Document of The World Bank Report No. 17375-CM PROJECT APPRAISAL DOCUMENT ONA PROPOSED CREDIT IN AN AMOUNT OF US$ 4.8 MILLION EQUIVALENT TO THE REPUBLIC OF CAMEROON FOR A HIGHER EDUCATION TECHNICAL TRAINING PROJECT June 4, 1998 Human Development II Africa Region CURRENC'Y EQUIVALENTS Currency Unit = CFA Franc (CFAF) US$1.00 = CFA Franc 604 (Mid May 1997) FISCAL YEAR OF BORROWER July 1 - June 30 ACADEMIC YEAR OF IUT DOUALA Mid-September to Mid-July ABBREVIATIONS AND ACRONYMS BAC - Baccalaur7at CAA - Caisse autonome d'amortissement CETIC - College de / 'enseignement technique industriel et commercial CIDE - Canadian International Development Agency CF - Coopirationfranqaise CIDA - Canadian International Development Agency DCA - Development Credit Agreement EU - European Union ICB - International Competitive Bidding IlT. - Institut universitaire de technologie LIL, - Learning and Innovation Loan MINEDUC - Ministere de l 'education nationale Ml\EFI - jiinistere de l 'economie et des finances MINESUP - Minist're de 1 'enseignement superieur NCB - National Competitive Bidding SIL - Sector Investmenl: Loan SOCs - Statement of Expenditures TA - Technical Assistance UNICAM - programme d'appui au systeme ediucatif universitaire camerounais USAID - United States Agency for International Development Vice President Jean-Louis Sarbib Country Director Serge Michailof Sector Manager Nicholas R. Burnett Task Team Leader Nicholas L. Bennett THE REPUBLIC OF CAMEROON HIGHER EDUCATION TECHNICAL TRAINING PROJECT CONTENTS A. Project Development Objective ...............................................................2 1. Project development objective and key perfornance indicators B. Strategic context ...............................................................3 1. Sector-related Country Assistance Strategy (CAS) ............. .............3 2. Main sector issues and government strategy .....................................3 3. Sector issues to be addressed by the project and strategic choices ... 5 C. Project Description Summary ...............................................................5 1. Project components ........................................................5 2. Key policy and institutional reforms supported by the project .........7 3. Benefits and Target Population ........................................................7 4. Institutional and implementation arrangements ...............................7 D: Project Rationale ...............................................................8 1. Project alternatives considered and reasons for rejection ................. 8 2. Major related projects financed by the Bank and other agencies ......9 3. Lessons learned and reflected in the project design ........................ 10 4. Indications of borrower commitment and ownership ...........11.......... 1 5. Value added of Bank support ....................................................... I 1 E. Summary Project Analysis .............................................................. 11 1. Economic Assessment ....................................1.................... 1 2. Financial Assessment ....................................................... 12 3. Technical Assessment ....................................................... 12 4. Institutional Assessment ........................................................ 12 5. Social Assessment ................................... 13 6. Environmental Assessment ................................... 13 7. Participatory Approach ................................... 13 F. Sustainability and Risks .......................................... 13 1. Sustainability .......................................... 13 2. Critical Risks .......................................... 14 3. Possible Controversial Aspects .......................................... 15 G. Main Credit Conditions and Readiness for Implementation . . 15 1. Effectiveness Conditions .......................................... 15 2. Other .......................................... 15 H. Compliance with Bank Policies ................................................ 15 Annexes Annex 1. Project Design Summary Annex 2. Estimated Project Costs Annex 3. Procurement and Disbursement Arrangements Table A. Project Costs by Procurement Arrangements Table B. Allocation of Credit Proceeds Table C. Tentative Disbursement by Year Annex 4. Project Processing Budget and Schedule Annex 5. Country at a Glance THE REPUBLIC OF CAMEROON HIGHER EDUCATION TECHNICAL TRAINING PROJECT Project Appraisal Document Africa Regional Office AFTH2 Date: June 3, 1998 [X] Draft [ ] Final Task Manager: Nicholas Bennett Sector Manager: N. Burnett Country Director: Serge Michailof ProjectID: CM-PE-55684 Sector: Education Program Objective Category: PV Lending Instrument: Learning and Innovation Loan PTI: [ Yes [X] No Project Financing Data [] Loan [ x] Credit [] Guarantee [] Other [I For Loans/Credits/Others: Amount: US $ 4.86 million equivalent/SDR 3.7m ........................................................................................... ...................................................................... ... .......... ................................................................................................... Proposed Terms: [X] Multicurrency [] Single currency Grace period (years): 10 years [] Standard [ Fixed [] LIBOR- Variable based Years to maturity: 40 years Commitment fee: 0% Financing plan (US$m): Source Local Foreign Total Government (Taxes and duties) 0.87 - 0.87 IDA 0.61 4.25 4.86 Sub-total (1) 1.48 4.25 5.73 IUT Self Generated Funds 0.36 - 0.36 Government (Increase in Teachers Salaries) 0.26 0.26 Sub-Total (2) 0.62 - 0.62 Total (1+2) 2.10 4.25 6.35 Borrower: Republic of Cameroon Guarantor: N/A Responsible agency: Ministry of Higher Education (MINESUP) Estimated disbursements (Bank FY/US$M): FY99 FY00 FY01 FY02 Annual 1.5 1.8 1.0 0.5 Cumulative 1.5 3.3 4.3 4.8 .. ............................................ ..... .........................I...................................................................................................................... ..... .......................... Financing available without guarantee?: [ Yes [ x] No If yes, estimated cost or maturity: Estimated financing cost or maturity with guarantee: Expected effectiveness date: May 1998 Closing date: November 30, 2001 A: Project Development Objective 1. Project development objectives and key performance indicators (see Annex 1): The Project Development Objective is to introduce and test a new model of public higher education in Cameroon for adoption in IUT Douala and a number of other public higher education institutions. Project Appraisal Report Page 2 of 15 Cameroon Project Title: Higher Education Technological Training Project The higher education system in Cameroon has its roots in the traditional francophone African model, with almost all students in full degree courses, few links to the labor market, no involvement of the private sector in program selection and curriculum content, and virtually all financing (apart from small student fees introduced in 1993) provided and controlled by the Ministere de l Enseignement Superieur (MINESUP) and the Ministry of Economy and Finance (MINEFI). This model, initially designed to produce personnel for the civil service, no longer conforms to the economy's needs in the era of shrinking public services, nor to international best practices. In addition public: resources alone are not sufficient to provide an education of minimally acceptable quality to the number of students already enrolled in public higher education institutions. A number of small public higher education institutions are trying to break away from this inappropriate model, with the support of MINESUP, which is interested in searching for a new, more suitable system which eventually could be generalized in the Cameroon conitext. One such model is being tested under this LIL project and would: * encourage existing private sector enterprises to become involved in the management, the selection of courses and the development of curricula in public sector higher education institutions; * involve private sector enterprises in the training of higher education students in both public and private sector institutions; * insist on following up regularly the employment situation of students in the year following their graduation, and the attitude of employers to the training these students have received; * allow a range of different types of courses depending on market demand; shorl: courses requested by employers, sub -degree, degree or post graduate; regular full time, part time, or evening; * encourage institutions to raise a substantial proportion of the non salary recurrent resources they need from non-governmental sources; * allow institutions full financial autonomy and control in the utilization of all self generated resources. An opportunity to test such a model has arisen because of innovations already carried out at the Institut Universitaire de Technologie de l 'Universite de Douala (IUT Douala) (only recently created as a part of the university reforms of 1993) which has taken as its mission the training of students for employment and self employment, and the creation of close links with enterprises in the area surrounding the IUT. The IUT has decided to concentrate on diploma level courses instead of degree level, to limit enrollments to numbers that can be effectively taught, to rely on private sector internships, and to generate revenues from part time and "a la carte" training. Already the follow up programs on its first three small graduation cohorts has shown formal employment of graduates to be over 80%. Obviously, three years of graduating a small number of students however successfiul is not a sufficient basis on which to create a reformed system of public higher education. The proposed project has as its objective the testing of the components of this model described above. It1 is thus designed to institutionalize and to take to scale the tentative reforms that are already underway at the IUT. Relationships with the private sector will be reinforced, enrollments will be increased, new disciplines will be introduced (but only those with a symbiotic relationship with the existing), staff will be trained especially in the teaching of practical programs, and new enterprise-creation activities will be developed for graduating students. In addition evaluation and follow-up employment services will be substantially strengthened. If successful, the IUT Douala model could then be used as a basis for reforming other higher education institutions in Cameroon, as could a parallel model being considered by IFC with the technical participation of the Bank. The following performance indicators will be used in the evaluation of this program and in deciding whether post-LIL lending in the sector is justified or not (qualification annual targets is included in Annex 1): Project Appraisal Report Page 3 of 15 Cameroon Project Title: Higher Education Technological Training Project * Representatives from at least a dozen local enterprises will be involved in the panels responsible for the development of each new curriculum each year of the project, and in the committee selecting major items of equipment before they are procured; * All students in regular diploma level training courses will participate in at least six months of internships during their training throughout the project; * Studies carried out by the evaluation and employment follow-up services enable IUT to be sure that at least 80% of IUT graduates are employed, are in pre-employment internships, or in productive self- employment six months after their graduation in May 1999, May 2000 and May 2001; * Student follow-up services will enable IUT to ensure that from September 1998 each student will complete a minimum of 30 hours of courses per week; * The number of student participating in part time evening courses and the number of short training programs will be doubled over their 1996/97 levels of 380 by October 2,000; * Over two thirds of non salary operating expenses will be covered by resources generated by the IUT by 2000/01 fiscal year; * One fifth of operating expenses (excluding salaries, but including overtime payments) will be devoted to equipment maintenance from 1999/2000; * An average of 150 students/day will use the library services from 1999/2000. B: Strategic Context 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project (see Annex 1): CAS report No.: 15275 Date of latest CAS discussion: January 17, 1996 This project had not been identified at the time of the latest CAS in March 1996. Nevertheless it directly supports the third of the three main objectives of the CAS, i.e. to "create a climate favorable for private sector development so as to set the stage for faster growth." In addition, as a part of the core priority program, a fifth education project was specifically mentioned in the CAS with one of its objectives to "promote reform of technical education to give people technical skills more suited to employment needs in Cameroon." In the CAS update presented to the Board in March 1998 this project is specifically mentioned. 2. Main sector issues and Government strategy Budgetary. There are currently six universities, four technical schools or IUTs (Institut Universitaire de Technologie), and a number of "Grandes Ecoles, " with total enrollments of about 46,500 under the responsibility of MINESUP. The Higher Education Sector budget was reduced in 1993 by 80% from its 1991 level, necessitating major reforms. All local scholarships, and student services were eliminated, teachers' salaries were reduced by more than 60%, and no new foreign scholarships were allocated. All students were charged a tuition fee of 50,000 CFAF per year. Capital grants disappeared. In addition to these draconian cuts, budgeted subsidies to universities have not been paid in full. Most public higher education institutions have not fared well in this era of fiscal scarcity and are still looking to the Government to rectify the situation. Only those institutions that have found ways to raise a significant portion of their non-salary expenses (such as the IUT) and have become responsive to the needs of the private sector have managed to continue to provide quality education and training. Project Appraisal Report Page 4 of 15 Cameroon R ProjectI itle: Higher Education Technological Training Project Excessive enrollments. In the francophone tradition, all those who pass the Baccalaureat have a right to be admitted into public universities. Thus universities tend to admit far more students than they are able to educate or train effectively. Enrollments now are almost at the same level as they were before the 1993 budget cuts, and average unit costs supported by Government have fallen from around 1.0 million CFAF ($4,000) before the crisis, to 250,000 CFAF ($400) after the devaluation in 1994. The IUT has managed to limit its enrollments and generate non salary operational resources equivalent to the Government subsidy and thus has maintained a unit cost in its technical disciplines of about 1.0 million CFAF and half this level in other areas. Employment of graduates. The intemal efficiency of the overall university system is very low, with graduation rates of the order of 20% for the senior class. At the IUT, final year graduation rates were over 90%. Few graduates from the ordinary universities find employment within a year of their graduation and the overall unemployment rate of university graduates is around 30% (unemployment rates rise with qualifications--only 6.5% of unschooled young people are unemployed, compared with 30% of university graduates). Such figures put in question the validity of the 24 years of schooling bestowed upon graduates. Furthermore, the defeated expectations of many of the youth introduce a dangerous element of instability into society. Follow-up figures for the first graduating cohorts of IUT show an employment rate of between 81% and 89%. Lack of legal framework for private higher education. A number of private higher education institutions exist outside of any legal framework. These institutions charge fees of up to 1,000,000 CFAF for degree level courses and up to 750,000 CFAF for higher technician courses. Some of these private colleges, such as the Catholic University, offer quality training, but are not linked to the labor market and are not part of a cohesive tertiary education strategy. With the encouragement and accreditation from Government, private institutions could play an important role in training technicians needed by the economy, perhaps drawing from the IUT Douala model being developed under this project. Inter African cooperation. Experience gained through this project could also serve as a model outside of Cameroon. Although there are IUTs in Congo Brazzaville, C6te d'Ivoire, and Senegal, none of them presents the same combination of sub degree technical training and interaction with the private sector as does the IUT Douala. Management. The management of the public higher education system is cumbersome and outdated. Staff involved in sector administration are qualified but unmotivated, given the fact that their salaries were reduced by 60% five years ago, and they lack the tools necessary to carry out their tasks. Though public universities have considerable legal autonomy, their complete dependence on subsidies fiom MINESUP and salary payments from MINEFI, significantly reduces their de facto autonomy. The IUT Douala is a cutting edge institution in this respect as it is beginning to raise (and keep) increasing portions of its own resources. The IUT is already beginning to involve private sector representatives in management decisions. Finally the IUT Director has creaLted a participative management team at the [UT. Government Response to Sector Issues Described Above. The 1993 reforms forced upon MINESUP by the budget scarcities (such as replacing scholarships and student subsidies with significant tuition fees all in one year), went a great deal further than those in any other country in sub-Saharan Africa and established a framework which could be built upon in the years to come. They also demonstrated Government's willingness to tackle university reform issues head on. It was under this reform that the IUT was created by presidential decree. By June 1998 MINESUP will have prepared a detailed evaluation of the 1993 reforms which will result in some amendments to the decrees introducing these reforms. In addition it has drafted legislation to legalize the creation of accredited private higher education institutions, which has yet to be presented to the National Assembly. As a response to the development of this LIL, the Minister of MI1NESUP has decided to hold a round table meeting in July Project Appraisal Report Page 5 of 15 Cameroon Project Title: Higher Education Technological Training Project 1998 to determine the role that the private sector could play in the management and financing of public higher education institutions. Universities are also being encouraged to improve their data base and to develop strategic plans, as a first step in the development of a program that will eventually be presented to donors. This exercise will draw on the evolving experience of the IUT Douala. Two private higher technical institutions in Bamenda in Northwest Cameroon have submitted requests to IFC for financing, one of which is being actively considered. 3. Sector issues to be addressed by the project and strategic choices: The IUT Douala was chosen for the testing of the new system of higher education because it already embodies many elements in its current program which address several of the major current problems facing public higher education institutions: * The majority of IUT graduates find employment outside the civil service, with earnings in excess of the level obtained by university graduates newly recruited into the civil service. * IUT Douala has canvassed private sector operators regarding their labor needs. No other institution has developed this direct link with the labor market. * Internships in local enterprises are an integral part of the IUT program. The demand for interns from local enterprises is more than four times the number of students available. * The IUT has limited its intakes to 36 students per area of specialization to enable it to maintain a quality program. Because of the success of its training programs there were twenty times the number of qualified applicants as places available this year. * The IUT Douala has already started running evening courses and short courses on demand, which serve to raise funds to finance its activities. With this strong foundation, the school is ready to go to scale, doubling the number of disciplines, tripling the number of full time students, and doubling the number of part time and evening students. For this, and in order to consolidate existing programs, the IUT Douala will need some significant investments. C: Project Description Summary 1. Project components (see Annex 2 for a detailed cost breakdown): Component Category Cost Incl. % of Conting2encies Total (US$) 1. Existing Disciplines Policy, Physical 1,359,000 23.7 2. New Disciplines and System Coherence Policy, Physical 2,746,000 47.9 3. Institutional Development, Evaluation and INS, Policy, PM 1,623,000 28.4 Follow up, and Sustainability of Policy Initiatives Total 5,728,000 100.0 Of which financed by IDA 4,863,000 84.0 -~ ~ ~ s. . e1fgeneratd reo urces------- - ---------------------- - --..._... ... Note: In addition, lUT's self generated resources will total about $0.36 million over the three year implementation period and S 0.26 million for the increase in teacher salaries making a total of $6.35 million attributable to the project. Project Appraisal Report Page 6 of 15 Cameroon Project Title: Higher Education Technological Training Project Within the present curriculum, the three existing disciplines will be strengthened by introducing new training options requested by local industries. These disciplines are in i) management of enterprises and administrations; ii) computer science, and iii) industrial maintenance. In addition, transport and logistics management, an additional discipline is already selected and developed as a priority by local entrepreneurs and will take in its first students in September 1998. New disciplines such as electrical engineering and industrial computing (especially automatic control systems, electronic maintenance, and electro-technique), mechanical engineering and productivity (especially mechanical construction), and thermal engineering and energy (especially large scale air conditioning, refrigeration installation, and alternative energy sources) will be added to the four existing disciplines, both to strengthen existing dlisciplines and to respond to the demands of local enterprises. Use of LIL proceeds: See Annex 3. The use of project funds will be as follows: * C'ivil works ($1,589,000): All remaining derelict and unused buildings in the site will be rehabilitated in order to provide a library, a multimedia center, three classrooms, staff rooms and thirteen specialized teaching spaces. In addition there will be 1,900 m2 of new construction to provide six classrooms and nine laboratories will be constructed. * Equipment ($2,847,000): Specialized teaching equipment will be provided for all existing and new departments. Before procuring any new major items of equipment the IUT will check with local entrepreneurs to verify that these are appropriate. In addition, twenty computers will be purchased for the library to give students and staff access to library collections elsewhere through the internet. Specialized computer programs, virtual university equipment, and 5,000 titles for the library will also be procured. * Training and Studies ($753,000): A contract has been prepared for an initial two months orientation for 24 recently appointed IUT staff and, two five months research training programs for 12 staff. All trainees for this programs will be selected by a special scholarship committee chaired by a representative from the Strasbourg IUT. In addition, administrative staff will receive training in various Bank procedures. Finally, a number of studies and seminars on subjects such as financial autonomy, relations with the private sector and generation of resources, useful in spreading the ideas of this LIL to other higher education institutions will be financed. Finally, the evaluation and follow-up services at the IUT Douala will be strengthened. * Consultant Services ($371,000): The bulk of this allocation will be used to finance i) architectural and engineering services to manage the rehabilitation and construction works, ii) preliminary procurement agents recruited to help with technological equipment procurement bid preparation and evaluation, iii) project audits, iv) implementation of new accounting procedures and v) specialists to help in curriculum development. * Operating Costs ($166,000) will be used to finance equipment maintenance, internet and virtual university subscriptions, project related communications field allowances, special and second generation bank charges, and office equipment and vehicle maintenance. Government is committed to creating posts and actively recruit for additional 40 teaching staff required between now and the end of the project ($260,000); has agreed to provide an additional 15 non- teaching staff ($50,000); whilst IUT Douala will increase its self generated revenue by $360,000 during the life of the project. Project Appraisal Report Page 7 of 15 Cameroon Project Title: Higher Education Technological Training Project 2. Key policy and institutional reforms supported by the project: The IUT Douala will serve as a pilot higher education institution. Once its innovative programs have proven to be cost-effective, feasible, and beneficial, they could be replicated in a number of other institutions. Institutional development and Sustainability of policy initiatives are crucial and will require active involvement of private sector representatives in the Governing Board of the IUT; de facto as well as de jure financial autonomy of IUT (both the Governing Board membership, and the de Jure financial autonomy are covered by dated covenants) all students will complete six months of internships during their courses with follow up by IUT staff; library services will be linked to the internet; and a subscription to virtual university resources will be taken up. The evaluation and employment follow-up services will be substantially strengthened. Students who plan to launch their own small scale enterprises will be encouraged by the availability of financing for pre-investment studies. 3. Benefits and Target Population: Immediate Benefits: * An increasing number of students will pass through the IUT and will find employment in local industries or in productive income-generation activities within a few months of graduation; * links between the IUT and industries in the Douala area will be further strengthened; * sufficient resources to finance all additional non-salary recurrent costs at the IUT will be generated; * the Bank and the French Cooperation will work together with Government in supporting higher education reforms. Longer Term Benefits: * An increasing number of agreements will be signed between the IUT and local private and public sector enterprises, increasing the probability of sustained cooperation; * industries which employ IUT graduates will increase their productivity; * other university institutions will follow the examnple of the IUT by involving potential employers in the design and implementation of curricula and programs, by requiring intermships for students, and by generating their own resources; * the Bank and other donors will selectively support an increasing number of tertiary education institutions prepared to follow the tested model at IUT Douala; Target Population: The target population of this project includes secondary school graduates who succeed in passing the entrance exam into the IUT (5% of those who apply), evening students who pay the full cost of their courses, and technicians already employed in industry who benefit from short "a la carte" training. The ultimate beneficiaries are the entrepreneurs in and around Douala, who will employ the graduates. 4. Institutional and implementation arrangements: Full responsibility for implementation will rest with the Director of the IUT in Douala who will act as de facto Project Coordinator. He will be aided in these functions by his management team, by his qualified accounting and administrative staff and by the team of "cooperants" financed by the French Cooperation until the end of the project. These staff will use a standard project management and accounting program in day to day implementation activities and standard Bank procurement documents as outlined in an implementation manual already prepared and summarized in Annex 4. Project Appraisal Report Page 8 of 15 Cameroon Project ritle: Higher Education Technological Training Project Project operations will be approved anti implementation monitored by a project programming and follow-up commission, chaired by a high level appointee of MINESUP, with representatives from the University of Douala, the Ministry-of Public Investment, and some surrounding industries, which will meet four times a year in Douala. Government will open a special account in an approved commercial bank in Douala which will be managed by the Caisse Autonome d'Amortissement (CAA) with a subsidiary account managed by the IUT Douala in the same bank. Project accounls will be audited twice a year during the life of the project. All expenses will be made according to a rolling three-month plan of operations, using standard procurement procedures as outlined in the creclit agreement. The management of the construction and rehabilitation activities will be given to a local architectural and engineering partnership, with experience in the design and implementation of tertiary or higher technical education facilities, selected on the basis of competitive bidding. Consultants will be recruited to help in the preparation of bidding documents, the launching of the bids, and the preliminary evaluation of the bids when necessary. Procurement agents will also be recruited to assist with the procurement of equipment according to Bank procedures To avoid excessive patronage in selecting appropriate candidates for training (a point causing considerable difficulties in previous projects), the overseas training program for IUT staff will be managed by a commission similar to the one established under the CF project. This commission is chaired by a professor at the University of Strasbourg and includes two members nominated by him, two by the MINESUP, and the Director of the IUT, as secretary. A contract has been developed with the University of Strasbourg as executing agency on the same terms as with the CF project. As the Director of the IUT is the driving force behind most of the innovations that have been introduced over the past few years, his replacement--if necessary for any reason-- will require the non objection of the Bank if the project is to continue. The project will be of 3-years duration, with a 3.5 year disbursement period. Monitoring and evaluation: As a LIL, the monitoring and evaluation arrangements for this project are crucial, which is why the existing employment and follow-up services of the IUT will be continually reinforced during the project. In addition, there will be a detailed mid-term review at which time successful elements will be identified for wider replication. The mid-term review will take place after one and a half years of implementation of the LIL (plus three years of pre-project experience of the IUT) and will concentrate on six areas: (i) the status of graduating students, their current employers and salaries, anid the employers' opinion of the applicability of the graduates' technical skills; (ii) the number of private sector companies that have signed longer term contracts with IUT Douala and the type of contracts signed as well as those enterprises that have paid for "a la carte" training; (iii) the proportion of non-salary expenditures met from resources other than the Government budget and the actual autonomy in the use of these resources; (iv) the extent to which private entrepreneurs are actively involved in the Governing Board of the IUT and in taking crucial decisions relating to the future of the institute; (v) the interest that MINESUP and other institutions are showing in involving the private sector; and (vi) the accounting, financial reporting and auditing arrangements of the project. D: Project Rationale 1. Project alternatives considered and reasons for rejection: This LIL is the result of two years oi dialogue with NJNESUP on the impossibility of Government alone providing the resources needed to finance quality and up to date high level training essential if Cameroon is to compete in the twenty first century. Government is committed to encourage accredited private higher education institutions to be established and, also the private sector to participate in the management and financing of public institutions. In response to these conclusions and to the Cameroonian Government's request of assistance in restructuring the higher education sector and in Project Appraisal Report Page 9 of 15 Cameroon Project Title: Higher Education Technological Training Project developing a higher education strategy, a large investment or sector project may be attempted in the future, not to regenerate or expand the previous system, but to create an improved system truly responsive to the needs of the economy. Before this is done new models have to be developed and tested. One such model can be tested in one institution over a short period of three years for a cost of around $6.0 million. Since this institution already has a clear idea of what innovations are being tested and has already developed a rudimentary evaluation and follow-up system it seems an ideal candidate for a LIL. A SIL does not have either the simplicity in preparation, nor the flexibility in implementation of a LIL. Another model, equally important in the creation of a reformed higher education system, is being developed concurrently with IFC support and involves the creation of a private technical university offering courses from foreign universities on a franchise basis. 2. Major related projects financed by the Bank and/or other development agencies (completed and ongoing) Sector Issues Project Form 590 Ratings Latest Form 590 Ratings (Bank-financed Projects Only) IIP DO Quality of general secondary education First Education Project S S industrial and agricultural training Cr. 161 CM. Closed 1979 Quality of technical and vocational studies Second Education Project U S at the secondary level and rural training in Cr. 320 CM. Closed 1982 northern Cameroon Quality of technical training through Third Education Project U S construction of CETICs in Douala and in Ln. 1245 T CM. Closed 1984 Ngaoundere;,and through improvement in technical education planning Quality of primary education, vocational Education and Vocational Training HU HU training for job market, and institutional Project - Loan 2683 CM (Education IV) strengthening. Canceled 1995 Other development agencies USAID: Improvement in quality of Agricultural Education Project agricultural education at the University of Closed in 1991 Dschang USAID Basic Education Project Canceled in 1989 CIDA: Construction of 6 lycees SOFATI Project (closed 1993) techniques on a Turnkey Basis Mission de coopiration et d'action Programme d'appui au systeme culturelle (France): Support for the educatif universitaire camerounais university education system, especially (UNICAM) Ongoing technical faculties and institutions Project Appraisal Report Page 10 of 15 Cameroon Project ritle: Higher Education Technological Training Project European Union: Rehabilitation of ENIs, Programme d'appui a l'ajustement library books, teaching aids and charts and slructurel (PAAS) 112 - Volet education teachers salaries in the private sector for 1995/96 academic year. Japan: Construction of 460 classrooms in Primary school construction Project existing schools in Yaounde and Douala. (forthcoming) IP/DO Ratings: HS (Highly Satisfactory3, S (Satisfactory), U (Unsatisfactory), HU (Highly Unsatisfactory) 3. Lessons learned and reflected in the project design: Most Bank and other donor resources for education in Cameroon over the past thirty years have supported vocational and technical education. However, the resulting projects had little lasting impact on the sub-sector, be they projects with heavy physical investments, such as the Canadian Lycde Technique, or those with largely (or even solely) TA inputs, such as the French technical cooperation projects for the University of Yaounde, which have been underway for more than 30 years. Few donor projects have ever been rapidly implemented -- the average life of a Bank project is nine years, as is those of other donors using normal structures within MINEDUC or MINESUP. Many projects have faced serious implementation problems due to troubled donor-Government relations, such as the USAID basic education project, which was canceled, at least partly, because of an unacceptably high level of interference in the selection of 36 teacher educators for training in the USA. The first three Bank education projects concentrated on constructing and equipping earmarked institutions. All suffered considerable cost overruns, but disbursed 100% of credit/loan proceeds (the first was even allocated an additional credit), and thus tended to finance under 60% of actual expenditures. All three projects took about 70MO longer to implement than the appraisal estimates. Procedures were over complex, and implementation capacity generally weak. The fourth educational project (Education and Vocational Training Project - Loan 2683 CM) which aimed at improving the quality of primazy education, relating vocational training to the labor market, and improving sector management in three ministries including MINESUP closed without any significant achievements. Important lessons can be learned from the failure of that project, 71% of whose loan proceeds were undisbursed and canceled, and none of whose objectives were achieved. According to the ICR (report no. 15034), four major lessons can be drawn from the experience of this project. First, counterpart fund requirements were high, and even when reduced after a loan amendment were not made available in the amounts and according to the schedule agreed upon. Second, three ministries were involved in project implementation with no common policy framework and no effective coordination mechanisms. Third, there was inefficient management, especially in administration and accounting. Finally, a demand for technical training did not correspond to the demand for trained workers. There was insufficient involvement of employers and economic operators in the preparation and implementation of vocational training activities. Throughout the preparation of this IUT LIL, prime attention has been devoted to creating a project whose counterpart funds would not directly affect disbursements other than taxes and duties, which are being reflected in the budget, but which would normnally either be paid (or exempted) directly by MINEFI. In addition, at the time of negotiations Government will commit as its counterpart contributions i) the creation of posts for an additional 40 professional teaching staff over the 1996/97 level which is a dated covenant (an increase of 86 million CFAF in the final year), and ii) a 115% Project Appraisal Report Page 11 of 15 Cameroon Project Title: Higher Education Technological Training Project increase in the resources for operational expenditures over the 1996/97 level, from the IUT's self generated resources of the direct project costs, 15% is for taxes and duties. The counterpart funds from additional salaries and operational expenses will total I 1% of project costs. 4. Indications of borrower commitment and ownership: The IUT Douala was created by presidential decree (Arretes Nos. 008 and 009/CAB/PR of 19 January 1993) as an autonomous institute within the University of Douala as a part of the 1993 higher education reform program. This decree also established the membership of the Governing Board of the IUT. It has received the highest support from MINESUP and was even given some structural adjustment resources by MINEFI to help it establish its first rudimentary facilities. It is one of the four institutions selected by MINESUP to benefit from UNICAM 2,000 TA resources financed by the Cooperation Fran aise. It was the Government that approached the Bank for possible support; it was the IUT that invested its own resources (without any PPF) in preparing and revising several times its own project document,; it was the Director of the IUT who made frequent trips to Yaound6 to discuss the different versions of the detailed project document; it was the IUT that recruited a local consultant to teach them how to use the Bank's COSTAB; and most importantly of all it was the Director of IUT and his staff that developed the innovations that would be tested under the LIL. Government ownership is not in doubt. 5. Value added of Bank support: The Government, and the IUT through self generated revenues, would finance all salaries and other operating costs. The CF (which has been involved with the IUT through the UNICAM 2,000 project), would continue to provide the core TA required (six posts), some staff training, and a small amount of the most urgently needed pedagogic equipment. However, other essential investments exceed CF possibilities, and thus it has requested a partnership in financing with the Bank (and has participated in the appraisal of this LIL). The Bank's unique contribution would be to use its investment in the IUT as an essential element in its ongoing dialogue with Government on the creation of a new model of higher education which will become truly responsive to the needs of the private sector. Obviously also the size of its investment will enable a number of the important reforms already being undertaken by IUT to be fully institutionalized through the training of key teaching staff to enable them to be appointed as "charge de cours; " the construction and equipping of essential teaching spaces, and the full establishment of a permanent structure for evaluation and employment follow up. E: Summary Project Analysis 1. Economic Assessment: The Bank would provide support for investments essential for the successful development of IUT. For an investment of around $4.7 million, adequate buildings, teaching equipment, and qualified staff will be available to cater for 804 regular full-time diploma students and a similar number of part- time evening students. The cost per student place (each used by two students) will be under $6,000 which is low by international standards for technical institutes. Amortizing this cost at a 12% discount rate over ten years involves a cost per use of a place per student (assuming two'students will use each place) of around $500, or 26 % of total direct unit costs. The total recurrent and amortized capital cost is about 1.1 million CFAF per student per annum. Given the fact that starting salaries of new graduates range from 1.0-2.0 million CFAF p.a. the rate of return to this investment will be high. Thus even without the indirect benefits gained through the development and testing of the new model to be used in other parts of the higher education system, this investment is justified. Project Appraisal Report Page 12 of 15 Cameroon Project ritle: Higher Education Technological Training Project 2. Financial Assessment: Currently the annual unit costs in technical disciplines are just over 1.0 million CFAF and in secondary disciplines about half these levels (with an average of 860,000 CFAF excluding the amortization of investment costs). Marginal costs are 200,000 to 300,000 CFAF per student per year. The present subsidy from the state for operational costs excluding teacher salaries is 38,000,000 CFAF. Teacher salaries are paid directly by NIvNEFI without passing through MINESUP or the IUT account, and they amount to about 66 million CFAF. Self generated revenue is also about 31,500,000 CFAF. By the end of the project in 2000/01, the required government subsidy will remain unchanged, teacher salaries will increase to 154 million CFAF and the self generated revenue will have almost tripled to 91,000,000 CFAF. The increase in the total Government contribution by 40 million CFAF per year should be relatively easy to support. 3. Technical Assessment: Field studies have shown that the demand for interns in local industries is considerably greater than the supply of students in the IUT in all disciplines, and this demand has consistently exceeded the supply during each of the past three years. More than a dozen local enterprises have been involved in the development of the new discipline "transportation management." Special non-specialized, comprehensive management training modules have been developed for students likely to be employed in small and medium scale industries. Employment information in IUT shows that 91% of 1994 graduates are currently in regular employment, 87% of 1995 graduates, and 81% of 1996 graduates (the lower figures for the later years are largely due to w?aiting times). Of the most recent graduates, depending on the discipline, between 89% and 61% are already in regular positions. Relations between the IUT and the local private sector are healthy; and one company has already signed an agreement with the IUT Douala giving a long term commitment for the employment of a certain number of graduates and the provision of regular financial support to the nJT. 4. Institutional Assessment: Executing agencies: The IUT Douala is an autonomous institution under the University of Douala, which in turn is an autonomous institution under MINESUP. The Rector of the IUT is chairman of its Governing Board. The IUT Douala has managed to obtain a considerable degree of financial autonomy from these two agencies. Since this autonomy is de-facto and not de-jure, the IUT must obtain full de jure financial autonomy over the long-term. This will eventually be done through an amendment of the official decree establishing the IUT bul it will be a long process (it is a dated covenant for December 31 1998). For immediate purposes, autonomy can be achieved by MINESUP instructing the Rector of the University of Douala to delegate his financial autonomy to the Director of IUT and to have a "comptefleche " in the coming years budget specifying the subsidy allocation. The University of Douala operates four faculties and three institutes, including the IUT, but has not been paying IUT the fee-income it has generated over recent years (the IUT received only 26 % of the fee-income collected from its regular students in 1996/97). MINESUP is poorly organized, makes little use of its ample but unmotivated staff, and fails to collect even basic statistical or budget and expenditure data on the six universities and their composite institutes. Project management: The current director of the IUT has led the institute since its creation in 1993. He is highly motivated and competent and has the loyalty of a good core group of staff. He also has the help of six French technical assistants who work well with him, and the CF is willing to keep these assistance for the duration of the project. The Director is very familiar with the ways in which business is done in Cameroon and is deterrnined to keep his project professionally and honestly run. As Project Appraisal Report Page 13 of 15 Cameroon Project Title: Higher Education Technological Training Project long as the current Director is maintained in his post no major problems of project management are envisioned. 5. Social Assessment: Since students will be accepted into the IUT programs only on the basis of a competitive entrance examination there will be no preferential treatment given to any ethnic group or sex. Offering students good opportunities of employment at the end of their training will result in some reduction in urban unemployment. 6. EnvironmentalAssessment: Environmental Category [] A [] B [X] C The only new buildings to be constructed will be completed on sites already developed within the boundaries of the city of Douala. 7. Participatory Approach: Preparation Implementation Operation Individual Teachers CON COL CON Individual Students CON CON COL Private Sector Enterprises CON COL COL Other Donors COL COL COL IS: Information Sharing; CON: Consultations; COL: Collaboration The management of the IUT Douala has not only involved teacher groups and students in the preparation of this project, but has also made efforts to find out what training options the local private operators would like to see added at the IUT. The attitudes of teachers, students, and private sector entrepreneurs have been recently surveyed, and the results are largely positive. The ways in which the IUT involves the various stockholders is yet another lesson that can drawn from this LIL. F: Sustainability and Risks: 1. Sustainability: The IUT Douala, already an institution of repute, will remain viable and grow larger and stronger with the support of the IDA project. The sustainability of the project depends on the satisfaction of the IUT staff (ensured through the possibilities for their training and by earning extra income in teaching evening courses), the restricted size of the institution (ensured by limiting enrollments), the continued cooperation with local companies (ensured by building up long term contracts with private sector enterprises), and the development of financial autonomy. The largest risk is that the existing director be replaced by someone less motivated and qualified, and less convinced of the trail blazing mission of IUT. This risk is mitigated by the agreement with the Borrower that the terms of reference, qualifications and experience of the Project Coordinator, who will be the Director, shall be acceptable to IDA. A secondary risk to the larger mission of creating the elements of a new model for higher education in Cameroon, is the possibility ofjealousy amongst the peers of the Director of IUT from other parts of the Cameroonian higher education system. This can only be mitigated by strong leadership within MINESUP. Project Appraisal Report Page 14 of 15 Cameroon Project rtle: Higher Education Technological Training Project If the r esults of these innovations are positive (see Block A, Performance Indicators), a somewhat larger-scale project could be developed for other parts of the university system which are able to develop equally close relationships with the private sector. This larger project might be expected to get underway iin January 2002. 2. Critical Risks (reflecting assumptions in the fourth column of annex 1): Risk Risk Risk Minimization Measure Rating Project Outputs to Development Objectives Pressures to expand enrollment M Reach agreement with MINESUTP on need to limit intake size for both technical and academic programs. The addition of four new disciplines over the L, Hold one discipline in reserve, to be implemented only three-year life of the project might be too when the other three have been successfully started rapid. L, Limit the number of student intakes to intern position Period of economic decline which would reduce opportunities for intermships. L, Any new project director would be subject to IDA non The Director of the IUT might be replaced objection. 1, Involve these heads in round table with private sector Heads of other higher education institutions scheduled for July 1998. Annual studies and seminars on might fail to cooperate with the model being key LIL elements have been included in the project. developed at IUT because of jealousy. Nl Active Ministerial leadership Project components to outputs There might be a tendency of IUT staff to Ml Appropriate private enterprises should be given the procure items of equipment that are not chance to vet all important equipment purchases in their normally found in local industries. areas Staff training opportunities that exist might I\1 The scholarship selection committee should be instructed not be sufficiently practically oriented. to place staff only in practically oriented programs. IUT staff might be so involved in the Mv! Use agents and consultants to assist in all the more implementation of the hardware aspects of aspects of procurement and physical implementation. project implementation that they neglect a follow-up of key actions When equipment purchased through the M Involve the local private sector in the selection of all project becomes obsolete or inappropriate for important items of equipment. Create sinking fund with the local private sector, sufficient funds not be private sector support. available for replacement. Insufficient attention be devoted to key L Emphasize these elements in the mid term review. innovations that involve only small expenditures Overall Risk Rating M Risk Rating - H (High Risk), S (Substantial Risk), M (Modest Risk), N (Negligible or Low Risk) Project Appraisal Report Page 15 of 15 Cameroon Project ritle: Higher Education Technological Training Project 3. Possible Controversial Aspects: There are two main controversial aspects: first, the proposal to give local private-sector representatives a majority position in the Governing Board of the IUT, replacing about half the Government nominees on the committee; and second the decentralization of most financial responsibility to the Director of the IUT, thus eliminating intermediate layers, and the expensive blockages that these often cause. G: Main Credit Conditions and Readiness for Implementation 1. Effectiveness Conditions: As a LIL, the project will not be presented to the Board. There will be no conditions for presenting the project to the Regional Vice President, except for standard administrative conditions. However, the delegation of financial autonomy from the Rector of the University of Douala to the Director of the IUT was required prior to presentation to the Regional Vice President. In addition, the inscription of taxes and duties necessary for the project in 1998/99 were to be included in the 1998/99 draft Government budget also prior to presentation to the Regional Vice President. These two requirements have been met. The following effectiveness conditions have been or will need to be met: * the subsidiary agreement has been executed on behalf of the Government and the IUT Douala; * a manual of procedures in a forrn and substance acceptable to the Association has been adopted; * the IUT Douala has employed independent auditors satisfactory to the Association; - * an annual operation and budget for the first year after effectiveness has been found acceptable to the Association. In addition there are five dated covenants in the DCA, the first establishing and replenishing regularly a project account in which will be deposited the funds needed to pay taxes and duties (September 30 1998); the second relating to the numbers of additional teachers who will have to be recruited in each of the three academic years covered by the project; the third to increasing private sector participation in the Governing Board of the IUT Douala (December 31 1998); the fourth to increasing the de jure financial autonomy of the IUT Douala ( by December 31 1998); and the last relating to the establishment of the fellowships commission (August 31, 1998). The project is currently ready to be implemented. In addition, the implementation of a financial management and accounting system satisfactory to the Association is a condition for disbursement for equipment and vehicles. 2. Other: There will also be a mid-term review of the project in January 2000 which will concentrate on reviewing the employability and employment of graduates, ensuring that the skills of the graduates are those that the private sector requires, checking the extent to which the IUT is generating its own resources; and evaluating the degree of decentralization of responsib lity to the IUT. H. Compliance with Bank Policies The project is consistent with Bank policies. 4 Task Team Leader: Nicholas Bennett Country er: Serge Michailof Annex 1 Page 1 of 4 Annex 1 HIGHER EDUCATION TECHNOLOGICAL TRAINING PROJECT Project Design Summary Narrative Summary Key Performance Monitoring and Critical Assumptions Indicators Supervision and Risks CAS Objective: (CAS Objective to Bank Mission) 1.1 Create a climate 1.1 GDP attributable to 1.1 Follow-up of SAC III 1.1 Manpower shor- favorable for private private sector. and ESAF tages are a con- sector development conditionalities. straint to private so as to set the stage sector growth. for faster growth. 1.2 Promote reform of 1.2 Employment rate of 1.2 Follow-up of 1.2 Employers are technical education to newly graduating graduating students looking for already increase number of students with from the IUT Douala. trained personnel, qualified technicians appropriate technical rather than available to the labor skills. trainable personnel. market in Cameroon. Project Development (Development Objectives Objectives to CAS Objective) 1.1 A new model of public 1.1 White paper and 1.1 Appropriate 1.1.1 Jealousy of IUT higher education more texts specifying documents verified Director by peer's responsive to the needs the details of the during supervision. could hinder adop- of the economy new model signed. tion of new model. accepted. (Year 2001) 1.1.2 Vested interests in old system could prevent adoption of new model. 1.2 A number of public 1.2 Number of 1.2 MINESUP reports, 1.2 The adoption of a higher education insti- institutions and ICR preparation radically new way of tutions, in addition to adopting new supervision visit. doing business takes IUT Douala adopt this model. time. model. 1.3 A project document for 1.3 Project document 1.3 Appropriate 1.3 Support for higher the wider adoption of and credit/loan/ documents verified education refonns this model prepared and grant agreements. with donors during not a donor priority. submitted to the Bank supervision. and/or other donors. Annex 1 Page 2 of 4 Narrative Summary Key Performance Monitoring and Crtical Assumptions Indicators Supervision and Risks Project Outputs: (Outputs to Development Objectives) 1.1 Assist in the full 1.1 An expanded, 1.1 Semi annual progress 1.1 Director of Douala developmerit of the improved Douala reports and IUT replaced by innovations of the IUT by the year supervision missions someone less Douala IUT 2001 capable and motivated. 1.2 Private sector 1.2 Amendment of 1.2 Copy of amended 1.2 Private sector involved in the decree changing decree duly signed. representatives not management of membership interested in Douala institute of governing boaid to devoting sufficient technology give private sector time to manage- a majority ment of institutions management. 12/98 1.3 Private Sector 1.3 Number of 1.3 Semi annual progress 1.3 Director of IUT involved in enterprises reports and Douala replaced by management and involved: supervision visits. someone less capable curricula devpt. and motivated. 1998: 12 enterprises 2000: 12 enterprises 2002: 12 enterprises 1.4 Involve private sector 1.4 Full-time students 1.4 IUT employment 1.4 Private enterprises in the training of participating in 6 follow-up service are not compelled higher education months of internship report. to take on interns. students (through over 3-yr. program.: internships). 1998 100% 2000 100% 2002 100% 1.5 Adequate course load 1.5 Students receive a 1.5 Verification through 1.5 None for students minimum of 30 reports and hours of instruction supervision a week: 1998/99: 100% 1999/00: 100% 2000/01: 100% 1.6 Wide use of library 1.6 Students using 1.6 Verification through 1.6 facilities facilities: reports and None Annex 1 Page 3 of 4 Narrative Summary Key Performance Monitoring and Critical Assumptions - Indicators Supervision and Risks supervision Present: 50/day (12/99: Completion of library building renovation) 2/00: 150/day _ 1.7 Follow-up of 1.7 Proportion of 1.7 IUT employment 1.7 Employers not employment situation graduating students follow-up service interested in the of graduating students. employed six months report. Spot checks on specific skills after grad.: local enterprises given during during supervision. training. 1997 80% 2000 80% 2002 80% 1.8 Create a wide range of 1.8 Different types and 1.8 Semi-annual progress 1.8 Pressures to on the to respond to market levels of courses report. training specific demand offered. 1998 3 disciplines (actua) 1999 4 disciplines 2000 5 disciplines 2001 7 disciplines 1.9 Illustrate that public 1.9 Proportion of non 1.9 Semi-annual progress 1.9 Official limits on higher institutions can salary operational report and verification levels of and other generate their own resources generated by of accounts during charges, prevent resources. IUT: supervision. sufficient of resources. 1998 60% 1999 63% 2000 70% 2001 78% 1.10 Study to define 1.10 Report completed 1.10 Reception of report 1.10 none criteria of financial 8/31/98 autonomy 1.11 Allow institutions 1.11 Amendment of 1.11 Copy of amended 1.11 Possible objection autonomy in the use of decree giving decree, duly signed. from MINEFI which self generated autonomy in use of Verification of is against prolifera- resources. self-generated practice during tion of govt. resources (12/98). supervision. accounts. Annex 1 Page 4 of 4 Narrative Summary Key Performance Monitoring and Critical Assumptions Indicators Supervision and Risks Project Components (Components to _______ ______ _______ _________ __ O utputs) 1.1 Existing Disciplines. 1.1.1 Trained staff, 1.1 Semi-annual 1.1 IUT concentrates so teaching space and progress report, and much on project equipment in supervision visits to implementation and place. private enterprises. installation of hardware that it fails 1.1.2 Private sec. in- to devote sufficient volved in selection attention to the of equipment. reform objectives of this LIL. $1.359 m 1.2 New Disciplines and 1.2.1 Private sector 1.2 Semi-annual progress 1.2 IUT Douala System Coherence. involved in selec- report and supervision concentrates so much tion of program visits to private on project implemen- options and cur- enterprises. tation and riculum content. installation of hardware that it fails 1.2.2 Trained staff, to devote sufficient teaching space an,d attention to the appropriate equip- reform objectives of ment in place. this LIL. 1.2.2. Virtual university in place end 1999 $2.746 m. 1.3 Institutional 1.3.1 Evaluation and 1.3.1 Evaluation during 1.3 Evaluation and Development, employment supervision visits of employment follow- Evaluation and Follow- follow-up service methodology, and up service given up, and Sustainability operating results of evaluation insufficient resources of Policy Initiatives. effectively. and employment to operate follow-up service. effectively. 1.3.2 Model being tested in IUT Douala 1.3.2 Study of official adopted by Govt. texts. $1.623 m. _ _- Annex 2 Page 1 of 1 CAMEROON HIGHER EDUCATION TECHNICAL TRAINENG PROJECT Estimated Project Costs in US $ Government IDA Total Project Components (Taxes and duties) Costs 1. CIVIL WORKS 297,133.8 1,291,817.0 1,588,951.0 2. EQUIPMENT 532,486.2 2,315,034.0 2,847,520.0 3. STUDIES AND TRAINING 30,109.8 722,769.7 752,879.5 4. CONSULTANT SERVICES 5,425.9 365,241.7 370,667.6 5. OPERATIONAL COSTS -- 168,211.8 168,211.8 TOTAL 865,155.7 4,863,074.2 5,728,229.9 Project Cost Summary by components (US $) Local Foreign Total Foreign Total Exchange Baseline Costs 1. Existing Disciplines 398,746 835,448 1,234,195 68 24 2. New Disciplines and System 777,067 1,721,626 2,498,693 69 49 Coherence 3. Institutional Development 187,349 1,296,078 1,413,427 92 27 Total BASELINE COSTS 1,363,1642 3,853,153 5,216,315 75 100 Physical Contingencies 63,158 194,157 257,315 75 5 Price Contingencies 52,224 202,372 254,596 79 5 Total PROJECT COSTS 1,478,5464 4,249,683 5,728,227 74 110 Annex 3 Page 1 of 5 CAMEROON HIGHER EDUCATION TECHNICAL TRAINING PROJECT Procurement, Disbursement and Auditing Arrangements Procurement 1. Procurement Experience: None of the staff of the IUT Douala have experience in the procurement of goods, works, and services under a Bank project (though one of the French cooperants at the IUT has had such experience). However they have had considerable experience under a project financed with French resources. In order to avoid delays in project take-off, key staff at IUT will be given a basic orientation by the staff of the resident mission in Bank procedures, and as soon as appropriale regional training programs are available staff will be sent to participate in these. Civil Works and Goods 2. Procurement of Civil Works and Goods will be carried out according to procedures set forth in the Guidelines for Procurement under IBRD loans and IDA credits dated January 1995 and revised in January and August 1996 an,d September 1997. 3. C'ivil Works: The main construction activities under this project involve the rehabilitation and construction of classrooms, library facilities, and specialized teaching spaces at the existing site of the IUT. Six classrooms and 9 specialized spaces will be built for a total cost of around US $1.1 million, and 3 classroomls, a library building, and 15 specialized spaces will be rehabilitated for a total cost of US $480,000. All together 2,800 m2 will be constructed or rehabilitated. There will be two relatively large civil works contracts, one for new construction to be let under international competitive bidding (with a preferred margin of 7.5% for local contractors) and the second for rehabilitation under national competitive bidding for around $180,000. In addition, small rehabilitation contracts, each for under US $50,000 (for an aggregate not exceeding US $300,000) will be let on the base of comparison of estimates from three qualified contractors. 4. Goods financed under the project include technical training equipment, books, journals, internet and virtual university subscriptions, vehicles, furniture, computing equipment and software. Most of these goods (with the exception of furniture, books and softvare) will be grouped into packages costing more than US $50,000 per contract, and procured under International Competitive Bidding procedures (ICB). US $2.4 million will be procured under ICB (of which US $1.95 million will be financed by IDA). Where ICB procedures are applied, standard bidding documents developed by IDA will be used, and a preferential margin of 15 percent, or the applicable customs duty, whichever is the lower, over the c.i.f. prices of competing goods will be given to domestic manufacturers in accordance with IDA guidelines. Contracts for furniture and other small items totaling about US $250,000 required over a period of time and available locally at competitive prices, for which foreign firms would not be interested, would be procured under NCB procedures which are acceptable to IDA. In addition competitive shopping contracts of less than US $20,000 each for an aggregate total of US Annex 3 Page 2 of 5 $120,000 would be allowed. The NCB document to be used for national bidding will be cleared by IDA prior to the first contract for national bidding. Procurement for books (estimated to cost around $125,000) will be carried out through limited international bidding amongst at least 5 qualified wholesalers. Procurement will be spread over the three years of the project. Table A: Project Costs by Procurement Arrangements (first tentative estimates) (in US$'000 equivalent) Total Cost Expenditure Category Procurement Method (including contingencies) ICB NCB Other 1. Civil Works 1,100 180 300 1,580 (898) (147) (245) (1,290) 2. Equipment, furniture, 2,400 250 245 2,895 computers, books, software. (1,950) (203) (200) (2,353) 3. Studies and training - 732 732 (684) (684) 4. Consultant Services 370 370 _ - (370) (370) 5. Other Operating Costs 166 166 - - (166) (166) Total 3,500 430 1,813 5,743 (2,848) (350) (1,665) (4,863) Figures in parenthesis are the amounts to be financed by the IDA credit Prior Review Civil Works and Goods 5. Prior review thresholds. Contracts for goods and works in an amount of US $50,000 equivalent and above will be sent to IDA for prior review. Draft standard bidding documents for NCB and the first three NCB contracts processed during a specific calendar year will be reviewed and submitted to IDA for approval. Consultancies and Training 6. Procurementfor Consulting Services will follow IDA's Guidelines on Employment of Consultants by World Bank borrowers, dated January 1997 and revised in September 1997. Consultancy services will be required for architectural and engineering, procurement, auditing and other specialist services. Selection of consultants will normally be addressed through competition among qualified short-listed firms in which the selection will be based both on the quality of the proposal and on the cost of the services to be provided. Short-lists for contracts estimated under US $100,000 (all contracts), may be comprised entirely of national consultants if Annex 3 Page 3 of 5 a sufficient number of qualified firms (at least three) is available. However, if foreign firms have expressed interest, they will not be excluded from consideration. 7. Prior review consultants. Will be required for all consultants contracts. 8. Procurement for training will follow the norms and the unit costs already established by the French Cooperation for similar training activities in order to ensure complete coherence between the different donors, and will use the same French University as executing agent. The 5% management charge already negotiated is extremely low. 9. Procurement information will be collected and recorded as follows: (a) prompt reporting of contract award information by the Borrower; (b) cojmprehensive semi annual reports to IDA by the Borrower indicating: (i) updated cost estimates for individual contracts and for the total project, including best estimates of allowances for physical and price contingencies; (ii) revised timing of procurement actions, including advertising, bidding, contract award and completion time iFor individual contracts: and (iii) compliance with aggregate limits on specified methods of procurement. Disbursemtent 10. The IDA credit is expected to be effective by July 15, 1998 and the project will run over the following three years. Disbursements are expected to continue over three and a half years. There is no PPF to be refinanced. 11. Special Account (denominated in CFA francs): The authorized allocation will be 25 Million CFAF (US $420,000). Fifty percent will be deposited upon effectiveness in a commercial bank in Yaounde, and fifty percent when disbursement levels justify (total expenditures and commitments of over 1.2 million SDR). Like all special accounts this account will be managed by the CAA. A subsidiary account will be established in the same bank in Douala and managed by the IUT Douala witlh an authorized maximum of 50 million CFAF (US $82,000), to cover payments of less than 10 million CFAF over a three month period and replenishecd from time to time from the special account. 12. Exlpenditures from the special account should be submitted for reimbursement at least once a month or more frequently, if necessary. The special account may be used to pay for expenditures either in local currency or foreign exchange through the commercial banking system, against any category of eligible expenditure. All expenditures would be paid from the special account. All replenishments should be fully documented except in the case where Statements of Expenditure (SOEs) are authorized. Monthly bank statements and reconciliation of the Special Account statement would accompany replenishment requests. Direct payment by IDA will only be approved in exceptional cases, and on no account will the minimum application amount be below 10% of the Special Account deposit. Annex 3 Page 4 of 5 13. Semi annual and Annual Budget Review. The IUT through the Comite de Programmation et de Suivi of the IUT will submit an annual plan to IDA for its approval which will include estimates of all proposed procurements and expenditures over the following 12 months. For local training and operating expenditures, a semi annual operation plan and budget will be submitted for IDA's approval. Disbursement requests in conformity with the main expenditure items under this plan and budget will be submitted to IDA for payment without specific non-objection letters, except for expenditure falling above the non-objection thresholds, as specified in the Credit Agreement. Only expenses, below the prior review or clearance thresholds, which represent significant changes in the semi annual budget will be required to be submitted for special non-objection of IDA. Table B: Allocation of Credit Proceeds Expenditure Category Amount in Financing Percentage by US $000's EDA 1. Civil Works 1,200 85% 2. Equipment, Vehicles, Computers, Software, Books and Journals 100% of Foreign 2a Software, & Printed Materials 220 Expenditures and 85% of 2b. Other 1,980 Local Expenditures 3. Studies and training 630 100% 4. Consultant Services 330 100% 5. Other Operating Costs 150 100% Unallocated 350. Total Project Cost 4,860 Disbursements under category 2b will not be able to take place until there is a financial management and accounting system in place satisfactory to IDA. 14. Government counterpart contribution will be met by assuring the creation of posts for an additional 40 teaching staff for the IUT making a total of 71 staff by the end of the project and by almost a tripling of IUT's self-generated resources being used for running costs. These will amount to about 11 % of total project costs. In addition for imported goods, Government will be liable to pay all taxes and duties that might fall due; and for civil works, and locally purchased goods, will pay the imputed tax implication by covering 15% of such expenditures. In order to ensure the timely payment of these taxes, duties and imputed tax expenditures on time, Government will establish a project account with an initial balance of 75 million CFAF . Whenever the balance of this account drops below 35 million CFAF this account will be replennished up to its iinitial balance. 15. The credit closing date is January 31, 2002 which provides 3 years and six months for the disbursement of this three year project. The following table shows the estimated disbursements by year. Annex 3 Page 5 of 5 Table D: Tentative Disbursement by Year (in US $ million equivalent) FY99 FY00 FY01 FY02 Annual 1,5 1.8 1.0 0.5 Cumulative 1.5 3.3 4.3 4.8 16. Disbursement by IDA against Stat,ements of Expenditure (SOEs). Appropriate arrangements for accounting and auditing will be in place by July 1998 and the IUT Douala will then possess the ability to process and maintain SOE documentation in a manner satisfactory to IDA. IUT would claim reimbursement on lthe basis of statements of expenditure (SOEs) for: (i) goods, works and equipment contracts less than US $50,000; (ii) contracts with consulting firms valued at less than US $50,000; (iii) contracts with individual consultants costing less than US $50,000 (including amendments); and (v) all operating costs. Audits 17. 1'he project's accounts will be audited semi annually according to IASC accounting guidelines by private audit firms recruited under NCB procedures, having demonstrated professional competence and applying auditing standards recognized under IASC's auditing guidelines. Financial reporting standards will be in conformity with recent IDA guidelines on fnancial statements and norms of the IASCI. Financial statements submitted for auditing will comprise as a minimum, a statement of nel: position (balance sheet equivalent), a source and application of funds, a summary budget execution statement and summary statement on the IDA Special Account. Audit reports in the long form will be submitted within four months of the end of the period to which they refer. Assurance to this effect has been obtained during negotiations 18. T'he annual work program incorporating the rolling six month training program, details of procurement and other agreed project details would be prepared and submitted to IDA for comments and approval by the beginning of July each year. 19. Reports on project implementation progress would be submitted to IDA semi-annually at the end of June and at the end of December each year. The June report would be submitted to coincide with discussion of the draft annual work program and budget for the following year. Annex 4 Page 1 of 1 CAMEROON HIGHER EDUCATION TECHNOLOGICAL TRAINING PROJECT Project Processing Budget and Schedule A. Project Budget (US$'000) Planned Actual LENP/LENN $20,000 $20,000 B. Project Schedule Planned Actual Appraisal 2/15/98 3/2/98 Negotiations 2/22/98 4/5/98 Timne taken to prepare the project (months) 4 months 4 months First Bank mission (identification) October 1997 10/09/97 Appraisal mission departure 2/15/98 3/2/98 Negotiations 2/22/98 4/5/98 Planned Date of Effectiveness 5/15/98 ... Prepared by IUT Douala Preparation assistance: No financial assistance of any kind was provided to help in the preparation of the project. Bank staff who worked on the project included: Nicholas Bennett David Tchuinou Helene Pieume Lydie Munshikpu Myrina McCullough Annex 5 Page 1 Of 2 Cameroon at a glance 8/21/97 Sub- POVERTY and SOCIAL Saharan Low- I Cameroc n Africa Income Development diamond* Population mid-1996 (millions) 13.7 600 3,229 GNP per capita 1996 (US$) 6tl0 490 500 Lifeexpectancy GNP 1996 (billions US$) 8.4 294 1.601 Average annual glrowth, 1990-96 Population (%/6) 2.9 2.7 1.7 GNP Gross Labor force (%) 3:1 2.6 1.7 per Gprimary Most recent estimate (latest year available since 1989) capita enrollment Poverty: headcount index (% of population) Urban population (% of total population) 45 31 29 Life expectancy alt birth (years) 57 52 63 Infant mortality (per 1,000 live births) 156 92 69 Access tD safe water Child malnutrition (% of children under 5) 14 Access to safe water (% of population) 41 47 53 Illiteracy (% of population age 15+) 37 43 34 - Cameroon Gross primary eniollment (% ofschool-age population) B9 72 106 Male 93 78 112 Low-income group Female 84 65 98 KEY ECONOMIC RATIOS and LONG-TERM TRENDS 1975 1985 1995 1996 Economic ratios GDP (billions US$) 2.8 8.1 8.0 9.0 Gross domestic ihvestment/GDP 20.0 24.9 14.5 16.1 Openness of economy Exports of goods and services/GDP 22.7 33.4 25.9 23.9 Gross domestic savings/GDP 17.1 26.8 20.6 19.4 Gross national savings/GDP 12.1 20.9 12.4 13.7 Current account balancelGDP -8.0 4.0 -2.1 -2.4 /nesm Interest payments/GDP 0.6 1.7 2.1 1.7 Savings Investment Total debtVGDP 15.3 36.2 115.6 103.2 Total debt service/exports 6.8 1 5.5 40.9 38.5 Present value of debVGDP .. . 107.9 94.1 Present value of debVexports .. .. 407.2 379.6 Indebtedness 1975-85 1986-96 1995 1996 1997405 (average annual growth) Cameroon GDP 8.5 -2.9 3.3 5.0 5.3 Low-inome goup GNP per capita 1.7 0.3 -1.0 3.9 3.3 Lwicm ru Exports of goods and services 16.1 2.0 -1.8 6.3 3.6 STRUCTURE of the ECONOMY (% of GDP) 18S 1995 1996 Growth rates of output and Investment l%) Agrculture 29.1 22.1 42.5 44.3 30 Industry 18.2 36.8 25.3 24.3 20 - Manufacturing 10.3 11.8 10.8 10.9 o _A \ Services 52.6 41.1 32.2 31.5 -10 -20+/ Private consumption 72.0 64.2 70.8 72.7 -30 General govemment consumption 10.9 9.0 8.6 7.8 -GDI CDP Imports of goods and services 25.5 '31.6 19.7 20.6 1975-85 1986-96 1995 1996 (average annual growth) Growth rates of exports and Imports (%) Agriculture 4.9 0.7 2.0 5.0 20 Industry 18.4 -.5.5 -0.4 5.5 Manufacturing 13.8 -.1.0 2.4 7.7 10 Services 6.3 -3.5 6.6 4.7 o . Private consumption 5.5 - 3.1 7.2 7.8 -109 92 96 General govemment consumption 6.8 -4.7 0.9 -4.2 Gross domestic investment 1.7 *8.0 -6.6 12.8 -20 Imports of goods and services 10.8 -1.2 -0.7 13.2 -Exports Imports Gross national product 4.1 2.4 1.9 7.1 Note: 1996 data are preliminary estimates. ^The diamonds show four key indicators in the country (in bold) compared with its income-group average. If data are missing, the diamond vill be incomplete. Annex 5 Page 2 of 2 Cameroon PRICES and GOVERNMENT FINANCE 1975 1985 1995 1996 Dornesilc prices Inflation (Y) (% change) 30 Consumer prices 13.6 11.5 26.9 6.4 20 - Implicit GDP deflator 6.0 11.2 17.0 4.5 10 Government finance l (% of GDP) 91 92 94 95 95 Current revenue .. 21.0 12.9 14.4 -10 Current budget balance .. 9.5 -3.8 -1.9 GDPdef. -'O-CPI Overall surplus/deficit .. -1.6 -4.9 -2.8 TRADE 1975 1985 1995 1996 (millions US$) Export and Import levels (mill. US$) Total exports (fob) 512 2,339 1,662 1,721 2,500 Fuel .. 1,535 454 330 Cocoa .. 226 256 276 2,000 Manufactures 126 137 192 Total imports (cif) . ,3 ,9 ,8 Food .. ~~~ ~~~~ ~~~~~~~92 222 248 Fuel and energy .. 8 8 9 So Capital goods .. 382 460 440 Exportpriceindex(1987=100) .. 126 121 121 90 91 92 93 94 95 98 Import price index (1987=100) .. 96 81 83 o ExDorts m Imports Terms of trade (1987=100) .. 131 149 146 BALANCE of PAYMENTS 1975 1985 1995 1996 (millions US$) Current account balance to GDP ratio (%) Exports of goods and services 648 2,725 2,059 2,159 Imports of goods and services 730 2,573 1,572 1,867 2 Resource balance -82 153 488 302 o- ' lI Net income -202 -488 -668 -595 -2 94 Net current transfers 62 10 9 74 Current account balance, before official capital transfers -221 -325 -171 -220 Financing items (net) 203 363 185 302 4. Changes in net reserves 18 -38 -13 -82 -10 Memo: Reserves including gold (mill. US$) 0 13 13 Conversion rate (localUJS$) 222.4 471.1 518.6 501.9 EXTERNAL DEBT and RESOURCE FLOWS (millions US$) Composition of total debt, 1996 (mill. USS) Total debt outstanding and disbursed 420 2,946 9,203 9,323 IBRD 50 287 639 520 G A IDA 50 227 443 513 1198 576 B 645 C Total debtservice 45 432 863 861 136 IBRD 4 35 148 129 IDA 0 3 8 8 Composition of net resource flows Official grants 0 0 0 0 Official creditors 56 94 -195 100 Private creditors 48 -253 -94 -133 Foreign direct investrnent 0 0 0 0 Portfolio equity 0 0 0 0 D 6768 World Bank program Commitments 22 159 86 254 A - IBRD E - Bilateral Disbursements 37 50 68 163 B-IDA D- Other mutilateral F - Private Principal repayments 0 16 92 93 C - IMF G - Short-term Netflows 37 34 -24 70 . ,, Interest payments 4 22 56 51 Net transfers 33 12 -80 19 Development Economics 8121/97