Document of The World Bank FOR OFFICIAL USE ONLY Report No: T7724-CM REPUBLIC OF CAMEROON TECHNICAL ANNEX ON A PROPOSED CREDIT OF SDR 6.4 MILLION (US$9.9 MILLION EQUIVALENT) TO THE REPUBLIC OF CAMEROON AS PART OF THE SDR 17 MILLION (US$26.2 MILLION EQUIVALENT) FOR THE COMMUNICATIONS INFRASTRUCTURE AND TECHNOLOGY APL PROJECT (APL1A) IN SUPPORT OF THE FIRST PART OF THE FIRST PHASE OF THE CENTRAL AFRICAN BACKBONE PROGRAM August 19, 2009 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS Exchange Rate Effective: June 30, 2009 Currency Unit = SDR $ 1. 5522 = SDR 1 CFAF 464.46 = $ 1 FISCAL YEAR January 1 ­ December 31 ABBREVIATIONS AND ACRONYMS $ United States dollar, all dollars are US dollars unless otherwise indicated AfDB African Development Bank ANTIC Agence Nationale des Technologies de l'Information et de la Communication APL Adaptable Program Loan APL1A Communications Infrastructure and Technology APL Project which is the First Part of the First Phase of CAB Program APL1B Second Part of the First Phase of CAB Program ART Agence de Régulation des Télécommunications AU African Union CAB Central African Backbone CAB APL1 First Phase of CAB Program. CAB APL1 is composed of APL1A and APL1B CAMPOST Cameroon Postal Services CAMTEL Cameroon Telecommunications CAR Central African republic CAS Country Assistance Strategy CDMA Code Division Multiple Access CEMAC Communauté Economique et Monétaire des Etats de l'Afrique Centrale CENADI Centre National de Développement de l'informatique CFAA Country Financial Accountability Assessment CITCM Communications Infrastructure and Technology APL Project - Cameroon Credit CPIPP Country Procurement Issues Paper DFID UK Department for International Development ECCAS Economic Community of Central African States EDGE Enhanced Data Rates for GSM Evolution EMP Environmental Management Plan FOR OFFICIAL USE ONLY ESMF Environmental and Social Management Framework FBS Fixed Budget Selection FMU Financial Management Unit GDP Gross Domestic Product GIS Geographic Information Systems GSM Global System for Mobile Communication or 2G ICB International Competitive Bidding ICT Information and Communication Technology IDA International Development Association IFC International Finance Corporation IFR Interim Financial Report ISP Internet Service Provider ISR Implementation Status Report ITU International Telecommunication Union IXP Internet Exchange Point Kbts Kilobits per second Mbts Megabits per second MINCOM Ministry of Communications MINEPAT Ministry of Economy, Programming and Regional Development MINPOSTEL Ministry of Post and Telecommunications MMDS Multichannel Multipoint Distribution System M&E Monitoring and Evaluation NICI National Information and Communications Infrastructure PIM Project Implementation Manual PPIAF Public-Private Infrastrucure Advisory Facility PPF Project Preparation Facility PPP Public Private Partnership PRSP Poverty Reduction Strategy Paper RAP Resettlement Action Plan RCIP Regional Communications Infrastructure Program RPF Resettlement Policy Framework TA Technical Assistance UNCTAD United Nations Conference on Trade and Development WBG World Bank Group WiMAX Worldwide Interoperability for Microwave Access Vice President: Obiageli Katryn Ezekwesili Acting Regional Integration Director: Richard Scobey Sector Director: Mohsen Khalil Country Director: Mary Barton Dock Sector Manager: Philippe Dongier Task Team Leader for CITCM : Yann Burtin Co-Task Team Leader for CITCM: Jérôme Bezzina This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not be otherwise disclosed without World Bank authorization. AFRICA Central African Backbone Program Communications and Infrastructure Technology APL Project (APL1A) Cameroon Credit (CITCM) CONTENTS Page A STRATEGIC CONTEXT AND RATIONALE ..................................................... 1 1. Country and Sector Issues .................................................................................. 1 2. Rationale for Bank involvement......................................................................... 7 3. Higher level objectives to which the project contributes ................................... 8 B PROJECT DESCRIPTION ..................................................................................... 8 1. Lending instrument............................................................................................. 8 2. Project development objective and key indicators ............................................. 9 3. Project components .......................................................................................... 10 4. Lessons learned and reflected in the project design ......................................... 12 5. Alternatives considered and reasons for rejection ............................................ 13 C IMPLEMENTATION ............................................................................................ 13 1. Institutional and implementation arrangements ............................................... 13 2. Monitoring and evaluation of outcomes/results ............................................... 14 3. Sustainability .................................................................................................... 16 4. Critical risks and possible controversial aspects .............................................. 16 5. Credit conditions and covenants....................................................................... 20 D APPRAISAL SUMMARY ..................................................................................... 20 1. Economic and financial analysis ...................................................................... 20 2. Technical .......................................................................................................... 21 3. Fiduciary ........................................................................................................... 21 4. Safeguards policies ........................................................................................... 23 5. Policy Exceptions and Readiness ..................................................................... 24 Annex 1: Major Related Projects Financed by the Bank and/or Other Agencies ... 25 Annex 2: Results Framework and Monitoring ........................................................... 26 i Annex 3: Detailed Project Description......................................................................... 30 Annex 4: Project Costs .................................................................................................. 33 Annex 5: Implementation Arrangements .................................................................... 34 Annex 6: Financial Management and Disbursement Arrangements ........................ 37 Annex 7: Procurement Arrangements ......................................................................... 46 Annex 8: Economic and Financial Analysis ................................................................ 55 Annex 9: Statement of Loans and Credits for Cameroon .......................................... 58 Annex 10: Country at a Glance .................................................................................... 60 ii AFRICA CENTRAL AFRICAN BACKBONE PROGRAM COMMUNICATIONS INFRASTRUCTURE AND TECHNOLOGY APL PROJECT (APL1A) CAMEROON CREDIT (CITCM) A STRATEGIC CONTEXT AND RATIONALE 1. Country and Sector Issues 1. Cameroon is the biggest country in the Communauté Economique et Monétaire des Etats de l'Afrique Centrale (CEMAC), which includes Chad, Central African Republic (CAR), Gabon, Equatorial Guinea and the Republic of Congo. The country remains the powerhouse of the CEMAC by virtue of its geographical size; and economic, political and military. Though Cameroon exports oil, its economic mainstay is agriculture. Agriculture accounted for 44.3 percent of GDP, as opposed to 39.8 percent for services, and 15.9 percent for industry (2007). The country has a very young population with 64.8 percent (2004) under the age of 25; an adult literacy rate of 76 percent and youth literacy rate of 94 percent (2006). Over half (53.4 percent) the population lives in urban areas. For a decade Cameroon has embarked on key reforms which include the enactment of the Investment Code in the early 1990s to promote export business (among other things). There is also the General Tax Code (Code Général des Impôts) including Manual of Tax Procedures which has streamlined, simplified, and rendered more transparent the activities of the General Directorate of Taxation. The Guichet Unique project was implemented in 2002 to centralize and simplify the payment of all dues during import/export operations. In October 2005, Cameroon was granted a three-year Poverty Reduction and Growth Facility (PRGF) arrangement by the IMF worth XAF14.7 billion ($27.3 million). In its first review of the facility (April 2006), the IMF commended Cameroon for its strong fiscal performance and structural reforms. In 2006, under the program, inflation was at 2.4 percent while GDP grew by around 4.1 percent, and a further favorable PRGF review was given in December of that year. GDP dipped in 2007 to 3.5 percent, but in January 2008 the governor of the Bank of Central African States (BEAC) claimed that the figure could reach 5.8 percent in 2008 if budgetary resources--freed by debt relief--were well-managed. Inflation was controlled in 2007, averaging less than 2 percent, but in April 2008 the rate rose to more than 3 percent as the effects of rising fuel prices filtered throughout the economy. 2. Telecom and ICT Snapshot. In Cameroon, out of a total population of 18 million in December 2007, the number of main fixed-lines in operation was 188,691, and mobile subscriptions was 4.5 million, representing a fixed teledensity1 of 1.02 and a mobile teledensity2 of 24.45. The number of broadband subscribers and the international 1 Number of fixed telephone lines per 100 inhabitants. 2 Number of mobile subscriptions per 100 inhabitants. -1- bandwidth were respectively estimated to 8,000 and 130 to 150 Mbps in the same period. In Cameroon, the cost of monthly Internet broadband connection (CAMTEL) for a 256Kbps bandwidth was $165. The eGovernment Readiness for Cameroon was 0.2734 in 2008 as compared to a level of 0.25 in 2005, and to be benchmarked to an average Central Africa eGovernment Readiness of 0.2530 (average eGovernment Readiness for the World: 0.4514). 3. The telecom and ICT sector detailed structure. Cameroon's fixed telecommunications market is dominated by the state-owned carrier, CAMTEL, which has failed to upgrade the country's fixed infrastructure. The Government of Cameroon has twice failed to privatize CAMTEL. Near-term opportunities will emerge from the government's minimum investment plan in CAMTEL and the introduction of fixed wireless services to speed up fixed telephony adoption (CAMTEL has launched a Code Division Multiple Access ­ CDMA - offering in Cameroon's major cities). In the mobile segment, two giants compete: MTN Cameroon and Orange Cameroon. As in most African countries, Cameroon's mobile market has been booming since competition was introduced, while the fixed-line sector has been stagnant. Although mobile networks cover at least 85 percent (2007) of the country's population, the SCAN-ICT project (2006) showed that only 30.2 percent of households had a mobile phone. The reduction of call rates and adoption of universal access policy would, therefore, be the key drivers for growth in the mobile sector. Convergence between fixed and mobile, voice and data services is now set to change the market dramatically: the fixed-line incumbent, CAMTEL, is reentering the mobile sector through fixed wireless services, while the existing mobile operators are establishing themselves as leading Internet Service Provider (ISPs) by introducing mobile data services and acquiring existing ISPs--both have launched WiMAX networks through subsidiaries. The existing ISPs are combining forces by merging and preparing to offer VoIP services through newly established wireless broadband networks. Moreover, growth in the Internet industry is still very slow and highly constrained and it remains a service for use by industry, government, and a few private citizens. This can be attributed to several factors including the following: (a) the high cost of international bandwidth, especially of the SAT3/WASC/SAFE system (SAT3), and (b) the lack of an Internet exchange point (IXP) to reduce the cost of bandwidth for local Internet traffic. Cameroon's international traffic is handled by satellite earth stations in Zamengoé, and in Douala by all three main operators, and the SAT-3 submarine fiber-optic cable that links ten (10) African countries with Europe and Asia. Alternatively, CAMTEL can route international traffic through the SAT2, SEA- ME-WE-3, and FLAG submarine cables. It exists a terrestrial fiber-optic international infrastructure along the Chad-Cameroon oil pipeline that could provide an alternative infrastructure. 4. Competition. Despite CAMTEL exclusivity over long-distance, telecommunications operators have received a dispensation that enable them to establish long-distance transmission networks and therefore a national backbone. CAMTEL is the main provider of most international Internet bandwidth. CAMTEL also competes with the private sector to provide Internet services. Cameroon's market has become increasingly competitive, notably in the mobile and VAS segments. To date, MTN and Orange share the mobile space and act, therefore, as a duopoly and as a consequence, the Cameroonian mobile market is characterized by high per-minute prices and a lower user -2- mobile teledensity than its GDP per capita would suggest, reaching only 25 at year-end 2007. 5. Policy and regulation overview. The legislation governing the telecommunications industry (as of July 14, 1998) also established the Agence de Régulation des Télécommunications (ART). The ART monitors licenses obligations and rights and, regulates telecom services. The ART continuously needs to strengthen its human resources capacity. Since early 2008, ART has pressured mobile operators to lower prices with threats to impose a price-cap regulation. The role and capabilities of the regulator would need to be strengthened with the evolution of the market liberalization. Following the adoption of the CEMAC Directives on Electronic Communications Services in line with good international practices and consistent with Central African Backbone (CAB) design, the Government of Cameroon is currently using the Project Preparation Facility (PPF) to finance the harmonization and adaptation of sector legal and regulatory framework. 6. High cost structure is resulting in less trade. The isolation and high cost structure of Cameroon have held back the availability of affordable telecommunications infrastructure. Without access to low price and high quality telecommunications services, it is very costly for Cameroonians to trade with each other, and with the rest of the world (limiting opportunities to create jobs, and expand production of goods and services). 7. Lack of competition is negatively affecting the sector. Cameroon has implemented reforms to reduce the cost of access through policy/regulatory reform and market liberalization in various ICT subsectors. However, in some instances, limited competition has allowed telecommunications operators to use their dominant position to keep prices artificially high for various ICT services such as international bandwidth, mobile (duopoly), and Internet access. 8. The absence of 21st century backbone infrastructure3 at the national level is an additional key constraint. Most telecommunication operators do not have broadband terrestrial networks and rely on expensive and poor quality satellite connectivity or microwave backbones (with the exception of CAMTEL) to link cities at the national level. Some projects have been proposed in the past, but none have materialized due to a combination of factors, including inadequate legal and regulatory framework (CAMTEL's monopoly of long-distance infrastructure) and investment climates, and the complexity of a multi-country investment project and related concerns about financial sustainability. Recently, existing operators (fixed and mobile) and public authorities began to explore new business models that could foster the deployment of such infrastructure at the national level. The new infrastructure could be developed through a Public Private Partnership (PPP) under principles of competitive level pricing and Open Access4. Such backbone would connect the capital and secondary cities (contributing to reduce the urban-rural divide) to neighboring countries but also provide redundancy routes (network securization). Operators and service providers could then 3 For the purposes of this project, backbone infrastructure refers to a collection of high-capacity fiber-optic or point-to-point wireless (e.g. microwave) links both within countries and between countries. 4 Open Access is broadly defined as an equal opportunity for operators and service providers to have unfettered access to specific infrastructure or services under similar terms and conditions. -3- provide affordable and better quality ICT and eGovernment services to citizens. Effective cross-border links and supporting regulatory frameworks are therefore critical for Cameroon, and the region as a whole. 9. Without cross-border initiatives and regional coordination, Cameroon may not be in a position to solely achieve low-cost broadband access and low-cost regional connectivity. A prefeasibility study was conducted by a specialized international firm in Cameroon, CAR and Chad that evidences the economies of scale and cost efficiencies of a truly regional and fully integrated end-to-end backbone infrastructure. The study demonstrates the financial and technical feasibility of the CAB Program and recommends the implementation of CAB APL1 involving Cameroon, CAR, and Chad. The study forms the basis for the design and framework for the CAB Program intervention. The CAB network, as designed, is a regional telecommunications network made up of suitable on-ward terrestrial fiber connections to submarine fiber-optical cable systems linking several Central African countries and providing the region with a digital broadband access to the global fiber network. In addition to the build-out of approximately 2,200 km of new fiber-optic infrastructure, the planned broadband backbone would leverage the 1,000 km existing fiber-optic infrastructure laid along the oil pipeline between Kribi (Cameroon) and Doba (Chad). The study developed nine scenarios, the traffic demand and flows for the targeted countries and has set key principles (the CAB network is to be a shared infrastructure promoting an Open Access regime and owned and operated according to PPP principles). 10. In May 2007, based on the findings of the study, the heads of state of CEMAC adopted a Declaration calling for the establishment of the CAB under Open Access and PPP principles, and asked for donor intervention. In line with the Regional Integration Assistance Strategy (RIAS) and national CAS/ PRSP, the World Bank and the African Development Bank (AfDB) provided technical assistance (TA) to CEMAC and Central African countries to conduct preparatory studies. Regional and national technical committees were set-up since 2007. In parallel, the World Bank participated (as an observer) to the elaboration of the 2008 CEMAC Directives on Electronic Communications Services in line with sector good practices and the CAB Program as designed. 11. A new operating model consisting of a new regional network and national telecom operators will become fully integrated, thus driving prices lower. The CAB structure as designed and supported by the proposed World Bank Program calls for the establishment of a new regional telecom operator and national operators. These operators would be in charge of reselling international, regional and national capacity to existing national operators and service providers at discounted rates, compared to current pricing in the targeted countries. As such, the CAB network will increase competition for the provision of international and national capacity (new alternative infrastructure, fiber-optic backbone, competing with satellite and microwave connectivity). It is important to note that CAB legal structure needs to be finalized and approved by the three countries. 12. Key principles (promoting Open Access regimes, developing wholesale markets and promoting PPPs) have been defined in the study and have to be endorsed by all -4- participating countries in order to be eligible for World Bank financing. To keep some flexibility, the detailed arrangements (in terms of ownership and management) will be defined at the country-level, taking into account the difference of all eligible countries in terms of sector structure, level of development and access, and the operational and financial situation of the respective State Owned Enterprise (SOE). 13. The backbone network that will be installed at the country-level will use a hybrid competitive and cooperative approach. This reflects the need to differentiate the role of the government and the operators and to build strong partnerships with the private sector to develop telecommunications infrastructure. 14. The government's role is to focus on providing the right incentives for infrastructure and services to reach areas unattractive to the private sector (on a purely commercial basis), as well as in cases where large initial sunk investments are required. Government participation through the financing of segments of the CAB backbone will be used to buy-down the cost of capital; therefore the prices that could be charged to consumers to recover the investment (regulatory mechanisms will be set-up to ensure that lower costs are passed to the consumer). Additional government support may take the form of government participation in the new legal entity created for the build-out of the backbone networks (such as through contribution of existing assets), guarantees, subordinated debt, ensuring rights-of-way, and/or commitment to purchase certain capacity on the network for a given time period. 15. Role of the private sector. The private sector will participate in financing, and will install, maintain and operate the CAB network. The capital and financing structure will be a blend of public and private sector. The inclusion of the private sector and profit sharing can bring several benefits including: (i) access to private finance; (ii) reduced operational risk for public sector; (iii) faster delivery of capital projects; (iv) project management skills; and (v) entrepreneurship and innovation. The PPP structure will share the risks and rewards between the government and the private companies. CAB PPP Structure and financing 16. The CEMAC ­ in coordination with the Governments of Cameroon, CAR and Chad, the World Bank Group, the AfDB, and the International Telecommunication Union (ITU) ­ has launched the recruitment of the investment bank and legal adviser (transaction advisers) to finalize the structure and mobilize the private funding. 17. The design and ownership structure of the PPP will (i) maximize the use of private financing (or minimize the use of public financing); (ii) ensure feasibility and attractiveness of the transaction; (iii) secure Open Access to regional connectivity infrastructure; and (iv) ensure competitive, reasonable tariff of international, regional and national capacity. 18. New legal entities will be formed for the purposes of owning and operating the CAB networks. This will take the form of a consortium including the private operators, private financers', incumbent operators and/ or governments. The private sector will -5- install and maintain the CAB networks. A contract will be set between the private sector and the existing public telecommunications operators on the management of the national backbones (the new structure could also be leveraged to manage these networks). Final ownership distribution will be based on the amount of private financing mobilized and final contributions made by the Governments. 19. The IFC is playing a role as part of the World Bank Group's support to the CEMAC and to Governments as they finalize an optimal structure for the public-private partnership that ensures the feasibility and attractiveness of the transaction. If needed IFC may also assist in mobilizing funding or assist investors5. 20. Financing CAB Program (APL1). The first phase of the CAB program proposed for IDA financing will cover Cameroon, Central African Republic and Chad. The first Phase of CAB Program6 comprising APL1A and APL1B will be structured as a vertical APL. APL1A will cover the technical assistance to strengthen the enabling environment and prepare the PPP structure for the establishment of the CAB Network. APL1B will focus on financing the connectivity infrastructure of the CAB Network. To establish the CAB infrastructure in Cameroon, CAR and Chad (that will utilize the existing 1,000 km fiber-optic backbone laid next to the oil Chad-Cameroon oil pipeline), approximately $40 million will be contributed from the first phase of the CAB program (technical assistance will be provided through APL1A and connectivity infrastructure will be partly financed by APL1B). 21. In addition, the AfDB will provide parallel financing to establish complementary backbone infrastructure in CAB APL 1 countries. However, the cost and design of this additional infrastructure is not included in the CAB APL1. As structured, the World Bank CAB Program and CAB APL1 will not be affected if the AfDB financing does not materialize. 22. Private sector interest. An additional $27.8 million is estimated to be needed to establish the CAB network for CAB APL1 countries. It will be mobilized from the private sector (private equity, off-take agreements and commercial debt). The structure as recommended has been presented to all public and private operators in CAB APL 1 countries (but also in other eligible countries). Despite the economic and financial crisis, all operators have confirmed their strong interest in the venture since CAB will lower significantly their operating cost and provide new opportunities for additional network coverage. Several operators have announced that they will explore the opportunity to contribute financially, and some international commercial banks have also expressed an interest. 5 In consultation with the Conflict of Interest Office, the WBG has disclosed the potential risk of perception conflict of interest to the Governments highlighting the expected benefits from the institution to intervene as a Group. 6 The first Phase, CAB APL1, includes two parts: APL 1A and APL1B. See Para 30 for more explanation of the structure. -6- 2. Rationale for Bank involvement 23. Strong government commitment to the ICT sector. The government is strongly committed to the use of ICT. Cameroon has adopted a national ICT Strategy in 2005, in consultation with various stakeholders in the sector, including government ministries, international organizations (UNDP, ITU and the World Bank), and public and private companies. Since then the National ICT Development Policy and Strategy Document has been updated by the Ministry of Posts and Telecommunication (MINPOSTEL) and the Agence Nationale des Technologies de l'Information et de la Communication (ANTIC). In 2007, the heads of state of the CEMAC have adopted a Declaration to implement this program as a key tool for regional integration and growth. Significant technical and financial resources have been mobilized by the countries and the CEMAC Commission to accelerate the implementation of the CAB Program. 24. The proposed operation is consistent with the PSRP, particularly within the framework of the Africa Action Plan. The PSRP highlights the role of key infrastructure (such as roads and telecom backbones) and the need for policy harmonization in the sector. The project is consistent with the strategic pillar of the PSRP. The telecom sector has been identified as a source of growth and will diversify the national economy. The Bank's Africa Region Development Strategy (discussed at the Board in July 2003), identified advances in ICT as one of the three emerging positive trends in the 21st century for Africa, offering "enormous opportunities to leapfrog stages of development". The CITCM also fits within the Bank's comprehensive Africa Action Plan developed in 2005, which further articulates goals and objectives covering several important development areas including: (i) building national development strategies and measuring results; (ii) building capable states and improving governance; (iii) supporting drivers of growth; and (iv) strengthening and implementing partnerships at the country level. The CITCMwill facilitate cross-border communications traffic and will promote trade, stimulate cross-border movement of factors of production, and promote regional integration. 25. The World Bank Group is well placed to contribute within the frame of a multiple development partners' effort. The WBG has been involved in the CAB program since 2005. The May 2007 Declaration of the CEMAC heads of state called for, explicitly, for World Bank Group financial support for the implementation of the CAB program. The overall program has been formulated with other key stakeholders and DFIs (the AfDB joined the initiative in 2007 and is providing parallel financing for the CAB Program; The African Union (AU) is also playing an important role in facilitating inter- governmental cooperation and policy harmonization, in conjunction with the CEMAC). 26. The CITCMfits well with WBG's Regional Integration Assistance Strategy for Africa (RIAS), particularly within the framework of the Africa Action Plan. The Bank's RIAS discussed at the Board in April 2004, identified advances in ICT as one of the three emerging positive trends in the twenty-first century for Africa, and highlight its role for the regional connectivity objective. The CITCM and APL1A will strengthen and implement partnerships at the regional level (including regulatory harmonization) and will support for both Economic Community of Central African States (ECCAS) and CEMAC objective of creating a unified economic space in Central Africa. -7- 3. Higher level objectives to which the project contributes 27. The development objective will be the engine of shared growth achieved by: (i) accelerating the physical roll-out of backbone infrastructure (investment intervention based on PPPs to leverage private sector investment in infrastructure); and (ii) removing monopoly regimes through policy and regulatory support to ensure that once in place, the infrastructure is accessible to all operators on open, transparent and non-discriminatory terms. 28. The project will help reduce the cost of doing business in Cameroon. In the 2009 Doing Business report which presents quantitative indicators on business regulations and the protection of property rights compared across economies, Cameroon was ranked 164 out of 181 countries (the country was ranked 158 in 2008), while Equatorial Guinea 167, Republic of Congo 178, and Gabon 151. 29. The project will contribute to the government's ability to implement eGovernment. Cameroon eGovernment readiness ranking in 2008 was 0.2734 in 2008 ranking the country 149 out of 182 countries. It is interesting that the country had a positive showing in the 2008 survey mainly due to an improved situation in its infrastructure index (improved personal computers penetration and mobile density). A better communications infrastructure, capable of delivering advanced ICT services throughout the country would reduce the cost of doing business and significantly contribute to efficiency in public sector service delivery. B PROJECT DESCRIPTION 1. Lending instrument 30. Lending instrument. The lending instrument is a Regional IDA horizontal and vertical Adaptable Program Loan (APL). The Communications Infrastructure and Technology APL Project (APL1A) - Cameroon Credit (CITCM) is the first part of the first phase of the CAB Program. The APL instrument is well-suited to take into consideration the length of time it takes to achieve the overall objective of establishing a regional network for Central Africa. An APL is also flexible enough to accommodate the different level of readiness of the participating countries (horizontal APL) and to phase Technical assistance if needed prior to the mobilization of the required financing for the infrastructure (vertical APL). 31. Breakdown of Regional and National IDA allocations. Since this is Project included in a regional Program, supplementary regional IDA funding can be used to leverage country allocations for up to two-thirds of the full proposed IDA amount of the project, with country allocations covering one-third of the project cost attributable to each individual country involved (taking into account that the National IDA allocation cannot exceed 20 percent of the FY National Allocation). In the case of the "eGovernment and ICT Flagship" component, given that the impact of eGovernment activities is more national in nature than regional, the activities related to this component will be funded -8- from the country individual IDA allocations. The table below provides a summary of the regional/national IDA breakdown for CITCM and estimated breakdown for the Cameroon activities to be supported under APL1B. Regional National $million IDA Pilot IDA Total APL1A-Cameroon portion 5.80 4.10 9.90 APL1B-Cameroon portion 8.30 4.10 12.40 2. Project development objective and key indicators 32. Project Development Objective (PDO). The core PDO is to contribute to increase geographical reach and usage of regional broadband network services and reduce their prices. 33. Key monitoring and evaluation indicators are summarized in the Table 1. However since the first Phase of CAB includes two parts: APL1A (including CITCM) and APL1B, the only outcome indicator retained for CITCM is related to the volume of national traffic. Others outcome indicators for Cameroon related to APL 1B are provided on a indicative basis. Table 1 Monitoring and Evaluation framework Project Development Objective Outcome Indicators At closing of project Contribute to increase geographical Volume of international traffic reach and usage of regional [APL1B] : broadband network services and International Communications reduce their prices (Internet, Telecoms, and Data) 80 bandwidth per person Volume of national traffic using proxies [CITCM]: Internet user per 100 inhabitants 4.5 Total teledensity (active fixed and 70 mobile subscribers per 100 habitants) Average price of international communications using the proxy $1200 [APL1B]: Average monthly price of wholesale international E1 capacity link from Yaoundé to European hub (E17) 7 E1: This is equivalent to two (2) Mbps. -9- 3. Project components 34. The first phase of the CAB proposed for Cameroon will be structured as a vertical APL to cover first the technical assistance to strengthen the enabling environment and prepare the PPP structure for the establishment of the CAB (APL1A) then a subsequent part will focus on financing the connectivity infrastructure of the CAB (APL1B). 35. The CITCM (part of APL1A) will therefore finance activities related to the "enabling environment" component, the "eGovernment and flagship ICT applications" component, and the "project management" component 3) while APL1B (expected to be presented for Board approval in April 2010) will finance activities related to the "connectivity" component described in the CAB Program. APL1B will be triggered after (i) the establishment by the recipients and other stakeholders of a legal structure which will install and manage the CAB network in accordance with PPP principles and Open Access regime; and (ii) the CAB legal structure has received the legal rights to install, manage and operate the CAB network on the Recipient's territory. 36. The CITCM will have the following components and activities (see Annex 3 for more details). 37. Component 1 ­ Enabling environment ($6.9 million). This component will provide support mainly in the form of technical assistance, training and equipments in order to: (i) modernize the policy, legal and regulatory environment; (ii) strengthen key public institutions (including MINPOSTEL, MINCOM, ART, CAMTEL and ANTIC); and (iii) promote a pro-competitive environment and restructure of incumbent operators. This component is a key for the effective establishment of the CAB network. It includes the following activities: - Modernize and harmonize the legal, regulatory and institutional framework in Cameroon to accelerate sector growth and ICT development. It includes the following activities: (i) TA to transpose CEMAC Directives and modernize the Electronic Communications Services; and (ii) TA to establish ICT legislation and institutional framework (e.g. Digital signature, eCommerce, Intellectual Property Rights, Data Privacy). - Strengthen capacity of key public stakeholders (MINPOSTEL, MINCOM, ART, and ANTIC) to promote further sector reform so as to maximize benefits from access to capacity including: (i) TA to develop regulatory tools (i.e., interconnection/tariffs, networks monitoring, Open Access); (ii) TA to increase ICT access in remote areas and reform the Special Telecommunications Fund; (iii) TA to review spectrum management framework in Cameroon and prepare bidding documents for the acquisition of a spectrum management and monitoring system; (iv) training/ capacity building; and (v) equipments (i.e., spectrum management and monitoring system, information systems). - 10 - - Promote a pro-competitive environment and restructure incumbent operators to maximize the benefits from the regional backbone. The project will finance activities such as: (i) TA to liberalize further the sector (including the award of a new mobile license); (ii) TA to promote and establish PPP to deploy the CAB; and (iii) TA to define and implement the restructuring options and establish PPPs for incumbent operators. - Establish Internet Exchange Points (IXPs) to complement the other investments that the government and the private-sector are undertaking to boost connectivity and the capacity of the regional backbone network. The project will finance the following activities: (i) TA to design the establishment of a National and Regional IXP and (ii) equipments for the National and the Regional IXPs. - Launch structuring and start-up consultancies required for the establishment of CAB networks including CAB-related environmental and resettlements consultancies (i.e. the preparation of specific Environmental Management Plans (EMP), Resettlement Action Plans (RAPs) and Indigenous Peoples Plan (IPP) if planned). 38. Component 2 ­ eGovernment and flagship ICT applications ­ ($1.2 million). The objective of this component is to promote public access to administrative services and ease the use of ICT through the establishment of essential online administrative services and the digitization of a cultural and touristic heritage on one hand, and enhance the image of Cameroon on the Internet by the vulgarization of its virtual identification code on the Internet ".cm". It includes the following activities: - Design and Implementation of Management Policy for ".Cm" Domain Name to vulgarize the ". Cm" domain name and its use in Cameroon and abroad. The project will finance activities such as: (i) TA to conduct a diagnostic summary of the current status of the use of ". Cm"; and (ii) purchase of automated software for the". Cm" and training of users. - Design and Development of Local Content Policy to facilitate the launch a cultural and touristic heritage content policy in Cameroon. The project will finance activities such as: (i) TA to identify the documents, subjects and contents to be digitized and to describe the digitization process, and (ii) TA develop a pilot web site in collaboration with the Ministry of Culture or Tourism. - Identification of a Governmental Web Portal Strategy to federate on the "gateway" (the government web portal) all online public services, inform citizens on all essential administrative procedures. TA will be provided to analyze the state of the public administration, the needs of citizens and companies and to design and develop the Governmental Intranet. The project will include activities such as: (i) TA to prepare a diagnostic summary of the online public administration in Cameroon; (ii) TA to identify public services to be put online; and (iii) TA to develop a specification for designing a governmental web portal. - 11 - 39. Component 3: Project Management ­ ($1.8 million). This component will consist of support to finance project management related issues. This component may include elements such as human resources support with management, procurement, financial management, M&E, internal and external audit, and communications expertise, training, small works, equipment and operating expenses. 40. With respect to CAB APL1 countries including Cameroon, the connectivity component will be financed under APL1B expected to be presented for Board approval in April 2010. The financing to be provided for Cameroon for this subsequent phase is estimated at about $12.4 million (including contingencies). Most connectivity infrastructure will support the deployment of regional backhaul links between Yaoundé and Douala and across the borders with neighboring countries (including the installation of additional equipment to use the existing fiber-optic backbone already installed along the oil pipeline). 41. Counterpart financing: The government is committed to finance the following activities:(i) indemnities and operating costs8 for the CAB Steering Committee; (ii) indemnities and operating costs for the CAB National technical Committee; (iii) indemnities and operating costs for the CAB procurement Commission; (iv) indemnities for the Project Coordinator; and (v) the CAB Communication Program (except consultancies ­ to be financed by IDA under component 3 of CITCM). These activities are estimated at about $530,000 will be financed directly by the Government of Cameroon. 4. Lessons learned and reflected in the project design 42. Enabling environment to meet market potentials. The inadequate enabling environment prevents or reduces investments from operators and services providers and lead to inadequate market structure. It is expected that the CITCM, while promoting a pro-competitive environment on services and markets, will leverage existing strengths of the ICT markets. ICT market growth in Cameroon can be accelerated if actions are taken to mitigate bottlenecks jeopardizing the development of markets. From the regulatory and policy perspectives, the CITCM project design intends to cope with major sector issues, namely: (i) the ongoing difficulties of implementing Special Fund for Telecommunications; (ii) the need to harmonize the ICT institutional framework in Cameroon to avoid confusion and conflicts and also to provide coherence in the operations of ART, ANTIC, MINPOSTEL and all the other stakeholders in the sector; and (iii) the need to modernize the Telecommunications Act (98/014) of July 14,1998, and transpose the new CEMAC directives for the sector. 8 Indemnities and operating costs financed by the counterpart financing includes travel costs and per-diems. - 12 - 43. Different roles for public and private actors in the ICT sector. The CITCMreflects the need to differentiate the role of the government and the operators and to build strong partnerships with the private sector to develop telecommunications infrastructure. The role of the government is to focus on providing the right incentives for infrastructure and services to reach areas unattractive to the private sector on a purely commercial basis, as well as in cases where large initial sunk-investments are required. The private sector is better placed to invest in, install, manage and maintain ICT infrastructures. Moreover the inclusion of the private sector and profit sharing can bring the following benefits: (i) access to private finance; (ii) reduced operational risk for public sector; (iii) faster delivery of capital projects; (iv) project management skills; and (v) entrepreneurship and innovation. Therefore, the models presented here which involve the sharing of risk between the government and the private companies (PPP) can be defined as an agreement between government and private entities for the purpose of delivering a project or service by sharing the risks and rewards of the venture. The PPP model helps to bridge gaps in quality, speed, and efficiency in the provision of services by the public sector. 5. Alternatives considered and reasons for rejection 44. Cooperative approach is welcome in a resource-constrained environment. The project will promote the development of a collaborative framework to finance and establish a regional and national backbone. An alternative design would have been to finance backbone links under a competitive structure, where each operator would bid separately for the construction of a particular link or group of links. However, the countries targeted have inadequate environment or the market size does not justify multiple backbones outside the main cities. The proposed solution will accelerate the deployment of broadband backbones within Cameroon and will be used by all operators and service providers (Open Access). C IMPLEMENTATION 1. Institutional and implementation arrangements Institutional and implementation arrangements (see Annex 5). 45. The MINPOSTEL will be responsible for the overall coordination, implementation, and supervision of the project. For each activity concerned, MINPOSTEL, through the Project Coordination Unit (PCU), will consult with and delegate to the relevant agencies and ministries. 46. The implementation arrangements involve three organizational levels: (i) a Project Steering Committee (Comité de Pilotage) will be responsible for providing advice regarding cross-sectoral issues; (ii) the PCU will be responsible for project implementation, coordination of activities and fiduciary management; and (iii) a Cameroon CAB Technical Committee that will provide technical input for the development of the regional backbone. - 13 - 47. The MINPOSTEL and the Cameroon CAB Technical Committee liaise with other CAB participants9. 2. Monitoring and evaluation of outcomes/results 48. Monitoring and evaluation (M&E) of CAB will be embedded in the components of the project, and TA provided through the project will include support for M&E. The MINPOSTEL and the ART will collect most indicators needed to monitor and evaluate the project (the last indicators are collected by an international organization on a yearly basis). Both national institutions have been collecting the selected indicators for several years. However, the project will provide support through technical assistance to strengthen their statistical units. 49. Moreover, at the regional level, an IDF grant (CEMAC - strengthening capacity in the telecom & IT sector - IDF Grant P109923) has been processed to strengthen the Telecom legal and institutional environment of CEMAC region and improve the telecom and information technology representation/visibility to increase regional telecommunications and information technology investments. The Grant will finance short-term TA to adequately monitor regional telecom and IT activities and to develop a common M&E system shared by all CEMAC member states (including Cameroon). The establishment of this M&E system will: (i) increase knowledge transfer between member states and reinforce CEMAC coordination and policy role for the region; (ii) improve sector visibility for the government (as a main growth contributor); and therefore (iii) improve sector policy decision to attract additional foreign direct investment. 50. Outcome indicators for Cameroon related to APL1B (financing of the Connectivity/ infrastructure component defined in the CAB Program) are provided on a indicative basis. 9 To date CAB APL1 countries have established: (i) an Inter-Ministerial Committee involving sector ministers, (ii) an expert commission involving three representatives from each participating CAB APL1 country, and one representative from the following institutions : the World Bank, the AfDB, the CEMAC, the Economic Community of Central African States (ECCAS) and the International Telecommunications Union; (iii) national technical committees involving representatives from the government, the regulatory agency, the public and private operators and users groups. - 14 - Project Development Objective Outcome Indicators Use of outcome information Contribute to increase geographical Volume of international traffic Assess trends in international reach and usage of regional [APL1B]: communications and regional broadband network services and communications integration reduce their prices · International Communications (Internet, Telecoms, and Data) bandwidth per person Assess level of access to Volume of national traffic using 2 communications services within proxies [CITCM]: targeted countries Internet user per 100 inhabitants Total teledensity (active fixed and mobile subscribers per 100 inhabitants) Assess competitiveness of Average price of international countries with regards to cost of communications using the proxy capacity [APL1B]: Average monthly price of wholesale international E1 capacity link from Yaoundé to European hub (E1) Intermediate Results Results Indicators for Each Use of results monitoring component Component 1: Enabling Environment, including Monitoring & Evaluation capacity-building Sound environment conducive to Price of mobile call and internet Monitor sector competitiveness investment and competition access and efficiency of regulation Average cost of mobile call [three minutes, local, peak] Average monthly price of Internet access (256kbps) Geographic reach of mobile Monitor efficiency of regulation services Coverage of mobile network (percentage of population Component 2: eGovernment and flagship ICT applications Improved internal government Number of Internet Servers Access bottleneck and use of functions and delivery of public registered under the Country Internet local resources services through eGovernment Top-Level Domain (ccTLD) applications Number of Departments with deployed eGovernment Assess eGovernment services applications demand and implementation - 15 - 3. Sustainability 51. The component 1 will support the establishment of the CAB PPP environment and structure. APL1B will finance CAB connectivity infrastructure to be implemented through the set PPP. The CITCM will also stimulate sector development in the country and promote competition. The stimulation of the supply of low-cost wholesale international connectivity will be a major boost to investment and competition in the downstream segments of the market. These benefits thereof will last beyond the end of the project, increasing the sustainability of the project outcome. Component Sustainability Component 1: Enabling TA is being provided to improve sustainability through capacity building environment at the regional and within the Ministry and regulator. national levels Component 2: eGovernment Sustainability is ensured through PPP arrangements or by targeting and flagship ICT applications beneficiary agencies where commercialization can be achieved for cost- recovery purposes or where significant cost savings can be realized. 4. Critical risks and possible controversial aspects 52. The table 3 below summarizes the team's assessment of the key risks to the project. Table 2 Risks Assessment and Mitigating Measures Main Risks Initial Mitigating measures Residual Rating Rating Country Level Risks Macroeconomic Framework L The Bank maintains an active L dialogue with the government on Cameroon's membership in an economic macroeconomic management issues in and monetary zone with a supra national close partnership with the IMF and Central Bank has helped to maintain a other donors. The IMF's PRGF generally sound macroeconomic program is under final review and a its framework. Indeed, annual inflation has successor will allow significant space been kept below 3 percent over the past 10 for policy dialogue on issues related years, and since the devaluation of the to inter alia budget planning and CFAF in 1994, an appreciation of the real execution, reducing the nature and effective exchange rate has been avoided. scope of public enterprises, and Furthermore, fiscal and external balances eliminating extra budgetary have been consistent with available non- expenditures. inflationary financing. As a result, Cameroon scores well on its CPIA rating for macroeconomic management (3.7). Nevertheless, growth performance has been suboptimal with an average annual rate of about 2.9 percent in the period 2004-2008 because of delays public finances management and key structural reforms. Risks center on oil price and exchange rate volatility. Recently, high oil prices and revenue have resulted in a - 16 - public spending spree, with concerns on the composition of these expenditures (high untargeted oil subsidies, transfers to poorly-run public enterprises). The emergence of extra budgetary spending by the National Hydrocarbons Corporation (SNH) is also a matter of fiscal and governance concern. Also, the erosion in external competitiveness due to appreciation of the Euro to which the local currency is pegged has been a concern. Lastly, there are risks associated with petroleum and foodstuff consumer prices, as evidenced by widespread rioting in February 2008. Country Engagement With World Bank M Bank management has made L concerted efforts to strengthen its The GoC's engagement with the World dialogue with the government, in Bank remains solid, though the recent order to ensure that investment boom in oil revenue has diminished both activities reflect their priorities and the importance of IDA resources. The vision for economic growth. The engagement is also frustrated by a highly Bank is also working closely with centralized administration. As a other donors to harmonize operational consequence, technical matters are often approaches and its policy dialogue delayed and sometimes reversed by the with the government. executive. Country Governance S As one of 9 CGAC pilot countries, M significant efforts are being made to Cameroon faces significant governance better understand and respond to challenges, as evidenced by its status as governance challenges in Cameroon. "not free" according to Freedom House and A new CAS will be prepared this FY the 2007 World Governance Indicators and governance will feature both in its (which aggregate most governance analysis and the program of activities indicators) that put Cameroon between the it will outline. Key areas of current bottom and second quartile for all but one Bank support include public financial governance indicator. Overall, the country management, local governance, and faces significant challenges in the areas of empowerment. Governance issues accountability, administration and civil need to be considered at an early stage service, and government oversight. of project preparation, including Centralized decision-making and often political economy issues within their weak or non-functioning checks and sector and developing appropriate balances have led to a culture of impunity mechanisms to respond to governance that greatly undermines transparency and challenges. accountability. Voice and participation is also weak, both in terms of electoral processes and the ability of citizens to hold service providers accountable. Systemic Corruption H The donor community has come S together over the corruption issue, The risk of corruption poses the single including joint financing for an anti- greatest threat to the Cameroon portfolio. corruption project and efforts to raise The country ranks 141st out of 181 the issue with political leadership on a countries in Transparency International's regular basis. Active participation of 2008 Corruption Perceptions Index, and financial management and the 2007-2008 Global Competitiveness procurement staff in preparation and Report ranked corruption as the greatest supervision of lending operations, - 17 - barrier to doing business. Though including the use of in depth ex post President Biya has launched an aggressive reviews constitute one important anti-corruption campaign that has led to the mitigation measure at the project arrest of dozens of high ranking officials, level. including some for misuse of donor- provided funds, there is some question as to whether this is politically motivated. While the Bank portfolio has been reasonably insulated from corruption, recent cases of ineligible expenditures and mis-procurement reiterate the need for vigilance on fiduciary matters. Operation-specific Risks . Failed Privatization of CAMTEL S A subcomponent in the Project aims at M The privatization of CAMTEL has failed maximizing the benefits from the twice (2001 and 2008). No schedule has regional backbone in promoting PPP been published since the last failed restructure and designing and attempt. implementing options to restructure the incumbent telecom operator. Problem to access International Submarine S The regional approach will enable the M cable (SAT3) at competitive prices. regional operator to bundle all The feasibility study has already included a international traffic and negotiate at "price-cap" on potential capacity price to much higher discount international access SAT3 in Cameroon (presently the capacity price. only international route for the basic configuration). Cameroon government, Also, the CAB network is planned to regulator and incumbent operator have connect additional third countries with used this price as a benchmark in the international broadband access (like country. Cameroon) to increase competition and even further reduce international CAMTEL, by virtue of its status as the capacity tariffs (new West-African only Local Provider and also the local undersea international cables are SAT3 partner, wields tremendous control supposed to be operational in 2010 ­ over the main international gateways. WASC and Glo-1). Political and Growth in the Internet industry is still very technical discussions have started to slow and highly constrained by the high connect Nigeria (access to SAT3, Glo- cost of International bandwidth, especially 1), Sudan (access via the Red Sea to of the SAT3 SEA-ME-WE 3&4), Congo (WASC) and DRC (access via the Rwanda or Burundi Broadband cable to access EASSy, TEAMS, SEACOM or WASC). Inadequate coordination could delay S Following the adoption by heads of S project implementation state of the CEMAC Region of the Declaration for the establishment of the CAB, the telecoms sector ministries have set-up working groups at the national and regional levels to oversee CAB Program planning and implementation. Working groups include stakeholders from the government, regulatory agencies, public and private operators, user groups and donors (World Bank and AfDB). - 18 - During Program preparation, the World Bank and AfDB identified activities to be financed by each stakeholder. The WB is focusing on the core/main routes mitigating the overall implementation risk if AfDB financing is delayed or canceled. Also the Commission of the AU is providing a strong political support to the CAB program as it is seen as a key regional program for Africa. Inadequate implementation capacity and M While there are high demands and L readiness could delay project interests from participant countries, implementation and from regional coordination body (CEMAC), the lack of implementation capacity and readiness itself may cause the serious delay of project implementation. Key Principles and implementation arrangements both at national and regional levels have been established ahead of Board approval. A PPF has been launched in Cameroon to reinforce key stakeholders ahead of project Board approval. Inadequate financing M A feasibility study has been carried M out to quantify risks and required public and private financing for the CAB basic configuration infrastructure requirements. Due to the ongoing financial and economic crisis, it may be difficult to raise private financing for the CAB Program. For the time being, however, investment in the telecommunications sector remains strong10. Also, structuring the CAB Phase1 as a vertical APL will mitigate this risk since the Public financing could be adjusted to match the requirements and parts not funded by the private sector. 10 For the time being, however, investment in the telecommunications sector continues to remain strong. The investment and legal advisers will test the market before finalizing/freezing the overall structure to ensure private sector adoption and adequate financing. IFC in collaboration with the World Bank will provide support to the CEMAC Commission and CAB APL1 countries to ensure adequate final structuring (feasibility and attractivity of the transaction) while ensuring long term economic viability and adequate return for potential investors. IFC could also consider mobilizing funding. - 19 - Governance issues with regards to build M While the participation of enterprises M out of infrastructure where SOE coexist with poor efficiency records in the with private operators roll-out of the infrastructure may not be desirable, it cannot be completely avoided, especially in countries where the telecommunications market is not open to competition. Hence, the project will provide funds to promote liberalization, restructuring and privatization of public telecommunications incumbents Risk Rating: H = High, S = Substantial, M = Moderate, N = Low or Negligible. 5. Credit conditions and covenants 53. Conditions for project effectiveness: (a) Establishment of the Steering Committee, the Project Coordination Unit and the CAB Technical Committee with functions, members and resources satisfactory to IDA; (b) Install a computerized financial management system in a manner satisfactory to IDA (c) Adoption of a sound Project Implementation Manual acceptable to IDA. 54. Dated covenant: (a) Recruit independent external auditors acceptable to IDA not later than four months after effectiveness. D APPRAISAL SUMMARY 1. Economic and financial analysis 55. The benefits accrued in the targeted countries (i.e., increased access to quality and affordable ICT services) spill over country boundaries as: (i) higher volumes increase the viability of the regional communications infrastructure network, decrease cost of access and increase trade between African countries, and (ii) cross-border initiatives provide countries with the incentives to develop missing infrastructure to increase ICT access. Indeed, the implementation of the CAB Program will have a transformational impact on regional connectivity which will impact regional trade and overall economic integration of the participating CAB countries. - 20 - 56. A detailed traffic study and a financial model have been developed by International consultants for CAB APL1 countries and Nigeria. Results from the study shows that traffic will expand significantly due to the growth of mobile operators and the development of the Internet market (i.e. International bandwidth in Cameroon will increase from 171 Mbps in 2006, to 2.1 Gbps in 2011, to 6.2 Mbps in 2016). The CAB network will carry a significant portion of this traffic (especially for landlocked countries using exclusively satellites). 57. The opportunity cost in Cameroon, CAR and Chad calculated to measure economies from the cost of providing bandwidth relying on satellite connection as opposed to CAB Network until 2021 is estimated at $117million (discount rate of 13 percent and average annual decrease of satellite connection of 8 percent). 58. The economic impact in Cameroon, CAR and Chad on a 10 year model is estimated at $94 million out of which $76 million as consumer surplus and $18 million as producer surplus. 59. Based on the financial projections and taking into account the existing public- private structure, it is expected that CAB network could generate a positive net income in the first twelve months of operations. 2. Technical 60. The design and ownership structure of the PPP to be established based on ongoing technical assistance provided at Regional-level and the technical assistance to be provided under the CITCM will be consistent with international best-practices. The CAB Program, APL1A and CITCM will (i) maximize the use of private financing (or minimize the use of public financing); (ii) ensure feasibility and attractiveness of the transaction; and (iii) secure Open Access to regional connectivity infrastructure and ensure competitive, reasonable tariff of international, regional and national capacity. 3. Fiduciary 61. Financial Management. The diversified outcomes of the project and the number of agencies involved are factors which increase financial management risks. 62. The main financial management risks are related to: (a) inexperience of the MINPOSTEL staff of the with regard to the procedures of the project; (b) insufficient control may result in misuse of funds and impede the execution of the project; (c) the lack of exposure in WB disbursement procedures may cause delay in disbursement and in submitting the reports; and (d) the national audit capacity is weak. 63. The mitigating measures include the following requirements: (a) systematize the dissemination of the budget for CITCM and organize workshop for the staff; (b) - 21 - communicate the good practices to facilitate the mobilization of counterpart funds; (c) increase the number of supervision missions; (d) foster stakeholders control on the management of the project's resources; (e) recruit an internal auditor within the project; (f) improve organization around the production of Interim Financial Report (IFR); and (g) and optimize the use of the computerized system to improve reporting. 64. The overall residual FM risk is moderate, provided that the arrangements described in Annex 6 derived from mitigating measures are satisfactorily implemented in a timely manner. 65. Disbursements: One Designated Account (DA) in CFAF will be opened in a commercial bank and managed the Caisse Autonome d'Amortissement (CAA) under the responsibility of the PCU (in terms of ensuring fiduciary standards and accordance with Bank FM guidelines), the Project coordinator and the financial manager. The initial advance will be replenished based on submission of Statement of Expenditures (SOEs). Report based disbursements will be considered in the second fiscal year provided the project maintains a satisfactory FM rating. The grant will finance 100% of eligible expenditures inclusive of taxes with the exception of the Value Added Tax (VAT). 66. Procurement. The PCU of the MINPOSTEL will be responsible for the administration, coordination, monitoring of the Project, and procurement activities including compliance with procurement procedures. The PCU include a coordinator appointed by the Government, a financial manager, a procurement specialist, an internal auditor and, an accountant, all recruited on a competitive basis. Procurement activities of the PCU, which are costing the CFA Francs (CFAF) 5 million (equivalent of $10,000) or more, will be conducted with the technical support of the tenders board placed under MINPOSTEL's authority by the Prime Minister through a decree. The assessment of the tenders boards of the ministries so far under World Bank financed projects have revealed: (i) an unfamiliarity of the members with bank's procurement procedures and, (ii) a weakness in the interpretation of Bank procurement procedures. As a result, appropriate capacity building program will be set for tender boards members. 67. The PIM includes a detailed section on procurement (draft submitted to the Bank) and outlines, among others, the procurement arrangement and the relevant procedures applicable to the management of the credit. 68. Procurement corrective measures have been identified and an action plan has been defined with tasks to be performed, responsible body as well as time-frame (see annex 7). 69. Procurement risk. The overall project risk for procurement is substantial because, among other factors, there was no previous Bank operation with this ministry and the PCU with procurement responsibility, which is been set up and staffed, is a completely new entity and is not familiar with procurement processes. Although procurement risk rating is presently substantial, the above well designed action plan with mitigation measures to be implemented and appropriate monitoring will reasonably bring this risk to moderate. - 22 - 70. Guidelines: All international competitive bidding (ICB) and selection of consultants involving international consultants will be carried out in accordance with the World Bank's "Guidelines: Procurement under IBRD Loans and IDA Credits" dated May 2004 and revised in October 2006; and "Guidelines: Selection and Employment of Consultants by World Bank Borrowers" dated May 2004 and revised in October 2006, and the provisions stipulated in the Financing Agreement. 4. Safeguards policies 71. Category B rating. The APL1A (including CITCM) has a Category B rating. Activities financed under CITCM are fully consistent with the set of activities eligible for financing under the CAB Program. 72. The physical components of the CAB Program in Cameroon (to be financed under APL1B) will mostly be limited to the establishment of the regional backbone which consists of terrestrial networks (e.g. fiber-optic cables laid next to main national roads. The risk associated with the kind of infrastructure financed under this Program is low, and the project is therefore assigned to environmental category B under OP 4.01. 73. The ESMF and the RPF have been prepared, reviewed and approved by the Bank and publicly disclosed prior to appraisal in Cameroon. They are available at the InfoShop. 74. Specific costed Environmental Management Plans (EMP) and Resettlement Action Plans (RAPs) will be prepared as necessary for the terrestrial facilities during project implementation, in line with the ESMF and RPF, once the exact locations of those facilities have been identified. The institutional responsibilities for preparing the various safeguards instruments would lie with the implementing agency. These agencies will be assisted by consultants financed by the project. Any specific required action for some of the Civil Works will be taken into account during project implementation. 75. Since CAB APL1 (APL1A and APL1B) in Cameroon will only finance fiber- optic cables laid next to main national roads (no rural networks and landing stations will be financed), OP 4.10 for indigenous peoples, OP 4.36 for Forests and OP 4.11 for Cultural Property will not be triggered. The CITCM will not finance any fiber-optic cable/ backbone infrastructure (it will be funded under APL1B expected to be presented for Board approval in April 2010). - 23 - Safeguard Policies Triggered by the Project Yes No Environmental Assessment (OP/BP/GP 4.01) [x] [] Natural Habitats (OP/BP 4.04) [] [x] Pest Management (OP 4.09) [] [x] Cultural Property (OPN 11.03, being revised as OP 4.11) [] [x] Involuntary Resettlement (OP/BP 4.12) [x] [] Indigenous Peoples (OD 4.20, being revised as OP 4.10) [] [x] Forests (OP/BP 4.36) [] [x] Safety of Dams (OP/BP 4.37) [] [x] Projects in Disputed Areas (OP/BP/GP 7.60)* [] [x] Projects on International Waterways (OP/BP/GP 7.50) [] [x] 5. Policy Exceptions and Readiness 76. The Project does not require any exception to the Bank policies. * By supporting the proposed project, the Bank does not intend to prejudice the final determination of the parties' claims on the disputed areas - 24 - Annex 1: Major Related Projects Financed by the Bank and/or Other Agencies Central African Backbone Program Communications Infrastructure and Technology APL Project (APL1A) Cameroon Credit (CITCM) Project Latest Supervision Ratings (Bank-financed projects only) World Bank/IDA Financed Implementation Development Progress (IP) Objective (DO) CEMAC ­ Transport Transit facilitation Project (P079736). The development objectives are to enhance regional trade and integration and sub-regional cooperation between CEMAC and ECCAS member states, and specifically provide the landlocked countries Central African Republic (CAR) MS MS and Chad with a better access to the Port of Douala through: (i) assistance to the strengthening of the CEMAC Customs Union; and (ii) improvement of the logistics chain, including road and rail infrastructure to the Port of Douala's hinterland. Cameroon - Transparency and Accountability Capacity Building Project (P084160). The Project is to contribute (i) to enhance transparency and efficiency in public financial management, and (ii) to strengthen accountability in the use of public MS MS resource. The project will play a key role in Cameroon acceleration of the pace toward a more orderly and open in public financial management and thus more efficient service delivery. Cameroon ­ Competitive Value Chains (P112975) ­ Pipeline. The proposed Competitive Value Chains Project will stimulate private investments in high potential value chains by providing a critical mass of infrastructure investments, policy reforms and support to firms. To ensure focus and results, the project will cover a limited number of value chains with short term potential. Prime candidates include forest based economic activities, and tourism. Regional Communications Infrastructure Program, Phase I (RCIP I) (P094103): Madagascar ($30 million), Kenya ($114.4 million) and Burundi (IDA Grant $20.1 million). The development objectives (i) to contribute to lower prices for international capacity and extend the geographic MS MS reach of broadband networks (the "connectivity development objective") and (ii) contribute to improved government efficiency and transparency through e- government applications (the "transparency development objective"). IP/DO Ratings: HS (Highly Satisfactory), S (Satisfactory), U (Unsatisfactory), HU (Highly Unsatisfactory) - 25 - Annex 2: Results Framework and Monitoring Central African Backbone Program Communications Infrastructure and Technology APL Project (APL1A) Cameroon Credit (CITCM) 77. M&E of CITCM will be embedded in the various components of the project, and TA provided through the project will include support for M&E. Outcome indicators for Cameroon related to APL1B (financing of the Connectivity/ infrastructure component defined in the CAB Program) are provided on a indicative basis. Project Development Objective Outcome Indicators Use of outcome information Contribute to increase geographical Volume of international traffic Assess trends in international reach and usage of regional [APL1B]: communications and regional broadband network services and International Communications communications integration reduce their prices (Internet, Telecoms, and Data) bandwidth per person Volume of national traffic using 2 Assess level of access to proxies [CITCM]: communications services within targeted countries Internet users per 100 inhabitants Total teledensity (active fixed and mobile subscribers per 100 inhabitants) Average price of international communications using the proxy Assess competitiveness of [APL1B]: countries with regards to cost of capacity Average monthly price of wholesale international E1 capacity link from Yaoundé to European hub (E111) Intermediate Results Results Indicators for Each Use of results monitoring component Component 1 Enabling Environment, including Monitoring & Evaluation capacity-building Sound environment conducive to Price of mobile call and internet Monitor sector competitiveness investment and competition access and efficiency of regulation Average cost of mobile call per minute [pre-paid, local, peak] 11 One E1 equals to 2 Mbts. - 26 - Average monthly price of Internet access (256 kbps) Geographic reach of mobile services Monitor efficiency of regulation Coverage of mobile network (percentage of population Component 2 eGovernment and flagship ICT applications Improved internal government Number of Internet Servers Access bottleneck and use of functions and delivery of public registered with Country Top- Internet local resources services through eGovernment Level Domain (ccTLD) applications Number of Departments with Assess eGovernment services deployed eGovernment demand and implementation applications - 27 - Arrangements for results monitoring at country level (Cameroon) Target Values Data collection and reporting Frequency Data Responsibility Baseline YR1 YR2 YR3 YR4 YR5 and collection and Data (2008) reports instruments Collection OUTCOME INDICATORS International Agence de [indicator Internet/Communications Régulation des 10.95 15 25 40 65 80 yearly available at Bandwidth (bits per Télécommunications ITU] person) (ART) SCAN ICT Stratégie Internet users per 100 Nationale de ART 2.0 2.5 3.0 3.5 4.0 4.5 yearly inhabitants Développement ANTIC des TIC Operators SCAN ICT Total teledensity (active Stratégie fixed and mobile télécoms 28.1 40 50 59 66 70 yearly ART subscribers per 100 Etudes six ingabitants) segments du marché Average monthly price of wholesale international capacity $6,000 $5,000 $4,000 $3,000 $2,000 $1200 yearly Survey ART link from Yaoundé to European hub (E1) in $ RESULT INDICATORS Component 1 Enabling environment Average cost of mobile Operators call (1 minute, local, 0.306$ 0.306$ 0.204$ 0.153$ 0.153$ 0.102$ yearly ART MINPOSTEL peak)- Average monthly price of 256kbps broadband 165 130 110 90 70 50 yearly ART connection ($) Coverage of mobile network ( percent of 35.0% 36.0% 38.0% 55.0% 62.0% 70.0% Yearly Operators ART population) - 28 - Component 2 - Egovernment and Flagship applications Number of Internet - Régulateur Servers registered - ANTIC under the Country 1,100 30,000 50,000 100,000 150,000 200,000 Yearly ANTIC Ministère Top-Level Domain télécoms (ccTLD)12 Number of Departments with - Ministère deployed e- 01 01 15 25 35 50 yearly télécoms ANTIC Government e-Government applications13 12 l'ANTIC compte faire enregistrer 1,000,000 de noms en ".cm" d'ici 2015 13 The Government in collaboration with Korea is finalizing the implementation of secured platform for electronic transaction (PKI) and the creation of a national certification authority. - 29 - Annex 3: Detailed Project Description Central African Backbone Program Communications Infrastructure and Technology APL Project (APL1A) Cameroon Credit (CITCM) 1. This section provides a description of the components and activities for the CITCM. 2. Component 1 ­ Enabling environment ($6.9 million) will provide support to: (i) strengthen the policy, legal, regulatory and institutional environment in Chad, (ii) support further regional market integration, (iii) strengthen key public institutions (MINPOSTEL, MINCOM, ART, ANTIC, CAMPOST and CAMTEL); and (iv) promote further sector reforms so as to maximize benefits from access to the regional backbone. · Modernize and harmonize the ICT legal, regulatory and institutional framework in Cameroon. The project will finance activities as such: (i) TA to transpose the new CEMAC Directive on Electronic Communications Services and develop secondary legislation; and (ii) TA to strengthen ICT legislation and institutional framework (e.g. Digital signature, eCommerce, Intellectual Property Rights, Data Privacy) · Strengthen capacity of key stakeholders to ensure adequate policy setting and regulation of the sector. This subcomponent will finance TA to MINPOSTEL, MINCOM, ART, in particular for the following activities: (i) TA to develop regulatory tools (i.e., interconnection/tariffs, networks monitoring, Open Access); (ii) TA to increase ICT access in remote areas and reform the Special Telecommunications Fund; (iii) TA to review spectrum management framework in Cameroon and prepare bidding documents for the acquisition of a spectrum management and monitoring system; (iv) training/ capacity building; and (v) equipments (i.e., spectrum management and monitoring system, information systems). · Promote a pro-competitive environment and restructure incumbent operators. The project will finance activities such as: (i) TA to liberalize further the sector (including the award of a new mobile license); (ii) TA to promote and establish PPP to deploy the CAB; and (iii) TA to define and implement the restructuring options and establish PPPs for incumbent operators. · Establish Internet Exchange Points (IXPs). This subcomponent will include the following activities: (i) TA to design the establishment of a National and Regional IXP and (ii) equipments for the National and Regional IXPs. · Launch structuring and start-up consultancies required for the establishment of CAB network including CAB-related environmental and resettlements consultancies (i.e. the preparation of specific Environmental - 30 - Management Plans (EMP), Resettlement Action Plans (RAPs) and Indigenous Peoples Plan (IPP) if planned). 3. Component 2 ­ EGovernment and Flagship ICT applications ­ ($1.2 million). The objective of this component is to promote public access to administrative services and ease the use of ICT through the establishment of essential online administrative services and the digitization of a cultural and touristic heritage on one hand, and enhance the image of Cameroon on the Internet by the vulgarization of its virtual identification code on the Internet ".cm". This component will include the following activities: · Design and Implementation of Management Policy for ".Cm" Domain Name to vulgarize the ". Cm" domain name and its use in Cameroon and abroad. The project aims to achieve 200,000 names registered in the". Cm" by the year 2015. This will create direct jobs for qualified engineers and / or technicians in this area and, attract foreign investors in the sector. The project will finance the following activities: (i) TA to conduct a diagnostic summary of the current status of the use of ". Cm; to describe the process of public participation in policy development and to develop management policy for "Cm" Domain Name (taking into account the tools, means and outcomes); (ii) TA to design and undertake a national implementation policy and a media communication plan around the ".Cm" at the national and international level; and (iii) purchase of automated software for the". Cm" and training of users. · Design and Development of Local Content Policy. The project will finance flagship ICT application including the launch of the cultural and touristic heritage and in Cameroon. This should help to promote and preserve the cultural and historical heritage, improve the image of Cameroon on the Internet through a virtual touristic platform, create jobs by the entry of new suppliers of content, vulgarize the ".Cm", and increase traffic. The project will finance activities such as: (i) TA to identify the documents, subjects and contents to be digitized and to describe the digitization process, and (ii) TA develop a pilot web site in collaboration with the Ministry of Culture or Tourism. · Identification of a Governmental Web Portal Strategy to establish a "gateway" (a governmental web portal) for Cameroon which federates all online public services and provide information and forms to citizens on all essential administrative procedures. The "gateway" will be Client / User oriented. The project will include activities such as: (i) TA to prepare a diagnostic summary of the online public administration in Cameroon; (ii) TA to identify public services to be put online and set priorities based on needs expressed by users and businesses; and (iii) TA to develop a specification for designing a governmental web portal. Given the funding envelope and considering the country's stage of development, it was decided to focus on a small number of applications which could have the greatest impact for government and for the citizens of Cameroon. Based upon discussions with government officials and an examination of existing applications, the subcomponent will narrow down the list of potential - 31 - applications. In each case, the application will be subject to scrutiny against the following criteria: (i) existence of a champion or change agent who could help reduce resistance from within government, the private sector or civil society; (ii) acceptability of the PPP approach or possibility of a joint venture with the private sector; (iii) potential for improvement of internal efficiency, leading to greater transparency and less potential for corruption; (iv) Cost-benefit analysis (e.g. implementation and payback within a few years) and possibility for quick wins; and (v) High potential for positive impact for citizens and link to poverty reduction through making service delivery less expensive, less time-consuming for the beneficiary and the service institution, and less susceptible to fraud. 4. Component 3 - Project management capability ($1.8 million). The project will be primarily executed by MINPOSTEL. A small experienced project management team is established within the MINPOSTEL. This component will consist in financing Project management related issues. It will support the following activities: (i) consultant to staff the PCU (i.e., a procurement specialist, a financial manager, an internal auditor, an accountant, a backbone expert); (ii) equipments (i.e., financial management system); (iii) various TA (i.e., Audits); (iv) training; (v) small works and; (vi) operating expenses. - 32 - Annex 4: Project Costs Central African Backbone Program Communications Infrastructure and Technology APL Project (APL1A) Cameroon Credit (CITCM) Components Activities Amount Technical assistance for the provision of a legal and regulatory 200,000 framework for Electonic Communications Technical assistance to draft an ICT legislation 80,000 Technical Assistance to design frequency spectrum management regulatory tools and prepare bidding documents for the purchase of 175,000 spectrum management and monitoring equipments Purchase of spectrum management and monitoring equipments 1,400,000 Technical assistance to implement universal access in remote areas 300,000 Capacity strengthening of the Ministry of Post and 500,000 Telecommunications (Technical assistance and training) Capacity strengthening of ART (technical assistance and training) - Component 1 - Design and set up of regulatory tools (interconnexion/tariff, operators' 540,000 Enabling networks monitoring platforms....) Environment at the Regional and Technical Assitance to award new mobile licence 200,000 National Level Technical assistance to design the restructuring options of the 240,000 incumbent operators CAMTEL - Study to use solar energy for the network transmission 25,000 Technical assistance to support the implementation of the 1,700,000 restructuring options of the incumbent operators Fiscal and Tarification study (Telecom sector) 80,000 Strengthening of the capacity of the Ministry of Communications 300,000 (Technical Assistance and Training) Study and establishment of a national and regional Internet eXchange 300,000 Point Technical assistance to support the rollout of the CAB 730,000 Technical Assistance for social and environmental activities 150,000 TOTAL Component 6,920,000 1 Design and Implementation of Management Policy for ".Cm" Domain 500,000 Composante 2 - Name Promouvoir la bonne Design and Development of Local Content Policy 500,000 gouvernance et la transparence Identification of a Governmental Web Portal Strategy 200,000 TOTAL 1,200,000 Componente 2 Establishment of the PIU 180,000 Component 3 Project Coordination Unit - Staffs/Consultants, equipments and Project 1,400,000 operating costs Management Communication Campaign 200,000 TOTAL Component 3 1,780,000 Total national 9,900,000 Out of which Project Preparation Facility 1,100,000 * Excluding counterpart financing of $530,000. - 33 - Annex 5: Implementation Arrangements Central African Backbone Program Communications Infrastructure and Technology APL Project (APL1A) Cameroon Credit (CITCM) 1. The MINPOSTEL will be responsible for the overall coordination, implementation, and supervision of the project. For each activity concerned, MINPOSTEL, through the PCU, will consult with and delegate to the relevant agencies and ministries. 2. The implementation arrangements involve three organizational levels: (i) a Project Steering Committee (Comité de Pilotage) will be responsible for providing advice regarding cross-sectoral issues; (ii) the PCU will be responsible for project implementation, coordination of activities and fiduciary management; and (iii) a CITCM Technical Committee that will provide technical input for the development of the regional backbone. 3. The figure below identifies these agencies and ministries, as well as other entities not concerned with the carrying out of the project, but whose responsibilities are related to its objectives and/or implementation. Implementation Arrangements for CIT1 in Cameroon MINPOSTEL Cameroon Project CAB Technical Steering Committee Committee Advice/ Direction/ Project Coordination Oversight Unit (PCU) Support Including Including Project manager MINPOSTEL, ART, MINPOSTEL, MINFI, Backbone Specialist Public and private MINEPAT Procurement Specialist operators, user Fin. Management Specialist Support Technical groups inputs ... MINPOSTEL ART CAMTEL MINCOM ANTIC Note: CIT1 refers to CITCM. 4. The PCU: Day-to-day project implementation, coordination of activities and fiduciary management of the project will be done by the PCU anchored in the MINPOSTEL and financed through the project. The PCU, in close collaboration with the technical team from MINPOSTEL, will be responsible for: (i) oversight of all technical, social, and environmental matters relating to Project implementation; (ii) planning of - 34 - Project activities and preparation of Project annual work programs; (iii) monitoring and evaluation of Project activities including quality insurance; (iv) financial management, procurement, and audits under the Project; and (v) monitoring of implementation of the National ICT Policy. The PCU will also provide TA support to the Ministry by monitoring progress towards the government strategy on ICT. The PCU includes a Project Coordinator (nominated) and a financial manager, a procurement specialist, an internal auditor and, an accountant, all recruited on a competitive basis. Environmental expertise (and other position like backbone experts) will also be available, depending on the needs identified. These experts will be financed by the project through performance based contracts linked to evaluation results acceptable to IDA. The PCU will be housed in MINPOSTEL to facilitate knowledge transfer and strengthen capacity at Ministry level. 5. A Project Steering Committee (Comité de Pilotage) will be established and will be in charge of ensuring the consistency and smooth execution of the project. It will meet at least twice a year. Placed under the MINPOSTEL (or his representative), it will comprise at least of representatives of the MINFI, MINEPAT, the ANTIC and of the participating agencies and ministries, as well as the Project Coordinator. The Steering Committee will provide advice on coordination of cross-sectoral interventions and ensure consistency of ICT activities carried out by different agencies/ institutions. Given the inclusion of some "eGovernment and ICT activities in this project, special attention will be paid to the coordination and strategic consistency with Ministry in charged for Administrative Reform (will help the government in formulating and refining a national e-government strategy, and will assist the relevant agencies in their efforts to translate this strategy into their own activities). 6. The CITCM Technical Committee has been established to provide technical inputs from all key stakeholders from the sector on issues related to the establishment of the CAB network. All technical studies conducted at national and regional level have and will benefit from their support. Other institutional strategic elements 7. Project Implementation Manual (PIM): The PIM includes all procedures and areas of M&E, coordination and implementation, financial management (including financial, administrative, accounting and procurement, internal controls and audits). The PIM describes the diverse roles, responsibilities, and individual work programs of each participating agency or entity (including the timetable that shall be respected to ensure the success of the project). Technical implementation of project activities shall be delegated to the participating agencies and ministries. 8. World Bank supervision. The Bank will conduct a minimum of two supervision missions per year during project implementation, including an annual progress review. A midterm review will be conducted, which will encompass: (i) a thorough review of the execution of the project and the achievement of project objectives to date and (ii) agreement between the Bank and the Borrower on recommended measures to ensure - 35 - efficient execution of the project and successful achievement of project objectives in the period after the review, all in accordance with agreed performance indicators. The Borrower will provide the Bank a project completion report within six months of loan closing and inputs to the Implementation Completion Report to be prepared by the Bank. The Bank will support public dissemination of project information, including supervision reports on the project's performance. - 36 - Annex 6: Financial Management and Disbursement Arrangements Central African Backbone Program Communications Infrastructure and Technology APL Project (APL1A) Cameroon Credit (CITCM) Scope of Assessment 1. Based on project implementation arrangements, the overall responsibility for the financial management will remain with the PCU, and the day-to-day management will be carried out by the Coordinator, the financial manager and the internal auditor. Considering the diversified activities of the project, the coordination and reporting mechanisms between the various agencies involved in the project and the PCU have been revised to ensure that arrangements in place will allow smooth implementation of the project activities and that the funds are used only for the purposes for which they are granted, with due regard to economy, efficiency, and sustainable achievement of the project's development objectives. 2. The objective of financial management arrangements for this project is to ensure that the systems used are sufficiently robust to permit adequate use of funds in an economic and efficient way and that all transactions are duly accounted for reported and audited. 3. An evaluation of the CITCM was conducted to assess the financial management capacity of the PCU of the MINPOSTEL designated as the implementing entities. The PCU will be responsible for overall supervision and monitoring project activities. 4. This is compliant with OP/BP 10.02 on Financial Management and depicted in the financial management Practice Manual published in November 2005. These arrangements are as follows (with the responsible actor in brackets): The MINPOSTEL has appointed one qualified financial manager at the PCU to set up the financial management system, maintain accounting records, prepare the project financial statements and have them audited in accordance with the International Standards on Auditing by an independent audit firm acceptable to IDA (PCU to recruit the external auditor). The audit reports will be submitted by the PCU on annual basis to IDA not later than six months after the end of each fiscal year. Within 45 days following the end of each quarter, the PCU will submit unaudited consolidated Interim Financial reports (IFRs) to IDA according to the IDA standard format. A computerized financial management system will be established by the PCU before project effectiveness. Given the high risk context and the lack of familiarity with the Bank fiduciary procedures, the transaction-based disbursement method will apply at the beginning but could shift to report-based disbursement once the PCU: (i) sustains satisfactory financial management rating during project supervision; (ii) submits - 37 - IFRs consistent with the agreed format and content within 45 days of the end of each quarterly reporting period; and (iii) submits all expected audit reports by the due date and have them accepted by the Bank. Not later than four months after effectiveness, an external audit firm will be recruited under Terms of Reference acceptable to the Bank to audit the project in accordance with the international auditing standards. The audit scope will include the review of all project activities. Implementing entities 5. The PCU of the MINPOSTEL is dedicated to the CITCM. The Project coordinator has been already appointed and has worked with the World Bank for many years and has been involved in all preparatory studies and regional discussions. He will oversee and manage all staffs to be recruited under this Project to strengthen the implementation and supervision of this Unit. The PCU has already recruited on a competitive basis an accountant and an internal auditor. Country issues 6. Two Bank studies were recently undertaken: a CFAA (2005) and a PEMFAR (2006.). The two studies concluded that public financial management was average in terms of capacity in budgeting, accounting, reporting, debt management, auditing and internal control systems. As of December 2008, the country risk is rated Medium. Financial risk assessment and mitigation 7. The diversified activities of the project and the number of agencies involved are factors which contribute to increasing financial management risks. 8. The financial management risks are related to: (a) inexperience of the staff of the with regard to the procedures of the project; (b) uncertainty about the mobilization of counterpart funds; (c) slowness in the justification of expenditure of supporting documents; (d) weak implication of staff in internal control; (e) delays in reporting; and (f) poor linkage between physical progress and financial outcomes.. 9. The mitigating measures include the following requirements: (a) systematize the dissemination of the budget for CITCM activities and organize workshop for the staff; (b) communicate the good practices to facilitate the mobilization of counterpart funds; (c) increase the number of supervision missions; (d) foster stakeholders control on the management of the project's resources; (e) recruit an internal auditor within the project; (f) improve organization around the production of IFR; (g) and optimize the use of the computerized system to improve reporting. 10. The table below shows the results of the risk assessment from the Risk Rating Summary conducted for the MINPOSTEL. This identifies the key risks the project management may face in attempting to achieve project objectives, and it provides a basis for determining how management should address these risks. - 38 - Risk assessment and mitigation Risk Risk Rating Risk Mitigation Measures Residual Risk Inherent Risk Country level H The PRSP adopted in July 2003 and M updated later on was structured into seven pillars including improving institutional framework, administrative management and governance. The Cameroon 2006 Interim Itrategy Note has proposed support to address transparency issues including corruption. Entity level M The Bank is helping to ensure effective M The MINPOSTEL lacks financial management of the CITCM is the capacity to manage entrusted with the overall financial fiduciary aspects of the management responsibility. project FM arrangements have been reinforced with the hiring of a financial manager, an accountant and an internal auditor recruited with TORs acceptable to IDA. Overall Inherent risk S M Control Risk Budgeting S The project budget will not be included M Possibility of committing in the government budget. It will be expenditures outside the prepared and managed under the budget. No variance responsibility of the MINPOSTEL. analysis. Annual work program and budget will be timely agreed, recorded and monitored through the financial integrated system. More consideration should be given to budget control and the control of commitments of the Cameroon State and will be therefore executed by the "Controle financier" of the Ministry of Finance. Accounting S Accounting management at the PCU of M There is no accounting the MINPOSTEL will be carried out by system in place; delay in a recruited project financial manager keeping reliable accounting and an accountant with TORs records and issuing reliable acceptable to the Bank. He will (i) file financial statements might the supporting documents at PCU level; occur. (ii) record accounting information and issue on a timely basis financial statements and IFRs. This process has been launched during Project preparation (a project preparation facility has been mobilized to that effect). Quotation for the acquisition of the financial management system, its - 39 - customization and related training has been received and evaluated. Internal control H Sound financial management and S Insufficient safeguards and Administrative procedures are included controls may result in in the PIM (currently reviewed by the misuse of funds and Bank team). Audit account will be impede the execution of the carried out on an annual-basis. An project. internal auditor has been hired for the project. Funds flow and financial S FM/disbursement training and M reporting implementation support will be The lack of exposure in provided to PCU in order to be WB disbursement acquainted with Bank's procedures. procedures may cause The integrated financial management delay (i) in disbursement system including an adequate and ineligible expenditures; accounting system will help in (ii) in submitting the achieving reporting requirements by reports. implementing agencies. Timely production of IFRs will be adequately monitored. Auditing S An independent external audit firm will M The national audit capacity be recruited to perform the audit in is weak accordance with the international audit standards. It will be recruited on TOR acceptable to the Bank. Overall control risk S M Overall risk rating S M 11. The overall residual FM risk is moderate, provided that the arrangements below derived from mitigating measures are satisfactorily implemented in a timely manner. 12. Following the assessment, the action plan presented below, indicates the actions to be undertaken to strengthen financial management of the project and due completion dates. Financial Management Action Plan EFFECTIVENESS AND/OR DATED COVENANT Action Completed by Responsible 1 Establish a robust financial management and Prior to MINPOSTEL accounting procedures included in the PIM. This will effectiveness include non-audited Interim Financial Report (IFR) format, the annual project financial statements format, and the TOR for external auditors for the project. The PIM will have to be in form and substance satisfactory to IDA. 2 Acquire, install an integrated financial management Prior to MINPOSTEL system and train the staff in its use. effectiveness 3 Selection of independent external auditor. Four months after MINPOSTEL Credit Effectiveness - 40 - Budgeting 13. The PCU will prepare the overall budgets on an annual basis. The budgeting system needs to forecast for each fiscal year the origin and use of funds under the project. The budget must be managed on a daily basis. Only budgeted expenditures would be committed and incurred. The annual budgets will be monitored during project implementation to ensure that the resources are used within the agreed upon allocations and for the intended purposes. The different steps of budget management - preparation, revision, adoption and execution/monitoring- will be briefly detailed in the PIM. It is agreed that the budget will be closely monitored and execution reports reflected in each quarterly interim financial report through variance analysis. Staffing, accounting policies and procedures Staffing 14. To ensure the Project is effectively implemented, the PCU has been staffed with a financial manager, an accountant and an internal auditor. They will work under the supervision of the coordinator of PCU. Terms of reference for these staff, recruited on a competitive selection, have been prepared and agreed upon with IDA. All of them are well trained in Bank's FM and disbursement procedures. Staffing arrangements are therefore adequate to ensure that IDA funds are well managed. Accounting arrangements 15. The PCU will maintain accounting system similar to those for other IDA funded projects. The Project specific accounting books have to encompass: a cash book, ledgers, journal vouchers, fixed assets register and contracts register. A specific chart of accounts will be developed in the PIM in a way that allows Project costs to be directly related to specific work activites and outputs of the Project. This should match with the classification of expenditures and sources and application of funds indicated in the Financing Agreement. Project financial Statement 16. The project financial statements will comprise of: (a) a Balance Sheet, reflecting the assets, liabilities and the funding of the project; (b) a Statement of Sources and Uses of Funds/Cash Receipts and Payments which recognizes all cash, receipts, cash payments and cash balances and separately identifies payments to third parties on behalf of the entities (if any); (c) the Accounting Policies Adopted and Explanatory Notes, cross- referenced to the Balance Sheet, etc.; and (d) a Management Assertion that project funds have been expended for the intended purposes as specified in the relevant financing agreements. - 41 - 17. Project financial statements shall be prepared in accordance with: (a) The accounting standards applicable in the country acceptable to IDA, or (b) International Public Sector Accounting Standards (IPSAS), which document inter alia includes the application of the cash basis of recognition of transactions; or (c) International Financial Reporting Standards for entities applying the accrual basis of accounting. Indicative formats of statements will be agreed within six months following effectiveness. 18. The project will equally produce separate reports with information on the project's physical progress and on the physical progress of contract execution. These very provisions will be required for each management unit. Reporting 19. Formats of the various periodic Financial Monitoring Reports (FMR) to be generated from the financial management system. It is agreed that the PCU will prepare and submit quarterly to IDA an IFR not later than 45 days after the end of each calendar quarter. The content of these reports should, at a minimum, include the following: sources and uses of funds by project activity/component, statement of actual and budget expenditures, both cumulatively and for the period covered by the said report, showing separately funds provided under IDA, other financiers and counterpart funding, and explanation of the variances between the actual and planned uses of such funds and the fund balance supported by bank statements and reconciliations. Formats of IFRs and annual Project's Financial Statements (PFS) will be prepared by the PCU and included in the PIM. There will be clear linkages between the information in these reports and accounting data. The IFR will be designed to provide quality and timely information to project management, implementing agencies, and various stakeholders on project performance. Internal control and internal audit 20. The first pillar of the government's internal audit will be used. It is a set of ex- ante controls led by an internal auditor. The internal auditor will pre-screen and clear all payments. Before payment, all requests will be checked by the financial controller to ensure that they are supported by the following reliable evidence: (i) expenditures are budgeted; (ii) the service is rendered according to the contract; and (iii) the payment is within the available budget allocation. 21. To mitigate the abuse of official positions, it will be explicitly requested in the PIM that the internal auditor should conduct due diligence within 72 hours. The performance of the internal auditor will be monitored against this indicator. This provision will complement the existing administrative regulations of the MINPOSTEL where the PCU is located. In addition, clear segregation of duties is documented in the MINPOSTEL chart on which the project procedures and organization will build upon. The existing internal control system will be reinforced with the adoption of a simplified administrative, accounting and financial procedures (included in the PIM) describing key processes, procedures, job descriptions, authorizations and charts that are specific to the project. - 42 - External audit 22. The World Bank requires that the audit scope and terms of reference, the auditor, and the audit standards applied be acceptable to it. The responsibility of the presentation of consolidated financial statements and audit preparation remain to the PCU. 23. The project's consolidated financial statements will be audited each fiscal year by an independent auditor accepted by IDA. Detailed terms of reference for the selection of project auditor have been agreed with IDA. The scope of the audit will include IDA financing as well as government counterpart funds, in accordance with the Bank's requirements and accepted by the Borrower. 24. The auditor will provide: (a) a unique opinion of financial statements, which may include a special opinion on the statements of expenditures or interim reports and Designated Account; (b) a management letter containing the auditor's assessment on the internal controls, accounting system relating to the project and compliance with financial covenant in the Project Financing Agreements; and (c) suggestions for improvement, which will be submitted to management for follow-up. 25. Reports and audit details will be submitted to the IDA within six months from the end of the audit period. 26. Counterpart financing : The government is committed to finance the following activities: (i) indemnities and operating costs14 for the CAB Steering Committee; (ii) indemnities and operating costs for the CAB National technical Committee; (iii) indemnities and operating costs for the CAB procurement Commission; (iv) indemnities for the Project Coordinator and (v) the CAB Communication Program (except consultancies ­ to be financed by IDA under component 3 of CITCM). These activities are estimated at about $530,000 will be financed directly by the Government of Cameroon. Disbursement arrangements 27. Disbursements cover: (i) funds flow; (ii) the Designated Account; (iii) disbursement methods and; (iv) type of supporting documentation. Funds Flow 28. One Designated Account (DA) in CFAF will be opened in a commercial bank and managed the Caisse Autonome d'Amortissement (CAA) under the responsibility of the PCU (in terms of ensuring fiduciary standards and accordance with Bank FM guidelines), 14 Indemnities and operating costs financed by the counterpart financing includes travel costs and per-diems. - 43 - the Project coordinator and the financial manager. Upon effectiveness, the DA will receive an initial deposit equivalent of CFAF 325 millions. 29. Withdrawal applications on the DA would be submitted to IDA on a monthly basis and supported by a statement of expenditures (SOE) as indicated in the disbursement letter. The SOE will be signed by the persons responsible for the project Accounts. 30. No replenishment of the accounts will occur until the previous expenditures made out of the process of the previous allocation have been properly documented. 31. A Project Account in CFAF for the activities to be financed by the Government will be opened in a commercial bank and managed the Caisse Autonome d'Amortissement (CAA) under the responsibility of the PCU, the Project coordinator and the financial manager. The amount of these activities is estimated at about $530,000 for the project implementation. 32. Allocation of Credit Proceeds The World Bank will issue a "Disbursement Letter" which will specify the additional instructions for withdrawal of the proceeds of the Credit. The following table shows the allocation of the proceeds of the credit by disbursement category. Allocation of the Credit Proceeds Category Amount of the Credit Percentage of Allocated Expenditures to be (expressed in US$) Financed (inclusive of Taxes except VAT) (1) Small Works, Goods, Consultants' Services 8,800,000 100% including audits, Training, Non-Consulting Services and Operating Costs for Components 1, 2 and 3of the Project (2) Refund of Preparation Advance 1,100,000 100 percent or Amount payable pursuant to Section 2.07 of the General Conditions TOTAL AMOUNT 9,900,000 Disbursement methods 33. Disbursements from IDA to Borrower: Disbursements from IDA would be initially made on the basis of statement of expenditures (SOE) (transaction- based disbursements) until such time when the Project FM arrangements meet the requirements for report based disbursements. Four disbursement methods will be available for this project: the "Advance" method which would allow IDA to deposit an initial advance up to the ceiling amount into of the Designated Account and these funds will be used by the Borrower to finance project's eligible expenditures under the proposed Credit. The project may also submit requests for reimbursement of eligible project expenditures pre- financed from the Borrower's own resources. Another acceptable method of withdrawing funds from the Credit is the direct payment method, involving direct payments from the - 44 - Credit to a third party for works, goods and services upon the Borrower's request. Another option is for IDA to make payments to a third party for eligible expenditures under special commitments entered into, in writing, at the Borrower's request and on terms and conditions agreed between the Bank and the Borrower. The minimum application value for requests for reimbursement, direct payment and special commitment is 20% of the Designated Account ceiling. IDA will have the right as reflected in the financial agreement to suspend disbursement of funds if MINISPOSTEL does not comply with reporting requirements. To move from transaction based disbursements to report based disbursements where six monthly expenditure forecast are quarterly made available on the DA, MINIPOSTEL would have to meet the following requirements: (a) sustain satisfactory FM rating during the project's supervision; (b) submit IFRs consistent with the agreed form and content within 45 days of the end of each reporting period; and (c) submits the expected Audits Reports by the due date, namely the report on financial statements and the management letter. In the event or when the conditions are met. The DA ceiling of the DA will be base on six months cash forecast as provided in the quarterly IFR. Supporting documentation will be retained by the PCU for review by the Bank. Types of Supporting Documentation 34. The Bank requires either copies of the original documents evidencing eligible expenditures ("Records") or summary reports of expenditure ("Summary Reports"). For this operation, disbursements will be supported with (i) Statement of Expenditures (SOE) summarizing eligible expenditures paid during a stated period for amounts below the SOE documentation threshold specified in the Disbursement Letter and (ii) records evidencing eligible expenditures. In all cases, the Implementing Entity will be responsible for retaining the original documents evidencing eligible expenditures and making them available for audit or inspection. 35. Taxes: The credit will finance 100% of eligible expenditures inclusive of taxes except the Value Added Tax (VAT). Financial covenants 36. Financial covenants are the standard ones as described in the legal documents and are comprised of maintaining project accounts in accordance with sound accounting practices, audit requirements and records well kept and secured. Supervision plan 37. Based on the residual financial management risk determined above, considered Moderate at entry, the project will be supervised once a year. A review of transactions will be included to check at random the specific operations encountered in sub-accounts in favor of service providers. The Bank's supervision will ensure that funds are used for the intended purposes in an economic and efficient manner and that the agreed FM arrangements continue to perform well and help the project reach its development objectives in a satisfactory manner. The supervision output will comprise: (i) a financial management supervision report documenting findings and recommendations; (ii) an update of the financial management risk; and (iii) a financial management contribution to ISR risk rating. - 45 - Annex 7: Procurement Arrangements Central African Backbone Program Communications Infrastructure and Technology APL Project (APL1A) Cameroon Credit (CITCM) A. General Procurement Environment 1. The adoption of the new procurement code approved on 24 September 2004, has improved the legal and institutional frameworks of the said system. No special exceptions, permits or licenses need to be specified in the Financial Agreement since the new procurement code allows IDA procedures to take precedence over any contrary provisions in local regulations. However, the latest audits of public contracts by independent experts revealed persistent weaknesses in procurement planning operations and practices 2. The Country Procurement Assessment Review (CPAR) conducted in 2005 indicates significant achievements in the procurement reform undertaken over the past five years. The four pillars of the system have now been put in place (in 2005 the rating of the Baseline Indicators System is 69 percent). Government's priority has been to develop capacities and strengthen the monitoring and evaluation of performance of the system in the public and private sectors. To that end, government, at the end of 2005, adopted an action plan whose main yardsticks include: (i) the preparation and adoption of a program to develop procurement capacities; (ii) the setting up of a computerized contract award system aimed at improving the planning, execution, monitoring and evaluation of operations; (iii) developing contract supervision and execution monitoring capacities; and (iv) the implementation of specific measures to ensure regulation, the strengthening of contract award rules and the sanctions mechanism. Guidelines 3. A procurement code, currently under revision, has been elaborated and got approved by the President of the Republic in September 2004. However, this procurement code does not fully comply to International Standards regarding the domestic preferences, the eligibility for NCBs and the selection and recruitment of Consultants, as it appears among others that (i) there is an absence of precision on the recruitment of NGOs and individual consultants, (ii) the short list of consultants is unlimited, (iii) there is a requirement for consultants to submit a bid security and performance guarantee. These issues are being discussed as part of the procurement reform dialogue with the government and are under review by authorities, as reported in the action plan of the workshop on the assessment of the procurement system held by ARMP (Procurement Regulatory Agency) in Yaoundé from November 27 to 28, 2007. A draft revised procurement code, based on the action plan of November's workshop, has been discussed with stakeholders involved in public procurement during the period June 2-4, 2009 at a national workshop. In the mean time, these shortcomings will be addressed within the framework of this project by the PIM (including the procurement, administrative, accounting and financial procedures). - 46 - 4. Procurement for this project would be carried out in accordance with the World Bank "Guidelines: Procurement under IBRD Loans and IDA Credits" dated May 2004 and revised in October 2006; and "Guidelines: Selection and Employment of Consultants by World Bank Borrowers", dated May 2004 and revised in October 2006, and the provisions stipulated in the Development Credit Agreement. The general description of various items under different expenditure category is described below. For each contract to be financed by the credit, the different procurement (works, goods and non-consulting services) methods or consultant selection methods, prequalification, estimated costs, prior review requirements, and time-frame would be agreed between the Recipient and the Bank Task Team in the procurement plan. The procurement plan will be updated at least annually or as required to reflect the actual project implementation needs and improvements in institutional capacity. To the extent practicable The Bank's Standard Bidding Documents for goods and Standard Requests for Proposals for Proposals as well as all standard evaluation forms would be used throughout project implementation. Publicity 5. A comprehensive General Procurement Notice (GPN) will be prepared by the Borrower and published in the United Nations Development Business online (UNDB online) and in the Development Gateway Market (dgMarket) following Board Approval, to announce major consulting assignments and any ICB.15 The GPN shall include all ICB for goods contracts and all large consulting contracts (i.e., those estimated to cost $200,000 or more). In addition, a specific procurement notice is required for all goods to be procured under ICB in dgMarket and UNDB online. Requests for expressions of interest for consulting services expected to cost more than $200,000 shall be advertised in UNDB online and in dgMarket. An expression of interest is required in the national gazette or a national newspaper or in an electronic portal of free access for all consulting firm services regardless of the contract amount. In the case of NCB16, a specific procurement notice will be published in the national gazette or a national newspaper or an electronic portal of free access. Contracts awards will also be published in UNDB and dgMarket, in accordance with the Bank's Procurement Guidelines (para. 2.60) and Consultants Guidelines (para. 2.28). Works 6. No major works are foreseen under this project. Small works estimated to cost less than $50,000 equivalent per contract may be procured through shopping, based on price quotation obtained from at least three contractors in response to a written invitation to qualified contractors. Goods 7. Goods procured under this project would include spectrum management and monitoring equipments, vehicles, IT equipment for the establishment of a national and regional Internet exchange point and It equipment or management of the local domain 15 ICB: International Competitive Bidding 16 NCB: National Competitive Bidding - 47 - name, IT equipment for the PCU. Taking into account (level of value added) manufactured/producers capacity in the country, procurement of goods will be bulked where feasible (similar nature and need at same time period) into bid packages of at least $500,000 valued, so that they can be procured through suitable methods to secure competitive prices. The procurement will be done using the Bank's SBD for all ICB. Goods estimated to cost $ 500,000 equivalent and above per contract will be procured through ICB. For any others goods contracts cost less than $500,000 equivalent, NCB procurement method in accordance with national procedures using Standard Bidding Document acceptable to the Bank and ensuring the following: · in accordance with paragraph 1.14 (e) of the Procurement Guidelines, each bidding document and contract financed out of the proceeds of the Financing shall provide that: (i) the bidders, suppliers, contractors and subcontractors shall permit the Association, at its request, to inspect their accounts and records relating to the bid submission and performance of the contract, and to have said accounts and records audited by auditors appointed by the Association; and (ii) the deliberate and material violation by the bidder, supplier, contractor or subcontractor of such provision may amount to an obstructive practice as defined in paragraph 1.14(a)(v) of the Procurement Guidelines; · invitations to bid shall be advertised in national newspapers with wide circulation; · bidders shall be given at least one month to submit bids from the date of the invitation to bid or the date of availability of bidding documents, whichever is later; · eligible bidders, including foreign bidders, shall be allowed to participate; · no domestic preference shall be given to domestic contractors and to domestically manufactured goods; · bids are awarded to the lowest evaluated bidder proven this bidder is qualified; and · fees charged for the bidding documents shall be reasonable and reflect only the cost of their printing and delivery to prospective bidders, and shall not be so high as to discourage qualified bidders. 8. Procurement of readily available off-the-shelf goods that cannot be grouped into bid packages of $50,000 or more may be procured through shopping in conformity with the clause 3.5 of the procurement guidelines. At the beginning of the project implementation, vehicles whose cost is estimated at less than $100,000 may be procured through UNOPS. Procurement of non consulting services 9. Non consulting services under this project include maintenance of the office electronic equipment and other services such as printing, and editing. Non consulting - 48 - services are likely not to exceed the equivalent of $50,000 per contract. Procurement of such services will be done using prudent shopping procedures in conformity with the clause 3.5 of the procurement guidelines. Selection of consultants 10. Consulting services will be needed for the following activities: (i) Technical Assistance to support the award of a new mobile license, (ii) Technical assistance to design the restructuring options of the incumbent operators, (iii) Technical assistance for the provision of a legal and regulatory framework for Electronic and to draft an ICT legislation, (iv) Technical Assistance related to spectrum management and monitoring equipments, (v) Technical Assistance for social and environmental activities, (vi) Study and establishment of a national and regional Internet exchange Point, (vii) Technical assistance to implement universal access in remote areas, (viii) Assistance to design and set up of regulatory tools , (ix) Study on Digital Dividend and Digital Switchover, (x) Study on Digital Dividend and Digital Switchover, (xi) Technical assistance to support the implementation of the restructuring options of the incumbent operators; etc. These consulting services will be procured with the most appropriate method among the following which are allowed by Bank guidelines and included in the approved procurement plan: Quality-and Cost-Based Selection (QCBS), Quality-Based Selection (QBS), Selection under a Fixed Budget (SFB), Least-Cost Selection (LCS). Selection Based on Consultants' Qualifications (CQ) will be used for assignments that shall not exceed $200,000. Single Source selection shall also be used in accordance with the provisions of paragraphs 3.9 to 3.13 of the Consultant Guidelines, with IDA's prior agreement. All terms of reference will be subject to IDA prior review. 11. Short lists of consultants for services estimated to cost less than $200,000 equivalent per contract may be composed entirely of national consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines. 12. Assignments in excess of $200,000, and specialized TA assignments, must be procured on the basis of international short-lists after appropriate advertisement in UNDB on line, DgMarket and in the national gazette or a national newspaper or in an electronic portal of free access 13. Consultant for services meeting the requirements of Section V of the consultant guidelines, will be selected, under the provisions for the Selection of Individual Consultants, through comparison of qualifications among candidates expressing interest in the assignment or approached directly. Training, workshops and study tours 14. Participation in training sessions, workshops, seminars, conferences, and study tours will be subject to the approved annual programs. The latter will identify the general framework of training and similar activities for the year, including the nature of the training, study tours, workshops, number of participants, as well as estimated costs. - 49 - Operating costs 15. Operational costs, which will be financed by the project, would be procured using the project's financial and administrative procedures included in the PIM previously agreed on by the Bank. For efficiency purpose, operational furniture packages will be procured on the basis of 6 or 12 months need and procured competitively. For services (car maintenance, computers maintenance, etc.) to be financed through operational costs, the project will proceed by service contracting for a defined period. B. Evaluation of the Borrower's capacity to award contracts in line with guidelines 16. The PCU of the MINPOSTEL will be responsible for the administration, coordination, monitoring of the Project, and procurement activities including compliance with procurement procedures. The PCU already includes a coordinator, a financial manager, a procurement specialist, an internal auditor and, an accountant, all recruited on a competitive basis. Procurement activities of the PCU, which are costing the CFAF5 million (equivalent of $10,000) or more, will be conducted with the technical support of the tenders board placed under MINPOSTEL's authority by the Prime Minister through a decree. The assessment of the tenders boards of the ministries so far under World Bank financed projects have revealed: (i) an unfamiliarity of the members with bank's procurement procedures and, (ii) a weakness in the interpretation of Bank procurement procedures. As a result, appropriate capacity building program will be set for tender boards members. 17. For contract amounts of less than CFAF 5 million (equivalent of $10,000) the PCU will rely on an internal procurement committee. Details of the institutional arrangement and the responsibility of this internal procurement committee will be provided in the PIM. 18. Regarding the evaluation of technical proposals for consulting services assignment, all procurement sub-commissions shall evaluate proposals using a minimum of three specialists in the sector. 19. A PIM including the financial administrative arrangements with a detailed section on procurement has been drafted and outlines, among others, the procurement arrangement and the relevant procedures applicable to the management of the credit. 20. To ensure that the above mentioned procurement corrective measures will be met in due time, an action plan is proposed in Table hereafter with tasks to be performed, responsible body as well as time-frame. - 50 - Schedule of actions to be carried out ACTION TO BE UNDERTAKEN EXPECTED RESPONSIBLE BODY TIME-FRAME Finalize and submit to IDA a Prior to PCU satisfactorily version of the PIM effectiveness PIM (effectiveness condition) Monitoring and evaluation of the As needed during World Bank procurement staff MINPOSTEL tenders board in order project's life with information collected by the to go for an alternative if the PCU procurement specialist, performance is not acceptable Finalize and submit the draft text of Prior to PCU the creation of a special tender effectiveness board approved through a Prime Minister decree, as well as all of the tender boards members nominated Strengthen capacity building for the Prior to PCU through its procurement Key staff of the PCU and the tender effectiveness and as specialist, with as needed the board needed during participation of the World Bank project's life procurement staff Set up a record keeping and filing Prior to The PCU procurement specialist system at PCU effectiveness 21. Procurement risk. The overall project risk for procurement is substantial because, among other factors, there was no previous Bank operation with this ministry and the PCU with procurement responsibility, which is been set up and staffed, is a completely new entity and is not familiar with procurement processes. Although procurement risk rating is presently substantial, the above well designed action plan with mitigation measures to be implemented and appropriate monitoring will reasonably bring this risk to moderate. 22. Award of contracts will be realized in due respect of the government procurement code regarding the composition and the mandates of the members of the MINPOSTEL's tenders board and the specialized contract control boards. It's the responsibility to ensure that the necessary national clearances and approvals have been received before the No- Objection request is transmitted to the World Bank. Procurement steps that need review or/and approval from particular tenders control boards, with respect to specific price thresholds, will be defined in the PIM. Procurement plan 23. At appraisal, the Borrower has prepared a procurement plan for project implementation providing the basis for the procurement methods. This plan, covering the first 18 months of project implementation, will be discussed and agreed upon by the Borrower and the project team at negotiations. It will be available in the Project's database and a summary will be disclosed on the Bank's external website once the project is approved by IDA Board of Executive Directors. The procurement plan will be updated in agreement with the project team annually or as required to reflect the actual project implementation needs and improvement in institutional capacity. - 51 - Publication of Results and Debriefing. 24. Publication of results of the bidding process is required for all ICBs, LIBs and Direct Contracting. Publication should take place as soon as the no objection is received, except for Direct Contracting which may be done quarterly and in a simplified format. Publication of results for NCB and Shopping should follow the requirements of the procurement code of Cameroon. The disclosure of results is also required for selection of consultants. All consultants competing for the assignment should be informed of the result of the technical evaluation (number of points that each firm received) before the opening of the financial proposals, and at the end of the selection process the results should be published. The publication of results in selection of consultants applies to all methods, however for CQS and SSS the publication may be done quarterly and in a simplified format. The publication may be done through Client Connection. Losing bidders/consultants shall be debriefed on the reasons why they were not awarded the contract if they request explanation. Fraud, Coercion and Corruption 25. The procuring entity as well as Bidders/Suppliers/Contractors shall observe the highest standard of ethics during the procurement and execution of contracts financed under the program in accordance with paragraphs 1.15 & 1.16 of the Procurement Guidelines and paragraphs 1.25 & 1.26 of the Consultants Guidelines. C. Frequency of procurement supervision 26. The capacity assessment recommended that supervision missions and field visits by the World Bank should take place at least twice a year to carry out among other things post review of procurement actions. D. Details of the procurement mechanism 1. Works, Goods, and Non Consulting Services (a) List of main ICB packages to be procured in the first 18 months: 1 2 3 4 5 6 7 8 9 Com Domest Review Expected ment Estimate Prequalific ic Contract by Bank Bid- s/com Ref. No. d Method ation Prefere (Description) (Prior / Opening pletio Cost (yes/no) nce Post) Date n (yes/no) date Purchase of spectrum CITCM/AR July management and 1,400,000 ICB No No Prior May 2010 T/09/E/003 2011 monitoring equipments - 52 - (a) ICB Contracts estimated to cost above $5,000,000 for works and $500,000 for goods per contract, the first two NCB contracts for works and goods, eventually others as identified in the procurement plan and all Direct Contracting will be subject to prior review by the Bank. F. Details of the Procurement Arrangements for Consulting Services (a) List of main consulting assignments with selection methods and time schedule for the first 18 months. 1 2 3 4 5 6 7 Review Expected Comments Ref. Estimated Selection by Bank Proposals / Description of Assignment Cost No. Method (Prior / Submission completion Post) Date date CITCM /09/MI Technical Assistance to support the September NPOST 200,000 QCBS Prior April 2010 award of a new mobile license 2009 EL/C/0 01 CITCM /09/MI Technical assistance to design the September March NPOST restructuring options of the 240,000 QCBS Prior 2009 2010 EL/C/0 incumbent operators 02 CITCM Technical assistance for the /09/MI provision of a legal and regulatory September December NPOST 280,000 QCBS Prior framework for Electronic and to 2009 2009 EL/C/0 draft an ICT legislation 03 CITCM Technical Assistance related to October /09/AR spectrum management and 175,000 QCBS Prior May 2010 2009 T/C/004 monitoring equipments CITCM /09/MI February Technical Assistance for social and November NPOST 100,000 QCBS Prior 2010 environmental activities 2009 EL/C/0 06 CITCM /09/MI Study and establishment of a December NPOST national and regional Internet 100,000 QCBS Prior June 2010 2009 EL/C/0 eXchange Point 07 CITCM /09/AN Study for the management of the December 100,000 QCBS Prior June 2010 TIC/C/0 country top domain ".cm" 2009 12 CITCM Technical assistance to implement April 2011 /10/MI 150,000 QCBS Prior March 2010 universal access in remote areas NPOST - 53 - EL/C/0 08 CITCM Technical Assistance to design and /10/AR 150,000 QCBS Prior March 2010 July 2010 set up of regulatory tools T/C/009 CITCM Study on Digital Dividend and August /10/AR 120,000 QCBS Prior March 2010 Digital Switchover 2010 T/C/010 CITCM /10/MI Technical assistance to support the January NPOST implementation of the restructuring 1,000,000 QCBS Prior April 2011 2010 EL/C/0 options of the incumbent operators 11 (b) Consultancy services estimated to cost above $200,000 for firms and $100,000 for individuals per contract, and Single Source Selection of consultants (firms and individuals) will be subject to prior review by the Bank, as well as each contract for consultants' services procured under Single Source Selection, all audit contracts and the first contract to be awarded in accordance with each procurement method of consultants' services regardless of contract amount to be procured as well as eventually others as identified in the procurement plan. (c) Shortlists composed entirely of national consultants: Shortlists of consultants for services estimated to cost less than $200,000 equivalent per contract may be composed entirely of national consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines. - 54 - Annex 8: Economic and Financial Analysis Central African Backbone Program Communications Infrastructure and Technology APL Project (APL1A) Cameroon Credit (CITCM) 1. Economic and financial analysis with a focus on connectivity. An assessment study for backbone connectivity was conducted with the help of international consultants in several CAB eligible countries (including Cameroon). A preliminary economic and financial analysis was carried out based on this study, and yielding the results outlined below. 2. The aim of CAB APL 1 (APL1A including CITCM, CITCAR and CITCD and APL1B) is to establish a regional broadband network across Cameroon, CAR and Chad. This broadband network will reduce significantly the cost of international connectivity. This will have a direct economic impact through additional investment, value added, and employment and as a generator of tax revenues. It will also have an indirect economic impact through increased productivity of the public and private sectors (e.g. improved public service delivery). CAMEROON ­ Traffic Forecasts 18,000 16,000 2021 CAGR, 2005-2021: 16.4 37% 14,000 Gb/s CAGR, 2005-2010: 72% 12,000 2016 10,000 6.2 Mb/s Gb/s 8,000 2011 Private lines 2.1 Internet 6,000 2006 Gb/s Voice over IP 171 PSTN Voice 4,000 Mb/s 2,000 Source: Terabits Voice 0 2011 2006 2007 2008 2009 2010 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 3. The opportunity cost was calculated to measure the global economies from the cost of providing bandwidth relying on satellite connection as compared to the cost of providing bandwidth relying on CAB connection. As suggested in the table below under the assumption of a discount rate of 13 percent and an average annual decrease of 8 percent for satellite connection, the actual opportunity cost is estimated at more than $117 million: $34 million Cameroon, $26 million for CAR and $58 million for Chad. - 55 - Total discounted opportunity cost Chad $58 Cameroon $34 CAR $26 CAB $117 4. The estimated opportunity cost is a decreasing function of the annual decrease in satellite connection prices An average annual decrease of 21.6 percent of satellite connection prices between 2011 and 2021 would jeopardize the competitiveness of the CAB Program and would therefore produce a 0 (zero) opportunity cost. 5. The CAB Program in general will provide a major boost to the broadband market through increasing usage of broadband in public institutions, in the private sector and for the consumers. The project will significantly reduce the cost of international connectivity. The project will stimulate the market and the overall economy. The effect of the project is therefore to accelerate the development of the broadband market. It is estimated the backbone will carry more that 23,000 E1 in 2021. 2011 2013 2015 2017 2019 2021 Chad 3,654 6,146 8,256 10,704 13,354 16,440 Cameroon 847 1,252 1,930 2,847 4,213 6,285 CAR 50 76 106 151 218 320 Capacity Carried on CAB (E1) 4,551 7,474 10,292 13,703 17,785 23,045 6. The estimates of economic impact are based on a 10 year model of the broadband market in Cameroon, CAR and Chad. Broadband Internet is a new industry in Africa and there are very few countries with advanced broadband markets on which to base economic calculations. The economic impact is based on a micro- economic analysis calculating the social welfare as the sum of the consumer surplus and producer surplus. The consumer surplus is calculated as the amount that consumers benefit by being able to purchase a product for a price that is less than they would be willing to pay. The producer surplus is computed as amount that producers benefit by selling at a market price mechanism that is higher than they would be willing to sell for. The graph below gives a snapshot of the economic methodology used in this paragraph: - 56 - Price Supply Curve Consumer Surplus Market Price Equilibrium Producer Surplus Demand Curve Equilibrium Quantity Quantity 7. The global regional calculated economic surplus was estimated at $94 million out of which $76 million of consumer surplus and $18 million of producer surplus at the regional level. Consumer Surplus Producer Surplus Social Welfare Chad $38 $9 $47 Cameroon $25 $6 $30 CAR $14 $2 $17 CAB $76 $18 $94 8. An analysis was conducted to analyze the financial viability of the CAB program. In the detailed financial analysis conducted by International consultants, it is estimated the CAB Program will generate a positive EBITDA the first year of operation. - 57 - Annex 9: Statement of Loans and Credits for Cameroon Central African Backbone Program Communications Infrastructure and Technology APL Project (APL1A) Cameroon Credit (CITCM) Operations Portfolio (IBRD/IDA and Grants) As Of Date 8/3/2009 Closed Projects 75 IBRD/IDA * Total Disbursed (Active) 96.46 of w hich has been repaid 0.00 Total Disbursed (Closed) 2,195.07 of w hich has been repaid 1,284.30 Total Disbursed (Active + Closed) 2,291.52 of w hich has been repaid 1,284.30 Total Undisbursed (Active) 340.50 Total Undisbursed (Closed) 0.00 Total Undisbursed (Active + Closed) 340.50 Active Projects Difference Between Last PSR Expected and Actual Supervision Rating Original Amount in US$ Millions Disbursements a/ Development Implementation Project ID Project Name Fiscal Year IBRD IDA GRANT Cancel. Undisb. Orig. Frm Rev'd Objectives Progress Status of Bank Group Operations (B8) Port Stat Active Country Republic of Cameroon Approval FY Proj ID (SPN) Proj ID (SPN) Latest DO Latest IP Approval FY IBRD IDA Grants Cancel. Undisb. Orig. Frm Rev'd P073020 CM GEF Forest & Env DPL (FY06) MS MS 2006 10 6.20 P112635 CM-Agricultural Competitiveness Project # # 2009 60 62.13 P073629 CM-Com Dev Prog Sup APL (FY04) S S 2004 20 2.93 2.31 P113027 CM-Com Dev Prog Sup APL-II # # 2009 40 41.16 P074490 CM-Douala Infrastructure (FY03) S MS 2003 56.35 13.16 0.73 0.73 P075964 CM-Edu Dev CB (FY05) MU MU 2005 18.2 13.27 11.79 P104456 CM-Energy Sector Development SIL (FY08) S S 2008 65 60.69 -1.28 P109588 CM-Env. Capacity Energy SIL (FY08) S MS 2008 20 17.12 -1.81 P070656 CM-Forestry & Env DPL (FY06) MU MU 2006 25 15.96 7.86 P089289 CM-GEF Sst AgroPastor & Land Mgmt (FY06) MU S 2006 6 4.40 2.53 P104525 CM-Health Sector Supp. SWAP SIL (FY08) S MS 2008 25 23.36 0.52 P084160 CM-Transp & Account CB (FY08) MS MS 2008 15 14.45 P084002 CM-Urban and Water D. SIL (FY07) S MS 2007 80 76.27 15.66 Overall Result 424.55 16 351.10 34.51 0.73 - 58 AFRICA STATEMENT OF IFC's Held and Disbursed Portfolio Cameroon Committed and Disbursed Outstanding Investment Portfolio As of 6/30/2009 (In USD Millions) Committed Disbursed Outstanding FY Compan **Quasi Partici **Quasi Partici Approval y Loan Equity Equity *GT/RM pant Loan Equity Equity *GT/RM pant Aef 3t 2006 cameroun 0.97 0 0 0 0 0.97 0 0 0 0 Aef nosa 2005 iii 1.13 0 0 0 0 0.67 0 0 0 0 Aef 1996 notacam 0.97 0 0 0 0 0.97 0 0 0 0 2006 Aes sonel 98.86 0 0 0 0 51.47 0 0 0 0 2007/09 Cmf 0 0.9 0 0 0 0 0.9 0 0 0 2000 Cotco 21.65 0 0 0 21.65 21.65 0 0 0 21.65 Eb-accion 0 cmr 0 0.93 0 0 0 0 0 0 0 0 2008 Fme-gaz 2.68 0 0 0 0 2.68 0 0 0 0 Pecten 2003 cameroon 10.45 0 0 0 13.3 10.45 0 0 0 13.3 Total Portfolio: 136.71 1.83 0 0 34.95 88.86 0.9 0 0 34.95 * Denotes Guarantee and Risk Management Products. ** Quasi Equity includes both loan and equity types. - 59 Annex 10: Country at a Glance Central African Backbone Program Communications Infrastructure and Technology APL Project (APL1A) Cameroon Credit (CITCM) Cameroon at a glance 9/24/08 Sub- Lower Key Development Indicators Saharan middle Age distribution, 2007 Cameroon Africa income (2007) Male Female Population, mid-year (millions) 18.5 800 3,437 75-79 Surface area (thousand sq. km) 475 24,242 35,510 60-64 Population growth (%) 2.0 2.4 1.0 Urban population (% of total population) 56 36 42 45-49 30-34 GNI (Atlas method, US$ billions) 19.4 762 6,485 GNI per capita (Atlas method, US$) 1,050 952 1,887 15-19 GNI per capita (PPP, international $) 2,120 1,870 4,544 0-4 GDP growth (%) 3.3 6.2 9.7 20 10 0 10 20 GDP per capita growth (%) 1.3 3.7 8.6 percent (most recent estimate, 2000­2007) Poverty headcount ratio at $1.25 a day (PPP, %) .. 50 .. Under-5 mortality rate (per 1,000) Poverty headcount ratio at $2.00 a day (PPP, %) .. 72 .. Life expectancy at birth (years) 50 50 69 200 Infant mortality (per 1,000 live births) 87 94 41 Child malnutrition (% of children under 5) 15 27 25 150 Adult literacy, male (% of ages 15 and older) 77 69 93 100 Adult literacy, female (% of ages 15 and older) 60 50 85 Gross primary enrollment, male (% of age group) 117 99 112 Gross primary enrollment, female (% of age group) 98 88 109 50 0 Access to an improved water source (% of population) 70 58 88 1990 1995 2000 2006 Access to improved sanitation facilities (% of population) 51 31 54 Cameroon Sub-Saharan Africa Net Aid Flows 1980 1990 2000 2007 a (US$ millions) Net ODA and official aid 265 444 379 1,684 Growth of GDP and GDP per capita (%) Top 3 donors (in 2006): Austria 0 0 9 443 10 France 95 172 86 244 Germany 25 44 47 228 5 0 Aid (% of GNI) 4.7 4.2 4.0 9.5 Aid per capita (US$) 29 36 24 93 -5 Long-Term Economic Trends -10 95 05 Consumer prices (annual % change) 9.5 1.1 0.8 1.8 GDP implicit deflator (annual % change) 14.2 1.6 2.8 2.0 GDP GDP per capita Exchange rate (annual average, local per US$) 209.2 300.7 656.3 479.3 Terms of trade index (2000 = 100) 113 99 100 103 1980­90 1990­2000 2000­07 (average annual growth %) Population, mid-year (millions) 9.1 12.2 15.9 18.5 3.0 2.6 2.2 GDP (US$ millions) 6,741 11,152 10,075 20,644 3.4 1.7 3.5 (% of GDP) Agriculture 31.3 24.6 22.1 19.4 2.2 5.4 3.5 Industry 25.6 29.5 36.0 29.0 5.9 -0.9 2.3 Manufacturing 9.6 14.5 20.8 18.0 5.0 1.4 4.6 Services 43.1 46.0 41.8 51.6 2.1 0.2 6.6 Household final consumption expenditure 68.6 66.6 70.2 72.6 3.6 3.1 4.5 General gov't final consumption expenditure 9.7 12.8 9.5 9.2 6.8 0.7 2.8 Gross capital formation 21.0 17.8 16.7 17.3 -2.6 0.4 4.9 Exports of goods and services 27.9 20.2 23.3 22.1 5.7 3.2 0.7 Imports of goods and services 27.1 17.3 19.7 21.3 3.6 5.1 4.0 Gross savings 6.3 16.1 16.1 19.7 Note: Figures in italics are for years other than those specified. 2007 data are preliminary. .. indicates data are not available. a. Aid data are for 2006. Development Economics, Development Data Group (DECDG). 60 Cameroon Balance of Payments and Trade 2000 2007 Governance indicators, 2000 and 2007 (US$ millions) Total merchandise exports (fob) 2,123 4,056 Total merchandise imports (cif) 1,542 3,012 Voice and accountability Net trade in goods and services 704 -226 Political stability Workers' remittances and compensation of employees (receipts) 11 103 Regulatory quality Rule of law Current account balance 266 85 as a % of GDP 2.6 0.4 Control of corruption Reserves, including gold 38 961 0 25 50 75 100 2007 Country's percentile rank (0-100) Central Government Finance higher values imply better ratings 2000 (% of GDP) Source: Kaufmann-Kraay-Mastruzzi, World Bank Current revenue (including grants) 12.5 13.4 Tax revenue 11.2 10.8 Current expenditure 9.3 7.3 Technology and Infrastructure 2000 2007 Overall surplus/deficit 0.9 1.1 Paved roads (% of total) 8.1 10.0 Highest marginal tax rate (%) Fixed line and mobile phone Individual 60 .. subscribers (per 1,000 people) 1 18 Corporate 39 .. High technology exports (% of manufactured exports) 1.4 2.7 External Debt and Resource Flows Environment (US$ millions) Total debt outstanding and disbursed 10,103 3,171 Agricultural land (% of land area) 20 20 Total debt service 556 519 Forest area (% of land area) 48.0 45.6 Debt relief (HIPC, MDRI) 1,662 687 Nationally protected areas (% of land area) .. 8.0 Total debt (% of GDP) 100.3 17.7 Freshwater resources per capita (cu. meters) .. 15,341 Total debt service (% of exports) 18.9 10.1 Freshwater withdrawal (% of internal resources) 0.4 .. Foreign direct investment (net inflows) 159 309 CO2 emissions per capita (mt) 0.22 0.22 Portfolio equity (net inflows) 0 0 GDP per unit of energy use (2005 PPP $ per kg of oil equivalent) 4.6 5.0 Composition of total external debt, 2006 IDA, 170 Energy use per capita (kg of oil equivalent) 400 392 IBRD, 46 IMF, 8 Short-term, 596 Other multi- lateral, 280 World Bank Group portfolio 2000 2007 (US$ millions) IBRD Private, 579 Total debt outstanding and disbursed 214 40 Disbursements 0 0 Principal repayments 52 5 Bilateral, 1,491 Interest payments 22 2 US$ millions IDA Total debt outstanding and disbursed 769 198 Disbursements 55 20 Private Sector Development 2000 2008 Total debt service 12 2 Time required to start a business (days) ­ 37 IFC (fiscal year) Cost to start a business (% of GNI per capita) ­ 137.1 Total disbursed and outstanding portfolio 65 186 Time required to register property (days) ­ 93 of which IFC own account 18 105 Disbursements for IFC own account 3 28 Ranked as a major constraint to business 2000 2007 Portfolio sales, prepayments and (% of managers surveyed who agreed) repayments for IFC own account 11 24 Tax rates .. 32.6 Electricity .. 15.1 MIGA Gross exposure 0 0 Stock market capitalization (% of GDP) .. .. New guarantees 0 0 Bank capital to asset ratio (%) .. .. Note: Figures in italics are for years other than those specified. 2007 data are preliminary. 9/24/08 .. indicates data are not available. ­ indicates observation is not applicable. Development Economics, Development Data Group (DECDG). 61 Millennium Development Goals Cameroon With selected targets to achieve between 1990 and 2015 (estimate closest to date shown, +/- 2 years) Cameroon Goal 1: halve the rates for extreme poverty and malnutrition 1990 1995 2000 2007 Poverty headcount ratio at $1.25 a day (PPP, % of population) .. .. .. .. Poverty headcount ratio at national poverty line (% of population) .. 53.3 40.2 .. Share of income or consumption to the poorest qunitile (%) .. 5.7 5.6 .. Prevalence of malnutrition (% of children under 5) .. .. 17.8 15.1 Goal 2: ensure that children are able to complete primary schooling Primary school enrollment (net, %) 69 .. .. .. Primary completion rate (% of relevant age group) 57 .. 50 52 Secondary school enrollment (gross, %) 26 .. 27 24 Youth literacy rate (% of people ages 15-24) .. .. .. .. Goal 3: eliminate gender disparity in education and empower women Ratio of girls to boys in primary and secondary education (%) 83 .. 85 83 Women employed in the nonagricultural sector (% of nonagricultural employment) 21 19 22 .. Proportion of seats held by women in national parliament (%) 14 12 6 14 Goal 4: reduce under-5 mortality by two-thirds Under-5 mortality rate (per 1,000) 139 151 151 149 Infant mortality rate (per 1,000 live births) 85 89 88 87 Measles immunization (proportion of one-year olds immunized, %) 56 46 49 73 Goal 5: reduce maternal mortality by three-fourths Maternal mortality ratio (modeled estimate, per 100,000 live births) .. .. .. 1,000 Births attended by skilled health staff (% of total) 58 .. 60 63 Contraceptive prevalence (% of women ages 15-49) 16 .. 26 29 Goal 6: halt and begin to reverse the spread of HIV/AIDS and other major diseases Prevalence of HIV (% of population ages 15-49) .. .. 6.0 5.1 Incidence of tuberculosis (per 100,000 people) 77 115 166 192 Tuberculosis cases detected under DOTS (%) .. 4 31 91 Goal 7: halve the proportion of people without sustainable access to basic 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 .. 48.0 45.6 Nationally protected areas (% of total land area) .. .. .. 8.0 CO2 emissions (metric tons per capita) 0.1 0.3 0.2 0.2 GDP per unit of energy use (constant 2005 PPP $ per kg of oil equivalent) 5.0 4.1 4.6 5.0 Goal 8: develop a global partnership for development Telephone mainlines (per 100 people) 0.3 0.5 0.6 0.7 Mobile phone subscribers (per 100 people) 0.0 0.0 0.7 24.5 Internet users (per 100 people) 0.0 0.0 0.3 2.0 Personal computers (per 100 people) .. 0.1 0.3 1.1 Education indicators (%) Measles immunization (% of 1-year olds) ICT indicators (per 1,000 people) 100 100 20 75 75 15 50 50 10 25 25 5 0 2000 2002 2004 2006 0 0 1990 1995 2000 2006 2000 2002 2004 2006 Primary net enrollment ratio (..) Fixed + mobile subscribers Ratio of girls to boys in primary & Cameroon Sub-Saharan Africa Internet users secondary education Note: Figures in italics are for years other than those specified. .. indicates data are not available. 9/24/08 Development Economics, Development Data Group (DECDG). 62 IBRD 33382 12°E 14°E 16°E Lake C A MER O O N This map was produced by 1963 Level the Map Design Unit of The Chad World Bank. The boundaries, 1973 Level colors, denominations and any other information shown SELECTED CITIES AND TOWNS 2001 Level on this map do not imply, on the part of The World Bank To Group, any judgment on the PROVINCE CAPITALS Fotokol Massaguet legal status of any territory, or any endorsement or NATIONAL CAPITAL Maltam acceptance of such To boundaries. RIVERS Maiduguri 12°N To Mandélia MAIN ROADS 0 40 80 120 160 Kilometers To RAILROADS Maiduguri 0 40 80 120 Miles ts. PROVINCE BOUNDARIES INTERNATIONAL BOUNDARIES Mora M ra n da E X T R E M E To Maroua Guelengdeng a NIGERIA M Yagoua NORD Kaélé 10°N 10°N To Figuil Kim To Pala To Leré CAMEROON Garoua Touroua Bé no CHA D ué NORD Fa r o 8°N 8°N bang. Mbé Mts M na Vi Ngai ts. Ngaoundéré M ADAMAOUA a u ao Banyo m m ére Dj Wum da Ngaoundal A Tibati To NORD- 6°N Ikom OUEST Kumbo To 6°N Bamenda Bankim Sangbé Bouar Mamfe Mb Garoua Boulai u Foumban Bafoussam Dschang OUEST Yoko Lo m CENT RA L A FR I CAN SUD- Bafang CENTRE REPUBL I C OUEST Nkongsamba Mb am Bélabo Kadei Kumba Bertoua ri Nanga ou Yabassi Eboko Batouri W Mt. Cameroon (4,095 m) LITTORAL Buea Ntui Tiko 4°N Limbe Douala Akonolinga Abong Mbang Yola 4°N Edea YAOUNDÉ EQUATORIAL Eséka Nyong EST Bou GUINEA Mbalmayo mb a Echambot Kribi Ebolowa Sangmélima Lokomo SUD Ambam Dja Kom Mouloundou 2°N 2°N To Oyem Gulf of EQUATORIAL GA BO N Guinea GUINEA CO NGO 10°E 12°E 14°E 16°E SEPTEMBER 2004