lic cameroon central africa backbone … development bank group cameroon central africa backbone...
TRANSCRIPT
AFRICAN DEVELOPMENT BANK GROUP
CAMEROON
CENTRAL AFRICA BACKBONE (CAB) PROJECT
CAMEROON COMPONENT
OITC DEPARTMENT
June 2015
Translated Document
P
ub
lic
Dis
clo
sure
Au
tho
rize
d
P
ub
lic
Dis
clo
sure
Au
tho
rize
d
TABLE OF CONTENTS
STRATEGIC THRUST AND RATIONALE ..................................................................................................... 1 1.1. Project Linkages with Country Strategy and Objectives........................................................................... 1 1.2. Rationale for Bank’s Intervention………………………………………………………………………...1 1.3. Donor Coordination ................................................................................................................................ 2
II. PROJECT DESCRIPTION ................................................................................................................. 3 2.1. Project Objectives and Components ....................................................................................................... 3 2.2. Technical Solutions Adopted and Alternatives Explored ......................................................................... 5 2.3. Project Type .............................................................................................................................................. 6 2.4. Estimated Project Costs and Financing Arrangements ............................................................................. 6 2.5. Project Area and Beneficiaries…………………………………………………………………………...8 2.7. Consideration of Bank Group Experience and Lessons Learned in Project Design ................................. 9
III. PROJECT FEASIBILITY ...................................................................................................................10 3.1. Economic and Financial Performance .................................................................................................... 11 3.2. Environmental and Social Impact ........................................................................................................... 11
IV. IMPLEMENTATION .........................................................................................................................13 4.1. Implementation Arrangements…………………………………………………………………………..13 4.2. Procurement Arrangements……………………………………………………………………………...13 4.3. Financial Management and Disbursement Arrangements 14 4.4. Monitoring .............................................................................................................................................. 15 4.5. Governance ............................................................................................................................................. 16 4.6. Sustainability…………………………………………………………………………………………….17 4.7. Risk Management ................................................................................................................................... 18 4.8. Knowledge Building ............................................................................................................................... 18
V. LEGAL INSTRUMENT ..................................................................................................................... 18 5.1. Legal Instrument ..................................................................................................................................... 18 5.2. Conditions Associated with AfDB Intervention ..................................................................................... 18 5.2.1. Conditions Precedent to Effectiveness .................................................................................................... 18 5.2.2. Conditions Precedent to First Disbursement of the Loan ........................................................................ 18 5.2.3. Condition Precedent to First Disbursement of the GEF Grant 19
5.2.4. Other Cconditions ................................................................................................................................... 19 5.2.5. Undertakings ........................................................................................................................................... 19
VI. RECOMMENDATION 19
APPENDIX I: DESCRIPTION OF INSTITUTIONAL SUPPORT AND CAPACITY BUILDING
APPENDIX II: RATIONALE FOR THE LEVEL OF COUNTERPART FINANCING TO THE AFDB ..
PROGRAMME
APPENDIX III: COMPARATIVE SOCIO-ECONOMIC INDICATORS
APPENDIX IV: STATUS OF BANK PORTFOLIO IN CAMEROON AS OF 31 MARCH 2015 APPENDIX
V: MAP OF THE OPTICAL FIBRE INFRASTRUCTURE PROJECT AREA
LIST OF TABLES AND GRAPHS
Table 2.1 - Project Components
Table 2.2 - Alternative Solutions Explored and Reasons for Rejection
Table 2.3: Summary of Estimated Cost by Project Component
Table 2.4: Summary of Cost by Project Expenditure Category
Table 2.5: Project Summary by Source of Financing
Table 2.6: Summary of Project Components by Source of Financing (EUR million)
Table 2.7: Expenditure Schedule by Source of Financing (EUR million)
Table 3.1: Economic and Financial Assessment
Table 3.2: Sensitivity Test
i
Currency Equivalents June 2015
EUR 1 = CFAF 655.96
UA 1 = EUR 1.27
Fiscal Year
1 January - 31 December
ABBREVIATIONS AND ACRONYMS
ADF African Development Fund
AFD French Development Agency
AfDB African Development Bank
ANTIC National ICT Agency
ART Telecommunications Regulatory Authority
CAB Central Africa Backbone
CAMPOST Cameroon Postal Services
CAR Central African Republic
CEAC Centre for Education and Community Action
CEMAC Economic and Monetary Community of Central Africa
CFAF Franc of the Financial Community of Africa
CPF Women's Promotion Centre
CSIRT Computer Security for Incident Response Team
CSP Country Strategy Paper
DAA Sub-Divisional Delegation of Agriculture
DIR Department of Infrastructure and Access Networks
DPU Declaration of Public Utility
ECCAS Economic Community of Central African States
EIRR Economic Internal Rate of Return
ENSPT National School of Post and Telecommunications
ESMP Environmental and Social Management Plan
EU European Union
FO Optical Fibre
GDP Gross Domestic Product
GEF Global Environment Fund
GESP Growth and Employment Strategy Paper
GHG Greenhouse Gas
HDPE High Density Polyethylene
ICB International Competitive Bidding
ICT Information and Communication Technology
IsDB Islamic Development Bank
ITU International Telecommunication Union
JICA Japan International Cooperation Agency
LTS Long Term Strategy
MCIS Market and Climate Information System
MINADER Ministry of Agriculture and Rural Development
MINAS Ministry of Social Affairs
MINEPAT Ministry of Economy, Planning and Regional Development
MINEPDED Ministry of Environment, Nature Conservation and Sustainable Development
MINFI Ministry of Finance
MINPOSTEL Ministry of Post and Telecommunications
ii
MINPROFF Ministry for the Promotion of Women and the Family
MINTP Ministry of Public Works
MPC Multi-partner Committee
NCB National Competitive Bidding
NEPAD New Partnership for Africa's Development
NIS National Institute of Statistics
NPV Net Present Value
PAP Project Affected Person
PCN Project Concept Note
PCU Project Coordination Unit
PIDA Programme for Infrastructure Development in Africa
PIU Project Implementation Unit
PKI Public Key Infrastructure
PRSP Poverty Reduction Strategy Paper
PVC Polyvinyl Chloride
RISP Regional Integration Strategy Paper
STF Special Telecommunications Fund
TCP Multipurpose Community Tele-centre
TFP Technical and Financial Partners
WB World Bank
iii
PROJECT INFORMATION SHEET
Client Information
Borrower : REPUBLIC OF CAMEROON
Project Name : CENTRAL AFRICA BACKBONE (CAB) PROJECT –
CAMEROON COMPONENT
Project Location : CENTRE, EAST, NORTH-WEST, SOUTH AND SOUTH-
WEST REGIONS OF CAMEROON
Executing Agency : MINISTRY OF POST AND TELECOMMUNICATIONS
(MINPOSTEL)
CAB-CAMEROON PROJECT IMPLEMENTATION UNIT
(CAB-CAMEROON/PIU)
1. Financing Plan
Source Amount in
CFAF million
Amount in
EUR million
Amount in
UA million
Amount in
USD million
Instrument
AfDB 24 470 37.304 29.374 41.034 Project Loan
GEF 1 089 1.660 1.307 1.726 Grant
GOVERNMENT OF
CAMEROON 4 872
7.427 5.848 8.170
Public Investment Budget
TOTAL 30 372 46.301 36.458 50.930
2. Key AfDB Financial Information
Loan currency: Euro (EUR)
Loan interest type: Floating (EURIBOR)
Interest rate margin: 60 basis points (bp) + Bank financing margin1
Commitment fee: N/A
Other costs: N/A
Maturity: Six-monthly
Maturity: 20 years
Grace period 60 months
NPV (baseline scenario): EUR 135.9 million
FIRR (baseline scenario) : 19.79%
EIRR (baseline scenario) : 34.14%
1 The financing margin corresponds to the cost of the Bank loan calculated twice a year.
iv
3. Duration – Milestones (expected)
Activities (month, year)
Concept Note approval March 2015
Project approval July 2015
Effectiveness November 2015
Last disbursement December 2019
Completion June 2020
Last reimbursement of AfDB loan December 2035
v
EXECUTIVE SUMMARY
1. Project overview: Building on the objectives set for the Information Technology and
Communication (ICT) sector by the Growth and Employment Strategy Paper (GESP), as well
as on available ICT and other sector strategies, the Government requested the Bank to finance
the national component of the CAB project involving the laying of 916 km of optical fibre
cables comprising approximately five priority links. The project also envisages the
implementation of a number of ICT applications and services (e-Post, e-Banking, Markets and
Climate Information System, etc.), and institutional support relating, among others, to
feasibility studies for the preparation of the next phase of the project, the setting up of an Optical
Fibre Skills Development Centre at ENSPT and support for women’s empowerment.
MINPOSTEL is the project’s executing agency. The project implementation will span four
years. The total project cost is estimated at UA 36.458 million. The Bank will intervene through
the AfDB window to the tune of UA 29.374 million. Other co-financiers are the GEF with a
grant of UA 1.307 million and the Republic of Cameroon whose contribution stands at UA
5.848 million.
2. Needs Assessment: In addition to its regional focus, the project aims to complete the
missing links in the national optical fibre backbone. The project will extend the coverage of the
national optical fibre network in this densely populated region as well as the Cameroon’s
borders with Congo, Nigeria and Central African Republic (CAR). These links with
neighbouring countries (especially CAR) will offer them an alternative service for international
traffic through underwater cables with landfall points in Cameroon. Thus, the costs of
international connectivity should be reduced by the introduction of these new international
outlets. The project also enables Cameroon to take advantage of the extension of its national
optical fibre backbone to modernize the banking and postal sectors with the introduction of e-
Banking and the adoption of hybrid mail by CAMPOST – hence the inclusion of the project in
Cameroon’s new Country Strategy Paper (CSP) for 2015-2019.
3. Bank’s value-added: The Bank’s value-added stems from the experience garnered
through exchanges with countries since the project was initiated in 2007. In coordination with
the World Bank, the Bank has provided substantial resources for the financing of studies on the
regional CAB project, while continuing exchanges with countries involved ever since. The
Bank’s intervention also allows Cameroon to carry out these major infrastructure projects,
particularly its interconnections with neighbouring countries, while complying with
international norms and standards, in order to avoid possible risks of defects that may seriously
undermine the economic spinoffs of the project and its reasonable financing costs.
4. Knowledge building: The project will offer an opportunity to improve knowledge in
the area of national optical fibre infrastructure. Provisions have been made to prepare the first
Broadband Infrastructure Development Master Plan that will benefit all stakeholders in the
sector (MINPOSTEL, ART, CAMTEL, private operators, etc.). This Plan could be used by
ART, among others, by deriving from the outcomes of the study on the profitability thresholds
of optical fibre deployment, the appropriate tools for regulating the broadband infrastructure
sector. Indeed, illegal trenching causes serious damage to costly road infrastructures, some of
which were, incidentally, financed by the Bank.
vi
RESULTS-BASED LOGICAL FRAMEWORK
REPUBLIC OF CAMEROON
Country and Project Name: CAMEROON – Central Africa Backbone (CAB) Project – Cameroon Component Project Goal: Contribute to the diversification of the economy by fostering the emergence of a digital economy in Cameroon
Results Chain Performance Indicators
Means of Verification Risks/Mitigation Measures Indicator (including CSI) Baseline Situation Target
Imp
act
Contribute to the diversification of Cameroonian's economy, breaking the
digital isolation of the project target
areas and regional integration through optical fibre infrastructure enabling
access to neighbouring countries
(Congo, Nigeria and RCA)
Percentage of ICT contribution to the
tertiary sector
Number of potential international outlets
53.5% in 2013 (source
MINFI)
1
60% (at least) in 2019
4
Reports and
Statistics from MINPOSTEL, ART,
etc.
ITU, ECCAS and CEMAC reports
Ou
tco
mes
Outcome 1: Improved access of the
population, government services and
businesses to telecommunications / ICT services
Penetration of Internet services
Tele-density (mobile)
6% (2013)
76% (2014)
20% (2019)
90% (2019)
Reports and Statistics
from MINPOSTEL,
ART, etc. Reports from
MINADER,
CAMPOST, etc. Project impact
assessments
produced by the PCU/CAB-
Cameroon
Reports by ITU, ECCAS, CEMAC,
etc.
Risks: (i) Non-compliance with
commitments regarding the laying of
optical fibre cables; (ii) no impact on prices; (iii) premature degradation of the
optical fibre due to lack of maintenance
(iv) lack of maintenance and upgradeability of the various applications
installed.
Mitigation measures: (i) Government's
commitment to implement the guidelines of the International Telecommunication
Union (ITU); (ii) technical assistance for
ART; (iii) commitment by CAMTEL and CAMPOST to ensuring the sustainability
of infrastructure put in place.
Outcome 2: Reduced cost of access to telecommunications and Internet
services
Internet access costs
Improvement of the ICT legal and regulatory
framework
Rates for Internet services
2015: Dissatisfaction of
private operators with the
implementation of the “open access” principle
50 % reduction (at least) in 2019 in the price of Internet
subscription
2019: Greater compliance by
private operators with
conditions of access to shared optical fibre
infrastructure
Outcome 3: Contribution to the social,
economic and financial inclusion of residents of the country's hinterland
Number of people having access to banking
services thanks to e-Banking
Number of farmers / stockbreeders with
access to market and weather information
Number of people benefiting from solar
electric terminal systems
0 (2015)
0 (2015)
0 (2015)
17 000 new customers
(2019)
20 000 (2019)
20 000 (2019)
vii
Outcome 4: Improved availability of training and access to ICT in institutions
of higher learning
Number of persons entering the Optical Fibre Skills Development Centre at ENSPT
for initial and continuing training
Number of students with Internet access on
campuses of Yaoundé I, Bamenda and
Maroua Universities
0 (2015)
0 (2015)
1345 (2019) -> Initial (1060 in Yaoundé and Buea 285),
50% of them women
500 (2019) -> Continuing (300 in Yaoundé and Buea
200), 50% of them women
65 000 students (2019)
Ou
tpu
ts
Output 1: Optical fibre infrastructure
Optical fibre connections built
Technical sites built
Linear distance of optical fibre
Number of technical sites along project links
≈ 6.000 km (2015)
0 (2015)
≈ 7 000 km (2019) at least
7 (2019)
PCU / CAB-
Cameroon progress
reports
Control mission reports
Project supervision
reports Project completion
reports.
Risks: (i) Slow pace and lack of
transparency in the procurement process;
(ii) escalation of the cost of works; (iii)
non-compliance with technical and functional specifications in the context of
various project applications; (iv) delays in
compensation of project-affected persons (PAPs) along the Batouri-Bertoua-
Kentzou road section.
Mitigation measures: (i) Close cooperation between MINPOSTEL and
the Ministry in charge of Public
Procurement; (ii) consideration of physical contingencies in the project; (iii)
PCU/CAB capacity building; (iv)
prioritization of the compensation of PAPs in the national counterpart funding.
Output 2: ICT applications
andservices
ICT applications (e-Post, e-Banking, Market and Climate
Information System) installed
Number of new ICT applications developed
and put in operation
0 (2015)
4 (2019)
Output 3: Institution and capacity
building
Development and preservation of optical
fibre infrastructure
Conduct of feasibility studies to prepare the
next phase of the project: (i) laying of optical
fibre cables along the Foumban-Tibati-Ngaoundéré-Tignère, Bamenda-Fundong-
Wum, Ngaoundéré-Touboro road sections;
(ii) a CSIRT+ PKI project; (iii) a technology park project (including a Datacentre); (iv) an
integrated electronic system for the
identification of persons (SIGIEP); and (v) a mobile financial service development project
Number of TCP, CEAC / DAA and Women’s Promotion Centres (CPF)
equipped
Number of reference optical fibre training
centres
Number of students awarded doctoral
scholarships at ENSPT
2015: Lack of strategic
framework for the
development of the national
optical fibre backbone
2015: Absence of
foundations for a large-scale
deployment of ICT applications/services
0 (2015)
0 (2015)
0 (2015)
2019: Strategic decision-
making documents prepared
(Master Plan and study on
profitability thresholds)
2019: Feasibility studies on
the delivery of electronic
administrative services to the public and private sector
52 (2019)
2 (2019) on the ENSPT sites
in Yaoundé and Buea
4 (including 3 female
students) during the project's
lifespan
PCU/CAB-
Cameroon progress
reports
Control mission
reports Project supervision
reports
ENSPT monitoring and evaluation report
UN Women reports
MINPROFF statistics
Project Completion
Reports.
viii
Output 4: Project management
Support for CPU/CAB-Cameroon;
Monitoring and evaluation of the technical implementation as well as
the socio-economic and
environmental impacts; Project accounting and financial
audit;
Project technical audit.
Audit reports Monitoring and evaluation reports of the
various aspects of the project
Technical audit reports
2015: No report
2019: At least 4 audit reports, at least 3 monitoring
and evaluation reports and 1
technical audit produced, etc.
Progress reports of PCU/CAB-
Cameroon
Control mission reports
Project supervision
reports Project completion
reports.
Key
Acti
vit
ies
Components Resources
A. Optical fibre infrastructure
B. ICT applications and services C. Institutional support and capacity building
D. Project management
Components In EUR million
Optical fibre infrastructure (Component A) 23.622 ICT applications and services (Component B) 9.158 Institutional support and capacity building
(Component C) 6.916
Project management (Component D) 2.316
Base cost 42.012
Physical contingencies 2.941
Financial contingencies 1.348
Total project cost 46.301
ix
PROJECT IMPLEMENTATION SCHEDULE
1
MANAGEMENT’S REPORT AND RECOMMENDATION TO THE BOARDS OF
DIRECTORS ON A PROPOSAL TO GRANT A FEM GRANT OF USD 1 726 484 AND
AN ADB LOAN OF EUR 37 304 000 TO THE REPUBLIC OF CAMEROON FOR
FINANCING THE CENTRAL AFRICA BACKBONE (CAB) PROJECT - CAMEROON
COMPONENT
I. STRATEGIC THRUST AND RATIONALE
1.1 Project Linkages with National Strategy and Objective
1.1.1. Cameroon potentially occupies a strategic position for ICT development in Central
Africa in view of the underwater cables (SAT3, WACS and ACE) that have landfall points on
its coast and which could provide international data connectivity for the entire sub-region. Yet,
of all its neighbours, the country has only one optical fibre link with Chad. Moreover, its own
use of connectivity for data is still limited. In addition to the low Internet penetration rate, with
only 6% of the population enjoying Internet access, the online service industry is barely starting
to emerge.
1.1.2. Given the significant needs in terms of regional and national connectivity, and the
catalytic effect of ICT in all sectors of the country, it was agreed that the Bank’s intervention
will follow the multi-phased project implementation method. The project is consistent with the
Growth and Employment Strategy Paper (GESP), which places the challenge of growth and job
creation at the centre of Government’s poverty reduction efforts, and is now the overall
framework for the action of public authorities over the period 2010-2020. The recent adoption
of the new telecommunications and ICT development strategy is in line with GESP and aims
to provide widespread ICT access to the Cameroonian population. The major objective of this
strategy is to increase the supply of high-quality broadband electronic communication services
at competitive prices. The project is also consistent with the Growth Acceleration Emergency
Plan launched in December 2014 by the country's authorities, which aims to boost the
implementation of GESP meant to transform Cameroon into an emerging economy by 2035.
Lastly, it aligns with Pillar I of Cameroon’s 2015-2019 CSP and the Regional Integration
Strategy Paper (RISP) 2011-2015 for the Central African Region. It also contains positive
externalities that will strengthen sector governance (Pillar II of the said CSP).
1.1.3. Beyond the strictly infrastructural aspects, this project is intended to help Cameroon
develop a genuine digital economy in order to ultimately create enough jobs by improving
factors of production. The introduction of the e-Post and e-Banking project for CAMPOST will
complement the optical fibre system through new electronic products and services. In addition,
the implementation of the technology park, the feasibility study of which is included in this
project with a view to the implementation of the second CAB project, will help to create an ICT
cluster housing in one place all players in the technology value chain, i.e. innovative companies
(start-ups in particular), training institutions, research laboratories, etc.
1.2 Rationale for Bank’s Intervention
1.2.1. The project aligns with the Bank’s Ten-Year Strategy (2013-2022), particularly the
two pillars on infrastructure development and promotion of regional integration as well as the
ICT Sector Strategy. It also addresses the issue of green growth and inclusive development
(especially gender) through the following initiatives: (i) capacity building of various
community centres (TCP, CEAC and CPF); (ii) implementation of a mobile banking (e-
banking) system; (iii) establishment of a Markets and Climate Information System (MCIS); (iv)
women's empowerment activities; and (v) monitoring of project environmental and social
2
impacts. The Bank’s environmental and social safeguards requirements will guide the
implementation of all these activities.
1.2.2. The Bank’s intervention in this project is justified by the fact that broadband
connectivity is a key component for the development, adoption and use of ICT in various
economic activities, with a view to promoting social and economic inclusion in the country.
Based on several studies conducted notably by the World Bank in 2010 in Africa, it is now
proven that a 10% increase in the number of Internet broadband connections will lead, among
others, to a 1.3% boost in economic growth. The ICT sector has already created 65 000 direct
jobs in Cameroon and contributes an estimated 4% to gross domestic product (GDP). It could
be even more beneficial provided that the infrastructure and application prerequisites are in
place, since it already makes up at least 50% of the tertiary sector.
1.2.3. It should also be noted that the construction of the CAB-Cameroon optical fibre link
project aligns seamlessly with Bank-financed road projects in Cameroon, among others. In
constructing the roads, duct-laying has systematically been required since 2008. All that is
required is to procure the optical fibre cables for the roads involved in the project, given that
most of the costs will be borne by the civil engineering component. This is the case with the
Kumba-Mamfe road (187 km), Mamfe-Ekok road (82 km) and most of the Sangmelima-
Djoum-Mintom-Ntam road (266 km) under this project. These links with neighbouring
countries, particularly Nigeria, will induce competition between the various underwater cables
to which Cameroon will be connected and will result, in turn, in a sharp drop in prices for
international capacity. This will then have an impact on end-user access costs.
1.3 Donor Coordination
1.3.1. The Ministry of Economy, Planning and Regional Development (MINEPAT) is
responsible for coordinating aid and cooperation with donors at national level. The Ministry
includes the Department of Regional Integration (DIR), the focal point of the Bank's economic
and technical cooperation. With regard to technical and financial partners (TFPs), the Multi-
Partner Committee (CMP) monitoring GESP, which was set up in June 2001, is a platform for
dialogue and exchange on all key development issues in Cameroon. Technical and thematic
sub-committees dedicated to the alignment and harmonization agenda actively support this
structure. The Bank is a member of all these thematic and sector-based groups and, with the
World Bank, participates in IMF review missions in Cameroon. The Bank was leader of the
MPC Sector Committee on Public Finance from 2008 to 2014, before passing the mantle to the
European Union.
1.3.2. Regarding the ICT sector, in particular, there is a forum for constant dialogue between
the World Bank and the Bank, in consultation with MINPOSTEL. The discussions have been
expanded to JICA and the Islamic Development Bank (IsDB), which would like to participate
in financing the next project. Moreover, the World Bank would like to continue financing the
CAB project in Cameroon beyond March 2016 (end date of the current funding) and is therefore
willing to work closely with the Bank for its implementation, particularly through a joint
PCU/CAB-Cameroon, shared documents and information, joint meetings and mutual
monitoring of the progress of actions undertaken.
3
1.3.3. The Bank has acquired extensive experience through its exchange with all countries
of the sub-region since the project was initiated in 2007. In coordination with the World Bank,
the Bank allocated substantial resources to finance studies on the initial regional CAB project.
Its intervention also allows Cameroon to carry out these major infrastructure projects,
particularly its interconnections with neighbouring countries, while complying with
international norms and standards, in order to avoid possible risks of defects that could seriously
undermine the economic spinoffs of the project and its reasonable financing costs.
1.3.4. During the project identification, preparation and appraisal missions, the Bank team
held discussions with these key TFPs (WB, IsDB and JICA). The discussions helped to
harmonize views concerning specific project components and the joint financing of the Project
Coordination Unit (PCU/CAB Cameroon) with the World Bank. All these partners have
acknowledged the importance and relevance of the project, which is fully consistent with the
operation of other partners. This explains the interest shown by the IsDB and JICA in co-
financing the subsequent project.
II. PROJECT DESCRIPTION
2.1. Project Objectives and Components
2.1.1 The overall objective of this project is to contribute to reduce the impact of the high
cost of telecommunications/ICT on the business climate in the sub-region, create all forms of
jobs and expand the production of goods and services, thus helping to reduce poverty.
2.1.2 The construction of optical fibre infrastructure will help to reduce the cost of accessing
high-quality ICT services. It will also generate additional resources for Cameroon not only
through induced economic activities within the country itself, but also through taxes on data
streams passing through the international underwater cables with landfall points in Cameroon.
2.1.3 In terms of infrastructure, the project will: (i) extend the national optical fibre
backbone on five major sections (missing links and interconnection with neighbouring
countries) for about 916 km of fibre; (ii) provide solar office automation and IT equipment for
Multi-purpose Community Tele-Centres (TCPs); Education and Community Action Centres
(CEAC) and Women Promotion Centres (CPF) with the deployment of photovoltaic solar
panels, thanks to additional funding from the Global Environment Facility (GEF); and (iii)
support to institutions of higher learning (ENSPT, Universities of Yaoundé I, Bamenda and
Maroua).
2.1.4 In terms of legal and regulatory framework of the ICT sector, the Government of
Cameroon decided to grant CAMTEL (the traditional national operator), an exclusive
concession on intercity connections which include the five links covered by this project.
However, it should be noted that CAMTEL has the obligation to provide the capacities required
by other operators throughout the national optical fibre backbone, under the strict control of the
Telecommunications Regulatory Authority (ART), a public administrative establishment
endowed with legal personality and financial autonomy set up by Law No. 2010/013 of 21
December 2010. Conversely, operators have the right to deploy their own infrastructure for
urban links as they wish.
4
2.1.5 The project will support the regulation of the wholesale data market under the
responsibility of the Telecommunications Regulatory Authority (ART), by fully enforcing the
"open access" principle on each optical fibre link financed by the Bank in order to ensure
minimal competitive conditions on access costs, to the benefit of Cameroon’s end users. In this
regard, a specific provision has been made concerning ART, which involves preparing an
economic model fixing the cost of access to national and international connectivity, with a view
to lifting barriers to entry into the optical fibre segment. All these activities will be part and
parcel of activities to extend TIC sector reforms funded by the World Bank within the
framework of the CAB project.
2.1.6 In addition, and through its “ICT Applications and Services” component, the project
also envisages the implementation of several ICT applications to support the diversification of
the Cameroon’s economy. Currently, the bank access rate in Cameroon is quite low (less than
10%, even with the inclusion of microfinance institutions), not forgetting the significant
productivity gains that the postal sector can derive from ICT applications. Thus, it is expected
that the implementation of CAMPOST’s e-Post and e-Banking projects will strengthen the
financial inclusion of rural residents, particularly through the networking of post offices
nationwide. It is worth noting that since end-2013, CAMPOST has a modern, high-capacity
Datacentre which will serve as a hub for the development of postal e-services.
2.1.7 The project also plans to support Cameroon Government’s rural development efforts
through the establishment of a Market and Climate Information System (MCIS) for the Ministry
of Agriculture and Rural Development (MINADER) aimed at enabling farmers and
stockbreeders to access the prices of agricultural products and livestock, as well as weather
forecasts, through the TCP and CEAC. This system will ultimately lead to a significant
reduction in post-harvest loss of agricultural production in Cameroon estimated at 25% (source:
MINADER) through the combined effects of farmer education and needs/production balance.
2.1.8 The project also includes several feasibility studies relating, among others, to ICT
infrastructure and applications/services that will be considered as part of subsequent (second)
CAB project, preparation of which should start by end-2017 using a programme-based
approach. Thus: (i) studies are planned on the Foumban-Tibati-Tignère-Ngaoundéré, Bamenda-
Fundong-Wum, Ngaoundéré-Touboro road links, for the extension of the existing backbone;
(ii) a CSIRT+ PKI; (iii) a technology park (including a Datacentre); (iv) an integrated electronic
system for the identification of persons (SIGIEP); and (v) the development of mobile financial
services in Cameroon. The project also envisages a component to build the capacity of key
national stakeholders and provide support for the Project Coordination Unit (PCU/ CAB). To
attain these objectives, project activities have been grouped into the four components
summarized in the table below:
5
Table 2.1
Project Components
No.
Component Name
Description
A OPTICAL FIBRE
INFRASTRUCTURE
(EUR 23.622 million)
A.1 - Optical fibre infrastructure execution works,
A.2 - Monitoring and evaluation of impacts and population awareness,
A.3 - Control and supervision of optical fibre works.
B ICT APPLICATIONS
AND SERVICES
(EUR 9.158 million)
B.1 - Establishment of e-post and e-banking, B.2 - Establishment of a Market and Climate Information System (MCIS).
C INSTITUTIONAL
SUPPORT AND
CAPACITY BUILDING (EUR 6.916 million)
C.1 - Studies, C.2 - Technical assistance - Telecommunications Regulatory Board (ART),
C.3 - Capacity-building for TCP, ECAC and CPF,
C.4 - Support for higher education institutions (ENSPT, Yaoundé I, Bamenda and Maroua Universities), C.5 - Support for women's empowerment.
D PROJECT
MANAGEMENT
(EUR 2.316 million)
D.1 - Support for PCU/CAB-Cameroon,
D.2 - Support for operation of various committees, D.3 - Technical accounting and financial audits.
2.2 Technical Solutions Adopted and Alternatives Explored
2.2.1 This project involves the installation and commissioning of 916 km of optical fibre
cables, also comprising active equipment as well as power and cooling systems. It is made up
of five sections, namely Kumba-Mamfe, Mamfe-Ekok, Bamenda-Ndop-Kumbo, Bertoua-
Batouri-Kentzou and Sangmélima-Djoum-Mintom-Ntam, located in the South-West, North-
West, East and South Regions, respectively. These sections are part of the critical links of the
national optical fibre backbone (with terminals to neighbouring countries) that Cameroon
intends to cover with a view to rapidly extending its network to reach 20 000 km of optical fibre
by 2035.
2.2.2 Currently, there are two main technical alternatives for the deployment of optical fibre:
satellite or microwave links. The use of satellite links suffers from the combined effect of
prevailing high access cost and service quality that is far below that offered by optical fibre, not
to mention the capacity limitations inherent in the technologies used (even the latest). Even with
the development of new satellite facilities (for instance O3b) using low orbit satellites, the cost
difference is significant. In fact, satellite remains a redundancy technology, allowing operators
to compensate for the unavailability (due to technical damage, especially) of optical fibre, but
at operating costs two to ten times higher than the latter. In short, satellite is not a sustainable
alternative compared to optical fibre.
2.2.3 For its part, microwave links allow extension broadband service coverage, particularly
to underserved areas. However, while useful for point-to-point traffic (connection of base
stations and collection networks), they cannot carry the huge amount of data expected to be
transmitted through an optical fibre backbone. The migration of mobile operators in Cameroon
to 3G and even 4G in the near future will induce significant increase in the level of Internet
access and the bandwidth required. To this end, optical fibre is the only option that meets all
these requirements (particularly to serve as support for the potential international traffic of
neighbouring countries).
2.2.4 Furthermore, it should be noted that, based on technical studies conducted, the manual
laying of fibre (as opposed to the mechanical method) was selected for this project. This option
(despite its slightly higher cost compared with the mechanical method) induces beneficial
effects in terms of revenue generation for the population concerned and indirect support under
the project’s population awareness component.
6
Table 2.2
Alternative Solutions Explored and Reasons for Rejection Alternative Solution Brief Description Reasons for Rejection
Mechanized laying of optical
fibre cables
Using slicers in digging ducts along the five
sections identified in this project phase.
Quality risks related to the non-mastery of the
various reliefs concerned, reason for which this
method would not be easy to use. In addition,
manual laying generates income for labour from
the localities crossed, making the project
favourable to local residents.
Supply of dark fibre (without
active equipment)
In this case, it means supplying only optical
fibre cables without the transmission equipment.
Solution chosen by CAMTEL because it would
be operational from the first day of commissioning of the installed links.
Using CAMPOST data centre to
host ICT applications and
services planned under the project.
This option would mean using the CAMPOST
Datacentre in its current state, for all planned
ICT applications (hybrid mail, EDM and e-Banking).
This solution is not technically viable because
current capacity is not even enough to meet
intrinsic needs in CAMPOST. Moreover, there are plans to extend the same Datacentre in order
to implement the e-Post and e-Banking project.
2.3 Project Type
The AfDB loan will help to finance most of the project with the notable exception of the
capacity building of the Multi-purpose Community Tele-centre (TCP), the Education and
Community Action Centre (CEAC) and the Women's Promotion Centre (CPF) which will be
financed with the GEF grant. The investments to be financed are specifically defined.
Therefore, the loan was deemed considered appropriate as an instrument for Bank intervention
in the project. As comparison, World Bank interventions in the ICT sector in Cameroon are
funded through this type of operation (investment projects).
2.4 Estimated project costs and financing arrangements
2.4.1 The project cost net of taxes and customs duties amounts to EUR 46,301 million (UA
36,458 million). The provision for physical contingencies is 7% of the base cost. The provision
for price escalation is equal to 3% of the base cost plus physical contingencies. This cost was
established on the basis of feasibility studies carried out, exchanges with other partners and
similar contracts recently implemented or being implemented by CAMTEL. The equivalent of
the taxes and customs duties calculated within the project framework and considered as
counterpart funding, will supplement the financing provided by the GEF and earmarked for the
strengthening of TCP, CEAC and CPF (procurement of solar and IT equipment).
The summary of estimated cost by project component is provided in the table below:
Table2.3
Summary of Estimated Cost by Project Component
Components
In EUR million In UA million
F.E. L.C. Total F.C. L.C. Total
A. OPTICAL FIBRE CABLE
INFRASTRUCTURE 18.898 4.724 23.622 14.880 3.720 18.600
B. ICT APPLICATIONS AND SERVICES 7.326 1.832 9.158 5.769 1.442 7.211
C. INSTITUTIONAL SUPPORT AND
CAPACITY BUILDING 5.533 1.383 6.916 4.356 1.089 5.446
D. PROJECT MANAGEMENT 1.853 0.463 2.316 1.459 0.365 1.824
BASE COST 33.609 8.402 42.012 26.464 6.616 33.080
Physical contingencies (7%) 2.353 0.588 2.941 1.852 0.463 2.316
Financial contingencies (3%) 1.079 0.270 1.349 0.849 0.212 1.062
TOTAL 37.041 9.260 46.301 29.166 7.292 36.458
The summary of estimated cost by expenditure category is given in the table below:
7
Table 2.4
Summary of Estimated Cost by Expenditure Category
Expenditure Categories In EUR million In UA million
F.E. L.C. Total F.E. L.C. Total
A. GOODS 6.500 1.625 8.125 5.118 1.279 6.397
B. WORKS 18.923 4.731 23.654 14.900 3.725 18.625
C. SERVICES 5.717 1.429 7.146 4.501 1.125 5.627
D. OPERATION 1.280 0.320 1.600 1.008 0.252 1.260
E. MISCELLANEOUS 1.189 0.297 1.487 0.937 0.234 1.171
BASE COST 33.609 8.402 42.012 26.464 6.616 33.080
Physical contingencies (7%) 2.353 0.588 2.941 1.852 0.463 2.316
Financial contingencies (3%) 1.079 0.270 1.349 0.849 0.212 1.062
TOTAL 37.041 9.260 46.301 29.166 7.292 36.458
2.4.2 The project will be financed by the Bank Group, the Global Environment Facility
(GEF) and the national counterpart in accordance with the financing plan below. The Bank
Group will provide an AfDB loan of UA 29.374 million, representing a total of 80.6% of the
project cost. The provisions justifying this level of counterpart financing under the policy on
expenditure eligible for Bank Group financing are detailed in Appendix II.
Table 2.5
Summary of Estimated Cost by Source of Financing
Financing Sources In EUR million In UA million
Percentage F.E. L.C. Total F.E. L.C. Total
AfDB 29.844 7.461 37.304 23.499 5.875 29.374 80.57%
GEF 1.256 0.314 1.569 0.989 0.247 1.236 3.39%
Government of Cameroon 5.942 1.485 7.427 4.679 1.170 5.848 16.04%
TOTAL 37.041 9.260 46.301 29.166 7.292 36.458 100%
Table 2.6
Summary by Project Components by Source of Financing (in EUR million)
Components AfDB GEF Government of
Cameron Total
Component A: Optical Fibre Cable
Infrastructure 20.040 0.000 5.994 26.034
Component B: ICT Applications and Services 8.659 0.000 1.433 10.093
Component C: Institutional Support and
Capacity Building 6.053 1.569 0.000 7.622
Component D: Project Management 2.553 0.000 0.000 2.553
TOTAL 37.304 1.569 7.427 46.301
2.4.3 The expenditure schedule (in UA million) by source of financing is given in the
following table:
8
Table 2.7
Expenditure Schedule by Source of Financing (in UA million)
Source 15% 20% 35% 30% 100%
2016 2017 2018 2019 Total
AfDB 5,077 6,770 11,847 10,155 33,849
GEF 0,214 0,285 0,498 0,427 1,424
Government of Cameroun 1,011 1,348 2,359 2,022 6,739
BASE COST 6,302 8,402 14,704 12,604 42,012
Physical contingencies (7%) 0,441 0,588 1,029 0,882 2,941
Financial contingencies (3%) 0,202 0,270 0,472 0,405 1,349
TOTAL 6,945 9,260 16,205 13,890 46,301
2.5 Project Area and Beneficiaries
2.5.1 Project area: This is a nationwide project with regional ambitions. The deployment of
916 km-long optical fibre will be carried out along the following roads: (i) Mamfe-Ekok
(interconnection with Nigeria - 82 km) in the South-West Region; (ii) Bertoua-Batouri-Kentzou
(interconnection with CAR - 206 km) in the East Region; (iii) Kumba-Mamfe (187 km) in the
South-West Region; (iv) Sangmélima-Djoum-Mintom-Ntam (interconnection with Congo -
331 km) in the South Region; and (v) Ndop-Kumbo-Bamenda (110 km) in the North-West
Region. In addition to the local residents of these areas, the project will impact all inhabitants
of Cameroon and indirectly the population of the sub-region through the expected reduction in
the cost of ICT services following the integration of the telecommunications systems of Central
African countries. Moreover, the deployment of e-Banking and Markets and Climate
Information System (MCIS) will improve the socio-economic inclusion of the rural population
nationwide, especially farmers and stockbreeders, who will be provided with access to banking
services and to information on prices and quantities of agricultural products to improve their
productivity and strengthen their resilience to climate change.
2.5.2 Direct project beneficiaries: In Cameroon, the beneficiaries of the extended project
area stands at 2 604 248 persons. For their part, the direct beneficiaries of the direct project
impact area total 616 468 persons. At the sub-regional level, once the links are built to connect
the neighbouring countries to the Cameroon optical fibre backbone, the beneficiaries will
comprise the populations of Central African Republic, Nigeria and Congo. These are
predominantly rural residents whose main activities are agriculture and stockbreeding.
Specifically, the project will lead to the hiring and training of 208 people, who will operate and
run the 52 ICT promotion structures (21 TCPs, 20 CEAC/DAAs and 11 CPFs) for the benefit
of residents of the immediate project area. Furthermore, at least 7 800 people, including no less
than 3 000 women, are expected to be initiated in the use of ICT tools. Lastly, four (4) students,
three (3) of them girls, will be granted training scholarships for degree-awarding programmes
that will enable them to become part of the industry's elite. The sector's private operators
(CAMPOST, telephone companies, etc.) will also benefit from project achievements, as they
would be able to easily extend their services to all localities served by optical fibre facilities.
Similarly, they stand to gain from the improved institutional arrangements brought about by the
project.
9
2.6 Participatory Approach for Project Identification, Design and Implementation,
including Active Private Sector Participation
2.6.1 The participatory approach was adopted during the preliminary studies, the
environmental and social assessment, and the preparation and appraisal missions. These
consultations contributed to better project design both in terms of component formulation and
implementation arrangements.
2.6.2 During the identification, preparation and appraisal missions, all stakeholders were
consulted both in Government services (MINPOSTEL, MINADER, ART, CAMTEL
CAMPOST, etc.) and the private sector (MTN Cameroon, Orange Cameroon, Nexttel, etc.).
Discussions with these entities were helpful, for example, in the definition of the content of the
technical assistance to be offered to ART, as planned under the “Institutional Support and
Capacity Building” component, to ensure the effective implementation of the “open access”
principle in the operation of the optical fibre infrastructure envisaged under the project.
2.6.3 As part of the environmental and social assessment exercise, public consultations were
organized on the Kumba-Mamfe road link from 16 to 18 December 2014; on the Ndop-Kumbo-
Bamenda, Sangmélima-Djoum-Mintom-Kumba-Mamfe and Ntam-Ekok links from 16 to 22
December 2014; on the Bertoua-Batouri-Kentzou link from 8 to 15 September 2013 for the
preparation of the Environmental and Social Impact Assessment (ESIA), and in December 2014
for the Abbreviated Resettlement Plan (ARP). Community meetings took place and were
attended by an average of 50 to 100 people, 50% of them women in most cases. The people
expressed their main concerns and expectation, as well as their support for the project in a
development perspective. Minutes of these meetings were prepared and are available as Annex
to the public consultation reports.
2.6.4 Community meetings took place and were attended by an average of 50 to 100 people,
50% of them women in most cases. The people expressed their main concerns and expectation,
as well as their support for the project from a development perspective. Minutes of these
meetings were prepared and are available as Annex to the public consultation reports.
2.6.5 Generally, MINPOSTEL will prepare and implement a communication plan for the
information, education and social mobilization of local communities, and public and private
operators in the sector during the implementation phase.
2.7 Bank Group Experience and Lessons Reflected in Project Design
2.7.1 As of 31 December 2014, the Bank's active portfolio in Cameroon - all operations
combined - comprised 17 projects for a total net commitment of UA 507.220 million. The
overall portfolio performance is also satisfactory: no project in the national public portfolio is
classified as project at risk.
2.7.2 The major constraints and problems encountered, especially in the implementation of
infrastructure projects, include: (i) the slow pace of procedures for the procurement of goods,
works and services; (ii) the delayed mobilization of national counterpart funding; and (iii) the
financing of compensations.
2.7.3 In view of the foregoing, during project implementation, the Bank will capitalize on
the following measures already taken or planned: (i) use of the advance contracting (AC)
method to minimize procurement delays; (ii) steps taken by MINPOSTEL and MINEPAT to
ensure the inclusion of national counterpart financing in the budgets of the various fiscal years
throughout the project. For the management of compensation, MINPOSTEL will build on the
experience of the Ministry of Public Works (MINTP), which has developed an environmental
10
management procedures manual during the implementation of road projects as well as a
procedures manual for expropriation and resettlement related to road projects.
2.7.4 Lastly, this operation draws on the lessons learned from the implementation of
Cameroon's previous CSP (2010-2014). Hence, the ICT sector-related challenges in the country
were anticipated by taking into consideration the strengthening of the regulatory framework. It
is undeniable that this project is highly inclusive by virtue of its diverse components. Moreover,
the activities targeted by the co-financing provided by GEF will strengthen the project's green
growth objectives.
2.8 Key Project Performance Indicators
2.8.1 The key performance indicators and expected project outputs are presented in the
logical framework along with the timeframes. The core sector indicators (CSIs) on which the
project will focus are: (i) the number of additional international connections installed; (ii) the
fixed tele-density (especially for wired Internet) and mobile services in the regions concerned
by the project; (iii) the number of CAMPOST’s mobile banking (e-Banking) customers; (iv)
the costs of access to ICT services for the regions and at national level; (v) the number of people
likely to benefit from the initial and continuing training offered by the various entities
concerned (ENSPT, TCP, CEAC, CPF, etc.); (vi) the number of students with Internet access
on the campuses of Yaoundé I, Bamenda and Maroua Universities; (vii) the number of
farmers/stockbreeders with access to market and weather information; (viii) the number of
people benefiting from solar electric terminal systems; and (ix) institutional support and
capacity building for the ICT sector.
2.8.2 MINPOSTEL will be responsible for data collection and analysis; it may be supported
by Cameroon’s National Institute of Statistics (NIS). In this case, the NIS, which is familiar
with this type of exercise may: (i) establish the baseline situation of these indicators at project
start-up; (ii) conduct an impact assessment at project completion; and (iii) continue the
assessment after the commissioning of the planned connections.
2.8.3 To ensure that all these operations are performed on time, in addition to these output
indicators, implementation performance indicators were established in line with the Bank's
institutional performance indicators. These relate mainly to: (i) the effectiveness timeframe; (ii)
the timeframe for fulfilling conditions precedent to first disbursement; (iii) the procurement
timeframe; (iv) the mean indicator of progress in project implementation (IP); and (v) the trend
of disbursement in relation to the expenditure schedule. These indicators will be monitored
during supervision missions and the day-to-day management of the project.
11
III. PROJECT FEASIABILITY
3.1. Economic and Financial Performance
3.1.1. A study of the financial and economic rate of return was carried out on the following
projects: (i) implementation of optical fibre infrastructure; (ii) establishment of an e-Banking
system; (iii) establishment of a hybrid mail system; and (iv) deployment of an Electronic
Document Management (EDM) system.
3.1.2. The macro-economic assumptions are based on a 3% inflation rate and a stable
CFAF/EUR exchange rate. The fixed interest rate on the AfDB loan is estimated at
approximately 1%. The financial discount rate is 2%. The retained economic discount rate is
10%.
Based on these assumptions, the main outcomes are listed below.
Table 3.1
Economic and Financial Assessment
FIRR. NPV: 19.79%. EUR 135.86 million @ 2%
EIRR 34.14%
3.1.3. The economic lifespan of the project is 15 years. Based on the assumptions used, it
follows that the FIRR is 19.79% and the EIRR 34.14%. The economic and financial analysis
shows that the project is economically and financially feasible.
Moreover, a project sensitivity test was performed based on the following three parameters: (i)
a 10% increase in the investment costs; (ii) a 10% increase in operating costs; and (iii) a
combination of the two previous parametres. The outcomes of the sensitivity analysis shown in
the table below (the details of which are included in the Technical Annex B.7) indicate slight
variations which do not diminish the financial and economic viability of the project.
Table 3.2
Sensibility Test
ASSUMPTIONS
FNPV
(EUR million)
ENPV
(EUR million)
FIRR (%)
EIRR (%)
Baseline scenario 135.9 103.4 19.79 34.14
10% increase in investment costs 129.1 98.4 17.73 31.06
10 % drop in income 115.5 88.1 17.52 30.76
Combination of the two
assumptions above
108.7 83.1 15.63 28.03
3.2. Environmental and Social Impact
3.2.1. Environmental aspect: The project is classified under Category 2, in accordance with the
requirements of the Bank's Integrated Safeguard System. The Environmental and Social Impact
Assessment (ESIA) and the Environmental and Social Management Plan (ESMP) were prepared in
2014 for the Bertoua-Batouri Kentzou and Bamenda-Mamfe Ekok trunks. The project is also
underpinned by the ESIA of the Sangmélima-Djoum-Mintom-Ntam and Congo (Mbalam) Border
road project, as well as that of the Kumba Mamfe road link prepared in 2012. The studies were
validated by the Ministry of Environment, Nature Protection and Sustainable Development
12
(MINEPDED) and were issued acceptance certificates. The optical fibre cable will be deployed
along these road links, for which a Declaration of Public Utility (DUP) has been issued
3.2.2. Regarding the deployment links selected, the project environment is nationwide in
scope. The optical fibre cables and chambers will be installed strictly following the right-of-
way of identified existing roads links. Impact-generating activities are the civil works that will
be carried out on roads without ducts for the deployment of optical fibre cables. On roads that
already have ducts, deployment will be the major activity.
3.2.3. Impacts expected to be generated by civil works are: (i) risk of disruption of access roads
used by local residents due for lack of signalling devices and trenches that are not covered to ease
crossing; (ii) obstruction of access by various deposits; and (iii) risk of road accidents faced by
workers improperly positioned on the road. The deployment of optical fibre cables by portage will
generate occasional noise, but of very short duration (compressor for compressed air). The natural
and physical environments, poor waste management (small pieces of ducts and fibre, abandoned
strands, rejected cement mortar laitance, packaging, etc.).
3.2.4. These identified impacts will be offset for the most part by appropriate measures to enable
the project’s environmental integration. PCU/CAB will be responsible for monitoring the mitigation
measures recommended during the implementation phase. It will be supported in its task by a
Contracting Authority Assistance (CAA) mission.
3.2.5. The “ICT Applications and Services” component does not generate any adverse impacts
on the environment. It makes for the economy of movement and, as a result, reduces noise pollution,
traffic accidents and greenhouse gas emissions. Hence, the positive impacts are extensive, as
reflected, among others, in: (i) the creation of jobs directly related to equipment operation; and (ii)
the improved living conditions of local residents of project areas and across the country, thanks to
the increased connectivity and access to information of all kinds.
3.2.6. Climate Change: The project will help to reduce the carbon footprint of the electricity
sector in Cameroon by providing TCP, CPF CEAC and DAA data centres with solar panels
producing 190 000 kWh. It will prevent the emission of 47.5 tonnes of CO2 per year. ICT
services also substantially reduce greenhouse gas emissions. Indeed, the implementation of the
e-Post and e-Banking projects will lead to the substitution of transfers with data transmission,
thus eliminating the movement of persons estimated at 400 000 km/year. These avoided
movements therefore represent 74 t CO2/ year. Hence, a total emission of 121.5 t CO2 will be
avoided.
3.2.7. Social impacts: The extended project impact area is home to a population of 2 604 248
people. The direct impact area is inhabited by 616 468 people. Moreover, the project's positive
externalities will benefit the population of Cameroon and the sub-region as a whole. The main
positive impacts of the project are: (i) improved living conditions of rural residents with the
enhancement of TCP, CEAC/DAA and CPF capacity in the project area; (ii) opening up of the
project area; (iii) creation of employment opportunities and income improvement; (iv)
development of agricultural activities with access to agricultural data banks at the central level;
and (v) improved functioning of school and health infrastructure. Businesses will be encouraged
to recruit local labour for trenching, laying of ducts, optical fibre cables, etc.
3.2.8. Involuntary Resettlement: The project implementation will affect 30 people as follows:
owners of 24 screeds, 2 walls and 4 stairs. They are all located in the cities of Bertoua, Mandjou,
Batouri, Ngoura 2 and Kentzou, on the only road that affects local residents. The other 3 roads
do not affect any property owner. The cost of rehabilitation of destroyed property amounts to
CFAF 20 380 800, the running cost of the divisional commissions, local compensation and
13
awareness committee stands at to CFAF 33 000 000, while the contingencies are estimated at
CFAF 5 338 080.
3.2.9. Gender and women-specific activities: The gender aspect of the project was analysed
within the context of the laying of optical fibre in communities along the roads (see Technical
Annex B.8). It highlighted gender disparities in education, health, employment, security and
access to ICT. To fill the gaps identified by the analysis, the project will develop support for
the empowerment of women by: (i) strengthening the logistics of 11 Women's Promotion
Centres (CPFs); (ii) awarding doctoral scholarships to three girls; (iii) providing community
training for the initiation of at least 3 000 women; (iv) updating and validating CPF training
modules; producing an ICT benchmark; and (v) producing an entrepreneurship training manual
(common core), etc.
IV. IMPLEMENTATION
4.1. Implementation Arrangements
4.1.1. The project executing agency is the Ministry of Post and Telecommunications
(MINPOSTEL) acting through the CAB Cameroon Project Coordination Unit (PCU/CAB-
Cameroon) set up since 2008 by the Bank and World Bank. This Unit currently consists of a
Coordinator, an Administrative and Finance Officer (RAF), an Accountant, an Internal Auditor,
a Procurement Specialist (SPM), an Administrative and Finance Assistant and a Procurement
Assistant. It has a procedures manual that governs its operation. This Unit has the necessary
experience to conduct the sector's operations. To implement this project, this staff will be
strengthened by a technical expert (an ICT engineer) whose CV will be submitted to the Bank
for non-objection. Staff performance will be regularly evaluated at least yearly.
4.1.2. Specifically, the Unit will be responsible for the technical monitoring of project
implementation. In this regard, it will: (i) ensure that the State's commitments are honoured; (ii)
conduct monitoring and evaluation; (iii) ensure compliance with the project implementation
schedule; (iv) prepare semi-annual and annual project progress reports; (v) prepare counterpart
budgets and ensure their timely availability; (vii) ensure the financial management of the project
(verification of detailed accounts, transmission of direct payment requests to the Bank); (viii)
ensure timely submission of accounting and financial audit reports of the project; and (ix)
prepare the Borrower’s completion report for submission to the Bank.
4.2. Procurement Arrangements
4.2.1. All procurement of goods and works by international competitive bidding (ICB) and
consultancy services financed by the Bank will be in accordance with Bank Rules and
Procedures for the Procurement of Goods and Works (May 2008 edition, revised in July 2012)
or Bank Rules and Procedures for the Use of Consultants (May 2008 edition, revised in July
2012), whichever applies, using appropriate standard Bank bidding documents. Procurement of
goods and works through national competitive bidding (NCB) will be conducted in accordance
with national legislation on public procurement (Decree No. 2004/275 of 24 September 2004),
using the country's standard bidding documents and in line with the provisions set forth in the
financing agreement.
4.2.2. MINPOSTEL, acting through PCU/CAB, will be responsible for managing project-
related procurement. PCU/CAB was set up since 2008 as part of the CAB project financed by
the World Bank. This project plans to recruit a Procurement Assistant in order to strengthen the
procurement team in place.
14
4.2.3. A procurements plan (PP) was prepared during the appraisal mission and will be
regularly updated during the project implementation phase. The procurement arrangements are
detailed in Annex B.
4.2.4. The Government expressed the wish to use advance contracting (AC) to accelerate the
contract award process and thus ensure rapid implementation. In that regard, the Government
will submit a request to the Bank for that purpose, which would enable it to use the advance
contracting arrangement for optical fibre infrastructure works, control and monitoring. The
Bank will examine the request and notify the Government of its decision.
.
4.3. Financial Management and Disbursement Arrangements
4.3.1 The CAB Cameroon Project Coordination Unit (PCU/CAB-Cameroon), at the
Ministry of Post and Telecommunications (MINPOSTEL), will be responsible for the
administrative, financial and accounting management of the project. The fiduciary team will
comprise the Administrative and Financial Manager (RAF), a qualified accountant experienced
in managing development projects, an internal auditor (all three of them consultants recruited
on a competitive basis with World Bank financing), and a procurement specialist (PS).
4.3.2 The Unit will be responsible for the conduct of all control necessary to ensure: (i) the
use of project funds solely for the intended purposes with due regard for economy and
efficiency; (ii) preparation of accurate, reliable and timely periodic financial reports; and (iii)
safeguard of project assets. It will also be charged with producing quarterly Financial
Monitoring Reports (FMR) analysing activities financed by the Bank, monitoring activities by
source of financing (AfDB, GEF and Government of Cameroon) and consolidating the
accounting data of these three source of financing. An administrative, financial, and accounting
manual has been available since 2010, and will be updated to reflect the project’s specificities.
4.3.3 The fiduciary risk for project financial management is deemed moderate. Based on
project implementation arrangements, the Project Coordination Unit (PCU) under the Ministry
of Post and Telecommunications (MINPOSTEL) will be responsible for the financial
management of project activities. This task will be performed by the existing staff
(Administrative, Financial and Accounting Manager), which is already well versed in the
procedures of technical and financial partners, including those of the World Bank (WB).
4.3.4 The fiduciary arrangements within the PCU in Yaoundé were assessed and deemed
acceptable in light of the Bank's minimum requirements defined under the policy on the
“Financial Management of Projects Financed by the African Development Bank”, February
2014 edition. The implementation of mitigation measures and the action plan recommended in
annex should enable the financial provisions designed for the project to continue to provide
financial information that is reliable and compliant with Bank's minimum requirements, with
reasonable assurance.
15
4.3.5 Audit arrangements: Audits will be conducted yearly by an independent external audit
firm recruited on a competitive basis and in accordance with the Bank's standard Terms of
Reference (TOR). The external auditor will be recruited by the executing agency and audit costs
will be borne by the project. The ToR of the external auditor will be tailored to and harmonized
with those of the World Bank to account for project specificities validated during the
negotiation for the recruitment of an independent firm with experience in the audit of Bank-
financed projects. Audits will be conducted according to ISA/ISSAI international standards.
The financial statements audited by the independent firm will be forwarded (see table for
frequency) to the Bank not later than six months following the end of the financial year
concerned.
4.3.6 Arrangements relating to disbursement methods: Funds will be disbursed at the Bank
using the method of reimbursement of authorised advances made by the Government, the
working capital/special account method (mainly for operating expenditure) and the direct
payment method (for the procurement of goods and services, including audit costs).
4.3.7 A special account in CFA francs will be opened in a commercial bank acceptable to
the Bank to receive the AfDB funds, in accordance with the provisions set forth in the CAA
Procedures Manual and the Bank's Disbursement Handbook for the management of special
accounts. It will be managed by the fiduciary team of the executing agency and used exclusively
to finance the project's operating costs and, in particular, defray management expenses relating
to: (i) capacity building activities for the Project Management Unit; (ii) salaries and allowances;
and (iii) other operating expenses.
4.3.8 An account will be opened in CFA francs in Yaoundé to receive the funds of the
Cameroonian counterpart. It will operate in accordance with the provisions of the project's
administrative, financial and accounting procedures manual. The account will be used to
finance the following activities: (i) procurement of a portion of the solar equipment intended
for TCP, CEAC/DAA and CPF; (ii) procurement of technical sites (for the road links included
in this project); (iii) compensation for project-affected persons (PAPs), in particular, the laying
of optical fibre cables along the Bertoua-Batouri-Kentzou road; (iv) management of the “optical
fibre infrastructure” component; (v) logistical development works for CAMPOST as part of the
Electronic Document Management (EDM) system; (vi) support to the Procurement Committee;
and (vii) strengthening of the PCU/CAB technical support staff.
4.4. Monitoring
4.4.1. The implementation of various project components will be monitored by
MINPOSTEL’s Department of Infrastructure and Access Networks (DIR) through the CAB
Cameroon Project Coordination Unit (PCU/CAB-Cameroon). Joint supervision missions
(donors and Government) and inter-donor coordination meetings will also report on the
performance of the project in terms of physical and financial outputs.
4.4.2. To strengthen the system in place, it was agreed with the Cameroonian authorities that
a Technical Committee led by MINPOSTEL will be set up to support the Unit in preparing the
terms of reference, technical specifications and specifications relating to infrastructure building,
assessment of various bids and proposals submitted for the procurement of various items
envisaged, in cooperation with the technical expert, review and approval of reports and
documents submitted by the contractor responsible for works implementation, etc.
4.4.3. In addition to the above-mentioned committees and the Project Steering Committee
already in place, it is planned to set up a Project Communication Committee, which will be
coordinated by the Head of MINPOSTEL’s Communication Unit, which will work in
16
cooperation with the officials in charge of communication in each of the entities involved in the
project. It will coordinate activities relating, among others, to the publication of press articles,
press briefing, television infomercials, etc., covering the project implementation.
4.4.4. Regarding the assessment of the level of achievement of development objectives, a
socio-economic impact monitoring and evaluation mechanism will be put in place and
implemented by the PCU/CAB. Project environmental and social impacts will be monitored by
a local firm as part of ESMP implementation by the parties concerned, in cooperation with
MINEPDED, in an effort to overcome the PCU/CAB limitations identified in that area.
Regarding the implementation of the “ICT Applications and Services” component, a technical
audit of each planned project achievement will be conducted to ensure compliance with the
initial specifications, given that the implementation of the optical fibre infrastructure will be
entrusted to a separate manager who will supervise works scheduled on behalf of the
beneficiary.
Table 4.1
Project Monitoring and Supervision Deadline Stage Process Feedback Loop
T1 -2016 Project launch Field mission Progress reports
T1 – 2016 Project review – procurement,
resettlement
Field mission/Supervision Progress reports/Aide-memoire
T3&T4-2016, FO Infrastructure Works Field mission/Supervision Progress reports/Aide-memoire
T1&T2&T3&T6-2017-2018 FO Infrastructure Works Field mission/Supervision Progress reports/Aide-memoire
T1 -2019
T1 -2020
Guarantee period and first year
of operations
Field mission Progress reports/Aide-memoire
Progress reports/Aide-memoire
4.5. Governance
4.5.1. The risks of poor governance in the areas of procurement and financial management
were analysed during the project appraisal and presented as annex to this report. Since 2008,
progress has been achieved in budget management, but significant weaknesses still limit the
public expenditure efficiency. The enactment of the State Financial Systems Law (LRFE) in
2007 was accompanied by significant reform in results-based management. The reform
strengthens the responsibilities of the contracting authority in designing sector reforms and
preparing the Medium-Term Expenditure Framework (MTEF). However, the weaknesses
inherent in the entire Planning-Programming-Budgeting-Monitoring (PPBM) chain and the
absence of an integrated public finance management system are major drawbacks to public
expenditure efficiency.
4.5.2. Generally, the implementation of the public finance modernization plan will mitigate
these risks by strengthening public expenditure efficiency in the ICT sector. Furthermore, to
improve the sector's governance, the Bank made a review of public expenditure in 2013, and
the recommendations emanating therefrom will be the subject of regular dialogue aimed at
strengthening public expenditure efficiency in the transport sector.
4.5.3. In the procurement process, especially as concerns international bid invitations, the
governance-related risk would be mitigated by the Bank’s strict enforcement of its relevant
rules and procedures, and the conduct of prior reviews. The Bank's supervision missions and
technical and financial audits will ensure consistency between the specifications, actual services
provided and work performed, disbursements and the loan agreement.
4.5.4. In the ICT sectors, the market was liberalized, particularly with the authorization of
mobile operators to provide data services (Orange and MTN were authorized to provide 3G
17
licenses in 2015, in addition to Nexttel which was licensed since 2012). This should help to
support the use of wholesale market capabilities. For its part, the Telecommunications
Regulatory Authority (ART) guarantees competition in the telecommunications market. It
should, however, be mentioned that the difficulty faced by the Regulatory Authority in
controlling CAMTEL's prices is a major constraint. That is why this operation includes the
development of an economic model for the costing of access to national and international
connectivity. That will be beneficial to ART, since it will enable the entity to sift through the
catalogue of prices charged by the traditional operator and thus ensure the implementation of
the “open access” principle guaranteed by regulating the sector for all private operators with
licenses.
4.5.5. Regarding procurement, despite a number of gaps related to the Bank's fiduciary
requirements, the procurement procedures for the national competitive bidding (NCB) process
are deemed largely compliant. In view of the findings of Bank assessment and Government's
efforts, plans have been made to propose the use of national procedures for national competitive
bidding (NCB) to the Government. A letter of agreement to be signed with the Government will
identify weaknesses which should be remedied. As usual, the specific measures for mitigating
the governance-related risks of this project include: (i) recruitment of an independent financial
audit firm to ensure that funds are used rationally and for their intended purposes; (ii) prior
review and approval by the Bank of all procurement activities for the project; and (iii) the use
of direct payment disbursement method to transfer project funds directly to contractors and
service providers.
4.6. Sustainability
4.6.1. The national optical fibre backbone maintenance management in Cameroon devolves
on MINPOSTEL, which delegates the function to the incumbent operator, CAMTEL, except
for urban local loops that belong to private operators. CAMTEL will be responsible for
programming and implementing optical fibre maintenance on a force account basis. Indeed,
within CAMTEL, there are two technical directorates in charge of network maintenance and
servicing, namely the Directorate of Access Networks and the Directorate of Transport
Networks. The latter Directorate is responsible for the maintenance of the national optical fibre
network and has branches in CAMTEL regional representations. It employs more than 500
people nationwide.
4.6.2. Financing is done with CAMTEL's own resources. The Special Telecommunications
Fund (TSF) assists CAMTEL in installing certain segments, in particular the urban loops that
are also used for the interconnection of the sites of government services as part of the
government intranet system.
4.6.3. However, the revenue generated by the project focus areas is largely sufficient to cover
the cost of equipment maintenance (fibre and assets) during the lifespan of the various
components. The same is true for business applications (hybrid mail, EDM and e-Banking) that
will be procured by CAMPOST under this project. As part of its dialogue with the country, the
Bank will ensure the actual availability of resources for the maintenance and upgrade of the
systems (physical and software) in place.
18
4.7. Risk Management
4.7.1 Risks that may hinder the achievement of results include: (i) non-compliance with
undertakings relating to the laying of optical fibre cables; (ii) failure to produce an impact on
prices; (iii) premature degradation of the optical fibre due to lack of maintenance; (iv) lack of
maintenance and upgrade of the various applications installed.
4.7.2 Mitigation measures: (i) The Government's commitment to implement the guidelines
of the International Telecommunication Union (ITU); (ii) Bank support in the form of technical
assistance to enable the necessary reform of the ICT sector; (iii) commitment by CAMTEL to
allocate a substantial portion of the resources generated by the new connections for the
maintenance of the road links and more generally the national backbone; and (iv) commitment
by CAMPOST, in particular, to further invest in the extension of the reach of its existing
products and services (hybrid mail, electronic document management (EDM), etc.) to ensure
coverage of the entire country.
4.7.3 Risks that may hinder achievement of the outputs are: (i) the slow pace and lack of
transparency in the procurement process; (ii) escalation of the cost of works; (iii) non-compliance
with technical and functional specifications in the context of the various applications envisaged
in the project; and (iv) delay in compensating project-affected persons (PAPs) on the Batouri-
Bertoua-Kentzou road.
4.7.4 Mitigation measures: (i) expand competition by taking advantage of the size of works
contracts and the key reforms introduced by the Government through the establishment of a
Ministry in charge of Public Procurement; (ii) take physical contingencies into account in the
project financing plan; (iii) strengthen the Project Coordination Unit by including a technical
expert in charge of project supervision; and (iv) prioritize the compensation of PAPs when
allocating the national counterpart financing.
4.8. Knowledge Building
4.8.1. The project will provide an opportunity to improve knowledge in the area of national
ICT infrastructure. To better derive lessons from this project, a monitoring and evaluation
mechanism will be set up by the Unit. Establishing key impact indicators prior to the project
start-up and conducting impact assessment at the end of the project will help to provide useful
information on the project outcomes and impacts. The lessons, experiences and knowledge that
will thus be derived from implementing this project will be managed from MINPOSTEL’s
Department of Infrastructure and Network Access (DIR) and disseminated through annual
reports and the Bank's website. The knowledge will be very useful, among others, for
implementing the next CAB project.
19
V. LEGAL INSTRUMENT
5.1. Legal Instrument
The project will be financed through an AfDB loan and a GEF grant awarded to the Republic
of Cameroon.
5.2. Conditions Associated with AfDB Intervention
5.2.1. Conditions Precedent to Effectiveness
Effectiveness of the Loan Agreement shall be subject to fulfilment by the Borrower of the
conditions set out in Section 12.01 of the General Conditions, to the Bank’s satisfaction. The
GEF grant will be effective from the date of its signature by the Donee and the Bank.
5.2.2. Conditions Precedent to First Disbursement of the AfDB Loan
In addition to the effectiveness of this Agreement, the first disbursement of AfDB loan
resources shall be subject to fulfilment of the following conditions by the Borrower, to the
satisfaction of the Bank:
(i) Provide the Bank with evidence of opening a special account in a bank
acceptable to the Bank, intended exclusively to receive the counterpart funds for
financing certain project-related activities and compensating projec-affected
persons (PAPs); and
(ii) Provide the Bank with evidence of opening a special account, in the name of the
project and with a bank acceptable to the Bank, to receive the loan resources;
5.2.3. Condition Precedent to First Disbursement of the GEF Grant
The first disbursement of the GEF grant resources shall be subject to the effectiveness of the
GEF Protocol Agreement.
5.2.4. Other Conditions
Other Conditions: The Borrower shall also:
(i) Provide, not later than 30 June of each year, evidence of the inclusion of the
amount of the Government's counterpart funding for the projet in the finance act
of the fiscal year concerned;
(ii) As the works progress and prior to works start-up in any area that is yet to have
reservations, provide evidence of compensation of project-affected persons in
the area, in accordance with the Bank's relevant rules and procedures, the
Environmental Management Plan (ESMP) and the Abbreviated Resettlement
Plan (ARP).
5.2.5. Undertakings
The Borrower underatkes, to the satisfaction of the Bank, to:
20
(i) Open discussions with the Bank on practical arrangements for the effective
implementation of "open access" to the optical fiber planned under the project
within six (6) months following the first disbursement of loan resources;
(ii) Implement the project, the Environmental and Social Management Plan (ESMP)
and Abbreviated Resettlement Plan (ARP), and ensure their proper
implementation by its contractors, in accordance with: (a) the Bank’s rules and
procedures; (b) national law; and (c) the recommendations, provisions and
procedures contained in the ESMP and ARP;
(iii) Referain from starting up works in an area with no reservations without having
fully compensated project-affected persons (PAPs; and
(iv) Provide the Bank half-yearly reports on the implementation of the ESMP and
ARP, including, where applicable, any weaknesses and corrective measures
initiated or envisaged.
VI. RECOMMENDATION
The Management recommends: (i) that the Boards of Directors of the Bank and the Fund should
approve the award of a GEFgrant, not exceeding USD 1 726 484, to the Republic of Cameroon
and (ii) that the Board of Directors of the Bank should approve the proposal to award an ADB
loan of EURO 37 304 000 to the Republic of Cameroon; for the Central Africa Optical Fibre
Backbone Project (Central Africa Backbone - CAB) - Cameroon Component, subject to
conditions set forth in this Report.
I
APPENDIX I
DESCRIPTION OF THE INSTITUTIONAL SUPPORT AND CAPACITY
This institutional support operation will focus on strengthening the governance sector through
support for structural reform of the sector, including by strengthening its legal and regulatory
framework by the Telecommunications Regulatory Authority (ART), improving available ICT
training (especially in the optical fibre field) offered in the country by the National School of
Post and Telecommunications (ENSPT), and strengthening various entities in charge of
community development in Cameroon (TCP, CEAC / DAA and CPF). In addition to these
measures, there are several studies preparing, among others, the next CAB project which is
largely devoted to the development of the application layer with a view to consolidating the
foundations of the digital economy in Cameroon and supporting women's empowerment. The
support will focus on the following four activities:
i- Studies: The objective of this project in Cameroon is twofold. It is intended to lay the
groundwork, in terms of infrastructure (optical fibre, in particular), for the launch of the
development of an ICT economy and industry in the country. Meanwhile, Cameroonian
authorities wanted this initiative to include feasibility studies on a second CAB project which
aims to accelerate the leveraging of the growth and job creation sources underlying the ICT
sector. Thus, it is expected, among other things, that a comprehensive feasibility study will be
conducted on the establishment of an ICT technology park, which includes the first National
Data Centre, to serve as the bedrock for the development of e-government in the country. Also
worthy of mention is the establishment of a Citizen Electronic Identification System, which will
enhance the reliability of the official and mandatory, permanent and continuous registration of
events (births, deaths, marriages and divorces) relating to the status of individuals and their
characteristics, from birth to death, for administrative and legal purposes. This component also
includes two major assessments on the use of renewable energies in the development of ICT in
rural communities, in particular, and the study on the establishment of an Optical Fibre Skills
Development Centre at ENSPT. It also comprises a study on the development of mobile
financial services available in Cameroon, particularly to promote financial inclusion in rural
areas.
ii- Technical assistance for ART: The three studies envisaged in this component are
intended to support the development of the national optical fibre backbone by building the
capacity of the Telecommunications Regulatory Authority (ART) to contribute to achieving the
project’s development objectives (access to better quality ICT services at lower costs by private
operators and indirectly by users wherever they may be across the country). They concern the
development of: (i) an economic model on fixing the costs of access to national and
international connectivity; (ii) a study on the regulation of the “open access” arrangement; and
(iii) a business model on the profitability thresholds of optical fibre (OF) deployment in the
country.
iii- Support for institutions of higher learning (ENSPT, Yaoundé I, Bamenda and
Maroua Universities: The efficiency of Cameroon’s ICT sector depends on the availability of
high-quality training locally. In this regard, the country has long had a training school - the
National Advanced School of Post and Telecommunications (ENSPT) - which trains
technicians and engineers in various fields connected to postal and ICT services. However, this
institution has real needs in terms of equipment and capacity, especially in the optical fibre
field. The establishment of a centre for the development of skills in optical fibre
communications technology and techniques, as envisaged under this project, aims to: (i) create
an optimal learning environment, through the procurement of laboratory equipment for practical
II
work on optical fibre communications; (ii) create a favourable environment for optical fibre
research/development and engineering for students and staff researchers; (iii) facilitate the
understanding of theoretical teaching through hands-on training with practicals; (iv) increase
the competitiveness of ENSPT products nationally and internationally; (v) build the capacity of
trainers; and (vi) reduce the cost of further training for the sector’s employees by bringing back
to the sub-region specialized training in optical fibre technologies. The project also involves the
design and implementation of an Internet access pilot project for three university campuses
(Yaoundé I, Bamenda and Maroua) to support the expected growth in value-added services
based on mobile telephony, in the wake of the recent introduction of 3G in Cameroon. The goal
of this pilot project is to understand the barriers to Internet penetration in the school and
particularly university environment. The lessons from this first experiment will be utilized in
the next CAB project.
iv- Capacity Building for TCP, CEAC and CPF: Under the GEF component of the
project that aims to support the various TCP and ECAC, these entities will be provided with
solar, office automation and IT equipment to make them fully functional as places of meeting
and training, with access to basic services (Internet access, document copying and printing
facilities, especially for students, etc.). Moreover, this initial experiment on the use of renewable
energy in these centres will be evaluated for subsequent replication on a larger scale with
financing from the Bank and other partners. The experiment will also help to assess the
feasibility and sustainability of a pilot system of solar-powered electrical terminals for use in
recharging mobile phones, among others, in rural areas. The outcomes of the evaluation of this
model will be taken into account in the next CAB project.
v- Support for women's empowerment: To contribute to the promotion of gender
equality, the project plans to: (i) support the design and implementation of training programmes
(ICT, entrepreneurship, etc.) for Women’s Promotion Centres (CPF); and (ii) award doctoral
scholarships to four ENSPT students per year (including three female students) throughout the
lifespan of the project and support the Ministry for the Promotion of Women (MINPROF) in
implementing this component. Additionally, it comprises the organization of awareness
sessions for young female students (high school girls, in particular) in streams leading to ICT
professions, in an effort to contribute to the promotion of gender equality in public and private
institutions providing ICT-related training.
III
APPENDIX II
RATIONALE FOR THE LEVEL OF COUNTERPART CONTRIBUTION TO AFDB
FINANCING
The project will be financed by the Bank Group, GEF and the national counterpart contribution,
according to the financing plan below. The Bank Group's contribution will be an AfDB loan of
UA 29.374 million, representing a total of 80.6% of the project cost. The project will also
receive the sum of UA 1.236 million as a GEF grant. The national counterpart contribution was
estimated at UA 5.848 million, corresponding to CFAF 4.872 billion, or 16.0% of the total
project cost. This amount of counterpart financing represents the current level of contribution
affordable by the country.
The level of AfDB contribution is less than 50% of the total project cost as stipulated by Section
4.2.2 of the Policy on Expenditure Eligible for Bank Group Financing (revised version of 19
March 2008), which provides that the level of counterpart funding complementary to the
financing from the AfDB window will be determined on the basis of the following criteria:
the country's commitment to implement its overall development programme;
the financing allocated by the country to sectors targeted by Bank assistance;
the risk of fiscal sustainability posed by the drop in oil prices;
the impact of the crowding out of priority spending by security and humanitarian
spending generated by the Boko Haram terrorist threats in the Extreme North,
on the one hand, and the crisis in Central African Republic, on the other
The Country’s Commitment to Implement its Overall Development Programme
Drawing lessons from the implementation of its poverty reduction strategy following the
achievement of the HIPCI completion point in 2006, the Government formulated in 2010 a
Vision for its development by 2035 (Vision 2035). This long-term vision aims to make
Cameroon an emerging democratic country, united in its diversity. Specifically, the Vision
constitutes a benchmark for: (i) reducing poverty to a socially acceptable level; (ii) reaching
middle-income country status; (iii) becoming a newly industrialized country; and (iv)
consolidating the democratic process and strengthening national unity.
These specific objectives have guided the orientations of the Growth and Employment Strategy
Paper (GESP) for the 2010-2020 period, covering the first ten years of the long-term Vision.
The main issue concerning the implementation of GESP will be to focus on growth acceleration,
creation of formal jobs and poverty reduction. It is, therefore, planned to: (i) increase growth to
an annual average of 5.5% over the 2010-2020 period; (ii) reduce under-employment from
75.8% to below 50% in 2020; and (iii) reduce the monetary poverty rate from 39.9% in 2007
to 28.7% in 2020. To achieve these objectives, the Government intends to implement, in a
coherent and integrated manner with the support of Technical and Financial Partners including
the Bank, a three-pronged strategy: (a) a growth strategy; (b) a strategy to improve governance
and central government’s strategic management; and (c) an employment strategy.
IV
The presentation of this operation to the Board is taking place in a special context marked by
the graduation of Cameroon to the Blend Country status of the AfDB window. Indeed, based
on its recent macro-economic performance, Cameroon graduated in 2014 to the non-
concessional windows of the World Bank and the AfDB Group, respectively. This dual
graduation reflects the confidence of multilateral institutions and enables the country to benefit
from the resources of both the concessional and non-concessional windows of the Bank Group.
It should allow the country to finance its development, especially its ambitious infrastructure
programme, in a more cost-effective manner. The country's new ambition is to graduate from a
“Blend Country” to an “AfDB Country” status.
Financing Provided by the Country to the Sector Targeted by Bank Assistance:
Given the recent establishment of OITC.3 Division in charge of public sector ICT operations,
this project is the Bank's first investment in Cameroon. In this regard, it may be noted that the
ICT sector figures prominently in the pipeline of projects identified under Pillar I
(Strengthening infrastructure for inclusive and sustainable growth) of Cameroon's Country
Strategy Paper (CSP) for 2015-2019.
The implementation of the Cameroonian component of the CAB project demonstrates the
central role the country could play in a broadband network interconnecting all the countries of
the sub-region. This project stems not only from the weight of Cameroon's economy in the
Central African region, but also from the need to strengthen the country's competitiveness by
lowering the cost of factors, especially telephony, to which the project will contribute.
Based on the foregoing, and at the request of the Government, it is proposed that the AfDB
Window limit the counterpart funding to 16.3% of the total project cost net of taxes, for the
partial financing of the procurement of technical sites, compensation of project-affected
persons, management of the component relating to optical fibre infrastructure, logistics
development works relating to the e-Post project and the tax and customs duty exemptions
associated with this project.
Country’s Fiscal Situation and Debt Level:
Fiscal policy over the past three years was moderately expansionary, on account of investment
expenditure on major infrastructure projects in the energy and transport sectors, in response to
the strong demand for goods and services in a context of economic recovery and infrastructural
gap accumulated over more than two decades. The increased spending is financed primarily by
external borrowing and oil revenue.
Table 1
Cameroon: Macro-economic Indicators
2010 2011 2012 2013 2014
Real GDP growth 3.3% 4.1% 4.6% 5.5% 5.3%
Inflation 1.3% 2.9% 2.4% 2.1% 2.2%
Overall cash-based fiscal balance as % of
GDP -1.1% -3.6% -1.9% -4.1% -5.2%
Current account balance as % of GDP -3.4% -2.8% -3.3% -3.8% -4.2%
This expansionary fiscal policy has remained sustainable, resulting in a budget deficit (cash
basis) of approximately 5.2% of GDP in 2014, compared with 4.1% and 1.9% respectively in
2013 and 2012. A key reform that characterized fiscal years 2013 and 2014 was the
implementation of a programme budget, in accordance with CEMAC Directive No. 01/11-
V
UEAC-190-CM-22.2.
The debt ratios are below the thresholds. Since the debt cancellation under the HIPC Initiative
in 2006, the risk of debt distress has remained low. At end-September 2014, Cameroon's ratio
of public debt to nominal GDP stood at 19.1%, one of the lowest in the CEMAC zone, where
the Community debt ceiling is set at 70% of GDP. Based on this CEMAC community debt
threshold, and considering the financing needs, especially in the area of structuring
infrastructure, and given the country's debt sustainability in relation to the performance of its
economy, the authorities have set a debt target for the 2013-2017 period which should not
exceed 35% of GDP (equivalent to 50% of the CEMAC ceiling set at 70% of nominal GDP).
The annual external debt increase to reach this 35% ceiling does not seem to comply with debt
ratios, according to recent debt sustainability analysis conducted by the IMF and the World
Bank in June 2014.
While there is no denying that the country’s efforts have begun to bear fruit, the fact remains
that the situation is still fragile, and donor assistance continues to be a necessity for the country
and will enable the Government to meet its budget commitments. In addition, this aid, though
non-concessional, is less costly than that offered by the market and will thus contribute to better
management of the country’s debt.
2 This directive on finance laws etablishes the transition from a resource budget to a programme budget.
VI
APPENDIX III COMPARATIVE SOCIO-ECONOMIC INDICATORS
Year Cameroon Africa
Develo-
ping
Countries
Develo-
ped
Countries
Basic Indicators
Area ( '000 Km²) 2014 475 30 067 80 386 53 939Total Population (millions) 2014 22,8 1 136,9 6,0 1,3Urban Population (% of Total) 2014 53,8 39,9 47,6 78,7Population Density (per Km²) 2014 48,0 37,8 73,3 24,3GNI per Capita (US $) 2013 1 290 2 310 4 168 39 812Labor Force Participation - Total (%) 2014 70,4 66,1 67,7 72,3Labor Force Participation - Female (%) 2014 45,7 42,8 52,9 65,1Gender -Related Dev elopment Index Value 2007-2013 0,872 0,801 0,506 0,792Human Dev elop. Index (Rank among 187 countries) 2013 152 ... ... ...Popul. Liv ing Below $ 1.25 a Day (% of Population)2008-2013 27,6 39,6 17,0 ...
Demographic Indicators
Population Grow th Rate - Total (%) 2014 2,5 2,5 1,3 0,4Population Grow th Rate - Urban (%) 2014 3,6 3,4 2,5 0,7Population < 15 y ears (%) 2014 42,8 40,8 28,2 17,0Population >= 65 y ears (%) 2014 3,2 3,5 6,3 16,3Dependency Ratio (%) 2014 77,5 62,4 54,3 50,4Sex Ratio (per 100 female) 2014 100,0 100,4 107,7 105,4Female Population 15-49 y ears (% of total population) 2014 23,8 24,0 26,0 23,0Life Ex pectancy at Birth - Total (y ears) 2014 55,5 59,6 69,2 79,3Life Ex pectancy at Birth - Female (y ears) 2014 56,7 60,7 71,2 82,3Crude Birth Rate (per 1,000) 2014 36,8 34,4 20,9 11,4Crude Death Rate (per 1,000) 2014 11,5 10,2 7,7 9,2Infant Mortality Rate (per 1,000) 2013 60,8 56,7 36,8 5,1Child Mortality Rate (per 1,000) 2013 94,5 84,0 50,2 6,1Total Fertility Rate (per w oman) 2014 4,7 4,6 2,6 1,7Maternal Mortality Rate (per 100,000) 2013 590,0 411,5 230,0 17,0Women Using Contraception (%) 2014 28,3 34,9 62,0 ...
Health & Nutrition Indicators
Phy sicians (per 100,000 people) 2004-2012 7,7 46,9 118,1 308,0Nurses (per 100,000 people)* 2004-2012 43,8 133,4 202,9 857,4Births attended by Trained Health Personnel (%) 2009-2012 63,6 50,6 67,7 ...Access to Safe Water (% of Population) 2012 74,1 67,2 87,2 99,2Healthy life ex pectancy at birth (y ears) 2012 48,0 51,3 57 69Access to Sanitation (% of Population) 2012 45,2 38,8 56,9 96,2Percent. of Adults (aged 15-49) Liv ing w ith HIV/AIDS 2013 4,3 3,7 1,2 ...Incidence of Tuberculosis (per 100,000) 2013 235,0 246,0 149,0 22,0Child Immunization Against Tuberculosis (%) 2013 82,0 84,3 90,0 ...Child Immunization Against Measles (%) 2013 83,0 76,0 82,7 93,9Underw eight Children (% of children under 5 y ears) 2005-2013 15,1 20,9 17,0 0,9Daily Calorie Supply per Capita 2011 2 586 2 618 2 335 3 503Public Ex penditure on Health (as % of GDP) 2013 1,8 2,7 3,1 7,3
Education Indicators
Gross Enrolment Ratio (%)
Primary School - Total 2011-2014 110,6 106,3 109,4 101,3 Primary School - Female 2011-2014 103,2 102,6 107,6 101,1 Secondary School - Total 2011-2014 50,4 54,3 69,0 100,2 Secondary School - Female 2011-2014 46,4 51,4 67,7 99,9Primary School Female Teaching Staff (% of Total) 2012-2014 51,2 45,1 58,1 81,6Adult literacy Rate - Total (%) 2006-2012 71,3 61,9 80,4 99,2Adult literacy Rate - Male (%) 2006-2012 78,3 70,2 85,9 99,3Adult literacy Rate - Female (%) 2006-2012 64,8 53,5 75,2 99,0Percentage of GDP Spent on Education 2009-2012 3,0 5,3 4,3 5,5
Environmental Indicators
Land Use (Arable Land as % of Total Land Area) 2012 13,1 8,8 11,8 9,2Agricultural Land (as % of land area) 2012 0,2 43,4 43,4 28,9Forest (As % of Land Area) 2012 41,2 22,1 28,3 34,9Per Capita CO2 Emissions (metric tons) 2012 0,3 1,1 3,0 11,6
Sources : AfDB Statistics Department Databases; World Bank: World Development Indicators; last update :
UNAIDS; UNSD; WHO, UNICEF, UNDP; Country Reports.
Note : n.a. : Not Applicable ; … : Data Not Available.
CameroonCOMPARATIVE SOCIO-ECONOMIC INDICATORS
juin 2015
0
10
20
30
40
50
60
70
80
90
100
2000
2005
2008
2009
2010
2011
2012
2013
Infant Mortality Rate( Per 1000 )
Came roon Africa
0
500
1000
1500
2000
2500
2000
2005
2007
2008
2009
2010
2011
2012
2013
GNI Per Capita US $
Came roon Africa
0,0
0,5
1,0
1,5
2,0
2,5
3,0
2000
2005
2008
2009
2010
2011
2012
2013
2014
Population Growth Rate (%)
Cameroon Africa
01020304050607080
2000
2005
2008
2009
2010
2011
2012
2013
2014
Life Expectancy at Birth (years)
Came roon
Africa
VII
APPENDIX IV: STATUS OF APPENDIX IV: STATUS OF BANK PORTFOLIO IN CAMEROON AS OF 31 MARCH 2015 OF 31
MARCH 2015
SECTORS
PROJECTS Approval
Date
Signature
Date Effectiveness
Fulfilment of
disburs.
conditions
Date of 1st
disbursement Closing
Bank Financing (in UA million)
AfDB
Loan
ADF/NTF
Loan
ADF
Grant
Disburs.
Rate.
Governance
Cadastral Survey Project (PAMOCCA 1). 15.11.2010 05.01.2011 17.05.2011 10.02.2012 21.03.2012 31.12.2015 7.00 16.40%
Cadastral Survey Project (PAMOCCA 2). 17.12.2013 08.06.2014 29.10.2014 29.10.2014 30.03.2018 5.00 0%
Transport Kumba-Mamfe Road Project 21.11.2012 09.02.2013 16.09.2013 07.11.2013 27.01.2014 31.12.2017 47.26 17.30%
Batchenga-Lena Road Programme 1 26.11.2014 28.03.2015 123.039 12.45 0%
Water and Sanitation
Yaoundé Sanitation Project (PADY 2)
19.06.2013 11.09.2013 17.03.2014 01.10.2014 13.11.2014 31.12.2018 20.99 0.72%
Semi–Urban DWSS Project 28.01.2009 13.05.2009 02.11.2009 28.05.2010 14.10.2010 31.12.2014 40.00 27.68%
Rural DWSS Project 12.05.2010 29.06.2010 14.04.2011 02.05.2011 21.09.2011 29.02.2016 10.00 4.63 59.60%
Energy
Strengthening of Electricity Transport and Distribution Networks (PREREDT).
15.09.2010 15.10.2010 20.04.2011 22.01.2013 25.02.2013 31.12.2015 31.64 8.89%
Lom Pamgar Hydro-Electricity Development Project
10.11.2011 18.01.2012 14.06.2012 14.12.2012 25.07.2013 31.12.2017 44.93 2.26%
Agriculture Rural Infrastructure Support - Grassfield 2 23.10.2013 16.12.2013 10.04.2014 15.09.2014 07.10.2014 31.12.2019 13.61 3.19 1.44%
Emergency Humanitarian Aid to Refugees 13.01.2015 13.07.2015 724.91 0%
Private Sector
Shipyard and Industrial Engineering. (CNIC)
12.12.2002 02.06.2003 29.04.2005 29.04.2005 13.05.2005 31.12.2014 29.48 41.67%
AES-SONEL Investment Programme 10.05.2006 08.12.2006 13.02.2007 15.02.2007 20.02.2007 31.12.2020 53.17 100%
Dibamba Thermal Power Plant 28.04.2010 11.05.2011 11.05.2011 15.07.2011 22.07.2011 01.06.2023 19.74 100%
Kribi Thermal Power Plant 15.07.2011 22.12.2011 22.12.2011 27.08.2012 13.09.2012 15.11.2025 25.33 100 %
Regional Environment
Safeguarding elephants in Central Africa 22/07/2013 16.12.2013 11.11.2014 16.01.2015
31.12.2017 0.25 0%
Regional Energy
Chad–Cameroon Interconnection Study 07.10.2013 29.01.2014 03.09.2014 23.10.2014 15.12.2014 31.12.2016 1.25 15.75%
Regional Transport
Bamenda – Enugu Corridor Transport Facilitation
25.11.2008 13.05.2009 04.11.2009 01.12.2009 24.12.2009 30.06.2017 90.39 45.18%
Brazzaville -Yaoundé (Ketta –Djoumn Road) Corridor Transport Facilitation
25.09.2009 11.01.2010 29.03.2010 13.02.2012 24.04.2012 31.12.2015 59.27 61.21%
VIII
APPENDIX V
MAP OF THE AREA OF THE OPTICAL FIBRE INFRASTRUCTURE PROJECT
This map was provided by the staff of the African Development Bank
exclusively for the use of readers of the report to which it is attached. The names used and the borders shown do not imply on the part of the Bank Group and its
members any judgement concerning the legal status of a territory or any
approval or acceptance of its borders.