Cameroon - Northern Province Rural Development Project

Document of FILE COPY The World Bank FOR OFFICIAL USE ONLY Report No. P-2889-CM REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT AND THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN AND CREDIT TO THE UNITED REPUBLIC OF CAMEROON FOR THE NORTHERN PROVINCE RURAL DEVELOPMENT PROJECT October 29, 1980 This document has a restricted distribution and may be used by recipients only In the performance of their official duties. Its contents may not otberwise be disclosed witbout World Bank authorizatbon.  UNITED REPUBLIC OF CAMEROON NORTHERN PROVINCE RURAL DEVELOPMENT PROJECT CURRENCY EQUIVALENTS Currency Unit CFA Franc (CFAF) US$1 CFAF 210 1/ CFAF 1,000 = -US$4.8 CFAF 1,000,000 US$4,762 1/ Floating Exchange Rate. ABBREVIATIONS CCCE Caisse Centrale de Cooperation Economique (France) CFDT Compagnie Francaise pour le Developpement des Fibres Textiles FAO Food and Agriculture Organization FED Fonds Europeen de Developpement FNFP Fonds National Forestier et Piscicole FONADER Fonds National de Developpement Rural FTDU Field Trial and Demonstration Unit IRA-North Institut de Recherches Agricoles et Forestieres, Maroua MIDEVIV Mission de Developpement des Cultures Vivrieres, Maraicheres et Fruitieres MINAGRI Ministere de l'Agriculture MINEQ Ministere de l'Equipement MINEP Ministere de l'Economie et du Plan PCC Project Coordinating Committee SEMRY Societe d'Expansion et de Modernisation de la Riziculture de Yagoua SODECOTON Societe de Developpement du Coton du Cameroun USAID United States Agency for International Development FISCAL YEAR Government and SODECOTON: July 1 - June 30  FOR OFFICIAL USE ONLY UNITED REPUBLIC OF CAMEROON NORTHERN PROVINCE RURAL DEVELOPMENT PROJECT LOAN/CREDIT AND PROJECT SUMMARY Borrower: United Republic of Cameroon Principal Beneficiaries:Societe de Developpement du Coton du Cameroun (SODECOTON) Fonds National de Developpement Rural (FONADER) Amount: Loan: US$25.0 million Credit: SDR 9.5 million (US$12.5 million equivalent) Terms: Loan: 20 years including 5 years of grace at annual interest rate of 9.25 percent. Credit: Standard Relending Terms: US$25.3 million of the Loan/Credit proceeds would be passed on by the Government to SODECOTON as a grant. US$9.0 million would be transferred to and administered by SODECOTON for execution of different elements of the project by specific public agencies as follows: (i) the Institute for Agricultural and Forestry Research at Maroua (US$3.2 million); (ii) the Ministry of Agriculture (US$2.6 million); (iii) the National Fund for Forestry and Fisheries (US$2.1 million); (iv) the Provincial Planning Unit (US$1.0 million) and (v) the Agency for Development of Food Crops and Fruits and Vegetables (US$0.1 million). The remaining US$3.2 million from Loan/Credit proceeds would be relent to FONADER for 8 years, including a 3-year gracl period, at an interest of 5 percent per year, to finance medium-term credits to farmers; on-lending terms to sub-borrowers would be three years, at an interest rate of 10 percent per year. Project Description: The objectives of the proposed project are: (a) to improve agricultural production and farm incomes in the center-north area of Cameroon's Northern Province by providing: (i) improved rural infrastructure, including roads, storage and marketplace facilities; and (ii) effective services, including input supply, supervised credit for purchase of draft animals and equipment, extension and training, marketing, and adaptive research; (b) to provide the principal executing agency, SODECOTON, with financial and technical assistance to extend its responsibilities for a wider range of rural development activities; and (c) to improve the effectiveness of existing administrative structures in the Northern Province in the planning, coordination and control of development projects, including monitoring and evaluation and agricultural research. This document has a restricted distribution and may be used by tecipients only in the performance of their official duties. Its contenst may not otherwise be discosed without World Bank authorization.  Benefits and Risks: At full project development after ten years, annual production of cotton is estimated to increase by about 43,600 tons, rainfed sorghum by 28,000 tons, decorticated groundnuts by 9,000 tons, and maize by 13,000 tons. The benefits of this increased crop produc- tion would accrue to about 163,000 farm families, more than half of whom are currently not reached by extension services and are in the absolute poverty group with average annual income of about US$260 per family or US$55 per capita (1978). The project will also generate important indirect benefits through the proposed strengthening of institutions in the Northern Province responsible for various agricultural and rural development activities. Project implementation faces one important risk in that the management is shared by several agencies. To reduce this risk, the project provides for establishment of a Project Coordinating Committee with representation of each of the agencies involved, and under the chairmanship of the Governor of the Northern Province. The risk would be further alleviated through the planned provision of technical assistance for project management, monitoring and coordination, and for training. Achievement of the crop production targets is subject to the normal risks associated with agriculture in the Sahelian regions, but output forecasts have been based on conservative estimates, and technically innovative production packages have been tested with satisfactory results.  - iii - Estimated Costs: US$ million Foreign Local Total Agricultural development 5.1 8.2 13.3 Project monrtoring and field services 1.1 1.5 2.6 Feeder roads and marketplace facilities 5.7 4.8 10.5 Tree planting 1.0 1.1 2.1 Provincial Planning Unit 0.6 0.4 1.0 Applied research 1.4 2.0 3.4 Total Base Cost 14.9 18.0 32.9 Contingencie3 - physical 0.8 1.2 2.0 - prices 6.3 5.7 12.0 Sub-Total 22.0 24.9 46.9 Seasonal inputs revolving fund (Incremental) 16.1 7.2 23.3 Medium-Term Credit Program fund 0.8 3.7 4.5 Total Project Costs 38.9 35.8 74.7 Estimated taxes - 8.7 8.7 Total Project Costs Net of taxes 38.9 27.1 66.0 Financing Plan: The proposed Bank Group financing of US$37.5 million composed of a Bank loan of US$25 million and an IDA credit of SDR 9.5 million (US$12.5 million quivalent) would cover 57 percent of total project costs net of taxes, equivalent to 96 percent of foreign costs. Government, FONADER and farmers would finance the remaining 43 percent of total project costs.  - iv - Estimated Disbursement From the Loan/Credit: US$ million FY82 FY83 FY84 FY85 FY86 FY87 Annual Loan 0.7 6.1 7.3 6.4 4.5 Credit 5.0 7.5 Cumulative 5.0 13.2 19.3 26.6 33.0 37.5 Rate of Return: 34 percent Staff Appraisal Report: Report No. 3031-CM, dated October 7, 1980 Maps: IBRD 15025 - Cameroon: Rural Development Projects IBRD 15028 - Extensions and communications and infrastructure  INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN AND CREDIT TO THE UNITED REPUBLIC OF CAMEROON FOR A NORTHERN PROVINCE RURAL DEVELOPMENT PROJECT 1. I submit the following report and recommendation on a proposed loan for the equivalent of US$25 million and a development credit for the equivalent of SDR 9.5 million (US$12.5 million equivalent) to the United Republic of Cameroon to help finance a Northern Province Rural Development Project. The Loan will have a term of 20 years, including five years of grace, with interest at 9.25 percent per annum; the Development Credit will be on standard IDA terms. The loan/credit blend will have a grant element of 32 percent. US$25.3 million of the proceeds of the loan/credit would be passed on by the Government to SODECOTON as a grant. US$3.? m>l:ion would be relent to FONADER for 8 years, including a 3-year grace period, at an interest rate of 5 percent per year. The remaining US$9.0 million will be administered by SODECOTON for various public agencies in charge of specific project components. PART I - THE ECONOMY 1/ 2. A report entitled "United Republic of Cameroon Economic Memorandum" (No. 2877-CM), was distributed to the Executive Directors on April 30, 1980. Annex I provides basic country data. Background 3. Cameroon is one of Africa's most diversified countries with a wide range of ecological conditions, ethnic groups and cultures. Cameroon was a federation until the United Republic, which unified the anglophone western and francophone eastern parts of the country, was established in 1972. The Government has concentrated on the establishment and maintenance of national unity between the eastern and relatively small western parts of the country and between the sahelian zone in the north with Muslim traditions and the southern tropical regions. 4. Cameroon has a population of 8.3 million (1979) and covers an area of 475,000 km2. The main opportunities for development lie in the expansion of agricultural production, including forestry, and the processing of agricultural and forestry products for export. Soils and climatic condi- tions permit cultivation of a wide range of crops, and the southeast contains large untapped timber resources. The north holds promising potential for livestock development. Cameroon became an oil producer and exported 645,000 tons of crude petroleum in 1978. Crude oil exports reached 1.6 million tons in 1979 and are estimated to be about 3 million tons in 1980. Trade, trans- portation and transit services are other important economic activities. Cameroon's main economic centers are separated by vast areas of low population 1/ This Part is identical to that of the proposed Artisans and Small- and Medium-Scale Enterprise II Project (Report No. P-2890-CM) which is being circulated separately to the Executive Directors on October 30, 1980.  -2- density; furthermore, the country-s transport facilities also serve landlocked Chad and the Central African Republic. As a result, a large port and adequate inland transportation infrastructure are essential for promoting agriculture, forestry and industry, and for strengthening Cameroon's role as a regional trade center. Past Performance 5. GDP growth was about 4.5 percent per year during both the Second Five-Year Plan (1966-71) and the Third Plan (1971-76), and accelerated to 7.3 percent during 1976/79, the first three years of the Fourth Plan. Population growth is estimated at about 1.8 percent per year in the 1960s, about 1.9 percent until the mid-1970s and about 2.3 percent from 1975 to 1980. Per capita GNP reached about US$560 in 1979. 6. Most agricultural crops, livestock, fishing and forestry experienced high growth rates during 1966-71 thanks to favorable supply and demand condi- tions including high producer prices, high domestic income growth and rapid economic expansion abroad. Lower agricultural growth during 1971-76 was due in part to the decrease in output of two major commercial crops, cocoa and arabica coffee. Important factors in this decline were the decline in rela- tive competitiveness of producer prices with food cash crop prices and the termination of the foreign supported fertilizer subsidy program for arabica coffee. The decline in cocoa and arabica coffee output was not fully offset by growth in other important commercial crops including cotton, rubber, and oil palm. Growth in forestry production dropped during 1971-76 because of reduced Western European demand and some transportation bottlenecks. 7. Manufacturing and mining grew at about 10 percent per year during 1966-71 mainly on account of the rapid development of import substitution industries, particularly manufactured consumer goods. The lower manu- facturing growth experienced during 1971-76 was due to the slowdown in new import substitution activities and to slower income growth because of the deteriorating terms of trade. 8. Since 1976, Cameroon has experienced rapid growth in most major sectors. Agricultural growth was helped by recovery in cocoa production, as farmers responded to higher producer prices, and in forestry production. The construction industry grew by 14 percent per year during 1976-79 as large investments were undertaken for the implementation of the plan. The rapid increase in income and the high rate of economic activities has led to sub- stantial growth in most other sectors particularly food crops, trade, trans- port and other services. Investment and Savings 9. During the Second Plan period (1966-71), the investment rate, including increase in stocks, exceeded 16 percent of GDP, and gross domestic savings and gross national savings were 13.4 and 12.6 percent of GDP respectively. Foreign resources financed about 33 percent of invest- ment during this period. During the Third Plan period (1971-76), despite slow income growth, the investment rate increased to 18.1 percent of GDP.  - 3 - Gross domestic savings rose to 16.4 percent of GDP but with debt service increasing by 60 percent from a small base, gross national savings rose only to 13.9 percent of GDP. External resources therefore continued to finance about one-third of total investment during this period. The higher savings rate in a :eriod of slow output growth was made possible by a considerable reduction in the real growth of consumption, particularly private consumption, to less than 3 percent per annum. One of the prices paid for the substantial improvement in savings during the Third Plan was, however, a limitation on farmers earnings in tree crops, providing insufficient incentives for them to maintain and expand production capacity through efficient use of existing trees and to make new plantings; this situation may have serious implications for the longer term future of these crops. The high investment rate during this period was offset by a decline in the efficiency of investment. Some reduction in capital productivity was attributable to projects, such as oil exploration and trensport infrastructure, which would lead to production increases only a number of years later, and to social infrastructure invest- ments, which would improve welfare but have a limited impact on output. During 1976-79, the investment rate reached an average of 23.8 percent of GDP. Due largely to the record cocoa and coffee export prices, gross domestic savings and gross national savings increased further to 20.8 and 18.6 percent respectively of GDP. As a result, external resources financed about 30 percent of total investment during these three years. Public Finance and Balance of Payments 10. Budgetary revenue amounted to about 15 percent of GDP during each of the past two plan periods, and increased slightly to an average of 15.2 percent in 1976-79. Public savings after debt service as a percentage of total public investment declined from about 39 percent in 1966-71 to about 36 percent in 1971-76. During 1976-79, this ratio reached 55 percent thanks to the public savings mobilized by the Stabilization Funds. The balance of payments did not become a problem until 1974-76 while agricultural exports declined, particularly exports of cocoa and timber, resulting in sizeable current account deficits. The bulk of the current account deficits was financed by net capital inflows but a substantial drawdown of international reserves also took place in 1975. Therefore, net official international reserves decreased from more than two months of imports in 1974 to less than one month in 1975. In 1977-80, exports rose substantially (at an average annual rate of 26 percent) but imports also increased (at an average annual rate of 29 percent) because of rapid economic growth and expanded investment. Gross official international reserves were rebuilt in 1976-80, in part by the use of IMF credits but net official international reserves were about one month of imports at mid-1979. This was a low level by international standards but still acceptable considering Cameroon s membership in the Central African Monetary Union. Development Issues and Prospects 11. Cameroon's main medium- and long-term potential lies in the develop- ment of a diversified agricultural sector relying upon export crop production to generate foreign exchange and domestic food crop production to meet the  -4- needs of a growing urban population. Realizing this potential depends upon an appropriate mix of public intervention and policy measures aiming at stimulat- ing private initiative. Factors that further complicate the agricultural development effort in Cameroon are the dispersion of the main economic and population centers, regional and institutional diversity, the competition between export and cash food crops for the dwindling agricultural labor in some parts of the country, the dependence of a substantial part of public revenue and savings on cocoa and coffee, and the limited availability of skilled agricultural agents and administrators. Through technical assistance and education projects and through normal project work, the Bank is supporting Cameroon-s effort in manpower training and development in agricultural serv- ices, and in other sectors. In industry the Government has moved to channel more financial resources for investment directly through the public sector, in addition to the indirect support provided by tax incentives and other measures, which have been in existence for many years. The Government has actively participated in a Bank study of the manufacturing sector which will help to identify bottlenecks and opportunities to develop existing as well as new industrial activities. 12. The outlook for agricultural and industrial growth during 1980-86 is quite favorable. Agricultural growth expectations are based on the mainte- nance of cocoa output at about 110,000 tons; recovery of robusta coffee; continuing expansion for arabica coffee; increased production of most other commercial and food crops, as well as of livestock; and expansion of commer- cial forestry production. Growth of industrial and mining production is expected to result from existing and expanded manufacturing facilities (par- ticularly for food, beverages and construction materials), some new industrial projects and from crude oil and new mining ventures. Given the stepped-up production and investment activities, a high growth rate is also expected for construction and services. 13. Cameroon's vast and still largely unexploited natural resources, particularly agricultural, forestry and mineral resources, will continue to provide a fundamental basis for its growth and development in the next twenty years. With the revenue from the likely prospects of oil production considerably exceeding its current level of 3 million tons per year, in addition to resources from traditional agricultural exports and external borrowing, the constraints on the pace of development in Cameroon in the 1980s and 1990s will be increasingly non-financial. The extent to which Cameroon succeeds in expanding its manpower and institutional capacity will determine the rate of growth of an effective investment program to promote economic and social development. Fourth Development Plan (1976-81) 14. Cameroon is now implementing its Fourth Economic and Social Develop- ment Plan. Private investment is encouraged, under Government guidelines, to expand production capacity in agriculture, forestry, mining and manufac- turing. Part of the financing of private investment activities, however, will be publicly guaranteed borrowing. Planned investment of some US$3.1 billion (in 1974/75 prices) is about 40 percent higher in real terms than the  -5- estimated level achieved during the last Plan period and more than double previous Plan expenditures in nominal terms. Actual investment during the first three years of the Plan was estimated to be about US$2.2 billion (in 1974/75 prices) or at an annual rate about 60 percent higher in real terms than annual investment during the last Plan. External Borrowing and Creditworthiness 15. Total public and publicly guaranteed debt outstanding and disbursed rose from US$515 million at the end of the Third Plan Period to US$1.6 billion at the end of 1979, and is expected to exceed US$2.0 billion in 1981, the last year of the Fourth Plan. Debt service payments rose from US$39 million in 1976 to US$126 million in 1979, while exports of goods and services increased from US$715 million to more than US$1.3 billion during the same period. Notwithstanding a hardening of average terms since t^e -early 1970s, Cameroon's debt service ratio was still less than 10 percent at the end of 1979, up from 5-1/2 percent in the mid-1970s. The debt service ratio is projected to peak at about 16 percent in 1982 and decline gradually throughout the remainder of the decade to about its 1979 level in 1990. This projection assumes that the amount of new loans contracted during 1982-86 will be slightly above the average annual amounts contracted in 1977-81, and that there will be no dramatic change in the assistance programs and project intentions of official donors. Borrowing on non-concessionary terms would account for about two- thirds of total new commitments, and average terms would become harder during the period. Because of higher debt service payments, projected average annual net disbursements would be less than during the preceeding five year period but, with Cameroon-s favorable export and savings prospect, would be sufficient to allow an investment rate of some 25 percent and a restoration of a healthy foreign exchange reserve position. Cameroon is thus judged to be creditworthy for Bank financing on the basis of its ability to productively utilize the country's resources and its favorable potential to further diversify the economy. However, in view of the country's record of performance as well as the need to maintain debt service within the range mentioned above, foreign donors should be prepared to continue to provide some 50 percent of public capital assistance on concessionary terms. PART II - BANK GROUP OPERATIONS IN CAMEROON 1/ 16. The Bank and IDA commitments in Cameroon now amount to US$538 million and cover 34 projects: sixteen in agriculture, eleven in transport, three in education, two in public utilities, one small- and medium-scale enterprises project, and one technical assistance project. Transport accounts for the largest share (48 percent) of these commitments, followed by agricul- ture (39 percent). Annex II contains a summary statement of Bank loans and IDA credits as of August 31, 19B0, and includes notes on the execution of 1/ This Part of the report is substantially the same as that of the proposed Artisans and Small- and Medium-Scale Enterprise II Project (Report No. P-2890-CM) which is being circulated separately to the Executive Directors on October 30, 1980.  - 6 - ongoing projects. Although delays and setbacks have occasionally been en- countered in the execution of projects, the Government has consistently shown willingness to collaborate with the Bank in finding solutions to such problems. 17. The Bank Group's strategy for the future is to support the Govern- ment in its effort to increase agricultural production, including export- oriented crops, and in the process create productive employment in rural areas; to upgrade and improve the operation and maintenance of the country's infrastructure; to stimulate investment by local entrepreneurs and increase employment in urban areas; and to enhance the efficiency of Cameroon's institutions. 18. The Government's objectives in the agricultural sector are: (a) to achieve balanced and integrated regional development; (b) to improve income distribution and to raise living standards in rural areas; (c) to increase production of essential foodstuffs; and (d) to promote plantation agriculture, including smallholder schemes. The Bank has helped the Govern- ment develop agricultural resources in the southern and western parts of Cameroon by financing two oil palm and two rubber plantation projects. The Bank has financed two smallholder rice irrigation projects in the north, as well as a smallholder cocoa project which is modernizing cocoa farming and increasing rural productivity in the areas south and west of the capital city of Yaounde. The recently signed Second Livestock Project will benefit tradi- tional herdsmen in central and western Cameroon. The Government's objectives in the rural sector have been supported by three Bank-assisted rural develop- ment projects in populated but poor regions of Cameroon - Plaine des M-Bo on the western plain, ZAPI in the east, and the Western Highlands. These projects include studies, trial activities, and packages of inputs, techniques and infrastructure for improving agricultural productivity. The ongoing Rural Development Fund Project is designed to help the Government establish machinery for processing and implementing small-scale rural sub-projects, initially in the north. The proposed Northern Province Rural Development Project would provide SODECOTON and the Government with financial and technical assistance for planning and coordination at the provincial level and for strengthening agricultural research, thus enabling them to take a broader approach to rural development in the north, including crop diversification, reforestation, and improvement of rural infrastructure, as well as further development of cotton production. 19. In view of the crucial importance of transportation to the econo- mic growth of Cameroon and neighboring countries, the Government has devoted the largest portion of public investment to this sector. The Bank Group, together with other development institutions, has substantially aided the development of adequate transport facilities. The First, Second and Third Highway Projects were designed to help complete the country's basic trunk road system. A Feeder Roads Project approved in 1977 is establishing institu- tions for feeder road administration and maintenance in addition to pro- viding the necessary resources for a feeder road program to support high priority agricultural/ rural development projects. The Fourth Highway Project concentrates on road maintenance and rehabilitation and includes funds for feasibility studies for the construction of a two-lane heavy duty road between Yaounde and Douala. The Fourth Railway Project will help finance the new Douala marshalling yard, maintenance facilities at Yaounde, railway equipment, and technical assistance for improvements in operations, management and training. Given projected traffic increases, and the backlog of required  investments in the transport sector, substantial capital outlays are still necessary - particularly for the construction of Yaounde-Douala road, the expansion of the Port of Douala, which is being assisted by a Bank loan and IDA credit, and for related facilities such as those being financed by the Fourth Rai_.wd.y Project. Future road investments could possibly include financing of strategic international routes, but should place greater emphasis on road maintenance and on developing the network of forestry, feeder and farm access roads. 20. In other sectors, the first Small- and Medium-Scale Enterprise Project, approved in 1975, focuses mainly on developing local entrepreneurship and a second project which is now under preparation, would aim at further assisting Cameroonian artisans and small- and medium-scale enterprises and strengthening the Banque Camerounaise de Developpement, a development finance agency. A Third Education Project, approved in April 1976, places special emphasis on rural education and training. The Second Water Supply Project of December 1979 will provide water to 13 secondary centers, reinforce and expand water supply systems in Douala and Yaounde, and includes sewerage and drainage master plan studies for these two cities. At the same time an urban development project is being prepared which is designed to upgrade several low-income settlements and develop sites and services in Douala and Yaounde. 21. All Bank projects in Cameroon include training, technical assistance and other provisions necessary for strengthening institutions and improving sector policies. The Technical Assistance Project approved in June 1977 supports Government services in several key Ministries involved in investment planning, policy analysis, and project processing; a second technical assist- ance project is in preparation. The Bank's lending strategy will continue to emphasize institution building, particularly in the areas of sector planning, project preparation, and project implementation in transportation and rural and urban development. The Bank will also continue to assist the Government in developing policies in newer sectors of the economy. The Bank carried out sector studies in industry, forestry, and energy, and in telecommunications together with the International Telecommunications Union. Future projects have already been tentatively identified through these studies. 22. During the second half of the sixties, overall disbursements of official development assistance to Cameroon amounted to about US$40-45 million a year. While at the beginning of this period two-thirds of aid funds were grants, the proportion of loans slowly increased. A major part of the external assistance was provided by France and was concentrated in infrastructure and the productive sectors. The European Development Fund and European Investment Bank directed most of their lending to agriculture, with infrastructure next in magnitude. Bank and IDA disbursements were small during this period. Since 1972 overall disbursements of foreign aid have increased to about US$90 million per year with only one-fifth as grants. The Bank and IDA's share of these overall disbursements has amounted to about 23 percent and lending to Cameroon has been closely coordinated with other donors; in 16 of the 34 Bank projects, joint or parallel co-financing arrangements have been made and co-financing is being actively sought for several future projects.  -8- 23. Cameroon s public debt outstanding and disbursed as of December 31, 1979 amounted to US$1.7 billion, 7.7 percent of which was due to Bank loans and 7.6 percent to IDA credits. Bank loans accounted for 9.5 percent of public debt service at that date, and IDA credits for 0.6 percent. By 1985, the public debt outstanding and disbursed is projected to reach US$2.9 billion, and annual foreign loan disbursements may amount to over US$480 million. In 1985, Bank loans and credits are expected to account for about 18 percent of total public debt and 10 percent of public debt service. 24. In October 1974, Cameroon became IFC's 100th member. IFC's first operation in Cameroon, approved in May 1975, was a US$380,000 under- writing to bring domestic shareholders into a previously wholly foreign- owned shoe manufacturing company. In September 1976, the IFC Board approved an equity investment of about US$800,000 in a foreign-owned rubber estate (SAFACAM), which is currently the second largest rubber producer in Cameroon. The investment is assisting in the rehabilitation and diversification of an existing estate that will produce rubber for export and palm oil for the domestic market. The operation will also facilitate participation of domestic shareholders in the estate. The Board approved a second equity investment in SAFACAM of US$390,000 equivalent in September 1978. The increased capitaliza- tion was required to finance the construction of a palm oil mill. In November 1977, the Board approved a third IFC operation, an investment of up to US$125,000 in the share capital of a promotional company for maize development. No commitment has yet been made on this investment since the original technical partner has been replaced and major changes have been made in the arrangements expected earlier. In April 1979, the Board approved an IFC investment of US$7.93 million consisting of US$7 million loan and US$0.93 million equivalent in equity in a Cameroonian aluminum producing company, ALUCAM, to help expand the company's production capacity. Annex II contains a summary statement of IFC investments in the country as of August 31, 1980. IFC commitments in Cameroon total US$9.28 million - a loan of US$7.00 million, and US$2.28 million in equity participations. PART III - THE AGRICULTURE SECTOR General 25. Agriculture plays a major role in the economy of Cameroon and agricultural expansion remains the cornerstone of the country's economic development strategy. The sector contributes about 33 percent of the GDP, including 70 percent of the country s export earnings, and about 35 percent of tax revenues, and employs about three-quarters of the total labor force. Rural per capita incomes vary widely between regions and in the northern savannah areas average only about US$75, or less than half of the national rural average. During the first four Plan periods only about 14 percent of realized investments (Government and private sector) have been for agricul- ture and rural development. However, the proportion has risen to about 17 percent recently, and the allocation for agriculture is expected to rise still further in the Fifth Plan, currently being prepared.  -9. 26. Cameroon-s diversity of soil and climatic conditions are reflected in the variety and geographic distribution of its principal agricultural products. In the north, millet, sorghum, rice, maize, groundnuts and cotton are produced and there is potential for wheat. In the center and eastern provinces, marked by low population density, root crops, groundnuts, coffee, tobacco and some cereals are grown and livestock production is also an important feature. In the center south, including the principal urban concentrations, 80 percent of the country s cocoa is produced while plantain and taro are major food crops. In the coastal provinces, robusta coffee, cocoa and bananas are grown by individual farmers, while oil palm, and rubber are produced on large scale estates. In the heavily populated western provinces maize and tuber crops supplemented by groundnuts, beans and vegetables, are the main food staples. 27. Smallholder farming is the predominant source of agricultural output. Nearly a million farm families, cultivating an average of about 2 ha each, contribute 90 percent of total production. Small farmers are the principal growers of the two main export crops, cocoa and coffee, and of three other important crops which partly serve domestic industries, namely cotton, tobacco and rice. Almost all domestic foodcrops, which supply about 96 percent of the country's needs, are produced by small farmers. 28. Overall foodcrop production in the last ten years (1966-68 to 1976-78) has increased at about 5 percent per year. Production of vegetables, plantain and some rootcrops has increased at a rate of over 6 percent, production of cereal grains at only 1.2 percent, and production of major cash crops in the small farmer sector--cocoa, coffee, cotton and groundnuts --at 1.6 percent. With large areas of cultivable land still unexploited Cameroon has good potential for increased production. Only about 14 percent of the total land area is currently used for agriculture, with the rest mostly either under natural forest or used for grazing. But in the Western Highlands, in the Mandara Mountains of the Northern Province and in the Lekie area of the center-south there is a density of population which puts pressure on available cultivable land. The Government is encouraging reset- tlement in these areas by opening up new farm land, such as in the Benoue valley, and by establishing industrial plantations to provide alternative rural employment. 29. The food supply situation in northern Cameroon has greatly improved since the critical drought years, 1973-75, and, following good millet harvests in 1978 and 1979, food crop prices have returned to more normal levels. In general, however, the rapid escalation in prices of production inputs--partic- ularly petroleum based ones--has had an adverse effect on current efforts to rehabilitate and modernize Cameroon's agricultural sector. Prices received for the country's major export commodities have not generally kept pace with this fast rate of inflation. Domestic food production, notably of rice and sugar, also faces strong competition from cheaper imports. Despite ongoing infrastructure improvements, internal marketing costs continue to rise reflec- ting higher fuel prices and increasing wage rates. In response to these developments, the Government is encouraging projects which will earn or conserve foreign exchange, and is also taking the recurrent cost impact of its investments more into account.  - 10 - 30. Applied research and technical support has focussed in the past on export crops such as coffee, cocoa, cotton and oil palm. Cocoa and coffee are a major source of foreign exchange, providing 50 percent of total exports, while cotton provides about 5 percent. Food crop production has managed to keep pace with population growth, but progress has been restricted by the weakness of rural institutions and the limited access of most smallholders to extension, marketing or credit services. Better training is needed for agricultural extension staff, and agricultural research should be more respon- sive to the needs of its users. The proposed project would address these problems in the Northern Province. Institutions 31. Responsibility for designing and implementing the national develop- ment plan lies with the Ministry of Economic Affairs and Planning (MINEP), which normally entrusts the planning and supervision of development programs in the rural sector to the Ministries of Agriculture (MINAGRI) and Livestock (MINEL). Frequently, actual project implementation is carried out by a sector- or area-specific agency, either by a state-owned crop development company (Societe d'Etat) such as SOCAPALM (plantation and outgrower oil palm), CAMDEV (plantation and outgrower oil palm and rubber), HEVECAM (plan- tation rubber), SODECAO (smallholder cocoa) or SODEPA (Livestock), or by more localized institutions such as UCCAO (union of arabica coffee coopera- tives in the West), SEMRY (rice development in Yagoua area) and ZAPI (zones d actions prioritaires integrees). Other development activities are carried out by field services at the provincial and departmental levels of MINAGRI, representing the following main departments: Agriculture, Community Develop- ment and Rural Works, Statistics, Training and Cooperatives. MINAGRI exten- sion services to farmers are hampered by insufficient and inadequately trained personnel, difficulty of liaison with research, and the lack of coherent work programs and the means of implementing them. With objectives of output diversification and regional balance, Cameroon has faced a diffi- cult task in designing and implementing institutionally cost-effective development programs in the traditional sector. However, the Government is expected to draw upon lessons learned from the various institutional forms it has already tried out in preparing the next (fifth) Plan period covering 1981-86. 32. Fonds National de Developpement Rural (FONADER) was created in 1973 with the dual role of (a) providing credit to farmers or groups of farmers and (b) appraising, financing, and supervising a wide variety of rural development projects. In the past six years, however, it has become a large and complex financing and credit agency and has outgrown its original structure--which was, until recently, fully operated from Yaounde. It has concentrated mainly on administering various credit programs and project funds--some of which have been Bank provided--and it has gained considerable experience in cash management. Its growth has been supported by technical assistance from the Federal Republic of Germany, and a cadre of capable Cameroonians has developed. However, the development of adequate program and client accounting, budgeting and credit monitoring procedures has lagged. This has resulted in considerable committed but undisbursed cash  - 11 - reserves and a relatively high level of defaults--although these have been declining. In 1977, a reorganization of FONADER, designed with the assis- tance of the Caisse Nationale de Credit Agricole of France (CNCA), began which is gradually streamlining operations and alleviating major problems. Moreover, the Government is taking steps to transform FONADER into an agricultural development bank. Sufficient capable personnel are currently in place to carry out the reforms required at the overall management level. Technical supervision of credit in the field requires improvement, however, and would be addressed in the proposed project (paras 45-47). Institutions Serving the Cotton Sub-Sector 33. Societe de Developpement du Coton du Cameroun (SODECOTON) is the leading institution in the cotton sub-sector and in agricultural development in northern Cameroon, and would be the project's principal executing agency. SODECOTON was established in May 1974 as a parastatal development company to take over the functions previously carried out in northern Cameroon by the French cotton development company, CFDT. The company s capital now stands at CFAF 2,595 million (US$12.5 million), subscribed 55 percent by the Came- roonian Government and 45 percent by CFDT. SODECOTON's turnover in 1978/79 amounted to CFAF 8.3 billion (US$40 million), of which about 70 percent represented sales of raw cotton (110,000 bales), and 23 percent the value of its oilseed processing operations. SODECOTON keeps its accounts on a commer- cial basis. However, the legislation setting up SODECOTON provides for the apportionment of surpluses (60 percent to the National Produce Marketing Board, ONCPB; 10 percent to the cooperative savings and development movement of the Northern Province, and 30 percent to SODECOTON), while deficits are supported in their entirety by the ONCPB. For this reason, and because its accounts include the costs of rural development activities such as agricul- tural extension, training, field trials and input subsidies, SODECOTON acts as an agent of Government policy rather than as a profit-oriented enterprise limited to cotton production and marketing. 34. SODECOTON's accounting system does not currently permit a clear separation of costs of commercial activities related to cotton production from costs of rural development activities. Therefore, SODECOTON would improve its cost accounting system such that the costs of its various operations could be more accurately identified (Section 4.01 (b) of the draft Project Agreement). This separation of various costs would permit the Government: (i) to reim- burse SODECOTON for expenses related to development activities separately from the cotton account (Section 4.05 of the draft Loan Agreement), and (ii) to avail itself of more accurate information for making decisions on the level of producer prices. 35. SODECOTON is a vertically-integrated organization covering the following main operations: (a) production development: through an exten- sion force of about 800 people, organized in four regions and 29 sectors and affecting about 120,000 farmers; (b) input supply: ordering about 12,000 tons of fertilizers and 1 million liters of cotton insecticides annually and distributing these as well as cotton, maize, groundnut seed, and farm equip- ment on credit to cotton farmers; (c) cotton marketing: using a container  - 12 - transport system to evacuate seed cotton from market to ginnery with a minimum of delay and loss; (d) ginning, grading and seed processing at eight ginneries, two oil mills and a new refining plant; and (e) selling 16 types of Cameroonian cotton lint and seed cake on the world market through the selling organization of CFDT, and selling cotton to the local textile industry. Part of the seed cake production is sold locally at preferential prices to aid the livestock industry. All vegetable oil produced is sold on the local market, where there is a considerable unsatisfied demand. Development Strategy in the Cotton Sub-Sector 36. Until the early 1970s SODECOTON, and before it CFDT, had been reasonably successful in developing cotton as the principal cash crop in the central part of the Northern Province. However, from its first intro- duction in 1951, the crop was developed on an extensive, low-input basis. Fertilizers, for example, were not used at all. There was little room for raising the price paid to farmers or applying yield-raising inputs. Produc- tion was increased almost entirely by an expansion of acreage: the area planted under cotton steadily increased and reached its peak of 108,000 ha in 1969. Yields generally remained very low throughout this period, averaging only about 500 kg/ha. The area planted began to decrease in 1970 and, with the increasing impact of a low producer price and the drought years, when farmers replaced cotton with staple food crops, cotton production fell in only four years from 91,000 tons in 1969 (its peak and an exceptionally good year) to only 27,800 tons in 1973. At the same time, world prices for cotton fiber rose spectacularly in 1974 and, with considerable fluctuations, have generally remained at a somewhat higher real level than during 1950-70. 37. Following the drought years, Government and SODECOTON began re- establishing agricultural production in Northern Cameroon. Their strategy has involved making cotton profitable to farmers as an intensively-grown cash crop on a reduced area, freeing land and labor for food crops, by introducing new technology such as ULV spraying against cotton pests; changing the organiza- tion and extension approach by, for example, grouping farmers fields together in blocks to facilitate a rotation of cotton with other crops; and improving economic incentives (the producer price was increased from CFAF/kg 31 in 1972 to CFAF/kg 70 in 1979). Farmers responded rapidly and by 1976, the average cotton yield had risen to almost 800 kg/ha. Overall average yields have continued to rise each year (1977: 830 kg/ha, 1978: 1,250 kg/ha, and 1979: 1420 kg/ha), while the total farm area devoted to cotton continued to decline until 1978. The next phase in implementing this strategy, while maintaining the momentum on cotton intensification, is to (a) provide the means for developing other profitable cash crops, notably groundnuts and maize, in areas where cotton is not suitable; and (b) improve the productivity of staple food crops, especially sorghum, in an already densely-cultivated area and in line with expected increases in demand. The agricultural development component of the proposed project is designed to pursue such a strategy.  - 13 - IV. THE PROJECT 38. The project originates from needs identified in the Bank's agricul- tural sector survey in 1974. Following a formal Government request for assist- ance in November 1976, a Bank identification mission visited Cameroon in May/ June 1977. The project was then prepared by the FAO/IBRD Cooperative Program which visited Cameroon twice, in October/November 1977 and in March 1978, when consultants from CFDT, financed under the Technical Assistance Credit No. 673 CM, assisted in preparation of the agricultural production components of the project. This report is based on the findings of a Bank appraisal mission which visited Cameroon in November/December 1979. Negotiations were held in Washington, D.C. in July/August 1980, with a Cameroonian Delegation led by Mr. Bindzi, Ambassador to the United States. The Staff Appraisal Report No. 3031-CM dated October 7, 1980 is being circulated separately to the Executive Directors. Project Objectives 39. The objectives of the proposed project are: (a) to improve agricultural production and farm incomes in the center- north of the Northern Province by providing them with: (i) improved rural infrastructure, including roads, stores and marketing facili- ties; and (ii) effective services, including input delivery, super- vised credit, extension, marketing, adaptive research, and project monitoring; (b) to provide SODECOTON with financial and technical assistance required to extend its responsibilities to include management of the proposed project, and to take on a wider range of rural development activities; (c) to improve the effectiveness of existing administrative structures in the Northern Province in the planning, coordination and control of development projects, including monitoring and evaluation and agricultural research. Project Description 40. The proposed project would be implemented over a five-year period and would include both activities affecting the Northern Province as a whole, and activities within a project area in the Center-North of the Province. (i) Project components related to the Northern Province as a whole would be the following: (a) strengthening the provincial planning unit at Garoua to improve planning and coordination of development projects;  - 14 - (b) supporting the agricultural applied research work of IRA-North, with a view to making better use of existing resources, in particular for adaptive research on food crops; (c) expanding the savannah forest research unit of the Institute for Agricultural and Forestry Research at Maroua (IRA-North), which would also provide technical assistance for the compo- nents for tree planting in the project area; (d) providing additional seed handling equipment for use by the Agency for Development of Food Crops and Fruits and Vegetables (MIDEVIV) in furnishing improved groundnut seed; and (e) reorienting the tasks of the Ministry of Agriculture (MINAGRI) through: - provision of new vehicles and offices; establishment of a monitoring unit under MINAGRI to monitor and evaluate results of the proposed project and later of other agricultural projects in the north. (ii) Project components within the Center-North project area would be the following: (a) strengthening SODECOTON and broadening its approach to rural development by: - increasing the number of sectors, zones and agricultural monitors in its extension services; - establishing an animal husbandry unit within SODECOTON to improve the feeding and health care of draft animals; - rationalizing extension services through systematic training and retraining programs for staff of SODECOTON and MINAGRI; - expansion of two existing SODECOTON training centers; - establishing an agricultural field trials and demonstration unit within SODECOTON; - providing additional staff and operating funds to SODECOTON for project management services; (b) facilitating crop production and marketing by: - financing the incremental costs of seasonal inputs used by farmers (revolving fund);  - 15 - financing an agricultural credit program to be administered by FONADER, to enable participating farmers needing credit to buy work oxen and equipment; constructing additional storage facilities to handle farm inputs for the project; improving about 800 km of feeder roads, including construction of bridges and culverts; - improving rural market place facilities; (c) carrying out pilot tree plantations in forest reserves for fuelwood and timber, and plantings of windbreaks in densely farmed areas to reduce soil erosion and help improve soil fertility. Project Implementation 41. Aware of the problem of coordination that could arise, Government has decided that one agency, SODECOTON, should play the lead in assuring the execution and supervision of the proposed project. At the national level, responsibility for overseeing the implementation of project activities would rest with the corresponding responsible Ministries. SODECOTON would act as the channel and procurement agency for all project funds except those for the medium term credit program to be carried out directly by FONADER in cooperation with SODECOTON. In particular, SODECOTON would be responsible for implementation of the project in the Center-North area, except for the compo- nents to be carried out by MINAGRI (provision of essential offices and vehicles for MINAGRI and project monitoring and evaluation) and by the National Fund for Forestry and Fisheries (FNFP) for tree plantings. Thus SODECOTON would be responsible for implementing all aspects of the agricultural development program (crop and animal husbandry extension services, administration of the revolving fund for seasonal inputs, procurement of inputs and farm equipment), for the staff training and agricultural field trials and for the construction of stores, rural marketplaces and feeder roads. SODECOTON would also act as the channel of funds for the implementation of the three province-wide components: agricultural and forestry research (IRA-North) and provincial planning and coordination (Provincial Economic Division) as well as procurement of addi- tional seed handling equipment for MIDEVIV. FONADER, in cooperation with SODECOTON, would be responsible for providing medium-term credit to farmers for the development of ox-drawn cultivation. The activities of SODECOTON, FONADER, and the other institutions involved in implementation of the project would be coordinated by a Project Coordinating Committee in the Northern Province, as discussed in para. 48. 42. Government and SODECOTON would enter into a financing agreement which, among other features, would determine SODECOTON's responsibilities for execution and coordination of the project, and the flow of funds from the Government to SODECOTON and from SODECOTON to subsidiary executing agencies (MINAGRI, IRA-North, FNFP, MINEP's Provincial Economic Division and  - 16 - MIDEVIV). The conclusion of a financing agreement satisfactory to the Bank would be a condition of effectiveness of the proposed loan and credit (Sections 3.02 (b) and 6.01 (a) of the draft Loan Agreement). SODECOTON would also conclude protocols, to be approved by the Bank, with each subsidiary agency setting out respective responsibilities and financial arrangements. (Section 3.02 of the draft Loan Agreement, Section 2.01 of the draft Project Agreement). 43. The rehabilitation and construction of feeder roads (about 800 km) would be carried out by SODECOTON on force account, under the technical super- vision of the Ministry of Equipment (MINEQ). SODECOTON is already success- fully executing a road construction component included in the Southeast Benoue Project financed by the French CCCE. MINEQ and SODECOTON would conclude an agreement establishing their respective responsibilities for roads improvement and maintenance in the project area during and after the project period (Section 2.03 of the draft Project Agreement). 44. Because of a tendancy towards overlapping of responsibilities between SODECOTON and MINAGRI, Government has decided to make SODECOTON solely responsible for extension activities on field crops, while MINAGRI would con- tinue to deal with the small number of fruit and vegetable growers in the area. To put this decision into effect, MINAGRI and SODECOTON would agree on the number of additional field staff required in the first year of implemen- tation and the number of surplus MINAGRI agents which would be transferred to SODECOTON. A condition of disbursement of funds for new vehicles and offices for MINAGRI would be that the above transfer of MINAGRI field staff to SODECOTON had been carried out (para. 3 (e) of Schedule 1 to the draft Loan Agreement). 45. Government would also enter into a financing agreement with FONADER which would set out, in particular, onlending terms and conditions satisfactory to the Bank (Section 3.03(b) of the draft Loan Agreement). In administering medium-term credit to farmers in the past, FONADER accumulated considerable committed but undisbursed cash reserves and had a relatively high level of defaults (40 percent of outstanding amounts due in respect of past loans to farmers). In order to improve this situation, the Government would combine the two overlapping systems of medium-term credit presently provided by FONADER and SODECOTON. While FONADER would assume the role as lender for this combined credit program, the scope of FONADER-s operational involvement would be reduced, and the responsibilities of SODECOTON would be broadened. FONADER-s responsibilities would include financing medium term credit, appro- ving applications submitted by SODECOTON and preparation of annual debt service payment schedules (on its normal terms of 10 percent interest for a period of up to three years) and submission of these schedules to SODECOTON for collection. SODECOTON would be responsible for selection of loan appli- cants and for recovery of debt service payments for FONADER. A condition of disbursement for medium term credit would be: (i) signature of a financing agreement between the Government and FONADER; and (ii) signature of a credit administration protocol between FONADER and SODECOTON, approved by the Bank, outlining their respective responsibilities, sharing of risks, and remunera- tion of the parties (Section 3.03 (a) of, and Para. 3 (c) of Schedule 1 to, the draft Loan Agreement, and Section 2.02 of the draft Project Agreement).  - 17 - 46. In view of the risks involved in the provision of credit for draft animals, as evidenced by past experience in Cameroon and in other countries, the credit administration protocol between FONADER and SODECOTON would also provide: (a) that FONADER would not operate a separate credit scheme for purchase of draft animals during the project period in the Center-North project area; and (b) that FONADER would recruit and post a credit officer to its Garoua branch to supervise a credit recovery section, which would have as its main task the recovery of outstanding amounts due in respect of past loans to farmers in the Northern Province for draft oxen and other items (Section 3.03 (a) of the draft Loan Agreement). 47. New credit to farmers for the puchase of draft animals would not be offered until the recovery rate for past loans had been significantly improved. Therefore a condition of disbursement for medium-term credit for purchase of draft animals would be that FONADER has reduced arrears in recovery to a level not exceeding 25 percent of the outstanding aggregate principal amount due of such credits (para. 3 (d) of Schedule 1 to the draft Loan Agreement). 48. Coordination at the provincial level between SODECOTON, FONADER and MINAGRI and other institutions involved in the project would be assured by a Project Coordinating Committee to be established under the authority of the Governor of the Northern Province. The Committee would play an important role in the direction of the project by linking the political, administrative and traditional authorities in the Province to the technical agencies respon- sible for implementation. Its terms of reference would include: (i) ensuring coordination of all agencies involved in project implementation; (ii) reviewing work programs and progress reports of project executing agencies to ensure consistency with the overall implementation plan; (iii) reviewing annual budget proposals of project executing agencies prior to their submission to the central Government; and (iv) assisting project executing agencies in maintaining the full cooperation of the local people and of their traditional and administrative leaders. The Committee would meet as and when necessary, but in any event at least once every three months. The Chairman of the Committee would be the Governor of the Northern Province. Minutes of Com- mittee meetings would be sent to the responsible Government Ministers and to the Bank for information. Since the Project Coordinating Committee will be particularly important during early stages of project implementation, its establishment with terms of reference and composition satisfactory to the Bank would be a condition of effectiveness (Sections 3.06 and 6.01 (b) of the draft Loan Agreement). 49. The project components under the direct responsibility of SODECOTON would be implemented without changing SODECOTON's existing organizational structure. SODECOTON has already demonstrated a high degree of managerial competence in successfully carrying out since 1975 a campaign to reestablish cotton production, as well as pilot actions for food crop intensification, involving about 88,000 farmers in the North. SODECOTON is also the executing agency for the agricultural components of the Northeast Benoue Project financed by FED and for the first-phase rural development and settlement project in Southeast Benoue, financed by French CCCE, which includes major components of infrastructural development.  - 18 - 50. Six additional management posts would be created within SODECOTON for implementation of the project. The Development Coordinator, Project Financial Manager, Livestock Specialist, Construction Engineer, and Roads Engineer would need to be filled with specialists from outside Cameroon for all or most of the project period and they would be responsible to the Direc- tors of existing Departments. In addition, a Cameroonian agronomist would receive management training and assist the Director of Development. 51. Total expatriate technical assistance required for project imple- mentation estimated at 62 man-years at a cost of about CFAF 20.9 million (US$100,000) per man-year (1980 prices) makes a total cost of about US$8.7 million (Bank Group US$6.8 million) including contingencies. All specialists to be hired for these positions would be required to have qualifications and experience satisfactory to the Bank. These costs are comparable to those paid in other projects in Cameroon. Project Costs 52. Total project costs, including taxes, are estimated at CFAF 15,690 million (US$74.7 million). Customs duties and identifiable taxes of CFAF 1,833 million (US$8.7 million) make up 12 percent of total cost. Thus project costs net of taxes amount to CFAF 13,857 million (US$66 million), of which foreign cost account for US$38.9 million or 59 percent. Cost esti- mates are based on end-1979 prices and include: (i) physical contingencies of 15 percent on civil works, 10 percent on operating expenses and 5 percent on all other costs except salaries, wages and technical assistance; and (ii) price contingencies compounded on the basis of 12 percent in FY80, 11 percent in FY81-82, and 10 percent thereafter for local costs; and 10.5 percent in FY80 declining to 7 percent in 1985 for foreign costs. The higher price escalation factors on local costs are based on the estimated annual inflation rate for Cameroon. Total contingencies are equivalent to 45 percent of baseline cost estimates, or 31 percent of total project costs net of incre- mental revolving fund requirements, which are calculated in current terms. Project Financing 53. A Bank loan of US$25 million, and IDA credit of SDR 9.5 million (US$12.5 million equivalent) are proposed, making a total Bank Group partici- pation of US$37.5 million. Government would contribute US$27.5 million, equivalent to 37 percent of total costs or US$18.8 million (28 percent), net of taxes. Bank Group financing would cover about 50 percent of total project costs, or 57 percent net of taxes. This is less than the estimated foreign exchange costs of the project (US$38.9 million). Government contributions would be mainly for fertilizer and pesticide subsidies (US$14 million) for part of costs of incremental seasonal inputs. Farmer contribution would amount to US$9.3 million to finance the remaining seasonal inputs (equivalent to 14 percent of project cost net of taxes). FONADER would cover out of its own resources US$0.4 million for administration of medium-term credit. SODECOTON, the project-s leading executing agency, would prefinance the project's revolving fund requirements for incremental seasonal inputs, estimated at US$23.3 million over the five year project period. SODECOTON  - 19 - has successfully borrowed short-term funds at a preferential rate, presently 8.6 percent, in the past from a consortium of local banks thereby eliminating the need for Bank Group participation in the financing of this component. 54. The proceeds of the proposed Bank Group financing (US$37.5 million) would be made available by the Government to SODECOTON and FONADER as follows: (i) US$25.3 million would be passed on by the Government to SODECOTON as a grant on the grounds that the funds would predominantly be used for rural development investments which would not generate direct revenue to SODECOTON. In line with the non-profit-making status of SODECOTON, it is expected to allocate any net profit to its reserves for reinvestment during the project implementation period; (ii) another US$9.0 million would be administered by SODECOTON and used to strengthen MINAGRI in monitoring and evaluation, field services, to strengthen the Provincial Planning Unit, to improve the agricul- tural and savannah forest research units (IRA-North), to carry out tree plant- ings (FNFP) and to purchase seed handling equipment for MIDEVIV; and (iii) the remaining US$3.2 million would be relent to FONADER for 8 years, including a 3-year grace period, at an interest rate of 5 percent per year to finance medium term credit to farmers. On-lending terms to sub-borrowers would be at FONADER's standard terms, presently three years, at an interest rate of 10 percent per year, which is close to the average recent and projected rate of inflation in Cameroon. The proposed interest spread of 5 percent would provide a sufficient margin to cover FONADER and SODECOTON costs incurred in credit handling and recovery. 55. Assurances were obtained from the Government and SODECOTON that the budgets and work programs for the project components to be executed or admini- stered by SODECOTON, MINAGRI and FONADER be sent to Government after review by the Committee four months ahead of each Government fiscal'year for submission to the Government (Section 3.02(a) of the draft Loan Agreement and Sections 2.01(c) and 2.06 of the draft Project Agreement). Since the budgets and work programs for all project components are prepared either by SODECOTON or with the assistance of its Project Financial Manager, and thereafter reviewed by the Committee before being submitted to the Ministry of Economic Affairs and Planning for inclusion in the Government's budgets, it is felt that a further review by the Bank would not be necessary. Government would make available to SODECOTON and FONADER all funds necessary to carry out the project on the basis of half-yearly advances according to their approved budgets. Such amounts would cover Government's contribution to project costs and would, in addition, prefinance all items which, under the terms of the Bank loan/credit, would be eligible for reimbursement (Sections 3.05 and 3.09 of the draft Loan Agreement). 56. The Government contribution to the operating budget of IRA-North has been cut by about 40 percent over the last two years and this needs to be restored if existing research workers are to be utilized effectively. An assurance was obtained from the Government that it would furnish all the means required to cover operating and maintenance expenses of the existing research station at Maroua and its substations (Section 4.06 of the draft Loan Agreement).  - 20 - Procurement 57. Contracts for goods estimated to cost US$100,000 or more would be awarded through international competitive bidding in accordance with Bank guidelines. Goods so purchased would be expected to total about US$6.7 million, of which the Bank Group would finance US$5.0 million, and would include purchase of vehicles, road-making and agricultural equipment. Purchases would be grouped whenever possible in order to derive maximum benefits from bulk procurement. Contracts for construction of staff housing (US$3.7 million) and of storage facilities (US$2.7 million) (Bank Group financing US$5.3 million) would be too small and geographically dispersed to attract international bidders and consequently would be awarded following locally advertised competitive bidding procedures acceptable to the Bank. Feeder roads construction would be carried out by SODECOTON on force account. Contracts for goods below US$100,000 but more than US$50,000 would be procured through local competitive bidding procedures, while those of less than $50,000 would be on the basis of quotations from not fewer than three reputable suppliers. Such contracts would aggregate about US$2.5 million (Bank Group financing US$2.1 million). Goods financed through the FONADER medium-term credit (farm equipment and draft animals) worth US$4.2 million (Bank Group financing US$3.2 million) would be procured through local commercial channels. 58. Incremental seasonal farm inputs, chiefly insecticides, fertilizer and herbicides, estimated to cost US$23.3 million, are an essential part of the project but would not be financed by the Bank. They would be prefinanced by SODECOTON through the commercial banking system, and would be procured on behalf of SODECOTON by the Buying Department of CFDT in Paris, in accordance with the established procedures authorized by the Government's national tender board, "Commission Centrale des Marches". CFDT would purchase such inputs, bulked together where practicable with purchases on behalf of other cotton producing countries, on the basis of open international bidding. These arrangements are considered satisfactory to the Bank, since they assure a timely supply of inputs to farmers, of correct specification and procured at competitive prices. Disbursement 59. The Bank Group funds (US$37 5 million) would be disbursed over about 5-1/2 years to cover 73 percent of total expenditures excluding the revolving fund component for incremental seasonal inputs amounting to US$23.3 million which would be entirely financed by the Government and farmers. The IDA Credit (US$12.5 million) would be disbursed first (Schedule 1 of the draft Loan Agreement and the draft Credit Agreement). It is expected that no claims would be made against the IBRD Loan until the fourth quarter of Bank FY83. All disbursement claims against contracts for civil works, vehicles, road-making and agricultural equipment would be fully documented. Disburse- ments against project operating costs would be made on a declining basis, starting at 90 percent in Project Years 1 and 2 and ending at 30 percent in Project Year 5, to facilitate takeover by the national budget on project completion. Full supporting documentation, showing costs incurred, would be retained for inspection by the Bank during project supervision. Disbursements for credits made by FONADER would be made against certified statements of credit disbursements, with supporting documentation retained for verification during project supervision.  - 21 - Auditing 60. SODECOTON's accounts are jointly audited by two independent auditors, one is appointed by the Government and the other by CFDT. These auditors, who are acceptable to the Bank, would be retained for auditing the project accounts. Their reports would be furnished to the Bank within four months after the close of SODECOTON-s financial year. FONADER would keep separate accounts in its Garoua branch for medium-term credit disbursed or committed under the project. These accounts would also be subject to an annual audit by an independent auditor acceptable to the Bank. The auditor's report would include an opinion on the documentation supporting the state- ments of credit disbursement upon which withdrawal applications against Bank Group funds had been made. (Section 4.02 (c) of the draft Loan Agreement, Section 4.02 of the draft Project Agreement). Taxes and Financial Returns to Government 61. Returns to Government on incremental project production would come from two principal sources: taxes on exportation of cotton lint, and the projected marketing surplus on the sale of cotton lint. These two sources of revenue would begin to exceed total costs of operating the project, including additional input subsidies by project year six. Thus the project would generate sufficient Government funds to finance continuing project activities after the end of the five-year project implementation period. Producer Pricing Policy 62. The Government's present system of producer prices for cotton and partial subsidy on agricultural inputs for cotton is satisfactory, since it offers farmers an adequate incentive to grow cotton, so long as good yields are obtained, but does not introduce an economic distortion in favor of cotton at the expense of food crops. In fact, it is only through the residual effects of cotton fertilizer, and changes in husbandry practices, that significant increases in rainfed cereal yields are presently feasible. The policy of cotton intensification also allows a given production on a much smaller area, freeing land for food crop production. Nevertheless, a gradual move toward increasing the cotton producer price in real terms, accompanied by an increase in the proportion of costs covered farmers for production inputs, would be feasible after about 1983, in view of the Bank's forecast of rising world prices for cotton. Market Prospects for Exported and Locally Marketed Crops 63. Export Crops. At full development after ten years, the project would lead to an increase in production of about 43,600 tons of seed cotton, bringing estimated total Cameroon production to about 135,000 tons in 1990, equivalent to 54,000 tons (250,000 bales) of cotton lint. The market prospects for cotton lint, the only export commodity to be produced by the project, are good. Apart from sales at the equivalent of the world market price to local textile mills (CICAM), currently amounting to about 5,000 tons per annum, cotton lint output would be sold on world markets. The existing  - 22 - cotton marketing system operated by SODECOTON is efficient. To ensure that the project would not suffer from any changes in the present system, assurances have been obtained from the Government that appropriate marketing arrangements for cotton and its by products will be maintained (Section 4.04 of the draft Loan Agreement). 64. SODECOTON owns and operates four cotton ginneries in the project area. Production of seed cotton, however, is expected to exceed the existing ginning capacity around 1982/83. Therefore, assurances were obtained from the Government that it would provide SODECOTON with all the necessary means to construct additional ginneries sufficient for the entire cotton production in the Northern Province (Section 4.03 of the draft Loan Agreement). 65. Locally Marketed Crops. Annual sorghum and millet production for the Northern Province is estimated at 360,000 tons, accounting for about 85 percent of total cereal consumption. Of this production, only 10-15 percent is marketed, the bulk being consumed on the farm. Additional consumption needs by 1990 are estimated at 40,000 tons, so that incremental project production by that year (28,000 tons) would be a major factor in maintaining present nutritional levels. Assuming on-farm consumption remains constant, marketable surpluses would increase by 21,000 tons after five years and by 27,000 tons at full production after ten years, thus helping to supply the needs of faster growing urban populations. After ten years, project incremental groundnut production of 9,000 tons, together with increases elsewhere in the province, should bring total incremental produc- tion to about 15,000 tons, which is in line with estimates of increased demand in the Northern Province alone. However, the proportion of the incremental production marketed is expected to rise from 33 percent to 50 percent in response to expanded urban demand. The existing marketing systems with improvement of market places undertaken under the proposed project will be able to absorb the increase in food crop production. Project Benefits 62. The on-going program of intensification of cotton production in the project area already includes 74,000 farms or 36 percent of the 207,000 farms in the area. SODECOTON is expected to be able to reach about 15,000 additional farms each year, so that after five years it would have enabled a total of about 150,000 farms in the project area to raise their productivity. About 75 percent of participating farm families would be expected to grow cotton, and about 25 percent to grow groundnuts, as their principal cash crop. All participating farmers would be encouraged to use improved methods of cultivation of sorghum, their staple food crop. At full development after ten years, the project would directly benefit some 163,000 farm families, 55 percent of whom are not currently reached by extension srvices and are in the absolute poverty group, with average annual incomes of US$259 per family or about US$55 per capita (1978). With an estimated labor input of 168 days per year per farm family, the return per man-day worked in traditional agricultural activities on unimproved farms averages CFAF 325 or US$1.55. The adoption of intensification for cotton and maize, and of improved techniques for groundnuts and sorghum, would involve increased employment of  - 23 - family labor and would result in an increase in the net annual income per farm participating in the project of CFAF 19,000 or 35 percent without cotton, of CFAF 27,000 or 50 percent with cotton, and of CFAF 34,000 or 62 percent with cotton and maize as cash crops, using purely manual cultivation. Using ox-drawn cultivation, the net annual income per farm (after repayment of loans) would increase by CFAF 52,000 or 96 percent with cotton and by CFAF 56,000 or 104 percent with cotton and maize. The net return per man-day under the improved farming systems would increase from CFAF 325 to CFAF 393 or by 21 percent with manual cultivation, and to CFAF 420 or by 29 percent with ox-drawn cultivation. Family labor of about 45 man-days equivalent per month is adequate for the average small farm and in general labor shortages would not be encountered either at planting or at harvest. 67. In general there are sufficient supplies of basic foods in the project area. However, urban food demand in the province is expected to grow at around 8 percent per year and to provide the opportunity to further improve farm incomes through increased foodcrop production. The project at full development after ten years would have resulted in an increased annual production of about 37,000 tons of cotton, 28,000 tons of rainfed sorghum, 9,000 tons of decorticated groundnuts and 13,000 tons of maize, some of which would be available for export out of the region. A modest increase in beef production is also expected. 68. Other project benefits would be the strengthening of institu- tions for planning, coordinating, and monitoring rural development; and the strengthening of agricultural and forestry research work in the Northern Province; and a beneficial effect on the environment from proposed fuelwood plantations, which would reduce the cutting of natural woodland and farm trees. 69. Rate of Return. The full development level of farm improvement (163,000 farm families) would be reached after ten years. Costs and benefits have each been estimated over a 15-year period, corresponding to the expected life-span of project investments. However, all benefits have been lagged by one year, to reflect the time interval between procurement of inputs by SODECOTON, for example, and receipts from sale of agricultural products. 70. The economic rate of return calculated on the above basic assump- tions is 34 percent including only direct benefits consisting of estimated increases in production of cotton, foodcrops and meat, or 40 percent if additional road benefits derived from existing and non-project related traffic (user-cost savings) are included. The high rate of return obtained, despite the inclusion of costs for several non-directly productive components, is explained by the fact that: (a) The project would be executed by an already established and compe- tent organization, so that investment made by the project would be small relative to that made by the ongoing cotton program; and (b) The Bank world price forecasts for cotton lint, the main quantifi- able output of the project, are favorable, showing an increase in  - 24 - the calculated economic value at farmgate level of 54 percent between 1980 and 1990 (from CFAF 86.5 to 133 per kg of seed cotton) in real terms. Project Risks 71. The proposed project has a management risk, affecting project implementation since the project will involve SODECOTON, MINAGRI, FONADER and other agencies. To reduce this risk the Project Coordinating Committee, represented by these agencies and chaired by the Governor of the Northern Province, will be established to secure a strong political and traditional impetus in support of project activities. This risk would also be alleviated through the provision of technical assistance for project management, moni- toring and coordination. 72. Accomplishment of the project's production targets is subject to normal risks associated with agriculture. However, expected increases in foodcrop production under the project would essentially result from an integration of food and cash crop farming methods and would not rely on highly input-intensive systems which might expose farmers to unacceptable risks. The applied agricultural research, field trials, extension staff training and market infrastructure components of the project are all designed to avoid an over-emphasis on the cotton program while improving foodcrop production. Moreover, since the agronomic bases for project proposals have all been successfully tried in the area over the last 4 years, the risks associated with the introduction of technically innovative production packages would be small. On the other hand, climatic hazards in the Sahelian zone are perennial and the cumulative effect of a series of bad seasons can be long- lasting. However, the likelihood of about 20 percent of both cotton and foodcrop harvests being severely affected by drought (or other calamities) has been included in the average yield figures upon which project output forecasts are based. PART V - LEGAL INSTRUMENTS AND AUTHORITY 73. The draft Loan Agreement between the United Republic of Cameroon and the Bank, the draft Development Credit Agreement between the United Republic of Cameroon and the Association, the draft Project Agreement between the Bank, the Association and SODECOTON, the Report of the Committee provided for in Article III, Section 4 (iii) of the Articles of Agreement of the Bank and the Recommendation of the Committee provided for in Article V Section 1 (d) of the Articles of Agreement of the Association are being distributed to the Executive Directors separately. 74. Special conditions of the project are listed in Section III of Annex III. 75. Special conditions of loan and credit effectiveness (Section 6.01 of the draft Loan Agreement) would be that:  - 25 - (a) a coordinating committee for the project (PCC) had been established with terms of reference, and composition satisfactory to the Bank; and (b) a satisfactory Financing Agreement had been signed between Govern- ment and SODECOTON determining SODECOTON-s responsibilities for implementation of the project and the channelling of project funds, including pre-financing and reimbursement arrangements. 76. Conditions of disbursement would be: (a) for vehicles and offices for MINAGRI, that a plan for reorganizing agricultural extension in the Northern Province had been satisfac- torily carried out; and (b) for medium-term credit to farmers for purchase of draft oxen and agricultural equipment that: (i) a satisfactory Financing Agreement had been signed between the Government and FONADER; (ii) a satisfactory Credit Administration Protocol had been signed between SODECOTON and FONADER; and (iii) (for draft oxen credit only) FONADER had reduced arrears in recovery in the project area to less than 25 percent of the aggregate principal amount due. 77. I am satisfied that the proposed loan and credit would comply with the Articles of Agreement of the Bank and the Association. PART VI - RECOMMENDATION 78. I recommend that the Executive Directors approve the proposed loan and credit. Robert S. McNamara President Attachments October 29, 1980  - 26 - ANNEX I TABLE 3A Page 1 of 6 pages CAMEROON - SOCIAL INDICATORS DATA SHEET CAMEROON REFERENCE GROUPS (WEIGHTED AVEGES LAND AREA (THOUSAND SQ. KM.) - MOST RECENT ESTIMATE)A TOTAL 475.4 AGRICULTURAL 156.8 MOST RECENT MIDDLE INCOME MIDDLE INCOME 1960 /b 1970 /b ESTIMATE /b AFRICA SOUTH OF SAHARA LATIN AMERICA & CARIBBEAN GNP PER CAPITA (US$) 130.0 250.0 460.0/c 726.2 1384.1 ENERGY CONSUMPTION PER CAPITA (KILOGRAMS OF COAL EQUIVALENT) 55.0 91.0 119.0 699.4 1055.9 POPULATION AND VITAL STATISTICS POPULATION, MID-YEAR (MILLIONS) 5.7 6.8 8.1 URBAN POPULATION (PERCENT OF TOTAL) 13.9 20.3 31.6 28.9 63.4 POPULATION PROJECTIONS POPULATION IN YEAR 2000 (MILLIONS) 13.0 STATIONARY POPULATION (MILLIONS) 31.0 YEAR STATIONARY POPULATION IS REACHED 2135 POPULATION DENSITY PER SQ. K1. 12.0 14.0 17.0 61.7 28.1 PER SQ. EN. AGRICULTURAL LAND 36.0 44.0 52.0 126.0 81.7 POPULATION ACE STRUCTURE (PERCENT) 0-14 YRS. 40.7 41.3 41.3 45.5 41.4 15-64 YRS. 57.0 55.7 54.6 51.6 54.7 65 YRS. AND ABOVE 2.3 3.0 4.1 2.8 3.9 POPULATION GROWTH RATE (PERCENT) TOTAL 1.4 1.8 2.2 2.7 2.7 URBAN .. 5.6 8.0 4.9 4.1 CRUDE BIRTH RATE (PER THOUSAND) 43.0 42.0 42.0 46.8 34.8 CRUDE DEATH RATE (PER THOUSAND) 27.0 22.0 19.0 16.4 8.9 GROSS REPRODUCTION RATE 2.3/d 2.7 2.8 3.2 2.5 FAMILY PLANNING ACCEPTORS, ANNUAL (THOUSANDS) .. .. USERS (PERCENT OP MARRIED WOMEN) .. .. FOOD AND NUTRITION INDEX OF FOOD PRODUCTION PER CAPITA (1969-71-100) 89.0 101.0 112.0 94.0 106.9 PER CAPITA SUPPLY OF CALORIES (PERCENT OF REQUIREMENTS) 80.0 89.0 89.0 92.7 107.4 PROTEINS (GRAMS PER DAY) 43.0 51.0 51.0 53.0 65.6 OF WHICH ANIMAL AND PULSE 11.0 13.0 15.0 15.6 33.7 CHILD (AGES 1-4) MORTALITY RATE 40.0 32.0 27.0 21.3 8.4 HEALTH LIFE EXPECTANCY AT BIRTH (YEARS) 37.0 42.0 46.0 50.1 63.1 INFANT MORTALITY RATE (PER THOUSAND) 167.0e .. .. .. 66.5 ACCESS TO SAFE WATER (PERCENT OF POPULATION) TOTAL .. .. 26.0 31.0 65.9 URBAN .. .. 35.0 66.8 80.4 RURAL *- *- 22.0 .. 44.0 ACCESS TO EXCRETA DISPOSAL (PERCENT OF POPULATION) TOTAL .. .. .. .. 62.3 URBAN .. .. .. .. 79.4 RURAL .. .. .. .. 29.6 POPULATION PER PHYSICIAN 40192.0/f 30138.0 16509.0 14508.2 1849.2 POPULATION PER NURSING PERSON 6151.0/f 2870.0 2229.0 3279.5 1227.5 POPULATION PER HOSPITAL BED TOTAL 524.0jf 563.0 370.0 1141.5 480.3 URBAN 329.0f 302.0 RURAL 579.0OA 722.0 ADMISSIONS PER HOSPITAL BED .. .. HOUS ING AVERAGE SIZE OF HOUSEHOLD TOTAL .. .. 5.2 URBAN .. .. 5.1 RURAL .. .. 5.2 AVERAGE NUMBER OF PERSONS PER ROOM TOTAL .. .. URBAN .. .. RURAL .. .. ACCESS TO ELECTRICITY (PERCENT OF DWELLINGS) TOTAL .. .. 6.7 URBAN .. .. 22.6 RURAL 0.5  - 27 - ANNEX I TABLE 3A Page 2 of 6 pages CAMEROON - SOCIAL INDICATORS DATA SHEET CAMEROON REFERENCE GROUPS (WEIGHTED AVEGES - MOST RECENT ESTIMATE) - MOST RECENT MIDDLE INCOME MIDDLE INCOME 1960 /b 1970 lb ESTIMATE /b AFRICA SOUTH OF SAHARA LATIN AMEPICA & CARIBBEAN EDUCATION ADJUSTED ENROLLMENT RATIOS PRIMARY: TOTAL 65.0 107.0 119.0 61.7 99.7 MALE 87.0 124.0 132.0 69.2 101.0 FEMALE 43.0 91.0 106.0 51.4 99.4 SECONDARY: TOTAL 2.0 9.0 17.0 20.6 34.4 MALE 4.0 13.0 23.0 29.2 33.5 FEMALE 1.0 5.0 11.0 14.7 34.7 VOCATIONAL ENROL. (B OF SECONDARY) 23.0 23.0 23.0 7.0 38.2 PUPIL-TEACHER RATIO PRIMARY .. 48.0 51.0 36.6 30.5 SECONDARY .. 24.0 23.0 24.3 14.5 ADULT LITERACY RATE (PERCENT) 19.0 12.0 .. .. 76.3 CONSUMPTION PASSENGER CARS PER THOUSAND POPULATION 3.0 6.0 7.7 38.8 43.0 RADIO RECEIVERS PER THOUSAND POPULATION 7.7 36.0 96.0 83.5 245.3 TV RECEIVERS PER THOUSAND POPULATION .. .. .. .. 84.2 NEWSPAPER ("DAILY GENERAL INTEREST") CIRCULATION PER THOUSAND POPULATION 2.0 3.0 3.9 24.2 63.3 CINEMA ANNUAL ATTENDANCE PER CAPITA 0.1 .. 1.0 0.7 LABOR FORCE TOTAL LABOR FORCE (THOUSANDS) 2907.0 3299.2 3662.3 FEMALE (PERCENT) .. .. 41.0 38.1 22.2 AGRICULTURE (PERCENT) 87.0 85.0 82.0 54.3 37.1 INDUSTRY (PERCENT) 5.0 6.0 7.0 17,8 23.5 PARTICIPATION RATE (PERCENT) TOTAL 39.3 37.8 35.7 38.8 31.5 MALE .. .. 45.6 48.4 48.9 FEMALE .. .. 26.9 29.4 14.0 ECONOMIC DEPENDENCY RATIO 0.8 0.9 1.0 1.3 1.4 INCOME DISTRIBUTION PERCENT OF PRIVATE INCOME RECEIVED BY HIGHEST 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 (US$ PER CAPITA) URBAN .. .. 238.0 RURAL .. .. 105.0 .. 190.8 ESTIMATED RELATIVE POVERTY INCOME LEVEL (US$ PER CAPITA) URBAN .. .. .. .. 474.0 RURAL .. .. .. .. 332.5 ESTIMATED POPULATION BELOW ABSOLUTE POVERTY INCOME LEVEL (PERCENT) URBAN .. .. 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 1974 and 1978. /c Fiscal year July-June; /d West Cameroon only; /e 1960-65; /f 1962, including ex-South Cameroon under British administration. April, 1980  -28- ANNEX I DEFlNITIONi OF SOCIAL INDICATORS Page 3 of 6 pages Notes: Alh-ugh the data are druon frou sources ger-e-oly judged the most a-thi-t-etine and re_iab:e, in s-o.id u- ha noted chut they can not ne-O. tet- nationally comparable because of the lack of stan.dardiced deflnitions and concepts used by different countries In coI ltlo-ng the data. The data are, none- thelesn, useful to descrltbe _edeta ot nagPitdde, indibate trends, and oharacterize cartatnmaor differrncen hetowee The -eference groups are (1) the sane country gronp of rte nab err coutry and (2) a eontry grcap nict na-ehtt htgignr onerage income than the cousnry group of the subiect coumnty (enept foe 'Capiata Surplas 011 Enpcorers' group -here "Middle Ino.mo North Afrtca and iddle taste Is chosen because of soelo-oul tarai offinities) In the reference group data the averag-s ore ppula tnin oe ihted a ithhetii teans for ea tdindlcator and shown onlp shtn at least half of the caounties in a group baa data far then indtcator. Sinteebeonerage of countries among the indicators depends on the asilability of dat and is no uniforn, caution nat hr enercised in relating a -erages of one - ndlnno-. no another. fT,se areraens se onny onefol in comraring the valur of one indicnatr at a ti=s among the country ant reference group. LAND AREf (thossand sq.kc.) Cq--ularii'cet Hc ca- 'ofu.anun crooned t nrnb t croctotung ph,- Tbtan - Iotat surface area comprising laud area and inland yaters. ticiuni <,u: -d not u otodld ochwoc tnc mude. Agrioultural - Estieate at agrirulearur area used reaporutnly or permanently Pupult-n per Nrsing Peosoc - hopodation di-ided by nchbe, of practicing ftr crops, pastures, narkot and kilchen garde-n cr no lie falloc; 1971 deta. nub and ieale gradustt cnuea, p,actidal -n-ses and P aIisrant nursns. GNP PER CAPITA (SO)) - GNP per cnpita esriton at currna narkee prices, cal- urha,s and nut al) divided r r -h-e respocnitueber o hospisal heAt oulated bh sane tannersion=ehod as Acrid bunk dean (1576-TA banis); 1960, anailsble In public and pri-ate _ereral and apeotelined hbspial andIre- 1970, ann i97f dana. habilitatitonn eern. Htspitals are establish=enta per=anently staffed by at least one physictat. ttnahiish=erts prn-idisg prliiprtilycustaditl ENERGY CONSMDPTION PER CAPITA - Annual consu=peio o connercial energy (coal rare are non included. Rurai hosptnais, btwever, oinlude health and medical and litnite, petreleu=, natural gas and hydren-, n-clear and geetbar,sal eDen- ceneect not permanently staffed ho a phystcian fhut hr a =edical ssistant. ttrienit in kiogrsms at coal equivalent pee capita: 1960, 1970, and 1978 nurte, nidnife, etr-) whlch affer in-patient acoat,odat I.n ann pronide , data. lmiited range of =edical facilities. cot stattaieal purposes urban hospi- talstInc'udektMOs principal inneraul andnspecialized hosyitsls, and rural POPULATION AND VITAL STATISTICS ,ospitelo local nruro hI .pi.rain and nodical end m,aternttn centers. - Total P-pulation., Mid-Tear (illiAna1 - An of Juty 1: 19h0, 1970, and 157d Adniussiorn oer Hosnisal ed - Total nunher of odntslions to or di-therge- date. from hosp itals d inided hy thwe canter of heds. Urban Populaiton (percent af tonal) - catic of urban en total poynlonion; different deitnotians of orbon areas at affect caaparabiiiry of da.a HOUSING uong oauntrins; 1960, i970, and 197) data. Average Sloe at enunehold (rernons pee houmehold) total, urban, sad i l- Populatioe Peoleotians A houmehoid nnnsists of a group of individuols sho shar lining quarters Poulation tin near 2000 - Current popalotini projecti-nn are baaed an 1980 -nd their -ain trals- A hoarder or lodger soy or nay not be itoluded In total popalatita by age and _ru and the,ir enralit and fert ility ratrs. the housthold fortrastistical curposts. Projeotian paramieters far mortality eaten totprise of nhree lerels astor Averagn nubrb of persans per roon- total, urban, and rural - Aierage tun- ing lf eei peenany an birth inoreastogwith country'a per capita in_o_e bhr nf persons pen eoca 1,, all unbal, and rurul occupied conventional lenel, and femaile life exopecancy stebilising at 77,5 yaeas. The pars- dAsetlings, respotnively. OrlltIngs exclude non-pottanens struturnes and neners for fertlitty rate also lbane three Renels assuring dlcline in uno. pted P ferstilitp oounrdiog to 100cr level oud past tautly planning perforcance. access to tletrtciin (percent of d-llings) - tPtl , urban, -nd rural - tchountry is then assigned one of these tine toahinatlons of mortaity Con-entional dwellitgs oith elrctricity in liing quAreern an ptrtenragn and fertility trends for projection purposes. nf iotal, urhan, and rural dwellinganrespectnivey. Stani.narn paoatseion - In a sotaiona-y popul aton there is no growth strut the birth rote is equal no the death rant, and also ens age struonure re- EDOCATIOH n_insuconstoot. Tbhis is auhiened cohnl after fectility tates denline to Adjuted tnrotlmoen Ratios tis replacetunt level" o uninec reprnductionrare,wheneah nenerOat Pri=arvnchool-total,maleand fet-Gross-tota, =al tand eula of wo=en repl aoen utself exacrtly. Thtnststinnary population sire was nnrollment of nIl ages an the pri=ary iroel as percentages of respectine esti=atnd on the hasis of tile drojocted cdlaraotetlu tIcs nf the papulatioc prinary snhcol-age popalatitons; nor=a lly includes childrten aged 6-11 on the yrar 2OOt, and rhe race of decline of fertiy raten r repace- y earn but sdusted for different lengtht of prtoarn edueationi for ment Il..net.. tonni e nith a,noersal ed._nio rnreileent say rooned O percen Year stat -onls popAlation in reacted - The pear ohee art ionary population sinto none Ppli7S are heP G or agb v the offi tiol school age p iee hba bean r-acred. Stcondayn -hotol - total, male and foale - Co=puted am sbone; .e.n.dary Population De.sity tducntio requires at leost fo-r years of approned primary inetruetion; Per sq. kA. - Mid-year populanico per square kilonotor (IOO hnecnten) of provides general, vocatioosl, nr trather tratnimg instruntions for pupif nasal oOe. sully of ITto 17 y-ar nf 1og; nor-enpond.eno coresae gt-rsty Per o, A. agrioultural hood - Compoted .s abuts for agricultural land ena oded. only. Vocational enroilnot (percent nf secondarY) - Vocational institutilot Population Ago Ser.urune (oercene) - Children (0-14 years), -orking-age (10- itclude technical, i=dustrial, cr other programs shich operate nldepen- h4 yeart), sod retired (65 yours sod over) as peecentages at rid-year ppu- dently or an drpartnents of seonodary itnsitution-. laitno; 1960, 1970, and 1978 dana. Pupul-teacherratio - prieary, and se.onddry - Total students enr..led in Poeulation trooth fate (p-erent) - tonal - Annual grut h -rtes of total mid- poimry and secondary lenels divided by numbers of teacher-in the year populations for 1950-60, 19Sf-hf, i960-7i, and n9Tf-75. coreponding _oris Popalation trooth Rate (percent) - orban -Anual growth rates of arban popu- Adn7t 1itetraY rate (percent) - Literate adults (sble no read and orite) 1attons too 1950-60, 196g-7f, and 1910-7f. assper.notage of tetD1 adalt populstion agrd 15 yesos and _ver. Crade Mirth Rfte (perr thussnd) - Atnnal line births per thousand if =id-yesr population; 1960, 1970, and 1978 dana. CYSUHMPTION Crude Deth Rate (pfe th uss.df - Anousl deaths per tho a d of id-ynar Passngsr Cur (per thouandbeopslin.n - Passeuger ars cumpria manor population; 1960, 1970, and I97M data,.s _=a soaning Less than eit" b persons; -) luds mbulanes, herses and Grass Reproductiao Rata-Average number of daughters a ooan oill beae un milltory -hicl- her normal reproductine periad if she expertences present age-specific fer- Radio Rectiners (per tbhasand populatior) - All types of recainars for radi ellity rates; usually fine-your uayrageseoding in 1960, 19ff, and 1977, broad asts lo general public per thousand of popuiation; encludes unli- FPt.ily Plaoning-A..e.tors, Annual (thoousnds) - Annual number of a-ceptors tensed tceietrs in countries ond in pecre nben regiseratiom of rodeo seb nf birth-oontrol devicet under auspices of ostionat family plaoning pr-gran. ass in effet: d recntYea FP,iln Pianningo -sers (pec_ent of _arried wanen) - P_rcentage of =trried bwasne abolisheda ife Petings *o=en af child-beariog ego (15-Ak years) cho our birth-conicni denices to IS fntesain s (per thousan p o) - TV i On b. s t ali .areind .onen in sa_e age group. general public per thousand p-palatio;tn ludes unlic .ned TV receivers POOD AND NUiTRITION inaona ries and Do years wne n egistratlan of CT' stes wse in ef_ ect. Indeo of Food Prod-ction par Capita (1169-71=10) - Index of per capita annual S';ouofe_ Circulaeio (oat thousn spopiaon -eihnd th aPiedicag irob- aodction of all foodr ob_ditiesp Product:oncecladessed andteedand n prod ~~~~~lln-tion d-tondpnimeilytoePrdn geeaow eDnoiderd is on nalendar year basin. CPtt oditiescovr prinary goods (e.g. saggorcn no he "daily" Iit "Pp akt leastdfou setawnek. instead of sugar) whinh aro edible and connate unuriens (e.g. noffee and Cion- Annual Atendanne pee Caita pen Year - Bssed on the number ot tea are eoncluded) . Aggregate production of oath country is based 00 nih- sold during the di-ii.e.. nationtl avNeage producer print weights: 1961-h5, 1970 and 1979 dana. and sold duins t Per -apita supl of ualories (peren.t at requtreennts) - Compared from energy equi-ule-t of net fond supplies av.ilable in cunotry per uapita LAigR PFRCE per day. Aailable supplies -onpriso dosnaic production, timppcta lest Total Labor Forno (fhousandI) - Etonoomially scums peostns, including exports, and changes it snauk. Net sopplies nunidoal teed, seeds, armed foruns and unemployed but oxnlading housewinet, students, retr. qme=tnos usetiad I food cuy i - an g uises in dDinttrobatin Requi- Dtfinitionsinovariousncuntries are non nomparahlri 1960, 1970 atd menes onto eon mated ho PiG bate~~dPon phnicinl -a eds fur norma ac- 1979 d.la city and hea'th uonsidering eon-conmental compecature, body weights, ago porale (Fencent) - Fnm.le laboe force on pt..ereage .f total labot fame. and se- dour ibotion of popiation, and alloving iC perunen for -anto st household laol:; 1961-65, 1970, and 1977 data. fithiog an petcennags f notol i bnr tom; 190 r97f anting dat Per capita supplb of protein (gra-s perday) - Protein -ntennt of per capita Indu-try (peroene- - labor farce in =iniog, construction mamufainunita -nt supply of food par day. Ntt s_pply of food is defined as ahove. Re- an ecici v oanr and gas as lerumniage of total labor force; 1960. ia_retrnio fur all couneries established bh U5DA p-onide for yini.u= 1971and 7 ada Ptta, e ailowane of 63 gra=s of total prctein per doy end b grams of nimaal and Pareiairldon Rane (portent) - tonei, maIn, and fomole - Pariticpatlao or pulse protein, of which 10 gruct snould be Inimal pro_e_n. Chese stand- antivity rates aro co=puted an natal, male, and fe=ale labor force as ards are Iower than thos- of 75grams o tocal prgnsln and 13 gras of -er-entaget of total. male atd female populatio of oil aget respectively; sinial protein an an average for thIe orld, propound by PAO iu the Third l96T, i97f, aod 1970 data. These ate -IOn p-otlulpnttottatesrefle-ting Acrid road Surnny, 1961-h5, 197f and 1911 data.ag t sc n th - en long r Pee orlda roteun suny trot anol and p-ule-Prota supply of fo d de- magtese asr - t pp n, P g ti= rnd. A ft si- rivd from esitals and pulsos i grams per day 1961-6b, 970 and 1917 daa- . =al e i - Rti. of p i d 15 d 65 d Child (ages 1-4) Ourtaliy Rnote (pcr tlousand) - Annusl deaths per thoiusnd i0 the oto1 .bahr foro.. age group 1-4 yease, no nhildren it this age group; for =ont dtvelop ingucon- tries data denied iros life tablet; 196f, 1910 ani 1977 dunn. INCOKE DISTRIBUTION Percentage of Prinate lorome (both in -snh and kind) - Received hy roinest HEALTH 5 pertent i,r h- 0p-=-,1pr l a..d pooes _40percen life Etoennancy at Birth (yeArs)I -Avrnagenunbrr o: yesr of litfe re=aining h poe. e r n u dr at birth; ly6C. 19t0 and 1978 dta,. Infant Hortaitny ease (rn thbosar.d) - Antroal do-hs of infonts undor one year POVERTY TARGET GROUPS of age per bthetand iot bortbs -isttE atad Abh-'lte Pountn lDonin (aiS net isvt- -urban a rural - Nuber of people (total, urban, and rural) with reasonable across to oafe nntrietonalln atequate diet plus essential not-food reqotre=eots in tot mater mupply f(ncludes treated so surfe ..er. on untreeted but mnaonaslnaned affordable, nater sunh as that from protected bhreoles-, springs, snd sanitary wells) as Estimated tReanive Poverty Income Levnl CDI cocapita) - urban and rural - porcentages of beir renpectivo populsti.ons In an urban area a pIb"li Rural reistove poverev inone leoot is one-third af anerage par tapITa fountain or staodpust located nont mart nfan TO motors ir- a house mup bh perronal income of tho country. Crban loon is derived froe the rural -onsidered as bhing within reaonabshe access cf than houso. In rural area. lie0f oith adjustment Far higher cost of liineg in -rbae areas- o ..sonable a_erss ould imply that the hounevife or memberr nf the tousrhnlc Cotlmtted Population Erlom Absolute Ponertr In eeLennl lerces -ubt do not hane no spend a dimproportionate punt of tho day in fetching tho and erol - Percent of population (orbam and rural) who aee "absolute poor". family'sn saner nneds. AccessatnouEreta Disposalnnorntntncf on ulanion-tonad, urban. and rmal - Yuaber of people (total, urban, and rural) snroed by noureno disponsal as percentages of theirrespectivor populations. - Coert dis- Ptono=ic and Sonial Dlat Division posol eay include the colleAciot and disposul , vith no ounbuuutreaemeon iconomlo Analysis and P-o)entione eDeptent of bu=tan ecceena and saten-woter hby uater-bnroor nysnru or th.e ute of . Aoril, 1990 yin prinies ond si=ilar intrallaotions.-  - 29 A~~~~~~~~~~.NNEX I 29-Page 4 of 6 pages Population : 8.3 million (mid-1979) GNP Per Capita: US$559 (1979) CAMEROON - ECONOMIC INDICATORS /a Amount Annual Growth Rates (%) Indicator (million US$ at current prices) Actual Projected 1979 1975 1976 1977 1978 1979/-. 1980 1981 1982 1983 1984 NATIONAL ACCOUNTS Gross domestic products/b 5,321 - 1.7 5.7 7.9 6.7 8.5 5.8 5.9 5.9 5.9 5.9 Agriculture 1,720 1.2 1.3 1.3 4.7 6.o 4.5 4.5 4.5 4.5 4.5 Industry 891 3.0 13.2 14.8 2.8 10.0 7.9 8.o 8.0 8.o 8.o Services 2,710 - 5.0 5.1 10.4 10.4 9.6 6.o 6.o 6.o 6.o 6.o Consumption 4,260 - 1.8 7.6 11.7 5.4 8.7 4.6 4.8 .8 5.9 7.3 Gross investment 1,203 17.5 - 5.2 29.3 26.2 14.1 12.5 5.5 6.1 1.4 4.9 Exports of GNFS 1,237 -10.2 15.8 -15.1 10.1 2.5 25.4 11.6 8.a 6.7 3.5 Imparts of GNFS 1,483 4.1 3.0 14.6 i6.8 7.7 21.8 7.2 - 3.8 2.7 6.4 Gross national savings 908 .8 -10.6 - 9.7 34.4 - .3 - - - - PRICES GDF deflator Exchange rate Share of GDP at Market Prices (%) Average Annual Increase (%) (at current prices) L/ (at constant 1975-77 prices) 1965 1970 1975 1980 1985 1990 1965-70 1970-75 1975-80 1980-85 1985-90 Gross domestic Droduct 100.0 100.0 100.0 100.0 100.0 100.0 64.5 4.8 7.2 5.9 6.0 Agriculture 35.2 36.4 35.3 30.1 28.2 26.2 5.3 3.9 3.7 4.5 4.5 Industry 14.6 14.8 14.8 16.8 18.5 20.3 5.6 3.8 9.3 8.0 8.0 Services 50.2 48.8 49.9 53.1 53.3 53.4 3.7 5.7 8.8 6.0 6.o Consumption 87.2 80.5 84.9 32.3 79.9 84.8 4.3 3.4 7.8 5.1 7.2 Gross investment 13.4 17.0 21.5 27.3 25.8 25.1 .8 7.0 15.5 4.5 5.3 Exoorts GNFS 25.4 28.7 24.3 25.5 26.1 22.2 4.8 3.0 4.7 6.4 2.5 ImoDrts GNFS 26.0 26.1 27.4 35.1 31.8 32.1 3.7 .8 12.3 3.3 6.1 Gross national savings 11.1 19.2 14.6 15.7 18.8 13.8 9.9 10.8 - - - As ol f GDP fi ~~~~~1961 1970 1975 PUBLIC FINANCE Carrent revenues 11.4 15.5 14.4 Current expenditures . 11.9 12.9 12.2 aurplus (+) or deficit (-) .5 2.6 2.2 Capital expenditure - 1.7 1.4 Foreign financing n.a. n.a. - 1069-70 1970-75 1975-80 1980-85 1985-90 CTHER INDICATORS GNP growth rate (%) 4.1 4.3 7.2 6.1 6.o GNP per capita growth rate (%) 2.3 2.2 4.7 3.5 3.5 Energy consumption growth rate (%) 4.o 4.o 10.2 5.9 6.o ICOR 3 9 d 4.8 3.2 4.5 4.3 Marginal savings rate .2 Zd .4 .1 .4 .03 Import elasticity .8 .2 1.8 .6 1.0 /a Fiscal year (July-June) data. At market prices: components are also expressed at market prices; fiscal year (July-June) data. c Projected years at constant prices. Z 1965-70. / Estimate. October 15, 1980  - 30 - AM=E I g of 6 pageo P ulation 8.3 million (mid-1979) Per Capita: UE$559 (1979) CAIUOON - ETZ!UAL TRADE Asount ' JNWfl MOes B j Indicator (million Us$ at (at constant 197I -77 prioes) current prices) Actual Prolactsd 1979 1973* 1976 i977 1978 1 1980 1981 1982 1983 1984 XTMZRNAL TRADE Merchandise exports 918 *14.8 U1.0 -12.2 11.3 - 1.7 33.1 13.0 8.7 6.8 2.9 Primary 886 -14.5 10.7 -12.8 12.6 - 1.3 34.6 13.3 8.8 6.9 2.8 Manufactures 32 -20.0 17.3 1.1 -13.5 -12.2 8.9 2.0 4.0 5.6 5.4 Merchandise imports i,156 22.5 - 8.5 23.8 19.6 14.9 25.5 7.6 - 5.2 2.4 6.7 Food 78 - 3.4 2.4 19.3 8.5 - 1.0 1.8 1.9 ,1 2.4 3.0 Petroleum 102 31.2 -23.7 46.6 22.6 12.0 12.2 9.2 -70.2 - 5.7 5.- Machinery and equipment 363 52.3 3.0 21.0 33.2 4.1 11.5 5.3 6.o .9 4.7 Others 613 13.9 - 8.5 24.0 12.8 19.1 8.3 7.7 ' 7.4 7.8 8.1 PRICES Ex,)ort price index 149.6 16.3 - 5.3 63.5 6.4 6.o 23.5 7.7 6.7 12.2 9.5 Import parice index 119.9 29.0 7.5 11.0 4.0 5.3 15.9 13.6 4.4 7.1 7.5 Terms of trade index 124.8 - 9.8 -12.0 47.3 2.3 .7 6.6 - 5.2 2.2 4.7 1.8 Composition of Merchandise Trade (%) Average Annual Increase (%) (at currmnt ortcea) (at consatnt 1975-77 trices) 1ges _- 1