Documentof The World Bank FOROFFICIAL USEONLY ReportNo: 27975-CM PROJECT APPRAISAL DOCUMENT ONA PROPOSED CREDIT INTHEAMOUNT OF SDR 13.6MILLION (US$20 MILLIONEQUIVALENT) TO THE REPUBLIC OF CAMEROON FOR A COMMUNITY DEVELOPMENTPROGRAM SUPPORT PROJECT INSUPPORT OFTHEFIRSTPHASEOFTHE COMMUNITY DEVELOPMENTPROGRAM February20,2004 Environmental, Rural and Social Development Central Africa Country Department 07 Africa RegionalOffice This documenthas arestricteddistributionandmay be usedby recipientsonly inthe performance of their official duties. Its contentsmaynot otherwisebe disclosed without World Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective Estimation for August 2003) Currency Unit = CFA Franc 1CFAF = US$0.00166 US$1 = 600 CFAF FISCAL YEAR January 1st -- December 31 ABBREVIATIONS AND ACRONYMS AFD French Development Agency (Agence Franqaisede Dkveloppement) APL Adaptive Program Lending ASPEN Africa Safeguards Policy Enhancement CAA National Debt Management Agency (Caisse Autonome d'Amortissement) CAS Country Assistance Strategy CBO Community-Based Organization CDC Communal DecisionCommittee CDP Communal Development Plan CPAR Country Procurement AssessmentReview D C A Development Credit Agreement EMP Environmentalmanagement Plan EO1 Expression o f Interest ESMF Environmental and Social Management Framework FEDEC Foundation for Development andEnvironment FEICOM Special Fundfor Council Management (Fonds Special d'Equipement et d'Intewention Intercommunale) FMR Financial Monitoring Report GDP Gross Domestic Product GOC Government o f Cameroon GPN General Procurement Notice ICB International Competitve Bidding IPDP Indigenous People Development Plan LDP LocalDevelopment Plan MINEPAT MinistryofEconomicAffairs, ProgrammingandRegionalDevelopment MINAGRI Ministry o f Agriculture MINEPIA MinistryofLivestock, Fisheries andAnimal Industries MINEF MinistryofEnvironment and Forests MINSANTE MinistryofPublic Health MINATD MinistryofTerritorial Administration andDecentralization MINEDUC MinistryofNational Education MIS MonitoringInformation System NCB National Competitive Bidding N C U National CoordinationUnit NGO NonGovernmental Organization PIM Project ImplementationManual PADC Community Development Support Project (Projet d'Appuiau Dkveloppement FOROFFICIALUSEONLY Communautaire) PAPNDP Community Development Program Support Project PDC Provincial Decision Committee PDOB Chest-BCnouC Development Project PNDP Comunity Development Program PNVRA NationalAgricultural Extension andResearchProgram Support Project PPU Provincial Project Unit PRDM Projet de DBveloppement de la Rtgionde Monts Mandara PRSP Poverty Reduction Strategy Paper RAP? 'ResettlementActionPlan RPF Resettlement Policy Framework RSR Rural Sector Review SA Special Account SBD Standard BiddingDocument sc Steering Committee SOE Statement of Expenditures SPN Specific Procurement Notice SRFP Standard Request for Proposal Vice President: Callisto Madavo Country Director: Ali JShadr Sector Manager: JosephBaah-Dwomoh Task Team Leader: Ousmane Seck This document has a restricteddistributionand may be used by recipients only in the performanceof their official duties. Its contents may not be otherwise disclosed without World Bank authorization. CAMEROON COMMUNITY DEVELOPMENTPROGRAMSUPPORTPROJECT CONTENTS A. Program Purpose and Project Development Objective Page 1. Program purpose and program phasing 3 2. Project development objective 3 3. Key performance indicators 4 B. Strategic Context 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project 2. Main sector issues and Government strategy 3. Sector issues to be addressed by the project and strategic choices 4. Program description and performance triggers for subsequent loans C. Program and Project Description Summary 1. Project components 11 2. Key policy and institutional reforms supported by the project 12 3. Benefits and target population 12 4. Institutional and implementation arrangements 13 D.Project Rationale 1. Project altematives considered and reasons for rejection 17 2. Major related projects financed by the Bank andor other development agencies 18 3. Lessons leamed and reflected in the project design 19 4. Indications o f borrower commitment and ownership 20 5. Value added o f Bank support in this project 20 E. Summary Project Analysis 1. Economic 21 2. Financial 21 3. Technical 22 4. Institutional 22 5. Environmental 23 6. Social 27 7. Safeguard Policies 30 F. Sustainability and Risks 1. Sustainability 32 2. Critical risks 32 3. Possible controversial aspects 33 G. Main Conditions 1. Effectiveness Condition 33 2. Other 33 , H. Readinessfor Implementation 33 I.CompliancewithBankPolicies 33 Annexes Annex I: Project Design Summary 35 Annex 2: Detailed Project Description 42 Annex 3: Estimated Project Costs 49 Annex 4: Cost Benefit Analysis Summary, or Cost-Effectiveness Analysis Summary 50 Annex 5: Financial Summaryfor Revenue-Earning Project Entities, or Financial Summary 51 Annex 6: (A) Procurement Arrangements 52 (B)FinancialManagement and DisbursementArrangements 63 Annex 7: Project Processing Schedule 69 Annex 8: Documents inthe Project File 71 Annex 9: Statement o f Loans and Credits 72 Annex 10: Country at a Glance 74 Annex 11: Rural Development Policy Letter 76 Annex 12: Financial andInstitutionalArrangements 84 CAMEROON Community DevelopmentProgramSupportProject ProjectAppraisal Document Africa RegionalOffice AFTS3 Date: February 18,2004 Team Leader: Ousmane Seck Sector Managermirector: Joseph Baah-Dwomoh Sector(s): Sub-nationalgovernment administration(90%), Country ManagedDirector: Ali Khadr Information technology (10%) Project ID: PO73629 Theme(s): Municipalgovemanceandinstitution building Lending Instrument: Adaptable ProgramLoan (APL) (P), Municipalfinance (P), Participationandcivic engagement(P), Ruralservices andinfrastructure(P), Ruralpoliciesandinstitutions (S) Program Financing Data Estimated APL IndicativeFinancingPlan ImplementationPeriod Borrower (Bank FY) Others Total Commitment Date Date APL 1 62.82 82.82 Loan/ Credit I APL2 20.00 I 20.0 I 80.00 I 100.00 Loan/ II I I I Credit1 I I APL3 I 20.00 I 20.0 I 80.00 I 100.00 06/30/2010 I 12/31/2014 I Loan/ I I I Credit II Total I 60.00 I 222.82 I 282.82 I rl t n a n IX1 Credit I 1Grant I1Guarantee I 1Other: For LoanslCreditslOthers: Amount (US$m):20.0 ProposedTerms (IDA): StandardCredit Grace period (years): 10 Years to maturity:40 Service charge: 0.75% - Financing Plan (US$m): Source Local Foreign Total BORROWER 6.29 I 0.00 I 6.29 IDA 14.50 5.50 20.00 LOCAL COMMUNITIES 1.oo 0.00 1.oo FRANCE: GOVT. OF FRANCE - MOFA andAFD (C2D) 21.00 4.00 25.00 ~~~~~ ~ HIPC-DONORCONTRIB.FOR DEBT RELIEFNOT FLOWING Borrower: REPUBLICOF CAMEROON Responsibleagency: MINISTRY OF ECONOMICAFFAIRS, PROGRAMMING& REG. DEVELOPMENT Address: MINEPAT,Yaounde, Cameroun Contact Person: Mme. Marie-MadeleineNGA Tel: (237) 221-3664165168 Fax: (237) 221-3663 Email: pndp-canieroun@yahoo.fr - 2 - A. Program Purpose and Project Development Objective 1. Programpurposeandprogramphasing: The purpose o f the Community Development Program (PNDP) is to reduce poverty and to promote sustainable rural development in Cameroon by strengthening local governance and empowering communities in rural areas, including marginalized groups. More specifically, it would (i)support implementation o f demand-driven subprojects and (ii) carry out local capacity-building activities. The PNDP supports decentralization by strengthening local technical and financial capacity and by addressing weaknesses in social capital to improve delivery o f basic services, generate economic opportunity, and address poverty andgrowth. The program's long-term vision is that communes would collaborate with communities in the planning and control of local development in rural communes (as defined by Law 74/23) by (i) identifying and managing infrastructure and service needs, (ii) managing the resources needed to establish and maintain community infrastructures, and (iii) promoting good governance. The vision cannot be achieved quickly. To maximize success, the program would be implemented using the Adaptable Program Loan (APL) instrument in three four-year phases. The first phase (the subject of this Project Appraisal Document) initiates the process and refines its mechanisms in five provinces-Province du Nord, Province de 1'Ouest, Province de 1Ydamaoua, Province du Centre, and Province du Sud (annex 13). The three phaseswould be structured as follows: Phase 1: Initiation Under this phase, the program would start in 5 of 10 provinces: Province du Nord, Province de I'Ouest, Province de lYdumuouu, Province du Centre, and Province du Sud. Over the four-year implementation period, the program would progressively refine its approach and mechanisms, building on its results and on previous local development experience in Cameroon from such pilot initiatives as the National Agricultural Extension and Research Program Support Project (PNVRA), Ouest-BtnouC Development Project (PDOB), Mandara Mountains Area Development Project (Projet de Dkveloppement de la Rigion de Monts Mundura, PRDM), the Biodiversity Conservation and Management Program, and the Community Development Support Program (PADC). Rural communities would be empowered, development investments would be cofmanced, and rural communes would be strengthenedenough to manage local development. Phase 2: Expansion Under this phase, program activities would expand to all provinces, with activities initiated in eve9 rural commune, if not in every community. Commune-level capacity-building would greatly intensify, and when communes have shown satisfactory govemance performance, local developmeni responsibilities would be progressively more intensively transferred to them. Phase3: Consolidation Under this phase, the program would achieve national geographic coverage. Appropriate measures would be taken to ensure the long-term sustainability o f local development, with local governments takingover all local development activities. 2. Projectdevelopmentobjective: (see Annex 1) The Community Development Program Support Project (PAPNDP) i s the first phase o f the program. - 3 - Its objective is to assist the Government o f Cameroon in setting up and implementing a decentralized financing mechanism to ensure participatory community development in rural areas. It would (i) establish a system for channeling funds to rural communities to finance prioritized collective infrastructures, (ii) strengthen the capacity of communities and local governments to plan and manage their own development, and (iii)improve the legal and regulatory framework for decentralized rural development. Communities and communes would be engaged in a participatory appraisal o f their needs, culminating in the implementation o f subprojects cofinanced by the project. Efforts would be made to clarify procedures and build local governance capacity for communes so that resources and local development responsibilities could be transferred to them. Special efforts will be undertaken for enable marginalized people (indigenous communities, nomads, women, etc.) to participate in the project. 3. Key performance indicators: (see Annex 1) The first phase of the Adaptable Program Loan (APL) would have a large capacity-building component. Progress toward project objectives would be measured by qualitative and process-oriented performance indicators. Indicators would also measure the implementation of subprojects. Some quantitative indicators have been added to reflect improvement in basic services and social infrastructure, but because the subprojects are demand-driven, the quantitative indicators are tentative and based on current pilot operations, feasibility studies, and studies conducted for the country's Poverty Reduction Strategy Paper (PRSP). These indicators may be revisedduring the midtermreview. Performance indicators include: Performance Indicators 500 suburoiects have been imdemented * Local Development Plans o f at least 50 % o f targeted CBOs within the 38 targeted communes have been approved * Communal Development Plans o f at least 75 % of targeted communes have beenapproved I 50 healthcentershave been rehabilitated or built I I 150 classrooms have beenrehabilitated or built I I 30 rural roads improvement subprojects have beencompleted 150 water supply infrastructures have beenrehabilitatedor built 70 YOo f subprojects approved for more than six months have beencompleted Decentralization legal texts have been prepared Staff andor elected authorities o f all 38 targeted communes have benefitedfrom training sessions or sensitization campaigns at least 50 % o f targeted communes have a rate of implementation o f their budgethigher than 50 YOas comuared to the baseline I Imdementation ratio o f the training; plans established bv the PPUs to the benefit of CBOs reaches 55 % I at least 70 % o f infrastructures carried out under the subprojects are maintained and operational 80 % ofthe reports to be prepared by NCUunderthe Project MonitoringandEvaluation Manual have been issued on a timelv basis I 80 % of contracts simed bv N C Uhave been executed on time. I 50 % oftargeted communes have a rate o ftax covering higher than 50 % as comparedto the baseline A properly grounded decision hasbeenrendered on at least 95 % of subprojects submitted to Communal and - 4 - 1 Provincial Decision Committees * :direct contributionto results-basedCAS indicators B. Strategic Context 1. Sector-related CountryAssistance Strategy (CAS) goal supported by the project: (see Annex 1) Document number: 26555 Date of latestCAS discussion:September 11,2003 The recently-approved World Bank Group Country Assistance Strategy has been aligned with the PRSP goal o f poverty reduction through improved basic delivery, private sector-led growth, andbetter govemance. The proposed project would contribute to the first pillar ("strengthening the institutional framework for improved pro-poor economic management and service delivery") and, inparticular, to the following outcome: "improved delivery o f basic services, specially sustainable management o f service delivery at the community level, farmers reachedby extension services, and urban management units" (outcome 1.3.) by empowering local communities, strengthening decentralized authorities' capacities, and improving basic services delivery, in the context o f local development plans, as measured by the following related indicators: 4,000 rural community-based action plans have been designed, 50% of them have implementedone subproject, and women and vulnerable groups are more involved in decisionmaking. Finally the project would contribute to strengthening community-driven development capacity o f local government, an important element o f the first pillar o f the strategy. A Rural Sector Review (RSR) was completed by the Bank on January 9, 2003. It assessed the main issues and constraints to rural sector performance in Cameroon and proposed an action plan for the Bank, including a national local development program. The RSR also highlighted how sustainable community development requires support to communities andprograms for capacity-building. 2. Main sector issues and Government strategy: Main issues Despite significant progress between 1996 and 2001, poverty still affects a large share o f Cameroon's population, and poverty reduction remains a key concem o f the Cameroonian authorities. According to the Household Survey I1(ECAM-11), nearly 4 o f 10 Cameroonians livedinpoverty in2001, and some 80% of the poor lived in rural areas. So rural areas must be the primary focus of poverty reduction interventions. Analyses conducted during preparation o f the PRSP identified the following obstacles to the reduction o f ruralpoverty: 1. Inadequate andinefficient provision ofbasic services to ruralpopulations. As ECAM-I1showed, poor educationis closely associatedwith poverty: more than 4 o f 10households headed by a person with no education live inpoverty, compared with 1 o f 20 households headed by a college-educated person. Educational levels remain very low in Cameroon, particularly in rural areas. Although the literacy rate has improved over the last 30 years, it is still below 60% inrural areas, and the primary school enrollment rate (79% nationwide) shows strong geographic and gender disparities, with rates below 50% in the Provinces de I'Extrhe-Nord et du Nord. The main causes are long distances between home and school (more than 10 kilometers for some communities), poor quality o f education, and highstudent-teacher ratios. Health services fail to address all the population's needs and expectations. Contributing factors include (i)the weak financial situation of the population (the poorest 20% lack any financial coverage for health care and other social services ), (ii) the weak financial situation and poor technical capacities - 5 - o f the public health system, and (iii) excessive centralization and inadequate coordination o f public the services. HIV/AIDS is a major rural development issue. National HIV/AIDS prevalence is 11'?4-20% insome areas-and i s still rising. Women and young people are affected most. Limited and dilapidated rural road networks are a key factor inpoverty. According to the Ministry o f Agriculture, up to 40% o f production is lost due to lack o f available transport. Of the 50,000 kilometer national road.network, 28,000 kilometers are rural roads (transit roads, communal roads, livestock transhumant paths, and community roads). Funds cover only a third o f rural road maintenance needs. And because the Government has no policy for ownership o f community roads, communities lack support for periodic maintenance. Inrural areas, an estimated 58% of the population lacks access to clean water, and there is 1water point for every 460 people, nearly twice the accepted standard of 1 water point for every 250-300 people. The main water problems are (i) inaccessibility due to lack o f roads, (ii) o f a participatory lack approach to planning public investments, (iii)use o f poorly adapted technologies, (iv) lack o f coordination among the ministries in charge o f rural water supplies, and (v) scarcity o f technical capacities and skills at the local level for establishing and maintaining water supply infrastructure. Communities have limited access to credit. Financing from the banking sector has been limited, and microfinance institutions do not cover all rural areas or have the long-term resources needed to meet demand,so manycustomers are tumed away. 2. Technical andfinancial weaknesses of the communes and communities. Community involvement in the local development process has increased, and some communities have drawn up local development plans, although they often lack the financial means to implement their plans. Communes are still held accountable for local development even though their resources are inadequate and revenues under direct local government control are usually insufficient to cover expenditures. There are five main sources o f local funding with the following strengths and weaknesses: a. Centimes Additionnels Communazuc (CAC) are collected with state taxes on behalf o f the communes (a 10% surcharge on income caxes, a 25% surcharge on land taxes, a 10% surcharge earmarked on games taxes, and so on). Of these funds 10% are allocated to the Government; 20% are allocated to the Fonds SpCcial d'Equipement et d'htervention Intercommunale (FEICOM), as created by Law 74/23 and operational since 1977; and 70% are distributedto communes through the FEICOM. If the "fiscal chain" were tightened and resources collected on behalf o f communes were actually distributed to them, resources available to communes under the CAC provision would double without any other changes in government policy, tax rates, or tax bases. Improving the distribution of the CAC shouldbe a highpriority inthe effort to strengthen localgovernment. b. FEICOM capital loans and grants. One o f the roles o f the FEICOM is to support local investment with loans and grants. These funds are an important source o f fmance for local capital investment, but the relative weight of technical and financial criteria in allocating funds has yet to be determined. c. Local taxes. Property tax revenues inurban areas could be boosted by basing them on land value rather than on plot size. Higherlocal tax yields inurban areas would allow more CAC funds to be allocated to rural areas. This, along with better distribution o f CAC funds, could increase the resources available to rural communes. There is little potential for raising local taxes at the rural commune level. Most public services are delivered in the village, which is far from the commune physically and psychologically, and there is little willingness to pay local taxes. d. Userfees. There appears to be strong willingness to directly pay for services in which quality improvement is evident. Differences between sectors must be carefully studied before user fee policies are adopted. In all types o f countries and communities, user fees for maintenance of - 6 - small-scale infrastructure have increasedcommunity involvement and sustainability, but the results in social sectors have been mixed. An in-depth study (using a controlled experimental design) in Cameroon's Adamaoua Province found that use of rural health centers, particularly by the poor, rose significantly when user fees were introduced and then reinvested for quality improvements Gitvack and Bodart, Social Science and Medicine, 1993). Anecdotal evidence in education indicates the opposite: enrollment increaseswhen formal fees are removed, despite drops in quality. But other factors, suchas economic growth, mayhave driven these attendancechanges. e. Local elites. Inpractice, local elites (as they are known in Cameroon) appear to be a large source o f discretionary finance for villages. Villagers who have prospered and often movedto Yaoundk or Douala remit funds directly to their communities and are often able to successfully lobby to have their villages included in national programs (rural electrification, school improvements, and the like). While elites play a pragmatic and useful role, lobbying is not the best method for allocating public expenditures. Further, by placing overall emphasis on those who have already used their prior advantages, it further marginalizes those remote andor indigenous communities that have not begun to climb the ladder. While this phenomenon would probably persist, the transparency of national programs should be improved to ensure that village-level planning is participatory and focuses on the most necessary investments. Service delivery by local governments suffers from a severe lack o f capacity, skilled staff, andtraining. Equipment and materials needed to carry out work are either scarce or outdated. Coordination and communication among communes andcommunities are also lacking. 3. Lack o f coordinationbetween donors at the local level. Several local development projects have been launched in Cameroon, but coordination has been poor. The multisectoral character o f local development requires better integration. Government's strategy 1.Povertv Reduction Strategy. Poverty reduction has become a priority for the Government o f Cameroon. The Government presented its PRSP to the Bank inJuly 2003. The PRSP sets the following priorities: i.Promotingastablemacroeconomicframework. ii.Strengtheninggrowththrougheconomicdiversification. iii.Empoweringthe privatesector asthe mainengine ofgrowth andapartner insocial services delivery. iv. Developingbasic infrastructure andnatural resourcesinan environmentally sustainablemanner. v. Acceleratingregional integration inthe framework of the Central African Economic and Monetary community. vi, Strengthening human resources, bolstering the social sector, and promoting integration of vulnerable groups inthe economy. vii. Improvinginstitutional framework, administrative management, andgovernance. The PNDP is presented inthe PRSP as one of the main instrumentso f the rural development strategy. It would contribute to priority (ii), rural sector being presented as key for economic growth in the Cameroon. The PNDP would also contribute to priorities (iv), (vi), and (vii) by cofinancing collective social infrastructures, strengthening the capacities o f rural communes and communities, and supporting decentralization. - 7 - 2.Rural Development Stratem. On April 29-30, 2003, the Government o f Cameroon presented its Rural Development Strategy. Its overall objective is strong, equitable, and sustainable rural growth. Specific objectives are: i.Modemizingagriculturalproductionsystems. ii.Restructuringtheinstitutionalframework. iii.Promotinganappropriateincentiveframework. iv. Managingnatural resourcesina sustainable manner. The strategy would be implemented inthe context o f a Rural Development Support Framework (Cadre Synoptique de Mise en oeuvre de la Stratkgie de Dkveloppement du Secteur Rural) with five priority axes: (i)local development, (ii) agricultural production development, (iii)institutional support, (iv) forestry and environment, and (v) rural finance development. Local development activities are to be implementedunder the PNDP framework. 3. Decentralization. The Government o f Cameroon has been strongly engaged indecentralization, starting with Law 74/23 (December 5, 1974) that createdcommunes. The law distinguishes between urban and rural communes (306 rural communes inCameroon). Communal authorities, including a mayor who serves as chair, are elected. But progress has been slow. The role o f the communal elected authorities should be strengthened so that they can perform assignedfunctions and be heldaccountable for performance. The specific texts required to complete the legal framework laid out in the 1996 constitution have been underpreparation for five years. The awaited texts are expectedto set out: 0 General rules applicable to communes (financial resources, status and organizationcharts o f staff); 0 General rules applicable to regions (attributions, operational aspects) ; 0 Specific provisions applicable to communal elected authorities (status and organization charts) ; 0 Specific provisions applicable to regional elected authorities and regional staff (electoral made, status and organizationcharts). On finance, a 1998 decree relaxed the "single treasury" (unicit6 de caisse) principle previously imposed on councils. Reform of the tax system and council resources would come with decentralization. The PAPNDP would support the Government o f Cameroon's completion o f the decentralization regulatory framework and would increase the capacities o f rural communal authorities and commune staff. 3. Sector issuesto be addressed by the project and strategie choices: The PAPNDP, which is integrated into the Rural Development Support Framework (inconnection with its first theme o f local development), is designed to support implementation o f the PRSP and o f the Rural Development Strategy. The PAPNDP would directly address the main issues mentioned above through the following strategic choices: Empowerment and strengthening of communities to increase their involvement in local development. This would be achieved through capacity-building for community-based organizations and leaming by doing, with communities managing their development. Communities would analyze the existing situation; elect decisionmaking bodies; identify, prioritize, and analyze problems; draw up action plans; mobilize resources; and take responsibility for implementing actionplans. - 8 - BeneJiciary coJinancing of development subprojects. Experience has shown that demand is better articulated and the sustainability of infrastructure is enhanced when communities contribute to investmentcosts, control investment choices, and oversee implementation. A demand-driven and multisectoral project. Because the PAPNDP is demand-responsive, it would address the perceived priorities o f communities andincrease the efficiency and effectiveness o f poverty reduction efforts. A demand-driven approach o f this kind can only be pursued in a multisectoral manner. A wide range of subprojects would be cofinanced as long as they are of collective benefit (schools, health centers, literacy programs, rural roads, bridges, wells). The program would thus increase the availability o f social services inrural areas. Consistency between vision and action. Formal agreements between MINEPAT and each key technical ministryinvolved inPAPNDP implementationare beingpreparedby the Government and will be finalized prior to effectiveness. They will detail how those ministries would be involvedinPAPNDP implementation to ensure consistency between local activities and national policies and standards. The project would strengthen national and regional coordination units (such as missions rkgionales d'dtudes et dbmdnugement). At the regional level the project would reconcile (i) short-term technical and economic priorities and (ii)long-term social and environmental issues, making sure that local stakeholders and decisionmakers have a common understanding o f the constraints and priorities for eachregion. National coverage and adapting program design to local capacities. It is important to ensure that the PAPNDP would scale up from existing local development projects (PNVRA,PRDM, PADC, PDOB, GEF-Biodiversity), progressively covering the whole country. Given the country's size and the huge capacity-building effort required for a community-based approach, a long-term program is necessary. Coordination of initiatives of local development donors. As declared in the Rural Development Policy Letter o f Cameroon, the PNDP would be the framework for local development projects in the country. It is a multidonor program that aims to consolidate and coordinate donor initiatives to avoid the inconsistencies ofpastdevelopment activities. Monitoring and encouragement of the trend toward decentralization. The PAPNDP would strengthenthe capacities of communes and support a financial mechanism for channeling resources to communes and communities. Empowering local governments through capacity-building activities and resources, while mandating transparency, could initiate a process whereby electoral accountability could better express itself. 4. Program description and performancetriggers for subsequentloans: The PNDP would be executed under an APL in three four-year phases. An APL would allow for a flexible, long-term intervention covering the whole country, while tailoring activities to capacity and experience that would be progressively developed. Phase 1: Initiation The first phase would define the approach and methods and would implement them in 5 o f 10 provinces: Province du Nord, Province de I'Ouest, Province de lYdamaoua, Province du Centre, and Province du Sud. To increase the chances o f success, these regions were chosen by the Government o f - 9 - Cameroon under the following criteria: (i) poverty level definedby the 2001 ECAM-I1poverty survey, (ii)continuity where participatory initiatives have already been implementedand raised local expectations, and (iii) agroecological diversity. Inthe 5 regions, the PNDP would expand the scope o f previous local participatory development projects. For example, it would cofinance the implementation of subprojects in communities which have already prepared local development plans under the PNVRA. Communes would be strengthenedunder the PNDP, and interventions would dependon their capacities. The role o f the FEICOM would be definedonce its audit has beencompleted. Phase2: Expansion The second phase would expand the strategies o f the first phase to all provinces. It would maintain PNDP support to communities from the previous phase and target new eligible communes to reach at least one community per rural commune. Local development responsibilities would be increasingly transferred from project entities to the communes. Collaboration among communes supported during the previous phase would be promoted, and intercommunal projects would be cofinanced if communities so request. Phase3: Consolidation The final phase would (i)complete national coverage and (ii)support institutional and capacity-building activities aimed at developing a sustainable institutional and financial mechanism for supporting local development. Local development responsibilities would be totally transferred to communes. -10- Performance triggers for subsequent loans Phasesmightrunconcurrently because they would be triggeredby the following performance results: PERFORMANCETRIGGERS Initiation -riggers - 50% of targeted communitieshave defined and adopted a local development plan and -- electedofa local committee; 50% of these communitieshave fully and successfully implementedone subproject; -- 25% 50% targeted communes have defined and adopted a communal development plan; of these communes have fully and successfully implementedone subproject; 10%of targeted communes have acquired enough capacity to receive and manage - 25% PAPNDPfunds: -- 50% of the component 1have been disbursed; of targeted communes have profitedfrom training programs: - Status Legal texts on decentralizationhave been drafted; and organizaton charts of communes have been prepared ~ Expansion -riggers -- 50% 100%of rural communes have been covered; of targeted communities have defined and adopted a local development plan and ----.25% elected a local committee; 50% of these communities have fully and successfully implementedone subproject; 50% of targeted communes have defined and adopted a communal development plan; 25% of these communes have fully and successfully implementedone subproject; of communes receive and manage PAPNDP funds; Financialresources are channeled to communes through a transparent and sustainable - mechanism;on Legaltexts decentralizationhave been adopted by the Government. 1-1 IConsolidation 1 C. Program and ProjectDescriptionSummary 1. Project components (see Annex 2 for a detailed description andAnnex 3 for a detailed cost breakdown): The project would have four components: (i)supporting local development, (ii) supporting the decentralization process, (iii)capacity-building at the local level, and (iv) supporting project management and coordination, monitoring and evaluation, and communication (see annex 2 for a detailed description). -11 - For each component, the preliminary cost estimates are as follows: Supporting local development 53.07 64.1 10.00 50.0 Supporting the decentralization process 5.56 6.7 0.86 4.3 Capacity-building at the locallevel 10.22 12.3 3..59 18.0 Supporting project management and coordination, 13.97 16.9 5.55 27.8 monitoring andevaluation, and communication Total Project Costs 82.82 100.0 20.00 100.0 TotalFinancingRequired 82.82 100.0 20.00 100.0 ' 2. Keypolicyandinstitutionalreforms supportedbythe project: The PAPNDP would favor decentralization. Specific legal texts required to complete the legal framework in the 1996 constitution have been under preparation for five years. The texts are expected to set out (i) general rules applicable to communes, (ii) rules applicable to regions, (iii) general specific provisions applicable to communal elected authorities, and (iv) specific provisions applicable to regional elected authorities andregional staff. On finance, a 1998decree relaxed the "single treasury" ( unicitd de caisse) principle previously imposed on councils. But there is no provision for mandatory transfer o f financial resources to municipalities, except for taxes to be withheld at the source and used by councils. The project would assist the Government of Cameroon in finalizing the regulatory framework for decentralizing communes. The PAPNDP would consolidate financial mechanisms to channel funds to communes and communities. Cofmancing subprojects would strengthen financial management capacities at all levels: community, commune, region, and center. The project would support a financial mechanism (possibly FEICOM, depending on the results o f its current audit) for channeling funds to the local level. The project would then strengthen FEICOM's capacities to assume its responsibilities, and communes would be able to take advantage o f more financing. 3. Benefitsandtarget population: Benefits Target population Empowerment o f rural communities Rural communities Increasedinvolvement o fwomen andvulnerable Vulnerable groups inparticipating communities groups inthe processes of decision-making, (indigenous communities, nomads, women, etc.) definition o fpriority actionplans, and implementation oversight Increased capacity o f community-based Community-based organizations inparticipating organizations to plan andimplement priority communities activities Increasedcapacity among local government Local government officials andtheir constituents officials to develop communal action plans and budgets I I -12- Increased capacity among technical staff (NGO, Local technical staff and participating communities decentralized technical services, communal staff) to facilitate community participation processes Improvedrural infrastructure (roads, bridges, Rural communities schools, dispensaries, wells, etc.) and service delivery (education, health, extension, road maintenance, HIV/AIDS prevention, etc.) Target poDulation: The first phase will define the approach and methods and will implement them in five out o f ten regions: Province du Nord, Province de I'Ouest, Province de IYdamaoua, Province du Centre and Province du Sud. In order to increase the PNDP's chances of success, these regions were chosen by the GoC according to the following criteria: (i) poverty level as defined by the 2001 ECAM-I1poverty survey; (ii)continuity where participatory initiatives have been initiated and closed and have raised great local expectations, and (iii)agroecological diversity. PAPNDP mechanisms have already been tested in 10 pilot rural communes. They have been chosen based on the following criteria: (i)previous community planning experience in several villages, (ii) interest and commitment on the part o f local administrators and traditional authorities, and (iii) presence o f public/private service providers. The Project has worked first with the villages that already have some experience with the community-based approach, subsequently expanding to surrounding villages within one commune. Totally the five provinces count 152 rural communes and activities in38 communes will be financed by IDA Credit. The 28 additional rural communes to the 10 pilot ones will be chosen according to govemance quality and poverty level criteria. 4. Institutionaland implementationarrangements: Institutionaland ImplementationArrangements: The first of three phases o f the PNDP would be implementedover four years, although the subsequent phases might overlap since they would launch when predefined performance triggers are reached (see B.4.). The project would be placed under the responsibility o f the Ministry o f Economic Affairs, Programming, andRegional Development. The program's institutional arrangementshave been definedaccordingto the following principles: e The Government and local beneficiaries must participate in financial support to subproject decisionmaking, becauseboth are contributing financial resources. 0 Implementation entities must display transparency and efficiency, and avoid undue delay between community requests andimplementation o f subprojects. e Successful project implementation requires all stakeholders (Government, communities; local governments; nongovernmental organizations, or NGOs; donors) to be actively involved. 0 Community-level subprojects must be consistent with national sectoral policies. The PAPNDP is organized to comply with the dencentralization framework, especially with regard to - 13- rural communes. Four levels are involved inPAPNDP's organization: Village and community level. After a participatory assessment, a community would prepare a local development plan that reflects its perceived priorities. Participatory planning would be facilitated by operators contracted by the project. The community would elect a council that would be responsible for (i) verifying that subprojects are consistent with local development plan, (ii)performing a technical and financial appraisal of subprojects to be submitted, (iii)collecting contributions, (iv) implementing subprojects, (v) monitoring subprojects implementation, (vi) submitting subprojects requests to the Communal Decision Committee, and (vii) electing representatives to the Communal Decision Committee. Some communities are already organized and might have already elected local councils. Instead o f creating new structures, the PAPNDP would build on existing bodies, and communities would be free to decide whether they wish to keep or restructure them. After the LDP has been approved by the Communal Decision Committee, community-based organizations within the community would prepare submit subprojects. Commune level. The commune plays a major role in the PAPNDP mechanism. It is the "maitre d'ouvrage'' for all subprojects (commune or community level), but community-level subprojects would be jointly implemented by communes and communities. Communal Decision Committees would be established with representatives o f decentralized technical ministries, local governments, community-based organizations and NGOs. The committees would (i) approve local development plans, (ii) subproject proposals according to specific eligibility criteria (checking inparticular approve their technical and financial quality and consistency with national standards), (iii)coordinate activities among communities, and (iv) supervise subproject implementationwithregular field missions. Province level. Two entities would be involved at the provincial level: - Provincial Decision Committees would have the same mandate as Communal Decision Committee, but they would be responsible for approving communal development plans and subproject proposals from communes. The committees would comprise representatives from decentralized technical services, includingthe FEICOM, communes, the National Assembly, and NGOs. - Provincial Project Units (PPUs) would be in charge o f day-to-day PAPNDP implementation in each province. Because most activities would be subcontracted to local service providers, each unit would consist o f a small team o f specialists (a regional coordinator, a monitoring and evaluation specialist, a social and environmental specialist, a capacity-building and communication specialist, a technician in charge o f communities development, a technician in charge o f communes development and an accounting specialist). The PPUs would be responsible for (i) channeling funds to beneficiaries, (ii) launching capacity-building activities, (iii)coordinating activities in the province, and (iv) managing the monitoring and evaluation system. Central level. Two entities would be involvedat the central level: - A steering committee, under the responsibility of the Ministry of Economic Affairs, Programming, and Regional Development, would represent all stakeholders: several ministries (MINEPAT, MINAGRI, MINEPIA, MINEF, MINSANTE, MINATD, MINEDUC), local governments, NGOs, communities, and chambers. It would approve the PAPNDP's annual work plan and budgets, review its activities, and communicate on those topics. - A National Coordination Unit (NCU), also under the responsibility o f the Ministry of Economic Affairs, Programming, and Regional Development, would manage the project at the central level. The N C U includes a project coordinator, an assistant, an administrative and financial specialist, a monitoring and evaluation specialist, a capacity-building and communication specialist, a social and environmental specialist, a procurement specialist, and an accounting specialist. The N C U would - 14- consolidate monitoring and evaluation data from PPUs and supervise their activities, work plans, and budgets. FinancialManagementArrangements: The first phase o f the PNDP will be carried out over four years. Procurement, disbursement, and decentralized financial management practices will benefit from a wealth o f new and simplified methods developed and standardized recently in the Bank. These are described in Guidelinesfor Simplified Procurement and Disbursement for Community-based Investments, February 1998; Guidelines for Africa Region on Financial Management for Community Action Programs, October 2000; and Guidelines for Task Teams on Procurement Procedures Used in Social Funds, February 2001, and Fiduciary managementfor Community-driven Developmentprojects, March 2002 (draft). 1. Capacity Assessment o fthe National Coordination Unitand Financial MonitoringReports Based on program implementation arrangement, the overall responsibility for financial management will remain with the N C U and carried out by the Project Coordinator, the Assistant Coordinator and the Administrative and Financial Specialist. Accordingly, the scope o f the assessment has been limited to the NCU. However, given the decentralized nature o f the program, the coordination and reporting mechanisms between the entities involved in the program and the N C U will be looked at to ensure the arrangements inplace will allow for smooth implementationo fprogram's activities as well as to ensure that loan proceeds are used only for the purposes for which the loan is granted, with due regard to economy, efficiency, andthe sustainable achievement o f the program's development objectives. The capacity of the NCU is acceptable andthe preparation activities are inprogress. The objective is to have a fully established and functional N C U to declare the program effective so that at the outset o f the implementation of the activities, the NCU has the appropriate accounting, internal control, and the relevant financial reporting systems inplace. This will allow the N C U to (i) record andreport reliably the financial transactions o f the program ina timely manner, including those transactions involving the use o f Bank funds and other donors ; and (ii) sufficient and relevant financial informationfor provide managing and monitoring program activities. The N C U through its financial management and accounting unit will have the overall responsibility o f the program financial management. It will have to maintain program's consolidated budget and accounts. To that end, the financial management and accounting unit will be equipped with a computerized and integrated financial management appropriate to the scale and nature o f the different phases o f the program and capable o f recording and reporting in a timely manner the program's by geographical locations, components, activities , expenditure categories and origin o f funds. The computerized financial management system will be multi-currency and will include the following modules which should be integrated : general accounting, cost accounting, assets management, preparation o f withdrawal applications and tracking o f disbursements by donors, reports generating, including quarterly FMR and annual financial statements. A fully functioning financial management system satisfactory to the Bank i s considered as a condition o f credit effectiveness. A Project ImplementationManual and a ProjectAdministrative, Financial and Accounting Manualare available and describes procedures. It describes : (i) the overall organization of the program including and organizational diagram andjob description of the accounting and financial staff; (ii) the accounting system to be followed; (iii) the main transactions cycles; format, content, and timing of the program's financial reporting, Le., financial statements and other financial reports includingFMRs, filing system, etc.; (iv) the various operational procedures including budget management ( planning, execution and - 15- monitoring ) and management o f assets, procurement o f goods ands services, disbursement; and (v) internal control procedures. 2. Financial Management Financial Mechanism (See Annex 12): Two special accounts will be opened for the implementation o f the Project, and they will be managed by the NCU: o Special Account A (SA-A) to co-finance the subprojects; o Special Account B (SA-B) for other activities. Details o f the financial management arrangements, including reporting, are detailed inthe PIM and the Project Administrative, Financial and Accounting Manual. Accounting and Financial Reporting. The NCU will maintain the books and accounts o f Project activities at the Central level and on a consolidated basis as well. The PPUs will maintain the books and accounts o f the Project activities. The N C U will ensure that the production o f the annual financial statements are done in a timely manner. A financial management firm will be selected to design and install a computerized accounting and financial management system, based on internationally generally acceptable accounting principles agreed with the Bank. The consultant will also prepare the accompanying guidelines for the software operations and will ensure that the computerized guidelines match the Project Administrative, Financial and Accounting Manual. The Manual will be approved by IDA. The consultant will be responsible for the initial training of the accounting and financial management staff on the efficient operation o f the computerized accounting system. They will also be responsible for the preparation o f a training program infinancial management with an implementation timetable and will provide NCUPPUs with assistance. The selection o f the accounting software will ensure that the system is supported by a reliable organization. The N C U and the PPUs will maintain their accounts in accordance with International Accounting Standards, and the quality o f financial management has been verified by auditors during the first phase o f the Program. The N C U and the PPUs will keep all documentation related to Project expenditures, and will all at times keep financial records inaccordance with sound accounting practices to reflect its operations and financial position. These records would be made available to Bank missions and independent auditors. The consolidated accounts of the Project maintained by the NCU would be audited on an annual basis. The audltors would include PPUs selected on a random basis inan annual audit. -16- Financial Monitoring Reports. The NCU's responsibilities for preparation of Financial Monitoring Reports (FMRs) are explained in the Project Administrative, Financial and Accounting Manual and in the PIM. The administrative and financial specialist will be responsible for preparing the FMRs, while the Coordinator of the N C Uwill be responsible for ensuring that they are provided to stakeholders and IDA on a quarterly timely basis. FMRs will provide information that establish (i)whether funds disbursedto projects are beingusedfor the purpose intended; (ii) whether Project implementation is on track; and (iii)that budgetedcosts will not be exceeded. Financial information will be linked explicitly with the physical progress and procurement of the Project. The annual financial statements of the Project will be prepared in accordance with generally accepted accounting principles and will include (i) discussion o f Project progress, (ii)sources and uses o f funds statement, (iii) o f funds by uses expenditure type (iv) the output monitoring report, and (v) the procurement report. The audited financial statements will be submitted to IDA no later than six months after the end o f the fiscal year. The computerized accounting system will be customized to generatethe FMRsrequiredinthe forms as indicated in "Financial Monitoring Reports for World Bank-Financed Projects: Guidelines for Borrowers". A statement showing cash receipts by sources and expenditures by main classification, beginning and ending cash balances of the Project, and supporting schedules comparing actual and planned expenditures. Adequate financial management arrangements, including the ability to produce a timelyFMR, will be inplace by credit effectiveness. Auditing. Project records and accounts will be audited in accordance with internationalaudit standards by an experienced and intemationally recognized audit firm acceptable to IDA. The audit reports will be submitted to IDA within six months after the end of Govemment fiscal year. The auditor will produce their standard short-form report with an opinion on the annual financial statements, the SOEs and the special accounts. In addition the auditors will be required to: (i) out a comprehensive carry review of all the SOEs as well as the intemal control procedures governing their preparation for the relevantperiodunder audit; and (ii) the management and utilizationof the special accounts and review the Project account; (iii) auditor will complete their in-depth review, started at interim (see the paragraph below), o f the intemal control system o f the Project with a view to identify the major weaknesses and shortcomings and proposing practical recommendations for improvement. Regarding the matching grants for the Financial Support to Rural Communities, the audit firm will review the performance of randombeneficiaries, and provide a specific opinion on the effectiveness and efficiency of the lending and distribution procedures. The results o f this review would be documented in a Management Letter to be submitted along with the audit report. The auditors will review and audit, as a part of the Project first year audit, the use o f the PPF and PHRD Grant funds covering the period prior to effectiveness. They will also perform interimaudits (9 months into the fiscal year) to review the intemal control system including management performance, and issue reports to that effect within one month from the end o f their work. The findings and recommendations o f the interimreports will be addressedby management without delay before the final audit which report is due 6 months after the closing o f the fiscal year. The contracting o f auditors on a renewable multi-year contract, acceptable to IDA, and certification by the financial auditors that the Project accounting system is operational, is a condition of credit effectiveness. D. Project Rationale 1. Project alternatives considered and reasons for rejection: - 1 7 - A long-term lending tool. The only feature o f the program for which altemative options were considered was the use o f an APL. The choice o f an APL recognizes that support for community-driven development requires a long-term commitment from the Bank and other donors. Many reforms, especially those related to fiscal, political, and administrative decentralization, require further study and maturation and would take 10-15 years to implement. As part of the preparation process a decision was made to promote a shared understanding with the Government o f Cameroon on what the triggers should be for subsequentphases. A secondphase of the National Agricultural Extension and Research Program Support Project. The PNVRA aims to improve farmer productivity and income through an integrated, farmer-oriented agricultural extension system and a demand-driven research system. The project has launched pilot initiatives to assess the needs o f village communities and prepare development plans. Lessons from these pilot operations have helped define the PANDP. While some PNVRA activities could be relevant to the PANDP, agricultural services and producer organizations would be supported by other projects underthe secondthematic branchofthe rural development strategy. The PNVRA, originally scheduled to close in2003, has been extended to June 2004. 2. Major relatedprojectsfinancedby the Bankand/or other developmentagencies (completed, ongoingand planned). Latest Supervision ~~ Sector Issue Project (PSR) Ratings (Bank-financedprojects only) Implementation Development Bank-financed Progress (IP) Objective (DO) Agriculture NationalAgricultural Extension S and Research Program Support Project (PNVRA), Cr31370, active Infrastructure Douala Infrastructure Project, S Cr36940, active Infrastructure Transport Sector Project, S Cr28690, active Health Multisectoral HIV/AIDS S Project, Cr34540, active Energy Petroleum Development and S Pipeline Project, Cr70200, active Energy Petroleum Environment U Capacity Enhancement Project, Cr33720, active Environment CameroonForestry / Environment, planned, Private Sector Public/Private Partnership, S Growth, and Poverty Reduction Project, Cr33590, active Other developmentagencies French Cooperation Local development, Rural development - 18- GermanCooperation Health, Forestry, Rural development DFID Forestry Afncan Development Bank Local development, Rural development FIDA Local development, Rural development 3. Lessonslearnedandreflectedin the projectdesign: Lessons in Cameroon. The Bank has developed significant community development experience in Cameroon through the PNVRA, the GEF-Biodiversity, and pilot activities during PAPNDP preparation. Lessons have been also learned from projects financed by other development agencies, especially the PDOB (French Development Agency). These operations have shown that: Community participation inplanning and financing local investments can yieldpriority investments that better reflect local needs. Other donors have supported similar village- or community-based schemes. Working exclusively at the community level has some limitations as well. The main concems relate to the appropriate selection o f investments (some may be larger than any one community needs or can finance), financial sustainability (the need to finance recurrent costs), political accountability (Who is responsible for decisionmaking, how are they selected, to whom are they accountable?), andreplicability (How canthis be scaledupthroughout the country?). Capacity-building at the community level must be addressed before transferring resources to communities. Transferring resources without adequate attention to capacity-building could exacerbate rent-seeking behavior by local elites. Participatory processes that empower vulnerable groups would mitigate this risk. Responsibilities assigned to local governments must not exceed their level o f competence. Transferring resources to local governments without clear management procedures, mechanisms for transparency, and lines o f accountability could lead to rent-capturing by local leadership or bureaucracy. Adequate follow-up after the establishment o f community action plans i s necessary. Without continuing support from qualified technicians, up to half o f participating communities encounter serious problems implementing their action plans. Support is needed to reinforce the participatory process, train community leaders in financial management, and make administrative arrangements for support from local service providers. The proposed operation includes multisectoral teams to provide this support. Lessons from other countries. The Bank has supported many community-dnven development initiatives in Africa. One o f the first projects in Central Africa was the Community Action Program in the Borgouregion of Benin. It offers the following lessons: 0 Communities must be organized with a special participatory process (village-level participatory approach) to address the development needs o f their constituencies, particularly marginalized groups (herders), the underprivileged, women, and the young, and prioritize these needs at community level. 0 The training process can be contracted to any operator with the required expertise (consultant firms, government services, NGOs). 0 Communities attach more importance to the speed o f service delivery and accountability o f operators than to the level o f contribution (financial or inkind) they have to provide. Bureaucracy - 19- must thus be limited, and intermediaries must be avoided between communities and their institutional partners (project management, financial institutions, government, and services providers). Direct communication between communities and project staff is essential. Staff should be recruited locally, provided they have the necessary expertise, or be fluent in at least one local language. Project management must be nimble andclose to the beneficiaries (geographically and culturally). Operational interinstitutional links must be spelled out clearly in framework contracts from the start o f implementation to avoid conflicts and delays (with Government o f Cameroon's local services for review and technical support, with financial institutions for the management o f funds, and with other partners for technical support andtraining) Even when literacy is very low, communities can carry out procurement efficiently and transparently, often more efficiently than institutions (Government, projects, or NGOs), provided that the necessary steps have been taken to ensure ownership and understanding o f the processes and that supporting institutions (project) leave the actual leadership o f operations to them. Without specific targeting o f and outreach to indigenous communities, prior patterns o f marginalization are likely to continue. 4. Indicationsof borrower commitmentandownership: The Government of Cameroon signed a Rural Development Policy Letter on January 14, 2004 (see Annex ll), confirms its Rural Development Strategy and the Round Table recommendations, that including that (i) local development is one axis o f the strategy and (ii) PNDP would be the the framework for local development projects inCameroon. To show its willingness to implement a national community development operation, the Government has earmarked HIPCfunds to CoJinaizce the PAPNDP (FCFA 16.3 billion). The Government of Cameroon has adopted an Arrdtk to spell out the PNDP institutional arrangements (ArrCte 002lPM dated January 9, 2004, "Portant organization du cadre institutionnel d'execution du Programme National de Dkveloppement Participatif') The Government of Cameroon is engaged in administrative decentralization. As stipulated in Law 74/23 and the 1996 constitution, the Government o f Cameroon has begun to create decentralized entities. The commune, governed by an elected mayor and council, will be the decentralized body closest to communities. Communes will have a major role in local development, collecting and depositing financial resourcesand selecting, implementing, andmaintaining local investments. With the adoption of its Poverty Reduction StrateD, the Government of Cameroon has madepoverty reduction a core objective. The PNDP is explicitly detailed inthe PRSP as an implementationtool for the second priority ("strengthening of growth through diversification of economy"), the rural sector being a key sector for economic growth. The Government o f Cameroon has also earmarked FCFA 60 millions as counterpart funds to be deposited into the project account prior to effectiveness. 5. Value added of Banksupport in this project: The Bank has been active in Cameroon in the area of local development. The Bank has a comparative advantage in supporting community participation, scaling up operations to achieve national coverage, and improving governance at the national and local levels. Other donors, on the other hand, have been much more active in supporting decentralization. While the Bank could contribute to strengthening local government, it would be important to ensure that efforts do not - 20 - conflict with the work o f other donors. The Bank has strong multisectoral experience in Cameroon. With its support to forestry, infrastructure, education, health, and agriculture, the Bank has been instrumental over the past decade in helping the Government develop and implement operations enabling communities to gain control over service delivery and resource allocation. The Bank's presence in these sectors would allow it to participate inefforts to harmonize support to community action plans. The Bank has acquired broad experience with community-driven development projects in Africa. Several community-driven development projects are under way in Africa (Benin, Burkina Faso, Ethiopia, Guinea, Madagascar, Senegal), and some have already entered their second phase. The Bank acquired solid experience insocial fimds basedon the demand-driven development approach. The Bank is strivingfor better donor coordination in rural development in Cameroon. The Bank plays a strong role indonor coordination for rural development in Afixa, especially in Cameroon. The Bank led several multidonor preparation missions that ended with the financial and technical commitments o f several partners. Several multidonor meetings (2001, January 2002 and December 2002) helped finalize the program design. French Cooperation and German Cooperation already declared their support o f the PAPNDP. French Cooperation would finance PAPNDP activities with a contribution o f US$ 25 million provided after HIPC completion point. In case of delay o f the completion point, IDA-financed activities would not bejeopardized because they do not depend on each other. E. Summary ProjectAnalysis (Detailed assessmentsare inthe project file, see Annex 8) 1. Economic(see Annex 4): 0 Costbenefit NPV=US$ million; ERR = % (see Annex 4) 0 Costeffectiveness 0 Other(specify) The PAPNDP does not lenditself to cost-benefit analysis because: o All investments would be demand-driven, andtheir nature can not be knownbeforehand. o All eligible subprojectswouldbenonproductive. o The economic benefits of capacity-building are difficult to quantify. Economic criteria are included in the Project Implementation Manual to appraise the economic dimensiono f subprojects. 2. Financial(see Annex 4 andAnnex 5): NPV=US$ million; FRR= % (see Annex 4) Financial mechanism. The PNDP would dispense financial support through a matching grant system. Beneficiaries would have to make a contribution before receivingproject funds. Once a subproject is approved at the province level (by the Provincial Decision Committee), a financing contract would be signed by the relevant PPU and commune. A grant would then be transferred to a bank account especially set up by the commune. Once a subproject is approved at the commune level (Communal Decision Committee), a financing contract would be signed by the relevant PPU, commune, and community-based organization. The grant would be transferred to a bank account set up by the commune and the community-based organization. FEICOM's mission inthe financial mechanism would be determined after its audit. -21 - Fiscal Impact: The PAPNDP would support fiscal decentralization by assisting the Government infinalizing the legal and regulatory framework, and strengthening communes' financial management capacities. The FEICOM would be strengthened based on the recommendations of the audit report so that it can channel funds to local governments. 3. Technical: Technical quality. Eligibility criteria inthe Project ImplementationManual would be usedto appraise the technical quality of subproject proposals. Technical ministries, such as the Ministries o f Health, Education, and Public Works, would be involved in the process, including community planning and approval o f plans and subprojects, to ensure technical quality and consistency with national standards. Technical ministry clearance would be mandatory before subprojects can be submitted to Decision Committees. Subprojects implemented with labor-intensive methods and using local workers would receive preference. 4. Institutional: 4.1 Executingagencies: Consistency with the decentralization agenda. The PAPNDP is designed to support the decentralization now under way. The Government has officially confirmed that the commune will be the most decentralized level in Cameroonian politics. The commune would thus be the center of the PAPNDP's institutional arrangements. Commune Decision Committees would oversee local development, determine consistency, and approve subprojects. The weak technical and financial capacities o f communes mean that Decision Committees would initially be independent and part o f the PAPNDP, with membership to include the mayor and communal representatives. Once the capacities o f the communes have been strengthened, they would take over the responsibilities of the Decision Committees. Communes and communities. The main actors inthe PAPNDP are communes and communities. The project aims to strengthen and empower communes and communities to handle their development. The project would support strong partnerships among communes and communities. Conventions would be signed between them to delegate authority to communities (as set out in the Project Implementation Manual). For community subprojects, although the commune would own the infrastructure, the commune and the community-based organization would open ajoint bank account to receive PAPNDP grants, would jointly subcontract to service providers, and would jointly monitor subproject implementation. 4.2 Project management: Limitedmanagerial and technical capacity is a serious constraint at the decentralized level, particularly inruralareas. The PAPNDP would (i) capitalize and buildupon previous community-based initiatives and(ii) considerable resourcesfor capacity-building, especially duringthe first phase. deploy 4.3 Procurement issues: The Country Procurement Assessment Review which was carried out in Cameroun in2000 by a national committee representing all the sectors and a team from The World Bank found that the national - 22 - procurement system needed a major reform as the procedures for procurement o f works, goods, and services were weak in several areas. The Government, with the Bank's assistance, started to implement the recommended reforms o f which the following actions have already been accomplished: (a) preparation o f a new procurement code, (b) signature o f the decree regarding the Commisson des Marchks, (c) audit o f public procurement for 2000 and 2001 by an intemational auditor, (d) establishment o f specialized procurement commissions and (e) appointment o f independentobservers. Since most procurement would be conducted at the local level, during appraisal, a particular attention was paid to procurement rules and procedures that would apply to community-based subprojects and carried out by community participation procedures acceptable to the Bank and described inthe Project Implementation Manual. While the N C U at the national level would be responsible for monitoring all procurement-related issues for project implementation, the PPUs at the regional level would be responsible for coordinating project activities at the community level. 4.4 Financial management issues: At the commune level. Financial management capacity at the commune level varies widely, but overall it is rather weak. The ProjectAdministrative, Financial and Accounting Manualcontains current rules, regulations, and procedures to serve as training tools for capacity-building o f financial management staff at the commune level and to identify areas requiring further clarification or reform for enhanced transparency and efficiency o f financial management. At the community level. Like the communes, communities need much capacity-building in financial management. Specifically, procedures and mechanisms need to be designed andagreedon to ensure full transparency and the involvement o f vulnerable groups. Considerable experience has been acquired in other countries (Benin, Bolivia, Burkina Faso, Indonesia) and in Cameroon. The program preparation team would draw on those experiences in designing financial management procedures for the community level. 5. Environmental: Environmental Category: B (Partial Assessment) 5.1 Summarize the steps undertaken for environmental assessment and EMP preparation (including consultation and disclosure) andthe significant issues and their treatment emerging from this analysis. Preparation of Environmental Assessment documents. As part o f the preparation, the following studies were undertaken: (i) an Environmental and Social Management Framework (ESMF), (ii) a Resettlement Policy Framework (RPF), and (iii)an Indigenous People Development Plan (IPDP). Terms o f reference were drafted during the participatory pre-appraisal mission with multiple stakeholders. The ESMF and RPF studies were carried out by intemational and local consultants. The intemational consultants visited Cameroon January 27-February 13, 2003. The visit included interviewsinYaounde, field visits to four of the five provinces selected for the program's first phase, and a final workshop held via videoconference. The IPDP was carried out separately, between March 10, 2003 and April 8, 2003, by an intemational consultant knowledgeable of the Baka, Kola, and Aka (pygmy) ethnic groups. The study included interviews in Yaoundk, two field visits, and two participatory workshops. The reports were issued in the country and in the Bank's Infoshop on June 19, 2003. Significant issues. Most o f the developments or subprojects plannedunder the PAPNDP's community financial support would be small. Their direct negative environmental and social impacts are therefore likely to be small. The project would not have any large, significant, or irreversible impacts. Because the financial support to subprojects remain very modest andbecause they would be distributedto many communities during the project's first phase, there is little risk o f cumulative impact o f combined subprojects. Insome areas, though, many community subprojects may create cumulative impacts. - 23 - 5.2 What are the main features o f the EMP and are they adequate? Principle. The ESMF proposes that environmental and social considerations be fully incorporated into the participatory process for identifying, implementing, and monitoring activities or subprojects, to ensure that operations are screenedfor potential impacts and are consistent with Bank safeguards. Mainstreaming environmental and social considerations into the PNPD design. Environmental policy formulation is being finalized but is still in an early stage o f development in Cameroon . The capacity for environmental management is still weak. Qualified staff trained in impact assessment are scarce, andbudgets are inadequateto carry out impact assessments at the community level. To carry out the environmental impact assessmentsneeded for the project: 0 Key focal points incharge of coordinating and implementingthe ESMF would be designated (i) in the N C U (a social and environmental specialist), (ii)in the PPU (a social and environmental specialist), and (iii) at the local level (service providers contracted to support community-based organizations and communes inplanning and subproject preparation). 0 Subproject impact guidelines relevant to the main types o f subprojects submitted by CBOs would be developed by the end o f the first year to facilitate assessment and formation o f recommended measuresto mitigate and address potential impacts. The guidelines would be used to train CBOs in performing their own impact studies. 0 The PAPNDP would ensure that all levels of project management and service providers are given adequate preparation and sensitivity training in socioenvironmental issues, and would build capacity for implementation o f the ESMF and the RPF. Training would be provided in, but not limited to: (i)the use of the project's screening and reporting system, (ii) between natural links resource management and sustainable rural livelihoods, (iii) potential localized and cumulative impacts and suitable mitigation measures, (iv) relevant environmental policies, and (v) the PAPNDP's approach to policy reform and enforcement. The PAPNDP would also provide basic outreach and awareness training for community representatives and interested members o f the communities to raise the level o f environmental consciousness, promote adoption o f the screening checklist by literate community members, and alert communities to environmentally positive subprojects that the PAPNDP could finance. These training and sensitization activities should be incorporated into the training required for smooth functioning of the entire project management system. Screening subprojects. Communal and Provincial Decision Committees would decide on subprojects. Each proposed subproject would be checked against a screening checklist o f social and environmental issues with the assistance, especially during the first years, of the PPUs or service providers. PPUs should encourage literate members of the communities and communes (animal health workers, teachers) to perform this task themselves. The checklist is a simple yes-no checklist, culminating in whether specific advice to the community on environmental mitigation, environmental assessment, Resettlement Action Plans, mini-Waste Management Plans, and mini-Pest Management Plans are necessary. Decisions are based on likely impacts. A full Environmental Impact Assessment is not anticipated to be necessary for all subprojects. The completed screening form would need to be submitted along with the subproject application. The subproject application should have a section on "Environmental and Social Concerns" where design features to avoid negative impacts and capture benefits are described and any "yes" responses on the form are discussed and justified. Committees would then make a determination on the eligibility o f subprojects, taking environmental and social factors into account according to Bank safeguards. Resettlement Policy Framework. Resettlement issues would be identified in the environmental and - 24 - social screening. The Resettlement Policy Framework specifies when a Resettlement Action Plan (RAP) or abbreviated RAP is necessary. People affected by the subproject must be identified in the subproject application. RAPs and abbreviated RAPs would be prepared by CBOs with technical support from the social and environmental specialist o f the province and a pool o f commune and village-level consultants trained in land tenure policies and the Resettlement Policy Framework. Completed RAPs and abbreviated RAPs would be submitted to the decentralized decision committees for screening and approval. RAPs would be submitted to the Bank and the N C U during the first year for quality assurance (and additional training would be provided if gaps in quality are identified). Subsequent RAPs would be reviewed by decision committees and local management units under an independent annual review. Compensation, resettlement, and rehabilitation must be satisfactorily completed andverified before funds can be disbursed for civil works. Indigenous People Development Plan (IPDP). Without specific measures, pygmy communities would not be able to share inthe benefits o f the PAPNDP and would face higher risk o f marginalization. The project will carry out the following activities to fulfill the requirements o f O D 4.20 at end and a budget has been dedicated andapproved for implementingthese activities : Establishequal legal opportunities: o Establish equal legal status for Baka, Kola, and Aka individuals (including ID cards) to guarantee that they have the same citizenship rights as other Cameroonians and that they are taken into account by the councils. o Establish equal legal conditions for indigenous people CBOs to reduce the risk o f further marginalizationand dependency on community leaders o f other ethnic groups. o Establish community forests or traditional huntingzones for indigenous people CBOs to pursue their hunter-gatherer lifestyle; 0 Establish equal financial opportunities: o Offer Financial Support to the Baka, Kola, and Aka for financing subprojects at a subsidized rate becauseo f their very low economic capacity. o Offer special programs to help the Baka, Kola, and Aka benefit from job-creation opportunities (teachers, healthpersonnel, civil servants) relatedto subprojects approved by the PAPNDP. 0 Establish equal organizational opportunities: o Assist the Baka, Kola, andAka indecisionmaking. o Provide training on intercultural communication to civil servants and councilors working in subdivisions with indigenous people. o Help the Baka, Kola, and Aka establish independent bodies at various levels to coordinate, communicate, and facilitate activities. o Include indigenous people representativesinPAPNDP committees. o Establish a participatory monitoring and evaluation system for the IPDP o f the PAPNDP. 0 Equal cultural opportunities: o Sensitize the Baka, Kola, and Aka to the risks o f development. o Assist indigenous people with capacity-building to prevent the loss of traditional knowledge, culture, andlivelihoods. o Create forums for communication and exchange between indigenous people and other ethnic groups and promote mutualunderstanding. 5.3 For Category A andB projects, timeline and status o f EA: Date o f receipt o f final draft: June 13,2003 All three draft reports have been reviewedby the Bank. The final reports have been adopted by the Government of Cameroon and the Bank, and they were made available in the Bank's Infoshop and in Cameroon on June 19,2003. - 25 - 5.4 How have stakeholders beenconsulted at the stage o f (a) environmental screening and (b) draft EA report on the environmentalimpacts and proposed environment managementplan? Describe mechanisms o f consultation that were used and which groups were consulted? a) ESMF and RPF Stakeholder interviews in Yuoundi and Project Target Areas. Stakeholder consultation was key in achieving the ESMF and RPF objectives. The ESMF and RPF teams consulted stakeholders and key informants in Yaoundk. Four separate field visits to the Provinces du Nord, du Sud, de 1'Ouest et du Centre were carried out in January and February 2003. The purpose of these visits was to meet local governments and agencies and potential participating communes and communities, and to verify the Bank's initial analysis o f the project's potential environmental and social impacts. Key stakeholders consulted on the project included: 0 Decentralized technical services. 0 Communes. 0 Community members. 0 Environmental and social NGOs. 0 Internationaldevelopment agencies and the staff o f agency-funded projects. Wrap-up and completion. A briefingmeeting inYaoundk to present and discuss preliminary findings o f fieldwork inthe four Provinces was held on February 13, 2003. After comments from stakeholders and Africa Safeguards Policy Enhancement (ASPEN) were incorporated into a draft report, a final workshop to present and discuss the final report took place on April 28, 2003 (through videoconference). b) IPDP The IPDP was carried out betweenMarch 10 andApril 8,2003, ina participatory manner and inclose collaboration with all stakeholders (governmental agencies, donor organization, indigenous population as defined inO D 4.20, other ruralpopulations, NGOs). The study had three phases: Government agencies incharge of the PAPNDP (PAPNDP Project Coordination, MINEPAT) and responsible for ethnic minorities (Cellule des populations marginales et des sinistrks, Ministry o f Social Services), donor organizations with projects affecting indigenous people (Petroleum Environment Capacity Enhancement Project, World Bank, PGPNGTZ, ProfornatlGTZ, ECOFAC, SNV), NGOs (CERAD, INADES, RACOPY, Catholic Mission) and associations o f indigenous people (ASBAK, CODEBABIK) offered background information and assessed the current approachesto integrating indigenous peoples into development. The Baka and Kola people were directly consulted during two five-day field missions. Possible impacts and mitigation measurements were discussed with the population as a whole and in separate meetings with young people, the elderly, men, and women. After completion o f the draft report, its findings and recommendations were discussed in a participatory workshop (including four representatives o f the Baka, four representatives o f the Kola, and representatives o f PAPNDP, the Ministry o f Social Services, and several NGOs). The participants agreed with the general findings and recommendations. In a second workshop, the IPDP was adopted by the PAPNDP as an official document o f the Government o f Cameroon, and an appropriate budget has been includedinthe project to cany out this work. - 26 - 5.5 What mechanisms have been establishedto monitor and evaluate the impact o f the project on the environment? D o the indicators reflect the objectives and results o f the EMP? Reporting. The PPUs social and environmental specialists would be responsible for the provinces' annual reports. The N C U social and environmental specialist would complete an annual synthesis of impacts, on the basis o f the province's annual report. Monitoring and evaluation 0 The key issues include monitoring of water quality, biodiversity indicators, agricultural production, income generation, health, and population influx.The ESMF outlines indicators, baseline data, and targets, although monitoring indicators depend on specific project contexts. 0 Monitoring for the whole project would take place at several levels and be the responsibility o f communities, Communal and Provincial Decision Committees, PPUs (by the person in charge o f monitoring and evaluation inthe PPUinrelation with the social and environmental specialists), the N C U (by the person incharge of monitoring and evaluation inthe N C U inrelation with the social and environmental specialist), andthe consultant contracted to undertake the annual audit. It would also be important to include the decision committees inmonitoring and evaluation and ensure that results and issues are reported back to them in a timely manner. Monitoring and evaluation reporting should occur monthly and be the primary responsibility o f the Monitoring andEvaluation Technicians working withthe social and environmental specialists. 0 Annual audits o f social and environmental performance would be carried out by an independent consultant who would (i) review the paper trail o f screening checklists, Environmental Impact Assessments, and resettlement reports; (ii) make field visits to a selected number o f community subprojects to investigate compliance with proposed mitigation measures and identify potential impacts that are not being adequately addressed; and (iii) recommend practical improvements. 6. Social: 6.1 Summarize key social issues relevant to the project objectives, and specify the project's social development outcomes. Key social issues. Economic reforms have brought few tangible benefits for the poor. Poverty reduction continues to be a challenge due to poor infrastructure and inadequate delivery o f public services. Structural adjustment programs have decreased state spending on health, education, agricultural research, extension services, and road maintenance. Price liberalization and currency devaluation have raised the prices o fbasic necessities. Social impact of the program on the population at large. The PAPNDP would make a significant positive contribution to environmental and social sustainability in rural areas, by providing the tools and training to support community-driven development. Potentialpositive impacts include: The PAPNDP would strengthen traditional systems of environmental and social governance and would incorporate community dialogue and traditional chiefdoms. In some cases, less poverty in communities would decrease natural resource degradation and encourageconservation, but such safeguards as community management plansneed to be inplace. Strategically placed rural roads and associated services may lead to more sustainable agricultural systems andtimely transport o f agricultural production. More strategically placed small-scale water points would more evenly distribute human and livestock pressures. In some areas, efficient management and reversal of natural habitat degradation would have a positive impact on habitats and biodiversity. Better understanding o f the tools and mechanisms for assessing environmental and social impacts - 27 - and participatory approaches to community development would ensure that such tools are used over the long term incommunities and villages across the provinces. 0 Investments in social infrastructure, such as schools, health clinics, sport and leisure facilities, markets, and the hke, would promote sustainable rural development. The speciJicity of indigenous peoples (Baka, Kola, Aka). Three pygmy groups are found in Cameroon: the Baka (about 25,000 inthe southem part o f the Province de 1'Est and the eastem part o f the Province du Sud), the Kola (about 3,500 inthe westem part of Cameroon's Province du Sud), and the Aka (fewer than 500 along the border with the Central African Republic). The smaller groups of Aka on the southeastem border are closely related to the Baka. The status o f the Baka and Kola communities insouthem Cameroon is analyzed inthe IPDP. Competition for space (for logging, conservation, cash crops) and several campaigns to sedentarize them have confined these peoples, who formerly rangedover broad swaths of intact forest as full-time hunters and foragers, to areas where they have "home bases" with agriculture and outlying locales where some hunting is still practiced. The previous relationship of interdependence with sedentary farmers, in which pygmies suppliedvillage labor during the hunting off-season and villagers relied on the pygmies' production of meat and wild forest products, has evolved into the pygmies' increased dependency on villagers for cash, work, and a few govemment-derived social services. Unlike other ethnic groups, however, pygmy communities are not full-fledged citizens o f Cameroon. There is not a single Baka or Kola civil servant, no pygmy membersbelong to the 339 village councils, and only one o f Cameroon's 13,000 villages is headed by a pygmy. Rough estimates of cash income indicate that pygmy households earn about a thirdofthe averageruralincome. The issues they face include: Most Baka and Kola do not have ID cards or birth cert@cates because they cannot afford the US$25 fee and because administrators are unfamiliar with pygmies. The pygmies cannot participate incivic life, register to vote, or interact on a legal basis with governmental services. Baka and Kola settlements are usually not considered independent villages, administratively speaking, and are therefore usually unable to articulate their needs to government institutions. The interests of the Baka and Kola are often at the mercy o f elected mayors who see themselves as representinga mostly Bantu constituency. Lands of ethnic minorities, hunter-gatherer societies, or settlements without legal status as independent villages do not have any form of legal protection. Pygmies have no way to acquire rights to "community forests'' or to defend the remnants of their "homelands" from outside interests. An Indigenous People Plan is currently being implemented through FEDEC (Petroleum Environment Capacity Enhancement Project) and is assisting already Baka and Kola communities in southem Cameroon. Activities include: ID cards distribution, health assistance, school supplies delivery, agricultural inputs delivery. PAPNDP-IPDP activities will be coordinated with FEDEC in areas where the two plans overlap. A formal agreement highlightingoperational modalities for coordination is under preparation. Outcome of the IPDPprocess 0 The PAPNDP respects the dignity,rights, and culture o fthe Baka, Kola, andAka. 0 The PAPNDP ensures that the Baka, Kola, andAka receive benefits from the PAPNDP that are at least equal to, or better than, those enjoyed by other ethnic groups. 0 The PAPNDP assists the Baka, Kola, and Aka to improve their legal, political, societal, economic, cultural, andpsychological situation. 0 The Ministry o f Social Services is empowered to carry out the mandate assignedto the Department o f Marginalized Populations and its underfundeddivisional delegations. - 28 - 0 Important synergies with NGO partners are achieved by taking up the cause o f these dispossessed people. 6.2 Participatory Approach: How are key stakeholders participating inthe project? Consultation and participation during preparation. All stakeholders have been involved in project preparation. The preparation group includes representatives o f the Government, the private sector, NGOs, and the mayors o f main cities and rural towns. Several workshops have been organized in various regions, and field missions have visitedcommunities to seek comments and advice. Consultation andparticipation during implementation. The program is participatory inits approach. The principal actors under the PAPNDP are communities within rural communes. After a participatory assessment, a base community would prepare its local development planthat reflect perceived priorities and elect a council to represent them. This whole process would be facilitated by operators hiredby the project. Community-based organizations within the base community would then prepare subprojects requests andsubmit them. The Communal Decision Committee which approves CBOs subprojects, would consist o f representatives o f decentralized technical ministries, community-based organizations, rural communes, andNGOs. The Provincial Decision Committees whch approve communal subprojects, would be comprised of representatives from public services ,communes, the National Assembly, and NGOs. The Steering Committee would include representatives from the ministries affected by program activities, representatives o f beneficiaries, and representatives o f civil society. Donors would also be represented (as observers). 6.3 How does the project involve consultations or collaboration withNGOs or other civil society organizations? NGOs and civil society are among the key stakeholders and would participate in project implementation. The PAPNDP would rely heavily on NGOs with participatory experience to assist communities in assessing their needs, organizing themselves, and preparing and implementing subprojects. Baka and Kola organizations in particular, such as ASBAK and CODEBABIK and the NGOs working with the Baka and Kola, would have key roles in IPDP implementation. They should receive preferential financial conditions and benefit from the capacity- building and training activities o f PAPNDP components. 6.4 What institutional arrangements have beenprovided to ensurethe project achieves its social development outcomes? See E 6.2. All institutional entities would have representatives o f all stakeholders so that all interests are expressed. 6.5 How will the project monitorperformance interms o f social development outcomes? See E 5.5 for general social monitoring. (The process would be the same as for environmental monitoring.). Inaddition: For the IPDP. The IPDPproposed an independent, participatory monitoringandevaluation system for the IPDP. For monitoring and evaluating the impacts of mitigation strategies, an independent supervisory body that integrates indigenous people into the PAPNDP would be more effective than leaving these tasks to the program's Bantu-only monitoring and evaluation unit. An international supervisory body should conduct biannual evaluations o f the IPDP. Qualified Baka and Kola representatives should be allowed to participate in the PAPNDP's national monitoring and evaluation - 29 - meetings. Draft impact indicators have been developed, and one of the first tasks of participatory impact monitoring is to redefine them. Dueto unreliable data collected during the baseline study for the monitoring and evaluation system, the size and distribution o f Baka, Kola, and Aka populations in divisions and subdivisions needto be clarified. For the RPF. RAPSwould be submitted to the Bank and the N C U during the first year for quality assurance (and additional training would be provided if gaps in quality are identified). Subsequent RAPSwould be reviewed by decentralized decision committees and local management units under an independent annual review. 7. Safeguard Policies: Natural Habitats (OP 4.04, BP 4.04, GP4.04) 7.2 Describe provisionsmade by the project to ensure compliance with applicable safeguardpolicies. Environmental assessment. OP 4.0 1was triggered because o f the potential for negative environmental impacts, mainly o f a localized nature and associated with activities to be financed by the community investment fund. An ESMF was designed to ensure that the PAPNDP complies with the country's environmental policies and donor safeguards. Most negative impacts can be mitigated and are addressed under the ESMF by the screening and review procedures. But Cameroon's environmental management capacity is currently very weak. So a list o f projects not to be financed during the first year o f project implementation, until sufficient capacity for screening and mitigating subproject impacts is developed, has been made. The ESMF also identified the major environmental and social issues that could result from project interventions and proposed measures, including training and monitoring, to mitigate them.The EA has been disclosed by the Government o f Cameroon on June 19, 2003. Natural habitats. The OP 4.04 was triggeredbecause o f the potential for PAPNDP activities to affect natural habitats. The project borders or operates in several natural habitats, specifically in the North (Faro, BenouC, and Bouba-Ndjidda) and inthe South (Camp-Ma'an). Moreover, the PAPNDP aims to finance investments in natural habitats and biodiversity conservation. Cameroon possesses great biodiversity and several legally protected areas. The ESMF would identify any potential impacts that project-financed activities may have on natural habitats, reserves, or protectedareas. Forestry. The PAPNDP aims to support natural resource management through several subprojects, including soil protection and restoration, reforestation and woodlots, support for simple management plans for community forests, and management o f buffer zones around protected areas, including forested zones. It is unlikely that subprojects would adversely affect the use or sustainability o f forested - 30 - areas in Cameroon, but there is potential for indirect impact on forestry resources due to the demand for construction materials. To mitigate this risk, appropriate criteria have been added to the screening tools to address potential impacts on forestry resources. Moreover, training under the PAPNDP would focus on boostingawareness o f community forest protection, illegal logging, and poaching. Pest management. Insome cases subprojects proposed by the program have the potential to introduce or increase pesticide use into certain areas and villages in Cameroon. The project i s not expected to promote widespread pesticide use, but it has included appropriate criteria in the screening tools to address issues o f pesticide use and would require a mini-Pest Management Plan for microactivities triggeringthis criterion. Duringthe first year of the project, technical assistancewould be provided for an Integrated PestManagement Framework to address the project's effects on pest management. Culturalproperty. Cameroon has a rich anddiverse cultural heritage and is home to ancient tribes and civilizations. The main concern in terms o f cultural property is related to construction work required for certain small infrastructure projects. To mitigate the risk o f negative impacts on cultural property, community training and technical service providers would ensure that chance find procedures are incorporated into civil works contracts and that buffer zones are created to avoid damaging cultural assets such as traditional or "sacred" forests. Indigenous people. Because the PAPNDP is a national program focusing mainly on rural areas, it can be expected to affect ethnic minorities, and particularly those referred to as "pygmies." According to OD 4.20, an IPDP provides information supplementary to the ESMF and the RPF. An IPDP has been prepared to ensure that the PAPNDP would respect the dignity, rights, and culture o f Cameroon's "pygmy" populations and that they benefit from the PAPNDP. The IPDP has been disclosed by the Government of Cameroon on June 19,2003. Involuntary resettlement. Community-driven development experience shows that infrastructure subprojects-primarily improvements to roads, irrigation and water control, wells and schools-sometimes cause loss o f land or loss o f access to other resources, particularly for new physical works or changes in the configuration o f existing infrastructure. Land tenure and property rights are regulated by the national land tenure system, but traditional landtenure systems are inplace at the community level. Communal land is typically volunteered or chosen by the village elders for community development. It is unlikely that microinvestments financed by the PAPNDP would result in involuntary resettlement o f individuals, since communal laws and eaditional practices strive to avoid this. But to mitigate any involuntary resettlement, an RPF was prepared for planning resettlements under the PAPNDP in compliance with Bank policies and principles, namely OP 4.12 for Involuntary Resettlement, and the landtenure policies and regulations o f Cameroon. The RPF would ensure that all subprojects are screened for potential resettlement and that appropriate steps are taken to compensate affected persons. The screening tools provided by the ESMF have been designed to address issues o f resettlement andland acquisition inparallel with the screening criteria developed by the RPF. The RPF has been disclosed by the Government o f Cameroon on June 19,2003. Projects in international waterways. Cameroon borders six countries (Central African Republic, Chad, the Republic o f Congo, Equatorial Guinea, Gabon, and Nigeria) and shares a number o f waterways. This safeguard policy applies to the PAPNDP because subprojects might have an impact on waterways (small dams, water delivery infrastructure). The notification process took place in accordance with the requirements o f this policy. - 31 - F. Sustainability and Risks 1. Sustainability: Sustainability of institutional arrangements. Because o f weak local institutions, efforts at local development could disappear when external donors leave. National institutions lack the capacity and resources at the local level to take responsibility for donor-sponsored development efforts and to sustain them. The project is designed to strengthen community and commune institutional frameworks so that support to local development becomes more sustainable. The responsibilities o f the Communal Decision Committees andProvincial Decision Committees would be progressively transferred to decentralized authorities. Communal Decision Committees and Provincial Decision Committees would disappear by the end of the PNDP. An ongoing study on institutional sustainability would more precisely define how these responsibilities would be transferred. HIPCJinancial resources. Cameroon is expected to reach its HIPC completion point by June 2004, generating considerable savings over the next 20 years, with a cumulative net present value projected to reach US$1.5 billion. This funding opportunity, together with donor contributions, would put rural development on a sustainable path. The Government has already approved a HIPC contribution of FCFA 16.3 billion to cofinance the first phase o f the PNDP. FEICOM. The FEICOM was established in 1974 to bring technical and financial assistance to decentralized authorities. It was designed to be a major instrument for decentralization in Cameroon. FEICOM has already approved a FCFA 2 billion to cofinance communal subprojects and capacity buildingactivities at the commune level duringthe first phaseofthe PNDP. 2. Critical Risks (reflecting the failure of critical assumptions found inthe fourth column of Annex 1): Risk Risk Rating Risk Mitigation Measure From Outputs to Objective Lack of coordinationbetween PAPNDP S Regionalized technical ministries wouldbe and national sectoral policies involved indecision committees. Lack o f coordination between M Commune representativeswill be involved in communities andcommunes decision committees. Lack o f interest inPAPNDP activities by N The demandfor social infrastructures is very local populations high. Butstrong outreach and communication campaigns on PAPNDP activities would be launched throughout targetedregions. From Components to Outputs Communities lack resources to cofinance M The financial management capacities of subprojects communities would be strengthened. Microfinance institutions would be supported. Lack o f a safe financial system for S The PAPNDP would use differentways to channeling funds to beneficiaries transfer financial resources, including local microfinance institutions. The PAPNDP would support microfinance expansion inrural areas. Lack of competent service providers S Technical feasibility would be consideredwhen subprojects are approved. Beneficiaries are unwillingto be involved N Strong outreach campaigns on participatory inaparticipatory approach techniques and strengths would be launched in targeted areas. - 32 - Local committees are not elected ina M Maximuminvolvement of communities, transparent and democratic way encouragement o f discussions. Overall Risk Rating M 3. PossibleControversial Aspects: G. Main Loan Conditions 1. EffectivenessCondition 0 The Borrower has opened a Project Account and the initial contribution of CFAF 60 million has been deposited init. 0 The Borrower has appointed independentauditors, under terms and conditions acceptable to IDA. 0 The Borrower has installed a financial management, accounting, and monitoring and evaluation system acceptable to IDA. 2. Other [classify according to covenant types used in the Legal Agreements.] 0 Within six months of the Effective Date, the Borrower shall have remittedto the Association the audit report on the FEICOM, and adopted an action plan, satisfactory to the Association, for the channeling o f funds to communes. 0 Within six months of the Effective Date, the Borrower shall ensure that representativeslisted inthe Project Implementation Arre"t6 (Arr&tC 002lPM dated January 9, 2004 portant organisation du cadre institutionnel d'ex6cution du PNDP)are designated within the SC. H. Readiness for Implementation 0 1.a) Theengineeringdesigndocumentsforthefirstyear'sactivities arecompleteandreadyforthestart of project implementation. IxI1.b) Not applicable. [XI 2. The procurement documents for the first year's activities are complete and ready for the start o f project implementation. El3. TheProjectImplementationPlanhasbeenappraisedandfoundtoberealistic andofsatisfactory quality. 04. Thefollowingitemsarelackingandarediscussedunderloanconditions(SectionG): I. Compliancewith Bank Policies El1.This projectcomplies withallapplicableBankpolicies. - 33 - I?2. Thefollowingexceptionsto Bankpoliciesarerecommendedfor approval. Theprojectcomplieswith all other applicable Bank policies. JosgphBaah-Dwomoh AliKhadr ' Team Leader Sector ManagedDirector Country ManagedDirector - 34 - - Annex 1: Project Design Summary CAMEROON: Community Development Program Support Project Sector Indicators: iectorl country reports: from Goal to Bank Mission) Strengthening the institutional 0 Percentageo f poor per 0 PRSP surveys. 0 Country remains politically framework for improved pro-poor region. 0 National statistics (INS). stable. economic management and 0 Rural GDP per capita. 0 UNDP human development 0 HIPC funds are usedto service delivery. 0 Percentageo f households reports. satisfy needs insectors key with access to safe water. 0 National surveys. to reducing poverty. 0 Rural medical coverage. 0 Rural sector monitoring 0 School enrollment rate in system reports. rural areas. Program Purpose: Snd-of-Program Indicators: Vogram reports: from Purpose to Goal) Sustainable rural development 0 75% o f targeted 0 Supervision missions. 0 Participatory approach through community communities are organized 0 Midterm and final review. adoptedby central and local empowerment and strengthened and have adopted a local 0 National surveys. stakeholders. local govemance. development plan. 0 Beneficiary assessments. Project benefits accruing to a 0 60% o f community-based 0 Reports o f the PRSP. sufficient number o f organizations have access to communities. basic services (water, 0 Absence o f major crisis education, health, transport). (war, drought, epidemics). 0 80% o f rural communes 0 External funding sources show good govemance continue to finance the performance (criteria in the program. Project Implementation Manual). 0 Women and pigmies are satisfied with the PAPNDP. Project Development htcome IImpact Voject reports: :fromObjective to Purpose) Objective: ndicators: To set up and make operational a 0 Local developmentplans o f 0 Supervision missions. 0 Continued support from the decentralizedandparticipatory at least 50% targeted CBOs 0 Midterm and final Government. financing mechanismto ensure within the 38 targeted evaluations. Absence of political or social community development inrural communes have been 0 Program monitoring and crisis in the country or areas. approved. evaluation reports. concernedregions. 0 50% ofthese 0 Rural Development Sector community-based Monitoring Unit reports. organizations have fully 0 Sample studies and surveys. implemented at least one subproject. 0Communal development - 35 - plans of at least 75% targeted communes have been approved. 0 50% o f these communes have fully implemented at least one subproject. e 75% of targeted community-based organizations have benefited from training programs. - 36 - - - Outputfrom each htput Indicators: 'rojectreports: rom Outputsto Objective) Component: 1.Supporting local development (FADCR) 0 A matching grants facility Willingness o f beneficiaries has been set up to support 070% o f subprojects approved 0 Development plans. 0 to use facilities and services ruralcommunity for more than six months Projectmonitoring and financed by the project. development. have been completed. evaluation reports. 0 Good collaboration between 0 Rural communities have 0Time elapsedbetween 0 Accounting and financial communes and Decision better access to basic subproject approval and reports. Committees. infrastructures and services. financing is less than 45 0 Field missions. Good coordination between 0 Collective infrastructures are days. 0 0 Extemalaudits. PNDP activities and sector well managedand 0Bymidterm review 45% of policies. maintained. subprojects approved for more than six months have been completed. 0By midtermreview at least 50 classrooms, 30 water I supply infrastructures, and 15 health postshave been built or rehabilitated and at least 10 rural road improvement subprojects have been completed. 0By end ofthe project, at least 500 subprojects have been implemented. 0At least 150classrooms, 150 water supply infrastructures, and 50 health centers have been builtor rehabilitated and at least 30 rural road improvement subprojects have been completed. 2. Supportingthe decentralization process 0 Capacities o f communes are Democratic process remains strengthened inhuman 0By the midterm review, staff 0 Project monitoring and 0 functional. resources, financial andor elected authorities o f evaluation reports. management, basic at least 12 out o f 38 0 Fieldmissions. infrastructure Communes have benefited 0 Extemal audits. implementation, and from training sessions or sensitization campaigns. 0 By the endof the project, staff andor elected authorities o f 100% o f the targeted Communes in the Project Area have benefited from training sessions or sensitization campaigns. 0 By the end ofthe Project, decentralization legal texts have been prepared. 0 At least 50% oftargeted - 37 - communes have a rate of fiscal covering higher than 50% as compared with the baseline. 0 At least 50% of targeted communes have a rate o f implementation o f their budget higher than 50% as comparedwith the baseline. i. Capacity-buildingat the oca1level 0 By the midterm review, loca 0 Project monitoring and 0Committees are constituted 0 Communities are organized development plans of at leas evaluation reports. in a transparent and and have prepared 15% o f targeted 0 Field missions. democratic way. development plans on a community-based 0 Committees and service participatory process. organizationswithin 38 provider reports. 0 Communities implement targeted communes have their subprojects. been approved. 0 Priority training needs have 0 By the midtermreview, been identified and fulfilled. communal development plans o f at least 30% o f the 38 targeted communes have been approved. 0 Byend of the project, local development plans o f at leas 50% o f targeted community-based organizations within 38 targeted Communes have been approved. 0 Communal development plans o f at least 75% o f the 38 targeted communes have been approved. 0 The implementation ratio o f training plans establishedby the PPUs to the benefit o f community-based organizations reaches at leas 55%. 0 A properly grounded decision has been rendered on at least 95% o f subprojects submitted to Communal and Provincial Decision Committees. 0 70% o f infrastructures camedout under the subprojects are maintained and operational. .Supportingproject ianagementand oordination, monitoring 0 By the end o f the Project, at 0Fieldmissions. nd evaluation, and least 80% o f the reports to 0Project monitoring and ommunication be prepared by N C U under evaluation reports. 0 Efficient staff is inplace to the Project Monitoring and 0Extemal audits. manage the project. Evaluation Manual have 0Investigations near been timely issued. 0 Project data are regularly recipients. B 70% o f reports produced by - 38 - disseminatedto all the communities are rated stakeholders. Beneficiaries are efficiently satisfactory. At least 80% ofcontracts involved inproject 0 signed by NCU have been monitoring and evaluation. executedontime. -39 - 'roject Components I Inputs: (budgetfor each Jrojectreports: From Components to iub-components: somponent) Iutputs) .Supportinglocal US$ 53.07 million levelopment (FADCR) IDA: US$ I O million 0 Disbursement reports; 0 Communities have resources 0 Supervision missions; to cofinance subprojects. 0 Mid-tenn and final 0 A safe financial system evaluations; exists to bring funds to 0 Technical reviews and beneficiaries. audits. .Supportingthe lecentralizationprocess US$ 5.56 million IS above 0 Continued willingness from ,I. Support to finalization of [DA:US$ 0.86 million the Government to :gulatory framework strengthen communes. 0 Service providers are .2.Capacity building for available and competent. ommunes 0 Local governments are respected and elected .3Sensitization on transparently. .ecentralization Capacity-building at the US$ 10.22 million is above 0 Service providers are oca1level [DAUS$ 3.59 million available and competent. .1. Support for preparahon o f 0 Elected committees are .DP/CDP, subprojects respected and competent. .2. Specific trainings and iutreach campaigns for ommunities 1.Supportingproject nanagementand US$ 13.97million is above 0 Full collaboration of all toordination,monitoring [DAUS$ 5.55 million relevant implementing md evaluation, and agencies. Funding is secured. :ommunication 0 0 Willingness o f beneficiaries to be involved in 1.1. Management and participatory monitoring and :oordination evaluation. 1.2. Project monitoring and :valuation 1.3.Communication -40- -41- Annex 2: Detailed Project Description CAMEROON:Community Development ProgramSupport Project By Component: Project Component 1 US$53.07 million - IDA Credit: US$10 million Supportinglocaldevelopment Objective: The Community Development Program Support Project (PAPNDP) would channel grants to rural community-based organizations (CBOs with legal status) and rural communes to cofinance their proposed subprojects to reduce poverty by addressing their priority needs. Mechanisms: 0 Community subprojects. Base communities are made up of people living inone or several villages, districts, hamlets, or campments sharing use o f the space and natural resources around the settlements. With technical assistance provided by the project (supported by component 3), each community would conduct a participatory assessment o f their needs and prepare a local development plan to spell out their priorities. Decentralized technical ministries (health, education, transport, etc) and communal authorities would be involved in the planningprocess to ensure that local developments are consistent with national standards and policies and with planned activities andinfrastructures inthe commune. The local development plans would thenbe sent to Communal Decision Committees (CDC), comprised o f representatives from decentralized technical ministries, rural communes, community-based organizations, and non governmental organizations (NGOs). The CDC would look at the consistency of local development plans with national policies. After the CDC approves the local development plan, community-based organizations would then prepare subprojects' requests. CBOs might contract service providers to prepare all technical documents related to their requests, and these costs would be considered part o f the subproject's costs. The subproject's technical documentation would be sent to the Communal Decision Committee for approval basedonthe eligibility criteria (see below). 0 Communal subprojects. The project would provide technical assistance to rural communes (supported by component 3) to prepare communal development plans. Community-based organizations would be closely involved in this process. Communal development plans would address intervillage issues and specific communal needs rather than combining several local development plans. The communal development plans would then be sent for approval to a Provincial Decision Committee, comprised o f representatives from decentralized technical ministries, communes, the National Assembly, and NGOs. The Provincial Decision Committee would be responsible for coordinating PAPNDP activities in the province. After the communal development plan has been approved, communes would prepare and submit subproject proposals, and the Provincial Decision Committee would be responsible for reviewing and approving them, according to specific eligibility criteria (see below). The decision committee would check the technical and financial feasibility o f the subproject and its consistency with national standards and social andenvironmental screening. Community-based organizations and communes may receive grants for any public subproject they deem important as long as they meet the following eligibility criteria: 0 Beneficiaries are eligible and have the legal status to implement and maintain the subproject. -42- The subproject is consistent with the local development plan or communal development plan. The subproject is not included inthe negative list contained inthe Project ImplementationManual. Beneficiaries contribute an agreed share o f the value o f the investment, as detailed in the Project Implementation Manual (0-1 5%). The subproject's total cost is less than FCFA 15 million for a community subproject and FCFA 75 million for a communal subproject. There is no other source o f financing proposing to finance the same activities (excluding cofinancing). The subproject is consistent with national standards. The subproject is consistent with PAPNDP environmental andsocial safeguard policies. A specific subproject management committee has beenestablished, and adequate arrangements are inplace for financing maintenance and other incremental recurrent costs relatedto the subproject (human and financial resources). Communes will have ownership o f all infrastructure, whether the subproject has been requested by a community or not. When a communal subproject has been approved, the Provincial Project Unit(PPU) would transfer a grant to an account opened by the commune. For a community-based organization subproject, the commune would sign an agreement with the CBO to delegate implementation and management responsibilities. The community-based organization and the commune would open ajoint account to receive the grant. Eligible subprojects: Subprojects may be: 0 Collective social investments, including schools, classrooms, teacher training, literacy, health posts, HIV/AIDS prevention centers, health personnel training, rural roads and bridges, rural electricity, wells, latrines, and landtenure initiatives. 0 Public marketing infrastructures such as markets, storage, and slaughterhouses. 0 Natural resource management activities for soil erosion control, soil fertility control, and community forest management. 0 Rural finance subprojects to strengthen microfinance institutions. Resources would be allocated to beneficiaries on a first-come, first-serve basis to encourage dynamic communities and communes and to address as many basic needs as possible. FEICOM: The Fonds Sp&cial dzquipement et d'lnteuvention Intercommunale (FEICOM) was established in 1974 to bring technical and financial assistance to decentralized authorities. It was designed to be a major instrument for decentralization in Cameroon. FEICOM will participate inthe implementation o f PAPNDP in several ways: (i)FEICOM would mobilize Centimes Additionnels Communaux as contributions for communes to cofinance subprojects, (ii) FEICOMwould contribute to the monitoring o f commmunal subprojects implementation, and (iii)FEICOM would cofinance the PAPNDP as a donor (FCFA 1.7 billion). FEICOM is currently being audited, and, depending on the results, its involvement inthe Community Development Program (PNDP) might be more intense. Cost andfinancing: An IDA Credit (US$lO million) would cofinance subprojects inthe targeted rural communes. Project Component 2 US$5.56 million - IDA Credit: US$0.86 million - 43 - Supporting the decentralization process Objective: This component aims to strengthen local govemance to give accountable decentralized authorities the legal authority and human and financial resources needed for local development. It includes three subcomponents. Subcomponent 2.1 Support to the finalization of the legal and regulatory framework for local governance: Although decentralization is well under way, its agenda is still incomplete. Neither local rights and responsibilities, nor the means to fulfill them, are fully defined. The PAPNDP would support studies and technical and advisory services to support the finalization o f the preparation o f legal and regulatory framework for local govemance in particular regarding fiscal decentralization, including on mechanisms to transfer funds to municipalities. It may include support for a mechanism, such as the FEICOM, to channel funds to municipalities. The current audit would propose recommendations that mightbe implementedwith the PAPNDP's support. Subcomponent 2.2 Capacity-buildingfor communes Elected authorities are in place, but their capacity varies widely. Procedures for budget allocation, budget release, and financial management are not always clear or respected, human resources are lacking, elected officials and commune staff are not always aware o f their roles and responsibilities, and logistical support (information technology and transportation) at the commune level is very weak in most cases. A "commune graduation program" would be developed to assess the capacity and performance o f communes. Each commune would be assessed according to criteria determined in a participatory manner (involving mayors, administrative services, civil society, and donors). These criteria would assess (i) poverty in the commune and (ii) govemance. Based on this assessment, local specific capacity-building activities would be designed for each commune, and regular capacity assessments would produce progress reports. Communes would gradually buildup their capacity and take on more responsibilities, including the temporary Communal Decision Committee responsibilities, with the ultimate goal o fhandling local development withno support from the PAPNDP. The project would finance: i.Studiestoassesscommunes'capacitiesanddevelopcapacity-buildingprograms. ii.Training (communal accounting, decentralization, conflict resolution, local development ) for elected decentralized authorities and commune staff. ... 111.Accounting agents to be progressively taken charge by communes. iv. Equipment, mainly information technology, to allow adequate financial management and monitoring and evaluation. Subcomponent 2.3 Sensitization on decentralization The project would support the MINATD outreach and communication campaigns for administrative decentralization. It would finance (i)workshops on decentralization, (ii) trainings, and (iii) trips in field Cameroon and inother countries where decentralization is more advanced. Cost andjhancing: IDA Credit would support subcomponent 2.1. The IDA would also finance capacity-building for communes (activities (i)(ii)(iii),and (v) of subcompoent 2.2.) in the targeted rural communes and - 44 - contribute to activities (i), and (iii)f subcomponent 2.3. (ii), o Project Component3 US$ 10.22 million - IDA Credit: US3.59 million Capacity-buildingat the locallevel Objective: This component aims to strengthen and empower communities to get involved in decisionmaking and have an active role inlocal development. It includes two subcomponents. Subcomponent 3.1. Support for preparation of local and communal development plans, subprojects, and implementation The approach would be as flexible as possible dependingon the regional context, but the participatory approach would be systematically used. Preparation of development plans and subprojects: 0 Community level. NGOs or technical agents would assist communities in (i)defining their members, territory, assets, and common interests; (ii)assessing their issues and needs; (iii) perceiving their priorities; and (iv) drafting their local development plans. A local development plan would include (i) background with a map and the current situation, (ii) priority issues, (iii) solutions and their impacts, (iv) related estimated costs, (v) programming, and (vi) monitoring and evaluation arrangements. Decentralized technical services and communal authorities would always be involved in planning to ensure consistency with communal activities and national policies. The plan would have to be approved by the whole community. Underprivileged groups would be specifically targeted to involve them in the participatory process. Each community would democratically elect representatives to the Communal Decision Committee. A community-based organization would then be responsible for preparing subproject technical documents and might contract as needed. The PAPNDP would cover costs under the first component, considering them part o f the subprojects' global costs. 0 Commune level. Service providers would assist rural communes in preparing a communal development plan. Each communal development plan would be prepared ina participatory manner, involving community-based organizations, decentralized technical services, and traditional authorities. Communal development plans would address intervillage issues and specific communal needs rather than combining several local development plans. Communal development plans would include (i) background with a map and the current situation, (ii) issues, (iii) priority solutions and their impacts, (iv) related estimated costs, (v) programming, and (vi) monitoring and evaluation arrangements. The commune would then be responsible for implementing the plan and for preparingsubproject technical documentation. Support to subproject implementation: NGOs or technical agents would be contracted to strengthen the beneficiaries' capacity to implement subprojects by providingtraining incommunity-based procurement, financial management, and project management. The Communal Decision Committees and Provincial Decision Committees would be strengthened to enable them to appraise and approve subprojects, in accordance with PAPNDP principles. The project would support (i)part o f their operating costs (including regular field missions to supervise implementation o f approved subprojects) and (ii)training in such areas as local development, Cameroonian sector policies, strategic planning, safeguard policies, andparticipatory monitoring. - 45 - Subcomponent 3.Z.Specific training and outreach campaigns to improve communities' livelihoods and reducepoverty While assisting communities in the participatory planning process, facilitators would be able to assess community capacities and design specific training and outreach programs to be implemented by specialists contracted by the project. After each training or outreach campaign, beneficiaries would be surveyed to determine quality and impact. Themes addressed by trainings and outreach campaigns would include literacy, HIV/AIDS prevention, hygiene, nutrition, community-based integrated environmental management, community forestry, microcredit and savings, and safeguard issues. Specific attention would be given to marginalizedgroups, especially indigenous people, as described in the Indigenous People Development Plan. Cost andflnancing: An IDA Credit (US$3.59 million) would contribute to subcomponents 3.1 and 3.2 inthe targeted rural communes. Project Component 4 US$13.97 million - IDA Credit: US$5.55 million Supporting project management and coordination, monitoring and evaluation, and communication Objective: This component aims to allow all actors of the project and the rural and local development sector in general to share information and tools. This component includes three subcomponents. Subcomponent 4.1 Management and coordination This subcomponent would finance project implementation, project coordination, and financial management. Project implementation includes (i)operating costs o f the National Coordination Unit (NCU) and the five Provincial Project Units (PPUs), (ii) equipment and vehicles, (iii) rehabilitation of office space, and (iv) trainings to strengthen PAPNDP's management entities (procurement, financial management, disbursement, monitoring and evaluation). Project coordination includes specific workshops and meetings aimed at better coordination among ministries, a better liaison with donors, and better national communication. Financial management includes consultant services for procurement, audits (financial and technical), and accounting, as needed. Subcomponent 4.2 Project monitoring and evaluation. The project monitoring and evaluation subcomponent is designed to (i)ensure sound management o f the project through daily technical and financial monitoring o f its activities; (ii)enforce strategic, technical, and operational links between the program and sector strategies, other development programs and projects, and all stakeholders involved (particularly beneficiaries); and (iii)optimize the management of information generated and used by project management units. Stakeholders at every level would be involved ingathering, processing, analyzing, storing, and disseminating the information required for transparent and efficient decisionmalung, and for sound financial andtechnical monitoring of activities. The subcomponent would rely on (i) monitoring and evaluation system to follow a activities infinancial and technical terms and (ii)a knowledge management system for decisionmakers. The monitoring and evaluation system: - 46 - The monitoring and evaluation system of the PAPNDP is critical for managing the program's large volume o f information-the subproject cycle, the PPUs, community performance-and for aggregating information used to evaluate the program's impact. The management information system would have three modules. The PPUs would have a streamlined version o f the systemwith information neededfrom the NCU. PPUs would gather information from local beneficiaries and stakeholders and dissemination lessons andbest practices to beneficiaries, thus ensuring effective participatory evaluationandprogram steering. The database would be synchronized each month among the provincial and central levels. As program coverage progresses,the systemwould be set up inthe concerned province. Accounting and Jinancial monitoring. During preparation of the project, a consulting firm specializing infinancial and accounting systems was recruited to (i) develop the software and install it inthe NCU and PPUs, (ii) staff, and (iii) six months of technical assistanceto the NCU train provide and PPUs. Reports preparedinthe Financial MonitoringReport format would be issued quarterly. The project would conduct annual financial audits o f the N C U and PPUs. Activity monitoring and evaluation. A system has been developed to monitor and evaluate the project's performance and impacts. This monitoring and evaluation system would provide information to (i) set clear and realistic objectives for each activity, (ii) measure gaps between targets and actual results to identify problems with implementation, (iii)propose options and arrangements to address those issues, and (iv) better inform the stakeholders through periodic reporting (stakeholders' terms of reference, status o f activities and problems encountered; organizational chart o f activities with responsibilities, financial status o f the project, value o f key impact and performance indicators, value o f trigger indicators). Reports and performance charts would create an interface with the accounting and financial system so that financial disbursements and commitments could be compared to physical status. Monitoring and evaluation o f activities financed under component 1 (subprojects) would benefit from specific tools and procedures. The project's impact would be evaluated (i)once a year, by a census o f a statistically representative sample o f beneficiaries; (ii)once a year, through an environmental assessment; and (iii)every two years, through an appraisal by beneficiaries. The PAPNDP would also continually look at participatory appraisal reports indicating levels o f community satisfaction with PAPNDP and subproject implementation. Global impact information would come from the Poverty Monitoring System, withthe Cameron Household Survey I1(ECAM-11) providingthe baseline. A rural sector monitoring and evaluation system (Obsewatoire du Secteur Rural) would also be developed through the PAPNDP. Development operations and process monitoring. This module would be based on a Geographical Information System to monitor (i)existing or planned infrastructure, services, and development operations in affected departments; (ii) sector policies; and (iii) expansion o f the program's geographic scope (as measured on a predetermined scale ranging from "nothing happened" to "community fully empowered, with strong local government involvement"). This tool would be used to update the Provincial Development Frameworks. The Geographical Information System would use maps scanned from archives or satellite photographs as backgroundto display the following layers: 0 Existingor plannedinfrastructure: schools, health centers, water points, markets, slaughterhouses, veterinary services, drainage facilities, socioeducational outreach centers, roads, andvillage stores. 0 Development operations under way that specify objectives, sectors, themes, budgets, effectiveness, closing dates, financing sources, and contacts. 0 Geographical scope o f the program, showing progress in a given area according to a predefined process scale. National strategies and policies for poverty reduction, rural development, water management, health, -47- education, transport, and urban planning would also be monitored with this module, but without geographic interface. To be successfully implemented, the system would have numerous links to other monitoring systems (sector monitoring or development program monitoring), especially monitoring systems for the rural sector. Knowledge management in theprogram. The program's local dimension highlightsthe needfor sound knowledge management procedures during implementation to ensure efficient information circulation among stakeholders. "Information" includes (i)accounting and financial reports, (ii) technical status reports and related documentation (financing request forms), (iii)contact lists, (iv) communication supports (brochures, flyers), (v) technical support documents and publications (books, studies, maps), andso forth. A simple implementation manual describing knowledge managementprocedureswould be written and would include a website with content that would dependon the target audience: a. General public: an overview o f Cameroon's rural sector and present the program and its achievements. b. Project's financial partners: technical and financial status reports, with direct links to program performance and impact indicators. c. Project's technical partners: experience-sharing tools, including (i)an archive o f technical documents by sector (strategies, studies), (ii)a forum, and (iii)a calendar o f project implementationevents (commencement of studies, planning and validationworkshops). Subcomponent 4.3 Communication This subcomponent would focus on (i) ensuring circulation o f strategic information in the PAPNDP; (ii)ensuring circulation of technical and financial information to beneficiaries, partners, and experts; (iii) ensuring communicationwith the public; and (iv) supporting the secondand the third component. The communication plan would rely on (i) direct communication with beneficiaries (books, picture, movies), (ii)the support o f administrative and local authorities, and (iii)mass communication (television, radio, Internet). Cost andjnancing: An IDA credit would partially finance subcomponent 4.1 for the N C Uandthree PPUs. The IDA would also support subcomponent 4.2 by financing (i) financial and technical audits, (ii) workshops and technical advisory services for census and beneficiaries assessments to monitor impacts o f the project, (iii)technical advisory services to monitor implementation of the Environmental and Social Management Framework, the Resettlement Policy Framework, and the Indigenous People Development Plan. IDA Credit would then finance technical services and workshops to support the implementation of the PAPNDP communication strategy (subcomponent 4.3). - 48 - Annex 3: Estimated Project Costs CAMEROON: Community Development Program Support Project 53.07 5.56 10.22 Project Management andMonitoring 12.97 Total Baseline Cost 81.82 Physical Contingencies 0.20 Price Contingencies 0.80 Total Project Costs1 73.32 9.50 82.82 Total Financing Required 73.32 9.50 82.82 0.05 Vehicles and Equipment 3.27 ConsultantServices, Audit and Studies 10.63 Training 6.33 Grants for Sub-projects 53.07 Operating Costs 7.73 PPF 1.74 Total ProjectCosts1 73.32 9.50 82.82 Total FinancingRequired 73.32 9.50 82.82 1 Identifiable taxes andduties are 3.88 (US$m)andthe total project cost, net of taxes, is 78.94 (USSni). Therefore, the project cost sharing ratio is 25.33% of total project cost netof taxes. - 49 - Annex 4 CAMEROON: Community Development Program Support Project The PAPNDPdoes not lend itself to cost-benefit analysis because: o All investments would be demand-driven, and their nature can not be knownbeforehand. o All eligible subprojects would be nonproductive. o The economic benefits o f capacity-building are difficult to quantify. Economic criteria are included in the Project Implementation Manual to appraise the economic dimension o f subprojects. - 50 - Annex 5: Financial Summary CAMEROON: Community Development Program Support Project Years Ending 2008 IMPLEMENTATIONPERIOD IYear1 I Year2 I Year3 IYear4 I Year5 IYear6 IYear 7 Total Financing Required ProjectCosts Investment Costs 10.0 17.7 20.5 26.3 0.0 0.0 0.0 Recurrent Costs 1.4 2.3 2.3 2.3 0.0 0.0 0.0 j~ Total Project Costs 11.4 20.0 22.8 28.6 0.0 0.0 0.0 Total Financing 11.4 20.0 22.8 28.6 0.0 0.0 0.0 Financing IBRDllDA 4.4 3.7 5.2 6.7 0.0 0.0 Government 1.6 1.2 1.5 2.0 0.0 0.0 Central 0.0 0.0 0.0 0.0 0.0 0.0 Provincial 0.0 0.0 0.0 0.0 0.0 0.0 Co-financiersFrench 0.0 7.0 8.0 10.0 0.0 0.0 Cooperation :C2D Beneficiaries 0.1 0.2 0.3 0.4 0.0 0.0 Government-PPTE 4.5 7.1 7.0 8.6 0.0 0.0 FEICOM 0.8 0.8 0.8 0.9 0.0 0.0 0.0 Total Project Financing 11.4 20.0 22.8 28.6 0.0 0.0 Mainassumptions: - 51 - Annex 6(A): Procurement Arrangements CAMEROON: Community Development ProgramSupport Project Procurement GENERAL 1. A Country Procurement Assessment Review (CPAR) was carried out in Cameroun in 2000 by a national committee representing all the sectors and a team from The World Bank. It found that the national procurement system needed a major reform as the procedures for procurement o f works, goods, and services were weak in several areas. The Government, with the Bank assistance, started to implement the recommended reforms of which the following actions have already been accomplished (a) preparation of a new procurement code, (b) signature o f the decree regarding the Commisson des MarchCs, (c) audit o f public procurement for 2000 and 2001 by an intemational auditor, (d) establishment of specialized procurement commissions and (e) appointment o f independent observers. Cameroun's procurement laws and regulations do not conflict with IDA Guidelines. N o special exceptions, permits, or licenses need to be specified in the Credit since Cameroon's procurement practices allow IDA procedures to take precedence over any contrary provisions inlocal regulations. Guidelines 2. Goods and works financed by IDA shall be procured in accordance with World Bank Guidelines under IBRDLoans and IDA Credits ("The Guidelines", January 1995, revisedinJanuary and August 1996, September 1997 and January 1999) and Bank Standard Bidding Documents (SBD), and the Standard Evaluation Report will be used for ICB. National Competitive Bidding (NCB) advertised locally would be carried out in accordance with Cameroon's procurement laws and regulations, which are acceptable to IDA provided that they assure economy, efficiency, transparency and broad consistency with the key objectives o f the Bank Guidelines. Inthe absence o f national standardbidding documents, the Bank's SBD will be used for NCB, with appropriate modifications relating to provisions for "advertising and notification", "currencies o f bid and payment", "settlement of disputes", deletion o f the domestic preference provision. This should ensure that: (i)methods used to evaluate bids and award contracts are known to all bidders and not applied arbitrarily; (ii) all bidders have adequate response time (four weeks) to prepare and submit bids; (iii)bid evaluation and bidder qualification are clearly specified in bidding documents; (iv) no preference margin i s granted to domestic manufacturers; (v) eligible firms are not excluded from participation; (vi) awards are made to the lowest evaluated bidder in accordance with pre-determined and transparent methods; (vii) bid evaluation reports clearly state the reasons for the rejection o f any non-responsive bid; (viii) prior to the issuance of first bidding invitation, draft standard bidding documents, prepared as annexes to the Project Administrative, Financial and Accounting Manual, are submittedto IDA for review. 3. Contracts for consultant services financedby IDA funds will be awarded inaccordance withWorld Bank Guidelines for the Selection and Employment o f Consultants by World Bank Borrowers (January 1997, revised in September 1997, January 1999 and May 2002). The Standard Request for Proposal (SWP), as developed by the Bank, will be used for the appointment o f consultants. Simplified contracts will be used for short-term assignments, i.e., those not exceeding six months, executed by firms or individual consultants. Models o f such contracts can be found in the SRFP. For evaluation purposes, the Sample Form o f Evaluation Report for the Selection o f Consultants shall be used (October 1999). - 52 - 4. Procurement of small works, goods and services for community-based micro-projects financed by the matching grant will be carried out in accordance with paragraph 3.15 o f the Guidelines (Community Participation in Procurement) and with the Bank's Guidelines for Simplified Procurement and Disbursementfor Community-Based Investments (February 1998) and the Project Implementation Manual (PIM).These will be detailed the PIM. Advertising 5. A draft General Procurement Notice (GPN) will be prepared by the borrower and submitted to IDA for publication in the UnitedNations Development Business online (UNDB online) and in the Development Gateway Market (dg Market) following Board Approval, to announce major consulting assignments andany ICB. Inthe case o fNCB, a GPN will be published inthe national press or official gazette. The GPN shall be prepared prior to negotiations and published after Board Approval. It shall include all contracts under ICB and all large consulting contracts (Le., those estimated to cost $100,000 or more). In addition, a specific procurement notice (SPN) is required for all goods and works to be procuredunder ICB, and an Expression o f Interest (EOI) for all consulting services valued inexcessofUS$ 100,000. Procurement Capacity Assessment 6. A procurement capacity assessment was carried out during the appraisal mission and completed in November 2003. It was found that the first project preparation procurement activities were carried out by the National Coordination Unit (NCU) (Cellule de Coordination Nationale) which had some experienced staff but had not yet completed the recruitment o f its Procurement Specialist. Therefore, the recommendations made inthe action planto strengthenthe procurement capacities and the possible risks linked to it include: (i) of a Procurement Specialist at the NCU, (ii) space and the hiring office necessary equipment to the procurement specialist, (iii) procurement trainings to the procurement specialist and the other N C U staff, (iv) preparation o f a procurement plan to be discussed during negotiations, (v) establishment o f a procurement planning and contract management system integrated inthe computerized Financial management system to be installedat the national coordinationunit and regional units (PPUs) in order to ensure the follow-up o f contracts funds disbursement, (vi) technical assistancethrough short-term consultants as necessary, (vii) a clear development o f procurement rules and methods in the Project Implementation Manual (PIM), and (viii) annual technical and financial audits specific to procurement. By December 15, 2003, the Procurement Specialist's recruitment was completed and he was already on board. - 53 - Schedule of actions to be carried out I Actions to be undertaken Dates Responsible Institution 1. Finalization of the recruitment of the December 2003 Government o f Cameroun IProcurement SDecialist at the N C U I I I 2. Equipement and office space for the procurement December 2003 National CoordinationUnit specialist 3, Participation in procurement training As needed during National CoordinationUnit workshops at the Regional procurement centers in project's life the region (i.e. Dakar, Senegal); 4. Preparation of a procurement plan and a December 2003 National Coordination Unit regular updating o f such plan to reduce the risk o f (NCU) the extension of project duration 5. Establishment o f a procurement planning and Before National Coordination Unit and contract management system integrated in the effectiveness Consultants in charge o f the computerized Financial management system to be installation o f the integrated installed at the National Coordination Unit and system Regional Coordination Unit inorder to ensure the follow-up o f contracts funds disbursement and aggregate amounts 6. Short-term technical assistanceinprocurement As needed during National Coordination Unit by consultants as necessary project's life (NW 7. Clear development o f procurement rules and December 2003 National Coordination Unit methods in the Project Implementation Manual (NCU) and Consultants in (PIMI charge o f the PIM 8. Annual technical and financial audits specific At least twice a World Bank teams and to procurement year during extemal Auditors project's life Procurement ImplementationArrangements 7. At the national level, the bulk o f procurement for vehicles, equipment, construction or rehabilitation works for offices, consulting services, studies and training would be managed by the "Commission SpCciale de Passation des Marches" created by Arret6 No. 121/CAB/PM o f December 2003 o f the Prime Minister, in collaboration with the National Coordination Unit (NCU) through the Procurement Specialist it will be staffed with. He will be incharge o f the preparation o f all the bidding documents (ICB, NCB and shopping), the requests for proposals, their submission to IDA for no objection before their publication. The "Commission SpCciale de Passation des MarchCs" staffed with the Procurement Specialist will make the evaluation o f the bids and the proposals and seek the no objection o f IDA before making any award, when appropriate. The N C U would use consultants as necessaryto carry out specific tasks inprocurement. As far as the Community level is concerned, since there will only be subprojects to be financed, these activities will be carried out by the Communities which will be trained in Community-Based Procurement. The Project Implementation Manual (PIM) will develop a section entirely dedicated to Community-Based Procurement with all the necessary elements for the use o f communities. The recruitment o f all positions in the N C U and PPU would be acceptable to IDA prior to project implementationand during the life o fthe project. - 54 - 8. Documentsrelatedto procurement below the prior review thresholds will be maintained by the Borrower for ex-post review by auditors and by IDA supervision missions. The N C Uwould be requiredto prepare a computer-based system to monitor the signed contracts inorder not to exceedthe approved amount during the life of project implementation. ProcurementMethods CivilWorks 9. The project includes no major civil works. There will only be small works for the rehabilitation o f the NCU's office and the offices of the five PPUs to be financed by IDA. Each rehabilitation contract estimated to cost US$200,000 or less in value will be procured through NCB in accordance with national procedures acceptable to IDA. 10. The remaining procurement consists of small works to be carried out under community-based micro-projects. Given the size, amount and demand-driven nature o f community-based works, these contracts will be govemed, when appropriate, by the Guidelines for Simplified Procurement and Disbursement for Community-Based Investments (February 1998), detailed in the Project Implementation Manual (PIM). Small works, as part o f grants for community-based micro-projects, will consist mainly of small community social infrastructures such as classrooms, rural health posts, youth facilities, community meeting facilities, small dams and dikes etc. These expenditures are estimated to cost US$ 125,000 or less per subproject for a commune and US$50,000 for a community. They may be procured under the shopping procedure. Under this procedure, lump-sum, fixed-price contracts are awarded on the basis o f quotations solicited in writing from at least three qualified domestic contractors. The invitation shall include a detailed description o f the works, including basic specifications, the required completion date, a basic form o f agreement acceptable to IDA, and relevant drawings where applicable. Quotations should be opened at the same time and to the extent possible in the presence o f community members. The awards will be made to the contractors offering the lowest price quotes for the required work, and having the experience and resources to complete the contract successfully. Goods 11. Computers, office equipment, materials and furniture, locally available at reasonable prices and valued at less than US$ 500,000 per contract, will be procured in accordance with NCB procedures acceptable to IDA. Procurement o f vehicles, motorcycles and equipment costing less than US$500,000 per contract, will be carried out through NCB. Goods that cannot be grouped into bid packages o f US$50,000 or more may be procured through national or intemational shopping according to procedures acceptable to IDA, or through the UNDP Inter-Agency Procurement Services Office (IAPSO). Goods under the community-based sub-projects will be procured under the simplified Procurement Procedures detailed in the PIM. After soliciting bids in writing from at least three qualified suppliers, the Borrower would award the contract on the basis o f an evaluation o f the bids received in writing from such qualified suppliers. The award will be made to the supplier with the lowest price quote for the required goods, and with the experience and resources to execute the contract successfully. 12. IDA Reviews. IDA-financed contracts for amounts equivalent to the threshold value o f US$ 500,000 or more for goods and US$ 1,000,000 for works and the first three contracts for works and the first three contracts for goods awarded under National Competitive Biddingwill be subject to IDA'S - 55 - prior reviewprocedures inaccordance with Appendix 1of the Guidelines. 13. Community-BasedProcurement. The project will finance community-based sub-projects, for an estimated total o f US$53.07 million equivalent, o f which IDA will finance US$lO.O million. The sub-projects will comprise such things as small social infrastructures, classrooms, rural health posts, IEC-related activities and materials, minor repairs or works, capacity-building etc. N o subproject grant shall be in excess o f US$50,000 for a community subproject and US$125,000 for a communal subproject. Fundingfor these activities will be inthe form of grants. Communities will be required to contribute on agreed percentage o f the total budget in labor, in kind or in cash. The methods of procurement for sub-projects, according to Section D o f the Bank's Guidelines for Simplified Procurement andDisbursementfor Community-Based Investments (February 1998) are : 0 Local Shopping for Goods 0 Local Shopping for Works 0 Local Biddingfor goods and works 0 Direct Contracting/Off the shelf purchases See Project ImplementationManual for more details. 14. Financing o f activities will depend on applications received from communities. Due to their demand-driven nature, it is not possible to predetermine the exact mix o f goods, small works, and services to be procured in connection with these activities. Therefore, the types o f activities to be financed andtheir procurement details will depend on the needs identifiedby communities. A negative list o f activities which can not be financed under the project have been clearly developped in the PIM. Procurement o f items for the implementation o f sub-projects would be carried out in accordance with simplifiedprocurement procedures referred to the Project Implementation Manual. The Manual will describe procedures and tools in a special chapter based on the Bank's Guidelines for Simplified Procurement and Disbursement for Community-Based Investments (February 1998). The N C U and the PPUs will be responsible for ensuring compliance with these guidelines, and ex-post reviews of random sub-projects will be conducted periodically by the Bank and independenttechnical auditors. 15. The N C U and the PPUs will maintain a tracking system to follow-up disbursement against the contracts signedunder the project inorder to ensure that there is no overpayment. ConsultantsServices, Audits and Studies 16. IDA financing for consulting services, audits, studies, and training would apply to (i) specialized studies, supervision, project implementation and monitoring, Management Information System, financial management support, financial audits; and (ii) consultancies on technical matters and training, and skills development (participatory approaches), capacity-building for community development, empowerment and organization, and IEC campaigns. Consultants financed by IDA, totaling US$ 3.29 million, would be hired inaccordancewith the Bank's Guidelines for the Selection and Employment of Consultants by World Bank Borrowers (January 1997, revised in September 1997, January 1999 and May 2002). 17. Quality- and Cost-BasedSelection (QCBS). All consulting service contracts costing US$lOO,OOO equivalent or more for firms would be awarded through the Quality- and Cost-Based Selection (QCBS) method. To ensure that priority is given to the identification o f suitable and qualified national consultants, short lists for contracts under US$lOO,OOO equivalent may be comprised entirely of - 56 - national consultants (inaccordance with the provisions o f paragraph 2.7 o f the Consultant Guidelines), provided that a sufficient number o f qualified individuals or firms (at least three) are available. However, if foreign firms have expressed interest, they shall not be excluded from consideration. The NCU will ensure wide dissemination of expressions of interest in order to gather proposals from consultants. Based on agreed upon criteria, the NCU will maintain and update regularly a list o f consultants to be usedto establish short lists. 18. Least Cost Selection (LCS) will be the most appropriate method used for financial and technical audits estimated to cost less than US$lOO,OOO. 19. Selection Based on Consultant Qualifzcations (CQ). Consultants for small studies, engineering designs and supervision, monitoring and evaluation, and short term assignments, costing less than US$lOO,OOO, will be selectedusingthe Selection Basedon Consultant Qualifications method. 20. Individual Consultants. Consultants for project implementation and assignments in such sectors as agnculture, economics, sociology, land tenure and other types o f short-term appointment that can be deliveredby individuals selectedinaccordancewith paragraphs 3.8 to 3.11and5.4 of the Guidelines. 21. Trainings, Workshops,Seminars and Conferences. The total cost of these activities is estimated at US$6.33 milliono f which IDA will finance US$2.26 million equivalent. Training, workshops, seminars and conferences attendance and study tours will be carried out on the basis of approved annual programs that will identifythe general framework o f training and similar activities for the year, including the nature o f traininglstudy tourslworkshops, the number o f participants, and cost estimates. 22. IDA Reviews. Inaccordance with Appendix 1 of the Guidelines for Consultants, Bank staff will reviewthe Borrower's proposed selection process for the hiringof consultants. All consultingcontracts costing US$200,000 equivalent or more for firms andall contracts for audits regardless their estimated cost, and all contracts for the employment o f individual consultants costing more than US$lOO,OOO and all contracts for individual consultants selected on sole source basis, the report on the comparison of the qualifications and experience of candidates, the qualifications, experience, terms of reference and terms o f employment o f the consultants shall be furnished to IDA for its prior review. All other contracts would be subject to post review in accordance with paragraph 4 Appendix 1 o f the Guidelines. Any amendments to existing contracts that increase their values to levels equivalent to or exceeding the prior review thresholds are subject to IDA review. 23. All consultants' terms of reference would be subject to IDA prior review. Other procurement subject to IDA review would include: annual training plans for local and overseas training and workshops, including terms of reference and estimated budgets. All out-of-country training will be subject to IDA approval. 24. Modijication or waiver of the scope and conditions of contracts. Before agreeing to any material extension, to substitution o f key staff or to any modification or waiver o f the conditions o f contracts that would increase their aggregate cost by more than 15 percent o f the original price, the Borrower shall specify the reasons thereof and seek IDA'Sprior non-objection for the proposed modification. A copy o f all amendmentsto the contracts shall be furnished to the Bank. 25. Project Implementation Manual (PIM). The PIM has already been produced and is being revised to incorporate various comments. It will define the project's intemal organization and implementation procedures and would include: (i) procedures for issuing biddinginvitations, selecting consultants, and awarding contracts; (ii) procedures and sample contracts for community-based procurement; (iii) the - 57 - intemal organization for supervision and control, including operational guidelines defining the role o f the executing agency and reporting requirements; and (iv) disbursement procedures. The Implementation Manual has been adoptedprior to negotiations. 26. During negotiations, the Government has submitted to IDA for review: (a) a draft procurement plan for the first year o f the project ;(b) the Project Implementation Manual; (c) the standard bidding documents to be used for NCB procedures for goods and works; and (d) a training program for the N C U and the PPUs. The Government has also provided assurances that the N C U will: (a) use the Project Implementation Manual; (b) use the Bank's Standard BiddingDocuments for ICB, the Standard Request for Proposals for the selection o f consultants, and the Standard Bid Evaluation Reports; (c) apply the procurement procedures and arrangements outlined above; (d) update the procurement plan on a regular basis during annual reviews with IDA and other donors, to compare targeted and actual completion times, and transmit it to IDA, during implementation, with all procurement-related documents; and (e) carry out, during annual reviews, an assessment o f the effectiveness o f bidding procedures and performance, as they relate to the program's procurement experience, and propose for IDA and other donors' consideration any modifications to the current procedures that would accelerate procurement, while still maintaining compliance with the Bank's Procurement Guidelines and adequate control over contract awards and payments. 27. The Government has also provided assurances at negotiations that it will take the necessary measure to ensure that procurement phases do not exceedthe following target time periods: Procurementmethods(Table A) Procurement Phases Maximum number of weeks Preparation o f bidding documents 4 (6 for large contracts) Preparation o f bids by bidders 4 (6-10 for ICB) Bidevaluation 2 (4 for large contracts) Signature o f contracts 2 Payments 3 Procurement Method' Expenditure Category ICB NCB Other? N.B.F. Total Cost 1. Works 0.00 0.05 0.00 0.00 0.05 (0.00) (0.04) (0.00) (0.00) (0.04) 2. Goods 0.00 0.87 0.40 2.00 3.27 (0.00) (0.68) (0.30) (0.00) (0.98) 3. Services 0.00 0.00 5.23 5.40 10.63 (0.00) (0.00) (3.29) (0.00) (3.29) 4. Training 0.00 0.00 2.33 4.00 6.33 (0.00) (0.00) (2.26) (0.00) (2.26) 5. Matching Grants for 0.00 0.00 12.94 40.13 53.07 micro-projects (0.00) (0.00) (10.00) (0.00) (10.00) - 58 - 6. Operating Costs 0.00 0.00 5.47 4.00 9.47 (0.00) (0.00) (3.43) (0.00) (3.43) Total 0.00 0.92 26.37 55.53 82.82 (0.00) (0.72) (19.28) (0.00) (20.00) Includes civil works and goods to be procured through national shopping, consulting services, services o f contracted staff o f the project management office, training, technical assistance services, and incremental operating costs relatedto (i) managing the project, and (ii)re-lendingproject funds to local government units. - 59 - Table A I: Consultant SelectionArrangements (optional) (US$ million equivalent) (1.59) (0.00) (0.00) (0.30) (0.40) (0.00) (0.00) (2.29) B. Individuals 0.00 0.00 0.00 0.00 0.00 1.46 1.77 3.23 (0.00) (0.00) (0.00) (0.00) (0.00) (1.OO) (0.00) (1.OO) Total 2.50 0.00 0.00 0.40 0.50 1.46 5.77 10.63 (1.59) (0.00) (0.00) (0.30) (0.40) (1.00) (0.00) (3.29) - 60 - Prior reviewthresholds(Table B) Table B: Thresholds for Procurement Methods and Prior Review ' Table B: Thresholds for Procurement Methods and Prior Review' Contracts Subject to Prior Review (US$ millions) 1.Works less than $200,000 NCB Post Review Rehabilitation or (except first 3 contracts), construction amount:USO.O5 million Small works for micro-projects $125,000 or less Local Shopping for works Post Review (except first 3 contracts), amount:USO.15 million 2. Goods $500,000 or more ICB Prior review Below $500,000 N C B Post Review (except first 3 contracts), amount: US0.87 million Less than $50.000 Shopping Post Review 3. Services $200,000 or more QCBS Prior Review Consulting firms (amount: US$2.50 million) Below $100,000 CQ Post Review (TORSprior review) 4. Financial and Less than $100,000 LCS Prior Review Technical Audits 5. Individual ;100,000or more and sole (Prior Review o f the report Consultants source onthe comparison ofthe qualifications and experience o f candidates, the qualifications, experience, terms o f reference andterms o f employment of the consultants) 6. Miscellaneous Total value of contracts subject to prior review: US$3.57 million Overall Procurement Risk Assessment: Average Frequencyof procurementsupervisionmissionsproposed: One every 6 months (includes special procurement supervision for post-review/audits) - 61 - "Thresholds generallydiffer by country and project. Consult "Assessment of Agency's Capacityto Implement Procurement"and contact the RegionalProcurement Adviser for guidance. - 62 - Annex 6(B): Financial Managementand DisbursementArrangements CAMEROON: Community Development Program Support Project FinancialManaPement 1. Summary ofthe FinancialManagement Assessment Scope of the assessment Based on program implementation arrangement, the overall responsibility for financial management will remain with the NCU and carried out by the Coordinator, the Assistant coordinator and the Financial Management Specialist. Accordingly, the scope o f the assessment will be limited to the NCU. However, given the decentralized nature o f the program, the coordination and reporting mechanisms between the entities involved in the program and the N C U will be looked at to ensure the arrangements inplace will allow for smooth implementationo fprogram's activities as well as to ensure that loan proceeds are used only for the purposes for which the loan is granted, with due regard to economy, efficiency, andthe sustainableachievement o f the program's development objectives. CNC financial management capacity The capacity o f N C U is acceptable and the preparation activities are in progress. The objective is to have a fully established and functional N C Uto declare the program effective so that at the outset o f the implementation o f the activities, the N C U has the appropriate accounting, internal control, and the relevant financial reporting systems inplace. This will allow the N C U to (i) record and report reliably the financial transactions of the program ina timely manner, including those transactions involvingthe use o f Bank funds and other donors ;and (ii) provide sufficient and relevant financial information for managing and monitoring program activities. All these considerations have been taken into account to define the financial management proposed below. FinancialManagement The NCU through its financial management and accounting unit will have the overall responsibility of the project financial management. It will have to maintain project's consolidated budget and accounts. To that end, the financial management and accounting unit will be equippedwith a computerized and integrated financial management appropriate to the scale and nature o f the different phases o f the program and capable o f recording and reporting in a timely manner the program's by geographical locations, components, activities, expenditure categories and origin o f funds. The computerized financial management system will be multi-currency and will include the following modules which should be integrated : general accounting, cost accounting, assets management, preparation o f withdrawal applications and tracking o f disbursements by donors, reports generating, including quarterly FMR and annual financial statements. A fully functioning financial management system satisfactory to the Bank is considered as a condition o f credit effectiveness. A Project Administrative, Financial and Accounting Manual has been finalized which includes a description of and procedures. It describes : (i) the overall organization o f the program including and organizational diagram and job description of the accounting and financial staff; (ii) the accounting systemwhich will be on an accrual basis; (iii) main transactions cycles; format, content, and timing the o f the program's financial reporting, i.e., financial statements and other financial reports including FMRs, filing system, etc.; (iv) the various operational procedures including budget management ( - 63 - planning, execution and monitoring ) and management o f assets, procurement o f goods ands services, disbursement; and (v) internal control procedures. Financial Management risk The financial management risk are related to : (i)the weak implication of the technical staff on the internal control issue who are particularly involved in the core activities; (ii) availability o f timely regular budget for the operations of PAPNDP; (iii)The planning o f the activities for the different phases o f the program ( initiation, expansion and consolidation ) and the assessment o f the progress and the related costs; (iv) the ability o f local governments to be given the responsibility for managing PAPNDP resources; (v) the impact o f the variety o f donors inthe program and the combination o f the different natures of their contribution in the program ;(vi) the setting up of different mechanisms to channel funds to communes and communities. To mitigate these risks, the following has to be observed: (a) care must be exercised in ensuring the timely availability and release of Counterpart Funds; (b) regular Bank supervision missions, including SOEs reviews and timely follow-up of management letter issues, will be essential; (c) the planning and budgeting activity should be properly organized in consultation with different donors; (d) timely information on monitoring andevaluation mustbe provided. Staffing At the national level, the most important part of the staff have been recruited based on a competitive selection acceptable to the Bank. The key persons of the project have relevant academic background andprofessional experience and are familiar with Bank procedures andrequirements. The PAPNDP Financial Management Specialist will work closely with the Bank Financial Management Specialist (FMS) during the preparation to finalize the terms o f reference o f the project's staff and that o f the auditor to agree the format and the content o f FMRs. A Procurement specialist and an environmental andsocial coordinator will be identifiedandrecruited. The key staff at the provincial level will be recruited The recruitment planwill be set in accordance . with the project's implementationprogress. Reporting At least two sets of financial reports will be prepared by the NCU: the quarterly Financial monitoring Reports (FMRs, as required by the Bank) and the annual program's financial statements. The quarterly FMRs agreedupon at appraisal will be prepared and submittedto the Bank 45 days after the closing o f the quarter following the date o f effectiveness. The FMRs will be based on the formats developed in the Bank's Guidelines on Financial Monitoring Reports, agreed to with the Administrator and the Accountant, with some adjustments. For example, besides the two financial tables (Sources and Uses o f Funds, Uses o f Fundsby Project Activity), the N C Uwill prepare a thirdtable pertaining to Uses o f Funds by Category o f Expenditure. The FMRs focus on the financial aspects o f the project and their purpose is project monitoring, not management. The FMRs are not the same as the audited financial statements required annually for each project. However, they may form the basis o f these statements. Itwas also agreedthat the FMRs will include financial, physical progress andprocurement information to provide information that is useful to the borrower while also providing the Bank with - 64 - sufficient information to establish whether: (i)funds disbursed to the project are being used for the purpose intended; (ii) implementationis on track; and (iii) project budgeted costs will not be exceeded. The annual financial statements will comprise and will not be limited to: (i) the Statement of Source and Application o f Funds for the program during the current financial year, and cumulatively since the start o f the program; (ii)the statement of expenditures (SOEs); (iii)the Special Account Statement'Reconciliation; (iv) the Project Account StatementReconciliation and any other financial report the Accountant deems necessary andrelevant. ProgramFinancialManagement Capacity StrengtheningAction Plan To ensure that the above mentioned financial management system requirements will be met in due time to declare project effectiveness, an action plan is proposed hereafter with tasks to be performed as well as target completion date. Action Tasks Target completion date 1.Recruitment ofthe Procurement Preparation o f TORs and 12131103 Specialist simature o f contract 2. Finalization o f the Project Administrative, Update informationo f the 02118/04 Financial and Accounting Manual Manual basedon the Bank review 3. Selection o f an extemal auditor for annual Preparation o f TORs, 04/29/04 accounts including the PPF inthe first year launching of the the audit recruitment process and signature o f contract 4. Installationo f the integrated financial Design, installation, 04115/04 management and Monitoringand configuration, testing, and Evaluation systems training o f staff. 2. Audit Arrangements FinancialAudit The project's consolidated financial statements will be audited for each fiscal year by an independent auditor acceptable to IDA inaccordance with auditing standards also acceptable to IDA. Audit reports o f reasonable scope and detail will be submitted to IDA within six months o f the end o f the audited period. The auditor will provide an opinion on: (i) the project financial statements (Statement o f Source andApplication o f Funds andBalance Sheet); (ii) the statemento f expenditures (SOE); (iii)the Special Account (SA); and(iv) the project account. The auditor will also issue a separate management report on intemal and operational procedures, outlining any recommendations for improvements to intemal accounting controls and operational procedures identified as a result o f the financial statement audit at the levels o fNCU, PPUs and CBOs. - 65 - Detailed terms of reference for the selection o f the project's auditor were prepared, discussed and agreed on during preparation. The Audit Scope will be tailored the program's specific risks in accordancewith Bank requirements and agreedwith the Borrower. The selection o f an auditor acceptable to the Bank is a condition of effectiveness. TechnicalAudit Contracts with beneficiaries, for which templates are appended to the PIM, will be subject to micro-project technical audits. These may be ordered and managed, either systematically or randomly, by the NCU or the PPUs. For this purpose, the Program may hire outside firms. 3. DisbursementArrangements Allocation of credit proceeds(Table C) A computerized accounting andintegrated financial managementsystem will be set up andassessedby IDA as a condition of effectiveness. The system will allow inputs at different levels to capture all disbursements to be effected under the project. Statement of Expenditures. Disbursements for all expenditures should be against full documentation except for expenditure items under contracts valued at less than: (a) US$500,000 for goods; (b) US$200,000 for consulting contracts awarded to firms; (c) $100,000 for consulting contracts awarded to individuals; and (d) civil works, all training and operating costs, which will be reimbursed on the basis o f Statements o f Expenditure (SOEs). All supporting documentation for SOEs will be retained at the Caisse Autonome d'Amortissement (CAA) and will be readily accessible for review by periodic Banksupervision missions andexternal auditors. In the case of the funds for grants to be made to communities, there will be pre-financing of expenditures, as communities are unlikely to start contracting without the assurance of funds. All disbursements against expenditures under the Financial Support to Rural Communities Development will be subject to expost financial andphysical audits, on a sample basis, to be carried out by auditors employed by the project. Special Accounts, Second Generation Special Accounts and 90-Day Advance. To facilitate the project implementation and reduce the volume o f withdrawal applications, the Caisse Autonome d'Amortissement on behalf o f the Government, will open two Special Accounts (SA) in FCFA in a commercial bank on terms andconditions acceptableto IDA.The first Special Account (SA-A) will be used exclusively to finance all the micro-projects in form of Grants and the second Special Account (SA-B) will be used to finance all other activities such as monitoring & evaluation and project management costs (NCUPPUs expenses). The authorized allocation for SA-A will be FCFA 600 million and will cover about four months o f eligible expenditures. The authorized allocation for SA-B will be FCFA 480 million and will cover about four months of eligible expenditures. Upon credit effectiveness, IDA will deposit the amount o f FCFA FCFA 600 million in SA-A, representing the total allocation for that account, and FCFA 240 million in SA-B representing approximately 50 percent o f the authorized allocation of this Special Account. The remaining balance will be made available when the total commitments issuedamount to the equivalent ofUSD 4 million. The Special Accounts will be used for all payments in an amount below 20% o f the initial deposit to the Special Accounts. - 66 - Replenishment applications will be submitted monthly. Further deposits by IDA into the Special Accounts will be made against withdrawal applications supported by appropriate documents. Inaddition to the Special Account A (SA-A), with the authorization ofthe National Coordinator of the project, the Provincial Coordinators will open five (5) Second Generation Special Accounts in the Province du Sud, Province du Centre, Province de I'ildamaoua, Province de I'Ouest and Province du Nord on terms and conditions satisfactory to the Association. The N C U shall withdraw from the main Special Account and deposit an amount not to exceed FCFA 100 million into each Second Generation Special Account. These funds will be used exclusively to finance the sub-projects proposed by the communities. The Government will also open five (5) 90-Day Advance Accounts related to Special Account B (SA-B) in the same provinces, on terms and conditions satisfactory to the Association. The N C U shall withdraw from the main Special Account and deposit an amount not to exceed FCFA 30 million into each 90-Day Advance Account. These funds will be used to finance activities such as project implementation and management, monitoring & evaluation, consulting services and operating costs at the PCUs' level. Flow of funds Resources needed for the financing o f program activities will flow from (i)the Credit Account for Direct Payments to be made by IDA to suppliers, (ii)the Special Accounts A and B, the Second Generation Special Accounts and the 90-Day Advance Accounts (all maintained in commercial banks acceptable to IDA) for the activities to be financed by IDA and (iii) the Project Account for the counterpart funds. The project Financial Management Specialist (FMS) andthe Accountants will be in charge o f the financial management o f the project. The Managing Director o f the Caisse Autonome d'Amortissement (Directeur GCnCral de la CAA) or his Authorized Representative will sign all the checks for the payments to be made under the Special Accounts A and B. The Provincial Coordinators of the project in the PPUs and the Regional Accountants will countersign the checks for the payments to be made under the Second Generation Special Accounts and the 90-Day Advance Accounts. Under the supervision o f the project Financial Management Specialist, the project Accountants (one in Yaounde and 5 inthe Provinces) will prepare all the requiredsupporting documents andthe withdrawal applications for the replenishment o f the Special Accounts to be submitted to IDA at least once a month through the Caisse Autonome d'ilmortissement (CAA). The Project Account will receive counterpart funds incompliance withthe terms o f the DCA. - 67 - Table C: Allocation of Development Financing Proceeds Allocation of credit proceeds(Table C) Table C: Allocation of Credit Proceeds Expenditure Category Amount in US$million Financing Percentage 1.Civil works 0.04 100%of foreign expenditures 80% of local expenditures 2. Vehicles andEquipments 0.98 100%of foreign expenditures 70% of local expenditures 3. Consultant Services, Audits and Studies 3.20 1 72% of foreign expenditures 70%oflocal Grants for Sub-Projects I 10.00 I100% of amount 8 . disbursed 6. Operating Costs 2.50 70% 7. PPF 1.31 Amount due 8. Unallocated 1.oo ITotal Project Costs I 20.00 I I Total I 20.00 I - 68 - Annex 7: Project Processing Schedule CAMEROON: Community Development Program Support Project ProjectSchedule Planned Actual lime taken to prepare the project (months) 24 First Bank mission (identification) ]Appraisal mission departure I 06/23/2003 I 06/23/2003 I Negotiations 0111212004 01121/2004 Planned Date of Effectiveness 06/01/2004 Prepared by: Ministryo fEconomic Affairs, Programmingand Regional Development Preparation assistance: Japanese Grants for project preparation (TF050810 for US$ 82,500 & TF026786 for US$ 630,560) Bank staff who worked on the projec included: Speciality AFTS3, Task Team Leader Franqois Rantrua SFRSI, Corporate Strategy Officer Noel Chabeuf AFTS4, Livestock Specialist Soulemane Fofana AFTS3, Operations Analyst Gilles Veuillot LEGAF, Legal MohammedA. Bekhechi LEGEN,Legal Pierre Morin AFTPC, Procurement Specialist Agnes Albert-Loth LOAGl,Disbursement Henri Aka AFTPC, Procurement Specialist I FridolinOndobo AFTFM, Financial Management Specialist Siaka Bakayoko AFTFM, Senior Financial Management Specialist Helene Ndjebet AFMCM, Operations Analyst Robert Robelus AFTS1, Environmental Assessment Specialist Kristine Ivarsdotter AFTS1, Social Development Specialist Clotilde Ngomba AFTS3, Agricultural Economist Moctar Thiam AFTTR, Transport Specialist Luc Lecuit AFC07, Operations Officer Jacomina de Regt AFTS1, Lead Specialist, Peer Reviewer WillemZijp ECCU8, Operations Adviser, Peer Reviewer Sylvie Mbappe AFTS3, Language Program Assistant ValBrie Layrol Consultant, RuralDevelopment Sp. Jean-Jacques Pesquet Consultant, Agro-economist Yves Jantzem Consultant, Implementation Sp. - 69 - Olivier Franqois Consultant, Implementation Assistant Magaye Gaye Consultant, Financial Management Sp. Dan Aronson Consultant, Indigenous People Sp. FrenchDevelopmentAgency : Denis Loyer AFD Sector Manager Environment andNatural Resources Management Caroline Piquet AFD Project Manager Luc Mogenet AFD RuralDevelopment Specialist - 70 - Annex 8: Documents in the Project File* CAMEROON: Community Development Program Support Project A. Project Implementation Plan "Manuel d'execution du PNDP" (January 2004) ; 0 "Manuel de procedures comptables, administratives et financibres" (January 2004) ; 0 "Manuel de suivi et evaluation" (January 2004). B. Bank Staff Assessments 0 "Aide-memoire de la mission de prk-evaluation du PNDP" (July 2002); 0 "Aide-memoire de la mission d'appui technique duPNDP" (November 2002); 0 "Aide-memoire de la mission de cadrage duPNDP" (April2003) ; 0 "Aide-memoire de la mission d'evaluation du PNDP" (July 2003) ; 0 "Aide-memoire de la mission d'appui duPNDP" (November 2003); Procurement capacity assessment (AFTQK, November 2003); 0 Financial management capacity assessment (AFTFM, November 2003). C. Other 0 "Decentralisation communale et developpement local au Cameroun" (July 2002); 0 Environmental and Social Management Framework (June 2003); 0 Resettlement Policy Framework (June 2003); 0 Indigenous People Development Plan (June 2003). *Including electronic files -71 - Annex 9: Statement of Loansand Credits CAMEROON: Community Development Program Support Project 11-Fev-2004 Difference between expected and actual Original Amount in US$ Millions disbursements' Project ID FY Purpose IBRD IDA Cancel. Undisb. Orig Frm Rev'd PO74490 2003 DOUALA INFRASTRUCTURE 0.00 56.40 0.00 63.60 2.80 0.00 PO54786 2003 CAMEROONRAILWAYCONCESSIONPROJECT 0.00 21.40 0.00 17.00 2.50 0.00 PO73065 2001 CAM:Multi-sectoralHlViAlDS Project 0.00 50.00 0.00 35.90 -20.80 0.00 PO65927 2000 PubliciPrivatePartnership.Growth 0.00 20.90 0.00 14.40 13.00 0.00 PO51059 2000 CHADCAM PIPE (CAM) 53.40 0.00 0.00 4.90 -2.90 0.00 PO48204 2000 ENVIRONMENTOIL T.A. 0.00 5.80 0.00 5.00 2.80 0.00 PO45348 1999 CAM:AG.EXT.BRES.SUPPORT 0.00 15.10 0.00 3.80 2.90 0.00 PO54443 1998 Cameroon SAC 111 - 0.00 220.70 0.00 66.30 29.10 44.50 Total: 53.40 390.20 0.00 211.00 29.60 44.50 - 72 - CAMEROON STATEMENT OF IFC's HeldandDisbursedPortfolio Jan 31 - 2004 InMillions US Dollars Committed Disbursed IFC IFC FY Approval Company Loan Equity Quasi Partic Loan Equity Quasi Partic 1995 AEF Comp Avicole 0.34 0.00 0.00 0.00 0.34 0.00 0.00 0.00 2002 AEF FME-GAZ 0.00 0.00 0.34 0.00 0.00 0.00 0.34 0.00 2000 AEF Hobec 0.46 0.00 0.00 0.00 0.19 0.00 0.00 0.00 1996 AEF Notacam 0.87 0.00 0.00 0.00 0.87 0.00 0.00 0.00 2003 AEF SODETRAN-C 0.87 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1999 AEF Saicam 0.00 0.00 0.30 0.00 0.00 0.00 0.30 0.00 2000 BICEC 0.00 0.94 0.00 0.00 0.00 0.00 0.00 0.00 1986 CICAM 2.19 0.00 0.00 0.00 2.41 0.00 0.00 0.00 2000 COTCO 86.10 0.00 0.00 86.10 86.10 0.00 0.00 86.10 2002 Orange Cameroon 1.74 0.00 3.78 0.00 0.00 0.00 3.78 0.00 1992/94/97198 Pecten Cameroon 44.00 0.00 0.00 65.85 13.04 0.00 0.00 32.96 Total Portfolio: 136.57 0.94 4.42 151.95 102.95 0.00 4.42 119.06 Approvals Pending Commitment FY Approval Company Loan Equity Quasi Partic 2000 AEF Complexe I1 0.00 0.17 0.00 0.00 2004 AEFNOSA I1 0.42 0.00 0.00 0.00 Total PendingCommitment: 0.42 0.17 0.00 0.00 - 73 - Annex I O : Country at a Glance CAMEROON: Community Development Program Support Project SUb- POVERTYand SOCIAL Saharan Low- Cameroon Africa income Developmentdiamond^ 2002 Population,mid-year (millions) 15.5 688 2,495 Lifeexpectancy GNI per capita (Atlas method, US$) 560 450 430 GNI (Atlas method, US$ billions) T 8.7 306 1,072 Average annual growth, 1996-02 Population (%) 2.2 2.4 1.9 Labor force (%) 2.4 2.5 2.3 3NI Gross Der primary Most recent estimate (latest year available, 1996-02) zapita enrollment Poverty (% of populationbelownationalpovertyline) Urbanpopulation(% of totalpopulation) 50 33 30 Life expectancyat birth (years) 48 46 59 l. Infant mortality (per 1,000livebitfhsj 97 105 81 Child malnutrition(% of children under5) 22 Access to improvedwater source Accessto an improvedwater source (% of population) 58 58 76 Illiteracy 1%ofpopulation age 15+) 26 37 37 Gross primary enrollment (% of school-agepopulation) 108 86 95 W" Cameroon Male 115 92 103 -_ - Low-incomegroup Female 100 80 87 KEY ECONOMIC RATIOS and LONG-TERMTRENDS 1982 I992 2001 2002 Economic ratios* GDP (US$ billions) 7.3 11.4 8.7 9.4 Gross domestic investmenffGDP 24.8 14.3 18.1 18.1 Trade Exportsof goods andserviceslGDP 36.8 20.5 29.5 28.0 Grossdomestic savingsiGDP 29.6 16.5 19.0 16.6 T Gross nationalsavings/GDP 27.2 12.4 14.7 13.7 Currentaccount balanceiGDP 2.0 -1.9 -1.7 -6.9 Interest paymentsiGDP 2.1 1.3 2.9 2.4 Total debtlGDP 37.1 74.9 96.1 90.6 Totaldebt service/exports 15.7 16.3 12.3 16.1 1 Presentvalue of debtlGDP 56.6 Presentvalue of debffexports 180.7 Indebtedness 1982-92 1992-02 2001 2002 2002-06 (average annualgrowth) 1 GDP -0.2 3.6 5.3 4.4 5.2 GDP Der caDita -3.0 1.2 3.1 2.2 3.0 __ Low-incomegroup STRUCTURE of the ECONOMY 1982 1992 2001 2002 Growthof investmentand GDP (X) (% of GDP) Agriculture 28.7 27.3 42.4 45.5 15 T Industry 32.1 25.8 17.7 17.9 Manufacturing 12.1 14.3 9.3 9.1 11° 5 Services 39.2 47.0 39.9 36.6 0 Privateconsumption 61.6 70.7 69.7 71.7 97 98 99 w 01 02 Generalgovernment consumption 8.8 12.8 11.3 11.8 I -GDI *GDP Importsof goods and services 32.0 18.3 28.6 29.5 1982-92 1992-02 2001 2002 1 Growthof exportsand imports (%) (average annualgrowth) 1 Agriculture 0.9 6.2 4.3 2.2 20 Industry -0.2 3.0 5.0 2.9 Manufacturing 0.5 4.3 5.6 3.7 10 Services -6.5 1.6 5.3 6.7 0 Private consumption -0.4 4.6 6.0 6.1 Generalgovernmentconsumption 4.4 5.4 12.9 7.0 Grossdomestic investment -8.2 4.7 5.2 4.5 Importsof goods and services -0.6 9.3 8.8 6.2 Cameroon PRICES and GOVERNMENT FINANCE 1982 1992 2001 2002 Inflation (%) Domesticprices c (% change) Consumer prices 13.4 -0.1 2.8 2.9 ImplicitGDP deflator 12.5 -1.3 1.7 1.8 Governmentfinance (% of GDP, includescurrentgrants) Current revenue 24.6 15.7 19.8 20.1 97 9a 99 w 01 02 Current budget balance 11.6 -2.9 5.0 5.5 -GDP deflator -0-CPI Overallsurplus/deficit 0.8 -6.3 -0.7 -3.2 TRADE I 1982 1992 2001 2002 (US$ millions) Exportand import levels (US$ mill.) Total exports(fob) 2,227 1,937 2,129 1,794 2.500 T Fuel 882 868 1,048 812 Cocoa 134 132 103 130 2,000 Logs 77 241 158 140 1,500 Total imports(ciD 1,285 1,023 1,617 1,833 1,000 Food 59 189 181 203 Fueland energy 57 8 63 58 500 Capitalgoods 328 319 416 421 0 96 97 98 99 00 01 Export priceindex (1990=100) 165 95 245 219 I Importpriceindex (1990=100) 87 99 212 207 EB Exports Imports Terms of trade (1990=100) 190 96 116 106 BALANCEof PAYMENTS 1982 1992 2001 2002 1 Currentaccount (US$ millions) balance to GDP (Oh) Exportsof goods and services 2,432 2,342 2,708 2,377 Importsof goods and services 2,117 2,087 2,479 2,757 Resourcebalance 315 254 229 -380 Net income -228 -646 -494 -396 Net currenttransfers 57 176 119 127 Current account balance 144 -216 -147 -650 Financingitems (net) -192 327 316 848 Changes in net resewes 48 -112 -169 -198 Memo: Reservesincludinggold (US$ millions) 81 30 340 640 Conversionrate (DEC. /oca//US$) 296.7 280.4 743.5 732.7 EXTERNALDEBT and RESOURCE FLOWS 1982 1992 2001 2002 (US$ millions) Compositionof 2002 debt (US$ mill.) Totaldebt outstanding anddisbursed 2,715 8,531 8,369 8,495 IBRD 182 723 179 142 IDA 205 232 758 847 Total debtservice 387 394 335 386 IBRD 17 63 39 56 IDA 2 3 13 14 Compositionof net resourceflows Officialgrants 26 Officialcreditors 107 447 43 -78 Privatecreditors 56 73 -91 -49 Foreigndirectinvestment 102 Portfolioequity 0 E: 5.648 World Bank program Commitments 0 0 58 83 A IBRD E- Bilateral ~ Disbursements 52 54 32 51 B IDA - D Other multilateral - F Private - Principalrepayments 5 32 28 50 C IMF - G Short-term - Net flows 46 22 4 1 Interestpayments 14 34 24 20 Nettransfers 33 -12 -20 -19 'ueveiopment tconomics YIf/J/Uf/J - 75 - Additional Annex 11:Letter of Rural Development Policy CAMEROON:Community DevelopmentProgram Support Project UNOFFICIALTRANSLATION CONTEXT 1. Since 1990, the Government o f Cameroon has undertaken a restructuring of the Rural Sector within the framework of the revival of the Cameroon economy. Modernization of the agricultural sector, which experienced a sharp decline inexport income since 1987, is one o f the expected results o f this restructuring. 2. The impacts o f the country's first-generation agricultural policy reforms were not all foreseen. In light o f this, the Government has altered its strategy inpreparing for a new phase of agricultural sector growth, taking into consideration the favorable evolution o f the macro-economic environment o f the late 90's. The Government likewise intendsto simultaneously address the social deficit following years o f economic crisis, which is particularly visible inthe considerable deterioration o f human development indicators. 3. Cognizant that a deterioration o f social capital could negatively impact growth and social cohesion, the Government has chosento launch a new generation of socio-economic policies that promise to: (i) consolidate the gains o f previous programs to increase the pace o f growth; and (ii) reinforce social to policy issues such that sound economic performance can translate into the amelioration o f living conditions amongst the population. With these aims in mind, the Government has elaborated a Poverty Reduction Strategy Paper (PRSP). SECTORALSTRATEGICCHOICES 4. Parallel to the elaboration o f the PRSP, a number o f framework policies have been devised, including sector-based strategies and programs and projects to be implemented in short- and long-term time horizons. These policies, intum, have been articulated along seven strategic axes: o The promotion o f a stable macro-economic framework; o The reinforcement o f economic growth through diversification; o Invigoration o f the private sector as an engine o f economic growth and partner for social services delivery; o Development o f basic infrastructure, natural resources management andenvironmentalprotection; o Acceleration o fregional integrationwithin the framework o f the CEMAC; o The reinforcement o f human and social capital and the integration o f marginalized groups in the economic system; o Improvement inthe institutional framework, administrative management and govemance. 5. Without further diversification, economic growth would remain dependent on export income from traditional commodities, compelling the public sector to make frequent adjustments at the risk of aggravating the situation o f vulnerable population groups. The Government is therefore determined to accelerate economic diversification through reforms that can raise the growth rate at an average rate of 6% inthe period 2005 to 2015. The Rural Sector Development Strategy (RSDS) constitutes one o f the pillars o f these reforms. - 76 - 6. The improvement o f the living conditions o f the rural populace through participatory approaches lies at the core o f the RSDS. Socio-economic studies carried out in the region in 2000 have revealed that 86% o f the poor live in rural areas and 84% o f the rural population is poor. Among the determinants o f poverty include: o Lack o f organization o f the agricultural sector prior to liberalization; o The isolation o f rural areas; o Weak govemance; o The existence o f numerous dysfunctions at the social level; o Poor access to basic social services; o Poor access o f economic actors to natural resources. 7. For each o f these above articulated poverty factors, a new frame o f reference has been outlined, whose objective is to ensure strong, sustainable, and equitable rural sector growth. The Government intendsto address several challengesinmeetingthis objective: o Ensuringaccess to social basic services; o Satisfying the increasing food needs o f the population; o Successfully integrating intemational and sub-regional markets; o Ensuringfor the long-term sustainability of sector performance. OPERATIONAL STRATEGY 8. Participatory PRSP consultations with stakeholders helpedto identifyfive priority domains: 0 Local Development in the most decentralized mannerpossible to respond to questions linkedto the determination o f living conditions, effective participation indecision making and the appropriation o f new infrastructure. 0 The development of vegetable, animal andJish production to (i) increase producer income, (ii) ensure the food security o f the rural and urban populations and (iii) appropriate conditions create for the effective integration o f producers innational, sub-regional or internationalmarkets. 0 Institutional support to producers, building essential capacities to adapt to the evolving environment. 0 Sustainable management of natural resources to improve long-term productivity and performance, usingenvironmentally friendly technical andeconomical innovations. 0 Rural sector Jinance to encourage savings and income redistribution under concessional grants or credits guaranteeing access to credit for all producers, includingthe peasantry. 9. These priorities have been translated into a structured operational framework and programs with an operational budget. Four managing principles will guide their implementation: o Coherence o f the interventions; o Contracting o f service providers; o Promotion o f subsidiary bodies; o Empowerment o f civil society. SECTORAL ADJUSTMENT MEASURES 10. The sound recommendations from the rural sector partners roundtable in Cameroon, which took place April 29-30, 2003, constituted an important step for adopting sectoral adjustment measures, and achieving consensus on the subsequent action plan and concrete mechanisms to ensure harmonious development o f the rural space. - 77 - 11 Inaccordancewith the roundtable recommendations inCameroon, The Government undertakes to: 0 Establish coherent programs for each o f the intervention axes identified by the rural sector development strategy; 0 Promote dialogue and planningplatforms, at both centralized and decentralized levels; 0 Promote an adapted coordination mechanism for implementation o f the sectoral strategy, taking into account the specificities o f each sub-sector; 0 Promote the set up o f harmonized sectoral intervention and monitoring and evaluation mechanisms, and in particular through the set up o f coordination and follow up committees, both at central and decentralized level; 0 Reinforce the financial and technical capacities o f concemed ministries for efficient realization o f their assignedmissions; 0 Deepen sub-sectoral andthematic policies that can contribute to the optimal implementation o f the rural sector development strategy, such as local govemance, local hydrology and electrification, transportation, land tenure, community forests, the environment, etc. l? IL. The Govemrnent also intends to take a number o f measures in order to create a favorable environment for the realizationo fthe objectives o f the rural development strategy: a) Regardinglocal development, the Government o Will continue to strongly reinforce the capacities of local decentralized authorities and communities; o Designates the Community Development Program (PNDP) as the global dialogue, synergy and implementationframework for the local development axis of the rural development strategy. b) Regardingthe development of vegetable, animal andflsh production, the Government will o Establisha framework for positive incentives, through, inter alia, a re-engineering of the fiscal system, protecting sectoral economic agents and operators, and the development of a targeted subsidy policy; o Urgentlyestablish a multi-disciplinary body to coordinate the preparation of the development of vegetable, animal and fishproductionsprograms. c) Regardinginstitutional support, the Government will inparticular o Ensure proper coordination of all technical ministries charged with the rural sector, at both centralized and decentralized levels to guarantee the coherent implementation o f programs and projects that conform well to sectoral policies and strategies. d) Regardingsustainablenaturalresourcesmanagement, the Government will o Clarify andprotect access to and use o f natural resources; o Harmonize several ongoing or planned programs regarding the management o f community forestry along a community-based approach. e) Regardingrural sector finance, the Government will o Improve access to micro-credit, particularly through reinforcing the development o f a micro-finance network and an improvement o f the tax systeminthe rural sector; o Harmonizemodalities to support the financing o f communal and community needs. 13. Concerned about the sustainability o f development interventions, the Government has already committed to mobilize its own funds, in particular HIPC funds, to finance the priority needs o f decentralized collectivities, rural communities, and professionalagricultural and pastoral organizations - 78 - that have been identified in participatory processes and that will be included in future programs and projects under the rural development strategy. This resource mobilization will be explicitly reflectedin the budget allocationprocess. ADVANCING THE RURAL DEVELOPMENT STRATEGY 14. The rural sector development strategy declaration (RSDSD) will be advanced by sectoral ministries charged with rural development. They will be supported by a Steering Committee, through the rural sector monitoring mechanism to be developed by the Government. This mechanism would improve with the evolution of different programs and projects. It will be equipped with monitoring and evaluation tools, including performance and impact indicators. The scheduling of regular RSDSD reviews shall fall underthe responsibility of the Steering Committee. 15. Given these commitments, the Government now seeks contributions, collaborations, and technical assistance from the donor community and other development partners to implement all of the components ofthe rural sector development strategy. - 79 - * - 80 - - 81 - - 82 - 83- Additional Annex 12: Financial and Institutionalarrangements CAMEROON: Community Development Program Support Project 1. Financial arrangements IDA Credit Account CounterpartFunds Washington (Government) mL --4 SpecialAccount ProjectAccount Funchoning Micro-projects] [Other activities] NCUPPUs NCU NCU 5 Special Accounts 5 Second generation Accounts PPU I f w v - 84 - 2. Institutional arrangements National Communal Community Based Organizations Local ( C W Project ImplementationUnits Deliberationentities set up by the PNDP to approve Development Plans and Subprojects -85- - 86 - MAP SECTION