Project, which was carried out in the same area as the Northern Province Rural Development Project (Cr./Ln. 1075/1919-CM of January 27, 1981), has also had the beneficial impact of providing new, and rehabilitating existing, water points for the farming community, thereby freeing cotton and foodcrop farmers and their families from the time-consuming task of fetching drinking water in often far away streams. In that respect, the Rural Water Supply (RWS) sub-project of the second RDF project would complement the activities of the on-going Northern Province Rural Development Project; moreover, part of the line of credit for unidentified sub-projects could also serve to finance some isolated, small rural infrastructure interventions considered essential for a better implementation of the project (para 3.11).  - 6 - II. THE PROJECT AREA 2.01 The first RDF Project covered four departments of the then Northern Province. In line with Government's strategy to eventually extend RDF-type operations nationwide, the area would be gradually extended under the second project to cover the entire northern region and some areas of the Center and South Provinces. These two areas have been selected because of their priority needs and the presence of competent sub-project executing agencies (Chapter IT). A. The northern region 2.02 The region covers 164,000 km2 (35% of the national territory) and extends from 7