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Report No. P-1904-CM

REPORT AND RECOMMENDATION

OF THE

PRESIDENT OF THE

INTERNATIONAL DEVELOPMENT ASSOCIATION

TO THE

EXECUTIVE DIRECTORS

ON A

PROPOSED CREDIT

TO THE

UNITED REPUBLIC OF CAMEROON

FOR THE PLAINE DES M'BO

RURAL DEVELOPMENT PROJECT

December 9, 1976

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CAMEROON

PLAINE DES M'BO RURAL DEVELOPMENT PROJECT

CURRENCY EQUIVALENTS

CURRENCY UNIT CFA Franc (CFAF)

US$ 1 = CFAF 245 1/

CFAF 1,000 = US$ 4.1

CFAF 1,000,000 = US$ 4,082

1/ Floating exchange rate.

ABBREVIATIONS

Caisse Centrale: Caisse Centrale de Cooperation Economique (France)SODERIM Societe de Developpement de la Riziculture dans la

Plaine des M'BoMission de Mission de Developpement de la Riziculture dans laDeveloppement: Plaine des M'BoIRAF : Institut de Recherche Agronomique et Forestiere

FISCAL YEAR

July 1 to June 30

INTERNATIONAL DEVELOPMENT ASSOCIATION FOR OFFICIAL USE ONLY

REPORT AND RECOMMENDATION OF THE PRESIDENTTO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE

UNITED REPUBLIC OF CAMEROONFOR THE PLAINE DES M'BORURAL DEVELOPiMENT PROJECT

1. I submit the following report 1/ and recommendation on a proposedcredit to the United Republic of Cameroon for the equivalent of US$2.0 million,on standard IDA terms, to help finance the first phase of the Plaine des M'Borural development project. The Caisse Centrale de Cooperation Economiqueof France would participate in the financing of the project with a loan toCameroon equivalent to US$0.5 million, the terms of which are expected to be20 years, including 3 years of grace, with interest at 3.5 percent per annum.

PART I - THE ECONOMY

2. A report "Proposals for a Medium-Term Public Development Program,A Special Study, Cameroon" (No. 1097a-CM), was distributed to the ExecutiveDirectors on"May 11, 1976. In October and November 1976, an economic missionvisited Cameroon and a report is in preparation. The following sections,which are substantially similar to those included in the Second Douala PortProject President's Report, dated August 20, 1976, incorporate comments fromthis economic mission.

Economic Potential

3. Cameroon has a population of about 7.3 million (mid-1975) 2/ andcovers an area of 475,000 km , about the size of France. The country'snatural resources are varied, but not always easily accessible. Soils andclimatic conditions permit cultivation of a wider range of crops than iscommonly found in West Africa, and the forest areas of the southeast containlarge untapped timber resources. The north holds promising potential forlivestock development.

4. While the main opportunities for development in Cameroon lie inthe expansion of agricultural production, including forestry, the countryhas the potential to increase production of import substitutes neededfor a growing domestic market, and to process alumina and agriculturaland forestry products for export. A bauxite project is in the earlystages of preparation, and offshore oil and gas exploration is beingcarried out and has yielded some promising results.

1/ Given the technical assistance nature of the proposed project, thisreport constitutes a combined President's and Appraisal Report.

2/ Revised estimate based on the first population census taken in 1976.

Thit documcnt his a restricted distribution and may be used by recipients onily in the performanceof :heir offcial duties. itJ contents may not otherwise be disclosed without Worid Bank authorization.

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5. Commerce, transportation and transit services are other importanteconomic activities. Cameroon's main economic centers are separated byvast underpopulated areas. The country moreover serves as a main exportroute for landlocked Chad. As a result, large investments in port andinland transport infrastructure are essential to promoting agriculture,forestry and industry, and strengthening Cameroon's role as a regionaltrade center.

Past Performance

6. During the first decade of independence (1960-1970), the Govern-ment' s primary objective was to unify the nation and to ease serious inter-nal political and social tensions. Output of agriculture and industry grewrapidly and, along with high world prices for cocoa and coffee, resulted ina 7 percent per annum real growth rate. Gross investment averaged about 14percent of GDP, slightly over half in the public sector, with the largestpart devoted to the transportation network, the most immediate developmentconstraint. A major effort was also directed at expanding education anddiversifying agriculture. Significant increases in fiscal revenues combinedwith stringent expenditure controls produced sizeable budget surpluses thatmade it possible to accumulate reserves and to finance a large part (up to40 percent) of public investment out of local revenues. However, this pol-icy also imposed excessive restraint on much needed current expenditure insuch areas as road maintenance, public health, and education.

7. During the period 1971-1975, growth of real GDP slowed to less

than 3 percent per annum. This was caused by factors largely outsideCameroon's control such as: (i) low export prices for cocoa and coffeeduring 1971 and 1972, (ii) several years of drought in the north; (iii) adrastic decline in domestic and foreign private investment, triggered pri-marily by the relative stagnation of the agricultural sector and by thecompletion of the most obvious import substitution projects during thepreceding decade; (iv) a drop in 1975 in world demand for both cocoa andtimber; and finally (v) rapidly rising import prices.

8. The Government reacted to these developments by stepping up pub-lic investment, which has increased by 50 percent to reach annual averagesof about US$190 million in constant 1974 dollars during the Third Develop-ment Plan (1972-1976). At the same time, greater emphasis has been placedon agricultural output. Within a public investment program averaging 9 per-cent of GDP, rural development has comprised about 18 percent, transportand communications 42 percent, energy 6 percent, and education 9 percent.Since nearly 75 percent of public investment has been in sectors where itscontribution to domestic output is both indirect and delayed, the impact ofthis substantial investment effort on economic growth was limited duringthe Third Plan period. In addition, physical realizations have been in manycases less than projected due largely to substantial cost increases andthe subsequent need to reduce the scope of projects or defer them.

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9. The balance of payments has not been a major constraint untilrecent years; however, imports increased rapidly in 1974 and 1975 as a re-sult of worldwide inflation and the heavy public development expenditure,especially in capital goods. At the same time agricultural exports declined,particularly exports of timber, causing a sizeable current account deficitin 1975. Together with a decline in private capital inflows this resultedin a fall in reserves from a level equal to nearly three months of importrequirements in 1970 to one-half month at the end of 1975. Thanks mainlyto considerably improved export demand and higher prices, especially forcoffee and timber, by May 1976 gross reserves had recovered to the absolutelevel of 1972 and 1973. However, because of continuing international infla-tion, Cameroon's offical gross international reserves, in mid-1976, stillcovered less than one month of import requirements, a low level by usual.international standards but still acceptable in the Banque des Etats del'Afrique Centrale (BEAC) monetary union arrangements.

Prospects and Development Strategy

10. Cameroon's development effort over the next five years will becarried out under the Fourth Plan (1977-1981). A Bank economic missiondiscussed its recommendations on the level and composition of public invest-ment with the Government in November 1975 and agreed on overall priorities.It is antlcipated that short- and medium-term growth of GDP will be 5 to 6percent per annum in real terms, slightly lower than achieved during the1960s. However, if the Government can maintain a high volume of publicinvestment and further expand and diversify the country's production base,more satisfactory rates of growth can be attained in the early 1980s. Withthis goal in mind, the new Five-Year Plan has set a very ambitious publicinvestment target of over US$2.0 billion in constant 1974 dollars or two andone-half times that achieved during the preceding plan period. The Plangives increasing emphasis to the development of directly productive sectors,particularly agriculture and electric energy, while the share of transportinfrastructure investments is declining somewhat but remains high in absolutefigures. Social investments, particularly for sports and administrativebuildings, see their importance considerably reduced. These changes insectoral priorities are very much in line with the recommendations of the 1975economic mission. The overall investment targets, however, appear very highindeed in almost all sectors. They exceed by nearly two-thirds the invest-ment levels the mission considers physically possible to achieve over thenext five years. Consequently, reductions in Plan targets will almostcertainly be unavoidable during the plan period. These cuts will have to becarefully assessed so as to make sure that the sectoral priorities establishedin the Plan are not distorted during execution.

11. To achieve even the lower investment targets suggested by the Bankmission, the Government must strengthen its ability to choose, prepare, andimplement projects, particularly in the rural and transport sectors. Someprogress is being made in this direction. Special planning units are grad-ually being established within the technical ministries. A Government-ownedconsulting firm the Societe d'Etudes pour le Developpement de l'Afrique ,was created under the Ministry of Economy and Planning to accelerate project

preparation. Commercially-oriented public corporations are also servingto strengthen the project implementation capacity of the public sector.Nevertheless, further improvements are needed, particularly in the manage-ment of public corporations and in strengthening and coordinating ruraldevelopment institutions. The project presented in this report is designedto assist efforts recently undertaken by the Government in these fields byproviding technical assistance experts, training local staff, and financinghigh priority studies and project preparation in key economic sectors.

12. In addition to the physical limitations imposed by absorptivecapacity constraints, financial considerations also suggest that publicinvestment during the Fourth Plan is unlikely to exceed US$1.3 billion inconstant 1974 dollars, or some $400 million per year in current dollars.Indeed, this is about the maximum Cameroon can possibly hope to finance.Budgetary revenues already reach 17 percent of GDP and cannot be expectedto increase much faster than the economy as a whole. At the same timereserves of the stabilization funds are likely to stagnate, consideringthe uncertain price outlook for most export crops. Current expenditures,on the contrary, will expand as a result of recent increases in publicinvestment in transport, education, and health. Furthermore, public debtcharges will grow rapidly, particularly those of public enterprises, andwill absorb an increasing share of public savings. Consequently, in thenext five years, public savings after debt service will probably not exceedUS$100 mil-lion per year, or some 25 percent of total public investment, ascompared with 38 percent over the past few years. Cameroon will thus haveto rely on external financing for the bulk of its public investment.

13. An increasing reliance on foreign borrowing during a period ofrelatively slow economic growth, and unfavorable terms of trade, willrequire careful foreign debt management. However, on the reasonableassumption that at least 50 percent of foreign public capital inflowwill be on concessionary terms, the foreign debt service ratio couldbe maintained below 10 percent by 1980. Cameroon's proven ability tomake effective use of external resources, and the Government's dedicationto development are reasons for added external support. To avoid furtherrapid buildup of debt service, lenders, including the Bank Group, shouldprovide a large part of their assistance on concessionary terms. Theyshould also be prepared to finance a high proportion of project costs,including when necessary, a part of local costs.

PART II - BANK GROUP OPERATIONS IN CAIMEROON

14. The Bank Group's commitments in Cameroon now amount to US$245million and cover eighteen projects: six in agriculture, seven in transpor-tation, three in education, one in public utilities, and one small- andmedium-scale enterprise project. Transportation represents the largestshare (55 percent) of our past commitments followed by agriculture (nearly30 percent). Annex II contains a summary statement of Bank loans and IDAcredits as of October 31, 1976 and includes notes on ongoing projects.

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Although delays and setbacks have been occasionally encountered in theexecution of projects, the Government has consistently shown willingnessto collaborate with the Bank in finding solutions to such problems.

15. For the future, the Bank Group's strategy is to support the Gov-ernment in its efrort to increase agricultural production, including export-oriented crops, and in the process create productive employment in ruralareas; to upgrade and improve the operation and maintenance of the country'sinfrastructure; to stimulate investment by local entrepreneurs and increaseemployment in urban areas; and to increase the efficiency of Cameroon'sinstitutions.

16. In agriculture, we have been able to help the Government furtherdiversify production by financing its oil palm and rubber plantations in theeast and west, and rice irrigation and livestock in the north. The ongoingcocoa p'foject is helping to modernize cocoa growing by smallholders and toraise rural productivity in areas south and west of the capital. The rubberproject approved in June 1975 will develop the southwest coastal region.Preparation work for rural development projects in populated but poor regionsis underway with the assistance of the Bank. Preparation of the Zapi-EastIntegrated Rural Development Project is nearly completed and the projectis scheduled to be presented to the Board during FY78. Field appraisal ofthe Rural Development Fund Project has just been completed. The second stageof an oil palm development project (SOCAPALM), which is designed to helpmeet a rising domestic demand for palm oil and which would also inauguratea smallholder development program, is scheduled to be presented to the Boardduring the current fiscal year. Furthermore, the Plaine des M'Bo RuralDevelopment Project, which is proposed in this report, will help financestudies and three-year trial activities required before a full-scale ruraldevelopment program can be launched in the western highlands. Besidespromoting much needed foodstuffs production, increased Bank Group lending foragriculture will support the Government's effort to focus on rural developmentin order to improve income distribution and to achieve a better balance inregional development.

17. Recognizing the crucial importance of transportation to economicgrowth in Cameroon and in neighboring countries, the Government has devotedthe largest portion of public investment to this sector. The Bank Group,together with bilateral institutions, has substantially aided developmentof adequate transport facilities. The Second Highway Project of 1973 wasdesigned to help complete the country's basic trunk road system. -The projecthas encountered severe cost overruns partly alleviated by a recently approvedSupplementary Credit. The Second Railway Project of 1974 has focused on trackimprovement and expansion of the equipment needed to maintain and augment therailway's overall carrying capacity. Given projected sharp traffic increases-and the backlog of required investments, substantial capital outlays arestill necessary particularly for the expansion of the port of Douala, whichwill be assisted by a recently approved Bank loan and IDA credit, and somerelated facilities such as a railway station and marshalling yard to bebuilt outside the port area. An engineering loan, approved in May 1976, will

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help complete the engineering of this station and marshalling yard. Improve-ment of the Douala-Yaounde transport corridor will also require substantialinvestment. A study, financed by the Bank and scheduled to be completed inFY77, will help determine an economically optimal investment strategy forthis corridor. Future road investments will mainly be for road maintenanceand feeder roads to provide links to local markets and facilitate exploita-tion of Cameroon's forests. In other sectors, the Small- and Medium-ScaleEnterprise Project approved in 1975, focuses mainly on developing localentrepreneurship. A Third Education Project, approved in April 1976, placesspecial emphasis on rural education and training.

18. In all our projects, we will include, as needed, training, technicalassistance, and other provisions necessary for strengthening institutions andimproving sector policies. The proposed Technical Assistance Project wouldhelp to strengthen government services in several key Ministries involved in.investment planning, policy analysis and project processing. In addition,through our economic work we will continue to advise the authorities, at theirrequest, on development questions in general, and on particular matters suchas economic management, problems of urban migration, and manpower development.To help achieve the Government's priorities and to support our future lendingstrategy will require increased emphasis on strengthening the institutionalframework, particularly concerning project planning preparation and implementa-tion in transportation and rural and urban development.

19. During the second half of the sixties, overall disbursements offoreign aid to Cameroon amounted to about US$40-45 million a year. Whileat the beginning of this period 65 percent of aid funds were grants, theproportion of loans slowly increased. A major part of external assistancewas provided by France and was concentrated in infrastructure and productivesectors. The aid-giving agencies of the EEC (European Development Fund andEuropean Investment Bank) directed their lending mainly to agriculture, withinfrastructure in second place. Bank Group disbursements were small duringthis period. From 1972 to 1974 overall disbursements of foreign aid increasedto about US$60 million with one-third as grants. The Bank Group's share ofthese inflows amounted to about 25 percent. Our lending to Cameroon has beenclosely coordinated with other donors; in eleven of our eighteen projects,joint or parallel co-financing arrangements have been made.

20. Public debt outstanding and disbursed as of December 31, 1974amounted to US$295 million and is projected to reach US$1.5 billion in 1981.Public debt service as a proportion of export earnings amounted to 4.5percent in 1975 and is projected to reach 9.5 percent in 1981. At thattime disbursements may be over US$400 million with only 9 percent consistingof grants. At present IBRD debt, outstanding and disbursed, amounts to about13 percent of all public debt and 10 percent of public debt service. IDAcredits, outstanding and disbursed, amount to about 13 percent of publicdebt outstanding and 0.1 percent of public debt service. The Bank Group isexpected to account for about 25 percent of total public debt and 14 percentof public debt service in 1980.

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21. In October 1974, Cameroon became IFC's 100th member. IFC's firstoperation in Cameroon, a US$450,000 underwriting to bring domestic share-holders into a previously wholly foreign-owned shoe manufacturing company,was approved in May 1975. In September 1976, IFC Board approved an equityinvestment of nearly US$900,000 in a foreign-owned rubber estate (SAFACAM).The investment will assist in the rehabilitation and diversification of anexisting estate by producing rubber for export and palm oil for the domesticmarket. The operation will also facilitate participation by domestic share-holders.

PART III - THE AGRICULTURAL SECTOR

22. Agriculture plays a major role in the Cameroon economy, providinga livelihood for about 85 percent of the population and accounting for 35-40percent of GDP and over 75 percent of the value of exports. The agriculturalsector can be divided in two major subsectors: traditional agriculture andindustrial plantations. The traditional subsector accounts for over 85 percentof agricultural output. It comprises some 950,000 smallholders cultivatingplots-avereaging about two hectares each, using family labor. Smallholdersproduce foodcrops for subsistence and for the local market, and cocoa, coffee,cotton and groundnuts for export. The industrial plantation subsector com-prises several large government-owned and a few private industrial estates(foreign-owned), producing mainly palm oil (for export and domestic consump-tion) and rubber (for export).

23. Production for export has so far been the most dynamic. Outputof cocoa and coffee increased considerably during the 1960s at annual ratesof about 3.5 percent for cocoa, 5.5 percent for robusta coffee and 9 percentfor arabica coffee. Cameroon is now the world's fifth largest producer ofcocoa (110,000 tons) while its share of world coffee (88,000 tons) and cottonproduction (41,000 tons) are relatively minor. In recent years, growth ofcocoa has accelerated appreciably, while that of robusta and arabica coffeedeclined slightly as a result of the aging of plantations. Cotton productionhas suffered a considerable setback due to the severe droughts which haverecently affected the northern provinces. The oil palm sector continues toexpand rapidly (an estimated 80,000 tons of oil were produced in 1975) butbecause of increasing domestic demand, exports are generally negligible,though in 1975 exports accounted for 10 percent of production. Good eco-logical conditions exist for rubber and coconut for which development plansare underway.

24. Cameroon is largely self-sufficient in foodstuffs, with productionexpanding at an annual rate of 3-3.5 percent, ahead of population growth.This expansion results from a rapid growth of non-traditional foodstuffs,especially vegetables, beans and potatoes. However, there is a seriousstagnation of output of traditional staples (plantains, millet, sorghum,maize and cassava). This has reduced the supply of staple foods to majorurban centers, which consume more and more imports of rice and wheat.

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25. This stagnation partly results from unfavorable climatic conditionsin particular in the northern region, lack of adequate support services tosmallholders and the absence of an effective marketing organization. Existingextension services are mostly concerned with the improvement of cashcrops andhave paid little attention to the development of foodcrops, except for ricein the north. Marketing is reasonably well organized for export crops butfoodcrop marketing is largely in the hands of small traders, most of whomoperate within a small area and with limited turnover which constrainsthe cash cropping of traditional foodstuffs.

26. Farm incomes and services to farmers are unevenly distributed. Thehighest income areas are the central savannah and the western and coastal low-lands (US$130 - 140 per capita); the poorest areas are the northern plains andthe western highlands (US$70 - 80 per capita), which are densely populated.The weakness of extension and credit services is particularly evident in thelowest income areas.

27. However, prospects for developing smallholder agriculture arepromising and Government now intends to increase its support for the small-holder by making more investment funds available to this subsector. A totalcapital outlay of US$383 million would be allocated for agricultural andlivestock projects between 1976, and 1981, as compared to only US$168 mil-lion 1/ during the 1972-1976 period. Furthermore, institutions are beingimproved. In particular, the Fonds National de Developpement Rural created in1973 to expand and coordinate rural development programs, has recently beenreorganized and given more flexibility to provide credit to farmers. Third,the Planning and Agriculture Ministries would be given additional means -including technical assistance - to prepare and monitor rural developmentprojects.

28. As an example of Government concern towards the rural poor, severalprojects for the overpopulated western highlands are envisaged. Here, about600,000 people, among the-poorest of the country, depend on production ofarabica coffee and foodcrops, on decreasingly productive land. For socialreasons, it is not likely that this population could migrate rapidly outsidetheir original region. Settlement of the few plains around the highlands, ofwhich the Plaine des M'Bo is one, could reduce population pressures. Thisexplains the high priority given by Government to the project proposed in thisreport. Yet, in the long run, the scope for such settlements is not sufficientto solve the problem; a simultaneous effort to improve agriculture in thehighlands is necessary. Preparation of projects to this end is alreadyunderway. Furthermore, a technical assistance project is currently beingpresented to the Board, which would improve the ability of the Ministries ofPlanning and Agriculture to prepare and monitor such projects.

29. The Bank supports Government's efforts to achieve a balanced growthbetween rural development projects in traditional areas and integrated estate

1/ At 1974/75 prices and exchange rates.

and smallholder plantation projects. This strategy involves developing bothindustrial companies and smallholder schemes. In the past, Bank Group lend-ing for development of tree crop plantations (CAMDEV FY 67 and SOCAPALM FY69), was followed by loans or credits for rice irrigation (FY72), livestock(FY74), cocoa (FY75) and rubber (FY76). The Bank's lending in the agriculturalsector has three main objectives: firstly, increasing technical and managerialcapabilities, strengthening institutions, and improving sector policies,mainly through training and technical assistance; secondly, raising foreignexchange earnings through expanding the production and export of rubber,cocoa, livestock and forestry; and thirdly, increasing the productivity of theoverpopulated and poor rural areas. To the latter end, four integrated ruraldevelopment projects are at various stages of preparation.

PART IV - THE PROJECT

30. Negotiations for an IDA credit were held in Washington fromNovember 15 to 18, 1976 with a Cameroonian delegation headed by Mr. BenoitBindzi, Ambassador of the United Republic of Cameroon in Washington.

Project Area

31. The Plaine des M'Bo, which is about 200 km north of Douala, islocated in the overpopulated western highlands (150-200 persons per km ) andcomprises 30,000 ha at the base of the Bamileke Plateau. The mean altitudeis 720 meters. The topography of the plain is flat. There are severalmeandering rivers with many tributaries, as well as stagnant ponds. At thesouthern end of the plain, a rock formation slows down the flow of water onthe main river. As a result, the terrain is divided into permanently flooded,seasonally flooded and non-flooded parts. The soils are water-logged withzonal differences due to the fluctuations on the water table and the presenceof surface water in places. Total annual rainfall averages 1,730 mm, with twopeak periods in May and September; the dry season ranges from mid-November toFebruary. Mean temperatures vary only slightly during the year. Vegetationzones include semi-deciduous forests, savannah grasses, and tree-and-underbrushareas along the riverbanks. The soils are of good texture but their potentialremains to be verified.

32. The plain appears to have been reasonably well settled in the past,but complete depopulation occurred early in this century, partly because theplain harbored vectors of sleeping sickness, malaria and onchocerciasis.However, because of increasing population pressure in the surrounding high-land, 10,000 inhabitants have recently settled along the footlines of theplain where they grow traditional crops for cash (coffee) and for food(plantain, cassava, sweet potatoes). The major part of the plain is stillempty, except along the central road running from Dschang to Melong. Adetailed survey of 20,000 ha shows that 13,000 ha of unoccupied land are

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suitable for double-cropping rice and legumes (11,000 ha) and single-croppingrice in bottomlands (2,000 ha) without expensive land clearing. However,10,000 ha of unoccupied land have not yet been surveyed and some furtherdevelopment potential of about 2,000 ha seems likely to be identified.Preliminary investigations suggest that the health problem can be controlledat reasonable cost, using methods which have already been tested successfullyelsewhere. Settlement of about 5,000 to 7,000 farm families would then befeasible.

Project History

33. The project stems from experiments begun in 1971 by the Institutde Recherche Agronomique et Forestiere (IRAF) which initially suggested thepossibility of growing two crops of rainfed rice a year on the Plaine desM'Bo. Given the positive results of three years work at IRAF's agronomicstation on the Plaine, the Government set up the Mission de Developpement dela Riziculture dans la Plaine des M'Bo in 1973 to implement a pilot operationpartially financed by the French aid agency Fonds d'Aide et de Coopera-tion. It also classified as state-owned land 4,000 ha out of a total iden-tified potential of 13,000 ha. As this operation progressed, the Governmenthired the Societe d'Assistance Technique et de Cooperation, a French consultingfirm, to prepare a feasibility study for a project that IDA and the CaisseCentrale de Cooperation Economique agreed to consider. This study, completedin mid-1975, proposed a project aimed at developing a highly mechanized farmon about 8,000 ha to grow two crops of rice per year. Then, the CaisseCentrale and IDA requested that the project should also benefit the landlessfarmers living at subsistence level in the nearby overpopulated highlands.The concept of a settlement project was acceptable to Government, and theConsultants amended the study accordingly. Early in 1976 without waiting forthe conclusion of the appraisal mission, Government invested some US$5.5million in farm equipment, in infrastructure for the immediate development ofa 800 ha farm and in facilities for processing and storage of 5,000 tons ofrice.

34. The proposed project was appraised in February 1976. The jointCaisse Centrale/IDA appraisal mission concluded that the project area hasdevelopment potential but that technical and economic questions have not beenresolved to the degree necessary to justify a large scale development project.In the first place, there were uncertainties regarding the results of earlyagronomic trials and the Mission de Developpement's larger scale trials (on200 ha in 1974 and 1975 and on 400 ha in 1976). These mainly concerned thebest cropping system and the most appropriate fertilizer requirements thatwould be necessary to obtain yields which would justify the project economi-cally. Secondly, the proposed heavy mechanization for land preparation wouldnot have used available labor resources adequately and would have entailedhigh overhead charges for the settler. Although soil and other ecologicalconditions in the project area undoubtedly require a certain degree of on-farmmechanization, the proposed project assumed that settlers would have to bepermanently dependent on a central farm which the mission considered to_ beunsatisfactory as a long run solution.

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35. Some 13,000-15,000 ha in the project area can be developed, anda large part of the land is suitable for the double-cropping of rice inrotation with a legume (groundnuts, soybean, beans). The project areaalso offers one of the few possibilities to settle almost in situ, about5,000-7,000 industrious, landless farmers from the overpopulated neighboringmountains.

36. According to the mission's preliminary estimates, the developmentof some 13,000 to 15,000 ha in the project area would cost about US$35.0million in 1976 prices, or about US$5,000 per farm family. However, duringthe first phase, alternative mechanization and other systems will be testedin an attempt to find ways and means to establish a settlement project atreasonable costs per family. Current estimates include the cost of landclearing, preparation, settlement, control of health hazards, and necessaryfarm equipment and infrastructure. Based on the Bank's latest economic priceforecasts and reasonable yields (3 tons for rice and 1.7 for soya or ground-nuts) at complete maturity, a full development project could yield a rate ofreturn of about 15 percent and provide 25,000 tons of rice (for which thedomestic market already exists), 15,000 tons of soybeans (for which localmarketing prospects will be investigated) or groundnuts for import sub-stitution ,-and 10,000 tons of traditional foods for domestic consumption.

37. Therefore, as a first phase, it is proposed that the Associationshould finance pre-investment studies and agronomic trials on 300 ha in theproject area, in order to prepare a settlement scheme appropriate for the fulldevelopment of the plain. Simultaneously, the Societe de Developpement de laRiziculture dans la Plaine des M'Bo (SODERIM) 1/ will exploit the 800 ha whichhave been already developed, using equipment which was purchased previously(see para. 33). Government has agreed that no further development outsidethese 1,100 ha will be undertaken in the plain, until the proposed Phase Iproject has provided the necessary guidelines for such a development.(Section 3.08 of the draft Development Credit Agreement).

The Phase I Project - Summary Description

38. The three-year Phase I project would cover six cropping seasons.This offers adequate scope for carrying out the measurements necessary toprovide sound agronomic recommendations and workable approaches to organi-zation of the settlement and development of the plain. These results wouldbe summarized in a new feasibility report, which would be used as the basisfor appraisal of a full development project.

39. Specifically, the Phase I project would finance technical personnel,'equipment, infrastructure and operating expenses required mainly to:

1/ A decree establishing SODERIM as the entity to succeed the Mission deDeveloppement will be ratified shortly.

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(a) complete soil tests and analysis of the area to bedeveloped on the plain and carry out further agronomictrials with a view to finding a suitable cropping pat-tern and defining the related fertilizer applicationrequirement;

(b) organize the settlement of farmers on 300 ha, to testpromising mechanization systems and different types ofequipment and settlement schemes;

(c) study:

(i) the domestic marketing of soya;

(ii) health control measures, particularly tsetseeradication; and

(iii) migration problems;

(d) incorporate the results of the above trials and studiesinto a feasibility report for the full scale developmentand settlement of the Plaine des M'Bo.

The Phase I Project - Detailed Features

40. Soil Tests and Analyses: Although an existing soil survey, carriedout in 1973, provides an adequate framework to guide the development of theplain, some doubts remain as to the productivity of soils, moreover, thesubsequent years of cropping may have brought about chemical modificationsto the soils. Possible deficiencies (and toxicities) that might limit cropproduction have to be further investigated. Thus, available data would bereviewed and thorough soil analyses carried out in virgin areas and areascropped for at least three-years. Work would be subcontracted by SODERIMto IRAF, which would carry out the study in consultation with the Inter-national Institute for Tropical Agriculture or another experienced foreigninstitute.

41. Agronomic Trials: Under the project, SODERIM would, with supportby IRAF carry out field trials to establish the fertilizer requirements ofrice, soya and other legumes (groundnuts, beans, cowpeas), the adaptationof these crops in the farming system, and prospects for double-croppingwith rice. SODERIM would be responsible for implementation of the agronomictrials program, which would be conducted each season along lines definedwith consultants. In addition, IRAF would continue to test new varietiesand conduct related experiments at its agronomic station on the plain.

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42. Mechanization/Settlement Systems: 1/ A promising new mechanization/settlement system would be tested on 200 hectares, with the participation ofsome 100 farm families, of which about half are already settled on the plain.The objective would be to establish two groups of 50 farm families on 100hectares of land each, which would use central maintenance facilities providedby SODERIM. Each group would form a threshing unit and would be expectedto become self-managing. This concept is based on a real need, since closecooperation between farmers is essential to obtain effective utilization ofthe threshing machine in a short period of time. The new system would evenout the peak manual labor requirements at harvest, reduce losses duringharvest and, hopefully, make possible the best cropping pattern in economicterms. In order to permit comparisons between several methods of landcultivation techniques, various types of other light farm equipment (mini-tractors, power tillers and cultivators) would be tested to ascertain theiradaptability to small farms under the project conditions. After experimentswith this equipment, another group of 50 farm families would be settled onthe remaining 100 ha of land and provided with the equipment. These systemswould be supervised by SODERIM, with technical support from the Centre Nationald'Etude et d'Experimentation du Machinisme Agricole, and consultants contractedfor this purpose by SODERIM. A prime objective of these tests will be toreduce mechanization costs to the minimum compatible with efficient settlement.

43. Marketing Study for Soya: The study would determine the prospectsfor production and utilization of soya locally. It would analyze the pros-pects for soya oil and meal - including livestock development and animalfeed requirements in Cameroon and in neighboring countries - and would alsoinvestigate the possibilities of promoting soya for human consumption. More-over, the study would cover proposals for marketing procedures, price policiesand investment costs. This study, which would complement an ongoing study ofthe market for vegetable oils and fats in Cameroon, would be carried out overa two-month period by a consultant contracted by SODERIM.

44. Health Control Study: Disease vectors, which have been identifiedas being similar to those successfully eliminated elsewhere, will have to becontrolled before large-scale settlement could be undertaken. The projectwould focus on the control of glossinas (tsetse flies) in the forested areasof the plain and would evaluate the cost and effectiveness of alternativemethods of insect vector control. In addition, better information would bedeveloped about current,disease and nutrition problems in order to design ahealth care program for the area. The Office National de la Recherche Scienti-fique et Technique would be responsible for the health study, while SODERIMwould evaluate the structure and location of human settlements in the plain,and improvements in village domestic water supply and sanitary practices.

45. Migration Study: SODERIM, with the help of a specialist team,including sociologists and economists, would carry out a study of thecharacteristics of settler candidates, in such terms as work experience,resources and family structure, and thereby would define the most appro-priate conditions of settlement on the plain and the requirements for

1/ The following assumptions have been made for the settlement scheme:one farm family consists of an average of 7 persons of whom 2 are activefarmers; 2 ha will be allocated per farm family in the trial areas.

- 14 -

support services and settlement organization. The study would also pro-vide SODERIM with guidelines to locate the best sources of candidates forsettlement and to determine acceptable criteria for the recruitment and theselection process.

Organization and Management

46. The Phase I Project would be under the overall responsibility ofthe SODERIM General Manager assisted by a small group of qualified and ex-perienced professional staff and consultants. These key positions wouldcomprise the General Manager, a Research Assistant and an Administrativeand Financial Manager. These positions would be filled by expatriates sinceit is unlikely that Cameroonians with the required experience and qualifica-tions could be made available for the project. The Project Manager wouldsupervise the management of the existing 800 ha farm and would coordinateproject staff and consultant's work. Ultimately, he would be responsiblefor the preparation of the feasibility report for the full development ofthe Plaine des M'Bo. This report, which would embody the experience andinformation obtained during the Phase I project, would be the subject ofdiscussions between IDA and Government not later than September 30, 1979.The Research Assistant, an agronomist with tropical experience, would bein charge of-agronomic trials, the settlement/mechanization scheme, and themechanization equipment tests. The Administrative and Financial Managerwould organize suitable accounting/financing procedures at SODERIM. Otherlocal staff, already in place, would include a production chief, four fieldsupervisors, six extension officers, three experiment officers, and threestatisticians. In addition, two mechanics would maintain the existing in-frastructure and facilities, including the rice mill, storage facilities andagricultural equipment.

47. The various consulting firms and research institutes involved inthe project would enter into appropriate agreements with SODERIM and reportto the Project Manager. These arrangements would include detailed terms ofreference acceptable to IDA and a work schedule to be revised at the endof each cropping season.

Implementation and Phasing

48. Procedures have been carefully prepared to ensure the effectiveimplementation of the Phase I project. First, Government has agreed toapproach five qualified consulting firms immediately, in accordance withIDA guidelines for the use of consultants, to secure the arrival of projectkey personnel early in 1977 before the beginning of the first croppingseason. Draft terms of reference for the consultants and for the studieswere drawn up by IDA and were formally discussed with Government duringnegotiations. Secondly, agreements specifying the above terms of referenceof the main domestic research institutions involved have been prepared anddrafts were submitted to IDA at the time of negotiations. Consultants' and theProject Manager's reports would be made available to Government and IDA, twomonths after the end of each cropping season. The soya marketing study-and

- 15 -

the soil test and analyses should be completed at the end of the first year.By the end of 1978, the Project Manager would initiate preparation of the fullfeasibility study.

Cost and Financing

49. The total cost of the project, based on mid-1976 prices and includingcontingencies, amounts to US$2.5 million net of taxes. Foreign exchange costsare estimated at US$2.0 million or 80 percent of costs, net of taxes. Theproposed IDA credit of US$2.0 million would be complemented by a loan fromthe Caisse Centrale equivalent to US$0.5 million; both would be passed onby the Government as grants to SODERIM. The Government will ensure that fundsamounting to US$0.3 million are always available to SODERIM to prefinanceproject expenditures. Given the investments in infrastructure and equipmentfor this project already made by the Government, 100 percent external financingof project costs, net of taxes, is justified. Total expatriate staff andconsulting services would amount to 168 man-months for a total.cost ofUS$1.0 million in 1976 terms, or US$70,000 per man-year on average, ofwhich about US$30,000 would be salary.

Procurement

50. Since the equipment (US$0.4 million) and the contracts for build-ings (US$0.3 million) are not large enough to make international tenderingappropriate, equipment and buildings' contracts would be awarded on the basisof competitive bidding advertised locally and in accordance with local pro-cedures which are acceptable to IDA. The services of expatriate managementstaff and consultants-(US$1.0 million) would be obtained according toprocedures acceptable to IDA.

Disbursements

51. The IDA credit would be disbursed pari passu with the CaisseCentrale loan and Government's contribution (to cover the equivalent ofUS$0.1 million in taxes) to finance 75 percent of the cost of:

(a) consulting services and expatriate staff: US$0.7 million;

(b) local staff and operating costs : US$0.4 million;

(c) equipment : US$0.3 million; and

(d) buildings : US$0.2 million.

US$0.4 million would be unallocated. Disbursements would be againstcontracts and invoices for items a, c, and d. Disbursements for local staffand operating costs (item b) would be made against statements of expenditurescertified by the Project Manager with the supporting documentation retainedby SODERIM and made available for inspection during supervision missions.

- 16 -

Benefits and Risks

52. The Phase I Project benefits would provide Government with solidtechnical and economic grounds on which to base a decision on a total invest-ment for Phase II estimated at US$35.0 million in 1976 prices. The proposedPhase I project entails the ultimate risk that the agronomic trials woulddemonstrate the impossibility of obtaining the minimum yields necessary tojustify the investment required to develop the project area. However, giventhe preliminary results obtained by IRAF during four years of experimentsand the changes that have been introduced in the original project concept,we are reasonably confident that the new tests proposed in this projectwill provide a workable solution to known difficulties. The mechanization/settlement schemes envisaged in the project could run into unexpectedproblems given the absence of precedent for this type. of development inWest Africa. But again, this would be unlikely because the populationinterested in the settlement project is industrious and known to be capableof adjusting to new farming systems, and because the project would provideexpertise necessary to overcome known difficulties. On balance, the risksare worth taking given the estimated development potential of the Plainedes M'Bo, where at least 13,000-15,000 ha could be developed to provide anadequate income for 5,000-7,000 families (some 30,000-40,000 inhabitantsin total) now 'living at the minimum subsistence level in the surroundingoverpopulated Bamileke Plateau.

PART V - LEGAL INSTRUMENTS AND AUTHORITY

53. The draft Development Credit Agreement between the United Republicof Cameroon and the Association, the Recommendation of the Committee providedfor in Article V, Section 1 (d) of the Articles of Agreement and the text ofa draft resolution approving the proposed credit are being distributed to theExecutive Directors separately.

54. A feature of the draft Development Credit Agreement of specialinterest is referred to in paragraph 37 of this report. In addition, thefollowing special conditions of credit effectiveness are provided in sec-tion 6.01 of the dra't Development Credit Agreement.

(a) initial disbursement conditions under the CCCE LoanAgreement have been fulfilled;

(b) the General Manager, the Research Assistant and theAdministrative and Financial Manager, described inpara. 46, have been appointed; and

(c) the Financing Agreement to be entered into by theGovernment and SODERIM has been duly executed andauthorized.

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55. I am satisfied that the proposed development credit would complywith the Articles of Agreement of the Association.

PART VI - RECOMMENDATIONS

56. I recommend that the Executive Directors approve the proposedDevelopment Credit.

Robert S. McNamaraPresident

AttachmentsDecember 9, 1976

TABLE 3A Page 1 ofL pagesCAMEROON - SOCIAL INOICATORS DATA SHEET

LAND AREA tTHCU KN21______ CAMEROON REFERENCE COUNTRIES (19701

TOTAL 475.4 MOST RECENTAGRIC. 156.0 1960 1970 ESTIMATE GHANA IVORY COAST MALAYSIA

GNP PER CAPITA (US$) 9 0.0 190.0 270.0 340.0 340.0 440.0

POPULATION AND VITAL STATISTICS_______________________________

POPULATION (MI0-YR, MILLION) 5.8. 6.6 7.3 8.6 5.4 10.4

PCPULATICt DENSITYPER SQUARE KM. 11.0 1L.0 15.0 36.0 16.0 32.0PER SQ. KM. AGRICULTURAL LAND .. L2.0 62.0 30.0 291.0

VITAL STATISTICSCRUOE 8tRTe- RATE PER THOUSAND 43.5 42.1 40.I 49.8 46.1 42.2CRUOE OFATH OATE P'E THOUSANO 28.0 23.5 22.0 24.4 23.3 12.9INFANT MLUQTALITY RATE I/THOU) .. .. 142.0 /L 156.0 ,. 40.8 /aLIFE EXPECTANCY AT blRTH (YRS) 35.9 41.0 41.0 4L.5 41.0 56.7GROSS REPRCCUCTION RATE 2.3 / 2.7 2.7 3.2 3.1 2.6 .

POPULATICN GRnWTH RATE (%)TOTAL 2.4 2.0 2.0 2.6 3:4 2.6URbAN . 6.1 7.5 5.0 87 6

URBAN POPULATION (I OF TOTAL) 1I.9 A 20.3 26.3 29.0 28.0 27.8

AGE STRUCTURE IPERCENT)0 TO 14 YEARS 40.0 43.0 *- 46.9 42.5 44.7 i

15 '0 64 YEARS 56.0 54.0 .. 49.5 5l.8 52.1 .65 YEARS ANO OVER 4.0 3.0 .. 3.6 2.7 3.2 a

AGE OEPEhGENCY RATIO 0.8 0.9 .. 1.0 0.8 0.9 /ECONONIC OEPENOENCY RATIO 1.0 1.2 .. - 1.4 0.9 I. 1 6

FAMILY PLANNINGACCEPTOPS (CUMULATIVE, TOGUI .. .. .. 10.9 222.2USERS It OF MARRIED WOMEN .. .. .. 2.0 80 a

EMPLOYMENT

TCTAL LAeCR FORCE (THOUSAND) 2400.0 2800.0 .. 3300.0 2600.0 2900.0 /aLABOR FORCE IN AGRICULTURE (S) 88.0 82.0 .. 54.0 82.0 43.0 RUNEMPLOYEO (I OF LABOR FORCE) .. .. .. 5.0 S 6.0 6.00

INCOME DISTRIBUTION

I OF PRIVATE INCCME REC'O 8Y-HIGHEST 5X OF HOUSEHOLDS .. .. .. .. .. 28.3HIGHEST 20X OF HOUSEHOLDS .. .. .. .. .. 56.0LOWEST 201 OF HOUSEHOLOS .. .. .. .. .. 3.5

LOWEST 40S OF HOUSEHOLDS .. .. .. .. .. 11.2

DISTRIBUTION OF LANO OWNERSHIP

S OWNED BY TOP IO OF OWNEAS .. .. ..I OWNED BY SMALLEST 102 OWNERS .. .. ..

HEALTH ANO NUTRITION

POPULATION PER PHYSICIAN 33T70.0 /b 29330 0 30520.0 /b 12950.0 12140.0POPULATION PER NURSING PERSON 5400 0 c 2700A0 I 26L0.0 MS 1070.0 2480.0 a 1080.0 IacPOPULATION PER HOSPITAL 8ED 450. /. 50d 0 .. 760.0 680.0 20:0 !

PER CAPITA SUPPLY OF -CALORIES (Y OF REQUIREMENTS) 96.0 96.0 104.0 96.0 108.0 93.0 iPROTEIN (GRAMS PER OAY) 59.0 59.0 64.0 4 L 46.0 60.0 49.0 a.dd

-Of WHICH ANIMAL AND PULSE .. 23.0 .. 10.0 18.0 /a 20.0 a

OEATH RATE 11THOU) AGES 1-4 .. .. .. .. .. 5.5

EDUCATION

ADJUSTED ENRCLLMENT RATIOPRtMARY SCHOOL 66.0 108.0 107.0 L 58.0 i 76.0 89.0 4SECONOARY SCHOOL 2.0 / 9.04. 11.0 /-. 9.0 L 11.0 LL 34.0 L- s

YEARS OF SCHOOLING PROVIDED(FIRST ANO SECOND LEVEL) 14.0 Ia._ 14.0 4 14.0 f IS.0 13.0 13.0 L

VOCATIONAL ENROLLMENTtS OF SECONOARY) 23.0 22.0 21.0 La 23.0 7.0 3.0 .

ADULT LITERACY RATE (S) .. 12.0 .. 25.0 20.0 71.0 £

HOUSING

PERSCNS PER ROOM (AVERAGE) .. .. .. .. .. 2.3OCCUPIED DWELLINGS WITHOUT

PIPEO WATER IS) .. .. .. .. .. 65.0 LACCESS TO ELECTRICITY

(S OF ALL DWELLINGS) .. .. .. .. .. 43.0RURAL DWELLINGS CONNECTED

TO ELECTRICITY (SI .. .. .. .. .. 30.0

CCNSUMPTICN

RADIO RECEIVERS (PER THOU POP) 3.0 36.0 36.0 78.0 17.0 41.0PASSENGER CARS (PER THOU POP) 3.0 6.0 6.0 6 4.0 10.0 23.0 .ELECTRICITY IKWH/YR PER CAP) 190.0 201.0 .. 338.0 120.0 382.0 0NEWSPRINT (KG/YR PER CAP) .. .. .. 0.4 0.2 4.0 a

…______ - __.__________________ .- _ --- - _- _ _ - _ _ _ _._____________…_________._. -- -----------------

SEE NOTES ANO CEFINITIONS ON REVERSE

JJQG.l Ilag. 2 of L P*Z.i-

(boses otherwise, noted, date for 1960 rmfer to any year between 1 959 and 1 961 , for 1 970 between 1968 and 1970, and for Mast Recent Estimate betweer.

1973 and 1975.

- Pklsysla fAa baw selected as, the wily mon-Ofl of a alas eleller to Caearoon, which, endowed with a diversified tropical, prud-utios, readies toe GIIP

per capitae rtagt (US ULCO to 6003).

CAMER)ON 1260 a Weat Ceerooni; a, 1962; /c Including eldlvesS, aesiatant sidwiess and assistant nu.rses; Jd Ouvero-eotnoepitala, rraml hesp Itals aWnd dical centers; /a 12-18 years of age; If 13 years for East Ca,arno.

2970 Li 1960-66; &b 12-18 years of age; ac 13 Year for East Ce,meroo.

NDS, HXCM( ESLJ4ATX La 1972; L/b 1971; ac ¶969-71 averagle; Ld 12-18 years of age; /. 13 years for East C.amerno;

GM"N 1970 Li Registered unexploy*d; /b Registered, not all practicing In the fouafl7i ac i966-68; LA 6-15 and 16-21 years,

of age respectively.

IMRZ CGOAS 1970 La Due to imigretiom, p-opulation growth rate is higher then tbe rate of natural increase; 1965-70; ac Ratio of~PDaltioO Under 15 and 65 and over to total labor force; /d Govearuoast only; /a19IL-6

6J I 12-18 years of age.

MALAYSIA 90 est; MaleYsia; /b Registered applicantsa for work; LA Governiment only; LA i96&-66; Le 12-18 years of age;

fi97 InsIde only.

f2, August 5, 1976

fPDlrINTTh OF SOCIAL DiDIC-AZon

Lsead Area (thou ho Populstiosi per nursing perso -Ppuato divided by nmber Of practiciogTotal - Tocal surface ares cosprising iaod ares and (isead -etrs. vl n i egsuc uss .and r'etfe uss n

Ari. - ootrecet etimate of sgricultural ares used tenporraily orosr- sunlitery personnels with troining or soperiosionnmnentlv for coupe Pastures. marker & kitchen gardens or to lie follow. population per hoonital bed - Population divided ho ossber of houpita1

GN? Per caPita (0551 - Cip cer capica - -i.ss at ourr-o cakch prices, beds avilable in public sod pniv-ro gecers1 sod speciloi-od hospital

-csiloiacd by save cooveloo erhod as crild Bank Atias (1973-75 boo(s), sod rrhsbiiitation centers. eociudew oursitog hostas and estsblisw,-nts

1960 1970 and 1975 data for costodial sod preventive care..Pop.l.ciaa .. d i-l ~~~~~~~t.,J,tjc~~~ Per capita supply of calories (7. of Csornet) -C piredt Eru'

Population and :ltal aratistics ~~~energy q,iaetof net fond supplies avilable in c-wstry e

Popolati- (id-sr otlo)- As or Jclv first if cot av-ilabie. a-erage capita per day. soailahie supplies coopoise dovestic production. isports

of two -od-yerestae- 1960. 1970 sod 1975 data, less exports. and changes in stock, net supplies enclude animal feed.

POP-1-- d-s1c, - Mid-y- P -~~~~~~~~seds, quantities used is food processing sod losses. in distribution,

-ep -sIsIO h .r dest -fc tssIare . i-pa ouato e qur io rsquirmet ayocsstdb A aed on phyn-iogic-I -oeds for

eter (170 hecttaresdof total area. spfari.al activity and health oconsidering ssvirosneto1 toperature. bodycopultion eostc - r -cure he of aeri-. lad-Csue saoefrWeights, age wed ses distr1bsti-o of p-si Iso ad aliowiog 107. for

agrtcolrccsl bed polo, w~~~~~~~~~aste at household level.

Vital stjEls-cs ~ ~~~~~~~~~~~~Per capita supply of protein (cress per day) - Protein content of pervital bis rtati-s h-si-OO- capita nest, spplyt,of, fod orday, st suPppo of fo sdfsd5

Crud birh rae p ihosand- anuallive blrtho per thousand of etd-year abv,cqirennt oral ontieouobis d by defAisnedi

populatio. to-year aririh-tic avrags, ending In 1960 and 1970. and five- Research cervices provide for a sininu ailo....sce of ci dress Of total

o-a averagencding in 1975 for most recent estimate Protein per lay. end 20 graon of animal and pubse Protein, of w,hich

Crude deaco rate per thousad -sssa deaths per thousand of sid-year 10 gras. should be snimel protein , these a toodords ire io-ir then

PoPu1-lation.e- -oar-r '-e-c av-ra.s ending In 1960 snd 1970 and chowe Of PS grasm of total protein and 23 goons of animal protein as

fi---e-vrvrgo ending io 1975 for cost reose- ti.nate.anavrage for toe .s-ld proposed by FA) In 'ho Third Aorld rood

lofast sortalito rate (,th-ul - Annual deaths Of infants under one yesr of Asvy

'2' "' "' ~ ~~~~~~~~~~~~~~~Per capita protein, -pply for anim- 1and L. pss- Pru -sospply ci

life e7npenacc at, bi'Jrth (vrsi - Average number of years of life renainig food derived froes animals and pulses in gram per day

at birth, osuallo five-ra ace rges coding in 1960. 1970 and 1975 for Death rate f/thou) aces 1-4 - Annual deaths per thousand Jn age group 1-4

developing countries y~~~~~~~~~~~~~ears. to children in this age group, suggested aanindicatrcoc

Crows reproduction race -Acerage osber of Ive- dasghtern a wesn will Ianutrition.

bear in her normal reproductiv period if she esperienres present age-

specific etlt races~,usuallyt(toe-year averges ending in 1960. Education

1970 and 1 975 for deveopng souncnoes. Adjusted en,rollm,ent ratio - Prime- school - Enrollment of all ages as

Population cr-wc rate (7.)- total - C-Onoud asnual growth rates of cid- percentage of primnary sobool-age population, includes children agedyer pjopulg-C~ato for 1~950-60. 1960-70 and 1970-75 6-11 Years but adjusted for different lengths of primary education.

.Popltincruh (rceZ) - urhan - Cespused like growth rate of total for countries with unversel educaion, esoietny onceed 1007%

populatino. different definitions, Of urban areas nay affect ospara- since ions Pupils are bel1w or above the official school age.bility of data camog countries.Adutderlmn rai -seodr ucol-optdas bve

Urban nopoatios (.Of total) -ratooera.t oasoulto,dfe secondary education requires at least four psara of opproed prinary

rentrdeiniios furanara ma ffect conParahility of dat.aaasng Instruction, providesgnrl,vctoa or teacher training

countriesr. (O ct hlrn(-~yas .kg. (56 er) instrctions for pu~pils of 12 to 17 years of age. correspondence

As strutured (p5 erest) - -Ceildoc pU-I'. yer) wrigage.(1-64yeas),course are generslly extiuded.sod etied 65 ear an ovr) s prcetags o ol-year population. Years of schooling provided (first and second levels) - Total pesre of

ARe dependenc, ratio - RatiO of Population under 15 and 65 and over to schooling, at secondary level. voctional in.tructcob nay li partIally

those of ages 15 chrsugh 6i.. c opee. nldd

iconasi. dependency ratio - Ratio of population under 15 and 65 aod overploatiena onr clldedt(.of sonr)- osin oatuon

to the lsbor force is age group of 15-64 years. include technical, industrial or other program which operate ind,-Family planning :A.EcMZt-r (n.sltv thou) - C_Islaive number of pendentlc Or as deparct.et of secondory ins titutions.

aceptors of birth-control devioss under uaupices of national fanily Adult literacy rate (7.) - Literate adults (able to rea.d and write) as

ploneing program since inceptioncecnaeofttlautppuainee 5 er n vr

Family pl.aning - user (7. of e-arnd sae)-PrnagwOf mariedpecnaeo toaadlppjti gd15er nd e.

w-n Of obild-bearing age (15-4d. years) who use birth-control devices RousiJag

to all married amon in san ag group. Persons per roes (averag) - Average nsseber of persons per roe In

E.pl-.t ~~~~~~~~ ~ ~ ~~~~~~~~occupied covninldwellings in urban areas; d-1siings exclude son-

Ttsp loneo foc tosn)perman.ent st,rctoar.s and unoccupied pects.Tota laor orc (tousod)- Eoo0ceicaIly active persons, including Occupied dwellings without piped water (. Occupied cooentional1

redtfioities and urinply bauntr aexeldin bous.besocs. tdns t. dwellings in urban and rural areas without inside or outside pipedde.rfintonsein vagrioustr co7tie er o.o8al.wter facilities as perLentage of all occupied dwellinga.

Labr frcein griultre 7.)- Agricultral labor force (in farming, Access to electricity (7 of all dwelias - Conventional dwellings withforestr-y, hunting and fishing) as percentage of total laker force, electricity in Iving quarters as percent of total dwellings Jo urban

UjmPsloved (7. of labor force) - Ui1Ployed are tusully defined as persons and rural areas.who are able and willing to take a job, our of a job on a give day, Raral dwellings conac ted to electrciciy (7.) - Conputed as above for

reamed out of a job, and seeking work for a specified md.ntss period rural dwellings only.

aot enceeding one week, - sot be crparebie between countries due to

different definitions of eaplped and source of data. e.g., aeploy- ConSumption

nent office statistics, sample surveys cpsl...y -semploysint insurance. RAdio receiver (Per thou pop) - All types of receivers for radio broad-

Incow, d-ih~foa Per-I.g -f ri-e inonw,(bot in ash nd k~d)ceets to general public per tho,usand of population, excludes -olicen-ed

re-i- di orbyriches -% Prchentag of7 prIvate 20o%(ot in r. o 40b and bid)rceoer in count'ies and is years hen renits-rtios of ri-dio sets wareceived.b.ihs 7 Ihet27,poet2%.adpoetiio in effect, data for recent years. mY sOt be cesparable since .oat

households. ~~~~~~~~~~~~~~COoncries aholisbed licensing.

Distribution, of ~~~~~~~~~~~~~Passenger cars (per thou ceo) - Passenger car comprise nator tars a-etin1

DistrIbution oflad ownershiP - Percentages of land ownd bly wealhiest less than eight persona. -xcldas ambulances, hearses and wilitary10.adpoo 107. of land owners, vehicles.

H2-lth -d 4.ttition E~~~~~~~~~~lectricity (kwh/yr per cap) - Annual inais_ption of industrial. ci r-

(ixaltih and TIIa-Muaio M dt Nutriion cil, public end Private ielctrilty in bil-sott sours per capita,

Population s physicin-f suaioidvie ydine of prauticing gevraellp based on prodmtion data, without allowance for losses Inphyscias qaliiedfres a medical s-hoo at univrsity, level. grids hut allowing for imports and enports Of electricity.

NewPrime (kg/nT per cap) - Per capita unnual cona_ption in kilogr-s

DOO I DTA page 3 of 4 Page(Amount in si rion of U.S. doUlrar)

197 Actual Projected 1967- 1972 - 19774 - 19987 61 16 94 8197 17 94 T 7 T~1972 972 197419691817 197 198NATIONAL ACCOWITS-3 "F r

MATIONA-L ACCOMM p-Year Av-erage at 1967- 1.969 pricds & Exchange Rates Average Annual Grovth Rates As Percent of GDY

Gross Domestic PrOduct 799.4 1109.9 1195.5 1266.1 1363.8 1798.8 6.8 3.8 6.8 5. 7 101.2 104.0 103.6Gains from Terms of Trade() -__9.5 21.4 - 46.0 - 38.2 -__41.2 - 62.9.. . - 1.2 - 4.0 - 3.6Gross Domestic Income 789.9 1088.5 1149.5 12-37.9 132-2.6 17735.9 6.6 2.8 7.3 5. 6 100.0o 1600.0 -100.0-

Import (mci. NP'S) ~~~~~234.0 325.0 344.5 364.3 387.4 516.6 6.8 3.0 6.0 5. 9 29. 6 30.0 29.8Exports " (import capacity) 213.2 290.6 328.4 325.0 361 490 64 63 12 69 2. 86 2.

Resource Gap ~ ~ ~ ~ ~ ~~ T~~7! 7~~77 5T~- --- 47r 10.6 -46.2 78.5 -1.5 T T

Consumption Expenditures 682.1 951.2 1013.7 1084.0 1145.2 1i45.6 6.9 3.2 6.3 4.8 66.4 88.2 83.3Investment 1 (incl, stocks) 128.7 171.7 169.2 183.2 220.1 337 5.9 - .1 14.0 8.9 16.3 14.7 19.4

Domestic Savings ~~~~~~107.8 137.4 153.0 143.9 170.7 290.2 5.0 5.5 5.6 11.2 13.6 13.3 16.7Nationic Savinigs 87.9 114.0 102.7 110.0 151.2 249.8 5.3 - 5.4 21.3 10.6 11.1 8.9 14.4

MERCHNDIISE TRADE Anrnual Data at Currenlt PricesAsPreto Tta

Capitalgos4.s9. 0. 4. 1 77. 5 444.4 16.9 8.2 30.4 20.2 21.7 2J.9 35.4Caitemdate godsodse s 87.3 133.6 198.3 2543.32 9. 3. 8.9 21.8 22.5 12.4 46.4 45.5 42 5Inerels direategods mterials) 87.3 15.26 398.3 252.3 61.86 109.8 12.9 58.7 2 7 .0 12.2 4.4 9.8 8.7

of vl~~.ch: Petroleum ~~ 8.3 15.2 38.3 52.3 61.8 109.8 12.9 58,7 27.0 12.2 4.4 8.8 8.7

consurotion goods 51.6 64.9 95.0 112.7 128.9 169.3 122 1. 165 .674 2.8 35Total March. ImpoAts (cif) TMTU 30T-W =39 Sr7 =.7 T3 10.0 20.0 23.6 13.6 i1= i'7

Exports 858 .. 8 5. . 40 9. 35 8.Primary Products (~l fuels) 143.7 199.9 446.7 398.1 461.0 85. .68 00 16 140 98 935 68Fuels and related materials - - -- -

of which: Petrolaumi - - 48 1459-Mazps.fact~~~~~~~~~~e4jods ~~~~~14.6 20.9 31..1 53.9 68.3 7- 2134.5 7. 20 4. 4592 6.5 13.2

Total Merch. Exorts (fob) T3r 77 77-T Z=7 -3777T -TO=69 471 52 1.0 1f7 DUO *D~Tourism and Border, Traae . . ..

(erchand.ise Trade Indices -9. Average 1.967-69 100Export Price IndeX 9. 114.1 172.1 189.2 212.6 303.0 4.0 22.8 11.1 7.3import Price Index 94.8 127.6 186.0 218.0 239.3 343.7 6.1 20.7 13.4 7. 5Terms of Trade Index 99.1 89.4 92.5 86.8 88.9 88.2 -2.1 1.7 - 2.0 - .2Exports Volume Index 94.0 123.8 163.9 147.0 164.0 229.0 5. 7 15.1 - 6.9

tALUjE ADDED BY SECTOR Annual Data at 1967-69 Prices and Exchange Rates Average AnnUal Growth Rates As Percent of Total

Agriculture 2 72. 2 352.1 380.1 417.5 432.8 540.7 5.3 2. 9 6.7 4.6 38.5 37.4 34.4Industry and Mining 170.9 233.2 230.8 258.8 271.8 371.2 6.4 - .1 8.5 6.4 24.2 2 2. 7 2 3. 6Service 264.3 40. 40. 4fn- 488.1 658.3 8.7 .1 9.7 6. 2 37.4 39.9 41.9Total 707.4 986.9 10t6.3 1136.8 1192.7 1570.2 6.9 1.5 8.3 5.6 10 0.0o 100.0 100.0

~~~LMic FINANCE ~~~~~~~~~~~~~~~~~~~~~~As Percent of GDP

~Central Government) (in CFAF. billion)Current Receipts 31.9 56.6 68.4 79.6 103.8 201.1 12.2 9.9 23.2 14.1 16.4 16.4 17.0Current ExpendituLres 32.1 46.6 60.9 71.6 93.9 165.9 7. 7 14.3 24.2 12.1 16.5 14.6 14.0~~idgetery Savings - .2 10.0 7.5 8.0 ~~~~~~~~~~~ 9.9 35.2 152.7 -15.5 14.9 28.9 - .1 1.8 3.0Other Public Sector Savings 4.6 1.0 13.4 10.9 12.5 19.8 35.7 266.1 - 3.5 9.6 2.4 3.2 1.Public Sector investment 13.5 27.5 43.4 44.2 49.9 124.7 15.3 25.6 7. 2 20.1 6.9 10.4 10.6

us $ million.'IJERENT B1~~E2WITl1RE DETAILS ~ Actual Prelim. Eat. Proj. DETAIL ON At 1974-1975'? and ER

As % Total current Expend.) 1967 1972 19 74 19 75 1976 nThLCrSECT POGRAM 197ird Pla - of 75 talE.ducation 14.4 17.1 16.9 17.1 17.4 D9ET4RTP0E -17- 2- 95/6Other Social Services .7 10.7 9. 7 10.0 10.3 Social Sectors 247.6 26.6Agriculture. 5.0 5.6 5.9 6.1 6.6 Agriculture 167.5 -18.0Other Economic Services 11.6 8.7 11.2 12.3 13.5 Inldustry and Mining 14.0 1.5Administration and Defense 59.5 45.3 42.6 41.8 40.3 Power 56.8 6.1

Other . 8.8 12.6 13.7 12.7 12.1 ~~~~~~~~~~~~~~~~~~~~~~Transport and commnications 38 7. 2 41.6Totalr CurrentExpenditures1(in Other ,57.7 6.2TotaF billion) Epdtrs(n 32.1 46.6 60.9 71.6 939Total Expenditures 93-0.8 100.0

IELECTED INlDICATORS 1960 - 1967- 1972- 1977- FINAN____2_

cCalcul.ated from 3-year averaged data) 1965 1971 1976 1981 PulcScorSvrs35/ 3.kverage ICOR 2 .2 4.0 3.1 Loublc eorrowing s 351.8 63.0Import Elasticity . .968 .789 1.010 LocalgnBorroning 552.8 26.0Marginal Dmeatic Savings Rate . .023 .239 .289 Toreig Financing 523.2 56 201Iarginial National Savings Rate . .137 .151 .239TolFiacn93.100

EA~~~OR F0~~~~E AND Total Labor Force ~~~~~~~~~~~~~Value Added Per Worke (9 67- 69 Prices . Exc. RaLtes)3UTPTFPRCWOE R AN of Total 1967 - 71 In U.S.Dollars Preto vrg 96-7

)uTPLIT PER WO9R7KER j rowh Rte 1-967 1971 12_6 7 19 71 Growth Rate

3giclur 22,200 31.700 18.5 19.7 9. 3 4,585.6 4,186.1 118.9 10 7. 7- 2.6gindustury 29,210 41,360 24.3 25.7 9.1 1.064.7 1,090.4 2 7. 6 28.1 .6EnrvicrY 4/' 27,328 34,427 22.7 21.4 6.0 5,027.8 5,420.4 130.3 139.5 1.9.overnment 41,494 53,486 34.7 33.2 6.5 4,5. ,4. 132 174.'otal 1-20,232- 160r, 9 735 T 100.0 im o -7 'T117f T1 - I T007.- 100.0 .2

not applicable - nil. or negligible ~J~/ Estimated actual disbursements 4/ Excluding governmentnot avalilable --ls thn al the 2/ Net of debt ser-vice

smallest unit shown 3/ Modern sector only

Annex IPage 4 of i4 pages

CAMEROON

BALANCE OF PAYME1qTS, EXTERNAL ASSISTANCE AND DEBT PROJECTIONS(amounts in millions of U.S. dollars at current prices)

Average AnnualActual Estimated Projected Growth Rate

1971 1972 1973 1974 1975 1976 1977 1978 1979 19s0 1975 - 1930

M4ARY BA1,ANCE OF PAYMENTS

Exports (incl. NFS) 309 340 533 693 648 766 937 1095 1228 1358 16.oImDorts (incl. NFS) E 425 520 657 71 943 1071 1217 1382 15o6 14.6Resource Balance (X-M) -4 7 13 7 -143 -177 -133 -122 -155 -207 7.7

Interest (net) - 5.5 - 6 -11 -16 - 17 - 21 - 34 - 42 - 49 - 59 28.3Direct Investment Income - 1.7 - 2 - 4.5 - 7.7 - 8 - 8 - 11 - 15 - 21 - 28 28.5WorkersPRemittance -17.0 -21 -24 -33 - 34 - 39 - 45 - 52 - 59 - 68 14.9Current Transfers (net) 15.5 15 11 20 24 30 35 38 41 44 12.9Balance on Current Accounts -2 -99 T17 0 -7 - 715 -2179 -193 - -319 12.4

Private Direct Investment 12 -25.6 4.6 -13.3 - L 18 22 27 31 30 109.1Official Capital Grants 7 6.8 7.2 13 24 26 28 31 34 37 9.0

Public M&LT LoansDisbursements 28 72.4 51.5 60 78 118 150 191 253 317 32.4-Reoayments -8 - 8.8 -12.4 -16 -18 -18 -24 32 -40 -60 27.2

Net Disbursements 20 o3.6 39.1 T 7 0 101 19 159 213 257 33.8

Other M&LT LoansDisbursements . . . . . . . .

-Reoayments . . . _ . _ . .

Net Disbursements . . . . . . . .

CaDital Transactions n.e.i. 2 11.8 -13.7 44Change in Net Reserves 11 42.6 -15.9 0

.ANT AND LOAN SONSITTCTNTSActual Estimated

Official Grants Grant-like 25.8 24.0 25.2 24.0 1970 1971 1972 1973 1974

Public M&LT Loans DEBT AND DEBT SERVICEIBRD - - 25.7 34.1 Public Debt Outs.&Disbursed 130.3 159.8 194.5 239.9 295.1IDA 1.5 12.7 24.0 -Other Multilateral 3.5 .6 19.3 - Interest on Public Debt 4.5 5.7 6.5 9.9 12.3

Repayments on Public Debt 4.5 7.5 9.1 15.7 19.7Governments 8.2 24.6 81.1 47.1 Total Public Debt Service 9.0 15.2 15.6 25.6 32.0Suopliers 3.4 4.7 .6 16.8 Other Debt Serrice (net) .. ..Financial Institutions - 15.6 - 22.0 Total Debt Service (net) .. ..

Bonds -- 14.8Public Loans n.e.i. - - - .. Burden on Export Earnings (%)

Total Public M&LT Loans 1. 5T.4 150.7 iZ.6Public Debt Service 3.z 4.3 4.6 4.8 4.6Total Debt Service .. ..

Actual Debt Oustanding on TDS + Direct Invest.Inc. .. ..Dec. 31, 1974

(TERNAL DEBT Disb. Only Percent Average Terms of Public Debt

World Bank 26.8 9.1 Int. as % Prior Year DO&D 4.2 4.4 4.9 5.1 5.1IDA 31.3 10.6 Amort. as % Prior Year DO&D 4.2 5.8 5.7 8.1 8.2Other Multilateral 38.0 16.9Governments 153.8 52.1 IBRD Debt Out. Disbursed 3.4 7.7 13.8 23.1 26.8Suropliers 8.5 2.9 as % Public Debt O&D 2.6 4.8 7.1 9.6 9.1Financial Institutions 36.6 12.4 as % Public Debt Service - 4.0 6.7 5.4 6.7Bonds -Public Debts n.e.i. _ IDA Debt Out. Disbursed 8.9 11.0 18.4 30.1 31.3Total Public M&LT Debt 295.1 100.0 as % Public Debt O&D 6.8 6.9 9.5 1?.6 -10.6

as * oublic Debt Service - - 0.1 0.1 0.1Other MALT DebtsShort-term Debt (disb. only)

not aspltcable e staff estimatesnot available - nil or negligible

.. not available separately -- less than half thebut included in total smallest unit shown

ANNEX IIPage 1 of 5 pages

THE STATUS OF BANK GROUP OPERATIONSIN THE UNITED REPUBLIC OF CAMEROON

A. Statement of Bank Loans and IDA Credits (as of October 31, 1976)

US$ MillionAmount

(less cancellations)Loan orCreditNumber Year Borrower Purpose Bank TW IDA 3/ Undisburse

Four Credits and six Loans have been fully 39.7 24.2 -disbursed

161 CM 1969 Cameroon Education 11.7 1/ 0.4320 CM 1972 Cameroon Education II 9.0 7.1429 CM 1973 Cameroon Roads II 24.0 0.1429 1 CM 1976 Cameroon Roads II 15.0 14.4935 CM -.-L973 Cameroon Roads II 24.0 24.0983 CM 1974 Cameroon Livestock 11.6 7.7

1038 CM 1974 REGIFERCAM Railways 16.0 1.91039 CM 1974 Cameroon Cocoa 6.5 4.9574 CM 1975 HEVECAM Niete Rubber Project 16.0 14.5575 CM 1975 Cameroon DFC - Small Scale

Enterprises 3.0 3.0S 4 CM 1976 REGIFERCAM Railways 2.3 2.3

1245T CM 1976 Cameroon Education III 17.0 /2 17.0657 CM 1976 Cameroon Second Doula.Port 10.0 /2 10.0

1321 CM 1976 Cameroon Second Doula Port 15.0 /2 15.0

TOTAL 115.1 17.0 112.9 124.3of which has been repaid 1.1 0.0 0.0

TOTAL now outstanding 114.0 17.0 112.9

Amount sold 0.2of which has been repaid 0.2 _

TOTAL now held by Bankand IDA /3 113.8 17.0 112.9

TOTAL undisbursed 57.8 17.0 49.5 124.3

B. Statement of IFC Investments

311 CM 1975 BATA Equity Investmentin Shoe Factory 0.4

/1 Including a Supplementary Credit of US$1.2 million made in 1975./2 Not yet effective.7T Prior to exchange adjustment.

ANNEX IIPage 2 of 5 pages

C. PROJECTS IN EXECUTION 1/

Cr. No. 161, 161-1 First Education Project: US$10.5 million Creditof September 23, 1969; Effectiveness Date:April 29, 1970; Closing Date: December 31, 1976(Original Closing Date: June 30, 1974; FirstPostponement December 31, 1975) and US$1.2 millionSupplementary Credit of July 30, 1975: Effective-ness Date: October 30, 1975; Closing Date:December 31, 1976.

The implementation of this project was slow, especially in the ini-tial years. This resulted from delays in (i) selecting the consultants,(ii) reaching agreement on schedules of accommodation, (iii) revising thebidding documents, (iv) starting construction work for which overpricedinitial bids had to be cancelled, and (v) awarding contracts. The projectis now well managed and near completion. With the exception of additionalsite-works, the construction of the project schools is completed. Almostall furniture has been delivered and equipment delivery will soon be com-pleted. All the schools are in operation. The technical assistance programis about 30 months behind schedule due to slow selection process; hence theclosing date has been extended from December 31, 1975, to December 31, 1976.In May 1975 a Supplementary Credit of US$1.2 million was approved to covercost increases due to currency realignments. A completion mission isscheduled for February 1977.

Cr. No. 229 Douala Port Project: US$1.5 million Credit ofJanuary 14, 1971; Effectiveness Date: April 14,1971; Closing Date: December 31, 1974; (OriginalClosing Date: June 30, 1973).

The Douala Port Project commenced in July 1972 and physical workunder the Credit was satisfactorily completed in November 1974. Covenantsand undertakings agreed during Credit negotiations have been reasonably ful-filled, but financial targets were not achieved. Remedial financial measuresare included in the Second Douala Port Project.

Cr. No. 302 SEMRY Rice Project: US$3.7 million Credit of April26, 1972; Effectiveness Date: July 28, 1972;Closing Date: June 30, 1976.

Implementation has been on schedule and the Credit is fully dis-bursed. Results achieved by the project in the field of production yields

1/ These notes are designed to inform the Executive Directors regardingthe progress of projects in execution, and in particular to reportany problems which are being encountered, and the action taken toremedy them. They should be read in this sense, and with the under-standing that they do not purport to present a balanced evaluationof strengths and weaknesses in project execution.

ANNLA i1

Page 3 of 5 pages

and agricultural practice improvements have largely exceeded targets. Theproject has been less successful in attracting qualified Cameroonian staffand establishing an adequate financial management but these shortcomingsare being corrected.

Cr. No. 320 Second Education Project: US$9.0 million Creditof June 28, 1972; Effectiveness Date:February 27, 1973; Closing Date: June 30, 1979.

Due to difficulties in selecting architects and agreeing on thedesigns, project implementation is delayed by twenty-four months, but noextension of the closing date of June 30, 1979, is expected. The projectis generally well managed. Following cost overruns due to currency realign-ments and the accelerated price increases which have occurred since 1973, oneproject school was transferred to the Third Education Project. (Loan 1245-T).

Cr. No. 429, Ln. No. 935 Second Highway Project: US$24.0 million Creditof September 26, 1973; Effectiveness Date:December 20, 1973; Closing Date: December 31,1978 and US$24.0 million Loan of same date;Effectiveness Date: December 20, 1973;Closing Date: December 31, 1978.

The Government has awarded civil works contracts for all threeroads, and construction began in December 1974. Contractors started workslowly on the Douala-Pont du Nkam (161 km) and Pont du Noun-Foumban (50 km)roads, and delays of six months to one year are expected. Construction ofthe Garoua-Mora (260km) road is progressing satisfactorily. The projectwas re-appraised in September 1975 and the total cost was estimated to havealmost doubled. In view of the unexpected magnitude of the cost overrunsand the absence of additional financing from new donors, the Governmentagreed to postpone construction of one road section (90 km) to reduce totalproject cost. A Supplementary Credit of US$15.0 million was approved inMarch 1976 to help alleviate the burden imposed on the Government by theproject's cost overruns.

Ln. No. 983 Livestock Project: US$11.6 million Loan ofMay 14, 1974; Effectiveness Date: September 16,1974; Closing Date: June 30, 1980.

Project implementation has progressed satisfactorily, althoughsome project components are behind schedule. The situation at one projectranch continues to be very good, and that of a second ranch has notablyimproved; activities in the third could start in 1977, subject to Bank'sapproval of a development program. Twenty one bids have been received andevaluated for the turn-key construction of two slaughterhouses; negotiationstook place with the lowest fully responsive evaluated bid and the contracthas been signed in October 1976. About 45 credits are expected to bedisbursed during 1976/77. The tsetse-fly eradication campaign is likely tostart in November 1976, as scheduled.

ANNEX IIPage 4 of 5 pages

Ln. No. 1038 Second Railway Project: US$16.0 million Loanto REGIFERCAM of September 18, 1974; Effective-ness Date: December 18, 1974; Closing Date:December 31, i977.

Procurement of main project items is satisfactory. The track mate-rial has been delivered and final delivery of rolling stock items is underway.Although problems were encountered in the construction of the foundationfor the Japoma bridge, the works are expected to be completed by April 1977.Due to the fluctuation in exchange rates during project implementation, addi-tional financing was required to cover the cost of the equipment alreadyordered and of the reconstruction of the Japoma bridge. Consequently, therailway has obtained a supplier's credit of US$890,000 to supplement Bankfinancing for the rolling stock, and the foreign exchange cost of the con-sulting services (US$925,000) originally included in this Second RailwayProject has been transferred to the Third Railway Project financed under LoanNo. S-4 which became effective on October 5, 1976. Due to the world slump inthe timber market and recent substantial increases in staff costs, REGIFERCAMexperiences difficulty in attaining the financial covenants included in theLoan Agreement. During the negotiations of the Third Railway Project, theSecond Railway -Project financial targets were retained and the Government andREGIFERCAM undertook to take the necessary measures including tariff increasesto achieve the target set for 1978/79. A first tariff increase averaging12.4 percent has been implemented, effective June 1, 1976, and subsequenttariff increases will be implemented on July 1, 1977 and 1978, respectively.

Ln. No. 1039 Cocoa Project: US$6.5 million Loan of September 18,1974; Effectiveness Date: February 26, 1975;Closing Date: June 30, 1981.

The executing agency, SODECAO, is now fully staffed and is extendingits activity to the complete project area. The management structure, which isstill unsatisfactory, is to be strengthened by the appointment of a TechnicalManager, expected in January 1977. Progress in the field is up to appraisalobjectives but further progress will depend in a considerable part on arevision of the existing farmgate price structure which presently does notinduce production of higher quality cocoa. Project costs are under controland no cash-flow problems are foreseen for the next twelve months. TheRoadProgram part of the project has made a start, after a delay of more than oneyear. The main reason being lack of cooperation from the Government's RoadsDepartment, a problem which still remains to be solved.

Cr. No. 574 Niete Rubber Estate Project: US$16.0 millionCredit of June 3, 1975; Effectiveness Date:December 1, 1975; Closing Date: June 30, 1981.

Progress in establishing Niete Rubber Estate has been steady:plantings are on schedule and construction work ahead of schedule. Labor

ANNEX IIPage 5 of 5 pages

hired locally has been more than anticipated and is sufficient up to now;remote recruitment is likely to become necessary soon. Collection of rubberseed is being improved, as unusually heavy rains have hampered seed production.HEVECAM's Chairman has been appointed to an important national position, andhis resignation of the Chairman post should be anticipated. The terms ofreference for the regional master plan studies have been proposed.

Cr. No. 575 Small- and Medium-Scale Enterprise Project:US$3.0 million Credit of July 1, 1975;Effectiveness Date: July 30, 1976 (OriginalEffectiveness Date: December 1, 1975; FirstPostponement: February 2, 1976; Second Post-ponement: June 2, 1976); Closing Date:December 31, 1980.

Credit effectiveness was declared on July 30, 1976 after two post-ponements. Delays were caused mainly by difficulties with the selection andappointment of three experts as technical assistance to the Banque Cameroun-aise de Developpement (BCD). Their appointment was a condition of effective-ness of the credit.

Ln. No.-n245-T Third Education Project: US$17.0 millionThird Window Loan of July 2, 1976; Effective-ness Date: December 31, 1976 (OriginalEffectiveness Date: October 4, 1976); ClosingDate: December 31, 1981.

The effectiveness date was postponed because i) the documents en-larging the Project Unit have not yet been received in the Bank and ii) thecontract between the Government and the architects for undertaking projectdesign has not yet been signed. These are the only conditions of effective-ness that are unfulfilled. Work on school designs is proceeding under aLetter of Intent with consulting architects.

Ln No. S-4 Douala Railway Station and Marshalling YardEngineering Project: US$2.3 million Loan ofJune 25, 1976; Effectiveness Date: October 5,1976; Closing Date: October 31, 1978.

The loan is effective.

Ln. No. 1321 Second Douala Port Project: US$15.0 millionCr. No. 657 Loan of September 24, 1976; Projected Effec-

tiveness Date: January 24, 1977; Closing Date:June 30, 1981 and US$10.0 million Credit of samedate; Projected Effectiveness Date: January 24,1977; Closing Date: June 30, 1981.

The loan and the credit are not yet effective.

ANNEX IIIPage 1 of 4 pages

CAMEROON

PLAINE DES M'BO RURAL DEVELOPMENT PROJECT

PROJECT SUMMARY

Borrower: United Republic of Cameroon

Beneficiary: Societe de Developpement de la Riziculture dans la Plainedes M'Bo (SODERIM)

Amount: US$2.0 million, equivalent

Terms: Standard

Co-financing: The Caisse Centrale would participate in the financingof the project with a loan to Government of US$0.5million equivalent.

Relending Terms: The IDA credit and the Caisse Centrale loan would bepassed on as a grant to SODERIM.

Project Description: The Plaine des M'Bo extends for 30,000 ha at the baseof the Bamileke Plateau. The proposed project wouldconsist of three years of agronomic trials on thePlaine des M'Bo, to establish the fertilizer require-ments of rice and soybeans, the adaptation of soybeanto the cropping system, and the prospects for doublecropping of rice. In addition, a mechanization/settle-ment scheme would be initiated with settlers from theoverpopulated nearby highlands, which would test thefeasibility of establishing self-managing groups of 50farm families on 100 ha, i.e., to form a threshing unit.At the same time, a parallel settlement of 50 farmfamilies using new types of equipment to be tested underthe project, will permit comparisons between severalmechanization/ settlement schemes. The project willalso finance studies of the local market for soya, thesocio-economic characteristics of recent and potentialsettlers of the plain and neighboring highlands, andhealth control measures. The project would be managedby SODERIM, (the successor to the Mission de Developpement,;the entity which was created by the Government in 1973to implement the pilot operation). The three-year trialperiod would comprise six cropping seasons, which, withthe previous four years of field trials, would provide asufficient data base for a full project which couldbegin in 1979.

ANNEX IIIPage 2 of 4 pages

Estimated Cost 1/

Local Foreign Total

(in '000 US$)

Settlement Program 326 924 1,250

Agronomic Trials 106 430 536

Mechanization Tests 28 149 177

Soil Survey 2 17 19

Soya Marketing Study - 12 12

Migration Study 33 48 81

Health Program 20 73 93

Sub-Total 515 L,653 2,168

Physical Contingencies 26 82 108

Price Contingencies 83 253 336

Total Project Cost 624 1,988 2,612

1/ Including taxes, which are estimated at US$0.1 million.

ANNEX IIIPage 3 of 4 pages

Financing Plan:

IDA Percent Caisse Percent Government Percent TotalUS$ of US$ of US$ of US$

Million Total Million Total Million Total Million

1. Consultants andExpatriates 0.71 75 0.19 20 0.05 5 0.95

2. Local personnel andoperating costs 0.38 75 0.10 20 0.02 5 0.50

3. Equipment 0.32 75 0.09 20 0.01 5 0.42

4. Buildings 0.22 75 0.06 20 0.01 5 0.29

Sub-Total 1.63 0.44 0.09 2.16

Non-allocated 0.37 75 0.06 20 0.02 5 0.45

TOTAL 2.00 0.50 0.11 2.61

The external financing would cover 100 percent of project costs, netof taxes or 95 percent of total project costs. The Government contribution,shown above, is the equivalent of the taxes included in total project costs.

Estimated Disbursements:

FY FY FY FY1977 1978 1979 1980

0.2 0.8 0.5 0.5

The proposed IDA credit of US$2.0 million would cover about 75 percentof total project costs and be equivalent to the foreign exchange cost of theproject.

ANNEX IIIPage 4 of 4 pages

Procurement Arrangements: Since the largest part of equipment (US$0.4million) should be available from the beginningof the project and the contracts for constructionwork (US$0.3 million) are not large enough tomake international tendering appropriate, equip-ment and buildings' contracts would be awardedon the basis of competitive bidding advertisedlocally in accordance with procedures acceptableto IDA. The services of expatriate managementstaff and consultants (US$1.0 million) would beobtained according to IDA's normal procedures.

Technical Assistance: Total expatriate staff and consulting serviceswould amount to 168 man-months at a total costof US$1.0 million and an average man-year costof US$70,000 (of'which about US$30,000 would besalary).

Rate of Return: On the basis of very preliminary calculations, itis expected that, if the Phase I project is com-pleted successfully and Phase II is carriedout, the economic rate of return on the fullproject would be some 15 percent.

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