Document of The World Bank

FOR OFFICIAL USE ONLY

Report No. 52997 - C M

INTERNATIONAL DEVELOPMENT ASSOCIATION

COUNTRY ASSISTANCE STRATEGY

FOR

THE REPUBLIC OF CAMEROON

FOR THE PERIOD FY10-FY13

February 23,2010

Central Africa Country Management Unit (AFCC1) Africa Region

This document has a restricted distribution and may be used by recipients only in the performance o f their official Duties. Its contents may not otherwise be disclosed without World Bank authorization

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The date of the last Interim Strategy Note for Cameroon was December 2006

AAA AFD AfDB BEAC

BRIC CAB CAS CR CAPP CAS CBF CDS CEMAC

CFAF CHOC CMB CPPR DFID DeMPA DPL DMF DSCE

EFA-FTI EIB EIT I ESW

CURRENCY EOUIVALENTS

CFA Franc (CFAF) - Currency Unit -

US$l.OO = 480 CFAF (as o f February 10,2010)

GOVERNMENT FISCAL YEAR January 1 - December 3 1

ABBREVIATIONS AND ACRONYMS

Analytical and Advisory Activities Agence Franqaise de Ddveloppement (French Development Agency) African Development Bank Banque des Etats de I'Afrique Centrale (Central Bank of Central African States) Brazil, Russia, India and China Central Afr ica Backbone Country Assistance Strategy Completion Report Central Afr ica Power Pool Country Assistance Strategy Cameroon Business Forum City Development Strategy Cornrnunaute' Economique et Mone'taire de 1 'Afrique Centrale (Economic and Monetary Community o f Central Africa) CFA Franc Change Habits, Oppose Corruption Comite' Multi-Bail leurs (Multi-Donor Committee) Country Portfolio Performance Review Department for International Development Debt Management Performance Assessment Development Policy Loan Debt Management Facility Document de Stratkgiepour la Croissance et I 'Emploi (Growth and Employment Strategy) Education For All - Fast Track Initiative European Investment Bank Extractive Industries Transparency Initiative Economic and Sector Work

i

EU FY GDM GDP GEF GNI GoC GPF GPOBA HIPC IBRD ICT IDA IDF IFC IMF I S N ISR JSAN LEN LPHP MDG MDRI MTEF MIGA OHADA

PACA

PASE PER PDUE PEFA PETS PFM PNDP

PRECESSE

PRSP PRGF PSFE

FOR OFFICIAL USE ONLY European Union World Bank Fiscal Year (July 1 to June 30) Governance Development Marketplace Gross Domestic Product Global Environment Facility Gross National Income Government o f Cameroon Governance Partnership Facility Global Partnership on Output-Based Aid Highly Indebted Poor Countries International Bank for Reconstruction and Development Information and Communication Technologies International Development Association Institutional Development Fund International Finance Corporation International Monetary Fund Interim Strategy Note Implementation Status and Results Report Joint Staff Advisory Note Lending L o m Pangar Hydroelectric Project Millennium Development Goals Multilateral Debt Relief Initiative Medium-Term Expenditure Framework Multilateral Investment Guarantee Agency Organisation pour 1 'Harmonisation en Afrique du Droit des Affaires (Organization for Harmonization o f Business L a w in Africa) Projet d'Appui c? la Compktitivitk Agricole (Agricultural Competitiveness Project) Projet d'Appui au Secteur Educatif(Educati0n Sector Support Project) Public Expenditure Review Urban and Water Development Project Public Expenditures and Financial Accountability Public Expenditure Tracking Survey Public Finance Management Programme National de Dkveloppement Participatif(Nationa1 Participatory Development Program) Projet de Renforcement des Capacitks Environnementales et Sociales pour l e Secteur Energie (Environmental and Social Capacity Building for the Energy Sector Project) . Poverty Reduction Strategy Paper Poverty Reduction and Growth Facility Projet Sectoriel Fori?-Environnement (Forestry and Environment Sector Project)

This document has a restricted distribution and may be used by recipients only in the performance o f their off icial duties. I t s contents may not be otherwise disclosed without Wor ld Bank authorization.

REDD SME SPN TA TACD TF TFR

Reducing Emissions from Deforestation and forest Degradation Small and Medium Enterprise Supervision Technical Assistance Transparency and Accountability Development Project Tmst Fund Total Fertility Rate

IDA Vice President: Obiageli Katryn Ezekwesili Director: Mary Barton-Dock Task Team Leader: Daniel Murphy

... 111

Table of Contents

Executive Summary .............................................................................................................. v i

A . Political Conditions .................................................................................................... 2 B . Economic Conditions ................................................................................................. 2 C . Governance Conditions .............................................................................................. 5 D . E . Poverty and Inequality ............................................................................................... 6

Cameroon’s main development challenges and opportunities ...................................... 8

Improving governance to achieve inclusive growth .................................................. 8

Over-centralization of decision-making and execution ............................................. 9 Underinvestment in infrastructure ........................................................................... 10 Competitiveness lagging, but possibilities are there ................................................ 10 Enormous natural resource potential; the threat posed by climate change .............. 12

I . Cameroon: Vast potential. but with constraints ............................................................ 1

Social Conditions ....................................................................................................... 5

I1 . A . B . Weak public expenditure management 8 C . D . E . F . G .

......................................................................

Regional integration as a catalyst for growth .......................................................... 13

Cameroon’s Vision for Growth and Development ..................................................... 13

The Bank Group Assistance Strategy ......................................................................... 14

I11 . I V .

A . B . C .

Implementation of the last CAS and lessons learned ............................................... 15 Current Bank Portfolio ............................................................................................. 16 Proposed Assistance Strategy .................................................................................. 17

A Strategy Grounded in Governance ................................................................... 17 Strategic Theme One: Increasing Cameroon 3 Competitiveness ........................ 21 Strategic Theme Two: Improving Service Delivery ............................................. 27

Program delivery, monitoring, and management. ....................................................... 30

Aid coordination, partnership and consultation .......................................................... 31

i . i i . i i i .

V . VI . VI1 . Managing Risks .......................................................................................................... 32

Tables Table 1: Selected Macroeconomic Indicators. 2005-14 ........................................................ 3 Table 2: Poverty Dynamics in Cameroon. 1996-2007 .......................................................... 7 Table 3 : Current Cameroon Portfolio .................................................................................. 16 Table 4: Improving Competitiveness Overview .................................................................. 23 Table 5: Service Delivery Overview .................................................................................... 28

Figures Figure 1 . Cameroon’s protected areas and mineral resources ............................................. 12 Figure 2 . Client Survey Response ........................................................................................ 15 Figure 3 . The CAS Framework ............................................................................................ 17

i v

Boxes Box 1 . Core Governance Activities ..................................................................................... 18 Bo& 2 . Sector Governance Activities ................................................................................... 19 Box 3 . Demand-side Governance Activities ........................................................................ 20 Box 4 . Regional Integration at the core o f improved competitiveness ................................ 21 Box 5 . Ongoing IFC support to competitiveness and private sector development .............. 26 Box 6 . Collaboration with the African Development Bank ................................................. 31

Annexes Annex 1 : Cameroon Summary o f new interventions over CAS period ............................... 34 Annex 2: World Bank Program Results Matr ix ................................................................... 35 Annex 3 : Cameroon Donor Coordination Matr ix ................................................................ 43 Annex 4: Progress toward the Millennium Development Goals ......................................... 44 Annex 5: Cameroon at a Glance .......................................................................................... 45 Annex 6: IBRDIIDA Program Summary ............................................................................. 47 Annex 7 : Selected Indicators o f Bank Performance and Management ............................... 48 Annex 8: Summary o f Non-Lending Services ..................................................................... 49 Annex 9: Operations Portfolio (IBRD/IDA and Grants) ..................................................... 50 Annex 10: IFC’s Committed and Outstanding Portfolio ..................................................... 52 Annex 1 1 : I F C Cameroon Investment Operations Program ................................................ 53 Annex 12: Country Financing Parameters ........................................................................... 54 Annex 13: Cameroon Key Exposure Indicators .................................................................. 55 Annex 14: CAS Completion Report .................................................................................... 56 Annex 15: Map o f Cameroon .............................................................................................. 98

V

Executive Summary

i . Since the World Bank Board o f Directors last discussed a Country Assistance Strategy (CAS) for Cameroon in September o f 2003,’ much has changed in the global economic climate and with respect to the country’s future trajectory. The global slowdown has resulted in a significant contraction o f Cameroon’s exports other than oil, notably timber, rubber and cotton, and long-hoped for investments in the mining sector have been indefinitely postponed. While significant reforms were undertaken over the period since the last CAS was elaborated, much remains to be done to improve development effectiveness and transparent, efficient use o f resources in order to unlock Cameroon’s potential.

Cameroon: Vast potential, but with constraints 11. Cameroon’s macroeconomic performance has strengthened in recent years. Debt relief in 2006 under the Highly Indebted Poor Countries (HIPC) and Multilateral Debt Relief Initiative (MDRI) helped firm up the country’s debt sustainability, and create fiscal space for spending targeted on poverty reduction. Cameroon maintained sound macro policies throughout the financial crisis. The country’s growth achievement remains nevertheless disappointing. Despite the progress made to consolidate macroeconomic stability, poor infrastructure and an unfavorable business environment s t i l l hamper economic activity and make it difficult to reach the growth rates needed to reduce poverty on a sustainable basis. GDP growth between 2003 and 2007 was limited (3.3 percent on average per annum), and remained below the average annual growth rate o f 4.2 percent achieved between 2000 and 2002. In per capita terms, real GDP grew by only 0.6 percent on average between 2000 and 2007. As a result, poverty rates virtually stagnated from 2001-2007 at 39.9 percent. On its current trajectory, Cameroon i s likely to meet only one of the Millennium Development Goals, namely primary school enrollment.

..

Cameroon’s main development challenges and opportunities ... 111. Cameroon’s central challenge i s to stimulate a robust rate o f growth, and to ensure this i s equitably shared amongst the population in order to reduce poverty. The country’s governance deficit constitutes a major obstacle in achieving this, as evidenced in weak public expenditure management and a highly centralized state machinery that has few downward linkages to those most in need. A poor business climate undermines Cameroon’s competitiveness and growth prospects, as does significant underinvestment in critical infrastructure that could improve service delivery and broaden economic growth both at national and regional levels. To that end, Cameroon’s economy must become more competitive and public financial management must improve, creating a favorable environment to ensure the sustainable and transparent use o f the country’s considerable natural resources.

Cameroon’s vision for growth and development iv. The recently completed PRSP envisions significant investment in infrastructure to stimulate growth, notably in energy, roads, port infrastructure, water supply, and information technology. Productive increases are sought in agriculture and livestock farming, and mining. The PRSP also looks for improvement in key value chains and in the

An Interim Strategy Note covering Fiscal Years 2007-2008 was discussed by the Board in November 2006. I

v i

business climate. I t looks to strengthen human development and develop more robust formal sector employment. The PRSP also places important emphasis on regional integration, and envisions strengthened partnerships with non-traditional donors. Finally, it dedicates an entire chapter to improving governance, including specific initiatives related to corruption, public procurement, business climate, and civic participation.

The Bank Group Assistance Strategy v. The World Bank wil l help to stimulate growth by improving the competitiveness o f the Cameroonian economy through two main pillars and the cross-cutting governance theme.

A Strategy Grounded in Governance vi. Cameroon’s greatest development challenge i s governance. The pervasiveness o f bad governance inculcates most economic transactions. As a result, development outcomes suffer and those in the greatest need are most adversely affected. The Wor ld Bank response to this issue wil l be tackled in a cross-cutting, pragmatic manner. The Bank wil l continue to leverage i t s program to promote improvement in core governance (including public finance management), will deepen i t s work on governance at the sector levels, and will aim to mainstream a governance dialogue in-country so as to create an enabling environment for behavior change in the medium-term.

Strategic Theme One: Increasing Cameroon ’s Competitiveness vii. Vastly improved competitiveness underpins Cameroon’s intended growth trajectory. As such, World Bank support to improve competitiveness wil l focus on three principal axes: (i) increased infrastructure investment in the energy, transport, and telecommunications sectors; (ii) activities geared toward ensuring the transparent, equitable, and sustainable use o f natural resources, including mining, agriculture, fisheries, and protected areas; and (iii) promotion o f high potential value chains and improved business climate. Given the important role it plays in improving competitiveness, regional integration i s a critical part o f this strategic theme.

Strategic Theme Two: Improving Service Delivery vi i i . Effective service delivery i s critical in reducing poverty. Cameroon must place much greater focus on ensuring that poverty i s tackled in a meaningful way. As such, World Bank support to service delivery will focus on three main areas: (i) human development, where educational efficacy and accountability will be improved, and the quality o f health services will increase; (ii) social protection, to help develop an effective safety net system based on targeted programs; and (iii) local development, where the focus wil l be on increasing access to basic services through infrastructure upgrading and capacity building for improved local governance.

...

Program delivery, monitoring, and management ix . Total IDA resource availability to Cameroon during the CAS period from FY2010 to FY2013 i s estimated at approximately US$430 million. The CAS includes a strong focus on managing for development results. The CAS outcomes are based on a holistic view o f development, incorporating the concept o f strong interdependencies between different interventions and outcomes, and acknowledging cross-sector synergies that influence CAS

vii

contributions. The CAS indicators will be tracked in real time, using a recently developed CAS monitoring tool.

Aid coordination, partnership and consultation x. CAS preparation involved sustained and substantive discussions with Cameroonian government officials, civil society, private sector actors, and legislators that led to a consensual vision for Bank activities over the CAS period. Capitalizing on a joint need to prepare new strategies in the same timefiame, the Bank undertook a collaborative CAS preparation process with the African Development Bank. With the broader donor community, the Bank worked in close collaboration with the Comite‘ Multi-Bail leurs (CMB), a Yaoundd-based group that consists o f heads o f development cooperation for major multi- and bi-lateral donors during strategy preparation. The International Finance Corporation (IFC) spearheaded consultations with the private sector and worked closely with World Bank colleagues to use the strategy preparation process as an opportunity to identify synergies at the sector level.

Managing risks xi. The fragile global economy, coupled with a challenging country context, present several r isks to the strategy, including exogenous r isks associated with the global economic crisis, and more critically development effectiveness r isks associated with Cameroon’s poor track record implementing reforms that have a direct impact on poverty reduction. This situation could become more acute in the lead up to presidential elections in 201 1. Mitigating this risk calls for developing projects where there i s strong political will, close implementation support f i om task teams, and continuing to strengthen the Bank Group’s pol icy dialogue at a l l levels o f government, including with the Executive Branch o f Government. From a fiduciary perspective, Cameroon i s a high-risk environment, and as a result the Bank wil l continue and deepen i t s aggressive, practical interventions to ensure fiduciary integrity o f IDA operations.

... VI11

Cameroon Country Assistance Strategy

Inclusive Growth

1, Since the World Bank Board o f Directors last discussed a Country Assistance Strategy (CAS) for Cameroon in September o f 2003, much has changed in the global economic climate and with respect to the country’s future trajectory. Oi l revenue, on which the Government o f Cameroon (GoC) i s heavily dependent, has fluctuated wildly. The global slowdown has resulted in a significant contraction o f Cameroon’s other export commodities, notably timber and cotton, and long-hoped for investments in the mining sector have been indefinitely postponed. The previous CAS was developed in the wake o f Cameroon’s first Poverty Reduction Strategy (PRSP), and an Interim Strategy Note (ISN) bridged Fiscal Years 2007 and 2008 so that Government could complete its updated poverty reduction strategy, which has only come to fmition in August 2009. Despite the delays associated with the elaboration o f the “Growth and Employment Strategy” (DSCE), the process demonstrated strong buy-in for both i t s vision and policy directions. This underpins GoC’s stated intention to refocus i t s efforts on economic development and poverty reduction, a necessity made all the more stark by stagnating growth and persistent poverty over the previous CAS period. While significant reforms were undertaken over the period since the last CAS was elaborated, including reforms under the Highly Indebted Poor Countries (HIPC) Completion point in 2006, and the successful 2005-2009 International Monetary Fund (IMF) Poverty Reduction and Growth Facility (PRGF) program, much remains to be done to improve development effectiveness and transparent, efficient use o f resources in order to unlock Cameroon’s potential.

2. On the World Bank side, the institution i s poised to transform the way that i t engages with Cameroon, evolving into a trusted partner that continues to provide pragmatic, strategic, and focused investment lending and analytic and advisory activities. This CAS mirrors Government’s vision for economic growth, but in a manner that produces benefits for all Cameroonians, expressed as this CAS’ umbrella o f “Inclusive Growth”. The Cameroonian economy needs to not only maintain i t s delicate equilibrium in these trying times, but make strides to transform into a more robust, diversified, and competitive economy. Service delivery too demands improvement in terms o f access and quality o f services. Last, both government strategy documents and the CAS i t se l f acknowledge the key role that governance wi l l play in this transformation.

I. Cameroon: Vast potential, but with constraints 3 . Cameroon i s a linguistically and ethnically diverse country whose geography ranges from Sahelian semi-desert in the north through grassland to equatorial forest in the south. This diversity favors varied economic and agricultural activities, though in reality 70 percent o f the population depends on agriculture and pastoral activities for their livelihood. Cameroon has one o f the highest proportions o f land area devoted to conservation in Africa, with some 14 percent o f the country’s territory designated as national parks, reserves, sanctuaries and conservation concessions. Cameroon also exports oil and has significant natural resources, including high- value timber species; agricultural products including coffee, cotton, and cocoa; and as yet untapped natural gas, iron, bauxite, and cobalt.

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A. Political Conditions 4. Since i t s independence, Cameroon has enjoyed a degree o f political stability that i s unusual for sub-Saharan Africa. I t s f i rst President, Ahmadou Ahidjo, remained in office until 1982, and was peacefully succeeded by Paul Biya, who founded the Cameroon People’s Democratic Movement and ran a single party system. Following popular unrest, a multi-party system was introduced in 1990. Mr. Biya won multiparty polls in 1992, and in 1996 introduced a new Constitution that extended presidential term limits to two seven-year terms. Mr. Biya comfortably won the 1997 elections (which were boycotted by the main opposition parties) and subsequently the 2004 elections. In April 2008, Parliament approved a controversial constitutional amendment removing the term limit for the President amidst protests .from the opposition and civ i l society. This now enables the incumbent to seek re-election at the next presidential elections due in 20 1 1.

B. Economic Conditions 5. Macroeconomic Management. Cameroon i s a member o f a monetary union with a supranational central bank, conducting monetary policy consistent with the peg to the Euro. Fiscal policy i s thus the main instrument available to the authorities. In this regard, their medium-term fiscal strategy reflects the nonrenewable nature o f o i l revenues and the need to address obstacles to growth, while preserving debt sustainability. The strategy aims at limiting fiscal deficits while oi l revenues are significant so that future generations are not faced with a renewed debt burden. O i l revenues and available prudent borrowing should be effectively used to finance growth-enhancing investments. This strategy i s ensured by maintaining a moderately positive non-oil current fiscal balance and by avoiding sizable overall fiscal deficits for as long as o i l revenues remain substantial. Finally, fluctuations in the non-oil primary balance are contained to avoid destabilizing effects on the economy.

6. Debt Sustainability. Cameroon’s debt situation has sharply improved in recent years. I t s public debt-to- GDP ratio declined from 51.8 percent in 2005 to 9.8 percent in 2008 (US$2.28 billion), thanks to HIPC and Multilateral Debt Relief Initiative (MDRI) relief in 2006 and prudent borrowing policies since then. Since the HIPC Initiative and MDRI debt relief, the further decline in external debt has reflected the following: (i) a reduction in net borrowing by public enterprises; (ii) the settlement o f most London Club commercial creditors; and (iii) valuation effects due to changes in the exchange rate. On domestic debt, substantial repayments were also made possible due to the use o f windfall gains from higher-than-expected o i l prices in 2008.

7. Though the composition o f external public debt i s currently skewed toward bilateral debt, it appears sustainable. Under a baseline scenario, all debt indicators remain below their thresholds through 2029. As such, Cameroon’s risk o f debt distress remains low. However, because o f the global financial crisis and economic slowdown, debt indicators are somewhat higher than in the 2008 analysis. I t i s also noteworthy that persistent weakness in public finance management and insufficient data coverage remain areas o f vulnerability in Cameroon’s assessment. In particular, quasi-fiscal liabilities o f state-owned enterprises are not transparent and represent a possible build-up o f new arrears. In addition, continued efforts to achieve

Derived from the Joint Fund-Bank Debt Sustainability Analysis, June 12, 2009. 2

2

greater non-oil revenue mobilization and to widen the export base are s t i l l a challenge, given the expected long-run decline in o i l revenue.

8, Recent Economic Developments. Cameroon’s macroeconomic performance has strengthened in recent years. Debt re l ie f in 2006 under the HIPC and MDRI helped firm up the country’s debt sustainability, and create fiscal space for spending targeted on poverty r e d ~ c t i o n . ~ Public expenditure management i s slightly more transparent, and the financial sector stronger. Prudent management o f o i l earnings and revenue has allowed the authorities to accumulate government deposits at the regional central bank (BEAC) and to contribute to the currency union’s pool o f foreign exchange reserves, while raising public investment and normalizing relations with creditors.

Table 1: Selected Macroeconomic Indicators, 2005-144 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

2.0 3.8 3.5 3.4 2.4 2.6 4.0 4.2 4.5 5.2 Naiional Accounts Percentage increase Proj. GDP in which non-oil GDP

Private Investment Public Investment Prices Consumer prices FEER Terms of trade Oil (US$ per barrel) Fiscal Accouni Non-oil Revenue Oil revenue Recurrent expenditures Capital expenditures Overall balance, cash basis (excl. grants) Domestic financing External financing (net) External account Exports growth in volume Current account (excl. grants) (% of GDP) Reserves (in mos. of imports) Debt Stock o f Dublic debt

2.9 3.5 4.1 4.1 3.1 3.3

14.7 15.1 14.3 13.4 12.2 12.3 3.1 2.9 3.9 5.7 5.8 6.0

2.0 4.9 1.1 5.3 2.7 2.0 -3.5 4.5 1.2 3.3 18.0 14.0 -1.6 8.7 -20.9 12.5 50.4 61.6 69.6 94.3 52.7 71.5

12.4 12.2 12.5 12.6 13.3 13.3 4.9 6.7 6.4 7.8 4.9 4.0

11.8 11.4 11.6 14.4 13.0 12.7 2.3 2.8 3.9 5.7 5.7 6.0

Percent o f GDP

Percentage increase unless otherwise indicated

Percent o f GDP

2.2 2.9 2.5 1 . 1 -1.8 -1.6

-2.3 -4.8 -3.2 -2.0 -0.5 -0.6 -0.4 2.0 -0.5 -0.1 0.2 0.4

-8.4 3.4 2.3 0.7 -4.6 0.8

-3.8 -1.3 -1.8 -2.0 -6.9 -5.0

2.7 3.4 4.8 6.2 4.9 4.2

Percent o f GDP 52.7 14.3 11.8 9.8 12.4 13.1

3.6 3.9 4.9 5.6

12.8 13.6 13.3 13.9 6.3 6.6 6.8 6.9

2.0 2.0 2.0 2.0

4.4 2.3 -4.1 -3.9 75.0 77.0 78.3 79.5

13.4 13.6 13.7 13.9 4.9 5.3 4.9 4.6

12.4 12.2 12.1 12.1 6.3 6.6 6.8 6.9

-0.5 -0.1 -0.5 -0.7

-0.5 -0.8 -0.4 -0.4 0.3 0.3 0.4 0.6

7.7 5.7 9.1 9.4

-4.2 -3.7 -3.6 -3.5

3.5 3.0 2.6 2.4

13.2 13.3 13.0 13.2 in whici external debt 36.7 5.0 5.5 5.5 7.5 8.0 8.3 8.6 8.8 9.1

Sources: Cameroonian authorities; and IMF staff estimates and projections (Country Report No 09/3 18)

9. The country’s growth achievement remains nevertheless disappointing. Despite the progress made to consolidate macroeconomic stability, poor infrastructure and an unfavorable business environment s t i l l hamper economic activity and make it difficult to reach the growth rates needed to reduce poverty on a sustainable basis. GDP growth between 2003 and 2007 was limited (3.3 percent on average per annum), and remained below the average annual growth rate o f 4.2 percent achieved between 2000 and 2002. In per capita terms, real GDP grew by

Cameroon’s public debt-to-GDP ratio declined from 5 1.8 percent in 2005 to 9.8 percent in 2008 (US$2.28 3

billion). Substantial repayments were also made on domestic debt, using windfall gains from higher-than-expected oi l revenue (Joint Fund-Bank Debt Sustainability Analysis, June 12,2009).

Government and IMF staff estimates 4

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only 0.6 percent on average between 2000 and 2007. As a result, extreme poverty remained unchanged and even worsened in rural areas. O n its current trajectory, Cameroon i s unlikely to meet any o f the Millennium Development Goals (MDGs), with the possible exception o f that o f universal primary education.

10. The Global Financial Crisis. Cameroon is being adversely affected by the global economic crisis through lower commodity prices and external demand, and tighter external financing affecting major investments. Lower wor ld demand and prices for key commodities (e.g. timber, rubber, cotton), as well as lower-than-expected o i l production, have led to a downward revision o f export earnings in 2009. The fal l in commodity prices could also affect growth prospects in the outer years because it could delay investments in the oi l and mining sectors. The current account deficit i s projected to widen to about 6.9 percent o f GDP and economic growth to slow to about 2.4 percent. Lower o i l revenue will also turn the overall fiscal balance into a deficit o f about 2 percent o f GDP, as public spending was maintained at i t s budgeted level (with the exception o f the elimination o f subsidies on fuel prices). Although declining, headline inflation reached 4.3 percent (year-on-year) in June, driven mainly by higher food prices.

1 1. Medium-term prospects. In 201 0, the external position is expected to improve on the back o f stronger external demand and higher expected oi l prices. The main risks to this outlook relate to (i) a further worsening or longer duration o f the global downturn, and (ii) the upcoming presidential elections in 201 1 that could delay the implementation o f the needed policy reforms and lead to additional spending pressures. The authorities recognize that a broader structural reform agenda remains unfinished, holding back the economy from reaching the faster growth rates needed to reduce poverty. They have stressed their resolve to revive economic activity, while preserving macroeconomic stability and debt sustainability. The newly-adopted growth and employment strategy focuses on the need to alleviate the bottlenecks to growth, especially in infrastructure, refocus public spending on priority areas, strengthen the place and quality o f public investment, and improve the business environment.

12. The medium-term scenario is subject to significant downside risks. Government pol icy documents might be underestimating financing requirements. The projected path o f private investment assumes a very rapid response o f the private sector to the reforms aimed at improving the business environment. Should this projection not materialize, public investment may need to compensate for the shortfall. Public expenditure policy will be geared towards containing total current spending and reorienting outlays to productive uses, including infrastructure investment, but savings across various expenditure categories remain undefined. Policy documents recognize the declining importance o f o i l revenue and trade taxes, and stress the need to achieve greater nonoil revenue mobilization. At the same time, however, a number o f fiscal incentives are envisaged, further eroding an already narrow tax base. Planned public spending could therefore result in overall external and fiscal deficits putting substantial pressure on the country’s notional foreign exchange reserves and on government deposits.

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C. Governance Conditions 13. Evidence shows Cameroon’s weak track record with respect to stimulating growth. Despite the country’s tremendous natural, human, and financial resources, economic performance remains decidedly modest. Non-oi l growth has averaged only 4.2 percent over the past 5 years, well below Government’s ambitions, which sets its future annual goal at 10 percent. Statistics also show that what little growth i s generated is not being distributed in an equitable, pro-poor manner. At least one explanation for this i s governance, which continues to pose a major challenge to Cameroon’s development potential. Kaufmann-Kraay Governance indicators show that Cameroon ranks under the 25‘h percentile for al l criteria, with control o f corruption at the 19th percentile, government effectiveness at the 20th percentile, and voice and accountability at the 19‘h percentile. Cameroon’s IDA Resource Allocation index for 2008 i s at 3.2 which i s the borderline o f ratings for fragile states. I ts sub-ratings on “transparency, accountability, and corruption in the public sector” and “property rights and rule-based governance” both stand at 2.5. Starting a business in Cameroon i s a daunting task (Cameroon ranks 17 1 st out o f 183 countries in the Doing Business Index), and enforcing a contract requires 43 steps and 800 days.

D. Social Conditions 14. While Cameroon i s on track to meet the MDG on primary enrollment, issues remain with regard to educational quality, with a high pupil to teacher ratio, a lack o f adequate learning materials, etc. Cameroon’s expenditure on education has grown since 2000 by taking advantage o f funds released through debt relief. The main results include the construction o f 3,500 new classrooms to reduce overcrowding; salary increases to motivate teachers; recruitment o f additional teachers; and the provision each year o f a minimum package o f school supplies to all schools. Both enrollment rates and completion rates have improved at the primary levels, as has gender equity. Cameroon has made impressive strides in ensuring girls’ access to education, with a female to male ratio o f 85 percent in primary and secondary education. Furthermore, the sector has made great strides in equitable efficiency by deploying new contract teachers to schools with the greatest needs, thus reducing the variation o f the pupil-teacher ratios. The government eliminated school fees for primary school pupils 1999. This has led to an increase in gross primary school enrolment to over 100 percent, but problems remain. Governance constraints also impact the effectiveness o f the education system across the sector. Stakeholders do not have easy access to timely and useful information on the state o f the education system, accountability mechanisms that oblige authorities at all levels to make relevant changes or opportunities to participate in the decision-making process.

15. Cameroon i s experiencing rapid population growth at 2.7 percent and a high fertility rate that averages five children per woman. There are large geographical variations with the total fertility rate (TFR) being as high as 6.1 children per woman in rural areas. The high TFR i s partly a function o f a l o w overall contraceptive prevalence rate, which i s 14 percent nationwide but only 3 percent in the Northern and Extreme Northern Regions. Reducing fertility rates will have many benefits as it can be expected to: (i) improve women’s health and reduce overall maternal mortality by reducing the number o f high order births (fourth, fifth and higher births) which are much riskier than l o w order births; (ii) reduce infant mortality rates b y increasing the interval between births; (iii) help empower women by providing them with choices about when and how many children to have; (iv) provide a necessary condition for sustained and rapid economic growth by decreasing the dependency ratio and by facilitating the

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formation o f human capital (by allowing greater per child expenditures on education and health); and (v) reduce population pressures that further stress the fragile ecosystems o f the country (e.g. access to land, deforestation, food, and water supply, etc).

16. Broader health outcomes are out o f synch with the country’s potential and expenditures in the sector. National statistical data hide large geographical and socioeconomic disparities in service delivery. Most key indicators o f child health and nutrition have actually worsened since 1990 with a few exceptions (e.g., immunization). The HIV/AIDS epidemic increases the risk o f exacerbating the poor health outcomes, with current seroprevalency estimates at 5.1 per~ent.~ Cameroon’s overall epidemiologic profile corresponds to countries that spend dramatically less, reflecting important inefficiencies in the allocation o f resources and in the production o f health services as well as major inequities in the distribution o f human resources and the state o f facilities. The gender dimensions o f the health challenge are striking, with maternal mortality at approximately 1,000 per 100,000 live births. Not surprisingly, health sector performance i s also hindered by governance issues, and monitoring and evaluation o f health sector performance remains weak.

17. Cameroonians are increasingly living in urban areas, with a 56 percent urbanization rate in 2007, compared with only 26.9 percent in 1975. Urban population growth remains high, exceeding 6 percent per annum according to some estimates, compared with 2.1 percent for the population as a whole. Douala and the capital city, Yaounde, are the main urban centers, with populations o f 2 million and 1.7 million respectively. Urban growth occurred largely without the necessary investment in infrastructure, resulting in the growth o f informal suburban settlements that offer a low standard o f living. Cameroon’s population i s young: an estimated 41 -2 percent are under the age o f 15, and 96.7 percent are under 65.

18. Annex 4 shows that Cameroon continues to lag with respect to achieving the Millennium Development Goals, which underscores the difficulty in gearing public policy toward a focused effort at ensuring that the poorest benefit from the country’s modest growth. Only one MDG i s within reach by 2015, but only if reforms are sustained related to ensuring universal primary education. Indicators relating to gender equality and women’s empowerment, maternal mortality, child health and reduction o f malaria and other major disease incidence will not be met. Finally, the goal that seeks to halve the population living below the poverty line i s also unlikely to be met.

E. Poverty and Inequality 19. As previously noted, recent household data demonstrates that the average Cameroonian i s no better o f f than they were in 200 1, with poverty rates virtually stagnating from 200 1-2007 at 39.9 percent6 The survey also revealed that more than 55 percent o f rural households are poor, as compared to only about 12 percent o f urban ones (changing from 52 and 17 percent, respectively, in 2001). As a result 87 percent o f the poor were living in rural areas in 2007, up from 82 percent in 2001. However, these analyses may mask broader challenges faced by the burgeoning urban population, whose cost o f living i s generally higher than that o f rural

Seroprevalence: the number o f persons in a population who test positive for a specific disease based on serology

Third Cameroonian Household Survey, Troisieme EnquLte Camerounaise Aupres des Minages, Institut National

6

5

(blood serum) specimens.

des Statistiques, June 2008

6

inhabitants, but which i s not taken into account when calculating these poverty rates. This lack o f progress on poverty reduction since 2001 i s not surprising given 0.6 percent real growth over the period, governance problems, and highly centralized budget execution, resulting in compromised development outcomes in peripheral areas o f the country.

1996 2001 2007 Headcount 53.26 40.18 39.90 Poverty Gap 19.09 12.79 12.31 Squared Poverty Gap 9.00 5.55 5.03 Gini 40.63 40.41 38.96

20. Poverty analysis7 also demonstrates that Cameroon i s characterized by economic growth that has strong spatial and geographic dimensions, including regional disparity and a decline o f the agricultural sector. In essence, the poor continue to be worse off, while the wealthy fare relatively better, underscoring the inability o f the state to ensure an equitable allocation o f resources to fight poverty. For example, the poverty incidence in four regions (Adamaoua, East, North and Extreme North) experienced a significant increase between 200 1 and 2007 while the overall poverty trend was stagnating. The two Northern regions (North and Extreme North) saw the biggest increase, o f 13.6 and 9.6 percentage points respectively. These points underscore that poverty i s not being addressed in a comprehensive manner. This calls into question the implementation effectiveness o f the f i rs t Poverty Reduction Strategy Paper (PRSP), and underscores the need for interventions that are both geographically and sectorally targeted.

1996 2001 2007 1996 2001 2007 41.39 17.88 12.17 59.62 52.08 55.04 14.67 4.28 2.81 21.46 17.32 17.50 6.92 1.59 0.96 10.12 7.67 7.24

44.91 40.71 35.19 34.60 33.15 32.23

2 1. According to recent data from the National Statistics Office, the informal sector now employs about 7 mi l l ion workers, accounting for over 90 percent o f al l employment. Reliable data on the sector are unavailable, but it i s generally believed to account for over 60 percent o f economic output, with many estimates putting i t s contribution even higher. While the unemployment rate in 2005 in urban areas (1 0.7 percent) and in the two largest cities, Douala (12.5 percent) and Yaounde (14.7 percent), i s worrisome, the underemployment rate stands at over 75 percent. The informal sector appears to have grown over recent years as policies to stimulate the formal economy have largely failed. The apparent growth o f the informal sector is increasing pressure on the government to promote policies that recognize its economic importance, in particular by helping informal businesses to gain access to credit, social protection schemes and training.

B. Essama-Nssah and Leandre Bassole: “The pattern of Economic Growth in Cameroon and i ts Poverty Implications” March

/bid. Cameroon, Employment and Informal Sector Survey, Institute National des Statistiques, 2005.

7

2009.

9

7

11. Cameroon’s main development challenges and opportunities 22. Cameroon’s central challenge i s to stimulate a robust rate o f growth, and to ensure this i s equitably shared amongst the population in order to reduce poverty. The country’s governance deficit constitutes a major obstacle in achieving this, as evidenced in weak public expenditure management and a highly centralized state machinery that has few downward linkages to those most in need. A poor business climate undermines Cameroon’s competitiveness and growth prospects, as does significant underinvestment in critical infrastructure that could improve service delivery and broader economic growth both at national and regional levels. To that end, Cameroon’s economy must become more robust and competitive, creating a favorable environment to ensure the sustainable and transparent use o f the country’s considerable natural resources. Such reform would attract key investments in several areas, including mining, tourism, and small and medium enterprises linked to agribusiness and industry (wood transformation, textiles). In the medium-term, Cameroon must transform i t s natural capital into human and productive capital in order to achieve i t s aspirations to become a middle income country by 2035.

A. Improving governance to achieve inclusive growth 23. Cameroon’s poor reputation for governance i s grounded in a severe breakdown o f public accountability. Checks against fraud and corruption are weak, and a lack o f information makes it difficult for citizens and c iv i l society to hold governments accountable. Lit t le information i s made public on development performance indicators. The public i s not consulted before enactment o f legislation or given a role in the oversight o f public expenditures. Citizens have difficulty holding elected officials and the executive branch o f government accountable, and the answerability o f service providers to elected officials i s also flawed. Though Cameroon has a reasonably sound legal system, a disconnect exists between laws and their implementation. Regulations often subvert the intent o f the law, and laws are not adequately enforced.

24. Most observers agree that the main obstacle to growth in Cameroon at this time i s governance. As previously cited, a culture o f impunity and patron-client relationships pervades many economic transactions and levels o f society. The “rules o f the game” that would encourage transparency and due process are either unclear, unknown, or not respected. As such, the growth seen today i s both far under i t s potential and subsequently, the benefits o f growth are channeled to those .least in need o f it. The government recognizes in i t s public policy statements that governance i s a principal constraint to an improved growth performance. Governance failures constrain growth through three principal mechanisms. First, they adversely affect the investment climate in a variety o f ways. Second, they increase the cost o f doing business in Cameroon, and hence reduce cost-competitiveness. Third, poor public financial management and an inefficient and sometimes corrupt c iv i l service reduce the resources available to finance public investment and the effectiveness o f public service delivery.

B. Weak public expenditure management 25. Deficiencies in public financial management contribute to Cameroon’s disappointing economic growth, hampering the efficient use o f resources available to finance public investment and service delivery. Recent analysis suggests that progress has been made in budget preparation, but problems remain with budget execution and controls. With respect to the capital budget, for instance, a new procurement code has brought some improvement and a

8

regulatory agency for procurement i s now fully operational. However, limited internal controls, weak accounting and reporting, and an absence o f adequate external audit, hinders transparency and accountability. Funds are also often released late in the fiscal year, resulting in excessive use o f ad hoc regulations and exceptional procedures. Intergovernmental transfers lack transparency and local governments often have inadequate financial resources to meet their spending responsibilities.

26. A lack o f information makes it difficult for citizens and c iv i l society to hold governments accountable. The quality and timeliness o f in-year budget reports and annual financial statements i s deficient. External scrutiny i s weak with the Chamber o f Accounts and the National Assembly having limited access to relevant financial and budget information and no capacity to undertake their constitutional audit and oversight roles. Audit reports are not publicly available and l i t t l e information i s made public on development performance indicators. As in many developing countries, the task o f delivering services i s undercut by the inadequate funding and corruption. Lack o f comprehensiveness and transparency o f the budget (with significant expenditures o f f budget), large gaps between anticipated and actual revenue collections, and weak control over payrolls play ‘a role in reducing the funds available for service delivery and public investment.

C. Over-centralization o f decision-making and execution 27. Cameroon’s administration i s seen as more capable than most o f its neighbors, yet i t i s perceived as excessively centralized with few downward accountability mechanisms. While Cameroon’s basic decentralization legislation i s considered adequate, most o f it i s yet to be acted upon, notably on fiscal decentralization, staffing and organization o f local governments, and deployment o f deconcentrated staff. Local government i s bogged down by the typical issues in decentralizing highly-concentrated francophone states. Current issues partly stem from the superimposition o f a devolved structure onto a deconcentrated state. The government’s decentralization strategy recognizes in principle the need for devolving spending responsibilities to local governments while transferring at the same time the appropriate resources to meet these new responsibilities and avoid unfunded mandates. The nature o f these resources seems, however, unclear, as well as the design o f any equalization transfer mechanism to allow al l local governments to deliver the same quality o f public services irrespective o f their own revenue base. In addition, the borrowing pol icy o f local governments and the mechanism by which the center will enforce hard budget constraints need to be developed.

28. Although the government allocates roughly 30 percent o f the investment spending to the regions, it re-centralizes two thirds o f this budget. O n average, each region controls around 1 percent o f the total investment budget. The high centralization rates are often rationalized by the lack o f capacity at the local level, the absence o f “local” f i r m s that can deliver adequate goods and services, or economies o f scale brought about by large purchases only the central government can make. However, the large network o f more than 350 local treasuries, along with the fact that local governments have been dealing with public procurement issues since at least 2002 does not lend support to the over-centralization o f the investment budget.

29. Because local governments have superior information about local needs than the remote central administration, they are better able to identify, and given appropriate capacity, deliver

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the services their constituents want and need, and decentralizing spending would enhance economic efficiency. Over time, the efficiency gains at the local level would lead to better services and faster economic growth at both the local and national levels. The government has vowed to further the decentralization o f investment spending in the 2010 budget, but it remains to be seen if the requisite human and financial resources will actually be transferred. The scope, pace, and nature o f the transfer o f human and financial resources will need to be carefully managed in order to ensure that decentralization results in better development outcomes at the local level.

D.. Underinvestment in infrastructure 30. As previously noted, Cameroon urgently needs to upgrade i t s infrastructure, as it constitutes a major bottleneck for competitiveness and growth. I t i s only through improved access to markets and services, greater reliability and lower costs that connectivity and productivity will increase. Public investment could yield important social and economic returns. Through spending on economic and social infrastructure, a government can provide a strong boost to GDP growth and poverty reduction. However, for capital spending to contribute to growth, i t has to be effective and efficient. Analysis shows that planned public investment in infrastructure has increased markedly from 2004 to 2008, from less than 20 percent in 2004 to more than 40 percent in 2008. Infrastructure, however, represents a much smaller share o f the treasury payments; i t represented 45 percent o f the planned investment outlays in 2008, only 19 percent o f the actual payments went for infrastructure that same year.’’

31. None o f the government’s priority sectors escape this pattern. In energy, Cameroon’s hydropower potential i s the third largest in Sub-Saharan Africa, estimated in excess o f 12,000 megawatts. However, the total installed electricity generation capacity i s only 933 megawatts, 77 percent o f which i s hydro capacity and the remainder costly thermal capacity (diesel and heavy fuel oil). In telecommunications, the sector i s dominated by the state-owned operator Camtel and most other operators do not have broadband terrestrial networks and rely on expensive and poor quality satellite connectivity or microwave backbones to link cities at the national level. Transport costs within Cameroon and in the C E M A C sub-region are among the highest in the world (up to US$0.20 per ton-kilometer compared to US$O.lO per ton-kilometer for East African landlocked countries). Because o f the lack o f financial resources, only 29 percent o f priority roads are consistently maintained and the overall condition o f the road network i s deteriorating.

E. Competitiveness lagging, but possibilities are there 32. Cameroon’s economy presents a paradox, whereby it possesses a massive resource base, but does not transform this into sustained economic growth or poverty reduction. The government recognizes the critical importance o f the private sector for achieving the higher growth rates needed to reduce poverty. Policy documents, however, project private investment that i s significantly higher than i t s historical average and i s not expected to be accompanied by a similar expansion in the public sector’s contribution to gross capital formation. The private sector requires a favorable investment climate in order to play a crucial role in making Cameroon more competitive. However, conditions are at present decidedly not working in its favor, as highlighted by the 2010 Doing Business Report. Cameroon’s overall ranking places it

Cameroon: Fiscal Policy for Growth and Development. Washington, DC, World Bank, 2009. 10

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at 171” o f 183 countries, with particularly l ow rankings for Starting a Business (174‘h), Enforcing Contracts (1 74‘h) and Paying Taxes (1 70fh). These facts, coupled with the reality that most have stagnated or gotten worse in recent years, underscore that Cameroon’s attractiveness for the private sector i s eroding relative to other countries. The 2009 Enterprise Survey tel ls much the same story, whereby f i r m s report that dealing with government regulation requirements represents 7 percent o f senior management time, 5 1 percent acknowledge making informal payments to public officials “to get things done” and 70.4 percent indicate that a typical firm reports less than 100 percent o f sales for tax purposes. In order to attract the meaningful private investment that i s envisaged in i t s policy documents, these trends must be reversed. Significant reform measures must be taken in order to make Cameroon a vastly more attractive investment opportunity.

33. Given a favorable investment climate, several areas o f the economy could boost competitiveness, including the urban economy, agriculture, and mining. The urban economy has been shown to contribute greatly to economic growth. For example, the contribution o f greater Douala to the country’s GDP i s estimated at 60 percent, and the overall contribution o f the country’s urban informal economy i s estimated at one-third o f GDP. Though possessing enormous potential, human capital production, mobilization and accountability are binding constraints to economic growth in Cameroon and demand improvement. The agriculture sector too holds considerable potential, but faces important constraints. Several value chains could develop if structural constraints and weaknesses in market linkages are adequately addressed. These constraints include poor infrastructure (production, marketing, transportation); limited control o f improved production techniques and poor economic management skills; weak investment capacity; l imited use o f improved inputs; limited organization o f producers, weak linkages to markets and l imited development o f value-adding activities such as processing and warehousing. The mining sector also constitutes a viable source o f economic growth. The country’s mineral resources include nickel, cobalt, i ron ore, bauxite, diamonds, gold, limestone, marble and uranium, among others. During the global commodity prices boom, private sector interest in Cameroon’s geological potential spiked and a number o f investors explored various projects in the country. Despite the recent commodity downturn, investor interest in Cameroon’s mining sector remains strong and new investments are l ikely to come online given favorable global market conditions.

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F. Enormous natural resource potential; the threat posed by climate change 34. Cameroon i s endowed with abundant natural resources and diverse ecosystems that present tremendous opportunities and challenges to ensure their sustainability. As Figure 1 shows, the country's mineral resources are in many cases located under the Congo Basin forest, often in isolated areas. As a result, Cameroon faces the daunting task o f determining how to develop these mineral resources while minimizing the impact on the forest. The country' s biodiversity and biological resources have endured significant pressure in recent years: 27.5 percent o f forests are degraded; the rate o f deforestation o f 0.9 percent per year i s the highest in Africa; and the area o f arable land per capita continues a steady decline. Given Cameroon's vast natural resources, i t i s not surprising that climate change also poses threats. The

Figure 1. Cameroon's protected areas and mineral resources

country recently adopted a National Desertification Control Plan, underscoring the vulnerability o f the coastal and semi-arid Sahelian areas concerning climate change. Policy documents outline government intentions to implement a number o f actions aimed at managing and regenerating state-owned forests in order to enhance forest and wildlife resources, protect soil fertility, conserve water resources, protect grazing land, and safeguard biodiversity. In addition, the Congo Basin countries agreed on pooling resources in order to coordinate their climate policy.

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G. Regional integration as a catalyst for growth 35. Given Cameroon’s strategic geographic position vis-a-vis i ts neighbors and the size and structure o f i t s economy, it i s positioned to play a leading and catalytic role in fostering robust regional integration in central Africa. In particular, enormous potential exists for the promotion o f commercial relations in the framework o f the Communaute‘ Economique des Etats d’APique Centrale (CEAAC) and the Communaute‘ Economique et Mone‘taire de 1 ‘Afrique Centrale (CEMAC), and reinforcing relations with Nigeria. Strengthened regional integration could improve competitiveness and help member countries successfully attract investment and have better access to global markets. Closer integration would also bring greater stability and reduced price volatility that was shown to be quite taxing on the rural population in 2008. Important efforts have been undertaken to date to strengthen the customs union; to improve clearing procedures at the port o f Douala; and to facilitate transport along strategic transit axes to boost regional trade with Chad and the Central African Republic. These economic integration efforts are being strengthened in particular in the context o f the preparation o f the CEMAC Regional Economic Program which aims at making the sub-region an emerging integrated and competitive economic space.

36. A holistic treatment o f the transport network that includes linkages between the road network and portshailways wi l l make tremendous inroads in promoting greater regional integration. This could include a stronger emphasis on the development o f concrete plans for the construction or rehabilitation o f selected ports and railways, and a focus on policy reforms to facilitate trade across borders. Given i t s significant hydropower potential, Cameroon also has the potential to play a leading role in the development o f the Central African Power Pool (CAPP). To leverage this, interconnection agreements with neighboring states remain to be signed, market rules to be established, and capacity for regional coordination and planning to be built. Other areas where regional approaches can unlock additional growth opportunities for Cameroon and on which countries o f the sub-region are collaboratively working on include information and communications technology (ICT) and agriculture.

111. Cameroon’s Vision for Growth and Development 37. The Government o f Cameroon has an ambitious future planned, as reflected in i t s “Vision 2035”. This policy document serves as the long-term anchor for the new PRSP, and envisions Cameroon as an “emerging nation, democratic and united in i t s diversity” by 2035. I t s principle objectives include: (i) reducing poverty to less than 10%; (ii) becoming a middle- income country; (iii) being an industrialized nation; and (iv) consolidating democracy and national unity.

38. The recently completed PRSP,” the Growth and Employment Strategy (Document de strate‘gie pour la croissance et 1 ’emploi - DSCE) identifies weak productivity, a looming energy crisis and effects o f the financial crisis, food insecurity, stagnating poverty, and high unemployment as key challenges facing the period in question (2009-2019). It envisions significant investment in infrastructure to stimulate growth, notably in energy, roads, port infrastructure, water supply, and information technology. Productive increases are sought in agriculture and livestock farming, mining (notably in bauxite, iron, and cobalt), key value chains (timber, ICT, tourism), and in the business climate. It looks to strengthen human

The DSCE was approved by an Interministerial Committee on August 26,2009. I1

13

development and develop more robust formal sector employment. The DSCE also places important emphasis on regional integration and envisions strengthened partnerships with non- traditional donors (BRICs plus Korea; the Islamic world). Finally, it dedicates an entire chapter to improving governance, including specific initiatives related to corruption, public procurement, business climate, and civic participation. The new strategy aims to adjust the overall objectives and address the weaknesses o f the various policies including covering some areas that had not been prioritized in the first round, including energy, telecommunications, rural development and governance.

39. A draft Joint Staff Advisory Note (JSAN) underscores that the DSCE correctly identifies the country’s inadequate infrastructure and unfavorable business environment as the main structural weaknesses hampering faster economic growth and employment. The JSAN also states the view that DSCE outlines a comprehensive framework for growth and employment in Cameroon. The document lays emphasis on infrastructure, rural development and governance to accelerate growth while maintaining macroeconomic stability. I t also identifies that further work i s needed to strengthen the implementation tools o f the strategy. Priority areas are: (i) strengthening the macroeconomic framework especially i t s medium-term fiscal framework and growth assumptions set out in the strategy; (ii) strengthening the link between the DSCE, the MTEF and the annual budgets; (iii) deepening the strategy by prioritizing actions needed to accelerate pro-poor and private sector investment; (iv) ensuring the adequate resources for the medium to long-term objectives (infrastructures, rural development and human, development), and (v) strengthening the implementation o f the Governance and Anti-corruption program.

IV. The Bank Group Assistance Strategy 40. The dialogue between the World Bank and the Government o f Cameroon (GoC) i s at a critical juncture. The Bank continues to be reminded o f austerity measures associated with structural adjustment and the HIPC process in Cameroon, while the government i s asserting i tse l f in taking ownership over i t s economic future. The resulting dialogue at times presents a paradox, whereby the Bank i s acknowledged as a strong, trusted partner behind closed doors, but in public i s often blamed for Cameroon’s economic malaise o f the last decade. Since reaching the HIPC Completion Point in 2006, Cameroon has enjoyed substantial debt re l ie f (US$1.15 billion since 2000) from the HIPC, the MDRI and additional debt rel ief from the Paris Club creditors. However, these same institutions have noted a marked reduction in their policy leverage with the government, as new overseas development assistance earmarked for Cameroon has stagnated while government revenues, particularly from oil, mushroomed. With an annual budget o f approximately US$6 billion, the government’s resources dwarf that available from traditional international assistance sources (approximately US$400 million o f commitments per annum, excluding debt relief), including IDA’S annualized allocation o f approximately US$IOO million. Cameroon therefore finds i tse l f with substantially more fiscal space than in the past, thanks to a lower debt burden and i t s recent windfall oi l revenues.

41. As a result, the role o f the World Bank in helping Cameroon reach i t s objectives has evolved into that o f a key advisor and a catalyst for attracting investors to large projects. The Bank needs to demonstrate i t s analytical excellence as well as i ts leadership on complex operations in order to remain a key and trusted partner for Cameroon. The CAS outlines a selective set o f engagements that lay the foundation to influence reform and progress in key

14

sectors. The CAS also incorporates important lessons, both from experience during the last CAS period, from the CAS consultations, and a recent Client Survey.

Increasing employment Reducing corruption

A. Implementation o f the last CAS and lessons learned 42. A recently completed CAS Completion Report (CAS CR) covering the previous CAS (from 2003 to 2006) and the I S N for Fiscal Years 2007 and 2008, identified several important lessons learned that have been taken into account for the current strategy. The CAS CR states that Cameroon’s uneven performance during the CAS period resulted in a slower than anticipated delivery o f new operations, making outcomes difficult to achieve. As reflected in deteriorating disbursement ratios, many o f the planned projects experienced delays in start up and implementation effectiveness during the ISN period, suggesting that actual contributions are going to be felt mostly after the review period. A Client Survey has also greatly informed strategy preparation and the directions where the Bank will engage differently and do more.

Environment for private sector growth Policies to stimulate foreign direct..

Economic growth Increasing access to education

Increasing access to health services Improve effectiveness of law h..

HlVlAlDS and other communlcable.. increasing food security

43. -

Key lessons for the World Bank engagement in Cameroon include: Simpler project design to ensure a fit with the government’s implementation capacity. More flexible project designs may be appropriate in areas where the Bank has been largely absent from substantive policy dialogue over time. Bank teams should be attentive to the frequent disparity in commitment between the political and administrative levels. IEG reviews indicated the importance o f effective supervision and monitoring and evaluation systems with a recommendation to withdraw from certain projects if considerable opposition and delay are encountered. Though the previous CAS had a solid results orientation, many o f the envisaged outcomes

-

-

- - D - D I I

were either too ambitious or the associated projects/activities were not undertaken during the CAS period. As a result, this CAS Results Framework takes into account the existing portfolio along with the activity pipeline.

- Recent portfolio performance highlights an underlying readiness issue with respect to project preparation. A low disbursing portfolio (Fiscal Year 2009 was 1 1.1 percent) i s a result o f certain projects being underprepared, and as a result struggling to both reach effectiveness and demonstrate timely, quality outcomes. Country management i s working hard to insist that sectors invest the necessary time and resources for preparation, and has developed an indicative work program during the CAS period that allows for incremental preparation o f new lending operations.

- The CAS CR, a Client SuGey, and CAS Consultations underscored the need for the Bank to deepen i t s engagement on governance. Lessons learned from the multi-donor supported

15

CHOC Program demonstrate that governance should not only be tackled in a punitive sense, but rather as a collective challenge that necessitates activities that model good behavior, and fora to discuss and debate such behavior change. Given i t s importance, governance constitutes a cross-cutting theme within the CAS itself.

44. The results o f the Client Survey inform and confirm the strategic choices and directions o f the World Bank in the CAS period. The survey found that the overarching issues that concern stakeholders in Cameroon revolve around governance, corruption, and agricultural development. The survey also demonstrates that private sector and the country’s business climate are o f utmost importance to stakeholders. These issues all emerged as far more important than health and education.

45. Infrastructure i s recognized as critical to growth and poverty reduction as well. The majority o f respondents across al l stakeholder groups indicated that the World Bank should be more involved in Cameroon’s development activities. The survey suggests that stakeholders believe it would be most productive for the Bank to focus i t s resources on issues identified as high priority ones: governance, infrastructure, and to a lesser degree agriculture. In other words, stakeholders see a role for the Bank in the areas that they regard as absolutely essential for sustainable growth and poverty reduction.

46. Based on insights gleaned from the survey and consultation process, the World Bank is committed to taking corrective action so as to not repeat past mistakes. As such, the Bank has been selective and focused in identifying i t s pipeline o f new activities, and will put an emphasis on development outcomes - insisting on tangible results, and rewarding those who demonstrate them. Additional financing or new phases o f existing operations will be supported, provided that outcomes to date have been satisfactory. This will encourage selectivity, continuity, and the timeliness and quality o f outcomes.

B. Current Bank Portfolio’2 47. The current Cameroon portfolio represents a total o f US$764 mi l l ion in commitments, which includes US$384 mi l l ion for 12 projects (IDA & GEF), four regional projects totaling US$371 million, and five Trust Funded activities totaling US$8.3 million. US$704 mi l l ion remains undisbursed, reflecting both the relatively young age o f the portfolio (average o f 2.4 years) and a lagging disbursement ratio over the last two fiscal years.

48. Twice yearly Country Portfolio Performance Reviews (CPPR) have identified cross-cutting challenges that include the following: overly ambitious project designs; lack o f government ownership over certain

Table 3: Current Cameroon Portfolio # Total projects 16 # Regional projects Average project age (years) 2.4 $USD committed (million) 764 Disbursement ratio, FY 10 5.7%

% o f Problem Projects 31% % o f Risk Projects 31% $USD at risk (million) 153.8

## o f Problem Projects 5

projects; policy changes included as pre-requisites to certain project activities that do not

Data as o f December 3 1,2009 12

16

materialize; weak Annual Work Planning and consequent ad hoc and slow implementation; and problems with counterpart funding availability. Actions ‘to remedy these weaknesses are identified in collaboration with the government, and often include targeted training supported with human and financial resources from the World Bank.

C. Proposed Assistance Strategy 49. The World Bank has aligned i t s Country Assistance Strategy with the latest iteration o f the government’s poverty reduction strategy, the “Growth and Employment Strategy”. Achieving this synergy, while responding to a challenging country context, necessitates that World Bank engagement not just focus on helping catalyze growth, but that the institution use its policy leverage and financial resources to ensure that said growth i s shared in an equitable manner.

Figure 3. The CAS Framework

50. As Figure 3 illustrates, the World Bank will help stimulate growth by improving the competitiveness o f the Cameroonian economy through a cross-cutting governance theme and two main pillars. Interventions wi l l seek to improve core governance, including public finance management; undertake pragmatic diagnostics and analytic work that champions ‘good behavior’ at the sector level; and lead a frank, transparent dialogue with the government and development partners about the governance challenge and how to overcome it. Infrastructure investments wi l l improve access to energy, telecommunications, and trade corridors, while focused interventions will improve the transparency and sustainability o f investments in protected areas, energy, and mining, and protected areas. The Bank seeks to support the establishment o f processes that aim to achieve equitable growth, as measured through improved service delivery and development outcomes. This may take the form o f decentralized approaches where urban and rural local governments are held accountable for results, and where social sector outcomes improve and basic infrastructure services are delivered and maintained.

i. A Strategy Grounded in Governance 51. As explained in earlier sections, Cameroon’s greatest challenge to growth and development i s governance. The pervasiveness o f bad governance affects most economic transactions. The World Bank wi l l tackle this issue in a cross-cutting, pragmatic, and comprehensive manner. The Bank will continue i t s important engagement on core governance (including public finance management), deepen its work on governance in different sectors, and

17

aim to mainstream a governance dialogue into i t s activities so as to create an enabling environment for change in the medium-term.

52. Improving core governance. A main objective o f the Bank’s governance program over the CAS period will be to help Cameroon better manage i t s financial resources, so that fiscal policy can become an enabler o f inclusive growth. In addition to delivering stability, sound macroeconomic management should help Cameroon to weather unanticipated adverse crises such as the current financial crisis. In that context, the Bank will work jo int ly with IMF to help maintain debt sustainability. The Bank will also advise on a balanced composition o f expenditures that could prevent an appreciation o f the real exchange rate, thus protecting the competitiveness o f the economy. In turn, these actions will strengthen Cameroon’s resilience to adverse shocks.

53. Operationally, the Bank’s focus will continue to be on public finance management, in l ine with the objectives o f the government reform plan under preparation. The Bank’s contribution, through the Transparency and Accountability Development Project (TACD), complements government and other donor efforts (EU, AfDB, France) by focusing on resource utilization. The T A C D aims to (i) enhance transparency and efficiency in public finance management (PFM) and (ii) strengthen accountability in the use o f public resource through interventions in cross- cutting issues. If this program demonstrates solid progress and the need for additional resources, and additional’ financing could be considered for it late in the CAS period.

Box 1. Core Governance Activities

Ongoing Transparency and Accountability Project (TACD)

EITI, support to achieve validation Stolen Asset Recovery (StAR)

Proposed Anti-Money Laundering Technical Assistance Fiscal Space for Decentralized Development Integrity action plan for Cameroon Customs

Possible TACD additional financing Technical Assistance to ONECCA Technical Assistance to the CAA Budget Transparency Initiative Public Investment Diagnostic

DeMPA follow up support

I 54. On the analytic side, the World Bank will fol low up on a recent Public Expenditure Review (PER) and provide guidance to the government on capital expenditure execution. The Bank will undertake new analytic work to explore options to help develop a tax system that i s more conducive to private sector development, balancing the need to raise revenue with the necessity o f pro-business policies. A second fol low on to the PER will be a public investment diagnostic that will identify the specific weaknesses that contribute to poor execution o f capital spending, and suggest appropriate institutional and technical remedies that could correct such failures. As a fol low up to the Debt Management Performance Assessment (DeMPA), the World Bank wil l undertake technical assistance to help the government develop an action plan to improve debt management capacity. A final activity wil l undertake an analysis o f fiscal space for decentralized local development. I t will examine a sample o f local government budgets to determine the viability o f the planned and actual investments, identify and analyze planned and actual expenditures and revenue, and will seek to identify policy recommendations that could boost revenue streams, increase access loans and external grants as

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appropriate, and identify measures to improve the efficiency o f both local government budget planning and execution.

55 . Given the focus on mining development in the government's strategy, the Bank intends to continue ongoing support to the government to reach the validation stage o f the Extractive Industries Transparency Initiative (EITI) in FY 10, including placing emphasis on disclosures related to the mining sector. In addition, an Anti-Money Laundering technical assistance program will be provided to key government agencies, and Stolen Asset Recovery (StAR) Initiative support will be provided as appropriate. Technical Assistance will also support the government to develop and implement a customs integrity action plan. This will seek to improve efficiency and transparency o f customs, and improve trade facilitation by reducing customs clearance time at the Douala port. Support to the Cameroon Institute of CertifiedKhartered Accountants (ONECCA) will seek to develop quality control standards for f i r m s that perform audit and review engagements, while assistance to the Caisse Autonome d 'Amortissement (French acronym CAA) to make i t s internal audit department functional and develop an electronic archiving system.

56. Strengthening Sector Governance. World Bank support in this realm will seek to increase understanding o f sector-specific governance impediments to development effectiveness, and identify and agree upon corrective measures related to these deficiencies. Past experience confirms that the best entry point for the World Bank on governance i s through i t s sector operations. All ongoing operations maintain a substantive governance dialogue both at the policy and operational level; in a context like Cameroon, it i s a sine qua non for projects. The CAS recognizes that development effectiveness suffers when the Bank engages without a clear understanding o f the political economy o f the sector, and without serious analytical work and technical guidance both during preparation and supervision. Bank supported activities will therefore seek to increase

Box 2. Sector Governance Activities

Ongoing/Recent Political Economy Analysis

In Depth Reviews

Proposed Public Expenditure Tracking Surveys

Political Economy Analysis Governance Dialogues

Forensic Audits

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understanding o f sector-specific governance impediments to development effectiveness, and identify and agree upon corrective measures related to these deficiencies.

57. Political Economy Analysis in mining, protected areas, rural electrification, and telecommunications will provide a comprehensive understanding o f the prevailing incentives, relationships, distribution and contestation o f power between different groups and individuals specific to each sector. World Bank involvement in each o f the sectors i s at a formative stage, and robust political economy analysis will provide task teams with valuable insights to guide their sector dialogue. This will build on successful work done to date in the 'education, health, and energy sectors.

58. The T A C D will finance Public Expenditure Tracking Surveys (PETS) in the education and health sectors. This work will provide critical information about the integrity o f budget

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allocations down to the end users. Coupled with political economy work and dissemination to general public and civil society, this will provide a solid entry point for the Bank to engage policymakers and technicians alike on the implications o f these findings and to identify corrective actions. A Budget Transparency Initiative will help to publish and disseminate disaggregated sector budget and expenditure information, and support training and leadership innovations related to budget disclosure at local government levels.

59. In the fiduciary realm, the Bank will continue to undertake Forensic Audits o f selected IDA-financed operations. This activity will provide detailed field-based evidence related to the technical quality and fiduciary integrity o f infrastructure investments financed by the World Bank. In Fiscal Year 2008 the Projet d’tlppui au Secteur Educatif (PASE) and PNDP undertook this exercise (partly financed by the Country Governance and Anti-Corruption budget), and the results have proven a valuable entry point to identify remedial measures for problems and to engage in a broader dialogue on sector governance. A second fiduciary innovation that i s being built into new lending operations i s random third-party technical and financial audits for projects working at decentralized levels. Field-based evidence has proven that this approach substantially reduces corruption in projects; i t has been successfully negotiated into two new projects in FY09, Phase I1 o f the PNDP and the Agricultural Competitiveness Project.

60. In order to promote change among Cameroonian stakeholders, the World Bank will continue i t s efforts to ensure that objective analysis is in the public domain so that policy- makers, service providers, and beneficiaries can better understand some o f the binding governance constraints to development effectiveness. Beyond this, it i s also essential to bring these stakeholders together to discuss, debate, and act on lessons derived from this public information in the form o f Roundtable Discussions. A series o f Governance Dialogues will (i) put results o f the sector governance activities into the public domain, and (ii) convene key stakeholders to discuss governance and integrity issues identified by previous analytic work. This i s expected to help improve transparency, accountability, and integrity at sector levels.

6 1. Stimulating Demand-side Governance. Activities identified in the CAS will seek to improve the ability o f c iv i l society organizations to manage governance and integrity related activities in a transparent manner. They wil l also seek to strengthen civ i l society organizations so that their coordination, collaboration and information-exchange relative to governance and integrity- related activities are improved. A Governance Development Marketplace (GDM) will finance small grants for c iv i l society organizations to engage in innovative activities aimed at generating

Box 3. Demand-side Governance Activities

OngoingIRecent Roundtable on NRM Governance Civil Society Fund, GAC Theme

CHOC Program

Proposed Governance Development Marketplace

Civil Society Resource Center Governance Dialogues Governance Council Governance Survey

and articulating demand for better governance and accountability. The competition is expected to attract ideas from a range o f innovators including civil society groups, social entrepreneurs,

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and academia. Modeled o f f the annual event hosted by the World Bank in Washington, the GDM wi l l be undertaken in partnership with the CHOC Program, and i s expected to be taken over by it in subsequent years with the support o f other development partners.

62. The Cameroon Country Office Public Information Center will be transformed into a Civil Society Resource Center. This wi l l provide both a meeting space and materials to improve civil society coordination, cooperation and deliberation regarding governance issues. The Center wi l l continue to serve as a facility for global knowledge sharing. Based on the model o f the Client Survey, a Governance Survey wi l l collect data on government effectiveness, participation, voice and accountability, and Integrity. The survey will be developed and deployed in close partnership with the CHOC Program. A Yaounde-based Governance Council will act as the steering committee for the governance-related activities during the CAS period.

ii. Strategic Theme One: Increasing Cameroon’s Competitiveness 63. Vastly improved competitiveness underpins Cameroon’s intended growth trajectory. As earlier referenced, despite great potential in many industries (e.g. mining, timber, agribusiness, tourism and ICT), Cameroon’s exports continue to be dominated by oil. The reasons for this underperformance are essentially related to poor infrastructure (in particular energy, transport and telecommunications) and a poor investment climate. Cameroon’s DSCE envisions major state-led investment in large public works activities, both to accelerate growth and to provide a needed fiscal stimulus during the financial crisis. As such, World Bank support to improve competitiveness wi l l focus on three principal axes: (i) increased infrastructure investment in the energy, transport, and telecommunications sectors; (ii) activities geared toward ensuring the transparent, equitable, and sustainable use o f natural resources, including mining, agriculture, fisheries, and protected areas;

Ongoing activities - CEMAC Transport-Transit Facilitation

- West and Central Africa Air Transportation

- CEMAC Regional Institutions Support

Planned in CAS - CEMAC TransportiTransit Additional

Financing; - Central Africa Backbone

- Congo Basin REDD support - Regional Fisheries - OHADA reforms

and (iii) Gomotion o f high potential value chains and improved business climate. Given the role it plays in strengthening competitiveness, regional integration i s an important part o f this strategic theme (see Box 4).

1. Increase access to and quality of infrastructure services 64. Energy. Bank support to the energy sector wi l l seek to improve the overall reliability and supply on the national grid and access in rural areas o f Cameroon with a special focus on helping the GoC to realize investments in Cameroon’s significant hydropower resources. As outlined in Section IIc, the energy sector constitutes one o f the greatest binding constraints to growth in Cameroon. Current World Bank engagement in the sector includes the Energy Sector Development Project, which has yielded solid results to date, including the establishment o f a financing mechanism for rural electrification, capacity building and preparations o f the Lom Pangar Hydropower Project (LPHP) in accordance with World Bank and international standards. The World Bank has two planned investments in the sector during the CAS period.

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Financed in partnership with the International Finance Corporation (IFC), the African Development Bank (AfDB), and the European Investment Bank (EIB), the Kribi gas to power generation project will increase the capacity and reliability o f electricity supply in Cameroon through the provision o f 2 16 megawatts o f clean electricity. Prospective support to the LPHP would deepen the Bank’s support to GoC to improve the availability, reliability and affordability o f electricity supply for households and businesses, ensure that best practice economic, environmental and social standards are adhered to in the realization o f the LPHP. A higher share o f l o w cost hydropower resulting from the LPHP and future downstream investments will also provide a sustainable and clean source o f energy for the country, and would result in lower consumer prices that are critical to Cameroon’s increased competitiveness. The World Bank will also conduct analytical work on planning regional power investments and the impact o f climate change on Cameroon’s hydropower potential.

65. Transport. Bank activities during the CAS period will seek to reduce dwell and transit time o f imports coming into the Port o f Douala. As part o f the CAS strategic choice to reward successful operations that demonstrate a financing gap, the ongoing C E M A C Transport-Transit Facilitation Project will be scaled up during the CAS period, bringing important additional financing to bear on the road network that connects N’Djamena and Bangui to the Douala Port. Financed in parallel with the African Development Bank and the European Union, the overarching objective o f the program i s to contribute to facilitate regional trade within the CEMAC and improve access to world markets for Cameroon, the Central African Republic and Chad. In addition to investments in the road network, the project undertakes important reform activities in the port o f Douala and in customs.

66. Telecommunications. In the telecommunications sector, the Bank will seek to increase international telecommunication access and reduce associated consumer prices. The Central Africa Backbone (CAB) will extend the geographic reach o f broadband networks and contribute to improved government efficiency and transparency through eGovernment applications. This will be accomplished through fostering open and cost-effective access to communications infrastructure at the sub-regional level. This project will leverage the existing fiber-optic network laid along the Chad-Cameroon o i l pipeline that will form the core C A B network and support the deployment o f interconnected networks to form a Regional network. This program will be undertaken in partnership with the African Development Bank.

67. Given the critical need for improved infrastructure and the importance o f adequate infrastructure to al low other essential and growth-inducing projects to go forward, the IFC will focus on facilitating and supporting infrastructure projects in main sectors such as energy (including co-financing the Kribi gas to power project) and transport (including maritime). It will also support ancillary sectors that also serve to increase the country’s attractiveness as an investment destination and to raise the living standards, including real estate development.

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Table 4: ImDroving: ComDetitiveness Overview

- Energy and hydro-power production capacity has increased; - Access to modem sources o f energy in rural areas has improved - Construction of maritime, river, lake and port transport infrastructure - Extension of the road network - Improving access to telecoms / ICT services - Intensifying sylvicultural, agro-pastoral and piscicultural activities - Development of crop, animal, fisheries and forestry production - Development and Promotion of Tourism - Development and Support to Manufacturing - Improvement of the business climate

M a j o r Interventions

grid) in targeted areas - Electricity supplied from Kribi gas to power project - Total teledensity (active fixed and mobile subscribers per 100 inhabitants) increased - Average monthly price of wholesale international capacity link from Yaounde to European hub reduced - Douala port dwell time for main importers reduced - Average transit time for imports from the exit at the port o f Douala - to N’Djamena and Bangui reduced - Mining title system in compliance with established procedures for transparency and efficiency - Area under SLM practices in targeted zones increased - Facilities for which annual environmental performance report certified as compliant by MinEP with EMP increased - Average rice yields increase in rehabilitated irrigated areas

Ongoing Lending: Energy Sector Development; CEMAC Transport-Transit Facilitation; Railway Concession; Forestry DPL (IDA&GEF); Env. & Social CapacityEnergy; West and Central Africa Air Transportation; Agricultural Competiveness, CEMAC Regional Institutions Support Project Ongoing TF & Grants: none Ongoing AAA: Readiness for REDD; Mining IDF Proposed Lending: Kribi Gas (with IFC); Lom Pangar; CEMAC Transport-Transit Additional Financing; Central Africa Backbone APLl (a) and (b); Mining TA; Regional Fisheries; Protected Areas; Competitive Value Chains. Proposed TF & Grants: GEF Ngoila-Mintom; REDD GEF; GPF Proposed AAA: Protected Areas ESW; Fisheries ESW, Doing Business (with IFC), OHADA Uniform Acts modernization; Central African Power Pool - planning o f regional power investments; Impact o f Climate Change on Cameroon’s Hydropower Potential. Partners: France, European Union, African Development Bank, Germany, Canada, United Kingdom, World Wildlife Fund for Nature, European Investment Bank, BDEAC, Saudi Fund

2. Improve transparency, equity, and sustainability in the use of natural resources 68. The second element o f World Bank support to increased competitiveness relates to the transparent, equitable, and sustainable use o f the country’s considerable natural resource base. In addition to a cohort o f existing investments in this area, the CAS foresees new activities related to protected areas, mining, and fisheries. If transparently managed, and if revenues generated are used to deliver social services and education, fund basic infrastructure, and generate employment opportunities, the sustainable development o f the country’s natural resources can be beneficial to the citizens o f Cameroon

69. Forestry and Protected Areas. Bank support will seek to strengthen public and private efforts to achieve socially, economically, and ecologically sustainable use o f national forest and wildl i fe resources. The ongoing Forest and Environment Policy Development Program (PSFE), undertaken in collaboration with DFID, Canada, and Germany, supports important initiatives in environmental monitoring, policy oversight, law enforcement, forest management, biodiversity conservation, and community-based forest activities. As a fol low up to this operation, a new Protected Areas Project, based on analytic work on support mechanisms for protected areas, will consolidate achievements under the PSFE related to the forestry sector, and will also help the GoC design and deploy a holistic approach to preserving and managing the country’s protected areas. A pilot initiative to be financed under the Global Environment Facility (GEF) will seek to establish a core protected area within the Ngoyla-Mintom forest, through an approach based on land use planning and fostering public-private partnerships. This project will

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be undertaken in conjunction with the World Wildlife Fund for Nature. In addition, sustainable wood transformation activities will be covered through the planned Competitive Value Chains Project . 70. The World Bank has closely worked with the Congo Basin countries (Cameroon, Gabon, Central African Republic, Equatorial Guinea, Democratic Republic o f Congo and Republic o f Congo) to develop a set o f activities, both at the regional and national level, to help them prepare for future Reducing Emissions from Deforestation and forest Degradation (REDD)-related instruments. Regional analytical work i s ongoing to better understand the potential future trends o f deforestation in the Congo Basin and highlight impacts o f economic development on forest cover. Cameroon i s also participant in the Readiness Mechanism o f the Forest Carbon Partnership Facility and will get financial support to (i) prepare a national REDD strategy, (ii) establish a reference scenario for greenhouse gas emissions from deforestation and forest degradation, and (iii) set up a monitoring system for emissions and emission reductions. Additionally, the World Bank i s preparing a regional project (with GEF resources) to strengthen Congo Basin countries' capacities on REDD issues, which will build on experiences and lessons derived from the Ngoyla-Mintom experience.

71. Mining. In the mining sector, an Institutional Development Fund (IDF) grant i s helping build capacity o f the Ministry o f Industry, Mines and Technological Development and the Government o f Cameroon to regulate and administer the mineral sector. As more investors express their interest in the country's mining sector and Cameroon i s o n the path to become a mining producer, the country has sought assistance o f the World Bank to improve sector management. The IDF grant supports a mining cadastre assessment, an artisanal and small- scale mining baseline assessment, and a mineral baseline assessment. A Mining Technical Assistance Project will be developed during the CAS period, with the results o f the IDF grant feeding into project design and scope. The operation would support legal, regulatory and institutional mining sector reform. Cameroon's ability to promote i t s mining sector to international investors and the country's ability to work with large-scale companies will be addressed. The project may also focus on environmental and social management in mining areas and in particular would work on issues surrounding artisanal and small-scale mining.

72. Fisheries. Analytic work i s underway to assess the current state o f the fisheries sector in Cameroon, take stock o f existing constraints to i t s sustainable development, and make specific recommendations to government to address sector issues and improve governance o f fisheries. This work will analyze the actual overall contribution o f the sector to the national economy and to local livelihoods, and will estimate potential economic development as a result o f future investments. Based on this analytical work as well as other interventions f rom the World Bank and other donors in the region, a regional operation wil l be developed to (i) improve fisheries management, (ii) develop monitoring, control and surveillance, and (iii) support economic growth from the sector in the region.

73. Safeguards. World Bank support on social and environmental safeguards will foster facility-level compliance, as validated by the Ministry o f Environmental Protection. Accelerated development o f oil, gas and mineral resources and o f associated industries and infrastructure i s a key element o f the government's development vision. The ongoing Environmental and Social Capacity Building Project provides an important foundation to the

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aforementioned infrastructure investments and for activities related to the sustainable and transparent use o f natural resources. The project seeks to improve the management o f and the accountability for environmental and social issues related to large infrastructure investments, with an initial focus on the energy sector.

74. Climate change. The World Bank team will take stock o f the on-going activities (the Forest and Environment sector Program, the Sustainable land Management Project, and the Forest Carbon Facility) in Cameroon and global good practice to provide further assistance to the GoC to develop a comprehensive response to climate change. This assistance will focus on building institutional and technical capacity to help the GoC to become a leader in climate change adaptation and mitigation. The World Bank will also support Cameroon's participation in the African Program for Adaptation to Climate Change, which includes sustainable soil and water management and agro-forestry . Other priority actions that may be supported include: (i) helping develop a national strategy on climate change, including building awareness and a national consensus on climate change's challenges and identifying at-risk sectors; (ii) contribute to the establishment o f the National Observatory on Climate Change through piloting effective cross-sectoral data collection, analysis and dissemination related to climate change; (iii) strengthen in-country capacity on climate change with the objective to setting up a multidisciplinary and multisectoral pool o f experts. At the sector level, the following measures are foreseen: analytic work on the impact o f climate change on Cameroon's hydropower potential and the promotion o f renewable energy in rural areas.

3. Develop high potential value chains and improve business climate 75. Focusing on high potential value chains. Recognizing that past reform attempts have been uneven and spread too broadly, the government i s centering i t s new strategy on the most promising value chains to accelerate growth and j o b creation through private investments and diversified high value exports. The value chain opportunities are clustered around the manufacturing, mining, forestry, agribusiness, tourism, and I C T industries. In these industries, Cameroon has yet to take advantage o f i t s natural and human resource riches. There i s l i t t le industrial transformation o f raw materials, world class ecotourism sites are not accessible, mining production remains marginal, and a relatively skilled labor force remains vastly underemployed.

76. The recently approved Agricultural Competitiveness Project (Projet d'Appui & la Compe'titivite' Agricole - PACA) focuses on high potential agricultural value chains. I t signals the World Bank re-engagement in this sector after a decade-long absence and i s being undertaken in parallel with the European Union and France. Given the importance o f the sector both in reducing poverty and stimulating economic growth, the project was designed to increase the competitiveness o f beneficiary producer organizations working on targeted value chains. It i s expected the project will lead to increased value o f marketed production through increased productivity, quality, and marketing o f productions. The project provides a blend o f investment in infrastructure (the rehabilitation o f rural roads, the second for the rehabilitation o f irrigated perimeters), and capacity building (of Producer Organizations, apex producer organizations, and to improve core functions o f sectoral public services). Depending on IDA availability, project performance and needs during the CAS period, additional financing could be provided to P A C A to support export-oriented agriculture (such as coffee, cocoa, f ru i ts and vegetables) activities.

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77. A Competitive Value Chains Project will seek to contribute to sustained accelerated economic growth and employment creation by improving the competitiveness in two short te rm high potential value chains: sustainable wood transformation and ecotourism. I t i s expected that the project wi l l lead to reduced costs and increased quality o f the products being offered, as well as increased sales, exports, private investment and employment. The proposed project aims at stimulating private investments in these high potential value chains by providing a critical mass o f infrastructure investments, policy reforms and support to f i r m s . The IFC will also support initiatives in the woodforestry sector and extractive industries, with a view to increase value-adding transformation projects.

78. Improved business climate. The Competitive Value Chain project will also focus on improving the business environment along the two selected value chains. I t will also provide support to the Competitiveness Committee to trigger and mobilize political support for addressing key cross-cutting competitiveness issues and opportunities. This wi l l involve conducting and diffusing benchmarking studies on key factor costs, establishing and publishing an on l ine inventory o f all taxes and licenses and identifying additional high potential value chains and growth poles. The Competitive Value Chain Project wi l l complement IFC technical assistance to improve the country’s investment climate and reduce the cost o f doing business. IFC support on the Doing Business indicators focuses on priority reforms in four areas: company registration, property transfers, court reform and trade. In addition, the IFC i s supporting the reform o f OHADA (the Organization for Harmonization o f Business Law in Africa) to improve the quality and effectiveness o f the legal and institutional OHADA framework and thus help the 16 member countries increase their attractiveness for domestic and foreign private investment. This initiative aims at (i) reviewing and amending OHADA acts, (ii)

Box 5. Ongoing IFC support to competitiveness and private sector development

Cameroon Business Forum: a Forum for dialogue between the government and the private sector on improving the business environment in Cameroon.

Cameroon Leasing: seeks to develop the leasing sector in Cameroon by supporting the government in adopting a new leasing law and pro-leasing regulation.

Doing Business Reform: Support to priority reforms in four areas (company registration, property transfers, court reform and trade).

Economic Development through Regional Integration and Commercial Law reform: Support to the review and amendments of OHADA acts and capacity strengthening of OHADA Permanent Secretariat.

Poultry Sector Study: Market survey aiming to understand feasibility of a fully integrated and diversified large-scale poultry production.

Health in Africa Market Survey: aims establish the role played by the private sector in health care delivery compared to public health institutions, identify the financing and advisory service needs of private healthcare institutions, and understand the potential for local financial institutions to lend to the sector.

providing institutional support to the OHADA Permanent Secretariat based in YaoundC, and (iii) enhancing communication, advocacy and dissemination.

79. The IFC i s supporting the Cameroon Business Forum (CBF) Program that will establish a dialogue platform between the government and private sector. This will seek to ensure the

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effective implementation o f business reforms in order to improve the country’s investment climate and business environment. It will interface with many government initiatives geared at promoting an enabling business environment, including the Inter-ministerial Committee Comprising the Private Sector, the Regulation and Competitiveness Council (in charge o f the implementation o f the Investment Charter), the National Governance Program, the Competitiveness Committee, the National Committee for the Facilitation o f Maritime Traffic, the One-Stop-Shop for Foreign Trade.

80. The World Bank and IFC will also work closely to increase access to financial services. The IFC i s deploying i t s Global Trade Finance Program in Cameroon and i t s Africa Micro, Small, and Medium Enterprise finance initiative. Through the latter, the IFC i s providing technical assistance to help (i) develop products tailored to SMEs, (ii) strengthen i t s SME portfolio and (iii) assist SMEs in their long-term business planning. The IFC has also committed an equity investment in a new micro-finance institution to be established in Cameroon, and supported the preparation o f draft legislation aimed at setting up a legal and institutional framework to promote leasing in Cameroon. Finally, the IFC recently completed a bond issue in the C E M A C region to develop the regional financial market and promote harmonization between the Douala and Libreville stock exchanges. A portion o f the bonds proceeds will allow IFC to provide local currency financing to commercial banks to increase SME financing. The World Bank i s focusing on ensuring financial sector stability in the CEMAC Regional Institutions Support Project. The project aims to strengthen Central African regional institutions so that they can fulfill their mandates to encourage an expanded, better governed regional market, and a more transparent, better regulated and more competitive financial system. In addition, the Bank will provide assistance to GoC to help mobilize the development potential o f remittances. In particular, i t will analyze and recommend options to reduce the cost o f money transfers. I t will also disseminate cross-country experiences in catalyzing more effectively the financial resources o f the diaspora, particularly through the use o f diaspora bonds.

iii. Strategic Theme Two: Improving Service Delivery 8 1. Effective service delivery i s critical in reducing poverty. World Bank support to service delivery will focus on three main areas: (i) human development where efficacy and accountability o f the education sector will be improved and increase utilization and improve the quality o f health services; (ii) to help establish an effective safety net system based on targeted programs; and (iii) local development, where the focus will be on increasing access to basic services through infrastructure upgrading and capacity building for improved local governance and management.

1. Improve quality and efficiency o f the education system 82. Education: The World Bank’s ongoing interventions in the education sector aim to improve service delivery via more efficient use o f sector inputs (particularly teachers) that results from better accountability systems. The recently restructured Projet d’Appui au Secteur Educatif (Education Sector Support Project - PASE) seeks to develop and apply management and learning tools for use by government and communities to improve the efficiency and accountability o f the education sector in Cameroon. I t s outcomes focus on updating o f the sector strategy based on analytic work conducted during preceding years; improving the education information system to ensure greater accountability and better decision making;

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improving planning and monitoring capacity by education authorities, the government and the public; and providing opportunities for greater participation o f beneficiaries in education decision making, thus augmenting accountability. As the supervising entity for the Education For A l l - Fast Track Initiative (EFA-FTI) Catalytic Fund, the World Bank wi l l provide additional trust fund support during the CAS period to help finance the implementation o f the government’s Education Sector Strategy. The grant wi l l specifically finance the remuneration o f contract teachers, whose salaries will eventually be integrated into the national budget. New analytic work wi l l be undertaken during the CAS period to examine the linkages between education and economic growth. This wi l l require a holistic review that examines all the different parts o f post-basic education (secondary, higher and Technical and Vocational Education Training). The results o f this sector work will help orient the subsequent focus o f further interventions in the sector, which wi l l most likely focus on one facet o f the post-basic education.

Table 5: Service Delivery Overview

- Education Access and Equity are significantly improved - Pedagogic assistance as a whole i s adequate - Maternal and infant healthcare significantly improved - Maintenance of urban roads and sanitation facilities - Rehabilitation of urban roads - Improvement of socio-economic infrastructure - Supporting community and participatory development - Protect the populations against illnesses, scourges and social risks and promote social security

M a i o r Interventions

- Increase Completion rate in primary education - Increase Efficiency in the distribution of teachers - Increase Immunization DPT3 under- 1 - Increase Births attended by skilled professional - Increase People benefiting from access to transportation and improved sanitary conditions in targeted urban areas - Additional people with access to improved water supply - improved access to education, healthcare facilities, and improved water sources - Effective safety net system based on targeted programs - Increase number o f people covered by targeted safety net programs

Onioing Lending: Education Dev CB; Health Sector SWAp; Douala Infrastructure; Urban & Water Dev.; Com Dev Prog Sup. I1 Ongoing TF & Grants: EFA-FTI Grant. Cities Alliance; GPOBA on Water. Proposed Lending: Com Dev Prog Sup (PNDP) Phase 3; Urban Sanitation; PDUE Additional Financing; Safety Nets Proposed TF & Grants: EFA-FTI; GPF, Cities Alliance. Proposed AAA: Yaounde CDS; Skills Development Study; Safety Net Assessment; Fiscal Decentralization, Pro- business fiscal policies Proposed TF & Grants: ESMAP power pool; GPOBA Water 2; GPOBA Sanitation; Cities Alliance; EFA-FTI Partners: France, Germany, WFP, UNICEF, AfDB

2. Better access and quality o f health services 83. Health. World Bank support in the health sector seeks to address binding constraints to better service delivery through increases in utilization and improvements in the quality o f health services, with a particular focus on child and maternal health and communicable diseases. The ongoing Health Sector Support Project targets district level activities, providing financial resources and a performance-based incentive system to boost outcomes. The project focuses on gender aspects o f poverty by seeking to reduce Cameroon’s frighteningly poor health outcomes for women. The project also puts a strong emphasis on sector staff being held accountable for results, ensuring the flow o f funds to health facilities takes place in a timely manner, where results are measured and remunerated. The project i s also expected to help strengthen the health information system and generate new credible data. The availability o f better information will provide the opportunity to more thoroughly analyze the health sector and engage in better-informed policy dialogue. Undertaken in parallel with sector support from Germany and France, the project i s expected to last the duration o f the CAS period. A health

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country status report wi l l be prepared in F Y 1 1, and wi l l help guide future interventions in the sector.

3. Greater access to basic infrastructure and social safety nets 84. As earlier outlined, deepened decentralization l ies at the heart o f the government’s recent policy prescriptions, including the announcement o f intergovernmental fiscal transfers to local governments in 2010. This shift presents both an opportunity and a tremendous challenge to these local governments, who lack the requisite sk i l ls and experience to select and supervise efficient high-quality investments. Along similar lines, measures taken to date by the government to respond to the impact o f exogenous shocks on the population have not been well targeted to those most affected. As poverty rates stagnate and the overall number o f poor increases, particularly in the north o f the country, there i s a real need to identify safety net activities that could rectify this worrying trend.

85. Local Development and Basic Infrastructure. The National Community Development Program, an APL whose second phase was recently approved by the World Bank Board o f Directors, i s one o f the institution’s two key entry points to improve local development activities. Financed in partnership with Germany and France, the program seeks to improve the delivery o f specified basic social services (health, education, water and sanitation) in targeted local governments, and extend the ongoing process in support to decentralization to new regions. This program’s third and final phase wi l l be financed late in the CAS period.

86. The second entry point i s the ongoing Urban and Water Development Project (PDUE), which also supports local development, albeit in urban areas. The project i s working to increase access o f the urban population, particularly those living in low-income settlements, to basic infrastructure and services, including water. I t works intensively with five municipalities (Bamenda, Douala, Maroua, Mbalmayo, and Yaounde) in order to build their administrations’ capacity to plan, implement, and maintain small infrastructure works (primarily roads and drainage), as well as construction or repair o f social facilities (such as classrooms or health centers) in a transparent and sustainable manner. Crisis Response Window resources will be used in F Y 20 10 to provide additional financing for critical urban infrastructure investments.

87. A proposed Urban Sanitation Project will seek to increase and improve access to sanitation, primarily in low-income neighborhoods o f the main cities o f Cameroon. The project wi l l include capacity building and institutional strengthening, infrastructure work, and vocational training, hygiene education, and sanitation promotion. The potential partners in the project include the African Development Bank, France, the European Union, and Korea. Analytic support i s currently being provided to the municipality o f Douala to prepare a City Development Strategy (CDS), which wi l l provide an important foundation for municipal investments in basic services and infrastructure. During the CAS period, support will be provided to the municipality o f Yaounde to also develop a CDS.

88. Safety Nets. An extensive review o f existing safety net programs wi l l be undertaken in early in the CAS period. It wi l l provide a platform for policy dialogue with the government regarding the possibility o f using targeted transfer programs to the most poor and vulnerable to reduce poverty and protect them from the potential effects o f the global financial crisis. This review wi l l also examine gender-sensitive options for these targeted activities, in light o f the

29

important role women play in ensuring welfare at household level. This analytic work will also investigate the current functioning o f the social security system in general and o f the safety nets system in Cameroon in particular. I t i s expected that the government will improve the effectiveness and monitoring o f the safety net system by adjusting existing programs and piloting new programs. In support o f this, a new project late in the CAS period would provide the necessary support and resources to the government to achieve this goal. The main objective o f the project would be to strengthen the social safety nets system and to set up permanent programs that can provide income support to chronic and transitory poor to be used in regular times and to respond to crises, such as direct transfer or a public works program, following the recommendations o f the analytic work.

V. Program delivery, monitoring, and management 89. Program Delivery. Though Cameroon i s classified as a lower middle-income country, it will remain IDA eligible for the CAS period. Cameroon’s 2008 GNI per capita was US$1150, just above the operational IDA cut-off point o f US$1135. If Cameroon exceeds the cut-off point in 2009, it would become a gap country in F Y 2012 and receive IDA assistance on hardened terms (20 years maturity and 10 years grace). Though Cameroon’s economic outlook i s expected to remain favorable in the coming three years, the country i s unlikely to be eligible for IBRD lending so long as: (i) it i s under an IMF program that precludes any recourse to non- concessional lending13, and (ii) it has not established a sustained and credible track record o f economic performance. Upon achieving these milestones, a formal assessment o f Cameroon’s creditworthiness for IBRD lending wi l l be carried out.I4 Such assessment i s based on an analysis o f eight creditworthiness components (political risk, external debt and liquidity, fiscal policy and public debt burden, balance o f payment risks, economic structure and growth prospects, monetary and exchange rate policy, financial sector risks, and corporate sector debt and vulnerabilities).

90. Total I D A resource availability to Cameroon during the CAS period from FY2010 to FY2013 i s estimated at approximately US$430 million. Cameroon’s FY2010 allocation i s US$130 million (including US$29.7 million in additional resources made available through a pilot I D A Crisis Response Window), and i t s FY2011 to 2013 allocation in i s estimated at about US$lOO million per year. The FY11-13 allocations are indicative only and can change depending on: (i) total available IDA resources; (ii) the country’s performance rating; (iii) the performance and assistance terms o f other I D A borrowers; (iv) the terms o f IDA’S assistance to Cameroon (grants or credits); and (v) the number o f IDA-eligible countries. FY12 and FY13 indicative allocations assume a similar level o f replenishment in IDA16 as in IDA15. Should additional I D A resources materialize during the CAS period, this would be used to scale-up the amounts allocated to the pipeline o f planned investments rather than necessitating the development o f new ones.

91. Program Monitoring. The CAS includes a strong focus on managing for development results. CAS outcomes are based on a holistic view o f development, incorporating the concept o f strong interdependencies between different interventions and outcomes, and acknowledging

Cameroon completed its Fourth PRGF in April 2009, and will consider a new IMF program in the coming 13

months. I4 IBRD borrower’s creditworthiness i s defined as the country’s ability and willingness to repay IBRD on time and in full. Middle-income countries qualify for borrowing from IBRD based on this creditworthiness.

30

cross-sectoral synergies that influence CAS contributions. Drawing upon the experience o f the last CAS, the results framework (see Annex 2) has been carefully structured to incorporate the most relevant and effective indicators for monitoring progress from both ongoing and planned activities during the CAS period. Given that all indicators are taken from those that are currently tracked in Implementation Status and Results Reports (ISRs) o f projects in the portfolio, CAS results monitoring wi l l be strengthened with the increased attention that i s being placed on ISR quality. In addition, these indicators wi l l be tracked in real time, using the CAS monitoring tool that was recently developed by the Operations Policy and Country services Department. The CAS results framework wi l l also be adjusted as and when projects are formally restructured to reflect any formal changes in those project indictors that are also included in the CAS results framework. Changes to the CAS results framework will be compiled into the CAS Progress Report and the CAS Completion Report.

92. Program management. The quarterly CAS progress reports will also be shared with the government, and wi l l be discussed in depth during Country Portfolio Performance Reviews (CPPRs). Country management wi l l continue i t s recent practice o f sending monthly monitoring tables to the Country Team and the government, in order to identify both areas o f progress and prospective risk. To promote transparency in results and results monitoring, it i s intended that intermediary and final results from Bank financed interventions will be made available to the public by publishing these monthly portfolio snapshots on the Cameroon country office website. The World Bank wi l l also continue decentralizing senior international staff to the country office in order to ensure a more sustained sector dialogue and stronger attention to development outcomes. CPPRs wi l l continue to be held on a bi-annual basis, and wi l l not only identify and address cross-cutting challenges to the portfolio, but also bring in outside experts to critically examine specific projects that are either already at risk, or that have demonstrated recent diminished performance, as demonstrated by a lowered rating o f either Implementation Progress or progress toward achieving the Project Development Objective. Based on these analyses at both levels, the Country Management Unit w i l l continue to facilitate training seminars with project units that specifically respond to identified weaknesses, as has been the case in the past with annual work programming, procurement, and disbursement request processing.

VI. Aid coordination, Partnership and Consultation 93. CAS preparation involved sustained and substantive discussions with Cameroonian government officials, civil society, private sector actors, and legislators that led to a consensual vision for Bank activities over the CAS period. Other donors were consulted from the outset, and the strategy seeks to present these synergies in a succinct manner. Capitalizing on a joint need to prepare new strategies in the same timeframe, the Bank undertook a collaborative CAS preparation process with the African Development Bank, whereby the two institutions: (i) worked together in the field to flesh out their proposed strategies during a joint mission in May and June 2009; (ii) shared common diagnostics o f the country context, development challenges, and the

Box 6. Collaboration with the African Development Bank

- CEMAC Transport-Transit Facilitation - Lom Pangar Hydroelectric Project

- Public finance management - Central African Backbone

- Rural electrification - Urban sanitation - Business climate

government vision in their respective strategy documents; and (iii) made concerted efforts to

3 1

identify synergies during the strategy period for investments, analytic work, and pol icy dialogue with the government. Though each strategy is a distinct document, they reflect these efforts to harmonize our dialogue and planned interventions during the CAS period.

94. CAS consultations themselves consisted o f several meetings and workshops over several months. The most intensive period was during a week in May 2009, when eight brainstorming sessions were held based on major prospective themes for the CAS. These involved over 250 participants, and included representatives o f the government administration, c iv i l society, National Assembly, and academia. In early June 2009, consultations were jo int ly conducted with the IFC in Douala to seek input from the private sector. The Client Survey was fielded in March 2009, and included responses from a total o f 258 stakeholders, drawn from different organizations and sectors. The questionnaire identified overall attitudes toward the Bank, the importance o f specific areas o f the Bank’s work and the Bank’s effectiveness in those areas, and their level o f agreement with a series o f statements about the way the World Bank does business. Respondents were also asked about general issues facing Cameroon, the Bank’s future role in the country, and the Bank’s communication and outreach efforts in Cameroon.

95. With the broader donor community, the Bank worked in close collaboration with the Comite‘ Multi-Bailleurs (CMB), a Yaounde-based group that consists o f heads o f development cooperation for major multi- and bi-lateral donors during strategy preparation. The group anchors i t s work program around the Paris Declaration and sector working groups. As such the C M B served a critical forum to ensure coordination and harmonized approaches both for strategy preparation and the activities identified herein. Annex 3 provides an overview o f donor complementarities at sector levels. The C M B will continue to serve as the anchor for development partner cooperation during CAS implementation.

96. The International Finance Corporation was critical to the preparation o f the strategy. In addition to spearheading consultations with the private sector in Douala and participating in review and Country Team meetings, the IFC worked closely with World Bank colleagues to use the strategy preparation process as an opportunity to identify synergies at the sector level, as outlined in the “Bank Group Response” Section o f the CAS itself.

VII. Managing Risks 97. risks to the strategy, notably the following:

The fragile global economy, coupled with a challenging country context, present several

- Exogenous risks. In light o f the global economic climate, GDP growth estimates for 2009 stood at only 2.4 percent, well below DSCE and Vision 2035 estimates for the medium_term. If the current crisis persists or worsens, direct and spillover effects on the Cameroonian economy may become pronounced. For this reason, the World Bank i s immediately supporting analytic work that will examine social safety net options to mitigate these adverse shocks, and has allocated resources for new lending related to a safety net program.

- Macroeconomic risks. Cameroon’s medium-term growth forecasts in the DSCE and the Vision 2035 appear to underestimate the financing requirements to achieve the economic growth rates needed for a substantial decline in poverty. Should the ambitious

32

projection for private investment not materialize, public investment may need to compensate for the shortfall. This situation could lead to an accumulation o f new payment arrears and excessive borrowing. To mitigate these risks and safeguard fiscal sustainability, continued progress in strengthening P F M and debt management would be called for. The Bank will assist the Government in this regard through the T A C D project and further AAA work on identifying the hurdles o f public investment execution.

- Development Effectiveness Risks. Cameroon has a poor track record o f implementing reforms that have a direct impact on poverty reduction. While the government i s often firm in i t s commitment to these reforms (for example related to governance and anti- corruption), few o f these are pursued to their fullest extent. There i s a real risk that this pattern o f behavior will be repeated in the next CAS, translating into compromised development effectiveness and sustained inertia related to inclusive growth. Mitigating this risk calls for developing projects where there i s strong political will, and continuing to strengthen the Bank Group’s policy dialogue at al l levels o f government, including with the Executive.

- Reputational Risks. Certain investments, most notably the Lom Pangar Hydropower Project, pose significant reputational risks to the World Bank. Taking lessons learned from projects such as the Chad Cameroon pipeline on board, the World Bank has already started to build GoC’s capacity to prepare the LPHP according to best practice standards, and already has in place a parallel environmental and social capacity building project and forestry and environment protection program. Reputational risks are also present with respect to the governance agenda, where a failure o f the World Bank to deliver these activities would lead to an unacceptable perpetuation o f the status quo. Adequate human and financial resources will therefore need to be deployed for these efforts.

- Fiduciary Risks. From a fiduciary perspective, Cameroon i s a high-risk environment, as the CAS clearly demonstrates. To mitigate this, the Bank will continue and deepen i t s aggressive, practical interventions to ensure fiduciary integrity o f IDA operations; wil l help strengthen the government’s fiduciary risk management; will design operations that reduce opportunities for corruption; and will seek to change the incentives facing government counterparts by emphasizing the importance o f results and the Bank’s zero tolerance for corruption.

- Poli t ical Economy Risks. At the political level, Cameroon i s considered as a stable country. However, the lead up to the 201 1 presidential election could result in pressure for World Bank-financed activities to be used to political ends. While there i s limited scope to mitigate such a political risk, Bank task teams will carefully monitor planned investments to ensure that these are being targeted based on developmental, and not political, merits or interests. The Bank will closely monitor the situation and use the CAS midterm review to adjust the assistance strategy as necessary.

33

Annex 1: Cameroon Summary of new interventions over CAS period Lending is in normal text. A M is in italics. For new lending, indicative/actual IDA amounts are in parenthesis;

Public Sector Governance/ PREM

_I--_I__LIIIIIIIII

Energy

Telecom

Transport

Agric. & Rural Dev.

Environment

Mining

Health

Local

Water/Urban/

Soc. Protection

Transparency & Account CB- $ISM (Dec2012)

Budget Transparency Initiative (GPF, $200k)

Inertwin I- ___-- -1- - Energy Sector Support $65M (Dec2013)

CEMAC-Transport-Transit Facilitation $147M (Jan2013)

liicrcttsing .Agricultural Compstitii m e s s . 56011 (Kiov2Olj)

Forestry DPL ($25M) & GEF ($]OM Dec2Ol1)

PRECESSE $20M (Mar2014)

GEF Sst AgroPastor & Land Mgmt $6M (Mar201 I)

Mining IDF

Incuemint: Camery

Improi

CEMAC Reg Inst Support - $50M (Jun2014)

Edu Dev CB-$18 2M (Sep2012) EFA-FTl Grant-$24 8M (Sep2010) Health Sector Support Inv Swap-$25M (Mar20 14)

PNDP I1 ($40M)

~

Urban and Water Dev ($80M Aug2O 12)

Tovernance 'arhership 7aciliry ($2M, TF)

>ebt Management 'erformance tssessment (DMF)

Anti-Money

ONECCA

k l r n l l Cribi Guarantee $15M)

2entral Africa 3ackbone APLlA $3M/$9M viregional)

2EMAC TTF ldditional Fin $50M/$150M

igoila- Mintom $3.5 million, GEF)

Regional

~ # r n p e ~ i ~ ~ ~ ~ n ~ s ~ Competitive Value

~

Delivery: lfrsic %a 'DUE Add'l Fnce $29,7M ~ CRW)

Fiscal Space for Decentralization (GPFI

Public Investment Diagnostic (TF)

Laundering TA

TA (IDF) CAA

Lorn Pangar ~~

($75M-$IOOM)

Regional Energy TA Central Africa Backbone MLIB ($5M/$15M w/regional)

Protected Areas

Enhancing Institutional Capacity for REDD in Congo-Basin( GEF) Fisheries

itur chains and busii

Health Country Status Report

L

Yaoundi CDS (Cities Alliance)

Pro-business Fiscal policies

TA (IDF)

Impact of climate change on Hydropower potential

Protected Areas($SOM)

Mining TA ($15M)

Development S t U 4

Urban Sanitation ($50M)

Additional Financing (IDA TBDi

Possible Ag Competitiveness Add7 Financing (IDA TBD)

Regional Fisheries SIL ($10M/$30M with regional)

PNDP 111 ($40M)

-

kfety Safety Nets ($ISM)

34

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5 3 d

U n 9 -

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- 0 N x 0 m cr

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3 5

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- c! 2

m d-

Annex 4: Progress toward the Millennium Development Goals

Millennium Development Goals Cameroon

W/th selected targets to achieve between 1990 and 2015 (estimate closest to date shown. +/- 2 years)

Goa l 1: halve the rates for extreme poverty and malnutrltlon 1990 199s 2000 2007 Poverty headcount ratio at $1.25 a day (PPP, % of population) Poverty headcount ratio at national poverty line (% of population) Share of income or consumption to the poorest qunitile (%) Prevalence of malnutrition (% of children under 5) 18.0 17.8 15.1

51.5 32.8 53.3 40.2 5.7 5.8

Goal 2: ensure that children are able to complete primary schooling Primary school enrollment (net, %) Primary completion rate (% of relevant age group) 54 50 55 Secondary school enrollment (gross, %) 25 25 27 25

69

Youth literacy rate (% of people ages 15-24)

Goal 3 : ellmlnate gender dlspa_rlty In education and ernEoEecwgmen Ratio of girls to boys in primary and secondary education (%) 83 85 85

Proportion of seats held by women in national parliament (%) 14 12 6 14 Women employed in the nonagricultural sector (% of nonagricuRural employment) 19

~~

Goal-4~reduce under4 r n ~ ~ a l l ~ by Wo-tIJrdo __ - Under-5 mortality rate (per 1 000) 139 151 151 148 Infant mortality rate (per 1,000 live births) 85 89 88 a7 Measles immunization (proportion of one-year olds immunized %) 56 46 49 74

Goal 5: reduce maternal mortallty by three-fourths _ _ -- _ _ ~ ~- Maternal mortality ratio (modeled estimate per 100,000 live births) 1000 Births attended by skilled heailh staff (% of total) 58 60 63 Contraceptive prevalence (% of wmen ages 1549) 18 26 29

Gga! 6:Jalt and beginto reverse thespread of HlVlAlDS and major dlseases Prevalence of HIV (% of population ages 15-49) 0 8 4 7 6 2 5 1 Incidence of tuberculosis (per 100 OW people) 81 116 168 192 Tuberculosis cases detected under DOTS (%) 5 33 91

Goal 7: halve the proportion gpecp le wlthout sustalnable accesstobask needs Access to an improved water source (% of population) 49 56 63 70 Access to improved sanitation facilities (% of population) 39 43 47 51 Forest area (% of total land area) 52 7 50 4 4a o 45 8 Nationally protected areas (%of total land area) 8 8

GDP per unlt of energy use (constant 2005 PPP $ per kg of oil equivalent) 5 0 4 1 4 6 5 1 CO2 emissions (metnc tons per capita) 0 1 0 3 0 2 0 2

Goal 8: develop-a global partnershp for development 0 3 0 5 0 6 1 0 TeleDhone mainlines lDer 100 DeoDle)

Mobile phone subscribers (per'lO0 people) Internet users (per 100 people) Personal computers (per 100 people)

0 0 0 0 0 7 24 5 0 0 0 0 0 3 2 0

0 1 0 3 1 1

Education Indicators (Yo)

50

--P- Ralia of girls lo t q s ~n primary a secordav ed"Csll0"

~ ~~

Measles immunlzatlon (% of I-year olds)

1

1990 1995 2WO ZW7

Ocameroon O S u b S a h a m Africa

ICT lndlcators (per 100 people)

20 30 1 ZOW 2002 20M 2006 2007

Note: Figures in italics are for years other than those specified. .. indicates data are not available. 8/31/09

44

Annex 5: Cameroon at a Glance

Cameroon a t a glance 4/6/09

K e y Development I n d i c a t o r s

fZo08)

Population, mid-year (millions) Surface area (thousand sq. km) Population growth (Oh) Urban population (Oh of total population)

GNI (Atlas method, US$ billions) GNI per capita (Atlas method, US$) GNI per capita (PPP, international $)

GDP growth (Oh) GDP per capita growth ( O h )

(most recent estimate, 2002-2008)

Poverty headcount ratio at $1 25 a day (PPP, Oh) Poverty headcount ratio at $2.00 a day (PPP. Oh) Life expectancy at birth (years) Infant mortality (per 1,000 live births) Child malnutrition (Oh of children under 5)

Adult literacy, male (% of ages 15 and older) Adult literacy, female (Oh of ages 15 and older) Gross primary enrollment, male (Oh of age group) Gross primary enrollment, female (% of age group)

Access to an improved water source (I of population) Access to improved sanitation facilities (Oh of population)

Cameroon

18 9 475 2 0 56

19 5 1,050 2,120

3 9 1 9

50 87 15

117 98

70 51

Sub- Saharan

Africa

800 24,242

2 4 36

762 952

1,870

8 2 3 7

50 72 50 94 27

69 50 99 88

58 31

Lower middle income

3,437 35,510

1 0 42

6.485 1.887 4,544

9 7 8 6

69 41 25

93 85

112 109

88 54

Age distribution, 2007

Female

Under-5 mortality rate (per 1,000) I 200 1

150

100

50

0 I 1880 1895 2000 2 w 6

Net A i d F l o w s

(US% millions) Net ODA and official aid Top 3 donors (in 2006)

Austria France Germany

Aid (Oh of GNI) Aid per capita (US$)

Long-Term Economic T r e n d s

Consumer prices (annual O h change) GDP implicit deflator (annual % change)

Exchange rate (annual average, local per US$) Terms of trade index (2000 = 100)

Population, mid-year (millions) GDP (US$ millions)

Agriculture Industry

Services

Household final consumption expenditure General gov't final consumption expenditure Gross capital formation

Exports of goods and services

Gross savings

Manufacturing

Imports of gwds and SeNlCeS

1980

265

0 95 25

4 7 29

9 5 14 2

209 2 113

9 1 6,741

31 3 25 6

9 6 43 1

68 8 9 7

21 0

27 9 27 1

5 1

1990 2000

444 379

0 9 172 e6 44 47

4 2 3 8 36 24

1 1 0 8 1 8 2 2

3007 6563 99 100

12 2 15 9 11,152 10,075

(%of GDP) 24 6 22 1 29 5 360 14 5 20 8 460 41 8

666 70 2 12 8 9 5 17 8 16 7

20 2 23 3 17 3 19 7 16 1 20 1

2008 '

1 684

4 5 1 7

447 8 135

18 9 23,397

18 9 31 7 15 6 49 4

68 8 12 3 17 9

28 3 27 2 192

I I Growth of GDP and GDP per capita (Oh)

95 L --9- GDP - GDP per cap11a

1980-90 1990-2000 2000-08 (average annual growih %)

3 0 2 6 2 2 3 4 1 7 3 5

2 2 2 6 3 5 5 9 2 1 0 5 5 0 4 8 5 8 2 1 -0 3 6 0

3 6 3 1 4 4 8 8 0 7 4 7

-2 6 0 4 4 8

5 7 3 2 1 6 3 6 5 1 6 3

Note Figures in italics are for years other than those specified 2008 data are preliminary a Aid data are for 2006

Development Economics Development Data Group (DECDG)

indicates data are not available

45

Cameroon

Balance of Payments and Trade

(US$ millions) Total merchandise exports (fob) Total merchandise imports (cifl Net trade in goods and services

Current account balance as a % of GDP

Workers' remittances and compensation of employees (receipts)

Reserves. including gold

Central Government Finance

(% of GDP) Current revenue (including grants)

Current expenditure

Overall surplus/deficit

Highest marginal tax rate (%)

Tax revenue

individual Corporate

External Debt and Resource Flows

(US$ milons) Total debt outstanding and disbursed Total debt service Debt relief (HIPC, MDRI)

Total debt (% of GDP) Total debt service (YO of exports)

Foreign direct investment (net inflows) Portfolio equity (net inflows)

2000

2,123 1,542

704

-249 -2.5

38

16.5 15.8 9.3

4.9

60 39

10,230 558

1,662

101.5 14.9

159

2008

5,092 4,357

92

197 0.8

3,088

21.5

13.1

2.6

3,09 1 510 687

14.9 10.0

309

~~~~~~

Composition of total external debt, 2007

811aleral 1,585

US$ millions

Private Sector Development

Time required to starl a business (days) Cost to start a business (% of GNI per capita) Time required to register property (days)

Ranked as a major constraint to business (% of managers surveyed who agreed)

Tax rates Electricity

Stock market capitalization (Oh of GDP) Bank capital to asset ratio (%)

2000 2008

- 37 - 137.1 - 93

2000 2007

.. 32.6

.. 15.1

I Governance indicators, 2000 and 2007

Voice and amwntability

Political stability

Regulatory quality

Rule of law

Control of corruption

0 25 50 75 100

612007 Country's percentile rank (0-100) 02000 hlphervslues imply bellerra'mgs

I

I Source KaUlmBnn-KIBBy-MBstrYzn, W o M Bank

Technology and Infrastructure 2000

Paved roads (% of total) Fixed line and mobile phone

High technology exports subscribers (per 100 people)

(% of manufactured exports)

8.1

1

1.4

Environment

Agricultural land (56 of land area) 20 48.0 Forest area (% of land area)

Nationally protected areas (56 of land area)

Freshwater resources per capita (cu. meters) Freshwater withdrawal (% of internal resources) 0.4

0.22 CO2 emissions per capita (mt)

GDP per unit of energy use (2W5 PPP $ per kg of oil equivalent) 4.6

400 Energy use per capita (kg of oil equivalent)

(US$ mlllions)

IBRD Total debt outstanding and disbursed Disbursements Principal repayments Interest payments

IDA Total debt outstanding and disbursed Disbursements Total debt service

214 0

52 22

769 55 12

iFC (fiscal yead Total disbursed and outstanding portfolio

Disbursements for IFC own account Portfolio sales, prepayments and

repayments for IFC own account

65 18 3

11

of which IFC own account

MlGA Gross exposure 0 New guarantees 0

2007

10.0

18

2.7

20 45.6

8.0

15,341

0.22

5.0

392

2007

40 0 5 2

196 20 2

186 105 28

24

0 0

Note: Figures in italics are for years other than those specified. 2008 data are preliminary. .. indicates data are not available. -indicates observation is not applicable.

Development Economics, Development Data Group (DECDG)

4/6/09

46

Annex 6: IBRD/IDA Program Summary

As Of Date 1/14/2010

Proposed IBRDDDA Base-Case Lending Program a

Fiscal Proj ID year

Strategic Implementation US$ (M) Rewards b b Risks

(H/WL) (H/WL) 201 0 C M - Competitive Value Chains 40.0

Result 40.0 CAB APLlA

75 .O C M - Lom Pangar Hydropower 2011 Proj. (FY11)

Result 75.0 CAB APLlB

2012 CM-Urban and Sanitation S IL 50.0 Result 50.0 CM-Contr. to Health Sect Inv Proj 40.0 2013 (FY12) Result

Overall Result 40.0 205.0

47

Annex 7: Selected Indicators of Bank Performance and Management

As Of Date 1 /14/20 10

Indicator 2007 2008 2009 2010 Portfolio Assessment Number o f Projects Under Implementation

8 10 11 9 Average Implementation Period (years) 4.2 2.7 2.9 2.9 Percent o f Problem Projects by Number 12.5 10.0 18.2 55.6 Percent o f Problem Projects by Amount 6.9 5.0 11.2 44.8 Percent o f Projects at Risk by Number 12.5 10.0 27.3 55.6 Percent of Projects at Risk by Amount 6.9 5.0 14.6 44.8 Disbursement Ratio (%) e 24.2 11.9 11.1 4.1 Portfolio Management CPPR during the year (yedno) Supervision Resources (total US$) Average Supervision (US$/project)

U

Memorandum I tem Since FY 80 Last Five FYs

Proj Eva1 by OED by Amt (US$ millions) 1,959.3 108.2 % of OED Projects Rated U or HU by Number 50.8 75.0 % of OED Projects Rated U or HU by Amt 42.8 72.8

Proj Eva1 by OED by Number 59 4

a. As shown in the Annual Report on Portfolio Performance (except for current FY). b. Average age of projects in the Bank's country portfolio. c. Percent of projects rated U or HU on development objectives (DO) and/or implementation progress ( W . d. As defined under the Portfolio Improvement Program. e. Ratio of disbursements during the year to the undisbursed balance of the Bank's portfolio at the

beginning o f the year: Investment projects only. * All indicators are for projects active in the Portfolio, with the exception o f Disbursement Ratio,

which includes al l active projects as well as projects which exited during the fiscal year.

48

Annex 8: Summary of Non-Lending Services

As Of Date 111 4/20 10

Completion Cost Audience Product FY (US$OOO) a Objectiveb

Recent completions

Poverty Assessment

Investment Climate Assessment PEMFAR CFAA ROSC - Accounting & Audit Value Chain Competitiveness Governance Assessment RPSC FSAP Update Fiscal space for Growth & Dev. Mineral Sector Dialogue Technical Assistance

2005

2006 2006 2006 2006 2008 2008 2008 2008 2009

2009

180

60 450 225 87 78 100 31 31 100

100

Bank/Gvt

BanMGvt Bank/Gvt Gvt Gvt Bank/Gvt BanMGvt Bank/Gvt Bank/Gvt Bank/Gvt

Bank/Gvt

Knowledge Problem- solver Economic Knowledge Knowledge Knowledge Knowledge Economic Knowledge Economic

Knowledge

Underway Safety N e t Assessment 2010 150 Bank/Gvt Knowledge

49

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* *

Annex 11: IFC Cameroon Investment Operations Program

2007 2008 2009 2010*

Commitments (US$m) Gross Net**

3.07 1.36 2.49 3.07 1.36 2.49

Net Commitments by Sector (%)

EQUITY GUARANTEE LOAN Total

Net Commitments bv Investment Instrument (%) Equity Guarantee Loan Total

12.43 100

87.57 100

0 100 100 100

12.43 100

87.57 100

0 100 100 100

* As ofMarch 31,2010 * * IFC's Own Account only

53

Annex 12: Country Financing Parameters Date: April 14, 2005 The country financing parameters for Cameroon set out below have been approved by the Regional Vice President. Africa Region. and are being Dosted on the Bank’s internal website. Item

Cost sharing : Limit on the proportion o f individual project costs that the Bank may finance

Recurrent cost financing. Any limits that would apply to the overall amount o f recurrent expenditure that the Bank may finance

Local cost financing. Are the requirements for Bank financing o f local expenditures met, namely that: (i) financing requirement for country’s development program would exceed the public sector’s own resources (e.g., from taxation and other revenues) and expected domestic borrowing; and (ii) the financing o f foreign expenditures alone would not enable the Bank to assist in the financing o f individual projects. Taxes and duties. Are there any taxes and duties that the Bank would not finance?

Parameter

100%

No country- level limit

Yes

NONE

Remark / Explanation

Counterpart funding wi l l be generally encouraged. 100% Bank financing might be expected in some proj ectdsectors where urgent actions are required such as HIVIAIDS, electricity and environment. In sector programs (e.g., health, education, transport, and forestry sectors) some financing from Government would be generally expected. In projects providing support to local communities, financing may be sought from uroi ect beneficiaries in kind or cash. The Bank would continue to monitor the overall fiscal and debt situation, and i t s implications for recurrent financing. Bank financing o f recurrent costs wi l l be applied with caution. In particular, the Bank wi l l consider, on a project-by-project basis, financing recurrent costs taking into account (i) the sustainability o f project achievements, (ii) future budgetary outlays. The two requirements are met. The Bank may finance local costs in the proportions needed in individual projects.

As o f February 2005, there are no taxes and duties that have been identified to be unreasonable or discriminatory. In individual projects, the Bank would examine whether taxes and duties constitute an excessively high share o f project cost.

54

Annex 13: Cameroon Key Exposure Indicators

Actual Estimated Indicator 2005 2006 2007 2008 2009

Total debt outstanding and 7260 3229 2946 2794 2600 disbursed (TDO) (US$m)a

Net disbursements (US$m)a -684 -203 30 -170 -176 Total debt service (TDS) 822 519 514 378 435

(US$m)a Debt and debt service indicators

(%) TDOIXGS~ TDO/GDP TDS/XGS Concessional/TDO

IBRD exposure indicators (YO) IBRD DS/public DS Preferred creditor DS/public

DS (%)' IBRD DS/XGS

IBRD TDO (US$mld Of which present value of guarantees (US$m)

Share o f IBRD portfolio (%)

IDA TDO (Us$mId IFC (US$m)

Loans Equity and quasi-equity /e

MIGA

MIGA guarantees (US$m)

176.4 63.1 58.0 39.9 47.2 43.8 18.0 14.2 12.0 12.2 20.0 10.1 10.1 5.4 7.9 64.0 61.6 65.7 71.7 75.0

6.4 15.4 2.7 5.3 2.1 20.8 39.3 20.0 39.8 22.2

0.9 0.8 0.1 0.1 0.1

84 46 40 35 30

0 0 0 0 0 1032 170 198 225 240

a. Includes public and publicly guaranteed debt, private nonguaranteed, use of IMF credits and net short- term capital.

b. "XGS" denotes exports of goods and services, including income receipts. c. Preferred creditors are defined as IBRD, IDA, the regional multilateral development banks, the IMF, and the

Bank for International Settlements. d. Includes present value o f guarantees. e. Includes equity and quasi-equity types of both loan and equity instruments.

55

Annex 14: CAS Completion Report

FY04-06 CAS and FY07-08 I S N Cameroon Completion Report Country: Cameroon Date o f CAS: FY04-06 Date o f ISN: FY07-08 Period Covered by the Completion Report: Completion Report completed by: Date: December 15,2009

August 2003 through November 2008 Louise Davidson

I. Introduction 1. This Country Assistance Strategy Completion Report (CASCR) assesses the effectiveness o f the FY04-06 World Bank Group Country Assistance Strategy (CAS) for Cameroon (Report No. 26555, dated August 2003) and the subsequent Interim Strategy Report (ISN), (Report No. 37897-CM, dated November 9,2006). It i s based upon reviews o f (a) portfolio implementation performance reports; (b) most recent Implementation Status and Results Reports (ISRs) and Aide-Memoires o f each project active during the respective periods, (c) Implementation Completion Reports (ICRs) o f projects completed during the period, Independent Evaluation Group (IEG) Reviews o f ICRs, and Quality Assurance Group (QAG) Reviews, where available; (d) interviews with selected client counterparts; and (e) self- assessments by the Country Team. The findings from this assessment have informed the preparation o f the FY 1 0-FY 13 Country Assistance Strategy.

2. During the course o f FY04-06 CAS period, significant changes occurred in Cameroon's development context. These changes included Cameroon's attainment o f the completion point under the Heavily Indebted Poor Countries (HIPC) Initiative in April 200617. In addition, Cameroon also became eligible to receive additional assistance from the Multilateral Debt Relief Initiative (MDRI) and from official bilateral creditors belonging to the Paris Club Group. Both marked a significant shift in the relationship between the Government and i t s international partners and provided Cameroon with an opportunity to accelerate development, to get back on track to reach i t s Millennium Development Goals and to tackle the high prevalence o f corruption. All o f these changes resulted in the Government's decision to start to revise i t s PRSP, with an original expected completion date o f early 2008.

3. aligned, an ISN was prepared to extend the CAS for FY07-08, and which reflected consultation with the Government, other stakeholders and international partners. At the end o f the CAS period, initial high level conclusions regarding the effectiveness o f Bank contributions were presented in the I S N (and have been incorporated within this document). It was agreed that a comprehensive evaluation o f progress in achieving CAS outcomes would be conducted at the

Against this backdrop, and in order to ensure that the Bank's next CAS would be fully

I7 At the decision point, Cameroon was expected to reach completion point in April 2003, but it was only until 2005 after the macroeconomic framework were strengthened and progress in PRSP implementation and governance measures were sustained that Cameroon was able to reach the completion point in April 2006, after fidfilling all agreed conditions.

56

end o f the FY04-06 CAS/FY07 -08 ISN period and incorporated within the CAS/ISN Completion Report.

11. Government's Strategic Goals Finalized in 2003, the strategic framework o f the first Poverty Reduction Strategy Paper 4.

(PRSP) rested upon seven pillars: (i) promoting a stable macroeconomic framework; (ii) strengthening growth through economic diversification; (iii) empowering the private sector as the main engine o f growth and as a partner in social service delivery; (iv) developing basic infrastructure and natural resources in an environmentally sustainable manner; (v) accelerating regional integration within the Economic and Monetary Community o f Central Africa framework (CEMAC, Communaute Economique et MonCtaire d'Afrique Central); (vi) strengthening human resources, bolstering the social sectors, and promoting the integration o f vulnerable groups in the economy; and (vii) improving the institutional framework, administrative management, and governance.

5. several areas, including diversification o f the economy and the growth in non-oil revenues, the preparation o f Medium-Term Expenditure Frameworks (MTEFs) based on sector strategies in priority sectors, and better alignment o f annual budget allocations with PRSP priorities. Despite this improvement, economic growth during the period o f CAS implementation fe l l short o f expectations and PRSP target growth rates.

Following a slow start, the 2005 progress report o f the PRSP highlighted progress in

6. (MDGs), which underscores the difficulty in gearing public policy toward a focused effort at ensuring that the poorest benefit from the country's modest growth. Only two MDGs'' are within reach by 201 5, but only if reforms are sustained. Indicators relating to gender equality and women's empowerment, maternal mortality, child health and reduction o f malaria and other major disease incidence wi l l not be met. Finally, the goal that seeks to halve the population living below the poverty line i s also unlikely to be met.

7. the decision by the Government to undertake a longer te rm strategic analysis and vision stretching to 2035. At the time o f writing, many o f the outstanding actions have now been completed and the PRSP has just been finalized.

Cameroon continues to lag with respect to achieving the Millennium Development Goals

Completion o f the second PRSP was delayed considerably for various reasons, including

111. The FY04-06 CAS was one o f the f i rst results CASs to be developed in the Bank. I t was

B a n k Strategic Objectives and CAS Outcomes 8. well aligned to the agenda detailed in the country's PRSP and presented to the Board in July 2003. I t was aimed at supporting the goal o f reducing poverty by improving basic service delivery and spurring private sector-led growth, underpinned by better governance.

9. however, a need for adjustments, to reflect the country's changing development context, the World Bank's Africa Action Plan (AAP), lessons learnt arising from consultations with the Government and other partners, including a client survey and other analysis e.g., a QAG

These two pillars o f the CAS remained valid in the I S N for FY07-08. There was,

'* These are (i) ensuring primary education, and (ii) increasing the proportion o f population with access to drinking water (environmental sustainability)

57

assessment o f ESW. A l l o f this was embodied in three guiding principles for World Bank Group support, namely: (i) to step up efforts to address governance, notably by reducing corruption; (ii) to strengthen partnership, alignment, and harmonization; and (iii) to strengthen management for results, based on a modified I S N results framework organized around six outcome clusters. To further foster the Bank Group's management for results, the Bank's country office was also strengthened, including through the decentralization o f some international staff.

Higher-order PRSP goal PRSP outcomes targeted during I S N period

I S N Milestones

10. structure o f the I S N results matrix. As described above, this was reorganized around six outcome clusters, designed to create stronger cross-sector linkages, greater operational cohesion across the Bank Group, as well as to improve the effectiveness o f activities with other partners. Due to the brevity o f the two year period, a decision was taken by the newly appointed Country Director not to appoint outcome cluster leaders, nor to implement the Development Effectiveness Scorecard. Instead, results o f the program were assessed regularly, particularly during Country Portfolio Program Reviews (CPPRs).

1 1. economic management and service delivery, as well as reducing selected constraints to, and directly supporting private sector development, the six outcome clusters consisted o f the following:

The results assessment o f the CAS FY04-06/ISN FY07-08 i s presented according to the

Based upon the two pillars o f strengthening the institutional framework for pro-poor

Establish the PRSP as an integrated development framework and effective policy management tool 0

0

PRSP serves as mechanism for consultation and coordination with civil society and development partners Improved monitoring indicators are developed that clearly demonstrate progress (or lack o f progress) toward achieving PRSP outcomes. Revised, more results-based and prioritized PRSP prepared by March 2008. New PRSP-centered dialogue datform between Government.

0

0

i. Strengthening PRSP implementation 11. Strengthening governance, including anticorruption and public financial

management efforts iii. Fostering private sector development iv. Supporting infrastructure and urban development v. Supporting forestry and environment sectors and strengthening rural and

agricultural development vi. Promoting human development

..

IV. The Completion Report Analysis (Attachment I) provides a detailed analysis o f CAS and

Results Assessment - CAS FY04-06flSN FY07-OS 12. I S N progress against the results framework. This section summarizes these findings by outcome cluster, as articulated in the ISN.

58

I S N Activities: Analytical and Advisory Support

13. outcome. Nevertheless, the Bank provided some critical ground work towards the end o f the CAS period which positively influenced the PRSP process, particularly in relation to the establishment o f a PRSP-centered dialogue platform between the Government and i t s stakeholders.

Moderate progress was made by the Bank during the I S N period towards supporting this

national stakeholders and international partners i s developed and functioning by July 2007. Support to the revision and implementation o f the PRSP, including capacity building (Partially delivered) Update o f Development Policy Review (Delivered) Gender policy note (Dropped)

0

14. Development Policy Review (both the original report that was delivered in FY04 and a later update) both designed to support the revision and implementation o f the PRSP. In a review undertaken by QAG, the Development Policy Review, delivered in 2004, was judged to be an "outstanding report" and rated highly satisfactory. With regards to the likely impact, the report was considered to provide an important contribution towards the f i rst PRSC, the IMF PRGF, the PRSP, other IDA-financed operations in forestry, capacity building and other sectors and also the new CAS. The Poverty Assessment, delivered in 2005, was also rated as highly satisfactory by QAG, particularly in terms o f i t s likely impact. Joint efforts between the Government and the Bank team were considered to be best practice. The Assessment was expected to provide an important contribution towards updating the PRSP as well as guiding public expenditure decisions through the MTEF.

15. Point also provided critical ground work in revising the PRSP. For example, the Debt Rel ie f Grant Under the Enhanced HIPC Initiative, completed in December 2006, was a highly innovative operation and only the second o f i t s type to be carried out (i.e. debt re l ie f on IBRD debt). The operation was rated satisfactory with considerable impact. Albeit the HIPC completion point was achieved three years later than planned, the country's debt sustainability improved as a result o f the grant and CPIA ratings for Quality o f Budgeting and Financial Management improved since 2001. Other benefits related to improvements in HIPC tracking indicators (e.g., improved budget classification).

Significant activities during the CAS period included a Poverty Assessment (FY05) and a

Bank support provided to the Government towards attainment o f the HIPC Completion

16. highlighted increased public demand for more government ownership, transparency and responsiveness. Participatory consultations (across all ten departments o f the country) as well as outreach to civil society representatives were launched by the Ministry o f Economy, Planning and Territorial Administration (MINEPAT) in March 2008 to take stock o f results from PRS I implementation and to incorporate stakeholder recommendations for geographical and sector targeting. It i s estimated that some 6,000 people were consulted, representing a labor-intensive undertaking for the authorities.

The revision o f the PRSP by the Government was influenced by consultations which

59

17. The consultations also confirmed the major shortcoming o f PRS I implementation including the dearth o f quantifiable indicators and measurable outcomes. This was largely due to (i) the absence o f baseline information on performance levels and service standards at PRS I launch in 2003; (ii) the absence o f M&E tools to track the public investment budget and service delivery during PRS implementation; (iii) l o w statistical capacity at central ministry and local administration levels, as well as constraints on the ability o f the Institut National de la Statistique (INS) to respond to growing demand for information; (iv) the tendency to view participatory consultation as a once-in-four-year event rather than as a regular exercise and (v) weak capacity o f government and the mass media to conduct outreach on development issues.

18. Bank support to strategy implementation and monitoring in three principal areas (i) to strengthen public expenditure management (circuit des depenses), financial management and procurement mechanisms between central and local administrations; (ii) to provide support for institutionalizing participatory monitoring and feedback mechanisms in 2-3 priority sectors highlighted in PRS 11; and (iii) to support statistical capacity development in core and l ine ministries. During the I S N period, a trust fund o f up to US$500,000 was made available by the Bank in this regard, including capacity-building but to date, the Government has preferred to proceed without support in order to reflect strengthened government ownership o f the process.

While stressing the country-driven nature o f PRSII, M INEPT expressed initial interest in

E. ii) Strengthening governance, including anticorruption and public financial management efforts

Higher-order PRSP goal

PRSP outcomes targeted during ISN period

ISN Milestones

CAS Outcomes and Indicators

Table 2. ISNKAS results matrix Increase transparency and accountability in the mobilization and use o f Dublic resources 0 Improvement in public financial management performance, as

demonstrated by improvement in PEFA public expenditure management indicators in 2007 relative to baseline and subsequent update by June 2008 Measurable progress in implementing national governance and anticorruption plans

0 Increased transparency in use o f public funds through the publication o f 2004 audited central government financial statements in 2006, and 2005 audited financial statements in 2007 Budget more closely reflects the priorities in the PRSP, as a result o f full integration o f the overall MTEF in the preparation o f the 2008 budget

0 Increased transparency in o i l revenues achieved through wide annual dissemination o f the independent EITI conciliator’s assessment, in October 2006 Government-led corruption assessments undertaken and results-based action plans developed and agreed upon in several key ministries (possibly including health and education ministries) by December 2007

The Government exhibits greater transparency and accountability in the mobilization and use of public resources

Increase in the number o f 15 indicators o f quality o f P E M system as defined in HIPC tracking Action Strategy

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ISN Activities: Financial Support

ISN Activities: Analytical and Advisory Support

Well informed decision making at the cabinet level reflects trade -offs and priorities in resource allocation (PER evaluation in FY06) Annual budgets drawn up on the basis o f MTEF reflect the priorities o f the Government as indicated in the PRSP.

a

a

a

a

a e a

a

a

a

-

Transparency and Accountability Capacity Development project as IDA contribution to joint support from international partners, via the public financial management platform, including support for strengthening human resource management systems and procedures (ongoing) Programmatic public financial management support CPAR (delivered) Integrated CFAA (delivered) PEMFAR (delivered) ROSC Accounting and Auditing (delivered) Support to EITI implementation (delivered) Support to anticorruption program, (delivered) Financial Sector Assessment Program Update (delivered) Governance indicators (delivered) Support to public financial management reform as part o f public financial management donor platform (dropped)

19. a "starting point" for renewed effort to fight corruption and strengthen transparency and accountability in the management o f public resources. Strengthening o f public financial management was a critical element o f the 2006-20 10 National Governance Program, particularly given the significant increase in resources as a result o f debt relief.

20. respective outcomes, namely to ensure that the Government exhibits greater transparency and accountability in mobilization and use o f public resources and that Management and resource flows in key line ministries improved. At the end o f the CAS period, it was noted that 8 o f 16 indicators o f the quality o f public expenditure management were met, a slight improvement over the CAS baseline o f 7 o f 1 5.19 In two ministries (health and public works) substantial progress was made in preparing sector strategies and MTEFs as the basis for the annual budget. A more detailed summary o f progress made during the CAS period, in particular in four areas o f public management i s provided below as well as outstanding key challenges for the I S N period (s,ee I S N page 17).

For the Government o f Cameroon, attainment o f the HIPC Completion Point represented

During the CAS/ISN period, modest progress was made by the Bank in achieving i t s

Since the publication o f the FY04-06 CAS, an indicator on procurement was added, bringing the number of 19

indicators to 16. Cameroon had satisfactory ratings in only 4 of 15 areas in the 2001 baseline.

61

(a) Linking the budget to PRSP through the Progress made during the CAS FY04-06 period

Progress made during the CAS FY04-06 weriod

Budget allocations to PRSP priorities, particularly education, health and infrastructure, have progressively increased. A global MTEF, as well as sector MTEFs and strategies in education, health, rural development, public works, justice, and social development, have been developed and are contributing to the preparation o f the 2007 budget. The budget has become more comprehensive, with the road fund and spending previously financed directly through the national oil company now included in the budget. A new, common nomenclature for budgeting and accounting has been adopted.

(b) Budget execution and control

Progress made during the CAS FY04-06 period

Improvements in budget execution and control include computerization o f budget transactions and treasury systems, closure o f most government accounts held at commercial banks, significant reduction in the use o f special procedures that bypass the expenditure chain, regular payment by the Government o f public utility bills, monitoring o f the finances o f public enterprises, and payment o f domestic debt and arrears based on a multiyear payment plan.

Key challenges during ISN FYO7-08 period

Full adoption o f the MTEF approach, emphasizing decentralized budget planning and costing, results orientation and monitoring, and better coordination. Creation o f fiscal space to raise public investment expenditures from less than 2 percent in recent years to 4-5 percent in the medium term, as envisaged in the PRSP. Adoption and implementation o f the new organic budget law currently under preparation wi l l facilitate implementation o f the MTEF approach. Strengthening partnerships between the Government and international partners in order to ensure alignment o f external resources to the PRSP through the MTEFs and the budget.

Key challenges during ISN FYO7-08period

Internal budget control systems remain weak. Key improvements required include making line ministries responsible and accountable for managing expenditures, clarifying the mandates o f the various control units, and addressing problems in the transition to computerized systems. Management and control o f personnel and payroll needs to be substantially strengthened, by completing the census to cleanse the payroll, ensuring that employment o f contract workers i s brought within the control o f the budgetary process, and introducing secure systems for personnel information and payroll

62

(c) Public procurement

Progress made during the CAS FY04-06 Deriod

Key challenges during ISN FYO7-08 period

Reforms include decentralization o f procurement to l ine ministries, with oversight by a regulatory agency; presence o f independent observers in public procurement committees; annual audits o f public procurement; and publication in newspapers o f contracts awarded.

Progress made during the CAS FY04-06 Deriod

Full application o f the Procurement Code o f 2004 is required, including adoption, dissemination, and use o f standard bidding documents and procedures manual, completion and publication o f the procurement audit for 2005 and subsequent years, implementation o f a procurement monitoring system, publication o f al l procurement sanctions, development o f capacity in the public and private sectors, and provision o f sufficient budgetary allocations for procurement operations.

Key challenges during ISN FYO7-08 period

(d) Accounting, reporting, monitoring, and oversight

Introduction o f an integrated public finance information system (Systeme d’lnformation IntegrCe pour la Gestion des Finances Publiques - SIGEFI) i s facilitating the tracking o f resource flows throughout budget execution, production o f monthly fiscal data within one month o f end period, and better reconciliation o f receipts and payments. The quarterly report o f expenditures i s now regularly published on the government’s website. Arrangements involving c iv i l society were adopted for financial and physical monitoring o f capital project at local level. The Chamber o f Accounts (audit body) became operational at the beginning o f 2006.

a

a

a

The credibility and effectiveness o f the budget need to be strengthened through sustained monitoring o f results and increased transparency and accountability o f financial operations. Timely production o f audited accounts o f public financial operations i s a key priority. The establishment o f the Chamber o f Accounts i s a good start; i t s mandate should be brought in l ine with norms set by the International Organization o f Supreme Audit Institutions. Legislative oversight o f the budget i s weak and needs to be strengthened through provision o f timely information and development o f capacity.

63

I. Progress during the I S N FYO7-OS period 21, Most o f the key challenges identified during the ISN period are st i l l relevant today; two o f the milestones were not met and two were met partially. With regards to strengthening and increasing transparency in public financial management, including procurement, relevant bank support was incorporated within the IDA-financed Transparency and Accountability Capacity Development project (TACD). A project component emphasized the need for more transparency o f public accounts and sharpening the focus on accountability and oversight by the National Assembly and the civil society. It was also designed to complement the work led by the European Union, via the joint public financial management platform, to strengthen the newly established Chamber o f Accounts. Following extensive preparation delay (5 years), the TACD project became effective in June 2009, after completion o f the I S N period. Work i s currently underway to focus on beneficiary and stakeholder commitment and to ensure proper implementation and results are achieved.

22. The delay in the project preparation hampered the Bank's ability to contribute fully towards the achievement o f the milestones as articulated in the results matrix o f the ISN. For example, the central government financial statements o f 2004 and 2005 have just been prepared, later than the proposed 2006 and 2007 deadlines and the Chamber o f Accounts i s yet to audit the 2005 statements. Procurement audits have been also conducted on annual basis, but results are not published. The milestone relating to the integration o f the MTEF in the preparation o f the 2008 budget was not met; this was prepared using existing budget procedures that do not allow for a meaningful integration o f PRSP priorities and without a multiyear perspective. Stil l , the National Assembly adopted in December 2006, a new budget and financial framework that wi l l allow for multiyear budgeting and sets the implementing calendar for the 2013 budget.

23. Significant AAA support was provided by the Bank during the CAS/ISN period. This included continuation o f the policy dialogue and technical assistance, outreach and dissemination o f key pieces o f analytical work completed in FY06, and analysis o f emerging issues, including the anticormption agenda. The CPAR follow-up, delivered as additional A A A in FY06, was rated as satisfactory in terms o f meeting i t s likely impact by QAG. As mentioned above, the Development Policy Review o f 2004, rated by QAG review as highly satisfactory, also had a significant impact in terms o f the public finance reform agenda and resulted in stronger linkages between sector programs and the MTEF. The FY07-08 work program focused on sector dialogue and knowledge generation on governance. Examples o f activities included coordinated anti -corruption support with other development partners, dissemination o f the Public Expenditure Management and Financial Accountability Review (as part o f the multi- donor public financial management platform) and support to the implementation o f the Extractive Industries Transparency Initiative (EITI). To date, partial progress has been made by the Bank under the Extractive Industries Transparency Initiative (EITI), with particular focus on increased transparency in oi l revenues; EITI conciliator reports o f 200 1-2004 and o f 2005 were disseminated respectively in 2006 and 2007. The EITI reports o f 2006 and 2007 are currently under preparation.

64

F. iii) Fostering private sector development

Higher-order PRSP goal PRSP outcomes targeted during I S N Deriod I S N Milestones

CAS Outcomes and Indicators

I S N Activities: Financial Support

I S N Activities: Analytical and Advisory Support

Table 3. ISN/CAS results matrix Support sustainable economic growth and diversification, buttressing the private sector as the main engine o f growth 0 Reduction in selected constraints to private sector development and

associated costs

0 Development o f an effective public-private sector dialogue structure and convening o f first businesshnvestment forum by June 2007 Increase in Cameroon’s ranking in the 2008 Doing Business Survey (published in September 2007) by at least eight positions and reduction in the time and cost o f starting a business, as measured by the Doing Business Survey, by 8 percent Increase in number o f deposit accounts in banks and microfinance institutions by 15 percent over the December 2004 level by June 2008

0

Selected constraints (and associated costs) to private sector development are reduced:

Percentage o f private firms rating the following constraints as major or severe Customs and Trade Regulations and efficiency o f administratiodagencies Business Licensing and Operating Permits Absence o f clear rules o f the game and truly independent regulatory agencies Reduction in time o f dwell-time o f containers in Douala Port Reduction in delays in payment clearing and process in Bank to Bank and Client to client transactions Public-private partnership for growth and poverty reduction project, including support to public enterprise reforms and analysis o f tourism opportunities (closed) BEAC regional payment systems project (closed) CEMAC Regional Financial Institutions support project (ongoing) IFC direct investments (ongoing)

0 Regional OHADA capacity-building project (dropped) Follow-up to Investment Climate Assessment and ROSC, including support to develop investment forum (dropped) Enhanced IFC support to small and medium-size enterprises and advisory services (ongoing and planned technical assistance) Regional Financial Sector Assessment Program follow-up (delivered)

65

24. As noted in the I S N (p 20), CAS interventions in FY04-06 to relax constraints and reduce the costs to the private sector showed l i t t le progress. In the ISN, the Bank planned to step up i ts support in five areas as well as to address in-country staffing constraints. The five priority areas included (i) helping improve the business environment, including through support to set up a public-private dialogue mechanism for mechanism for addressing priority reforms in l ine with the results o f the Investment Climate Assessment, the ROSC, and Doing Business surveys, (ii) supporting public enterprise reforms, building on global expertise, including private-public partnerships, (iii) supporting small and medium-size enterprises, notably by continuing IFC support to the business advisory services provided by the private sector umbrella organization GICAM (Groupement Inter-patronal du Cameroun, Cameroon Employers Group); promoting leasing, through regulatory change; supporting micro finance; and linking small and medium- size enterprise supply chains to large investments, such as AES Sonel, (iv) financing IFC direct investments and advisory services in infrastructure, financial markets, forestry, and general manufacturing and services and (v) supporting reforms and initiatives that improve access to financial services, primarily by providing assistance to regional markets and institutions in the financial sector.

25. In spite o f these efforts, during the I S N period, l i t t le progress was made in achieving the outcomes and milestones in this cluster. Cameroon continues to make very slow progress with respect to i t s indicators relating to starting a new business. The second I S N milestone, namely to increase Cameroon's ranking in the 2008 Doing Business survey was not met; Cameroon's ranking in the 2008 survey improved by one position compared to the 2007 survey (from 161 to 160). During this time, Cameroon managed to reduce both the time and cost to start a business from 44 in 2005 to 37 days in 2007, and also from 157.4 percent o f GNI per capital to 129.2 percent respectively but no changes have been recorded in terms o f reducing the number o f procedures, including obtaining licenses to start a business.

26. first business investment forum by June 2007 were supported by the joint Bank's Publidprivate Partnership for Growth and Poverty Reduction Project (PPPGRP). While some progress was made, the project was deemed to be unsatisfactory by IEG with a weak project design and inadequate monitoring and evaluation procedures to permit a meaningful assessment o f progress. Good achievements were noted in financial sector work on micro finance and in improving the efficacy o f Doula Port, but the reform o f postal savings and social security was also limited by a lack o f government commitment. The project supported the establishment and early years o f operation o f the Competitiveness Committee. The Committee gained some importance with the Government's increased interest in supporting high potential value chains and in introducing investment climate reforms along these value chains. The Committee acts as a think tank to the Government on competitiveness issues.

27. Bank and to Client to client transactions were met. This was largely as a result o f support provided by the Bank's regional project, BEAC regional payment system, (Banque des etats de 1'Afrique Centrale), which was aimed at improving the efficiency and security o f the payment system in the Central African Economic and Monetary Union. The ICR report i s s t i l l under preparation, but the last ISR reports that all project development objectives have been either met

Efforts to develop an effective public-private sector dialogue structure and to convene a

CAS outcomes relating to reducing delays in payment clearing and process in Bank to

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or exceeded: significant reduction o f delays were recorded in payment clearing and settlement and settlement o f large value transactions in real time.

28. After considerable delay, the CEMAC Regional Institutions Support Project was approved by the Board in December 2008, and became effective six months later in April 2009. The project aims to strengthen Central African regional institutions so that they can fulfill their mandates to encourage an expanded, better governed regional market, and a more transparent, better regulated and more competitive financial system. The project i s currently experiencing delays in implementation and effectiveness.

29. o f effective supervision and monitoring and evaluation systems. Close attention needs to be paid to political economy and the Bank should withdraw if considerable opposition and delay are encountered.

With respect to lessons learnt, the IEG review o f the PPPGRP indicated the importance

11. IFC financing and advisory support 30. the power generation segment; (ii) enhanced financial and technical support to the SME sector, through local financial intermediaries; (iii) improvement o f the country’s investment climate and reduction in the cost o f doing business; and (iv) identification o f areas suitable for joint IDA/IFC initiatives to maximize WBG impact using sector studies and mapping. IFC delivered significant new investments during the CAS implementation period. The flagship investment was a US$90 million-equivalent investment in AES Sonel, the privatized power utility, IFC’s single largest investment in Sub Saharan Africa in FY06. Other operations included mainly small-scale investments in logistics, the financial sector, and general manufacturing. IFC also stepped up efforts to support small and medium-size enterprises. In close collaboration with Cameroon’s largest private sector umbrella organization, GICAM, IFC provided training, access to information, and capacity-building.

IFC’s strategy for Cameroon included: i) support to the infrastructure sector, in particular

3 1. dialog to enhance the business environment in Cameroon through the Cameroon Business Forum (CBF) following the signature o f the M O U between the Government, the Private Sector and IFC in January 2009. The letter o f request for Doing Business technical assistance has been signed by the Minister o f Economy on October 2008 and the Doing Business Memo has been formally submitted to the Prime Minister during VP Michael Klein’s visit in February 2009. IFC i s currently leading the advisory work required for the Growth Oriented Women Entrepreneurs Program (GOWE program) which i s a guarantee program set up by the African Development Bank (ADB) to fast-track the growth o f woman owned and operated small and medium-sized enterprises in Cameroon.

IFC has also been actively involved in the implementation o f a platform for private public

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G. iv) Supporting infrastructure and urban development in Cameroon

during I S N period

CAS Outcomes and Indicators

Support

ISN Activities: Analytical and Advisory Support

Table 4. ISN/CAS results matrix

0

0

0

0

0

Develop infrastructure to support the productive and social sectors Increases in length and improvements in quality o f road network Increase in access to energy services and drinking water Improvement in living standards in urban areas Provision o f funding levels for road maintenance consistent with Memorandum o f Understanding for 2007 and 2008 signed by the Government as part o f i t s dialogue with the European Union and other partners Reduction in travel times on main roads covered by the Douala Infrastructure. Project by 40 percent by June 2008 compared with baseline data from 2002 Increase o f rural electricity access from 5% to 7%, and o f urban electricity access from 45% to 48% by June 2008. Completion o f Investment Program 1, inception o f Program 2, and agreement on financial obligations borne by the Government and by Camrail by June 2008 Completion o f f i rst audits by International Civil Aviation Organization by December 2007

0

0

0

0

Other infrastructure constraints in energy, transport and telecom are reduced: 0

0 Increased service coverage (telecom) CAS Outcomes (Urban) Improved Delivery of Basic Services by Local Governments in urban areas (baseline values FY04) 0

0

0

0

Decrease in loss o f production due to power outages

% o f urban residents with access to water increased in urban areas o f Bank involvement % o f urban residents with access to sanitation % o f city neighborhoods connected and efficiently functioning roads and drainage Douala infrastructure project (closing Dec 31,2009)

0

0

0

0

0

0

0

-

-

Railway concession project (closed June 30,2009) West and Central Africa air transport safety and security project (ongoing j Urban and water development support project (ongoing) Energy sector development project (ongoing) CEMAC transport and trade facilitation project (ongoing) Support to energy sector (delivered) Multi-donor transport sector analytical work (dropped)

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111. Transport 32. Good progress was made towards achieving the CAS outcomes and I S N milestones in the transport sector during the respective period. These achievements built upon the reforms implemented under the Bank's Third Structural Adjustment Credit I11 (SAC 111), which closed in March 2004, and the Transport Sector Project (which closed in December 2003, before the start o f the CAS period). One o f the four major development goals o f SAC I11 related to substantially lower transport costs and to increase the availability o f services, both internationally and domestically. This credit was judged to be satisfactory by 1EG.

33. With reference to CAS outcomes, examples o f achievement o f relevant objectives included a reduction in costs and improvement o f services (except in air transport), institutional and regulatory reform, privatization o f several port activities, rehabilitation o f infrastructure, and dredging which made the port o f Doula more competitive and efficient. For example, the average stay at quay was reduced from 3.8 days to 1 day, clearance delays were reduced, and the cost o f import container handling was reduced by 27 percent. More than 20,000 o f roads received maintenance funding and resources for maintenance increased dramatically (from 20 billion CFA/US$400m to 40 billion CFA/US$800m (during the CAS/ISN period), following respect by the government o f i t s memorandum o f understanding with the EC and other donors. Rail traffic increased substantially following the privatization (concession) o f the railway, and funds flows between the government and the rail sector were steadily positive in favor o f the government during the whole CAS Period. However, the privatization strategy for CAMAIR (the domestic airline) was not implemented and the company remained subject to government interference.

34. During most o f the CAS and ISN period the Bank did not have a project to support the achievement o f targets related to the road sector (the CEMAC TTF project was declared effective only in July 2008, which was very close to the end o f the review period). The Bank support provided to the Doula Infrastructure Project however ensured continuity o f dialogue and support, as well as capacity to leverage donors' financing support with policy reforms and capacity building in the sector. At the time o f writing, the I S N milestones have been met:

a) Regarding direct project activities to the benefit o f the Douala Urban Community, more roads were built than was initially projected (27 km versus 23 km and travel time reduced by more than 40% except one short leg. A credible survey wil l be prepared to confirm this performance data before the project closes. (A QAG assessment undertaken o f the Doula Infrastructure project in August 2004 deemed the project to be moderately unsatisfactory. However, it was deemed too early to make a sound judgment on the project's contribution to the CAS). The institutional component was probably not as successful, but capacity has been partly built in the community for a better maintenance policy and adequate budgets for road maintenance were provided during most o f the CAS and I S N period.

b) A component o f the Douala Infrastructure Project supported policy dialogue in the Urban Development, Public Works and Transport areas. In the Public works sector, funding levels for road maintenance, consistent with Memorandum o f Understanding (MOU) signed by the Government as part o f i t s dialogue with the European Union and other partners were achieved for 2006,2007 and 2008, and the Douala Infrastructure Project contributed to

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reinforce capacity in the sector. In the transport sector, the actual contributions o f the project are going to be felt mostly after the review period (design o f a land transport strategy)

3 5 . arising f rom the Railway concession Project which was completed in June 2009 (The I C R i s currently under preparation). These objectives supported the Government's Transport Sector Strategy and Policy, which called for, among others, state divestiture o f transport operations in favor o f greater private sector operations. In the last ISR, management comments were provided regarding the satisfactory outcome o f this operation, the sustainability o f the concession from a financial and operational standpoint and the reversal o f financing flows between the sector and the government i s very significant results for the project. Moreover comparing the support to the rai l concession with al l other concessions in Sub Saharan Africa, i t s performance was considered to be one o f the best in the continent.

Other significant outcomes achieved during the CAS and I S N period relate to those

36. With regards to air transport, outcomes have only been partially met. Audits on security have been undertaken but not in relation to security. This outcome has been supported by the Bank through a regional project, namely the West and Central Afr ica Air Transport Safety and Security Project. (The program's main objective i s to create a safe and secure environment for air transport in the West and Central Afr ica region). Significant issues are being experienced with disbursement delays. Other important outstanding actions relating to the implementation o f security measures have to be undertaken before the Bank will consider an extension o f the project (due to be completed in December 2009).

IV. Energy and Urban 37. Government o f Cameroon's (GOC) growth and poverty reduction strategy. Achievements under the privatization program are mixed. SAC I11 supported privatization o f SONEL (Societe Nationale d'Electricit6). However, despite the privatization, the cost o f electricity has not decreased and the electricity generation has not become more efficient. In the public utility sector, the objectives o f raising the availability and quality o f service and o f raising the efficiency o f service providers were not achieved, except in mobile telephony. Relevant I S N milestones relating to increasing rural electricity and decreasing loss o f production have not yet been met due to delays in effectiveness in Bank related activities. The Energy Sector Development project became effective in April 2008 and the Urban and Water development project in 2009, after the completion o f the ISN period.

3 8 . The overall project development objective o f the Urban and Water development project was to increase access o f the urban population, particularly those living in low-income settlements, to basic infrastructure and services, including water supply. At the time o f writing, the likelihood o f achieving the project development remains high. Urban works are progressing and capacity building efforts are underway to sustain efforts carried out through the project, improve contract management and maintenance o f infrastructure at local level. Urgent water rehabilitation works have started and about 20,000 connections, including 4,000 social connections, have been installed, providing access to improved water to 100,000 people.

39. to increase access to modern energy in targeted rural areas and to improve the planning and management o f sector resources by al l energy sector institutions. Due to contractual delays, this

70

Increased access to and reliability o f electricity are key factors in the realization o f the

The overall project development objective o f the Energy Sector Development project i s

project reached effectiveness in January 2009, and i s experiencing significant disbursement delays, One o f the components o f this project i s to undertake preparatory activities o f the L o m Pangar Project.

40. With reference to lessons learnt, IEG reviews indicate that Cameroon’s experience with the privatization program confirms that complex privatization programs should be accompanied from the start by well targeted TA operations and secondly, that they should be wel l sequenced within a long time-frame, possibly over several operations. Bank teams should be attentive to the frequent disparity in commitment between the political and administrative levels. Lastly, small countries with limited resources should be encouraged to have a single multi-sector regulatory authority.

H. (v) Supporting forestry and environment sectors and strengthening rural and agriculture development

Higher-order PRSP goal PRSP outcomes targeted during ISN period ISN Milestones

CAS Outcomes and Indicators

I S N Activities: Financial

Table 5. ISNKAS results matrix Develop natural resources while protecting the environment

Sustainable management and protection of the environment and biodiversity Growth o f private agricultural production and increase in income and food security for the rural population

Forestry and environment Management o f 75 percent of production forests according to approved forest management plans by June 2008 Monitoring o f illegal poaching and logging, including effective eco-guardianship, in at least four o f the eight PSFE protected areas by June 2008

Increases in number o f people in targeted communities with access to drinking water (140,000); education (200,000); and health centers (80,000) by June 2008 Appraisal o f multi-donor support program to increase agricultural productivity and rural nonfarm employment by June 2008. Program to be built on findings o f Government-led collaborative Rural Investment Climate Assessment, including the informal sector, as well as competitiveness diagnostic o f main agricultural products.

Rural development and agriculture

Forestry and environment Management and resource flows in key line ministries are improved.

Rural development and agriculture Improved Delivery o f Basic Services, specifically sustainable management of service delivery at the community level. Farmers reached by extension services, and urban management units

% o f rural communities in the 4 provinces with access to socio-economic services (baseline

Increase in the population in the regions with access to water (current access to water of rural population i s 58%) Decrease in the time to get to school for communities in the region Increased use of rural health care clinics by communities in the region

Tax collection rates above 90% and the flows of forest taxation revenues maintained Local Government bodies receive shares for local development (evaluation o f use) At least 60% of concessions awarded begin implementation o f forest management plans (see first ISN milestone above) O f communities requesting support perceive this support as timely and useful (82 community forests have expressed interest).

in FY04 and to be determined in the PNDP program) - - -

% o f communities in the 4 provinces who have functioning elected committees Forest and environment sector program: IDA and GEF support operations

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Support

ISN Activities: Analytical and Advisory Support

41. Forests have a profound significance for poverty reduction in Cameroon. I t i s the largest employer in rural areas; and represents an important area o f economic diversification, providing a hedge against the national income to export price shocks implicit in the country’s significance reliance on oi l revenues. Good progress has been made by the Bank to meet the associated CAS outcomes and I S N milestones; the Bank has been considerably involved in relevant sector reforms over the past several years and has played an important role in coordinating international partners’ support for the forestry sector in Cameroon (e.g., the code de conduite established by the Bank between donors strongly reflected the goals o f the Paris Declaration). Relevant support was provided by the IMF and the Bank within the framework o f the Third Structural Adjustment Credit (SAC 111) which closed in March 2004. This was judged to be satisfactory by IEG with significant outcomes achieved as a result o f the bank contributions. These included (i) a revamped institutional and regulatory framework, including a competitive auction system for the award o f the logging rights and independent supervisory mechanisms, which resulted in a much improved and more transparent forest management system. (ii) the appointment o f an independent observer to monitor these activities and to strengthen accountability, (iii) the identification o f 10 percent o f the country’s territory as protected areas by the Government, (iv) an important shift from log-based to processed products exports and (v) revenues from forest exploitation were redistributed more equitably to local communities. I t was also noted by IEG that the considerable progress achieved in the forestry sector, (e.g., management, transparency, downstream activities and exports) was particularly important due to the prevalent corruption and the vital importance o f the sector to the economy.

(ongoing) Community development program support: IDA and GEF support operations (ongoing) Cameroon Petroleum Environment Capacity Enhancement Project (ongoing) Avian and Human Influenza Facility Grant (dropped)

0 Rural investment climate assessment (dropped) 0 Forest Policy Reform Analysis

Agricultural Value Chain Competitiveness Study

42. Milestones and CAS outcomes were largely met or exceeded. Bank contributions were incorporated within the Forest and Environment Sector Operation. This represented an IDA and GEF contribution towards a multi-donor national forest and environment sector development program that was initiated and led by the Government o f Cameroon (due to close in December 2009). In terms o f progress, 69 percent o f forestry concessions have begun implementation o f forest management plans. The forestry tax collection rate was achieved; in 2006, about $42 million were collected and $48 million in 2007. Local government bodies now receive shares for local development; in 2007, CFAF 7 billion was transferred to local governments and rural communities. In addition, in 299,238 communities had an approved Community Forest Simple Management Plan. From this, 13 8 had signed the Management Convention with the Government.

43. to separate the Ministries o f Forestry and Environment. Nevertheless, other outstanding conditions relating to the project are on track to be met. These include (i) allocation o f funds from the Government for implementation o f annual work plans in accordance with the METF and that at least 75 percent o f the amount o f external contributions allocated in the previous year

Some project difficulties have been experienced as a result o f the Government’s decision

72

wi l l have been made available in a timely fashion and used for program implementation, (ii) an audit o f completed forest management plans for community forests attributed before June 2005 and signed contracts with the companies that meet the requirements, (iii) establishment o f financial management and control systems within the Ministry o f Finance and Economy, and (iv) implementation o f environmental plans and development o f adequate institutional capacity.

44. local development in Cameroon, and has been instrumental in helping the Government to develop and implement operations enabling communities to gain control over service delivery and resources allocation. Good progress has been made by the Bank in relation to achieving related CAS outcomes and ISN milestones.

With respect to local development, The Bank has strong multi-sectoral experience in

45. by extension services derive productivity benefits was incorporated within the National Agricultural Extension and Research Program Support Project, designed to improve agricultural productivity and incomes in Cameroon in a sustainable way. This was a follow-on intervention to the National Project for Agricultural Extension (PNVA) and was completed in June 2004. The project was judged to be satisfactory by IEG. Significant outcomes included improvements to the extension service exceeded targets, 879 farmers received training in seed multiplication, 1,277 subprojects were grant-funded, providing equipment and small-scale infrastructure to producer organizations (the target was 700 subproject grants), the project strengthened the formation o f producer groups and promoted community-led development planning and a pilot operation helped 70-1 00 villages to prepare community development plans. The results o f this pilot fed into preparation o f a broader community development program.

Bank support directed towards meeting the CAS outcome to ensure that farmers reached

46. outcomes and milestones through i t s Community Development Program, (Projet d’appui au Programme National de DCveloppement Participatif - PAPNDP). The f i rst phase o f the program was designed to assist the GOC to (i) establish a system for channeling funds to rural communities to finance prioritized collective infrastructures, (ii) strengthen the capacity o f communities to manage their own development and (iii) improve the legal and regulatory framework for decentralized rural development. The Bank’s sustainable Agro-pastoral and land management promotion project (GEF) was blended with the Community Development Program Support project in order to strengthen Government support and development effectiveness with increased donor participation. The project i s due to reach completion in 201 1. Significant progress has been made in relation to the CAS outcomes and ISN milestones, particularly in relation to the respective progress recorded in the I S N in November 2006 (pg 11). For example, targets have now been exceeded in terms o f numbers o f people with improved access to water sources and sanitation facilities. According to the last ISR, approximately 16 health care facilities had been constructed which resulted in an additional 58,000 people with access to improved health centers. This number i s likely to continue to increase by an additional 30,000 by late 2009. Finally, to date, approximately an additional 102,000 people have access to education. This number i s also likely to grow during the course o f the project. The Government i s currently in the process o f approving the second phase o f PNDP.

The Bank provided further support to achieving local community development related

47. Pipeline Project (PDPP), the need for capacity building was identified in several areas, including oil-revenue management in Chad, environmental monitoring in both countries, and

During preparation o f the Chad-Cameroon pipeline (the Petroleum Development and

73

petroleum sector development in Chad. Ultimately, an IDA-funded capacity building program included three operations. The Petroleum Environment Capacity Enhancement project (capece) was one o f these three operations and closed in November 2007. A separate IEG review was undertaken o f this project; overall bank performance i s rated moderately satisfactory but based on modest ratings for relevance, efficacy and efficiency, the overall outcome was rated unsatisfactory.

48. and the Avian and Human Influenza Facility Grant.

Activities not undertaken in this outcome cluster include the Rural Investment Climate,

49. (i) project design and to avoid the temptation o f incorporation too many interventions, (ii) capacity building operations can work in a complementary manner with investment projects and (iii) the provision o f grant-funding for productive equipment and infrastructure can fruitfully be combined with attempts to strengthen farmer organizations and boost incomes. In the case o f the Agricultural Extension and Research Program Support Project, the infrastructure helped to increase farmer solidarity while enabling them to increase farm output and revenues.

Lessons learnt in relation to the projects undertaken during the CAS/ISN period relate to

I. vi) Promoting Human Development

Table 6. ISN/CAS results matrix for Dromotine human develonment Higher-order PRSP goal PRSP outcomes targeted during ISN period

ISN Milestones

CAS Outcomes and Indicators

Build capacity and enhancing human resources Promotion o f basic education for all Improvement in the health o f the population, particularly among mothers and children Improvement in health care and implementation o f the national HIV/AIDS strategy Increase in proportion o f people with HIV eligible receiving antiviral treatment and using it continuously from 15 percent in September 2006 to 50 percent by June 2008 Integration o f Multisectoral HIV/AIDS Project 2 into emerging H IV /A IDS SWAP mechanism by June 2008 Elaboration and endorsement by main development partners o f health sector SWAP mechanism, an updated Health Sector Strategy, and an MDG-oriented results framework by June 2008 Reduction in repetition rate in primary education f rom 30 percent to 20 percent by June 2008 Targeted communities change risky behavior, availability o f mitigative responses to HIV/AIDS or access curative support for HIV/AIDs Indicators: 2000 communities achieve results outlined in action plans targeted toward their communities by December 3 1 , 2005 (behavior change, orphan care, curative etc) Antiretroviral (ARV) treatments are properly administered to 15.000 Cameroonians bv December 3 1.2005.

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ISN Activities: Financial Support

ISN Activities: Analytical and Advisory Support

V. Health Sector 50. generalized HIV/AIDS epidemic with a prevalence rate o f 5.5 percent. Most key indicators o f child health and nutrition within Cameroon have stagnated or worsened since 1990 with a few exceptions (e.g., immunizations). The 2001-2010 Health Sector Strategy served as the overarching framework in the sector. Since i t s launch in 2002, some important organizational and institutional improvements have been introduced but in spite o f these improvements, the sector faces important challenges. These include (i) excessive centralization o f the health care system, (ii) human resource issues, (iii) high costs which hinder access remains (iv) low amount o f public funding, (v) cumbersome and slow flow o f public funding, (vi) governance issues and (vii) fragmented and unreliable monitoring and evaluation systems. Drawing lessons from the mid-term review, the Ministry o f Health launched a participatory process to prepare an enhanced and revamped strategy.

5 1. meeting the respective outcomes and milestones. Bank efforts to support the fight against HIV/AIDs within the Multi-sectoral HIV/AIDS operation (MAPS I) were deemed to be highly unsatisfactory by IEG. As noted in the I S N (pg 11) the project team was able to launch a large number o f activities; examples included three campaigns to influence behavioral change, support to community action plans was provided in 6,000 communities, and the I S N milestone relating to the number o f HIV+pregnant women who received anti-retroviral drugs (ARVs) was exceeded (from 499 in 2002 to 4,780 in 2006). MAPS I also supported a pilot ARV program which expanded access. to AIDS treatment to vulnerable groups. In spite o f this progress, adequate monitoring and evaluation was a significant failing o f the project and made i t almost impossible to assess bank contributions. In addition, supervision o f the project became extremely difficult due to the large number o f activities and partners involved.

Cameroon performs poorly on health-related MDGs, and continues to experience a

Against this backdrop, l i t t le progress was made during the CAS/ISN period towards

0

0

0

0

0

0

Increase access indicator from 94% in 2003 to get to 100% in 2007 Increase in primary completion rate from 60% in 2003 to 70% in 2007 Decrease in student-teacher ratio from 56% in school year to 50% in 2007 Multi-sectoral HIV/AIDS project M A P (deferred) operation) Education development capacity-building project (ongoing) SWAP support to health sector (ongoing) Poverty and social impact analysis in health (dropped)

52. shift in Government commitment towards a more participatory process in the preparation, enhancement and update o f i t s strategy. It also focused on the attainment o f the MDGs. The Country team decided to drop the PRSC, defer MAPS I1 and to focus resources on the development o f a Sector-wide Approach (Swap) in collaboration with the Government and other major health sector partners. Designed to support the implementation o f the updated Health Sector Strategy, the project development objective was to increase utilization and improve the quality o f health services with a particular focus on child and maternal health and

The I S N health-related outcomes were revised significantly from the CAS to reflect the

75

communicable diseases. (The HIV/AIDS medical related interventions are increasingly going to be mainstreamed through the SWaP).

53. experienced in relation to slow response on the ground, disbursements, lack o f progress on implementation o f key reforms and lack o f progress on Monitoring and Evaluation. Nevertheless, with careful supervision as well as increased government commitment, performance i s s t i l l expected to improve over time. The.Bank’s recent co-financing o f the 2010 Demographic and Health Survey, which i s now underway, i s also expected to contribute towards stronger baseline data for the national program.

The project became effective in March 2009. To date, significant delays have been

VI. Education Sector 54. completion rate, The Bank’s Education Development capacity-building project, (Programme d’Appui au Systkme Educatif, PASE), initiated during the CAS period in 2005 was designed to support the respective Government objectives in i t s PRSP, and in particular to reinforce the capacity o f the various ministries with responsibility for education. The objective o f the proposed project was to increase the efficiency and equity o f primary and secondary education, with a focus on disadvantaged areas, and increase capacity for high quality training in targeted disciplines in higher education. These goals were reaffirmed during the I S N period with the objective to contribute towards the Government’s higher level goal to reduce repetition rates from 30 percent to 10 percent at the national level by 2015. With respect to the milestone and CAS outcome indicators, marginal improvement was registered in the reduction o f primary repetition rates from 25 percent in 2005 to 22 percent in 2007. Do we know rate for 2008? The primary completion rate exceeded targets and increased from 60 percent in 2003 to 82 percent in October 2007. The student teacher ratio fe l l from 56 percent to 52 percent in 2008.

Cameroon i s likely to be on track to meet the education MDG o f primary education

55. In spite o f the progress made, the Bank’s project was designed for implementation in a very weak overall environment, from which the World Bank and other major donors had been largely absent for many years due to governance concerns. A review o f the Education Development Capacity Building project, undertaken in May 2008 by QAG (QALP-l), rated the project as unsatisfactory. Implementation was adversely affected by weak management capacity, lack o f reliable statistical data, concerns about governance and corruption and a highly complex institutional environment. In addition, the review asserted that the development outcomes were unlikely to be met due to issues relating to poor design, without clear l i n k s between activities, indicators and objectives. On the basis o f the QALP results and the request from government, a restructuring effort has been initiated by the Bank to revise the DPO and the results framework and to reorganize existing and planned activities under four new components. Steps have also been undertaken to improve inter-ministerial coordination. The QAG now also notes evidence o f improved disbursement during 2009.

56. design may be appropriate in areas in which the Bank has been largely absent from substantive policy dialogue over time, and where there are many unknowns about opportunities to leverage change. If Government commitment to key reforms i s not clear from the beginning, an approach based upon technical assistance or building dialogue may be more appropriate. Lastly, in spite o f clear advantages related to implementing a broad sectoral approach, the Bank needs to be cognizant o f the risks associated with complex parallel structures.

Lessons learnt from the QALP review relate to project design; a more open-ended project

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V. J. IDA Lending

World Bank Group Performance - Portfolio Management

57. Portfolio composition. During the FY04-06 CAS implementation period, three o f the seven I D A operations planned were approved by the Board totaling US$63.2 million. They were the Community Development'Program Support Project (US$20 million); the Education Development Capacity-Building Project (US$18.2 million); and the Forest and Environment Sector Program (US$25 million) originally planned for FY04 but approved only in FY06. The Board also approved a regional operation (the West and Central Africa Air Transport Safety and Security Project that included US$14.5 million o f support to Cameroon, as well as two Global Environment Facility (GEF) operations complementing the Forestry and Environment operation (US$lO million) and Community Development Program (US$6 million). In addition, after Cameroon reached the HIPC Completion point, an IDA grant was committed to prepay IBRD debt outstanding at the completion point. (The Energy Sector Support Project (US$lO million) initially planned for FY05 slipped to FY08).

58. implementation period which reflected Cameroon's uneven performance during the CAS period. Operations approved in FY06 were delivered in the form o f grants due to delays in reaching the HIPC completion point as well as Cameroon's debt vulnerability. New IDA commitments during the CAS implementation period amounted to US$l 1 0 million which was lower than the US$125 million forecast in the CAS base-case scenario.

There was a slower than anticipated delivery o f new operations during the CAS

59. During the I S N period, a balance o f approximately US$ 220 million was made available for I D A operations. Additional resources o f US$50 million were also added to the IDA allocation as a result o f the HIPC and MDRI debt relief. Delivery o f new operations improved significantly; in five IDA lending operations and one supplemental credit were approved totaling US$240 million, and in line with the indicative financing envelope. These included the Urban and Water Development Support project (US$80 million), the Transparency & Accountability Capacity Development Project (US$15 million), the Energy Sector Development Project (US$65 million), and the Health Sector Support Swap Project (S$25 million). In addition, the Board approved the Environmental and Social capacity building for Energy project (US$20 million). Part o f this amount (US$35 million) related to a regional operation, the Regional Transport and Transit Facilitation Project (the remaining amount o f the project o f US$112 million was financed from the Regional Integration allocation). Both the Multi-Sector HIV/AIDS MAP11 and the regional CEMAC Regional Financial Institutions projects, initially planned for FY08 were deferred.

60. age for the 10 projects under implementation was 2.7 years. A total o f seven projects exited the portfolio during the CAS and ISN period (FY04-FY08); the average age for those seven closed projects was six years.

Portfolio Age. As o f December 2008, the portfolio age was somewhat young; the average

6 1. Portfolio Performance. The number o f projects under implementation grew during the CAS/ISN period from seven to 10 projects. During this time, the percent o f active projects at risk decreased substantially from 33.7 percent in 2004 to 5 percent in 2008 (in terms o f amounts). This represented a significant improvement over that o f previous years. On the other hand, disbursement ratios deteriorated during the period in question, from 29.7 percent in 2004

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to 1 1.9 percent in 2008 reflecting start up and implementation delays, as well as other issues including financial management and counterpart funding. In response, in addition to focus on supervision, the Bank has hired specialist consultants to assist to identify and overcome the root causes for disbursement delays as well as to strengthen Bank representation and expertise in the country office.

62. the CAS/ISN period (FY04-05) and again in the Quality assessment o f Lending Portfolio (QALP) in May 2008, namely the Education development capacity-building project. In the Quality-of-Entry review, the project received a moderately satisfactory rating. Strong aspects o f the project related to (i) the consistency o f project objectives with the respective CAS pillar, (ii) the very effective former policy dialogue and preparatory work undertaken with the Government, (iii) the clarity o f project components and sub-components, (iv) the economic and financial analyses and (v) the M&E framework. Areas for improvement identified in the report included (i) the behavioral l i n k s between planned interventions and outcome targets (ii) weak integration o f the higher education component with issues addressed at the primary and secondary level, (iii) the lack o f clarity regarding how the GDLN will advance the project’s Dos and (iv) further opportunities to improve social development impact could have been exploited. In the QALP review, with respect to the likelihood o f the project reaching its Development Objectives, the project received an unlikely. Issues noted relate to significant issues with implementation and delays with the PIU, as well as significant obstacles to coordination as a result o f the multiplicity o f ministries. At the same time, the panel noted evidence o f improved disbursement and the lag time seen in improvement o f certain indicators which reflected efforts to build capacity within the Ministries.

Design and Quality at Entry. One project was rated for Quality-at-Entry by QAG during

63. the CAS/ISN period in August 2004: the Cameroon Doula Infrastructure project was rated as moderately unsatisfactory overall. Main problems encountered related to procurement delays and lack o f road maintenance in the Doula municipality.

Quality of Supervision. One project was rated for Quality o f Supervision by QAG during

64. Closedprojects. With respect to projects that exited the portfolio, four out o f seven projects received satisfactory ratings across all o f the five performance categories in IEG reviews. This included the Transport Sector Privatization Project, the National Agricultural Extension and Research Program Support Project, the Cameroon SAC I11 as well as the Debt Relief Grant. In terms o f outcomes, two projects, namely the Cameroon Petroleum Environment Capacity Enhancement Project and the Public-Private partnership for growth Project were rated unsatisfactory and the Multi-sectoral HIV/AIDS project was rated highly unsatisfactory. Issues related to lack o f government commitment, borrower performance, fiduciary and safeguard related issues as well as poor project design, management, supervision and M&E.

K. IDA Non-lending 65. update the stock o f country knowledge covered by core diagnostics. During the CAS period, AAA efforts included sector work in the education, health, and urban sectors; a Development Policy Review; a Poverty Assessment; a Country Procurement Assessment Review; and a Public Expenditure Management and Financial Accountability Review. An Investment Climate Assessment and a Report on the Observance o f Standards and Codes (ROSC) for accounting and auditing was also completed. In addition to these activities, considerable support was

During the CAS/ISN implementation period, significant efforts were undertaken to

78

provided towards implementing EITI and Paris Declaration on aid effectiveness, as well as stepped-up support for managing the structural reform agenda under the HIPC process, including intensive analytical and advisory support on the energy sector.

66. Economic and Sector Work (ESW. QAG rated four o f the six assessed products including all o f the core diagnostic ESW tasks in i t s sample completed during the FY04-06 CAS implementation period as highly satisfactory or satisfactory, compared to the marginally unsatisfactory overall performance rating for FY02-05. The QAG assessment highlighted Bank inputs and processes, coherence and integration, and dissemination as areas need further improvement.

67. Technical Assistance and Policy Advice. AAA efforts during the I S N period were designed to reinforce the Bank’s financing program, with primary focus on areas o f pressing concern to the Government. Support included continuation o f the policy dialogue and technical assistance in key areas o f Bank Group engagement, outreach and dissemination o f key pieces o f analytical work completed in FY06, and analysis o f emerging issues, including the anticorruption agenda. The FY07-08 work program focused on sector dialogue and knowledge generation on governance including corruption (coordinated anticorruption support with other development partners, dissemination o f the Public Expenditure Management and Financial Accountability Review and EITI and private sector development (dissemination o f the Investment Climate Assessment and ROSC and support to the set up o f the national investment forum.

68. Financing Instruments. During the CASASN period, IDA funding continued to be predominantly in the form o f investment lending. In May 2006, the Government and i t s major health sector partners agreed to develop a Swap to support the design and implementation o f the updated health sector strategy.

VI. Aid Coordination/Donor harmonization 69. Partnerships. Cameroon i s one o f the least aid-dependent countries in Sub-Saharan Africa, with a small number o f development partners. The HIPC completion point marked a significant shift in the relationship between the Government and international development partners. The Bank has pursued i t s activities in close collaboration with partners, examples include efforts to support the Government’s leadership in implementing the Paris Declaration on aid effectiveness, including developing more effective coordination and dialogue mechanisms centered on the PRSP, and moving toward sector-wide approaches, for example, the Swap support to the health sector.

70. In 2009 the Bank received a rating o f 6.6, on a ten point scale, that the Bank has been working with other donor partners to foster the alignment and harmonization o f donor support with the requirements o f Cameroon’s national development strategy, and a 6.5 rating that the Bank has been adequately encouraging the Government to lead the coordination o f i t s donor partners. The Bank was also perceived to be fairly effective at promoting the inclusion o f others in the development o f strategies, including civil society, private sector, local communities and local project experts.

Client surveys were undertaken at the end o f the CAS period in FY05 as well as in FY09.

79

VII. Client Feedback Client surveys were undertaken at the end o f the CAS period in FY05 as well as in FY09. 71.

Lessons from the FY05 client survey, which captured the views o f stakeholders in Cameroon, recent analytical work, annual PRSP progress re orts and an independent assessment o f partnerships and aid relationships in Cameroon were incorporated within the I S N . 2 f

72. In FY09, a total o f 258 stakeholders participated in the country survey, drawn from different organizations and sectors. Employees o f ministries comprised the largest percentage o f respondents (23%), followed by the private sector (1 5%), media (1 l%), academics (lo%), NGOs (9%), Office o f the President (7%) and Local government (7%). A small number o f responses were received by Parliamentarians, faith-based groups, bilateral or multilateral agencies and other organizations. The majority o f respondents indicated that they came from Yaounde (67%). Nearly three-quarters o f all respondents indicated that they have been involved with or a close observer o f World Bank activities for more than three years.

73. the most important development priority for Cameroon; a total 52 percent o f respondents had either marked this as the f i rst or second most important priority. This amount had increased significantly from FY05 where respondents had rated improving government effectiveness and reducing corruption equally (32 percent o f respondents). Corruption was considered to be the second most important priority (28 percent o f respondents) followed by improving the investment/business climate (24 percent). Other respondents had rated improving basic infrastructure, increasing employment, achieving universal access to education and controlling the spread o f HIV/AIDs as the most important development priorities.

In term o f general issues facing Cameroon, improving governance was considered to be

74. With respect to areas which would contribute most to poverty reduction, 30 percent o f respondents indicated that improving governance and agriculture development would be most significant. Infrastructure development, reducing corruption and increasing employment were also seen as key to reducing poverty in the FY09 survey. These views varied considerably according to the different stakeholders; for example, respondents from the office o f the President indicated that infrastructure development would contribute most to poverty reduction, employees o f ministries felt that improving governance and increasing employment generating opportunities would be most significant and parliamentarians and respondents from the private sector indicated that agriculture development would have the most impact.

75. Across all respondents, the Bank’s overall effectiveness in Cameroon received a mean rating o f 5.2 on a 10 point scale, with 1 being very unfavorable and 10 being very favorable. This was a slight decline from the rating o f 5.6 in the client survey o f FY05. In terms o f i t s poverty mission, the Bank was perceived as somewhat effective at giving appropriate priority to poverty reduction in Cameroon - receiving a mean rating o f 3.2 across all respondents on a 5 point scale.

76. resources and policy and economic advice. The Bank’s knowledge and lending were also highly valued. There was strong agreement that the Bank aligned i t s programs and approaches with the

Respondents indicated that the Bank’s greatest values to Cameroon were i ts financial

2o Une Arrive‘e et un Nouveau De‘part : Partenariats au Cameroun aprks le Point achtvement PPTE, Overseas Development Institute, July 2006.

80

requirements o f Cameroon’s PRSP. More specifically, respondents in this year’s country survey gave significantly higher ratings for the Bank’s effectiveness at helping to improve the quality o f l i f e in urban areas and helping to strengthen the transport and power and energy sectors compared to respondents from the FY05 country survey. Respondents also saw the Bank as most effective at ensuring that attention i s paid to the environmental impact o f Bank programs and safeguarding against corruption in projects. Other areas o f effectiveness related to improving service delivery in the health and education sectors, helping to strengthen infrastructure development and ensuring that attention i s paid to gender disparities.

77. reduce the complexity o f obtaining Bank financing and improve the quality o f i ts experts as related to Cameroon’s specific challenges. Specific areas o f weakness related to the Bank imposing technocratic solutions without regard to political realities (44 percent o f respondents) and being too bureaucratic in i t s operational policies and procedures (41 percent o f respondents). Overall, suggested areas for improvement include:

With respect to improvements, 30 percent o f respondents indicated that the Bank should

- Accessibility - Improving how i t s operational policies and procedures are aligned with country demand - Helping government lead on donor coordination - Reducing complexity o f obtaining the World Bank financing - Balancing level o f relevant expertise as the country’s specific challenges

78. significant role in Cameroon’s development over the medium term. In addition, 62% o f al l respondents indicated that the Bank should be more involved in Cameroon’s development strategies.

Going forward, the survey indicated that the Bank i s expected to play a somewhat

VIII. Conclusions and Lessons 79. Against a backdrop from which the World Bank and other major donors have been largely absent for many years due to governance concerns, as well as a changing development context, during the CAS/ISN period, the Bank recorded strong performances in some outcome clusters and sectors and only modest progress in others.

80. Cameroon’s uneven performance during the CAS period resulted in a slower than anticipated delivery o f new operations, making outcomes difficult to achieve; new I D A commitments during the CAS implementation period were lower than CAS base-case scenario. During the I S N period, however, delivery o f new operations doubled (from US$1 10 million to US$240 million), and the number o f projects under implementation grew seven to 10 projects. During this time, the percent o f active projects at risk also decreased substantially from 33.7 percent in 2004 to 5 percent in 2008 (in terms o f amounts) which also represented a significant improvement over that o f previous years.

8 1. reflect changes in the external environment, for example, an additional outcome cluster was added to support the revision o f the PRSP. In addition, the reorganization o f existing CAS outcomes into six outcome clusters improved implementation as well as actions undertaken to

The CAS objectives in the I S N were changed somewhat at the end o f the CAS period to

81

strengthen the country office and monitoring o f the ISN. These actions included (i) the decentralization o f several international staff to the field (ii) strengthening o f support and expertise for forestry and environment and rural and agriculture development and an infrastructure specialist, (iii) the appointment o f a senior private sector expert to fully integrate World Bank Group activities in support o f the private sector (and iv) a decrease in the number o f single -standing missions, replaced by joint missions with other international partners.

82. development as well as in supporting forestry and environment sectors and strengthening rural and agricultural development. Respective IEG reviews o f ICRs confirm strong results and a strong likelihood o f meeting development goals. The Bank has been instrumental in helping the Government to develop and implement operations enabling communities to gain control over service delivery and resource allocation. With respect to outcomes and milestones relating to governance and the PRSP outcome cluster, the Bank has provided important contributions which have laid the groundwork for future impact. Examples include the Debt Relief Grant under the Enhanced HIPC initiative as well as the Development Policy Review and Poverty Assessment. Little progress was made in achieving the outcomes and milestones in private sector development and the health sector. In particular, Cameroon continues to make very slow progress with respect to i t s indicators relating to starting a new business.

83. As reflected in the deteriorating disbursement ratios, many o f the planned projects experienced start up and implementation effectiveness delays during the I S N period, suggesting that actual contributions are going to be fe l t mostly after the review period. Projects include the CEMAC Regional Institutions Support Project, the Energy Sector Development Project and the Urban and Water development project. In response, the Bank has hired specialist consultants to assist to identify and overcome the root causes for delays. Other projects such as the Education Development Capacity Building project was significantly restructured in response to feedback and learning QALP results.

During the ISN period, good progress was made in supporting infrastructure and urban

84.

0

0

0

0

Key lessons for the Bank Group include :

Simpler project design to ensure a fit with Government’s implementation capacity. In addition, more open-ended project designs may be appropriate in areas in which the Bank has been largely absent from substantive policy dialogue over time for example, the Education sector. Other IEG reviews have indicated the importance o f effective supervision and monitoring and evaluation systems with a recommendation to withdraw from certain projects if considerable opposition and delay are encountered. Bank teams should be attentive to the frequent disparity in commitment between the political and administrative levels. The provision o f grant funding for productive equipment and infrastructure can be fruitfully combined with attempts to strengthen farmer organizations and boost incomes, as demonstrated in the Agricultural Extension and Research Program Support Project. Overall the Bank continues to face considerable challenges in developing reliable data baselines for key performance indicators due to lack o f availability o f solid data. For example, key lessons learnt in relation to the M A P project (stemming from the IEG

82

review), included the importance o f an accurate assessment o f the baseline situation which i s critical to designing and evaluating an effective project.

Attachments: 1. Completion Report Analysis 2. Planned IDA Lending Program and Actual Deliveries 3 . Planned AAA Program and Actual Deliveries 4. Selected Indicators of IDA Portfolio Performance and Management 5. IDA Projects that Exited the Portfolio During FY04-07 6. ICIUIEG Ratings for IDA Projects that Exited the Portfolio During FY04-07

83

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APPENDIX I : FY04-06 Cameroon CAS AND FY07-08 I S N COMPLETION REPORT Attachment 1: Planned IDA Lending Program and Actual Deliveries

FY PROJECT AMOUNT STATUS

CAS period

Planned lendin$’ 2004 PNDP (Community Development) APL $20m

$15m PSFE Forestry & Environment DPL (SECAL)

2005 Energy sector Support project $10m Education Sector Reform Project $15m Pilot secondary Infrastructure Urban project (LIL) $5m

2006 PRSC (Health, Rural, PDS) $50m $10m $15m

Public sector reform project (TA) PSFE Forestry & Environment DPL (SECAL)

Additional lending 2006 Forest & Environment Sector Program

GEF Sustainable AgroPastor & Land Mgmt 3A-West & Central Afr. Air Transport Safety ( TAL) -

ISN Period

Planned lending” 2007 Urban and Water Development $50m

$35m

2008 Multi-Sectoral HIV/AID MAP11 Project , $35m Transparency & Accountability Cap. Devt $10m Energy Sector Development $50m Health Sector Supp. SWAP SIL $37m CEMAC Regional Financial Institutions $3m

3A-CEMAC Transport and Trade Facilitation

Additional lending 2008 Environmental and Social Cap for Energy S IL

AMOUNT

Closing 11/30/2009 $20m Slipped to FY06

Slipped to FY08 Ongoing $18.2m Dropped

Dropped Dropped Closing 12/3 112009 $25m

Closing 12/3 1/2009 $10m Ongoing $6m Closing 12/3 1/2009 $14.5m

Ongoing $80m Ongoing $147m

Deferred Ongoing $15m Ongoing $65m Ongoing $25m Deferred FY09

Ongoing $20m

Directly taken from the FY04-06 CAS under “Proposed World Bank Group program FY04-06” p.24 Directly taken from the FY07-08 1SN under “Proposed World Bank Group program in Cameroon for FY07-08”

21

22

p.27

93

APPENDIX 11: FY04-06 Cameroon CAS AND FY07-08 ISN COMPLETION REPORT Attachment 2: Planned AAA Program and Actual Deliveries

FY PROJECT

CAS period Planned AAA23 and Advisory work 2004 Development Policy Review (Growth and Poverty)

Urban sector review Economic monitoring (HIPC, PRSP, MDGs) Health sector reform note

2005 PEWIGR Economic monitoring (HIPC, PRSP, MDGs) Private Sector/ Investment climate assessment Gender assessment and strategy (IDF)

2006 Economic monitoring (HIPC, PRSP, MDGs) CPAR (Country Procurement Assessment Review) Poverty Assessment

Additional AAA and Advisory work

Integrated CFAA PEMFAR (CFAA, PER, CPAR) ROSC Accounting & Auditing

2006 CPAR fOllOW-Up

ISN Period Planned AAA and advisory w o k 4 2007-2008

Support to the revision and implementation of the PRSP Update o f Development Policy Review Gender Policy note Support for implementation o f EITI Support to public financial management reform Support to anti-corruption program Regional OHADA capacity-building project Follow-up to Investment climate assessment Insolvency ROSC (FSAP) Financial Sector Assessment Program Update CM Support to energy sector (MTEF) Multi-donor transport sector analytical work CM Agricultural Value Chain Competitiveness Study Forest Policy Reform Analysis Poverty and social impact analysis in health

Additional AAA and Advisory work Governance indicators AML/CFT (Anti-Money Laundering Combating Financing o f Terrorists)

STATUS

Delivered Delivered Ongoing Dropped

Dropped Ongoing Delivered Dropped

Ongoing Delivered in FY05 Delivered in FY05

Delivered Delivered Delivered Delivered

Delivered Delivered Dropped Delivered Dropped Delivered Dropped Dropped Delivered Delivered Delivered Dropped Delivered Delivered Dropped

Delivered Delivered

Directly taken from the FY04-06 CAS under “Proposed World Bank Group program FY04-06”, p.24 23

24 Directly taken from the FY07-08 ISN under “Proposed World Bank Group program in Cameroon for FY07-08” p.27

94

APPENDIX 111: FY04-06 Cameroon CAS AND FY07-08 ISN COMPLETION REPORT Attachment 3: Selected Indicators o f Bank Portfolio Performance and Managem

Fiscal year

PorifoIio Assessment

Number o f Projects under implementation

Average Implementation period (years)

Percent o f Problem Projects by number

Percent o f Problem Projects by Amount

Percent o f Projects at Risk by Amount

Disbursement Ratio (YO)

Porifolio Management

CPPR during the year (yesho)

Supervision Resources (total US$)

Average Supervision (US$/project)

2004

7

2.8

28.6

11.7

33.7

29.7

Yes

2005

7

3.1

28.6

40.4

40.4

20.4

Yes

2006

9

3.3

11.1

21.6

21.6

25.2

2007

8

4.2

12.5

6.9

6.9

24.2

Yes

nt 2008

10

2.7

10

5

5

11.9

Yes

95

APPENDIX IV: FY04-06 Cameroon CAS AND FY07-08 ISN COMPLETION REPORT Attachment 4: IDA Projects that Exited the Portfolio during FY04-08

Project ID

pooo393

po45348

PO54443

po73065

p100965

po48204

po65927

Ext Latest Latest Risk IP Flags

I D A Net Total Comm. Undis. 2: DO uss Bal Approval Date TY Pe

513011996 12/31/2003 IDA 60 7 0 S S 2 7 6 12 CM-Transport Sect Prjvatisation (FY96)

1011 511 998 6/30/2004 IDA 15 I 0 9 5 7 12 S S 3 CAM AG EXT &RES SUPPORT

Cameroon - SAC I11 612511998 3/25/2004 IDA I80 0 5 8 418 S S 2

111 21200 1 6/30/2007 IDA 50 1 4 6 5 18 MS MU 4

412712006 12130/2006 IDA 31 5 3 2 0 5 0 S S 1

6/6/2000 l1130/2007 IDA 5 8 0 9 7 5 23 MS MS 2

513012000 6/30/2008 IDA 20 9 5 6 8 1 42 MS MS 1

Date, Closing Agreement Project names

CM-Multi Sectoral HIVIAIDS SIL (FYOI)

CM-Debt Relief Grant DPL (FY06)

(Pipeline) CM-CAF'ECE Env Oil TA (FYOO)

CM-PubPriv Partnership & Growlh (FYOO)

,

96

APPENDIX V: FY04-06 Cameroon CAS AND FY07-08 ISN COMPLETION REPORT Attachment 5: I C W E G Ratings for IDA Projects that Exited the Portfolio during FY04-

08

Exit FY

2004

2007

2008

Outcome O/O Sustainability YO lnst Dev Impact O h Bank Borrower Project ID Project name Satisfactory Likely Substantial Performance Performance

ICR IEG ICR IEG ICR IEG ICR IEG ICR IEG I

S S 1 Likely I Likely Substantial Substantial S S Na S pooo393 1 CM-Transport Sector Privatisation (FY96)

po45348 2 CAM AGEXT&RES SUPPORT S S Likely Likely Substantial Substantial S S Na S

PO54443 3 Cameroon - SAC 111 S S 1 Likely Likely Substantial Substantial S S I Na S I

I I MU HU ~ Na Na Na Na MU U ~ MU U

Na Na Na S S S

po73065 4 CM-Multi Sectoral HIVlAlDS SIL (FYOI)

5 CM-Debt Relief Grant DPL I I

- __ ___ ____ __ - - . __ (FY06) P 100965

po48204 6 (Pipeline) CM-CAPECE Env MS Oil TA (FYOO)

po65927 7 CM-PubPrivate Partnership MU & Growth (FYOO)

U 1; Na Na MS MS MU

U ~ Na Na N a - U - ; HU ~- U bl I - 4

97

MAP SECTION

1963 Level1973 Level

2001 Level

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MMttss MMbbaanngg.. MM

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MMttss ..

N O R D -N O R D -O U E S TO U E S T

S U D -S U D -O U E S TO U E S T

O U E S TO U E S T

L I T T O R A LL I T T O R A L

C E N T R EC E N T R E

S U DS U D

E S TE S T

A D A M A O U AA D A M A O U A

N O R DN O R D

E X T R E M EE X T R E M E

N O R DN O R D

EchambotEchambot

MouloundouMouloundou

Abong MbangAbong Mbang

LokomoLokomo

YolaYola

BatouriBatouriYYabassiabassi

LimbeLimbe AkonolingaAkonolinga

FotokolFotokol

MaltamMaltam

MoraMora

YagouaYagoua

KaéléKaélé

FiguilFiguil

MbéMbé

BanyoBanyo

NgaiNgai

TourouaTouroua

TibatiTibati

Garoua BoulaiGaroua Boulai

NgaoundalNgaoundal

BélaboBélabo

NangaNangaEbokoEboko

SangbéSangbéBankimBankimKumboKumbo

WumWum

BafangBafang

NkongsambaNkongsamba

TikoTiko

EdeaEdea

EsékaEséka

SangmélimaSangmélima

AmbamAmbam

MbalmayoMbalmayo

KribiKribi

DschangDschang

KumbaKumba

MamfeMamfeFoumbanFoumban

YokoYoko

NtuiNtuiBueaBueaDoualaDouala

EbolowaEbolowa

BertouaBertoua

BafoussamBafoussam

BamendaBamenda

NgaoundéréNgaoundéré

GarouaGaroua

MarouaMaroua

YAOUNDÉYAOUNDÉ

N O R D -O U E S T

S U D -O U E S T

O U E S T

L I T T O R A L

C E N T R E

S U D

E S T

A D A M A O U A

N O R D

E X T R E M E

N O R D

Echambot

Mouloundou

Abong Mbang

Lokomo

Yola

BatouriYabassi

Limbe Akonolinga

Fotokol

Maltam

Mora

Yagoua

Kaélé

Figuil

Mbé

Banyo

Ngai

Touroua

Tibati

Garoua Boulai

Ngaoundal

Bélabo

NangaEboko

SangbéBankimKumbo

Wum

Bafang

Nkongsamba

Tiko

Edea

Eséka

Sangmélima

Ambam

Mbalmayo

Kribi

Dschang

Kumba

MamfeFoumban

Yoko

NtuiBueaDouala

Ebolowa

Bertoua

Bafoussam

Bamenda

Ngaoundéré

Garoua

Maroua

YAOUNDÉ

N I G E R I A

CHAD

CENTRAL AFRICANREPUBLIC

CONGOGABONEQUATORIALGUINEA

EQUATORIALGUINEA

Bénoué

Vina

Djérem

Kade

i

Boumba

Dja Kom

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Mbam

Mbu

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Lom

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ou

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LakeChad

To Maiduguri

To Maiduguri

To Massaguet

To Mandélia

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To KimTo

PalaTo Leré

To Bouar

To Oyem

To Ikom

Adamaoua

Mts

.

Mts Mbang. M

andara

Mts.

Mt. Cameroon(4,095 m)

10º E 12º E 14º E 16º E

12º E 14º E 16º E

2º N

4º N

6º N

8º N

10º N

2º N

4º N

6º N

8º N

10º N

12º N

CAMEROON

0 40 80 120

0 40 80 120 Miles

160 Kilometers

IBRD 33382

SEPTEMBER 2004

CAMEROONSELECTED CITIES AND TOWNS

PROVINCE CAPITALS

NATIONAL CAPITAL

RIVERS

MAIN ROADS

RAILROADS

PROVINCE BOUNDARIES

INTERNATIONAL BOUNDARIES

This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of The World Bank Group, any judgment on the legal status of any territory, o r any endo r s emen t o r a c c e p t a n c e o f s u c h boundaries.