AFRICAN DEVELOPMENT FUND

PROJECT : ECCAS Institutional Capacity Building Support

(PARCI-ECCAS)

MULTINATIONAL: Economic Community of Central African States

(ECCAS)

PROJECT APPRAISAL REPORT September 2012

Appraisal Team

Sector Director: Mr. Isaac Lobe Ndoumbe, Director, OSGE

Regional Director: Mrs. M. KANGA, Director, ORCE

Sector Manager: Mr. J-L. BERNASCONI, Manager, OSGE.1

Team Leader: Mr. A. AMOUMOUN, Principal Governance Expert, OSGE.2

TABLE OF CONTENTS

I. Strategic Thrust and Rationale .......................................................................................... 1

1.1 Project Linkages with the Regional Integration Strategy and Objectives ................... 1

1.2 Rationale for Bank’s Involvement .............................................................................. 2

1.3 Aid Coordination ......................................................................................................... 3

II – Project Description .............................................................................................................. 4

2.1 Project Components .................................................................................................... 4

2.2 Technical Solutions Retained and Other Alternatives Explored ................................. 6

2.3 Project Type ............................................................................................................... 6

2.4 Project Cost and Financing Arrangements .................................................................. 6

2.5 Project Target Area and Beneficiaries......................................................................... 8

2.6 Participatory Process for Project Identification, Design and Implementation ............ 8

2.7 Consideration of Bank Group Experience and Lessons Learnt Reflected in Project Design .. 9

2.8 Key Performance Indicators ........................................................................................ 9

III – Project Feasibility ............................................................................................................ 10

3.1 Economic and Financial Performance ....................................................................... 10

3.2 Environmental and Social Impact ............................................................................. 10

IV – Implementation ................................................................................................................ 12

4.1 Implementation Arrangements ................................................................................. 12

4.2 Monitoring ................................................................................................................. 13

4.3 Governance ................................................................................................................ 13

4.4 Sustainability ............................................................................................................. 14

4.5 Risk Management ...................................................................................................... 15

4.6 Knowledge Development .......................................................................................... 15

V – Legal Framework .............................................................................................................. 16

5.1 Legal Instrument........................................................................................................ 16

5.2 Conditions Associated with Fund Intervention ......................................................... 16

5.3 Compliance with Bank policies ................................................................................. 16

VI – Recommendation ............................................................................................................. 16

Appendix I. Comparative Socio-Economic Indicators of ECCAS

Appendix II. Table of the Bank Group’s Portfolio of Multinational Operations in Central Africa as

at 30 June 2012 (in UA million)

Appendix III Major Related Projects Financed by the Bank and Other Development Partners of

ECCAS

Appendix IV. Map of the Project Area

i

LIST OF TECHNICAL ANNEXES

ANNEX A: DEVELOPMENT AGENDA, SECTOR OVERVIEW AND DONOR SUPPORT

A1 Development Agenda A2 Sector Overview A3 Donor Support

ANNEX B: SUPPORTING ANALYSIS OF THE KEY ARGUMENTS OF THE REPORT

B1 Main Lessons B2 Detailed Project Costs B3 Implementation Arrangements (details) B4 Financial Management and Disbursement Arrangements (details)

Financial Management Arrangements (details)

B5 Procurement Arrangements (details) B6 Audit Arrangements (details) B7 Environmental and Social Analysis B9 Project Preparation and Supervision

ANNEX C: OTHER TECHNICAL ANNEXES

C1 Detailed Description of Project Components C2 List of Financing Criteria for RPGs

LIST OF TABLES

No. Title Page 1.1 Support of Technical and Financial Partners for ECCAS Capacity-Building

(in CFA.F million) 4

2.1 Project Components 5

2.2 Alternative Solutions Considered and Reasons for their Rejection 6

2.3 Estimated Costs by Component 7

2.4 Project Costs by Expenditure Category 7

2.5 Sources of Financing 7

2.6 Expenditure Schedule by Expenditure Category 8

2.7 Expenditure Schedule by Component 8

4.1 Monitoring Stages/Feedback Loop 13

4.2 Risks and Mitigation Measures 15

ii

Currency Equivalents

September 2012

UA = CFA.F 791.668

UA = EUR 1.20689

UA = USD 1.52202

Fiscal Year

1 January – 31 December

Weights and Measures

1 metric tonne = 2204 pounds

1 kilogramme (kg) = 2,200

1 metre (m) = 3.28 feet

1 millimetre (mm) = 0.03937 inches

1 kilometre (km) = 0.62 miles

1 hectare (ha) = 2.471 acres

iii

Acronyms and Abbreviations

ACBF African Ccapacity Building Foundation

ADF African Development Fund AMU Arab Maghreb Union AU African Union CAADP Comprehensive Africa Agriculture Development Programme CEMAC Central African Economic and Monetary Community CEN-SAD Community of Sahel-Saharan States

CET Common External Tariff CIC Community Integration Contribution

CIDA Canadian International Development Agency

COBAC Banking Commission of Central Africa COMESA Common Market for East and Southern Africa

COMIFAC Central African Forestry Commission COPAX Council for Peace and Security in Central Africa DIPEM Department in charge of Physical, Economic and Monetary Integration

ECA Economic Commission for Africa ECCAS Economic Community of Central African States ECOWAS Economic Community of West African States EU European Union FCD Community Cooperation and Development Fund

FOMAC Central African Multinational Force

FTA Free Trade Area GDP Gross Domestic Product IGAD Intergovernmental Authority on Development

ITC International Trade Center

MARAC Central African Early Warning System MIP Minimum Integration Programme NEPAD New Partnership for Africa’s Development NEPAD-IPPFF NEPAD Infrastructure Project Preparation Facility

PACT II Programme for Building African Capacity for Trade PAP Priority Action Programme PAPS Support Programme for Peace and Security in Central Africa PARCI-ECCAS ECCAS Institutional Capacity-Building Support Project of ECCAS

(PARCI-ECCAS) PDCT-AC Central African Consensual Transport Master Plan PIDA Programme for Infrastructure Development in Africa PIU Project Implementation Unit PSC Project Steering Committee

REC Regional Economic Community REG Republic of Equatorial Guinea REP Regional Economic Programme RIS Regional Integration Strategy RISP Regional Integration Strategy Paper SADC Southern African Development Community

STP Sao Tome and Principe UDE Equatorial Customs Union UDEAC Central African Customs and Economic Union UNDP United Nations Development Programme UNECA United Nations Economic Commission for Africa

US United States

iv

Project Information Sheet

Client Information

DONEE : Economic Community of Central African States

(ECCAS)

EXECUTING AGENCY : ECCAS General Secretariat

Financing Plan

Source Amount (UA

million) Instrument

ADF (regional RPG budget)

7.00

Grant

ECCAS 1.23 Counterpart Funds

TOTAL COST 8.23

Key Financing Information on ADF Grant

Grant Currency

UA

Interest* Type NA

Interest Rate Spread* NA

Service Charge* NA

Other Charges* NA

Tenor NA

Grace period NA

FRR, NPV (baseline scenario) NA

ERR (baseline scenario) NA

*if applicable

Timeframe – Main Milestones (expected)

Concept Note Approval August 2012

Appraisal September 2012

Regional Team October 2012

Project Approval December 2012

Effectiveness January 2012

First Disbursement March 2013

Last Disbursement December 2016

Completion March 2017

v

Project Summary

Project

Overview The ECCAS Institutional Capacity Building Support Project (PARCI-CEEAC) falls within the framework of

the Bank’s Regional Integration Strategy Paper (RISP, 2011-2015) for Central Africa, the main pillars of

which is focused on capacity-building for the Central African Economic Community (ECCAS). Its objective is

to promote regional integration in Central Africa by building ECCAS’ institutional, human and operational

capacity to implement regional programmes and the harmonization of sector policies. It aims to enhance

performance in the preparation and implementation of regional infrastructure programmes by building

institutional capacity. It also contributes to the improvement of intra-regional trade by supporting the

streamlining ECCAS and CEMAC sector policy initiatives. The project cost is UA 8.23 million, jointly

financed by the ADF (UA 7 million) and ECCAS (UA 1.23 million). It will be implemented over a four-year

period from 2013 to 2016.

Beneficiaries The project’s main direct beneficiaries are the ECCAS General Secretariat of ECCAS, the CEMAC

Commission and the Technical Secretariat of the Central Africa-REC Rationalization Committee that will

participate in studies and in other activities planned under the rationalization and harmonization of regional

policies and standards.

Consultations were held with stakeholders during project preparation. The participatory process will be

maintained during project implementation using an implementation framework involving all beneficiary

structures. Ownership of the planned institutional reforms will be ensured through ECCAS’ participatory

decision-making process involving all Member-States.

Needs

assessment The project will ensure the continuation of ECCAS capacity-building activities which are necessary for the

efficient implementation of regional infrastructure programmes and the harmonization of sector policies.

Indeed, ECCAS is faced with several institutional, human, organizational and financial constraints that

undermine the efficiency, impact and visibility of its action. It will also ensure the concrete implementation of

the ECCAS and CEMAC activities rationalization process of which the Bank is a key partner.

Bank’s Added-

Value

This operation comes at the right time to help address challenges that require bold responses at the strategic,

institutional and operational levels, in order to help Central Africa to catch up with other parts of the continent

in terms of regional integration. Indeed, the Bank, more than any other partner, is engaged in supporting RECs

to implement the integration process in accordance with its mandate.

Knowledge

Management

Implementation of this project will lead to the development of several types of knowledge, including the

capacity to analyze and adapt the institutional framework of RECs, the development of a statistical tool for

monitoring the implementation of regional infrastructure, and harmonization of the trade policies of ECCAS

and CEMAC which are two communities in the same region with different levels of liberalization for their

respective domestic markets. The technical assistance provided for under the project will promote the transfer

of knowledge to the institution through the deployment of counterpart experts. Lessons learnt from project

implementation will be disseminated through validation and dissemination of the studies produced. The

knowledge and lessons learned will be disseminated within the Bank.

vi

Results-based Logical Framework

Country and Project Name : Multinational ECCAS - Institutional Capacity Building Support Project (PARCI-ECCAS) Project Goal : Promote regional integration in Central Africa by building ECCAS’ institutional, human

and operational capacity to implement regional programmes and harmonization of sector

policies.

RESULTS CHAIN PERFORMANCE INDICATORS

MEANS OF

VERIFICATION RISKS/ MITIGATION MEASURES Indicator (including CSIs) Baseline

Situation Target

IMP

AC

T

Consolidation of economic growth

in the Central African region Economic growth rate of the ECCAS area 4.5% in 2011 5.3% in 2020 ECCAS, UNECA

and ADB reports

OU

TC

OM

ES Outcome 1: Implementation of

regional projects/programmes is

better coordinated and more

efficient

Disbursement rate of projects/programmes

coordinated by the ECCAS General

Secretariat 5% in 2010 30% in 2016 ECCAS reports

Regional CPPR

Risk 1. Low level of ownership by member States as reflected in the

delays in CIC payments and

difficulties in holding summits

Mitigation Measure 1. The revival of

national coordination teams for the harmonization of RECs and the

facilitation of intra-regional trade will

enable ECCAS to increase its visibility substantially in other to

arouse the greater interest among the Highest Authorities in Member

States. Risk 2. The weakness of national

structures responsible for regional

integration undermines the smooth conduct of projects.

Mitigation Measure 2. The future establishment of National NEPAD

Coordination teams in each State,

coupled with the support provided under this

project will help to facilitate intra-

regional trade and increase the presence of the General Secretariat.

Risk 3. Bottlenecks in the decision-making process could delay revision

of the legal framework and the

implementation of necessary reforms.

Mitigation Measure 3. Joint action

by donors, very close and coordinated monitoring of the project by

headquarters as well as technical

assistance provided by the Bank through other projects could help to

speed up the process of reviewing

ECCAS texts. Besides, the effective functioning of the Steering

Committee on the Rationalization of

RECs in Central Africa (COPIL/REC-CA) and the creation of

the CEMAC-ECCAS Joint

Committee will facilitate the

execution of actions planned under

the harmonization of regional

integration policies and instruments.

Risk 4. The weakness of the fiduciary

framework cannot guarantee the transparency or rational use of

financial resources

Outcome 2: Intra-regional trade

strengthened. Share of intra-community trade in the

region's total trade 1 % in 2010 2.5% in 2016 ADB statistics

(ESTA)

Component I: Supporting improvement of the institutional framework and monitoring/evaluation of regional infrastructure development

projects/programmes

OU

TP

UT

S

Output 1.1: The legal and

institutional framework of the GS

is strengthened

Output 1.2: The operational and

financial management mechanism

of the General Secretariat is

strengthened

1.1.1 The texts (Treaty, IR, SR and FR) are

revised.

1.2.1 Establishment of a RB strategic

framework

Outdated

fundamental

texts

Non-existent

Texts revised in

2015

RB strategic

framework

adopted in 2016

Adoption

instruments/decision

s

ECCAS Report

Adoption

instrument/decisions

Output 1.3: The infrastructure

projects in the PIDA Priority

Action Plan are in an advanced

stage of preparation

1.3.1 Level of preparation of the 12 PIDA-

PAP projects Stage S1

(identification

phase)

The 12 projects

of PIDA-PAP are

in the S2 level of

preparation

(feasibility

studies done)

including at least

4 projects in the

S4 stage

(implemented) in

2016

Regional PIDA

monitoring reports

Output 1.4: The statistics unit of

ECCAS is operational and the

infrastructure and trade databases

are available

1.4.1 Regional statistical development

strategy

1.4.2 Regional infrastructure database

1.4.2 External trade database

Non-existent

Almost non-

existent

Almost non-

existent

Strategy available

in 2014

Regional

infrastructure

database

available before

the end of 2015

External trade

database

available before

the end of 2015

ECCAS Report

ECCAS Report

Component II: Supporting the harmonization of regional integration policies and instruments Output 2.1: Harmonization of the

CET of CEMAC/ECCAS and of

the common customs code are at an

advanced level of implementation

2.1.1 Level of harmonization of the CET of

CEMAC/ECCAS

2.1.2 ECCAS/CEMAC customs codes

harmonized

2.1.3 A permanent CEMAC/ECCAS

coordination, exchange and validation

mechanism for the harmonized monitoring

of regional policies and programmes

Harmonization

underway

Customs codes

not harmonized

in 2011

Non-existent

CET harmonized

at the end of 2015

Common customs

code adopted in

2016

Harmonized

monitoring

mechanism

established in

2014

ECCAS and ADB

reports

Output 2.2: The COPIL TS is

operational

Capacity for steering the CEMAC

and ECCAS rationalization process

is strengthened

2.2.1 The organizational framework of the

ST is established and operational

2.2.2 Number of COPIL TS staff trained

including the number of COPIL TS women

trained

Embryonic in

2012

Low-skilled

experts

Organizational

framework of ST

COPIL

established in

2014;

16 COPIL TS

experts trained,

including at least

4 women, for

2014-16.

ECCAS and ADB

reports

vii

Output 2.3: ECCAS has greater

visibility.

Output 2.4: The focal points, the

NSA are sensitized to integration

issues.

Output 2.5: Greater ownership by

member-states

2.3.1 A communication plan with the 10

member states is prepared and validated.

2.4.1 : Number of stakeholders trained

including the percentage of women trained

2.5.1 The mechanism for monitoring and

acceleration of CIC collection is established

No plan

Low

Outstanding

CIC payments

in 2011

Communication

plan adopted

200 persons 40% of women

30% decline from

2011 to 2015

ECCAS and ADB

reports

Mitigation Measure 4: The Bank’s

procedures will be used. The

technical assistance provided under

this project to review the texts,

mechanisms as well as the

programmatic and financial

management processes will help to

strengthen the financial management

system.

KE

Y A

CT

IVIT

IES

COMPONENTS RESOURCES Component I: Supporting the improvement of the institutional framework and of the monitoring/evaluation of

regional infrastructure development programmes - Technical assistance, equipment and training

Component II: Supporting the harmonization of regional integration policies and instruments - Technical assistance, equipment and training

Component III: Project management Technical assistance, operational management manuals, equipment and training

ADF loan:

Indicative Cost in UA

million Component I 4.50

Component II 2.96

Project

Management 0.77

Total 8.23

viii

Project Implementation Schedule

Years

Activities / Months N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D

Prior to Start-Up

Board Presentation

Grant Effectiveness

Appointment of Coordinator

Formation of PT

Preparation of Procedures Manual

Project Launching Mission

Equipment and Supplies

Bidding for Office Automation and IT

Equipment.

Procurement of Software

Bidding for Other Equipment

Delivery of Goods and Start-Up

Consultants

Preparation of BDs and SLs

Issue of Invitations to Bid, Bid Analysis and

Award of Contracts,

Consulting Services

Tech. Assist. Legal Unit

Tech Assist. DISC

Tech. Assistance. DIPEM

Tech. Assist. COPIL

Tech. Assist. PBARH

Regional Consultants

Recruitment of Counterparts

Training and Other Items

Training

Operating Expenditure

Mid-Term Review

Monitoring-Evaluation 0 0

Tech. Coordination Committee Meetings

PSC Meeting io

n

Audit

Annual Audit of Accounts

Final Audit of Accounts

2012 2013 2014 2015 2016

1

BANK GROUP MANAGEMENT REPORT AND RECOMMENDATION TO THE BOARD OF DIRECTORS

CONCERNING A PROPOSAL TO AWARD A GRANT TO ECCAS FOR THE INSTITUTIONAL CAPACITY

BUILDING SUPPORT PROJECT OF ECCAS (PARCI-ECCAS)

Management submits this report and recommendations on a proposal to award a grant of UA 7 million

to the General Secretariat of the Economic Community of Central African States (ECCAS) to finance

the Institutional Capacity Building Support Project of ECCAS (PARCI-ECCAS).

I. Strategic Thrust and Rationale

1.1 Project Linkages with the Regional Integration Strategy and Objectives

1.1.1 The African Union (AU) Integration Strategy derives from the Abuja Treaty to create the

African Economic Community (AEC) that has been in force since May 1994. The AEC is

implemented through the eight regional communities1 (RECs) which include ECCAS, created in 1983

and comprising 10 member states2, six3 of which are members of the Central African Economic and

Monetary Community (CEMAC), established in 1994. The 2009-2016 Minimum Integration

Programme (MIP) is the AU’s general strategic framework for implementation of regional and

continental integration by the RECs. PARCI-ECCAS is consistent with these AU strategic guidelines

and in line with the strategic vision framework (Vision 2025) of ECCAS, adopted in 2007 "and whose

main objective is to transform the region into a haven of peace, solidarity and balanced development".

This Vision is also consistent with CEMAC’s Regional Economic Programme (REP) for 2010-2015,

whose objective is to build a competitive regional environment in order to attract substantial private

investments to growth sectors.

As concerns the Bank, it should be noted that regional integration is enshrined in its Charter and has

been part of its mandate since its creation in 1963. Its intervention in multinational operations is

defined under its Regional Integration Strategy (RIS) 2009-2012 whose second pillar seeks to "build

institutional capacity including trade facilitation, with a view to promoting regional integration and

trade in Africa". PARCI-ECCAS falls under Pillar II of the Bank’s Regional Integration Strategy in

Central Africa (RISP 2011-2015), which seeks to "build the institutional and human capacities of

RECs" with a view to ensuring (i) greater ownership of regional infrastructure programmes; and (ii)

advanced rationalization of their action especially in the harmonization of regional integration policies

and instruments. This is in line with the Bank’s 2013-2022 Long-term Strategy (LTS) which makes

regional integration the driver for promoting sustainable and inclusive growth in Africa by releasing the

potential generated by economies that are more integrated through infrastructure and regional trade.

1 SADC, ECCAS, ECOWAS, AMU, CEN-SAD, COMESA, IGAD and EAC. 2 Angola, Burundi, Cameroon, Central African Republic (CAR), Congo, Democratic Republic of Congo (DRC), Gabon, Equatorial Guinea (REG), Sao

Tome and Principe (STP) and Chad 3 Cameroon, CAR, Congo, Gabon, REG and Chad

2

1.2. Rationale for Bank’s Involvement

1.2.1 Limited infrastructure is the main constraint to more robust growth in Central Africa. The AU,

in partnership with the ECA, the Bank and the NEPAD Planning and Coordination Agency, designed a

Programme for Infrastructure Development in Africa (PIDA). This continent-wide initiative, which

relies on regional projects and programmes, will help to address the infrastructure shortage which

hampers Africa’s competitiveness on the world market. ECCAS is recognized as the REC that should

coordinate NEPAD and the Priority Action Plan of PIDA (PAP-PIDA) in Central Africa. Regional

infrastructure development is one of the two pillars of RISP. RISP highlighted the weak institutional

and human capacities of ECCAS and CEMAC, especially in the design of regional programmes as well

as the harmonization and dissemination of community standards. These constraints are evident, inter

alia, in: (i) the limited cooperation between the two institutions that affects the implementation of the

regional integration agenda; and (ii) the lack of harmonization of standards which hampers the free

flow and facilitation of transport. Furthermore, ECCAS which is recognized as the REC responsible for

coordinating NEPAD and PIDA_PAP in Central Africa, faces several institutional, human,

organizational and financial constraints that include: (i) outdated fundamental texts that are not adapted

to the current missions of the institution and to modern management; (ii) shortage of human resources

and the lack of a performance-based human resource management system; (iii) the lack of budget and

investment management following a results-based programmatic approach; and (iv) poor coordination

between headquarters and member-states. It also faces the problem of irregular payment of the

Community Integration Contribution (CIC) by certain member states.4 These structural constraints

negatively affect the efficiency, impact and visibility of its action.

1.2.2 Besides, Central Africa’s integration agenda considerably lags behind that of other RECs

(ECOWAS, COMESA, etc.). The opening of the Free Trade Area (FTA), scheduled for 2004, is still

not effective. Limited ownership of regional market instruments by national and community

administrations is reflected, inter alia, in the limited intra-regional trade within both CEMAC and

ECCAS (1% of total trade). It has also been noted that tariff and non-tariff barriers continue to hamper

trade in the region. CEMAC and ECCAS treaties and conventions contain, in their related protocols,

provisions defining community policies on trade and laying down the rules, instruments and mechanisms

of trade cooperation. Yet one of the specificities of market systems is that they are mutually exclusive

whenever their parameters are not coordinated. Without harmonization, selection of one of the regimes

will systematically exclude the instruments of ECCAS' FTA or ECCAS' Customs Union. Maintenance of

a dual trade policy (even partially) by CEMAC and ECCAS deprives economic operators and national

governments of visibility. Harmonizing standards is a prerequisite to the optimization of the Central

African market. That is why ECCAS and CEMAC currently lay emphasis on rationalization, pursuant to

the decision of the 13th Conference of ECCAS Heads of State, held in October 2007, inviting the two

RECs to "set up a Steering Committee comprising the AU, ECA and the ADB to prepare a roadmap,

defining the actions for harmonization of the integration policies and instruments of both Communities,

in order to end up with a single REC in the Central African region".5 However, the Technical Secretariat

of COPIL, which has been set up, has very limited institutional capacity and lacks the resources to prepare

the rationalization roadmap.

4 However, it should be noted that there are encouraging prospects with the decision of the Conference of Heads of State held in January 2012,

requesting the General Secretariat to apply the sanctions provided under the Treaty for non-payment of contributions. 5 13th Conference of ECCAS Heads of State and Government, Brazzaville, October 2007.

3

1.2.3 Why the Bank Group has to intervene: In accordance with AU guidelines, the Bank

contributes to the implementation of the integration strategy in Central Africa through ECCAS. Hence,

the current operation is justified for three main reasons. First of all, there is need to continue with and

complete the capacity-building actions initiated under completed or on-going Bank operations (cf.

Appendix II). It should be recalled that the first institutional support project started in 2006, at the time

when ECCAS was emerging from a long period of lethargy characterized by institutional instability,

very limited ownership by member-states and staff demobilisation due to irregular payment of salaries.

Although the results were satisfactory on the whole, the diagnosis6 conducted under PAI-SG,

confirmed by the conclusions of the EU’s 4-pillar audit,7 reveals enormous capacity-building needs that

have not yet been addressed, especially as regards review of the legal framework, monitoring of sector

policies and results-based management. Secondly, the Bank is a key partner of ECCAS as regards

capacity-building and rationalization of Central Africa’s RECs. Indeed, the project will make it

possible to continue with harmonization activities piloted by COPIL/REC, whose TORs were prepared

with joint financing from the Bank and Sub-regional Office for Central Africa of the UN Economic

Commission for Africa (ECA/SRO-CA) in 2011, focusing on the 12 priority areas of rationalization.

Lastly, this project will help to create conditions conducive to the implementation of the two RISP

pillars,8 mainly by building capacity for the implementation of regional infrastructure development

programmes featured in the PIDA-PAP. It will also make it possible to build ECCAS capacity for more

effective monitoring-evaluation of integration programmes and the harmonization of sector policies.

The analysis that led to classification of the project as a regional public good, in accordance with the

criteria for prioritizing regional operations, is presented in Annex C2 of the technical annexes. Indeed,

given its multinational character (spanning two RECs and 10 countries) and the effects of positive

externalities on other communities, the project constitutes a regional public good whose benefits will

ultimately be shared by a great number of countries.

1.3. Aid Coordination

1.3.1 Technical Annex A3 provides details of TFP regional integration operations in Central Africa.

TFP coordination in both regional organizations remains limited. There is no operational structure for

coordinating and monitoring donor operations. Nevertheless, periodic meetings between donors enable

them to exchange ideas and share information with a view to coordinating and rationalizing their

operations. Participation in the project's steering committee by TFPs (EU, ECA) involved in

institutional capacity-building will enable ECCAS to strengthen the coordination and harmonization of

its support. Furthermore, project support to the setting up of a results-based programmatic management

framework within the GS, will in the long run provide ECCAS with a tool for integrated resource

programming and, consequently, an aid coordination instrument.

6 Institutional and Operational Diagnosis Report of ECCAS, 2008 7 Accounting, Audit, Procurements and Control 8 References: ADF/BD/WP/2009/153/Rev.1

4

Table 1.1: Support of Technical and Financial Partners for ECCAS Capacity-Building (in CFA.F million) Projects ADF ACBF Status Institutional support to the General Secretariat of ECCAS (PAI-SG) 2 135 Completed in 2010 Capacity-building for the ECCAS General Secretariat (RENFOR) 1 150 Completed in 2009 Capacity-building for Central African Members of Parliament (REPAC) 750 On-going 2007-

2010 Aid Coordination Level Existence of thematic working groups No Existence of a global sector program No ADB’s role in aid coordination None

II. Project Description

2.1 Project Components

2.1.1 The project’s overall objective is to promote regional integration in Central Africa by building

ECCAS’ institutional, human and operational capacity to implement regional programmes and

harmonizing sector policies.

2.1.2 The project’s specific objectives are to: (i) build the institutional capacity of the General

Secretariat to ensure better implementation of regional programmes and greater ownership of the

regional integration agenda; and (ii) support the implementation of the rationalization process for

Central Africa’s RECs with a view to harmonizing their integration policies and instruments and

facilitating intra-regional trade. The project has three components: (i) Supporting the improvement of

the institutional framework and monitoring/evaluation of regional infrastructure development

programmes; (ii) Supporting the harmonization of regional integration policies and instruments; and

(iii) Project management and coordination. Implementing these components which are

complementarity, contributes to the achievement of the project objective. Indeed, improvement of the

organizational and operational capacities of the ECCAS General Secretariat will enable the institution

to strengthen its role of coordinating regional programmes and driving Central Africa’s integration

agenda through synergy of action with CEMAC in the area of harmonization of community policies

and standards. A summary of project components and activities is presented below:

5

Table 2.1: Project Components Components Total cost

(UA

Million)

Description of Components

1. Supporting the

improvement of the

institutional framework

and of the

monitoring/evaluation

of regional

infrastructure

development

programmes

4.50

1.1 Institutional and organizational capacity-building for the GS of ECCAS

Support to the Legal Unit and revision of texts;

Capacity-building for DISC (including support for implementation of the

gender policy)

Support for the implementation of results-based programmatic management

1.2 Building the implementation and monitoring capacity of infrastructure

projects

Support to the Surface Transport Service (roads, rail, ports)

Support to the Water and Air Transport Service

Support to the Energy Unit

Support to the Information and Communication Technology (ICT) Service

1.3 Strengthening of the regional statistics system

Support to the development of regional external trade statistics

Strengthening of the infrastructure statistics system

Establishment of a statistical and economic analysis system

Support to the preparation of a Regional Statistical Development Strategy

2. Supporting the

harmonization of

regional integration

policies and instruments

2.96

2.1 Implementation of the ECCAS/CEMAC Rationalization Programme

Studies on the harmonization of ECCAS and CEMAC trade policies

Operationalization of the ECCAS/CEMAC Joint Committee on nomenclature,

tariffs and legislation

Preparation and follow-up of the Annual Forum on Rationalization of the

RECs in CA

Validation, publishing and dissemination of the Regional Customs Code

Rationalization Communication Plan and the ECCAS/CEMAC exchange and

consultative mechanism

2.2. Institutional support to the COPIL Technical Secretariat

Logistical support

Technical assistance for the operationalization of COPIL TS

Human resources capacity-building

Operational support

2.3 Strengthening of cooperation between the GS of ECCAS, member-states and

the Institutions

Support to the preparation and implementation of the Communication Plan Study of the organizational framework and establishment of mechanisms to

speed up collection of the Community Integration Contribution (CICI) from member

states

Awareness-raising programme for non-state actors (CSOs and private sector)

in the States

3. Management and

coordination 0.77 3.1 Management

3.2 Audit

6

2.1.3 Technical Annex B2 provides the detailed costs of project activities by component.

Furthermore, Technical Annex C1 gives a detailed description of project activities, indicating for each

sub-component: (i) the context and challenges to be addressed; (ii) the actions implemented by the

project; and (iii) expected results.

2.2 Technical Solutions Retained and Other Alternatives Explored

2.2.1 Although the causes of ECCAS’ human and financial resource constraints certainly stem from

inadequate management mechanisms, they are also structural. To address these difficulties, institutional

reforms are necessary. At the same time, the institution badly needs capacity-building to be able to

implement its integration agenda in the priority domains such as infrastructure development,

harmonization of sector policies and regional trade facilitation. Hence, the approach adopted by the

project entails tackling structural problems by reviewing the institutional framework (revision of the

fundamental texts, establishment of a strategic framework and a results-based medium- and long-term

action plan) and providing technical assistance that can build the institution’s existing capacity so that

it can implement its work programme in key areas (infrastructure, trade, statistics, programming).

Table 2.2: Alternative Solutions Considered and Reasons for their Rejection Alternative Solutions Brief Description Reasons for Rejection Establishment of a young

professionals programme To address the shortage of human resources

at the GS of ECCAS, there were plans to

set up a young professionals programme

Solution not sustainable without an adequate human

resource management policy

Include, within project, support

to certain specialized entities

(COMIFAC, COBAC)9.

Under RISP, there are plans to build the

institutional capacities of ECCAS, CEMAC

and COMIFAC

The project targets the rationalization of CEMAC and

ECCAS. Including other entities could create the risk of

dissipation of Bank intervention without tangible

results. Key support could be envisaged directly for

these entities at the proper time.

2.3 Project Type

2.3.1 PARCI-ECCAS is an institutional support project which, through its regional dimension and

its objectives, contributes to the promotion of a Regional Public Good. Indeed, it fulfils the conditions

defined in the Strategic and Operational Framework for Regional Operations (2008) as well as the

seven eligibility criteria for Regional Public Goods (cf. Annex C2). The choice of an operation in the

form of institutional support is justified by the nature of the planned activities (technical assistance,

studies, training) which, furthermore, will be implemented in several institutions. Through institutional

support, the Bank also hopes to strengthen synergies with the support of other TFPs involved in the

capacity-building of structures responsible for implementing the institutional reforms targeted by this

project.

2.4 Project Cost and Financing Arrangements

2.4.1 The total project cost, including customs duties and taxes, is estimated at UA 8.23 million (or

approximately CFA.F 6.62 billion at the exchange rate of September 2012), comprising UA 5.04

million in foreign exchange (61.24%) and UA 3.19 million in local currency (38.76%). The costs

include a 2% provision for physical contingencies and a 3% provision for price escalation per year for

expenditure in both foreign exchange and local currency. A detailed table of costs is presented in

Technical Annex B2 of this report. The table below provides a summary of total project costs by

component.

9 Banking Commission of Central Africa

7

Table 2.3: Estimated Costs by Component

COMPONENTS USD thousands Total Cost in UA thousand % F.E.

F.E. L.C. Total F.E. L.C. Total 1. Supporting the improvement of the institutional framework and monitoring/evaluation of regional infrastructure development

programmes Institutional and organizational capacity-building for the GS 1 010.5 644.6 1 655.0 663.9 423.5 1 087.4 61.06%

Building the implementation and monitoring capacity of infrastructure projects 2 217.1 740.8 2 957.9 1 456.7 486.7 1 943.4 74.96%

Strengthening of the regional statistics system 1 351.2 556.8 1 908.0 887.8 365.8 1 253.6 70.82%

Baseline cost Component I 4 578.8 1 942.1 6 520.9 3 008.4 1 276.0 4 284.4 70.22%

2. Supporting the harmonization of regional integration policies and instruments Implementation of the ECCAS/CEMAC Rationalization Programme 1 274.2 1 601.0 2 875.2 837.2 1 051.9 1 889.1 44.32%

Institutional support to the COPIL Technical Secretariat 544.5 88.2 632.7 357.7 57.9 415.7 86.06%

Strengthening of coordination between ECCAS, member States

and other institutions 559.6 224.4 784.0 367.7 147.4 515.1 71.38%

Baseline cost Component 2 2 378.3 1 913.6 4 291.9 1 562.6 1 257.3 2 819.9 55.41%

3. Management and Coordination Project Management 239.4 765.8 1 005.1 157.3 503.1 660.4 23.8%

Audit 105.0 0.0 105.0 69.0 0.0 69.0 100.0%

Baseline cost Component 3 344.4 765.8 1 110.1 226.3 503.1 729.4 31.02%

TOTAL BASE COST 7 301.4 4 621.5 11 922.9 4 797.2 3 036.4 7 833.6 61.24%

Physical Contingencies 146.0 92.4 238.5 95.9 60.7 156.7 61.24%

Price escalation 223.4 141.4 364.8 146.8 92.9 239.7 61.24%

TOTAL PROJECT COST 7 670.9 4 855.3 12 526.2 5 040.0 3 190.0 8 230.0 61.24%

NB: The exchange rates used are indicated in the introduction to this report (page (i)).

2.4.2 Table 2.4 presents estimated project costs by expenditure category, while Table 2.5 presents

an analysis of sources of financing and Tables 2.6 and 2.7 provide the expenditure schedule by

expenditure category and by component.

Table 2.4: Project Cost by Expenditure Category, (in UA thousand) EXPENDITURE CATEGORIES F.E. L.C. Total % F.E.

GOODS 199.6 0.0 199.6 100.00%

SERVICES 4187.5 2278.6 6466.1 64.76%

OPERATION 410.0 757.9 1167.9 35.11%

TOTAL BASE COST 4 797.2 3036.4 7833.7 61.24%

Physical Contingencies 95.9 60.7 156.7 61.24%

Inflation 146.8 92.9 239.7 61.24%

TOTAL COMPONENT COST 5 040.0 3 190.1 8 230.0 61.24%

Table 2.5: Sources of Financing [amounts in UA million]

Category/Sources of Financing ADF ECCAS Total UA

million % UA

million % UA

million 1. Supporting the improvement of the institutional framework and of the

monitoring/evaluation of regional infrastructure development

programmes 3.94 87% 0.57 13% 4.50

1. Supporting the harmonization of regional integration policies and instruments 2.53 85% 0.43 15% 2.96

3. Project management 0.53 70% 0.23 30% 0.77

Total 7.00 85% 1.23 15% 8.23

2.4.3 The project will be co-financed by an ADF grant of UA 7 million (85% of the total cost) and

by ECCAS counterpart contribution of UA 1.23 million, or 15% of the project cost. The counterpart

funds will earmarked for procurement of equipment and operational expenses.

8

Table 2.6: Expenditure Schedule by Expenditure Category, [in UA thousand]

EXPENDITURE CATEGORIES 2013 2014 2015 2016 Total

GOODS 124.2 78.7 3.5 3.5 209.7

SERVICES 2 050.0 2 763.0 1 478.4 501.9 6 793.3

OPERATION 186.2 487.9 321.5 231.4 1 227.0

TOTAL 2 360.3 3 329.6 1 803.3 736.7 8 230.0

Table 2.7: Expenditure schedule by component (in UA thousand)

COMPONENTS 2013 2014 2015 2016 Total

1. Supporting the improvement of the institutional framework and of the

monitoring/evaluation of regional infrastructure development

programmes 1 012.9 2 146.2 1 140.5 201.6 4 501.2

1. Supporting the harmonization of regional integration policies and instruments 1 109.1 988.2 495.5 369.8 2 962.6

3. Project management 238.4 195.1 167.4 165.3 766.3

TOTAL COST 2 360.3 3 329.6 1 803.3 736.7

8 2

3

0

.

0

2.5 Project Target Area and Beneficiaries

2.5.1 The project area comprises the territory of ECCAS member-states. Indeed, the activities of

PARCI-ECCAS will concern the services of the General Secretariat, but also the Technical Secretariat

of COPIL-CER-AC, the CEMAC Commission in Bangui (CAR), the Regional Coordinations of

NEPAD, ECCAS focal points in the countries, customs services and the Ministries in charge of trade

and regional integration in the 10 ECCAS member states.

2.5.2 The main direct beneficiaries of the Project are: (i) the GS of ECCAS; (ii) COPIL TS; (iii) the

CEMAC Commission that will be involved in studies and other rationalization activities to be

conducted under the second component of the project. The indirect beneficiaries of the project are the

people of these countries, women, youths, the private sector and especially SMEs and the informal

sector that will operate within a more favourable statutory framework of regional trade and certainly

benefit from basic infrastructure. Indeed, businesses could benefit from the growth opportunities in

intra-community trade that ensue from the trade rationalization and facilitation activities supported by

the project through unified approval procedures, a harmonized regional customs code and more

efficient market information systems.

2.6 Participatory Process for Project Identification, Design and Implementation

2.6.1 During project identification, a consultative process was established through exchanges

between the ADB, the relevant ECCAS departments and donors. These consultations continued during

preparation and appraisal missions to ensure greater ownership of the project. The project appraisal

mission held discussions with the TS of COPIL-CER-AC in Yaoundé and the CEMAC Commission in

Bangui. Similarly, the ECA contributed to project design through review of the concept note and

discussions that the project team held with BSR-CEA in Yaoundé at appraisal. The participatory

process will be maintained during project implementation through the steering committee (including

civil society) and internal mechanisms for consultations with States. The project supports the revision

9

of ECCAS fundamental texts that will be adopted in accordance with the applicable decision-making

process of ECCAS (after review by the Internal Committee of the GS, the Member-States Committee

of Experts, Council of Ministers, Conference of Heads of State). The project will also support

communication and awareness-raising actions directed at member-states in order to ensure greater

ownership of integration objectives in the countries. The project contributes to building the capacity of

the department in charge of infrastructure (DIPEM), and social and trans-border migration issues have

been factored into the design of regional infrastructure projects.

2.7 Consideration of Bank Group Experience and Lessons Learnt Reflected in Project

Design

2.7.1 Annex B1 in the technical annexes analyses the main lessons learnt from previous projects.

The completion report10 of PAI-SG shows that the project has achieved generally satisfactory results

with a score of 3 out of 4. Despite its implementation delays, the project has led to, inter alia, the

conduct of an institutional and operational diagnostic study of ECCAS and the adoption of a new

organization chart, the definition and implementation of priority programme activities in the areas of

NEPAD and statistics, an update of the accounting for FY 2008-2009 as well as the procurement of

equipment. The abovementioned diagnostic study as well as the study on Audit 4 pillars conducted by

European Union in 2010 clearly demonstrated that revision of ECCAS fundamental texts (Treaty, Staff

Regulations, Internal Rules and Financial Rules) was indispensable in order to ensure the effective

operationalization of the new organization chart as well as the adoption of a governance system that is

consistent with international accounting standards and results-based management.

2.7.2 The main lesson learnt from the project is the need to factor into the Bank’s future operations,

the fact that ECCAS has weak project implementation capacity due to its inadequate human resources.

Furthermore, in 2010 NEPAD’s Infrastructure Project Preparation Facility (IPPF) spent USD 1,098,000

to finance an institutional support project for the implementation and monitoring of the Central African

Consensual Transport Master Plan (PDCT-AC) by ECCAS. This project, which is being completed

(46% disbursement rate), contributes to the implementation actions of PIDA’s Priority Action Plan in

Central Africa. Lastly, the lessons learnt from review of the Bank’s portfolio of multinational

operations, conducted in 2010, highlighted the need to: (i) continue with efforts to build RECs’

capacities to improve programme implementation and design sustainable resource mobilization

mechanisms; (ii) strengthen coordination with other TFPs by focusing on joint financing; (iii) focus on

selectivity to generate a greater impact in the development of the region; and (iv) pursue and step up

dialogue with countries to ensure greater ownership of multinational projects. The lessons learnt from

the previous operation and from portfolio review were factored into project design. Indeed, a selective

approach was used to choose capacity-building actions for RECs, supported by participatory dialogue

with all stakeholders that will continue during implementation. Furthermore, discussions with other

TFPs led to better targeting of operations in order to avoid duplication and overlap.

2.8 Key Performance Indicators

2.8.1 The project’s key performance indicators are presented in the logical framework on Page viii.

The main expected achievements and outcomes of the project are:

10 References ADF/BD/IF/2011/124

10

Box 1: Key Performance Indicators Impact indicator

The economic growth rate of the CEMAC area rises from 4.5% in 2011 to 5.3% in 2020.

Impact indicators

The implementation rate of regional projects coordinated by the GS of ECCAS rises from 5% in 2010 to 30% in 2016.

The share of intra-community trade in total regional trade increases from 1% in 2010 to 2.5% in 2016.

Output indicators :

The texts (Treaty, IR, SR and FR) are revised in 2015

The GS of ECCAS has a Results-based Strategic Management Plan in 2016.

The 12 projects of the PIDA-PAP are in the S2 level of preparation (feasibility studies done) including at least 4

projects in the S4 stage (implemented) in 2016. CEMAC and ECCAS end up with one harmonized CET at the end of 2015. CEMAC and ECCAS use a single harmonized Regional Customs Code from 2016.

16 COPIL TS experts, including at least 4 women, are trained during the 2014-2015 period.

CIC payments arrears decline by 30% from 2011 to 2015.

III. Project Feasibility

3.1 Economic and Financial Performance

3.1.1 Since this is an institutional support project, economic and financial analyses do not apply.

However, it should be noted that due to the building of internal managerial capacity, the project could

contribute to better resource management by ECCAS and more judicious use of such resources.

3.2 Environmental and Social Impact

Environment

3.2.1 The project has no direct negative environmental impact since its activities are limited to

training, technical assistance, studies and the procurement of logistical resources including small-sized

office automation and IT equipment. Indeed, the project was classified under category 3 in accordance

with Bank Guidelines. Nevertheless, sub-component 1.2 of this project helps to build the capacity of

the department in charge of infrastructure (DIPEM). The environmental component is taken into

account in the preparation and implementation of various regional infrastructure projects. The Bank,

through the Congo Basin Ecosystems Conservation Support Programme (PACEBCo), supports

conservation of the second largest tropical forest in the world after the Amazon. This programme

should provide the answers to the steady degradation of this forest and climate change. The programme

duration is 5 years from March 2009 and its total cost is estimated at UA 37.28 million, with an ADF

grant financing of UA 32 million. In conclusion, through capacity-building, this project complements

the various forms of support provided by the Bank in response to environmental degradation and

climate change.

Climate Change

3.2.2 Project activities, focused on human and institutional capacity-building, have no negative

impact on the environment or on the climate change process. Nevertheless, the Bank, through the

Congo Basin Ecosystems Conservation Support Programme (PACEBCo) supports regional initiatives

to combat climate change.

11

Gender

3.2.3 The vision that defines ECCAS’ gender policy is that of a community in which men and

women enjoy equal rights, develop their skills and thus contribute as equal partners to the building of a

fair and prosperous society for all and the sustainable development of Central Africa. The

establishment, within the ECCAS General Secretariat, of an adequate institutional framework endowed

with the requisite authority as well as human and material resources is necessary to achieve gender

policy objectives. Within this framework, the project supports capacity-building for the Department of

Social and Cultural Integration (DISC) responsible for preparing and implementing ECCAS's gender

policy. Supported activities relate to: (i) the preparation of the gender policy action plan; (ii) training on

gender issues in regional infrastructure projects; and (iii) support to validation workshops of the Gender

Action Plan. The training and sensitization component of the project will affect 40% of women. The

project also supports measures that ensure efficient implementation of regional infrastructure projects

to generate jobs especially for women and women’s groups. Ultimately, women and youths who are

mainly involved in trade will see their incomes rise owing to increased marketing of agricultural and

artisanal products in the ECCAS area after the institution of the free trade area and the application of a

single customs code. In summary, project actions tend to improve the living conditions and well-being

of women and youths.

Social

3.2.4 The project covers 10 countries of the ECCAS area with an estimated total population of 137

million inhabitants. On average, poverty affects 63% of the population. The retained actions will lead

to more efficient coordination in the implementation of PIDA action plan projects and, ultimately, the

implementation of regional infrastructure projects (which will strengthen intra-regional trade and the

supply of public services). The implementation rate of regional projects coordinated by the GS of

ECCAS will rise from 5% in 2010 to 30% in 2016. Meanwhile, the harmonization of policies and trade

policy instruments (free trade area, common customs code) will reinforce intra-community trade and

generate an increase in customs revenue in the countries of the area. The share of intra-community

trade in total regional trade is expected to rise from 1% in 2010 to 2.5% in 2016. This will help raise

the living standards of the people.

3.2.5 In the longer-term, nationals of ECCAS member countries (including those considered to be

fragile States), women, youths, private sector will certainly benefit from inclusive growth generated by

the development of basic infrastructure and an environment which is more conducive to business,

thanks to the harmonization of trade policies at the regional level. Indeed, project activities will help to

generate employment including for women and youths. The beneficiary population is estimated at

approximately 27 million (20% of the population in countries of the ECCAS area). This operation will

contribute to the achievement of certain MDGs in particular combatting poverty by improving the

living conditions of the people and creating jobs. Ultimately, the benefits will be shared by a large

number of countries within the ECCAS area and in other regions, through the positive externalities of

successful integration.

Involuntary Resettlement

3.2.6 The project will not lead to displacement of communities.

12

IV. Implementation

4.1 Implementation Arrangements

4.1.1 Institutional arrangements: The institutional framework of project management is described in

detail in Annex B3 of the technical annexes in this report. According to the terms of the Paris

Declaration on the harmonization and alignment of project management on national systems, the

project implementation organ is the ECCAS General Secretariat. A Project Team (PT) will be

established within the GS that will comprise a coordinator, an accountant and support staff. The

Coordinator will be an expert from ECCAS with experience in project management. He will be

seconded for the duration of the project and placed under the direct responsibility of the GS. The PT

will be reinforced with technical assistance recruited on a competitive basis with ADF resources and

comprising: a procurements expert, a monitoring/evaluation expert, a training expert and an

administrative and financial officer (AFO). These experts will also be responsible for training their

counterparts, who will be experts designated by the PBARH (procurements, financial management,

monitoring-evaluation, human resource management) Department.

4.1.2 A Project Steering Committee (PSC) will be set up to serve as a consultative and monitoring

body for the project and to strengthen coordination. It will comprise representatives from the ECCAS

General Secretariat, the CEMAC Commission, the Technical Secretariat of COPIL, UNECA and a

regional civil society organization in Central Africa. It will be chaired by the ECCAS Secretary

General or his representative. The PSC shall meet twice a year and whenever necessary to ensure

consultation between stakeholders and project monitoring.

4.1.3 Procurements: All goods, works and services financed by the ADF shall be procured in

accordance with the Bank’s relevant rules and procedures on procurement (May 2008 edition, revised

in July 2012), or where necessary, the Bank’s rules and procedures for the recruitment of consultants

(May 2008 edition, revised in July 2012), using the Bank’s standard bidding documents. The project

team, placed under the supervision of the Secretary General, shall be responsible for procurements and

will be reinforced with one procurement expert familiar with the procurement procedures of the ADF

or of other TFPs. A draft procurement plan will be prepared by the Project Team and submitted to the

ADF for review and approval prior to the signing of the Grant Agreement. Details of the project’s

procurement arrangements are presented in Technical Annex B5 of this report.

4.1.4 Disbursement: The ADF grant will be disbursed according to the Bank’s applicable

procedures. The direct payment, repayment and special account methods will be used to finance

activities. A special account will be opened in a commercial bank and used to finance operating

expenses and staff allowances. Goods, services and audit fees will be defrayed by direct payment.

Replenishment of the special account shall be subject to justification of 50% of the last advance and

100% of previous advances. Proof of the opening of the special account will be a condition precedent

to first disbursement.

4.1.5 Financial Management and Audit: The overall project financial management risk was deemed

to be "high" and should be brought down to "substantial" with the satisfactory application of mitigation

measures (reference Technical Annex B4). The PT will be responsible for the financial, administrative

and accounting management of the project. The fiduciary team will be led by the AFO. It shall keep the

accounting ledgers of project activities and ensure that annual financial statements are produced on a

timely basis and in accordance with the accounting principles of OHADA (Organization for the

13

Harmonization of Business Law in Africa) – SYSCOHADA. The ECCAS General Secretariat will

prepare a work programme and an annual activity budget which should be submitted to the Bank,

together with annual progress reports and financial statements. It will ensure that the project's

administrative, financial and accounting procedures manual to be approved by the Bank, is prepared

and approved not later than three months after loan effectiveness (and prior to any disbursements). The

accounting software procured by ECCAS will be configured for project needs and the accountant will

be trained to use it. The annual audit of project accounts will be conducted by an approved independent

accounting firm. ECCAS must submit the audit report for project accounts not later than six months

after the end of each fiscal year.

4.2 Monitoring

4.2.1 The project’s physical implementation is expected to cover a period of 48 months, from

January 2013 to December 2016. This schedule is deemed reasonable, given the scope of activities to

be implemented and the average implementation deadlines for multinational operations. Furthermore,

the use of project funds to recruit a procurements expert and a monitoring/evaluation expert should

make it possible to reduce procurement deadlines and ensure appropriate monitoring of the

implementation of project components. The procurement of monitoring-evaluation software and the

training of project staff are also planned. A monitoring/evaluation system will be established, including

easily quantifiable performance indicators, collection of baseline situation data as well as measurement

of project progress towards attainment of intermediate targets and impacts.

4.2.2 The Project Team will be responsible for monitoring project implementation using logical

framework indicators. As soon as the Grant Agreement becomes effective, a launching mission will be

organized to train PT officials in Bank procedures. Supervision missions involving Bank offices in

Gabon, Cameroon and CAR will be organized at least twice a year. Quarterly progress and annual

reports will also be prepared and transmitted to the Bank. The key indicative monitoring stages are

presented in the table below:

Table 4.1: Monitoring Stages/Feedback Loop Schedule Stages Monitoring Activities/Feedback Loop

Dec. -12 Grant approval by the Board Notification to the ECCAS General Secretariat Jan-13 Grant effectiveness Signature of grant agreement

Jan-13 GPN and SPN UN Development Business; national and regional newspapers

March -13 Fulfilment of conditions precedent to 1

st

disbursement Proof of fulfilment of conditions submitted to the Bank

March -13 Launching of project Training of PT; Launching of first activities, preparation of

work programme.

2013-2016 Implementation of activities Quarterly and annual progress reports / audit reports

Feb-15 Mid-term Review Mid-term review reports Dec. -16 Last disbursement Closing audit reports

March 17 Project Completion Completion report

4.3 Governance

4.3.1 The risks faced by the project management team relate to procurement decisions, the use of

project assets and the selection of persons for training abroad or capacity-building. These risks will be

mitigated by preparing a detailed procurement plan, establishing sound processes for contractors as

well as rigorous selection of participants and applying the Bank’s standard rules and guidelines. More

14

advanced training will be provided to project staff members to ensure that they are fully informed on

the requirements and regulations. Compliance with these control mechanisms will be reviewed during

supervision missions.

4.3.2 As concerns financial management of the project, the executing organ shall keep separate

accounts for the project using software of international repute. This will make it possible to keep cost

accounting and produce reports that show expenditure by component, category and financing source.

Project accounts will be audited annually by a firm recruited for that purpose. The financial statements

and audit reports will be submitted to the ADF within six months following the close of the accounting

period.

4.4 Sustainability

4.4.1 Project implementation will make it possible to enhance the institutional efficiency of the

General Secretariat. The result will be a significant improvement in the design and monitoring of

regional infrastructure development programmes, which is one of the major components of the

integration agenda, given its expected impact on the circulation of goods and persons and on the quality

and cost of communications. The project will also make it possible to factor into these programmes, the

key concerns of member-state governments in the area of capacity-building for all stakeholders

involved in monitoring/evaluation (enhanced regional statistics system) and the harmonization of

policies. Furthermore, emphasis will be laid on the harmonization of CEMAC and ECCAS actions with

a view to increasing cooperation and synergies between these two institutions in order to reach the

common goal of creating a Central African common market as a prelude to the continental common

market; a target set for 2020 by the AU in MIP. Attainment of project results will consequently have an

obvious impact on improving the visibility of ECCAS among the peoples and authorities in Member

States, which could translate into a strong attachment to the reaffirmed political will to implement the

integration agenda in Central Africa.

4.4.2 The technical assistance to be provided and the training of experts from beneficiary

institutions will enhance the prospect of sustaining project impact. Besides, the sustainability of project

impact remains largely dependent on reform of the fundamental texts governing the functioning of the

General Secretariat; aimed at developing skills mainly through the creation of a legal and regulatory

framework as well as planning and management tools that enhance the efficiency of institution experts

in the exercise of their duties. Ultimately, the reform will result in the establishment of strategic

planning, a medium-term budgetary framework and staff regulations that lay emphasis on performance-

based career management, skills and training and continuous retraining of staff that will promote the

stability of experts. Similarly, the project envisages recruiting junior experts, with ECCAS counterpart

funds, who will be counterparts trained by technical assistance financed by the ADF grant. This activity

will enable the various structures to have the minimum capacity to define, implement and monitor

sector policies, thereby become an important factor of sustainability. Lastly, as concerns recurrent costs

generated by the project, it should be noted that equipment purchases only account for 3% of the total

project budget. The maintenance costs for this equipment, approximately UA 0.031 million per year (or

0.35% of ECCAS revenue), could easily be borne by the Institution.

15

4.5 Risk Management

4.5.1 The table below presents a summary of residual risks (other than those related to governance

and sustainability) as well as mitigation measures.

Table 4.2: Risks and Mitigation Measures Risks Level Mitigation Measures 1. Low level of ownership by member

States as reflected in the delays in the

payment of the CIC and difficulties in

holding summits

High The revival of national coordination teams for the

harmonization of RECs and the facilitation of intra-regional

trade, will enable to ECCAS to increase its visibility

substantially in other to arouse the greatest possible interest

among the highest ranking authorities in member States. 2. The weakness of national structures

responsible for regional integration

undermines the smooth conduct of

projects.

High The future creation of the National Coordinations of NEPAD

and support scheduled under this project should facilitate intra-

regional trade and increase the presence and visibility of the

GS. 3. Bottlenecks in the decision-making

process could delay revision of the legal

framework and the implementation of

necessary reforms.

High Close monitoring of the project as well as the technical

assistance and high-level dialogue provided by the Bank during

ECCAS summits could speed up the process of reviewing

ECCAS texts. 4. Weak fiduciary framework High The Bank’s procedures will be used. The technical assistance

provided under the project will help to strengthen the financial

management system.

4.5.2 The above analysis shows that the project presents relatively high risk levels. Nevertheless, the

achievements of ECCAS and the regional context argue in favour of Bank support to the project, given

the significant results expected in terms of institutional efficiency and ownership by member countries

through this operation and on-going NEPAD projects and considering the Bank’s commitment to

support the development of RECs within the framework of its mandate and its regional integration

strategy.

4.6 Knowledge Development

4.6.1 Implementation of this project will lead to the development of several types of knowledge,

including: (i) capacities to analyses and adapt the legal framework of a REC to an institutional

framework that is more compliant with international standards of administrative and financial

governance; (ii) the use of statistics to monitor the construction of regional infrastructure in an

environment characterized by endemically weak national systems; (iii) the definition of a harmonized

trade policy between CEMAC and ECCAS, two RECs whose respective domestic markets are at

different stages of liberalization; (iv) preparation of strategic plans and the introduction of results-based

programmatic management in an organization with a pyramidal structure and a high concentration of

decision-making powers at the top. Practices will be disseminated within the two RECs and Member

States through validation and dissemination of the studies conducted, the use of developed software,

procedures manuals and training sessions that will be organized under the project. This knowledge will

be acquired through processes involving production of the following reports: reports of technical

assistants, activity reports prepared by the executing agency, supervision reports and the project

completion report. These reports will also be disseminated within the Bank.

16

V. Legal Framework

5.1 Legal Instrument

A Grant agreement will be signed between the ADF and the Economic Community of Central African

States (ECCAS) on the ADF resources, for a maximum amount of 7 million UA.

5.2 Conditions Associated with Fund Intervention

o Grant effectiveness conditions:

Grant effectiveness shall be subject to the signature of the Grant Agreement between the Bank, the

ADF and the ECCAS General Secretariat.

o Conditions precedent to first disbursement

In addition to effectiveness of the Grant Agreement, the first disbursement of grant resources shall be

subject to fulfilment by the Donee of the following specific conditions to the satisfaction of the Fund:

(i) Provide evidence of the opening of a special account in foreign exchange in the name of

the project in a bank acceptable to the Fund, to receive grant resources (§ 4.1.4);

(ii) Provide evidence of the appointment of a Project Coordinator whose qualifications and

experience shall have been previously approved by the Fund (§ 4.1.1);

(iii) Provide evidence of the preparation of a manual of administrative, financial and

accounting procedures for the project which shall have been previously approved by the

Fund (§ 4.1.5); and

(iv) Provide evidence of the recruitment of an administrative and financial manager for the

project whose qualifications and experience shall have been considered satisfactory by

the Fund (§ 4.1.5).

5.3 Compliance with Bank Policies

This project complies with all the Bank’s applicable policies.

VI. Recommendation

Management recommends that the Board of Directors approve a proposed grant of UA 7.00 million to

the Economic Community of Central African States (ECCAS) to finance the Institutional Capacity

Building Support Project of ECCAS (PARCI-ECCAS) subject to the conditions stipulated in this

report.

1

Appendix I: Comparative socio-economic indicators of ECCAS

Year

Central

African

Republic

Africa

Develo-

ping

Countries

Develo-

ped

Countries

Basic Indicators

Area ( '000 Km²) 2011 623 30 323 80 976 54 658Total Population (millions) 2011 4,5 1 044,3 5 733,7 1 240,4Urban Population (% of Total) 2011 39,2 40,4 45,5 75,4Population Density (per Km²) 2011 7,2 36,1 59,9 36,5GNI per Capita (US $) 2010 470 1 549 3 304 38 657Labor Force Participation - Total (%) 2011 69,5 74,7 65,0 60,4Labor Force Participation - Female (%) 2011 46,7 42,5 49,2 50,2Gender -Related Dev elopment Index Value 2007 0,354 0,502 0,694 0,911Human Dev elop. Index (Rank among 187 countries) 2011 179 ... ... ...Popul. Liv ing Below $ 1.25 a Day (% of Population) 2008 62,8 40,0 22,4 ...

Demographic Indicators

Population Grow th Rate - Total (%) 2011 1,9 2,3 1,3 0,4Population Grow th Rate - Urban (%) 2011 2,6 3,4 2,3 0,7Population < 15 y ears (%) 2011 40,1 40,4 28,7 16,5Population >= 65 y ears (%) 2011 4,0 3,4 5,9 16,2Dependency Ratio (%) 2011 78,9 78,1 53,0 48,6Sex Ratio (per 100 female) 2011 97,1 99,5 103,4 94,6Female Population 15-49 y ears (% of total population) 2011 24,4 24,4 26,2 23,6Life Ex pectancy at Birth - Total (y ears) 2011 48,4 57,7 77,7 67,0Life Ex pectancy at Birth - Female (y ears) 2011 50,0 58,9 68,9 81,1Crude Birth Rate (per 1,000) 2011 34,7 34,5 21,1 11,4Crude Death Rate (per 1,000) 2011 16,0 11,1 7,8 10,1Infant Mortality Rate (per 1,000) 2011 98,6 76,0 44,7 5,4Child Mortality Rate (per 1,000) 2011 160,4 119,5 67,8 7,8Total Fertility Rate (per w oman) 2011 4,5 4,4 2,6 1,7Maternal Mortality Rate (per 100,000) 2010 890,0 530,7 230,0 13,7Women Using Contraception (%) 2007-09 19,0 28,6 61,2 72,4

Health & Nutrition Indicators

Phy sicians (per 100,000 people) 2007-09 8,0 57,8 112,0 276,2Nurses (per 100,000 people)* 2007-09 41,0 134,7 186,8 708,2Births attended by Trained Health Personnel (%) 2009 43,7 53,7 65,3 ...Access to Safe Water (% of Population) 2010 67,0 65,7 86,3 99,5Access to Health Serv ices (% of Population) 2007-09 ... 65,2 80,0 100,0Access to Sanitation (% of Population) 2010 34,0 39,8 56,1 99,9Percent. of Adults (aged 15-49) Liv ing w ith HIV/AIDS 2009 4,7 4,3 0,9 0,3Incidence of Tuberculosis (per 100,000) 2010 319,0 241,9 150,0 14,0Child Immunization Against Tuberculosis (%) 2010 74,0 85,5 95,4 ...Child Immunization Against Measles (%) 2010 62,0 78,5 84,3 93,4Underw eight Children (% of children under 5 y ears) 2007-09 21,8 30,9 17,9 ...Daily Calorie Supply per Capita 2007 1 986 2 462 2 675 3 285Public Ex penditure on Health (as % of GDP) 2009 1,6 2,4 2,9 7,4

Education Indicators

Gross Enrolment Ratio (%)

Primary School - Total 2011 94,1 101,4 107,8 101,4 Primary School - Female 2011 79,2 97,6 105,6 101,3 Secondary School - Total 2011 18,0 47,5 64,0 100,2 Secondary School - Female 2011 12,8 44,3 62,6 99,8Primary School Female Teaching Staff (% of Total) 2010 14,3 44,3 60,7 81,7Adult literacy Rate - Total (%) 2010 56,0 67,0 80,3 98,4Adult literacy Rate - Male (%) 2010 69,3 75,8 86,0 98,7Adult literacy Rate - Female (%) 2010 43,2 58,3 74,9 98,1Percentage of GDP Spent on Education 2010 1,2 4,6 4,1 5,1

Environmental Indicators

Land Use (Arable Land as % of Total Land Area) 2009 3,1 7,6 10,7 10,8Annual Rate of Deforestation (%) 2007-09 0,1 0,6 0,4 -0,2Forest (as % of Total Land Area) 2010 36,3 23,0 28,7 40,4Per Capita CO2 Emissions (metric tons) 2009 0,1 1,1 2,9 12,5

Sources : AfDB Statistics Department Databases; World Bank: World Development Indicators; last update :

UNAIDS; UNSD; WHO, UNICEF, WRI, UNDP; Country Reports.

Note : n.a. : Not Applicable ; … : Data Not Available.

COMPARATIVE SOCIO-ECONOMIC INDICATORS

Central African Republic

June 2012

0

20

40

60

80

100

120

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

Infant Mortality Rate( Per 1000 )

Central African Republic Africa

0

200

400

600

800

1000

1200

1400

1600

1800

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

GNI Per Capita US $

Central African Republic

0,0

0,5

1,0

1,5

2,0

2,5

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

Population Growth Rate (%)

Central African Republic

Africa

111213141516171

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

Life Expectancy at Birth (years)

Central African Republic

Africa

Appendix II: Table of the Bank Group’s Portfolio of Multinational Operations in Central Africa as of 30 June

2012 (in UA million)

Sector/Dpt Project Name Approval

Date

Closing

Date

ADB

Amount

ADF Amount TOTAL

ADB+ADF

Amount

Disbursement

Disbursemen

t rate.

AverageAge

WATER AND SANITATION

AWTF ECCAS REGIONAL WATER SUPPLY 09/02/2009 12/30/2013 0.00 1 173 439.24 1 173 439.24 566 204.95 48% 2.8

ENERGY

ONEC STUDY ON INGA AND RELATED

CONNECTIONS

04/30/2008 12/31/2008 0.00 9 510 000.00 9 510 000.00 4 965 433.67 52% 4.1

ONEC NELSAP INTERCONNECTION PROJECT-DRC 12/31/2014 0.00 27 620 000.00 27 620 000.00 66 797.70 0% 3.6

0.00 37 130 000.00 37 130 000.00 5 032 231.37 14% 3.8

TRANSPORT

OITC.1 COSCAP PROGRAMME IN WCA (CAPACITY

BUILDING)

04/27/2005 12/31/2012 0.00 4 600 000.00 4 600 000.00 1 769 160.00 38% 7.2

OITC.1 CAR- TRANSPORT FACILITATION 07/05/2007 12/31/2011 0.00 27 800 000.00 27 800 000.00 20 986 069.90 75% 5.0

OITC.1 CEMAC – TRANSPORT FACILITATION 07/05/2007 12/31/2011 0.00 14 000 000.00 14 000 000.00 1 289 587.21 9% 5.0

OITC.1 CAMEROON – TRANSPORT FACILITATION 07/05/2007 12/31/2011 0.00 48 000 000.00 48 000 000.00 32 852 323.76 68% 5.0

OITC.1 CHAD – TRANSPORT FACILITATION 07/05/2007 12/31/2011 0.00 19 000 000.00 19 000 000.00 13 153 484.58 69% 5.0

OITC.1 BAMENDA-MAMFE-EKOK-MFUM-ABAKALIKI

ROAD-

03/31/2009 12/31/2015 0.00 204 800

000.00

204 800

000.00

58 096 650.48 28% 3.7

OITC.1 CAMEROON/GONGO: KETTA-DJOUM ROAD 09/25/2009 12/31/2018 0.00 121 170

000.00

121 170

000.00

15 826 065.70 13% 2.8

OITC.1 STUDY ON KINSHASA- BRAZZAVILLE

BRIDGE

12/03/2008 0.00 5 000 000.00 5 000 000.00 1 526 320.47 31% 3.5

ONRI CENTRAL AFRICA BACKBONE CEMAC 12/08/2008 12/31/2011 308 849.51 0.00 308 849.51 262 522.08 85% 3.4

308 849.51 444 370

000.00

444 678

849.51

145 762

184.18

33% 4.5

PRIVATE SECTOR

OPSM3 RASCOM TELECOMMUNICATION SATELLITE 07/24/2007 07/01/2010 33 018

992.52

0.00 33 018 992.52 27 483 792.96 83% 5.0

AGRICULTURE

OSAN4 LAKE TANGANYIKA DEVELOPMENT

PROJECT (DRC)

11/17/2004 07/31/2012 0.00 11 750 000.00 11 750 000.00 4 358 337.43 37% 7.6

OSAN2 COTTON SECTOR SUPPORT PROJECT -CHAD 11/29/2006 12/31/2013 0.00 5 000 000.00 5 000 000.00 1 337 883.72 27% 5.6

- 2 -

OSAN4 LAKE CHAD BASIN SUSTAINABLE

DEVELOPMENT

12/11/2008 12/31/2015 0.00 30 000 000.00 30 000 000.00 3 297 248.97 11% 3.5

OSAN4 CONGO BASIN – ECOSYSTEMS

CONSERVATION

11/03/2009 12/31/2014 0.00 32 000 000.00 32 000 000.00 5 246 830.13 16% 3.3

0.00 78 750 000.00 78 750 000.00 14 240 300.25 18% 5.0

SOCIAL

OSHD3 LAKE CHAD BASIN INITIATIVE SUPPORT 10/26/2005 12/31/2011 0.00 10 000 000.00 10 000 000.00 7 284 720.96 73% 6.6

OSHD3 APOC (PHASE III) 07/15/2008 11/30/2013 0.00 15 000 000.00 15 000 000.00 12 599 917.40 84% 4.0

0.00 25 000 000.00 25 000 000.00 19 884 638.36 80%

OVERALL

SITUATION

33 327

842.03

586 423

439.24

619 751

281.27

212 969

352.07

34% 4.3

Appendix III: Major Related Projects Financed by the Bank and Other

Development Partners of ECCAS

Areas/Projects

Source of

Financing Approval

date Date of

signature Effectiveness Closing

date

Approved

amount (in

CFA.F

million) Peace, Security and Stability Sector

Peace Consolidation Mission in the Central African Republic France/EU 09/11/09 09/11/09 12/07/08 01/12/13 25 072

Peace Facility 4 (PF) EU, 10th EDF 17/12/10 01/05/11 31/12/13 3 501

Peace and security support II (PAPS II) EU, 10th EDF 02/12/10 17/12/10 17/12/10 30/06/15 7 819

Infrastructure sector (Transport & ICTs) 13 682

Institutional and operational support to ECCAS for monitoring of PDCT-AC implementation FPPI_NEPAD 27/09/10 06/10/10 06/10/10 30/11/13 494

Railroad bridge and extension of the Kinshasa-Ilebo railway ADB 00/01/00 03/12/08 13/05/09 31/12/12 3 630

Study on the Doussala-Dolisie road and transport facilitation on the Libreville-Brazzaville corridor

ADB/FPPI-NEPAD RIP 18/04/10 19/04/10 23/05/11 31/07/13 1 371

Study on the Ouesso – Bangui – Ndjamena Road and Waterways

Transport on the Congo, Oubangue and Sangha Rivers ADB/ADF 29/04/11 29/04/11 31/12/14 6 324

Ouesso-Sangmélima Road

expenditure related to ECCAS coordination ADB/ADF 11/01/10 11/01/10 31/12/15 1 863

Energy and Water Sector

Project for the implementation of Central Africa’s Regional Water

Policy ADB/AWF &

NEPAD-IPPF 02/09/09 04/02/10 04/02/10 31/12/13 1 257

Environment Sector

Congo Basin Ecosystems Conservation Support Program

(PACEBCo) ADB/ADF 01/02/09 03/04/09 03/04/09 22 400

Conservation and Development of Fragile Ecosystems of Central Africa (ECOFAC V) EU, 10th EDF 24/11/10 17/12/10 17/12/10 16/12/14 19 679

Support System for the Advanced Timber Processing Sector in the

Five Congo Basin Countries CFC 15/10/10 564

Agricultural and Rural Development Sector

Comprehensive Africa Agriculture Development Programme

(CAADP) WB_SF 27/10/10 22/11/10 01/10/10 31/12/13 2 000

Support Project for Phytosanitary Capacity-Building in the Five

Member States of ECCAS and CEMAC FAO 01/06/11 08/06/11 01/07/11 01/01/13 223

Livestock for Livelihoods Project (L4LP) AU-IBAR 01/02/11 01/02/11 01/07/11 31/07/13 14

Project "Participation of African Nations in Meetings of Health

and Phytosanitary Standard-Setting Organisations EU, AU-IBAR 115

Trade and Customs Sector

PACT II ITC Support to the private sector CDE

Multisector

Capacity-building for Central African Members of Parliament

(REPAC) ACBF 18/12/07 18/12/07 18/12/07 30/06/12 750

Appendix IV: Map of the Project Area