SCCD : G. G.

AFRICAN DEVELOPMENT BANK AFRICAN DEVELOPMENT FUND

ECONOMIC COMMUNITY OF CENTRAL AFRICAN STATES (ECCAS)

REGIONAL INTEGRATION ASSISTANCE STRATEGY PAPER

(RIASP) FOR CENTRAL AFRICA

2005-2009

COUNTRY OPERATIONS DEPARTMENT WEST REGION

JULY 2005

TABLE OF CONTENTS

Page LIST OF TABLES, LIST OF ANNEXES, ACRONYMS AND ABREVIATIONS, i-vii EXECUTIVE SUMMARY I INTRODUCTION 1 II ANALYSIS OF RECENT INTEGRATION TRENDS IN CENTRAL AFRICA 2 2.1 Context, Economic Characteristics and Developments in Central Africa 2 2.2 The Region’s Agents of Integration 6 2.3 Assessment of Performance on Integration in the Region 8 2.4 Assessment of Constraints to and Potentials for Deeper Integration 11 III THE REGION’S AGENDA AND STRATEGIC ISSUES 14 3.1 NEPAD as a Guiding Framework 14 3.2 Central Africa: Vision and Strategy 14 3.3 Main Regional Integration Institutions 15 3.4 ECCAS/CEMAC Cooperation 21 3.5 Regional Development Agenda 22 IV BANK GROUP ASSISTANCE 30 4.1 Assessment of Cooperation between ECCAS and the Bank 30 4.2 Rational, Goals and Principles of Bank Strategy for ECCAS 31 4.3 Priority Focus of Bank Group Assistance Programme 32 4.4 Overview of the Medium-Term Indicative Work Programme 40 4.5 Collaboration with Other Development Partners 42 4.6 Monitoring of Outcomes 43 V RISKS 43 VI CONCLUSION AND RECOMMENDATION 44 6.1 Conclusion 44 6.2 Recommendation 44 This report is the outcome of an appraisal mission to Central Africa from 28 October to 25 November 2004 by Messrs S. KONE, Economist, OCCC.2, B. TRAORE, Chief Transport Expert, OCIN.3 and two consultants. It was updated to reflect recent information provided during the dialogue mission to Libreville from 11 to 19 July 2005. For further information on this RIASP, please contact Messrs L.B.S. CHAKROUN, Director, OCCC, (Extension 2033) or I. KOUSSOUBE, Division Manager, OCCC.2, (Extension 2158).

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Boxes Box 1 : Central Africa at a glance Box 2 : RIASPRIASP Participatory Approach

Tables Table 2.1 : Overall Trends in Trade in Africa, 1994-2000 Average (%) Table 4.1 : RIASPRIASP Outcomes Framework 2005-2009

Graphs Graph 2.1 : Trends in Some Macroeconomic Indicators in ECCAS Zone

Annexes Annex I : Map of ECCAS Annex II : ECCAS Socioeconomic Indicators Annex III : Indicative Work Programme 2005-2009 Annex IV : ECCAS: RIASPRIASP: Matrix of Thematic Outcomes 2005-2009 Annex V : ECCAS Programme : Key Areas of Intervention, Objectives, Strategy and

Indicators Annex VI : Trends in Macroeconomic Indicators in Central Africa (ECCAS) Annex VII : ECCAS: Disparity between GDP/Per Capita Index and Distribution of Active Population by Remuneration Type Annex VIII : ECCAS: Intra-community Export and Import Distribution Annex IX : Intra-community Export and Import Trends Annex X : Millennium Development Indicators in Central Africa Annex XI : Summary of Bank Group Operations in ECCAS Countries Annex XII : ECCAS: Bank Group Multinational Operations Annex XIII : ECCAS Profile Annex XIV : List of ECCAS Treaties and Protocols

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ACRONYMS AND ABREVIATIONS

ACBF African Capacity Building Foundation ABEDA Arab Bank for Economic Development in Africa ADF African Development Fund AEC African Economic Community AFD Agence française de développement (French Development Agency) AMU Arab Maghreb Union APRM African Peer Review Mechanism ATO African Timber Organization AU African Union BDEAC Development Bank of Central African States BEAC Bank of Central African States BVMAC Bourse régionale des valeurs mobilières d’Afrique centrale

(Central African Regional Stock Exchange) CAR Central African Republic CCI Community Integration Contribution DSC Defence and Security Commission CEBEVIRHA Commission économique du betail, de la viande et des ressources halieutiques (Economic

Commission on Livestock, Meat and Fishery Resources) CEFDHAC Conférence sur les écosystèmes de forêts denses et humides d’Afrique centrale (Conference on

Central African Moist Ecosystems) CEMAC Central African Economic and Monetary Community CEN-SAD Community of Sahel-Saharan States ECGLC Economic Community of the Great Lakes Countries CICIBA International Centre for Bantu Civilizations CICOS International Commission for the Congo-Oubangui-Sangha Basin CIMA Inter-African Conference on Insurance Markets COBAC Central African Banking Commission COMESA Common Market of East and Southern African States COMIFAC Central African Forestry Commission COPAX Central African Council for Peace and Security COSCAP Projet conjoint de dévelopement cooperatif de la sûreté opérationnelle et de la navigabilité

aérienne (Joint Project for the Cooperative Development of Operational Safety and Airworthiness)

COSUMAC Central African Financial Markets Surveillance Commission PSC Project Steering Committee CRNEPAD/AC Regional Coordination for Implementation and Monitoring of NEPAD in Central Africa CSMTAC Subregional Telecommunications Maintenance Centre FDI Foreign Direct Investment DRC Democratic Republic of Congo RIASPRIASP Regional Integration Assistance Strategy Paper DSX Douala Stock Exchange ECA United Nations Economic Commission for Africa ECCAS Economic Community of Central African States ECOWAS Economic Community of West African States EIB European Investment Bank EIED Inter-State Customs School ESTAC Ecole supérieure des télécommunications de l’Afrique centrale (Central African Higher School

of Telecommunications) FAO Food and Agricultural Organization of the United Nations FCD Community Cooperation and Development Fund FEA French Equatorial Africa FODEC Community Development Fund FOMAC Central African Multinational Force FTA Free Trade Area FWA French West Africa GABAC Action Group against Money Laundering in Central Africa

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GDP Gross Domestic Product HIPC Heavily Indebted Poor Countries HIV/AIDS Human immunodeficiency virus/acquired immunodeficiency sydrome HS Harmonized System ICAO International Civil Aviation Organization CILSS Permanent Interstate Committee on Drought Control in the Sahel ICT Information and Communication Technologies IDB Islamic Development Bank IFC International Finance Corporation ISSEA Institut sous-régional des statistiques appliquées de Yaoundé (Yaounde Subregional Institute of

Applied Statistics) ISTA Multisector Subregional Institute for Project Planning and Evaluation LCBC Lake Chad Basin Commission LIFDC low income and food deficient country MAPP Multi-country Agricultural Productivity Programme MARAC Central African Early Warning System MFI Microfinance Institution NEPAD New Partnership for Africa’s Development NEPAD-IPPF NEPAD Infrastructure Projects Preparation Facility NGO Non-Governmental Organization OAU Organization of African Unity OCEAC Organization de coordination pour la lutte contre les endémies en Afrique centrale

(Organization of Coordination for the Control of Endemic Diseases in Central Africa) OHADA Organization for the Harmonization of Business Law in Africa STAP Short-term Action Plan PDCT/AC Plan directeur consensuel des transports en Afrique centrale (Consensual Transport Master Plan

for Central Africa) CAPP Central African Power Pool PIU Project Implementation Unit PPP Public Private Partnership PRASAC Projet régional de recherche appliquée au développement des savanes d’Afrique centrale

(Regional Project of Applied Research for the Development of the Central African Savannah) PRRI Integrating Road Network Programme RPFS Regional Programme for Food Security REC Regional Economic Community RMC Regional Member Country SADC Southern African Development Community RIAS Regional Integration Assistance Strategy TCI Community Integration Tax CET Common External Tariff UDE Equatorial Customs Union UDEAC Central African Customs and Economic Union UEAC Central African Economic Union UMAC Central African Monetary Union UNAIDS Joint United Nations Program on HIV/AIDS UNDP United Nations Development Program UNIPACE Central African Employers’ Union UNO United Nations Organization US United States VAT Value Added Tax WCO World Customs Organization WFS World Food Summit WTO World Trade Organization

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EXECUTIVE SUMMARY I. Introduction This Regional Integration Assistance Strategy Paper (RIASPRIASP) for Central Africa falls within the overall context of rehabilitation of ECCAS, NEPAD, creation of an African Common Market and strengthening of the Bank’s mandate with regard to the economic integration of African countries, particularly through Regional Economic Communities (RECs). In fact, the Agreements establishing the African Development Bank and the African Development Fund especially entrusted them with the mission of contributing to the economic development and social progress of regional member countries (RMC) both individually and collectively. In addition, the Bank was designated as strategic partner in the implementation of NEPAD. The Bank therefore intends to channel integration efforts in Central Africa through the Economic Community of Central African States (ECCAS) as the anchor point for countries of the region within the framework of NEPAD and the process towards creating the African Common Market. The goal of this RIASP, which covers the period 2005 – 2009, is to back up the regional integration of the eleven ECCAS member countries. It draws, when necessary, on the achievements of the Central African Economic and Monetary Community (CEMAC) which brings together six of the eleven member countries of ECCAS and where the integration process is at a relatively more advanced stage. However, the fact that some States belong to several RECs is a problem in the region and in Africa in general. Hence, the RIASP addresses the issue of coordination of different regional programmes which can be permanently resolved only through political rationalization. II. Socioeconomic Developments and Recent Integration Trends in Central Africa 2.1 The objectives of ECCAS are to establish a customs union by abolishing duties, quotas, prohibitions and administrative obstacles to trade between its Member States with a view to adopting in the long run a common external tariff system. Since its establishment in 1983 and the launching of its activities in 1985, ECCAS has not really been able to implement this comprehensive integration scheme because it was confronted from the early 1990s with major socio-political and security constraints particularly in seven of the eleven member countries. ECCAS was therefore paralyzed from 1992 until February 1998 when the Libreville Conference of Heads of State and Government decided to revitalize it. Six ECCAS countries are members of CEMAC successor to UDEAC. These six countries form a customs union and have a common currency (CFA franc) and a macroeconomic policy convergence mechanism. 2.2 On the whole, the regional context is characterized by the restoration of peace which is a prerequisite for reconstruction, economic integration and regional cooperation. This favourable situation should enable the region to develop its immense natural wealth. Apart from its dense forest which covers an area of about 2.5 million km² and which is the world’s second forest reserve after Amazonia, Central Africa has huge reserves of hydrocarbons and various minerals, in particular diamond, gold, cobalt, copper and iron. It is also the continent’s biggest water reservoir, which gives it the highest hydroelectricity potential of Africa. Central Africa’s population, which is estimated at 113 million, is increasing at a steady rate of 2.7% per annum. This explains in part its youthfulness (46.1% of the population is below the age of 15). Socioeconomic indicators relating especially to health and education are in general among the lowest in the continent. Should present trends continue, the majority of the millennium development goals (MDGs) may not be achieved. 2.3 From the regional economic standpoint, the restoration of peace has notably resulted in renewed growth and improved macroeconomic indicators. The real GDP growth rate of ECCAS has improved steadily, from 1.5% in 2000 to 13.6% in 2004. The inflation rate of the region’s countries dropped on average from 41.3% in 2000 to 6.3% in 2004 and has remained at around 2.3% on average in CEMAC member countries. Remarkable progress has been achieved in some countries

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outside CEMAC zone, particularly in the DRC where the inflation rate fell from 550% in 2000 to 7.9% in 2004. On the whole, the current account deficit was contained within ECCAS (2% of GDP) as well as in CEMAC zone (2.1%). Concerning public finance, the primary balance improved from a deficit of 1.1% of GDP in 2000 to a surplus of 1.1% of GDP in 2004 within ECCAS. In the CEMAC zone, there has been a budget surplus since 2000, partly due to the robustness of oil prices. The region’s outstanding external debt which stood at 116% of GDP in 2000 fell sharply to 58.2% of GDP in 2004, due essentially to the Paris Club and HIPC initiative debt relief mechanisms. The macroeconomic situation however remains fragile, because of the poor diversification of economies and the cyclical favourable impacts of oil. But efforts to improve economic management have not yet led to an improvement in the standard of living of the population, with a poverty prevalence rate of 40% to 80% depending on the country. 2.4 Regarding integration, Central Africa is the continent’s most backward region. ECCAS has no macroeconomic policy convergence and multilateral surveillance mechanism, unlike the CEMAC zone which formed a monetary union. However, ECCAS countries have individually embarked on a process of rehabilitation of their macroeconomic frameworks through their relations with the IMF under Article IV and reform programmes. Serious lack of infrastructure, impediments to the free movement of persons and goods, weak private sector and persistent tariff and nontariff barriers have contributed to slow down the development of ECCAS intra-community trade which is the weakest in the continent. Intra-community trade accounts for about 1.9% of total trade, whereas Africa’s average is estimated at 6.8%. Regional direct investments are scarce and localized. Foreign investment is not regional and is largely dominated by the oil sector. Lastly, the free movement of persons is effective only between four CEMAC countries (Congo, Central African Republic, Cameroon and Chad). 2.5 The major constraints on the integration process in Central Africa are of a political and security, social and economic nature. Politically, the internal and external conflicts of the 1990s not only jeopardized security at many borders and sometimes destroyed communication infrastructure, but also helped install an atmosphere of distrust between some countries of the region. This has resulted in a weak community vision demonstrated especially by frequent slippages in the payment of community contributions by the States, hence leading to weak community institutions incapable of recruiting the best experts and procuring modern equipment to enable them to design and implement regional development policies. Apart from lack of infrastructure, socioeconomic obstacles concern weakness and lack of complementarity of the productive system, non-existence of an integrated financial market and the rapid spread of HIV/AIDS. III. Regional Integration Agenda and Strategic Issues 3.1 The ECCAS vision as outlined in Chapter II of its Establishment Treaty is the promotion and strengthening of harmonious cooperation and balanced and self-reliant development in all areas of economic and social activity, with a view to achieving economic stability, strengthening close and peaceful relations between its Member States and contributing towards the progress and development of the African continent. Renewed global interest in regional integration due to globalization, mitigation of conflicts in Central Africa and the advent of NEPAD fostered the revival of ECCAS in 1998. ECCAS is yet to have a comprehensive strategy paper. Its regional development programme is in keeping with its establishment Treaty, NEPAD and the various action plans adopted by the region’s Heads of State for its recovery in 1998. To this end, the Heads of State considered peace and security as a pre-condition by setting up, as a matter of priority, as early as in 1999, the Central African Council for Peace and Security (COPAX) which is modelled on the Mutual Assistance Pact between the Member States. Financially, the Community Integration Contribution (CCI), which is a new ECCAS self-financing mechanism, was instituted.

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3.2 The economic and social component of the recovery is based on programmes and plans of action in strategic areas of economic integration and regional cooperation, with a view to accelerating growth and reducing poverty. It includes: (i) capacity building, particularly of the General Secretariat of ECCAS; (ii) trade promotion, through the establishment of a free trade area (FTA), initiated in July 2004 and a customs union from 2008; (iii) free movement of persons; (iv) development of regional infrastructure, through the Consensual Transport Master Plan for Central Africa (PDCT/AC) which draws particularly from the CEMAC Integrating Road Network Programme (PRRI); (vi) establishment of a strategic framework for combating HIV/AIDS; (vi) environmental protection; (vii) preparation of a Regional Programme for Food Security (RPFS); and (viii) mainstreaming of gender issues in development policies. However, the convergence of macroeconomic policies and multilateral surveillance, as well as the integration of the regional financial sector are not included in the ECCAS recovery plan. Nevertheless, these key aspects of economic integration are an integral part of the programme of CEMAC monetary area. IV. Bank Group Assistance 4.1. In Central Africa, the Bank intervenes not only in individual member countries under Country Strategy Papers (CSP) but also in the context of multinational operations of a regional nature covered by this 2005 – 2009 RIASP. At national level, the Bank has a project portfolio in each ECCAS Member State. Since the beginning of its operations in the ECCAS zone in 1967 up to 2004, the Bank has financed 525 operations in all 11 (eleven) member countries for a total amount of about UA 5 618.07 million (including 240 operations worth about UA 2 397.03 million in CEMAC countries). Bank resources are allocated essentially to transport (21.1%), agriculture and rural development (19.0%), multisector (18%) and social and urban development (14.1%). The other areas of intervention concern water and sanitation, energy, industry and mining. 4.2 The complementarity of the two levels of assistance that is national and regional, should be further optimized, in order to enhance the impact of Bank operations on growth and poverty reduction. Operations have hitherto been based essentially on national development strategies, thus reflecting to a large extent integration conflicts and weaknesses in Central Africa, particularly in terms of capacities. However, the importance of multinational projects will increase, in particular within the framework of NEPAD. Bank experience in implementation of multinational projects both in ECCAS zone and with other regional economic communities (REC) has shown the importance of the commitment of States to these initiatives and of cofinancing mechanisms. It has also shown that the efficient implementation of these projects is dependent on good governance, peace and stability at regional level, as well as the harmonization of policies and the existence of the appropriate regulatory framework. 4.3 In view of the foregoing, the Bank’s assistance strategy for ECCAS is based on the guiding principles of subsidiarity, broadening the participation of the private sector, strategic selectivity, coordination with other development partners and open regionalism. Subsidiarity, which is an important principle, implies that national interventions which are the principal channel of Bank assistance to member countries will be strengthened by multinational operations through RECs in essential integration activities for which the RECs have received a mandate from Member States, such as the harmonization of policies and establishment of the free trade area (FTA) and the common market. 4.4 In the light of the foregoing, ADB Group assistance to ECCAS targets the following three strategic thrusts: (i) capacity building and support to regional economic integration; (ii) regional infrastructure development; and (iii) support to cooperation in the management of issues of regional concern, focusing on HIV/AIDS control, food security and the environment. The first thrust, namely capacity building and support to regional economic integration, is a precondition

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because the capacities of the main regional economic communities, notably the General Secretariat of ECCAS and to some extent the Executive Secretariat of CEMAC, can not enable them to fully ensure the design and implementation of regional programmes and projects. 4.5 The development of regional infrastructure falls within the scope of implementation of NEPAD in the region where the Bank is a strategic partner. This is an area with enormous constraints. The third thrust, namely support to cooperation in the management of issues of regional concern, places emphasis on HIV/AIDS control, food security and the environment. Because of the transnational nature of these issues, the goal of this thrust is to strengthen national operations through regional coordination for greater efficacy. 4.6 Although ECCAS does not have a comprehensive strategy paper, an effort was made to base the RIASP on results, using indicators and monitoring mechanisms adapted to the institutional constraints of the region’s regional structures, in particular the General Secretariat of ECCAS. The mechanisms and indicators retained will help ensure the monitoring and assessment of the impact of Bank interventions on development at regional level. 4.7 The ADB’s work programme under the Central African RIASP provides for project and programme (loans and grants) and non-project financing activities. In the area of capacity building and support to integration, the Bank will consolidate dialogue with the region’s major RECs and provide support to their management structures, in order to contribute to the putting in place of the institutional capacities that will enable them to implement integration projects in Central Africa. Apart from the ongoing capacity building project at ECCAS General Secretariat, institutional support will be provided to the CEMAC Executive Secretariat to contribute towards the consolidation of its achievements in the area of integration. In addition, in collaboration with other partners and within the framework of a strategy adopted by the community bodies, the Bank will explore possibilities of extending some of CEMAC’s achievements to ECCAS. The goal is to develop synergies and speed up the integration process in Central Africa. Plans will be made to provide support to specialized institutions such as the Central African Forestry Commission (COMIFAC) and the Development Bank of Central African States (BDEAC), particularly within the framework of the Bank’s cooperation policy with subregional development institutions. 4.8 In the area of transport infrastructure, the Bank will contribute to the financing of PDCT-AC priority operations. In matters of energy, the Bank plans to participate in the financing of operations which will stem from the study on the interconnection of ECCAS electric power grids approved in 2003. Concerning support to cooperation in the management of issues of regional concern, the Bank will contribute to the strengthening of food security within ECCAS. Such support will include a study which will assist ECCAS in the formulation of a common agricultural policy as well as the formulation and implementation of the Regional Programme for Food Security (RPFS). In addition, it plans to cofinance the formulation of the agricultural research component of the (RPFS) (technological development and transfer). Regarding HIV/AIDS, in addition to assistance to the Lake Chad Basin Initiative (LCBI) and the Great Lakes Initiative on AIDS (GLIA), the Bank will develop synergy between these initiatives and ECCAS, as well as with specialized regional institutions in the area of HIV/AIDS. It will consider ways of intervening in the ECCAS HIV/AIDS control strategic framework and action plan. Lastly, in the area of environment, the Bank will provide support for the implementation of the COMIFAC Convergence Plan on the Conservation and Sustainable Management of the Congo Basin Forests. V. Recommendation The Boards of Directors are invited to approve the strategy and strategic orientation proposed in this RIASP for Central Africa for the 2005-2009 period.

I. INTRODUCTION 1.1 Support to regional integration is an integral part of the mission of the African Development Bank Group. In fact, the Agreements establishing the African Development Bank and the African Development Fund especially entrust them with the mission of contributing to the economic development and social advancement of regional member countries (RMC) both individually and collectively. Over the years, the Bank has redoubled its efforts to stimulate its operations in favour of economic integration and regional cooperation. Other major developments on the African and global scene aim to strengthen the regional integration process. Foremost among them is the 1991 Treaty instituting the African Economic Community (AEC) whose goal is to establish the African Common Market through the harmonization, coordination and progressive integration of activities of regional economic communities (REC), namely the Arab Maghreb Union (AMU), the Economic Community of West African States (ECOWAS), the Economic Community of Central African States (ECCAS), the Common Market of East and Southern Africa States (COMESA) and the Southern African Development Community (SADC). This goal was recently reiterated by the African Union (AU). In addition, in 2002 the Heads of State of Central Africa entrusted the coordination of implementation of NEPAD to ECCAS.

Box 1: Central Africa at a Glance The Central African region covers 6 666 904 km² shared between eleven countries, namely Angola, Burundi, Cameroon, Central African Republic, Congo, Democratic Republic of Congo (DRC), Gabon, Equatorial Guinea, Rwanda, Sao Tome and Principe and Chad which are the Member States of the Economic Community of Central African States (ECCAS). These eleven States form the Economic Community of Central African (ECCAS) which was established in 1983. ECCAS is an interlinking region bordering on other regions of the continent (North Africa, West Africa, East Africa and Southern Africa). In 2002, its population was estimated at 113 million and its GDP at about US$ 38 billion, representing a GDP per capita of US$ 334. Such low per capita income underscores the unequal distribution of the subregion’s wealth. In fact, Central Africa is far from being a homogeneous zone. It is characterized by great disparities between the different countries in terms of surface area, population and per capita income. Concerning surface area, the difference is obvious between Sao Tome and Principe which is an island with an area of 1 001 km², Rwanda, Burundi and Equatorial Guinea which have an area ranging between 26 000 and 28 000 km² and Angola (1 246 700 km²), Chad (1 284 000 km²) and DRC (2 344 885 km²). The population varies from 55 million for DRC to 130 000 for Sao Tome and Principe. Lastly, per capita income which is US$ 4 511 for Gabon falls to US$ 87 for Burundi. Central Africa has the second largest forest reserve in the world with tremendous natural resources which make it an issue of global concern. Regional policies are therefore bound to have a global dimension. The more open savannah environment encouraged human settlement, the development of trade and the formation of pre-colonial political entities in areas that today straddle borders, which constitutes an objective factor of human integration. The Congo-Nile tropical highlands, good for cattle breeding and endowed with rich volcanic soils, encouraged a large concentration of culturally homogeneous people. The region is also characterized by abundant water resources. As a strategic concern of the twenty-first century, it should command regional cooperation. The people are ethnically diversified even though most of them belong to the Bantu language group. There is no dominant ethnic group that has been able to impose a common language of trade and culture. This could be explained by the topography of the region which is dominated by forest. French is the official language of communication, especially for the political, cultural, economic and trading elite of the region, with the exception of three countries, namely Angola and Sao Tome and Principe whose official language is Portuguese and Equatorial Guinea where Spanish is spoken.

1.2 Based on its experience and the increasing importance of regional integration over the past few years, the Bank undertook to strengthen its policy in this domain. In 1999, it therefore defined its Vision which makes regional integration one of the strategic pillars of economic and social development in Africa. In March 2000, it approved its policy in the area of economic integration and regional cooperation which focuses on the need to strengthen RECs in order to support more effectively efforts in this area. It subsequently approved in September 2004 the establishment of a Regional Integration Unit to effectively coordinate the Bank’s regional interventions at the strategic and operational levels. Lastly, under NEPAD, the Bank has been designated as the lead agency for infrastructure and banking and financial standards.

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1.3 This 2005-2009 Regional Integration Assistance Strategy Paper (RIASP) for Central Africa falls within this overall context of strengthening the Bank’s mandate, NEPAD objectives and institution of the African Common Market. The Bank therefore intends to channel its integration efforts in Central Africa essentially through ECCAS which brings together eleven countries (Angola, Cameroon, Congo, Gabon, Equatorial Guinea, Central African Republic, Democratic Republic of Congo, Rwanda, Sao Tome and Principe and Chad). The RIASP for Central Africa draws, where necessary, on the achievements of the CEMAC zone (Cameroon, Congo, Gabon, Equatorial Guinea, Central African Republic and Chad) where the integration process is at a relatively more advanced stage because it constitutes a monetary union. It takes into account not only the principle of subsidiarity but also complementarity with the Country Strategy Papers (CSP) focused on RMCs. Efforts are being made to base the strategy on results. Moreover, the RIASP raises the issue of some States belonging to several RECs such as SADC and COMESA, which should reflect a real political will to rationalize and harmonize different regional programmes with a view to providing a real impetus to regional integration based on the RECs which are deeply rooted in the Continent. 1.4 The goal of this RIASP is to support the regional integration efforts of the eleven member countries of ECCAS. Apart from this introduction, it comprises the following five parts: (i) analysis of recent trends in integration in Central Africa; (ii) regional agenda and strategic issues; (iii) Bank Group assistance; (iv) risks; and (v) conclusion and recommendation. II. Analysis of Recent Integration Trends in Central Africa 2.1 Context, Economic Characteristics and Developments of Central Africa Political Context and Socioeconomic Characteristics 2.1.1 The regional context in Central Africa is, on the whole, characterized by the restoration of peace and stability as well as progress in the democratization process, after a long period of instability that affected at least seven countries of the region which experienced war and socio-political unrest. The smooth conduct of presidential and legislative elections in the Central African Republic in March and May 2005 could mark the end of the transition process in this country. In Burundi, the June 2005 communal elections were also properly conducted. Despite a few hotbeds of tension, notably in the East of DRC and the Darfur region near Chad, Central Africa henceforth seems to be returning to a situation of sustainable peace which is a prerequisite for reconstruction, economic integration and regional cooperation, as well as increase in official development assistance and private investment flows.. This timid return to normalcy has enabled the lead donors, including the Bank, to put in place financing facilities to settle the chronic public debt payment arrears of DRC, Congo and Burundi which are eligible for debt relief particularly under the HIPC initiative1. Such treatment could subsequently be applied to the CAR, subject to progress in the implementation of the ongoing national recovery programme and its classification as a post-conflict country by the international community. The consolidation of peace should, in the long run, enable the region to develop its huge natural resources, including its dense forest (about 2.5 million km²), immense water reservoirs and hydroelectricity potential of the continent, hydrocarbon reserves and various minerals.

1 The arrears of the DRC were settled through a specific and unique facility while those of Burundi and Congo were settled under the Post-conflict Countries Facility (PCCF) created by the Bank in 2004.

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2.1.2 Central Africa’s population, estimated at 113 million, is increasing at a steady rate of 2.7% per annum, which partly explains the high proportion of young people (46.1% of the population is below 15 years of age). At this rate, the population may rise to 164 million in 2015. With regard to employment, some 1.5 million people will enter the job market every year from 2004, in a context of high unemployment (22% in 2002; this rate can reach 30% in urban areas). In 2002, over 80% of the working population was employed in the agricultural and informal sectors where labour productivity is very low. 2.1.3 Concerning the other socioeconomic characteristics, indicators are generally among the lowest in the continent. Regarding health, over the 2000-2002 period, life expectancy at birth was estimated at 42.6 years compared with 50.6 years in Africa, the infant mortality rate reached 113.3‰ as against 81.9‰ in Africa, while the HIV/AIDS prevalence rate was comparable to the continent’s average, that is 7.1%. In contrast, 68.9 people out of 100 000 have tuberculosis, whereas the continent’s average is 109.7 people out of 100 000. Apart from generic weaknesses inherent in public health systems, this situation is also due to the small share of health expenditure in GDP (1.7% as against 3.3% for the continent) and the low level of access to health services (57.7%), drinking water (43.2%) and sanitation (24.0%). In addition, the delivery of these services is irregular (frequent water and electricity cuts, shortage of drugs, etc.). In education, the enrolment rate in primary education (90.7%) is comparable to Africa’s average (89.2%), but is only 12.3% in secondary education compared with 40.8% in Africa. Some 39.4% of women and 23.3% of men are illiterate, compared with 46.4% and 29.2% respectively in Africa. Furthermore, the quality of education is declining in all the countries, particularly because of the small share of expenditure on education in GDP (1.5%), considerably below Africa’s average (5.7%). Assuming that the present trends continue, the majority of the MDGs may not be achieved in Central Africa, in particular those relating to education, gender equality, infant mortality, maternal health and HIV/AIDS control (cf. Annex x). 2.1.4 From an economic standpoint, Central Africa is characterized by a wide disparity of average income between the countries and inequalities and significant pockets of poverty within each country, including in the two middle-income countries, namely Gabon and Equatorial Guinea. The incidence of poverty varies from 40% to 80% in the countries of the region. Many young adults are without real employment and seek refuge, for survival, in the informal sector which employs more than 80% of the working population. Some 46% of this population is in agriculture in the broadest sense of the word, 5% in small crafts and related trades and 11% in services. The modern sector employs only 16% of the working population, including 8% for services, 5% for agriculture and 3% for industry. Sector trends 2.1.5 The regional GDP sector structure is marked by the predominance of the oil sector, though it differs widely from country to country. In fact, six out of the eleven countries of ECCAS are oil-exporting countries (Angola, Cameroon, Congo, Gabon, Equatorial Guinea and Chad) and one country (DRC) produces a small quantity of oil. In 2003, these six countries accounted for more than 72% of the regional GDP formation. The high increase in prices since 2000 and new oil discoveries in Angola, Equatorial Guinea, Chad and, to a lesser degree, Congo, have contributed to strengthen the share of oil in GDP. The GDP share of the oil sector in Angola reached 40% in 2003. However, some former oil wells are drying up, especially in Cameroon and Gabon, and recently in Congo where oil production increased by only 2.4% in 2003. 2.1.6 The contribution of the nonoil secondary sector (manufacturing) is limited and little diversified. The key industries are in the beverages, textiles and agroprocessing branches. The regional industry is dominated by the public sector. However, the private sector is set to expand under the effect of progress in economic reforms in recent years. The level of industrial development

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differs remarkably from country to country, with most industries located in Cameroon. Industrial production in the ECCAS countries is facing numerous structural constraints, in particular a shortage of electric power, the high cost of intermediate consumption, obsolete production technology, under-utilization of capacity, and overall, fiscal and legal environment, as well as corporate management and governance problems. In the mining sub-sector, the region has huge mineral deposits such as copper, cobalt and diamonds in DRC, nickel, gold, tin and phosphates in Burundi, uranium in Gabon, manganese and diamonds in CAR. In spite of the immense mining potential, performance is relatively poor, particularly because of the small-scale and informal nature of the sub-sector and constraints related to its recapitalization in DRC. On the whole, the industrial sector, including oil, accounted for about 42.5% of regional GDP formation in 2003. 2.1.7 The share of the primary sector (agriculture, forestry and stock breeding) in regional GDP was 25.3% in 2003. The region has a huge forestry potential. Timber is the second export product in many countries. However, between 1998 and 2002, its contribution to growth was, on average, negative (-0.16%) or negligeable in 2003 (0.1%), because of restrictions imposed by the need to respect the environment (undressed timber export quotas, felling of some species subject to regulation, etc.). 2.1.8 Agriculture and stockbreeding are important sources of household wealth and income. The region’s agricultural potential is enormous, although it varies according to climatic conditions within and between States. There are 200 million hectares of arable land which however are inadequately tapped, especially because of an unequal distribution of available labour in the region and the low level of development of production techniques. The total surface area under cultivation is less than 1% of the region’s available land. However, countries such as Burundi, Rwanda and Sao Tome and Principe are confronted with the problem of land saturation, particularly with diminishing fallow and pastureland due to high population growth. In practically all States, mostly food crops are cultivated and the greater part of these crops are home-consumed. Export crops (coffee, cocoa, tea, cotton, rubber, banana and tobacco) account for more than 50% of foreign exchange earnings, which makes the economies dependent on external markets. In the CEMAC zone, the agricultural sector’s contribution to GDP formation rose from 0.4% in 2002 to 0.5% in 2003. Food and market garden crop production is increasing due to favourable weather conditions and increasing demand. On the contrary, many cash crops are declining, because of unfavourable market conditions. Lastly, in 2003, services accounted for 32.2% of regional GDP formation. 2.1.9 On the demand side, the structure of the average GDP of ECCAS member countries in 2003 reflects the predominance of household private consumption (57.1%) and investments (23.9%). Public consumption is steady at about 15.7%. Over the past few years, there has been an increase in investments, due to the launching of new investment programmes in the oil sector and reconstruction and rehabilitation in some countries. Trends in the macroeconomic situation 2.1.10 The new regional context marked by the restoration of peace has resulted in an upturn in the real GDP growth of ECCAS which is steadily rising, from 1.5% in 2000 to 13.6% in 2004. Such an improvement in growth concerns most of the countries, although it should be stated that it is essentially driven by the oil-producing countries (Equatorial Guinea, Chad, Angola and Sao Tome and Principe). Between 2000 and 2004, the real GDP growth rate of ECCAS countries was 6.8% on average, compared with 9.9% in the CEMAC zone. Central Africa’s GDP stood at US$ 13.08 billion in 2004, representing a per capita GDP of US$ 560 for ECCAS and US$ 1,074 for CEMAC (that is almost double). The variation of average income between the countries is wide, as per capita GDP ranges from US$ 8 740 for Equatorial Guinea to US$ 95 for Burundi and US$ 121 for DRC which accounts for nearly half of the population of Central Africa. An examination of the population

5

adjusted wealth disparity index shows wide income variations between the countries (cf. Annex VII) and leads to the conclusion that poverty affects vast majority of Central Africa’s rural and urban population. This poverty prevalence rate varies from 40% to 80% depending on the country. Sustained growth over many years will be necessary to impact on employment and poverty reduction, through the continuation of reforms in a favourable context, the rehabilitation and reconstruction of infrastructure, as well as a better integration of economies. 2.1.11 The rate of inflation within ECCAS fell on average from 41.3% in 2000 to 6.3% in 2004. In CEMAC countries, it was contained around 2.3% on average over the same period. Such a performance is attributable to the tightening of budgetary and monetary policies. Outside CEMAC, macroeconomic stabilization efforts undertaken over many years were beneficial in DRC. Indeed, the inflation rate plummeted from 550% in 2000 to 7.9% in 2004. In contrast, it remained high in the other countries, with nevertheless significant progress particularly in Angola where the inflation rate plunged from 325% in 2000 to 43.5% in 2004. 2.1.12 Overall, the current account deficit was contained over the 2000-2004 period both within ECCAS (2% of GDP) and in the CEMAC zone (2.1%). Such a performance is partly due to efforts made within the framework of reform programmes (public expenditure control) and above all to firm commodity prices, in particular oil. Considering the volatility of oil prices, prudence should be shown in the interpretation of the good performance of this indicator. 2.1.13 The region’s outstanding external debt which stood at 116% of GDP in 2000 contracted to 58.2% of GDP in 2004. There are however wide disparities between countries as this ratio in 2004 was 160.6% for DRC, 90.7% for CAR and 405.9% for Sao Tome and Principe. Most ECCAS countries are eligible for the HIPC initiative2, or already benefit from it with the exception of Angola, Gabon and Equatorial Guinea. The ratio of debt service to exports of goods and services dropped from 24.5% in 2000 to 10.6% in 2004, a relatively favourable situation which reflects, to a large extent the predominance of oil products in exports. Transparency in the management of oil revenue and the effect of the volatility of prices on public finances are crucial issues, particularly in a context where budget expenditure tends to be pro-cyclical. Discussions have been initiated in CEMAC, with the support of the IMF, to identify the effects of the volatility of prices and oil revenue on the convergence criteria and the public finances of States. The discussions also concerned the establishment of an oil revenue stabilization fund and a savings fund for future generations at the Bank of Central African States (BEAC). 2.1.14 In public finance, the primary balance rose from a GDP deficit of 1.1% in 2000 to a GDP surplus of 1.1% in 2004 within ECCAS. In the CEMAC zone, there has been a budget surplus since 2000, due in part to the firmness of oil prices. Efforts are however still needed to rehabilitate public finances particularly in Angola, CAR, Chad, DRC and Sao Tome and Principe. Efforts must also be made regarding transparency in the management of the oil sector in Chad and Congo which have embarked on measures for this purpose under their programmes backed by the Bretton Woods institutions, the Bank and the donor community. 2.1.15 To sum up, Central Africa is a region with diversified and rich potential, covering a vast area with a young population most of whom are poor. The socioeconomic indicators, which are among the weakest of the continent, contrast with the regional economic potential. Trends in macroeconomic indicators are encouraging but are fragile because of the poor diversification of

2 Rwanda reached the completion point in April 2005. Cameroon and Chad could reach it by the end of 2005, while DRC and Sao Tome and Principe, which are in the interim phase, could reach this stage in 2006. Burundi, CAR and Congo, which are coming out of a conflict, have not yet met the conditions for the decision point.

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economies and short-term favourable impacts of oil. Lastly, efforts to improve economic management do not yet translate into an improvement of the population’s standard of living3 2.2 The Region’s Agents of Integration 2.2.1 The ECCAS region occupies a central and strategic place in Africa. It is the only region bordering on all other regions of the continent. Thus, through Cameroon and Chad, it serves as a bridge to AMU and ECOWAS. Burundi, Central African Republic, Democratic Republic of Congo and Rwanda link it to COMESA, while Angola and DRC stretch as far as Southern Africa (SADC). This special geographical situation partly explains why some countries belong to several neighbouring regional economic communities (REC). In fact, besides ECCAS to which all countries of Central Africa are attached, Burundi, DRC and Rwanda are members of COMESA, while Angola and DRC also belong to SADC. Lastly, CAR and Chad are members of the Community of Sahel-Saharan States (CEN-SAD)4. This problem of belonging to many communities can be mitigated, for the time being, by the harmonization and coordination efforts between the RECs. However, a permanent solution ultimately lies in streamlining RECs at the political level. 2.2.2 The bases of regional cooperation in Central Africa date back to the colonial era. In fact, the former French West Africa (FWA) and French Equatorial Africa (FEA) sub-areas established the bases of the first economic and political integration groupings in Africa, because there was free trade within these areas. In Equatorial Africa, a convention setting up the Equatorial Customs Union (UDE) was signed in 1959 by the four former FEA colonies, namely the Central African Republic, Congo, Gabon and Chad which Cameroon joined in 1961. The UDE, which was paralyzed by the internal wranglings of newly independent States, was replaced in 1964 by the Central African Customs and Economic Union (UDEAC). Equatorial Guinea, a former Spanish colony, joined UDEAC later on in 1982 as a prelude to its membership of the CFA franc zone in 1985. However, UDEAC did not succeed in instituting the free movement of persons nor of goods. It was transformed in June 1999 into a new organization, CEMAC5, in order to strengthen the economic bases of their common currency, the CFA franc, and revive community building. 2.2.3 Within CEMAC, the Central African Monetary Union (UMAC) is the institution responsible for monetary policy. It has specialized bodies, including BEAC which issues the currency of the Union and guarantees its stability. Without prejudice to this objective, BEAC also provides support to the Union’s economic policies. BEAC was established by the Monetary Cooperation Agreements signed in Brazzaville on 22 and 23 November 1972 respectively between the five founding African partners and between the latter and France. With the entry of Equatorial Guinea on 1 January 1985, these original texts were amended. BEAC officially started its activities on 2 April 1973. The Development Bank of Central African States (BDEAC) is also one of the institutions of CEMAC whose mission is to finance medium-and long-term investments both in the public and private sectors by guaranteeing conditions for economic and financial profitability. In August 2004, BDEAC signed an agreement with the General Secretariat of ECCAS which marks the beginning of institutional cooperation between these two organizations6.

3 Note should be taken of the ongoing ECA, INICA and OECD reflections to put in place mechanisms to maximize the impact of the oil industry in Central Africa, especially with regard to transparency, financing of regional infrastructure, economic diversification, as well as support to local and regional development e.g. the tripartite regional workshop (private and public sectors and civil society) on maximization of the impact of the oil industry in Central Africa organized in Brazzaville from 13-14 July. 4 CEN-SAD comprises 19 countries : Benin, Burkina Faso, Cote d’Ivoire, Djibouti, Egypt, Eritrea, Gambia, Libya, Mali, Morocco, Niger, Nigeria, CAR, Senegal, Somalia, Sudan, Chad, Togo and Tunisia. 5 The process of setting up CEMAC lasted from 1994 to 1999. 6 Furthermore, the charter of BDEAC adopted in November 2002, create an opening by providing in Article 2 that : « the Bank’s area of intervention shall comprise ECCAS member countries. However, while concerning at last one member country, it may be extended to non-menber countries, if it is in the interests of the Institution ».

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2.2.4 ECCAS was set up in 1983 under the implementation of the Lagos Plan of Action adopted in 1980 which recommended the establishment of regional structures that will gradually lead to the establishment of an African Common Market. ECCAS set the objectives of establishing a customs union by abolishing duties, quotas, prohibitions and administrative obstacles to trade between the Member States with a view to adopting a common external tariff system. To achieve this economic integration, ECCAS envisaged (i) the putting in place of regional transport and communication infrastructure to ease the movement of goods and factors of production in the sub-region; (ii) the strengthening of sub-regional productive activities on the basis of industrial complementarities and opening up of a wider market; and (iii) the establishment of trade integration mechanisms. This integration plan was not actually implemented. In addition to the generic problems of RECs (lack of political will, governance problems and the proliferation of inefficient regional organizations), one of the reasons was that the Community had been paralyzed since 1992 by socio-political crises and armed conflicts that affected seven of the eleven member countries. However, in February 1998, the Libreville Conference of Heads of State and Government decided to revitalize ECCAS7. 2.2.5 Moreover, Burundi, DRC and Rwanda, former Belgian colonies, formed a customs and monetary union during the colonial period. The union split up with independence and each country defined its own economic policy and established its own currency. The determination of these three countries to cooperate led to the setting up of the Economic Community of the Great Lakes Countries (ECGLC) which internal socio-political unrest has weakened and stifled since 1993. It should, however, be pointed out that under the impetus of the United Nations and Canada, the Group of Friends of the Great Lakes Region of Africa was formed in 2003. Two groups of countries make up the Great Lakes entity: those of the “first circle” (Burundi, DRC, Rwanda, Kenya, Uganda and Tanzania) and countries co-opted (Angola, Congo, CAR and Sudan). The Bank is a member of the Group of Friends which also includes other bilateral and multilateral partners. The goal of this partnership is to establish a stability security and development pact for the Great Lakes Region. 2.2.6 Central African countries are also members of various regional, sub-regional or continental organizations with sectoral or specific missions. Thus, regarding the management of ecosystems, some States are members of the Lake Chad Basin Commission (LCBC), the African Timber Organization (ATO) and the Permanent Interstate Committee on Drought Control in the Sahel (CILSS). The mission of the LCBC8 which was set up in May 1964 is to manage the water resources in the Conventional Basin of Lake Chad which covers 966 955 km². Regarding the ATO9, it was set up in 1976 to ensure cooperation on forestry issues concerning its 15 member countries which own more than 75% of the continent’s natural tropical forests. One of the key objectives of the ATO is to foster the production and marketing of African timber in the context of the sustainable management of forests. At the close of the 1990s, two conferences resulted in the establishment of other organs, namely the Conference on Central African Moist Ecosystems (CEFDHAC) and the Central African Forestry Commission (COMIFAC) which bring together all ECCAS countries, with the exception of Angola. Lastly, CILSS10, of which Chad alone is member, was established in September 1973 to ensure food security and combat the effects of drought and desertification in order to restore the ecological balance of the Sahel.

7 Section 3 of this paper examines in more detail the missions, performance and the resources and constraints of ECCAS and CEMAC. 8 At its inception, the LCBC comprised Chad, Cameroon, Niger and Nigeria. The Central African Republic joined the Commision in 1994. 9 The ATO comprises : Angola, Cameroon, CAR, Congo, Cote d’Ivoire, Gabon, Ghana, Equatorial Guinea, Liberia, Madagascar, Nigeria, DRC, Sao Tome and Principe, Tanzania and Togo 10 The ICDCS comprises : Burkina Faso, Cape Verde, Gambia, Guinea-Bissau, Mali, Mauritania, Niger, Senegal and Chad

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2.2.7 In river transport, in 2003 four countries (Cameroon, Congo, CAR and DRC) prepared, under the auspices of CEMAC, an agreement instituting a uniform river transport regulatory system and set up the International Commission for the Congo-Oubangui-Sangha Basin (CICOS)11. It will be operational in 2005 and will become a partner in the management of waterways which is a priority of the NEPAD short-term Plan of Action. In the area of culture, the International Centre for Bantu Civilizations (CICIBA)12 has been carrying out since it was set up in 1983 a series of actions to promote dialogue between cultures through the establishment of a data bank with about 10 000 books and documents, research and the institutionalization of the Contemporary Bantu Art Biennial. 2.2.8 Regarding the harmonization of legislation in the area of business law, the franc zone countries have set up the Organization for the Harmonization of Business Law in Africa (OHADA)13 to boost inter-State trade, improve conditions for free competition, facilitate the communication of modern management techniques and ensure the legal security of enterprises and investors so as to instill the confidence necessary for the expansion of business. DRC joined OHADA in 2004. Additionally, the treaty to institute the Inter-African Conference on Insurance Markets (CIMA)14 was signed in 1992 in order to enhance savings and financing of the economy. 2.3 Assessment of Performance on Integration in the Region 2.3.1 Status of macroeconomic policy convergence : ECCAS does not have a formal mechanism for the harmonization and convergence of the macroeconomic policies of its Member States, except CEMAC countries which have a multilateral surveillance and stabilization system which, since 2001, has developed from mere annual monitoring into a surveillance mechanism based on three-yearly (2004-2007) convergence objectives. Besides price stability, convergence aims at combating the monetary financing of the budget deficit and backing a fixed CFA franc -euro15 parity. The implementation performance of these criteria is encouraging because at least two first-rank criteria are respected by the six countries and four countries are able to respect at least three criteria. As part of the strengthening of multilateral surveillance, discussions are under way at CEMAC, with IMF support, to review the convergence criterion relating to basic budgetary balance in order to identify the effects of volatility and oil revenue on the public finances of States and to establish mechanisms for imposing penalties. 2.3.2 However, ECCAS countries have in actual fact individually embarked on a process to improve their macroeconomic frameworks through their relations with the IMF under Article IV or within the framework of reform programmes. Indeed, all macroeconomic indicators are improving (cf. Graph 2.1). The current account deficit is contracting. Inflation, the primary deficit and external debt service are on the decrease. These developments could in the long run help lay down the bases

11 The ICDCS comprises : Burkina Faso, Cape Verde, Gambia, Guinea-Bissau, Mali, Mauritania, Niger, Senegal and Chad. 12 CICOS also received assistance from ECA which financed the studies and part of the activities created by the Organization. 13 The CICIBA brings together Angola, Cameroon, CAR, Congo, Comoros, Gabon, Equatorial Guinea, DRC, Rwanda, Sao Tome and Principe and Zambia. 14 On 10 July 1992, the fourteen Member States of the franc zone signed in Yaounde the Treating Instituting the Inter-African Conference of Insurance Markets (CIMA) as an integrated organization of the insurance industry in African States in place of CICA (International Conference on Insurance Control). CIMA is a community insurance body. 15 Since the revision of August 2001, the four CEMAC first-rank convergence criteria are : (i) Basic budget balance/Nominal GDP≥ 0 (by 2004) (ii) Inflation ≤ 3% per annum ; (iii) Non-accumulation of external and domestic payment arrears on the management of the current period; and (iv) Outstanding internal and external debt≤ 70% of nominal GDP (by 2004). Second-rank criteria, which are also four, are : (i) Wage bill ≤ 35% of fiscal revenue ; (ii) Public investments financed out of domestic resources ≥ fiscal revenue ; (iii) Current account deficit excluding grants/GDP ≤ 5% ; and (iv) Fiscal revenue > 17% of nominal GDP .

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for the establishment of a mechanism for harmonization and multilateral surveillance in ECCAS, drawing from the experience of CEMAC zone.

Graph 2.1 : ECCAS : Trends in Some Macroeconomic Indicators

2.3.3 Trade integration : the low level of development of transport infrastructure, particularly roads, obstacles to the free movement of persons and goods, a weak private sector and persistent tariff barriers have not allowed for a real development of trade in Central Africa. Intra-community trade within ECCAS is the weakest in the continent. It accounted for about 1.9% of the total volume of trade over the 1994-2000 period, whereas the African average was estimated at 6.8% (cf. Table 2.1).

Table 2.1

Overall Trends in Trade in Africa, 1994-2000 Average (%) REC Intra-community

Trade Rest of Africa Other Countries Total

AMU 3.1 1.3 95.6 100 ECOWAS 10.3 2.9 86.8 100 ECCAS 1.9 2.5 95.6 100 COMESA 6.0 8.2 85.8 100 SADC 12.8 4.6 82.6 100 African Average 6.8 5.8 87.4 100

Source : Economic Commission for Africa, 2004. 2.3.4 Goods traded in the regional area are mostly a few staples : soap and cosmetics, raw or refined sugar, wheat flour, crude and refined vegetable oil, food preparations, cells and batteries, beverages (beer, natural mineral waters and other non-alcoholic beverages), domestic articles, plastic articles, cement, corrugated sheets, PVC tubes and pipes and aluminium sheets. Basic cereals, stock-farming products, other raw or handicraft products play some role in intra-community trade but their share is hard to determine because of the lack of exhaustive statistics on transborder trade. 2.3.5 An analysis of intra-community export flows shows that over the 1997-2002 period, they were worth, on average, US$ 206.8 million per year, 53.4% of which were to the credit of Cameroon along, followed by Congo (12.2%), Equatorial Guinea (11.4%) and Gabon (10.6%) (cf. Annex VIII). In 2003, intra-community trade 90.1% of which was carried out by CEMAC countries, was worth CFAF 137 billion, that is, about 3% of total exports. It is broken down as follows: mineral products (30%), food products (22%), chemical products (8.2%), base metals and metal articles (8%), live animals and animal products (7%), timber, cork and articles of timber and cork (5.5%), machines and machine tools (5%) and plant products (3%). Regarding intra-community imports, they amounted, on average, to US$ 231.96 million per annum over the same period. The biggest community importers are DRC (18.8%), Congo (16.6%), Cameroon (15.2%), Gabon (12.3%) and Angola (10.3%).

ECCAS: Macroeconomic Indicators, 1997-2004

-50

0

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100

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200

1997

1998

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1997-2004

Perc

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Encours dette extérieure (%GDP)

Solde compte courant (% GDP)

Solde primaire (% of GDP)

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2.3.6 Mobilization of savings and investment flows: the savings rate is relatively high in ECCAS area, standing on average at 23.8% of the regional GDP over the 2000-2004 period. The level of investment is influenced, to a large extent, by the oil sector which has no spillover effect on employment and poverty reduction and, therefore, on sustainable development. Outside the oil sector, investment is low. Investment is structurally higher than savings estimated at 15.7% of the regional GDP in 2000-2004. The gap is bridged by external financing, basically in the form of borrowing, aid and, in some cases, accumulation of payment arrears. Foreign investment : direct regional investments are scarce and are localized. Foreign investment is therefore not regional and is largely dominated by the oil sector, particularly in the oil-producing countries of the region such as Angola, Equatorial Guinea and Chad. The high level of oil prices since 2002 has also boosted investment in this sector. Nevertheless, external investment flows are expected in the mining sector, particularly in DRC. Resource inflows under foreign direct investment (FDI)16 are estimated at US$ 2 146 million for Angola and US$ 47.8 million for Gabon. 2.3.7 Private sector and business environment : the private sector is not developed in ECCAS countries. The majority of jobs in the private sector are provided by the informal sector which is made up essentially of small trades and trading. Private investment by major enterprises, essentially foreign, is concentrated mainly in the oil and mining sectors (Angola, Gabon, DRC, Chad, Equatorial Guinea and Congo) which remain poorly integrated into the rest of the economy. In fact, purchases and sales by big oil companies from and to the other sectors are negligeable compared to the value of their production. Privatization programmes are confronted with rigidities because the branches concerned are often deemed strategic. The rest of the enterprises are essentially SMEs/SMIs which process timber (sawing, peeling and joinery in Gabon, DRC and Cameroon), local products (fruit juice and cigarettes in Cameroon) or imported products (cement from clinker in Gabon, DRC and Cameroon, plastics from PVC). In addition, all the countries have breweries (beer and fizzy drinks), with the exception of Equatorial Guinea and Sao Tome and Principe). The private sector is also present in the hotel industry, carriage of goods and provision of services to households and enterprises. 2.3.8 In most countries, the main obstacles to the development of the private sector are: (i) political uncertainties and conflicts (Angola, CAR, DRC, Rwanda and Burundi); (ii) institutional weaknesses, particularly unattractive incentive measures, contract regulation problems and difficulties in obtaining business licences; (iii) high costs of factors of production, especially transport, electricity and telecommunications; (iv) small domestic markets and difficulties of access to the regional market; (v) lack of skilled labour (to a lesser extent in Cameroon and DRC); (vi) difficulty of access to bank financing and the lack of guaranteee funds; and (vii) problems of payment in the sub-region and the non-convertibility of currencies, especially between the CEMAC zone and the other ECCAS countries. It should be noted that in the CEMAC zone, the regional investment charter was adopted in 1999. It provides a comprehensive framework for the promotion of private investments, particularly through guarantees, legal protection against the risk of attachment by a State and the freedom to repatriate profits in compliance with the regulations of the currency area. Each Member State is urged to reflect the orientations of the regional charter in its national code. However, only three countries (Cameroon, Congo and CAR) have so far complied with this community guideline. 2.3.9 Free movement of persons : it is effective only between four countries of CEMAC (Congo, CAR, Cameroon and Chad). For the other countries, it is necessary to obtain a visa to travel from one country to another. The traveller must have a valid passport which is a document difficult to obtain in many countries, which greatly limits the movement of persons. Inter-State roads are scarce and sea transport and waterways are not used. In spite of its high cost, air transport 16 Economic Intelligence Unit, Country reports for Angola and Gabon (2004)

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is the main means of transport used in regional travel. But this mode of transport is in short supply in the region. Moreover, the many conflicts experienced by the region have led to the displacement of millions of people, particularly in the sub-region of the Great Lakes where, despite the progress made, there are still a few hotbeds of tension. Lastly, towns are the main destination of migratory movements due to both rural-urban migration and immigration. Migrants are most often young people, the large majority of whom are unmarried men. Their massive presence in small-scale commercial production makes them indispensable to the operation of the urban economy but regularly exposes them to bureaucratic excesses which result in deportations. 2.4 Assessment of Constrainsts to and Potential for Deeper Integration 2.4.1 Potential for integration : Central Africa has great potential, particularly abundant farmland (200 million hectares of arable land) of which less than 1% is used. In addition, the Congo basin (3 700 000 km²) has the continent’s largest water resource. Countries located in the central basin harbour the equatorial dense forest (4/5 of the African dense forest, or about 2.5 million km² rich in various species) with regular, abundant rainfall. 2.4.2 The hydroelectric potential of the river Congo, the world’s second river by virtue of its flow (40 000m3/ second on average emptied into the Atlantic Ocean), is remarkable with 100 000 MW of which 44 000 MW for the Inga site alone. Simulations show that implementation of the “Grand Inga” project would allow for the supply of power not only to the whole of Africa but also to the Middle East. In addition, Central Africa has the biggest oil-producing countries of sub-Saharan Africa (after Nigeria), namely Angola,, Congo, Gabon, Equatorial Guinea, Chad and possibly Sao Tome and Principe. These countries also have gas reserves (associated or not with oilfields). DRC and Rwanda have natural gas reserves in Lake Kivu, while Angola, CAR and DRC have various rich mineral deposits (gold, diamond, copper and coltan)17. The judicious tapping of these resources could significantly contribute to the improvement of the population’s living conditions, through regional integration as shown by the tapping of Chad’s oil which is a good example of cooperation between this country and Cameroon. Moreover, the tapping of the mineral deposits of DRC would require the consolidation, and even construction, of community infrastructure such as the railway which would contribute towards the development of other activities. 2.4.3 Central Africa also has significant potential in terms of inland waterways, both national and international (when they delimit borders), which could contribute towards the facilitation of regional trade. They include the Congo River and its main tributaries (Kasaï, Oubangui, Sangha and Alima), the Ogoué River and Lake Kivu and Lake Tanganyika. The inland waterways system which comprises the right bank of the Congo River and its tributaries (Oubangui and Sangha), commonly called the trans-equatorial, has always been a route for physical integration and trade for CAR, Congo, Cameroon, DRC and Chad (landlocked country). Lake Tanganyika between DRC, Burundi and Rwanda also serves this purpose. The length of the waterways contributing towards integration in the sub-region (international waterways), with differing navigability conditions, is at present estimated at over 3100 km. 2.4.4 Main obstacles to integration: despite its huge potential , socio-political and economic constraints continue to impede the process of integration in Central Africa. First, many internal (mutinies, ethnic wars, tensions due to budding democracy, rebellions, etc.) and external (involvement of some States in unrest destabilizing other States, etc.) conflicts in the early 1990s not only jeopardized security at borders and destroyed infrastructure, but also instilled distrust 17 Coltan : local contraction for columbo-tantalite. The tantalum in the mineral is in great demand for use in the aerospace industry and in the manufacture of computers and mobile phones. Coltan is found in abundance in the Kivu Province (DRC)

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between some countries of the sub-region. This atmosphere of distrust impedes the regional integration process. Though there is a return to peace, the consolidation of such peace is still a challenge, because the situation remains fragile. 2.4.5 Central Africa is also characterized by weak community vision and political will. In fact, the instrument instituting the free movement of some categories of persons adopted since January 1990 by the decision-making bodies of ECCAS is yet to be implemented. This situation is all the more disturbing as even within the CEMAC area where the integration process is at the most advanced stage in Central Africa, the free movement of persons is not yet effective between all States, despite the relevant agreements signed by the States. The weakness of the community vision is also shown by slippages in the payment and the non-payment of contributions by the Member States. This in turn leads to weak community institutions incapable of recruiting the best experts nor acquiring modern equipment in order to better design, implement and coordinate regional integration policies. 2.4.6 Political unrest and armed conflicts have deepened poverty and worsened the population’s living conditions, particularly in the rural areas where food insecurity is on the increase. In particular, the populations displaced to remote areas live under precarious conditions. The food situation is worrying with an average calorie intake generally below the required 2 400 Kcal/day. Only Gabon slightly exceeds this threshold with 2 517 Kcal/day. The average calorie intake in most countries is between 71% and 91% of this minimum threshold. The lowest levels are noted in Burundi and DRC, with less than 80% of the threshold. In Burundi, Rwanda, CAR and Congo, more than one out of four inhabitants are reported to suffer from food insecurity. Only in Cameroon and Gabon is the problem not very serious, with food insecurity rates of 9% and 7% respectively. About 40% of the community population suffer from nutritional deficiency. In view of the regional potentials, food insecurity could disappear in the long run, particularly through appropriate policies and the fluidity of trade. 2.4.7 The low level of development of transport infrastructure, especially roads, is a real impediment to the development of trade. In countries as vast as Angola, Chad and DRC, the bad state of roads, when they exist, and poor air transport services18 make it impossible to link agricultural production points to urban consumer markets or export markets. This situation seriously limits the development of intra-regional trade. Apart from the Kigali-Bujumbura road link, no two capitals are linked by a completely tarred road19. There is a main road network of 147 314 km of which only 15% are tarred, representing a road density of 2.2 km/100 k² for the entire network and 0.3 km/100 km² for the tarred roads. This constraint is aggravated by the km construction cost which is higher in Central Africa than elsewhere in Africa because of the dense forest, abundant rainfall and the existence of many rivers and mangroves which require the construction of huge bridges. With regard to rail transport, only five countries have one or several railway lines, namely Angola (2 380 km), Cameroon (1 016 km), Congo (886 km), Gabon (650 km) and DRC (5 138 km). These lines are however poorly linked both within and between the countries. There are also significant constraints on communications infrastructure, related in particular to investment and management shortfalls. Other constraints worth mentioning are: the non-harmonization of transport legislation in the corridors, problems pertaining to infrastructure maintenance and the low level of use of waterways. All these constraints result in higher transport

18 With the disappearance of Air Afrique of which three countries of the sub-region were members, on the one hand, and the shutting down of the national airline of DRC (LAC), on the other hand, there are only three main national operators remaining in the sub-region: Cameroon Airlines, Air Gabon and TAAG (Angola). The situation of these three airlines is precarious. 19 However, by 2005/2006, the Yaounde-Libreville, Yaounde-Bangui and Yaounde-N’djamena links should be completely tarred under the consensus transport plan.

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and communication costs, which constitutes an impediment to trade, access by the population and the competitiveness of enterprises. 2.4.8 The economies of Central Africa are also marked by the weakness of productive systems in industry and mining, and electricity. The region’s huge potential is generally undertapped. The national private sector has not yet succeeded in replacing the State, which has failed, in reviving production. The limited volume of electricity generated in the countries of the region is characteristic of weaknesses in the area of energy infrastructure. The region has only 1 300 000 electricity consumers for a population of about 113 million. In addition, lack of maintenance and decay of electricity infrastructure are the cause of the poor quality of services and heavy losses of up to 30%, compared with 10% to 15% under normal conditions. These weaknesses in respect of energy lead to rising factor costs and impede the industrial development of countries and access by the population to electricity. The electricity production level is only 8 kwh/per capita in Chad, 20 kwh/per capita in Burundi and 21 kwh/per capita in CAR. There have been few investments in the development of the immense hydroelectricity potential of the sub-region in order to increase the production capacity installed in the 1990s. Mention should however be made of the Owendo (Gabon) and Equatorial Guinea thermal power stations, as well as the gas-fired power station to be installed in Pointe-Noire. Concerning hydroelectric power stations, work has resumed on the Sounda gorges in Congo and on the rehabilitation of the Djoué (Congo) and Inga (DRC) power stations. There is also a lack of complementarity between the productive systems of the region. 2.4.9 The absence of an integrated financial market in ECCAS is also an obstacle to the development of trade. Indeed, only the CEMAC zone has a relatively integrated financial market at the sub-regional level. For the other ECCAS countries, the financial sector is national, without any regional dimension and without formal institutional relations with CEMAC. The compensation mechanism that existed between BEAC and the Central Bank of Congo (DRC) was abolished during the crisis period, because of the difficulties that ex-Zaire experienced. In Angola, after the nationalization period between 1975 and 1991, there has been an upturn in growth of the financial sector, driven by the establishment of domestic and foreign financial institutions. The sector comprises nine commercial banks, two savings and credit banks, an investment bank, an insurance and reinsurance company and a pension fund. In DRC, the financial sector suffered from a defective and chaotic business climate characterized by hyperinflation, currency distortions and frequent change of exchange rate policy. Many banks therefore accumulated bad debts, causing them to grant only high-interest and short-term loans for external trade. The gradual return to peace, implementation of new reforms and economic recovery prospects bolstered the financial sector which now comprises nine banks most which are linked to foreign big bank groups. In Rwanda, nine commercial banks are operating, including five since 1994. The capital of most of the banks is jointly owned by the State and foreign interests. The sector also comprises a development bank, a people’s cooperative bank with 137 branches across the country and four insurance companies. The financial system of Angola, DRC and Rwanda is characterized by dollarization. This phenomenon is less prevalent in Burundi and Sao Tome and Principe. 2.4.10 The HIV/AIDS epidemic spread rapidly in the countries of the region, due particularly to inadequate prevention, the effects of conflicts and constraints on social and health services of the countries. The prevalence rate in the sexually active population varies from 5.5% in Angola to 14.8% in CAR in 2001. It rose from 0.5% in 1987 to 11.8% in 2000 in Cameroon and from 1% in 1986 to 7.7% in 2001 in Gabon. The number of people infected with HIV/AIDS is estimated at over 4 million out of the 28 million cases in sub-Saharan Africa. The epidemic is common among the young population and it is « feminizing » with about 2 million women infected. In fact, the HIV prevalence rate is estimated at 9% in young people aged 25 to 29 years in Congo, and is nearly 13% in young women aged 15 to 24 years in Cameroon and CAR. The management of patients is

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weighing on hospital facilities. In Congo, CAR and DRC, about 50% of hospital beds of internal medicine services are occupied by patients with HIV/AIDS-related diseases. Since the beginning of the epidemic, more than 319, 000 persons have died of HIV/AIDS in ECCAS countries, including more than 40 000 in Burundi and 24 000 in Angola. The prospects are worrying in most countries. The pandemic has a real impact on the reduction of life expectancy, labour productivity and sustainable development. In Angola and Cameroon, the reduction of life expectancy is estimated at 5 and 10 years respectively. Moreover, the spread of HIV/AIDS has a certain negative effect on integration, as it is sometimes used as a pretext to oppose the free movement of persons. 2.4.11 Finally States membership in several RECs constitutes a serious obstacle. It creates overlapping of regional integration mechanisms, leading to a dilution of the vision as well as of scarce financial, administrative and institutional resources at regional level. In addition, the programmes and pace of integration in the different RECs are not always convergent, which raises problems of consistency in the objectives of integration and some community decision of the States. Efforts must be made with regard to harmonization and rationalization. 2.4.12 In short, the regional potential of Central Africa is enormous and virtually untapped. In a context of consolidation of peace, affirmation of political will regarding integration and improvement of the macroeconomic and business environment, intra-community trade could be a strong engine of development of the region, subject to the investment of the necessary resources to open up roads as well as the abolition of administrative obstacles to the free movement of goods and persons. III. The Region’s Agenda and Strategic Issues 3.1 NEPAD as a Guiding Framework

The eleven countries of Central Africa belong to NEPAD whose long-term goal is to bridge the gap separating Africa and developed countries by helping to better structure its development. The RECs which are acknowledged as pillars of the AU form the regional level of planning, coordination and monitoring of the integration of the continent. For the Central African region, a Regional Coordination of the Implementation and Monitoring of NEPAD (CRNEPAP/AC) was put in place in January 2004. ECCAS serves as its secretariat and Gabon as the chair. Institutional capacity building as well as the prevention, resolution and management of conflicts are top priorities. They condition the implementation of NEPAD’s Short-term Action Plan (STAP), particularly in the areas of infrastructure, agriculture, water, environment and HIV/AIDS control. NEPAD also focuses on the promotion of the African Peer Review Mechanism (APRM), a self-monitoring system that places emphasis on governance. Angola, Cameroon, Congo, Gabon and Rwanda have already agreed to participate in the APRM exercise. The Bank will support these countries, in particular through the preparation of Country Governance Profiles (CGP). Within the context of Central Africa, the implementation of NEPAD will require the consolidation of peace efforts, a genuine political will of States and the building of institutional and human resource capacities in the design, implementation and monitoring-evaluation of integration programmes and projects, particularly the capacities of the General Secretariat of ECCAS in its capacity as the pivot REC of countries of the region. 3.2 Central Africa: Vision and Strategy 3.2.1 The vision of ECCAS, as set out in Chapter 11 of its Establishment Treaty, is the promotion and strengthening of harmonious cooperation and sustainable development, in order to achieve economic stability, strengthen the close and peaceful relations between its Member States and contribute to the progress and development of the African continent. Such regional cooperation is in keeping with respect for the principles of international law governing relations between States,

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in particular the principles of sovereignty, equality, independence, good neighbourliness, non-interference, no use of force in the settlement of disputes and compliance with the law in their mutual relations. The achievement of this objective required the complete liberalization of trade, the adoption of a common trade policy regarding third States, the harmonization of national policies in order to promote community activities, the free movement of persons, goods, services and capital, as well as the right to settlement of nationals of Member States. To this end, ECCAS should ensure from its establishment, political dialogue in the region and the creation, over a period of twelve to twenty years, of a customs union and the introduction of common sectoral policies. 3.2.2 In fact, since its establishment on 20 October 1983 and the launching of its activities in 1985, ECCAS did not achieve tangible results until 1998 as a result of conflicts, institutional inadequacies and low commitment of the States. Moreover, the restoration of peace to region and growing awareness of the slow pace of the common market process prompted the Conference of Heads of State held in Malabo in 1998 to decide the reform and revitalization of ECCAS. In this respect, a recovery programme which needs to be fast tracked was launched in 1998. The Heads of State and Government restated their unalloyed commitment to work toward regional integration during the June 2005 Summit in an effort to make up for Central Africa’s backwardness in this respect with a view to addressing the MDG challenges, implementing NEPAD and winning the confidence of the international community. 3.3 Main Regional Integration Institutions 3.3.1 ECCAS was selected by the AU and Heads of State of the region to implement economic integration and NEPAD in Central Africa. To speed up the process, ECCAS must establish a synergy with CEMAC which, though at its teething stage and gripped by some difficulties, is relatively advanced. In addition, it has several specialized institutions some of which have already entered partnerships with other non-CEMAC countries of the region, notably BDEAC and OCEAC ECCAS 3.3.2 Historical background: the objective of ECCAS since its establishment has been to build a common economic community through the establishment of a common market and implementation of common sector policies. The Treaty establishing the Community set up the following organs: (i) the Conference of Heads of State and Government which is the highest organ of ECCAS that is responsible for the implementation of its objectives; (ii) the Council of Ministers; (iii) the General Secretariat which is the executive organ of the institution; (iv) the Court of Justice which is still to see the light of day; (v) the Advisory Committee; and (vi) specialized technical committees. The Advisory Committee composed of experts is responsible, under the supervision of the Council of Ministers, for considering matters and projects submitted to it. Specialized technical committees are set up as the need arises to support the Secretary General in the preparation of technical files for consideration by the Council of Ministers. The Treaty contains some twenty specific cooperation protocols20. Concerning the achievements for the period 1985-1992, ECCAS conducted a number of multi-sector studies aimed at formulating a regional agricultural and industrial policy as well as fostering free movement of some categories of nationals of Member States. However, genuine integration policies have not been implemented efficiently and boldly owing to the combined effects of regional crises and general inertia of RECs in Africa. Between 1992 and 1997, most ECCAS officers returned to their respective countries and facilities deteriorated.

20 Protocols on the rules of origin; cooperation in the area of transport, energy, industrial development, settlement rights of nationals, streamlining and harmonizing business procedures and documents; natural resources, etc. (Cf. Annex XV).

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3.3.3 ECCAS recovery programme: since its revival in 1998, ECCAS regularly holds statutory and technical meetings. Its governing bodies have resolved to raise it to the level of other RECs, especially during the last ordinary session of the Conference of Heads of State and Government held in Brazzaville in June 2005. The recovery programme addresses peace and security as well as economic, financial and social issues. Indeed, due to the fragile socio-political and security situation of the region, the Heads of State, as a matter of priority, established the Central African Council for Peace and Security (COPAX) in 1999. COPAX which is modelled on the Mutual Assistance Pact between the Member States has the following three specialized organs: (i) the Central African Early Warning System (MARAC) that collects and analyzes information for early warning and conflict prevention; (ii) the Defence and Security Commission (DSC) that brings together military chiefs of staff and police and gendarmerie chiefs of Member States to plan, organize and advise ECCAS organs on military operations, where necessary; and (iii) Central African Multinational Force (FOMAC), a non-permanent force comprising military contingents of Member States whose mission is to carry out peace, security and humanitarian aid operations. COPAX is lodged at the ECCAS General Secretariat since June 1999, thus prompting the decision by the UN General Assembly to confer an observer status on ECCAS in December 2003. 3.3.4 Within the purview of mediation and conflict prevention activities, ECCAS played a decisive role in restoring the rule of law in Sao Tome and Principe in July 2003 after a coup d’état and in organizing a national forum whose conclusions will be monitored until the legislative and presidential elections billed for 2006. It also organized in Libreville the first FOMAC military manoeuvres in June 2003 in Libreville, known as Biyongho 2003 . similar manoeuvres planned for Chad in November 2005 (Barh-El-Gazel 2005) are being prepared. Furthermore, during the Brazzaville Summit of June 2005, the Heads of State decided to establish a regional Military Command and a Standby Brigade within FOMAC as well as an election support unit within the ECCAS Secretariat. 3.3.5 The economic and social component of the ECCAS recovery plan seeks to enhance poverty reduction by regional mainstreaming. It entailed the formulation of programmes and plans of action with a view to strengthening institutional capacities, establishing a Free Trade Area (FTA) and a customs union, a Fund for Compensation for Loss of Revenue, adopting a common agricultural policy and establishing multilateral trade negotiations, implementing NEPAD in Central Africa, adopting and implementing a Consensual Transport Master Plan for Central Africa (PDCT-AC), gender mainstreaming in ECCAS programmes and projects, adopting a strategic framework and establishing a Regional Fund to Fight HIV/AIDS, and formulating and implementing a Regional Programme for Food Security (RPFS). It should be noted that the Treaty provides for the establishment of an ECCAS Cooperation and Development Fund (CDF) to finance community projects and assistance to Member States. In April 2003, ECCAS established the Central African Power Pool (CAPP) to harmonize power production and marketing policies. A Network of Parliamentarians of Central Africa (REPAC) was also created in June 2002 in Malabo, the precursor of the Central African Parliament. Generally speaking, the achievements made so far are still inadequate due to the General Secretariat’s low capacity to give the requisite impetus to regional activities. The implementation of these programmes and plans is a major challenge to be addressed in the coming years. 3.3.6 Status of ECCAS institutional capacities: the General Secretariat has implemented several organization charts. The current structure was provisionally adopted by the Council of Ministers in 2004 pending the drafting of a new organization chart that is better tailored to the traditional and new missions and resources of the Community. The Bank is financing studies aimed at defining an organization chart through the first phase of the institutional support project approved in November 2004. According to the current structure, the office of the Secretary-General

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is at the helm, assisted by three departments, each headed by a deputy secretary-general21. The office of Deputy Secretary-General in charge of the Department of Physical, Economic and Monetary Integration was vacant until it was filled by the Summit of Heads of State in June 2005. The current staff strength is 37 including officers and employees, against 82 before the crisis period. The provisional organization chart projects additional staff needs at 60 officers. Out of the current 37 workers, there are 4 consultants, 15 support staff and 18 cadres including the Secretary-General, the three deputy secretaries-general, the Secretary-General’s office head, the Secretary-General’s adviser, an accountant, a financial controller, a legal adviser and three directors for administration and finance, trade, customs, monetary and financial matters, and transport and communication respectively22. The low number of management positions and qualified professional staff impedes the functioning of the institution as highlighted by the setting up of ad hoc working groups and assignment of several tasks to a single officer. MARAC’s headquarters building does not have adequate working materials and equipment for all its requirements. Internet service is available and the Web Site is being installed. ECCAS needs an organization chart, expert capacities and adequate equipment to carry through its economic integration programmes. 3.3.7 With regard to resources, the budget of ECCAS General Secretariat is adopted annually by the Conference of Heads of State and funded through contributions as follows: 15% for each of the wealthiest Member States (Angola, Cameroon, Congo, DRC, and Gabon) and 4.167 % for each of the other six countries. This funding method resulted in recurrent arrears that resulted in the stagnation of the Institution. On the basis of the situation as at 31 March 2005, arrears for the 1985-2004 period stood at CFAF 6.2 billion, broken down as follows: 2.2 billion during fiscal 2004; 1 billion in 2003; 1.9 billion for the period 1998-2002; and 1.2 billion for the period 1985-1997. The leading defaulters are (in million CFAF): DRC (1,745), Cameroon (1,131), Chad (645), CAR (643), STP (572) and Burundi (525). Rwanda (423), Equatorial Guinea (258), Congo (230) and Gabon (47) have low arrears. It is noteworthy that remarkable recovery efforts have been made over the last few years. Accordingly, on the basis of settlements as at 30 June 2005, Angola had cleared its arrears and owes no contribution; Gabon had settled its arrears for the period 1985-2003 and had paid its contribution for 2004; Congo had settled its arrears for 1998-2003 and had paid its full contribution for 2004; Congo had settled its arrears for the 1998-2003 period and owes nothing for 2004; Cameroon paid its full contribution for 2004 (CFA.F 690 million) and 310 million in respect of 1998-2003; Equatorial Guinea and Burundi had settled their arrears for the period 1985-1997. The 2005 budget amounts to CFAF 5.45 billion, including 3 billion as recurrent expenditure, 750 million for COPAX, 1 billion for NEPAD, and 700 million for the Fund to Fight HIV/AIDS. 3.3.8 To ensure the financial autonomy of ECCAS and to settle once and for all the issue of contribution arrears, the Heads of State decided to institute the Community Integration Contribution (CCI) in June 2002 in Malabo. It is a tax levied on products imported from countries outside ECCAS and consumed by Member States. The CCI rate which became effective on 1 January 2004 was set at 0.4%. ECCAS has not made a real assessment of imports from third countries, but estimates total revenue generated by CCI at CFAF 17 billion (reference year: 2004). To ensure the actual payment of contributions, a decision was taken to the effect that, where payment is not made within 30 clear days after the end of each quarter, central/national Banks of 21 They include: (i) the Department of Programmes, Budget, Administration and Human Resources divided into three Directorates (administration and finance, programming and monitoring, human resources; (ii) the Department of Human Integration, Peace, Security and Stability comprising three Directorates (Directorate of Human Integration and Humanitarian Issues, Directorate of MARAC, Directorate of Peacekeeping and Security) and (iii) the Department of Physical, Economic and Monetary Integration comprising two Directorates, namely, the Directorate of Trade, Customs and Monetary and Financial Issues; and the Directorate of Transport and Communication divided into three Divisions (transport, energy and ICT). 22 The other cadres include: a protocol officer, peacekeeping and security officer, an energy expert recruited to run the electric interconnection project funded by the ADF, and three translators. The 15 general staff are distributed as follows: 1 bookkeeper, 7 secretaries, 1 duplication employee, 1 office boy, 1 receptionist and 4 drivers.

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Member States shall be authorized to automatically debit an amount equivalent to the amount owed from the State Treasury account for payment to the ECCAS General Secretariat. As at 18 July 2005, six States had signed the CCI Convention alongside the Convention to settle arrears, to open ECCAS accounts in Central Banks and to automatically debit such in case of default payment. The countries are Congo, CAR, Chad, Gabon, and STP and Cameroon23. The Conference of Heads of State held in June 2005 urged the other Member States to make every effort to sign the convention establishing the CCI as soon as possible with a view to providing necessary and indispensable resources to ECCAS for the performance of its lofty missions. CEMAC 3.3.9 Objectives and missions of CEMAC: CEMAC24 was officially established in June 1999 building on the achievements of UDEAC. It has a surface area of some 3,000,000 km2 and a market of over 35,000,000 inhabitants. Its objectives include the creation of a common market through the elimination of customs barriers and other protective measures, harmonization of sector policies, convergence of macroeconomic policies, stability of a single currency, equal distribution of community projects and the building of an economic union that will be effective in 2014 based on a three-phased five-year schedule: (i) 25 June 1999 to 24 June 2004 ; (ii) 25 June 2004 to 24 June 2009; and (iii) 25 June 2009 to 24 June 2014. 3.3.10 During the first phase that ended in June 2004, CEMAC had to: (i) develop an enabling environment for the launching of the common market; (ii) embark on a coordination process of national policies on agriculture, livestock, fishing, industry, trade, tourism, transport and telecommunication; (iii) start the process to establish instruments on the free movement of goods, services, capital and persons; (iv) develop the coordination of trade policies and economic relations with other regions; and (v) prepare common actions in the areas of education, vocational training and research. 3.3.11 CEMAC has four institutions and eight organs. The institutions include: (i) the Economic Union of Central Africa (UEAC), based in Bangui ; (ii) the Central African Monetary Union (UMAC) based in Yaounde; (iii) the Community Parliament based in Malabo; and (iv) the Community Court of Justice (comprising a Judicial Bench and an Audit Bench) based in N’djamena. The eight organs are: (i) the Conference of Heads of State; (ii) the UEAC Council of Ministers; (iii) the UMAC Ministerial Committee; (iv) the Executive Secretariat; (v) the Inter-State Committee; (vi) the Bank of Central African States (BEAC); (vii) the Central African Banking Commission (COBAC); and (viii) the Development Financing Institute. In monetary matters, it is noteworthy that, contrary to UEAC which is still in the pipeline, UMAC is fully established and has a currency unit known as the “franc” of the African Financial Community (CFA) the issuing of which has been entrusted with the common issuing institute, BEAC. Apart from BEAC and COBAC, new organs whose statutes comply with CEMAC basic instruments have been established. These are: (i) the Action Group against Money Laundering in Central Africa (GABAC) launched in 2004; (ii) the Central African Financial Market Surveillance Commission (COSUMAC) established in 2003; and (iii) the Central African Stock Exchange (BVMAC) created in 2000 and currently under establishment. 3.3.12 CEMAC has several specialized institutions, including: (i) the Development Bank of Central African States (BDEAC) set up in 1975 and headquartered in Brazzaville, responsible for the financing of medium- and long-term investments in the public and private sectors; (ii) the

23 DRC and Angola have expressed their readiness to sign the CCI Convention as soon as possible. 24 CEMAC is made up of the following six member countries: Cameroon, Central African Republic, Chad, Congo, Equatorial Guinea and Gabon. Sao Tome and Principe has observer status since 1999.

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Community Development Fund (FODEC), which has a light unit lodged at the Executive Secretariat since 2003, in charge of financing integration projects; (iii) the International Commission for the Congo-Oubangui-Sangha Basin (CICOS), responsible for the management of the said basin; (iv) Organization of Coordination for the Control of Endemic Diseases in Central Africa (OCEAC), upgraded to a CEMAC specialized institution in 200325. Several other specialized institutions26. 3.3.13 BDEAC plays a strategic role as a community body responsible for financing development. Since August 2004, its mandate has been extended to the entire ECCAS region. Its intervention is geared at infrastructure, the private sector and development of a regional financial market, including microfinance activities. With respect to the funding of CEMAC integration projects, BDEAC was selected as the funding agency of FODEC. It was also admitted as member of the Regional Coordination for the Implementation and Monitoring of NEPAD in Central Africa (CRNEPAD/AC). In this capacity, it has been assigned to assist the ECCAS General Secretariat in drafting terms of reference for priority projects of the NEPAD Short-Term Plan of Action and organizing a conference of donors who are likely to fund infrastructure projects of the Transport Master Plan. BDEAC suspended funding in 1992 following a severe financial and institutional crisis stemming from the reluctance of shareholders to pay up their capital, non-settlement of public and private debt service by the borrowers and political interference in decision-making. However, it embarked on a major recovery drive with the implementation in 2002-2004 of the first phase of its Revamping and Recovery Plan (2002-2007), marked by institutional reform. It re-launched its operations cautiously in 2003. 3.3.14 Concerning FODEC, it needs to be funded with the proceeds of the Community Integration Tax (TCI), representing a 1% levy on all imports from third countries. TCI resources are used mainly to finance CEMAC and its specialized institutions to the tune of CFAF 1.5 billion per country. The balance is shared out for offsetting revenue losses resulting from the enforcement of the Common External Tariff (40 %) and financing integration projects (60 %). However, TCI resources collected from some countries fall short of CFAF 1.5 billion, due to several import exemptions (especially oil), thus making it impossible to finance FODEC.

25 OCEAC serves as a reference institute in the area of public health in the region. Its objectives include (i) developing a regional scientific centre for the development of public health in Member States; (ii) participating in the training of public health personnel from Member States; (iii) providing public health expertise to Member States; and (iv) stimulating, in achieving this goal, the interest or support of NGOs and bilateral and multilateral cooperation bodies. OCEAC is currently refocusing its missions and action on common issues which address the priority health problems of the sub-region such as: HIV/AIDS, malaria, tuberculosis, sleeping sickness, vaccine- preventable diseases and the Ebola haemorrhagic fever. OCEAC is managed by an Inter-State Ministerial Committee that meets once every two years. The General Secretariat is its implementing organ. It has two scientific institutions, namely the Yaounde Research Institute and the Inter-State Higher Public Health Training Centre of Central Africa (CIESPAC) in Brazzaville. 26 They include: (i) the Libreville Sub-regional Multi-sector Institute for Planning and Project Evaluation (ISTA) set up in 1980 ; (ii) the Regional Applied Research Centre for the Development of the Savannas of Central Africa (PRASAC), responsible for the coordination of agricultural research in savannah areas which became Centre for Central African Savannah Development a community body in 2000; (iii) Sub-regional Telecommunications Maintenance Centre (CSMTAC), based in Yaounde, Cameroon ; (iv) the Economic Commission on Meat and Fishery Resources (CEBEVIRHA) set up in 1987 and based in N’Djamena; (v) the Inter-State Customs School (EIED) set up in 1972 and based in Bangui; (vi) the Central African Advanced School of Telecommunications (ESTAC), based in Franceville, Gabon; (vii) the Sub-regional Institute of Applied Statistics (ISSEA) based in Yaounde, Cameroon, set up in 1984; (viii) the Ngaoundere Hotel Management and Tourism School upgraded to a community institution in 2004; (ix) the Regional Training Centre for Financial Services of Libreville (Institute of Economics and Finance), upgraded to a community institution in 2004 ; (x) the Central African Police Chiefs Committee which became a specialized CEMAC organ with the entry into force of the Treaty; (xi) the CEMAC Multilateral Force, created in 2003 ; and (xii) the International Civil Liability Car Insurance (known as the “Carte rose”), established as a CEMAC specialized institution in 2002.

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3.3.15 Achievements of CEMAC : in terms of achievements in respect of the first phase that ended in 2004, the Executive Secretariat strove to establish CEMAC Institutions and Organs, pursue the development of the macroeconomic framework and integration of the financial sector, and launch the building of the common market. Regarding the establishment of institutions and organs, the following achievements were recorded: (i) the Community Court of Justice, the Judicial Bench and Audit Bench were put in place, and the community judges appointed by the Conference of Heads of State were commissioned on 12 April 2000 in N’Djamena; (ii) the Community Parliament headquartered in Malabo after an additional decision by the Conference of Heads of State is, on a temporary basis and in keeping with the Treaty, represented by the Inter-parliamentary Commission set up on 22 June 2000; (iii) the Economic Union of Central Africa became operational in June 1999 after the appointment of the Executive Secretary. 3.3.16 Harmonization of the macroeconomic framework: under the provisions of UEAC, the joint monitoring of macroeconomic policies was transferred from BEAC to the CEMAC Executive Secretariat in 2001. Its main objective is to reduce huge public deficits. To achieve this objective, Member States are bound to meet the four convergence criteria cited earlier under the three-year convergence programme. An assessment of the macroeconomic framework suggested that there is increasing compliance with convergence criteria. Accordingly, in 1999, out of the set 24 country-criteria27, 13 were not met; in 2002 only 9 country-criteria were not met and 8 in 2003. However, the implementation of the policy encounters a number of difficulties in most States which can be summarized as follows: (i) delay by States in preparing convergence programmes, making exploratory monitoring difficult; (ii) lack of coordination between national units responsible for the monitoring of macroeconomic convergence and between the latter and the CEMAC Executive Secretariat; (iii) difficulties in comparing aggregates of member countries, notably GDP, public finance data and price indices; and (iv) fluctuating oil prices which tend to water down the pertinence of public finance criteria. Community bodies are currently reflecting in conjunction with the IMF to lay down the conditions for revising the criteria and enhancing the performance of the system, in particular, by applying penalties in cases of non-compliance. 3.3.17 Integration of the financial sector: the reform programmes implemented since 1994 have aimed at streamlining the banking sector, enhancing bank supervision, introducing a single approval, combating money laundering, modernizing the payment systems, regulating microfinance and launching the Central African Stock Exchange (BVMAC). Efforts to reform the financial sector resulted in the restructuring and privatization of banks in CEMAC countries. Most banks, except one in Congo28, have sound cashflow, are creditworthy and profitable. By end 2003, there were 31 operational commercial banks and a development bank (Gabon) in the CEMAC zone. Overall, these banks grant short-term loans and are all recording overliquidity. Half of the banks in the sector are found in Cameroon and Gabon and account for 80 % of net total aggregated statements, deposits and credits. With respect to supervision, COBAC is enhancing its activities in the area with the support of the international community. Moreover, the effective operation of GABAC, launched in 2004, is expected to step up the anti-money laundering drive. 3.3.18 However, the banking sector is relatively compartmentalized on a country basis, notably in payment systems. In this respect, the World Bank approved a project to modernize payment systems in 2002. Additional resources are required to complete the funding of certain components of the project. The Single Approval was introduced in 2002 to ease the establishment of banks in the sub-region and thereby stimulate competition in the sector. It allows a bank approved in a member country to open branches in all the other countries of the community without

27 There are 4 first-rank convergence criteria to be met by each country, hence, a total of 24 country-criteria for the six countries. 28 In this country, the banking system which is made up of four credit establishments has been generally streamlined, with the exception of one bank that remains fragile and does not comply with prudential ratios.

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applying anew to the Ministry of Finance. However, it is still to become a reality probably due to capital requirements and persistent red tape which hamper the establishment of banks. With regard to microfinance, its development in Central Africa, particularly in Cameroon, Chad and Congo, prompted the financial and monetary authorities to envisage, like WAEMU, the regulation of the sector as early as in 2002. However, the level of activity of microfinance institutions (MFI) is generally low compared with the major microfinance needs of business operators outside the formal banking system. Furthermore, the sector remains fragile and volatile as it is confronted by low capitalization and poor management. COBAC was entrusted with the task of promoting MFIs in the context of a regulated and supervised system. Donor support is also necessary. 3.3.19 The BVMAC project launched in 2000 has made remarkable strides, especially by the establishment of the Central African Financial Market Surveillance Commission (COSUMAC) and the legal and statutory frameworks of the financial market (2003). The capital of BVMAC has been fully subscribed (CFAF 1.779 billion) and shared among 25 shareholders (Banks, insurance companies and companies). The draft Rules and Regulations of the Stock Exchange and Central Depository are ready and submitted to COSUMAC for approval. Staff recruitment and building of the head office are in process. It is worth mentioning that, following the decision to establish the head office of BVMAC in Libreville, Cameroon withdrew and set up the Douala Stock Exchange (DSX) inaugurated in April 2003. It is a private limited financial company with a share capital of CFAF1.2 billion held by several public and private partners. The coexistence of two stock markets in the small CEMAC market, dominated by Cameroon in terms of the number of companies, poses the problem of profitability and viability. It is desirable for the two projects to cooperate closely and form a single stock market. 3.3.20 Creation of a common market: customs reforms begun in 1994 have three main components: (i) introduction of a Common External Tariff (TEC), comprising the following four rates applicable to imports from third countries: 5% (essential goods), 10% (raw materials and capital goods), 20% (intermediate goods and sundry goods) and 30% (wage goods); (ii) a preferential tariff on trade between countries of the zone; and (iii) harmonization and simplification of indirect taxes and introduction of a value added tax (VAT). In addition, the CEMAC Customs Code was thoroughly reformed to comply with customs valuation of transactional value as set forth by the World Customs Organization (WCO) and new rules of origin established by the WTO. However, the implementation of the customs union is still partial. In fact, most countries have maintained nontariff barriers among themselves and with third countries. With respect to TEC, different nomenclatures and rates are still in force. Temporary surtaxes and specific taxes are still applicable within and outside the zone. It is also noteworthy that some States unilaterally increased VAT (25 %) in violation of the rate range set by the Community Guideline (12% to 18 %). 3.4 ECCAS/CEMAC Cooperation 3.4.1 Like WAEMU and ECOWAS in West Africa, CEMAC and ECCAS have partnership ties. Both communities are members of parity commissions, notably those relating to NEPAD, the Consensual Transport Master Plan for Central Africa (PDCT-AC) and the Regional Programme for Food Security (RPFS) supported by FAO. CEMAC and BDEAC are members of CRNEPAD/AC for the regional implementation of NEPAD, of which ECCAS is the focal point in Central Africa. An ECCAS/CEMAC Cooperation Protocol on transport has been signed. The two communities have been mandated by their respective authorities to jointly prepare the negotiations on the Economic Partnership Agreements (EPA) with the European Union, and have consequently set up a Joint Regional Committee for the preparation and coordination of the negotiations. Furthermore, an Agreement was signed in August 2004 between ECCAS and BDEAC, a specialized structure of CEMAC which permits institutional cooperation between these two organizations. Similarly, in an effort to control endemic diseases in Central Africa, OCEAC’s mandate has been extended to the entire ECCAS region.

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3.4.2 At the fiscal and customs level, CEMAC decided in July 2004, at the request of ECCAS, to amend the CET in force in its Member States based on the CCI rate adopted by ECCAS (0.4%). This decision will ease the institution and settlement of the CCI by CEMAC members of ECCAS. On the whole, the integration process is relatively more advanced in the CEMAC zone than in ECCAS zone, in spite of some dysfunctions that need to be corrected. There is therefore a need to enhance synergy between the two communities. In short, the challenge facing ECCAS is to achieve genuine and wider integration in Central Africa. Close cooperation between the two institutions should emerge as one of the strategic pillars to boost integration in this region. There is a need to strive for the consolidation and generalization of CEMAC’s achievements in all the countries of the region. In this regard, it should be mentioned that a tripartite memorandum was signed in April 2005 between the ECA/Central Africa/ECCAS/CEMAC putting in place a structure to coordinate activities and programmes with a view to ensuring complementarity, consistency of policies and decisions and to jointly implement projects/activities. This document was approved by the NEPAD Committee. A report was submitted to the Heads of State of ECCAS in June 2005 in Brazzaville. However, a formal comprehensive strategy is yet to be adopted by the Supreme community bodies in respect of the future role of the two institutions in regional integration in Central Africa. 3.5 Regional Development Agenda 3.5.1 ECCAS has not yet developed a comprehensive strategy document. Its regional development agenda rather falls under the Treaty, NEPAD and the recovery plan adopted by the Heads of State in 1998. The latter is a series of programmes and plans of action in the strategic areas of economic integration and regional cooperation. The recovery plan addresses nine priority areas, namely: conflict prevention, capacity building, promotion of trade, free movement of persons, development of community infrastructure, HIV/AIDS control, the environment, food security and gender. At the financial level, the Community Integration Contribution (CCI) was introduced to guarantee financial autonomy to the General Secretariat and community projects. Macroeconomic policy convergence and surveillance as well as the integration of the financial sector are not yet addressed in the current ECCAS recovery programme. However, pursuant to the different meetings of the supreme bodies of the Community, instructions have been given to the Secretary-General of ECCAS to conduct studies on the harmonization of the macroeconomic policies of member States with a view to speeding up the integration process. . Yet, these key economic integration components are an integral part of the CEMAC monetary zone programme. These issues will be addressed subsequently on account of their relevance in the economic integration process. 3.5.2 Conflict prevention and democracy: in this area, peace and security are considered as prerequisites by the Heads of State who set up the Central African Council for Peace and Security (COPAX) in 1999. To strengthen its capacities in peace, security, conflict prevention and good governance, ECCAS plans to initiate actions, notably, the rapid operationalization of its conflict prevention organs, that is MARAC and FOMAC, in the following areas: (i) assessing requisite equipment, especially in the areas of data collection and processing (office automation and telecommunication), and camping equipment for a small squad of 2000 troops; (ii) identifying requisite training for technical staff of ECCAS and Member States for specialization in information collection and processing; (iii) identifying requisite training for standby FOMAC contingents; (iv) establishing a strategy to improve civil society participation in conflict prevention and democratization in Member States; (v) establishing a strategy for better cooperation with other RECs, AU, EU and the United Nations in the area of conflict prevention; and (vi) establishing a resource mobilization strategy for conflict prevention and democratization in Central Africa, notably through the setting up of a Regional Elections Observatory. The Conference of Heads of State and Government held in Brazzaville in June 2005 decided to set up a Regional Military

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Command and Standby Brigade within FOMAC and a Unit to provide election support to Member States lodged at the ECCAS General Secretariat. 3.5.3 Capacity building: ECCAS General Secretariat is afflicted by the obsolete nature of its current structure and inadequate resources at a time it has to rapidly implement its work programme. The Secretariat requires appropriate expertise in the area of taxation, customs and statistics to pool customs procedures and regulations as well as foreign trade statistics. Qualified experts are also needed to coordinate NEPAD, formulate and manage community projects funded by FCD resources and development partners. As concerns institutional services, there is a need to strengthen accounting capacities to manage huge programme resource flows. Notwithstanding these urgent needs, the new structure should be light and gradually enhanced depending on the availability of financial resources and institutional priorities. Accordingly, the target is to strengthen the action and intervention capacities of the ECCAS General Secretariat to drive economic integration and regional cooperation through an organization chart tailored to the institution’s objectives and the recruitment of experts. The Bank will provide support for ECCAS capacity building. 3.5.4 Trade promotion: ECCAS launched the Free Trade Area (FTA) on 1 July 2004 with the adoption of the preferential tariff which aims at gradually reducing current customs duties in Member States based on a time frame adopted by ECCAS authorities. It is a four-year time frame that seeks to achieve a 100% reduction on handicrafts and local specialities outside mining products effective 1 July 2004. For mining and manufactured products deemed as original products, customs duties will gradually be reduced as follows: 50% by 1 July 2004, 70% by 1 January 2005, 90% by 1 January 2007 and 100% by 1 January 2008. To offset the fiscal revenue loss arising from the preferential tariff, a compensation fund was set up in January 2004. The fund also provides for the allocation of funds in a special account for landlocked countries, island countries, semi-island countries, semi-landlocked and/or countries falling under the category of least developed countries. Lastly, the time frame provides for the establishment of a customs union in 2008. 3.5.5 An ECCAS Council of Trade Ministers was held in Brazzaville in November 2004 to review the implementation of the FTA and to adopt a four-year plan of action. Actions to be undertaken include extension and dissemination of FTA instruments and monitoring of the implementation of measures on the ground. Constraints relate mainly to slippage in the implementation of the CCI by all Member States thereby impeding the establishment of the FTA. In fact, CCI resources are indispensable for the operation of the compensation fund for revenue losses. Programme coordination poses also a fundamental problem as some Member States belong to several RECs. The Council of Ministers held in Brazzaville in June 2005 urged the General Secretariat to: (i) intensify sensitization and extension activities on FTA instruments in Member States; (ii) conduct a study for better programme coordination and use of FTA instruments, taking into account the fact that some States belong to other RECs; (iii) address the issue of customs statistics for the harmonization and processing of data; (iv) conduct a thorough impact study to assess revenue loss by member States; and (v) take the necessary measures to conduct studies on the eventual institution of a common external tariff. 3.5.6 In this respect, it is worth noting that ECCAS States belonging to CEMAC form a customs union launched since 1994 with the introduction of the Common External Tariff (TEC), harmonization and simplification of indirect taxes and VAT. However, it is desirable to address the problems noted in the actual implementation of the fiscal and customs reforms by: (i) appropriate and uniform enforcement of TEC on goods from third countries; (ii) uniform management of exonerations; (iii) avoiding double taxation of products imported from third countries, consumed and bought by traders of another Member State; (iv) adequate implementation of rules of origin on

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products manufactured within CEMAC; and (v) compliance of VAT rates with the Community Guideline (12% to 18 %). 3.5.7 Free movement of persons: the effective free movement of persons is an overarching objective of ECCAS. Member countries should work toward the lifting of administrative barriers to the free movement of persons and goods which is not yet a reality within ECCAS nor within the CEMAC zone. The decision taken by ECCAS in January 1990 to allow the free movement of some categories of nationals29 effective January 1991 is not yet enforced even though in June 2002, the Heads of State set another deadline for 1 January 2003. In CEMAC, the community passport adopted since July 2000 is not yet implemented. However, four (CAR, Cameroon, Chad and Congo) out of the six countries allow the free movement of persons between their countries but require, as a reciprocal measure, visas from nationals of the other two countries (Gabon and Equatorial Guinea). 3.5.8 To ensure the actual implementation of community legislation on the free movement of certain categories of ECCAS nationals, a Council of Ministers in charge of Immigration and Justice was held in Brazzaville in August 2004. The Council made the following recommendations: (i) extension of community standards; (ii) adoption of national laws to waive immigration requirements for nationals from the community; (iii) introduction of border crossings exclusively for nationals from the community; and (iv) creation of “ECCAS” corridors in airports, ports and other border crossings. In addition, a Convention on cooperation and mutual judicial support to guarantee judicial security within the community and ease the implementation of measures adopted has been prepared. Before adoption by the Heads of State, the Convention should be considered as soon as possible by Ministers in charge of Foreign Affairs, Immigration and Justice. 3.5.9 Development and maintenance of regional infrastructure services: special emphasis is placed on the development of transport infrastructure programmes to address severe deficiencies in this area. ECCAS Heads of State adopted a Consensual Transport Master Plan for Central Africa (PDCT-AC) in January 2004 that falls under NEPAD. Implementation of the PDCT-AC should pave the way for the linking of ECCAS capitals by tarred roads by 2010. In this context, the CRNEPAD/AC adopted, in July 2004, a list of 14 priority projects out of the 28 contained in the Short-Term Action Plan (STAP) to be implemented during the coming years. They include: (i) conducting a study on the Grand Inga integration project; (ii) implementing the air security control capacity building programme in West and Central Africa (COSCAP)30 which has benefited from ADF financing since April 2005; (iii) implementing the PDCT-AC, namely through (a) conducting a feasibility study on the Mayumba Port, (b) conducting a feasibility study on the Doussala (Gabon border) – Brazzaville road, (c) implementing the Fougamou-Doussala road project, (d) conducting a feasibility study on a road/rail bridge over River Congo linking Brazzaville and Kinshasa and the extension of the Kinshasa-Ilebo railway; and (e) rehabilitating transport infrastructure in Angola and DRC; (iv) implementing the sub-regional Energy Interconnection Master Plan; (v) strengthening African telecommunications institutions and ICTs ; (vi) facilitating transport along the Douala-Bangui and Douala–N’djamena corridors; (vii) supporting water management in Central Africa; (viii) implementing the Marina and Re-Dowe tourist platform project; (ix) conducting a feasibility study on the Ouesso-Souanke-Sangmelima road; and (x) implementing the Franceville-Leketi railway extension project.

29 Decision No. 03/CCEG/VI/90 is worded as follows: “With effect from 1 January 1991, the following categories of persons shall move freely within ECCAS: (a) tourists, (b) professionals, (c) students, trainees, researchers and teachers, (d) frontier zone inhabitants and commuters”. 30 The objective of the COSCAP programme is to strengthen air security control capacities in Central and West Africa. To achieve this objective, West and Central African States decided to adopt a regional approach through the following three groups: (i) the West African Economic and Monetary Union (WAEMU) and Mauritania, (ii) countries of the Banjul Agreement; and (iii) CEMAC, including Sao Tome and Principe.

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3.5.10 Prior to the PDCT-AC, CEMAC Heads of State had adopted the Integrating Road Network Programme (PRRI) in July 2000. The PRRI is consistent with the PDCT-AC that is modelled on the criteria for selection of priority integrating highways defined by CEMAC with the support of the ECA31. The PRRI, which was updated in June 2004, totals 18,122 km, including 5,064 km of tarred roads, or to 28%of the network. Given the enormous financial resources to be mobilized, a decision was taken to launch a pilot Programme on the Douala-N’djamena and Douala-Bangui corridors because of heavy traffic flows and the need to foster the opening up of the two landlocked countries. Urgent actions require financing by available World Bank and EU funds. They mainly include: (i) the study for the drafting of the transport infrastructure development strategy document; (ii) the preparation of a comprehensive facilitation programme for the CEMAC zone; and (iii) the study of a general transit system (customs clearing at the port, transit system, bank deposit system, etc). Moreover, to address air transport difficulties in the community, CEMAC decided to set up an airline that will enjoy advantages within the zone. In this context, with the support of the World Bank and the ADF, the Joint Project for the Cooperative Development of Operational Safety and Airworthiness (COSCAP) will be implemented 3.5.11 Combating HIV/AIDS: to control the spread of HIV/AIDS in Central Africa, ECCAS adopted a strategic framework and action plan in Brazzaville in January 2004. the establishment of a health information system on HIV/AIDS in Central Africa ; (ii) the creation of a regional fund to combat HIV/AIDS in Central Africa, replenished mainly by CCI and private sector resources : (iii) mainstreaming an HIV/AIDS dimension into the activities of COPAX ; (iv) the e establishment of a special regional programme for men in uniform in joint peacekeeping and military academy exercises. (v) the mainstreaming of HIV/AIDS activities in the ex-combatants DDR programmes, including child soldiers ; and (vi) building the institutional capacities of the implementing organs of the Brazzaville Declaration that advocates the prioritization of HIV/AIDS control at national and sub-regional levels. 3.5.12 It is also worth mentioning that 25 countries of West and Central Africa have gradually mobilized into four entities known as “initiatives” to efficiently enhance the HIV/AIDS response through coordinated prevention actions which factor in areas with high migration flows and post-conflict situations at country and sub-regional levels. With respect to Central Africa, the initiatives include: (i) the Great Lakes Initiative Against AIDS (GLIA) comprising Burundi, DRC, Kenya, Rwanda, Tanzania and Uganda, (ii) the Lake Chad Basin Initiative involving CAR, Chad, Cameroon, Niger and Nigeria; and (iii) the Rivers Congo-Oubangui-Chari Riparian Countries Initiative comprising CAR, Chad, Congo and DRC. 3.5.13 Environmental protection: The ECCAS General Secretariat intends to support the implementation of the plan of action of the NEPAD environmental initiative through the following programmes: (i) implementation of the United Nations Convention to Control Desertification (UNCCD); (ii) promotion of renewable energies; (iii) development of the Lake Chad Basin; (iv) adoption of an African strategy on disaster risk management; and (v) implementation of the COMIFAC Sub-regional Convergence Plan for the Sustainable Management of the Congo Basin Ecosystems adopted in February 2005 in Brazzaville during the Second Summit of Heads of State of Central Africa. The summit also signed the Treaty on the conservation and sustainable management of forest ecosystems. The Convergence Plan aims at the joint management of forest resources through the management of transborder protected areas. The Brazzaville Summit also adopted the establishment of a sub-regional funding facility drawn from levies on revenue accruing

31 ECCAS criteria are similar to CEMAC criteria including the trans-African road component and the development and promotion of existing transport and transit corridors. Two priorities have been outlined for the implementation of the PRRI. The first level priority covers sections of roads linking the remote areas to international maritime ports and which are not funded. The second level priority covers sections of roads linking the maximum number of remote areas and promoting small markets.

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from exports of forest and wildlife products with a view to funding the convergence plan and sub-regional cooperation institutions. The Plan spans ten years with a three-year priority programme. The implementation of the Plan will depend on the urgency in addressing the dual challenge of strengthening the operational capacities of the COMIFAC Executive Secretariat and sustaining its funding as a coordination organ. 3.5.14 Food security : in approving the Special Programme for Food Security (SPFS) initiated by the FAO in 1994, the World Food Summit (WFS, Rome, November 1996) called for concerted efforts at all levels to increase food production and improve access to food in low income food deficient countries (LIFDC). For the first preparatory phase of monitoring of the WFS, the FAO provided technical support to the countries of ECCAS in the formulation of the “Draft National Agricultural Development Strategy – by 2010” document. This document contains essential policy elements and major challenges and constraints in matters of food security. The second phase consisted in preparing a Regional Programme for Food Security (RPFS), first for CEMAC countries prior to its extension in January 2004, to the other ECCAS countries. The RPFS is a framework for the coordination and harmonization of food security policies that can be used for the mobilization of human and financial resources. It is also a framework for consultation with professional and inter-professional organizations working in the area of food security. 3.5.15 The RPFS comprises the following 10 integration sub-programmes: (i) intensification and diversification of food production through the development of agricultural infrastructure; (ii) agricultural research development and extension and dissemination of research findings; (iii) production and marketing of high-yield seeds and seedlings in the Member States; (iv) management and prevention of food crises among vulnerable groups (refugees and displaced persons); (v) integration of the regional dimension in national agricultural policies; (vi) promotion of improved information management in order to strengthen food security and intra-and extra-ECCAS trade in agricultural produce; (vii) promotion of private sector initiatives and partnership for agricultural products processing SMEs; (viii) strengthening of health security of foodstuff and production inputs to facilitate intra-and extra-ECCAS trade. (ix) facilitation of intra-and extra-ECCAS trade; and (x) building the capacities of ECCAS member countries to participate effectively in multilateral trade negotiations on agriculture within the framework of WTO. The first four of these sub-programmes were chosen as pilot programmes by the ECCAS decision-making bodies. In addition, plans have been made for a regional structure for the promotion of agricultural investments and PRSA institutional mechanisms with the support of the FAO. 3.5.16 Gender mainstreaming : ECCAS has instituted a gender and development policy adopted by the Eleventh Ordinary Conference of Heads of State and Government in January 2004. The policy aims to (i) eliminate all forms of discrimination, inequality, exclusion and prejudices; (ii) promote human rights; (iii) ensure the effective participation of women and men in all domains of activity and at all levels of society in order to ensure the sustainable development of Central Africa; and (iv) build the capacities of women in all domains particularly in the political, economic, social and cultural domains, to enable them to contribute significantly to development. The General Secretariat of ECCAS subsequently set up a technical unit responsible for gender and development issues. In particular, it is planned to organize sensitization and training workshops in gender and development; sensitize Leaders; and provide support to Member States in the formulation of their national gender policy. However, this unit has not yet been provided with human and financial resources to carry out the planned actions. 3.5.17 Convergence and monitoring of macroeconomic policies: there is no formal mechanism for the convergence of macroeconomic policies within ECCAS. On the other hand, in CEMAC zone, there is a three-year multilateral surveillance mechanism for monitoring the measures to rehabilitate the macroeconomic framework. Discussions are under way to define, with

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IMF support, conditions for reviewing the criteria and operation of the mechanism, in particular the inclusion of the volatility of fiscal revenue, penalties in the event of non-compliance, comparability of economic and financial aggregates and strengthening of national units responsible for the monitoring of macroeconomic convergence. 3.5.18 Integration of the financial sector : like macroeconomic convergence, the building of a regional financial market is not included in the ECCAS programme of activities. The consolidation of the financial market is one of the major ongoing actions within CEMAC. It concerns the rehabilitation of the financial sector, strengthening banking supervision by COBAC, and combating money laundering by GABAC. Other financial integration activities concern the facilitation of the effective establishment of banks within the union, strengthening microfinance activities, modernizing means and systems of payment at sub-regional level, developing long-term financing institutions and ensuring the effective operation of the sub-regional stock exchange (BVMAC). The oil revenue stabilization fund and the fund for future generations at BEAC should also be mentioned. Regarding the establishment of banks, it will be a matter of examining and addressing the difficulties encountered in the implementation of the single Approval adopted in 2002. Moreover, the project to promote microfinance institutions (MFI) in a regulated and controlled framework will require that COBAC builds capacities for the control of MFIs by increasing the number of staff and providing specialized training. Concerning the means and systems of payment, the CEMAC zone is implementing a modernization programme. In this connection, the World Bank approved, in July 2002, its first sub-regional project, in collaboration with the Member States, BEAC, commercial banks and the IMF. Implementation of the project will enable the establishment of clearing systems for electronic payments for mass operations and big amounts, as well as interbank cards and risk management. However, financing is still to be mobilized for some components of the programme and discussions are ongoing between the Bank and BEAC for the financing of these components. 3.5.19 Concerning the development of the financial market, the medium-and long-term financing channels are developing fast, especially with the restructuring and resumption of financing by BDEAC as well as the conditional possibility of its operation in countries which are not members of CEMAC. The second phase of the BDEAC recovery plan, over the 2005-2007 period, will be devoted to the consolidation of outputs and prudent expansion of financing, in particular thanks to the co-financing and cooperation partnerships which it is developing with institutions such as the Bank, World Bank, BEAC, ABEDA, IDB, EIB and AFD. BDEAC will supplement, with its own resources, the concessional resources secured through certain lines of credits. In addition, in the domain of venture capital, two initiatives should be noted in CEMAC area, namely the Central Africa Investment Corporation (CENAINVEST) and the Central Africa Growth Fund (CAGF). CENAINVEST is a venture capital fund established in Cameroon in 1998 by Afriland First Bank with the financial contribution of the Dutch FMO. It intervenes in the form of equity and quasi-equity in SMIs/SMEs being set up. Its first operation helped set up about twenty SMIs in Cameroon and Chad. It plans to extend its operations to Equatorial Guinea and Gabon, in cooperation with BDEAC. The CAGF, an initiative of the EIB and PROPARCO, is a venture capital fund based in Douala and constituted in the form of an open-end investment fund (SICAV), with a capital of 30 million euros. It plans to support about fifteen selected investment opportunities in the region (professional or institutional investors). 3.5.20 Moreover, activities to launch the BVMAC will be pursued. The basic text of the regional financial market is in force since November 2003. Draft texts relating to debenture loans and to the dematerialization of securities have been prepared by COSUMAC which shall submit them to the UMAC Ministerial Committee. In this regard, the EIB, IFC, Dutch FMO and PROPARCO plan to guarantee the first debenture loans envisaged in 2005. The Douala Stock Exchange (DSX) commissioned in April 2003 will coexist with the BVMAC. Finally, it will be

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recalled that BEAC set up, in 2001, a stabilization fund and a fund for future generations, in order to improve the management of oil resources and consequently contribute to deepen the financial market. Countries can deposit into the stabilization fund 50% of their “surplus” oil revenue, defined as being revenue obtained when prices are higher than their average over a five-year period. On the other hand, countries can draw from the fund the equivalent of up to 50% of loss of revenue. The fund for future generations is a savings fund into which the countries can deposit up to 10% of their oil revenue. To-date here have been no transactions under these funds which still have to be activated. The remaining obstacles concern issues of management and the categories of assets that can be held by these funds, as well as the rates of return proposed by BEAC which are considered to be low. Ongoing discussions aim, therefore, to reconcile the short-term management rules of the international reserves of BEAC with the long-term investment objectives of the savings fund. 3.5.21 Evaluation of the strategy : the ECCAS recovery programme focuses on four main thrusts : (i) peace and security ; (ii) human integration culture ; (iii) capacities for analysis, action, initiative, intervention, communication and collective negotiation ; and (iv) physical, economic and monetary integration. The programme is in line with NEPAD. Concerning security, ECCAS endeavoured between 1999 and 2002 to prepare, with the support of the EU and the United Nations, a strategy capable of restoring sustainable peace and security in the region. Though all components of the strategy are not yet operational, remarkable progress has been made. In fact, institutionally, COPAX and its organs were set up. Mediation and conflict prevention activities were carried out in Sao Tome and Principe and Equatorial Guinea, as well as military exercises in Libreville. More recently, diplomatic activities were carried out within the framework of the conflict between DRC and Rwanda. To build its capacities in the area of peace, security and good governance, ECCAS must pursue its conflict prevention efforts (MARAC and FOMAC). It will also have to encourage its Member States to subscribe to the APRM. 3.5.22 The other programme components concern economic and social aspects which do not yet fit into an overall coherent strategy paper. Consequently, the existing programme of activities is evaluated on the basis of three focal points, namely human integration, capacities and physical, economic and monetary integration. Thus, concerning the development of human integration, the free movement of persons is still impeded by political, administrative and physical (lack of infrastructure) obstacles, in spite of the decisions taken for this purpose. This situation may hamper the achievement of the goal of human integration. Moreover, ECCAS has instituted a strategic framework for the fight against HIV/AIDS and a gender policy. These actions are judicious considering that these issues are major concerns in the region, but their level of implementation remains low. However, the strategic thrusts defined need to be operationalized in terms of concrete policies and actions to be implemented. 3.5.23 The second focal point, namely the development of analytical capacities is at the same level of effectiveness at the General Secretariat of ECCAS. Consequently, the Bank has already undertaken to build the capacities of the General Secretariat of ECCAS by approving in November 2004, an institutional support project the effective implementation of which will contribute towards building the analytical and intervention capacities of ECCAS. In fact, the project provides for the establishment of an organizational structure tailored to the missions of ECCAS, the building up of economic and commercial databases, support for the implementation of the community integration contribution (CCI), reforms and urgent integration activities, and training particularly in commercial negotiations and management. This situation implies that, in the short term, the effective conduct of certain design, implementation and monitoring - evaluation activities of integrating programmes and projects by the General Secretariat of ECCAS should be done gradually and pragmatically, in synergy with the countries involved, other RECs and sub-regional institutions.

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3.5.24 Regarding the development of physical, economic and monetary integration, much remains to be done in terms of actions, although under NEPAD efforts have been made in the preparation of regional programmes in the areas of infrastructure, environment and food security. In fact, ECCAS has a consensual transport programme and regional environment and food security programmes, and it plans to institute a common agricultural policy by 2008. However, the strategic thrusts and the institutional framework for implementation of these programmes have to be operationalized by studies, projects and resource mobilization. In addition, concerning free trade, the institution of the free trade area was officially launched on 1 July 2004. To this end, a number of actions must be rapidly carried out in order to abolish customs duties at the end of 2007 and establish the customs union in 2008. The meeting of Ministers of Trade of ECCAS Member States held in Brazzaville on 25 and 26 November 2004 underscored, among other things, the lack of progress in this domain. The meeting then urged the Member States to redouble efforts in the implementation of the 2004-2008 FTA plan of action. In fact, there is an urgent need to implement reforms in this area, in respect of the deadlines fixed by the WTO and EU which recommend the institution of the FTA by 2008 under the Economic Partnership Agreement. 3.2.25 Furthermore, except for the CEMAC currency area, ECCAS does not yet have programmes in such vital integration areas as the convergence and surveillance of macroeconomic policies and the integration of financial markets at regional level. In keeping with the principle of capitalizing on the achievements of CEMAC and the ambition of building an African common market, studies could be conducted on the constraints and conditions of extension in the long run to all countries of the region of CEMAC’s achievements in these areas. Such an approach should however be part of an overall strategy adopted by the authorities of the two communities. In addition, within CEMAC, it is advisable for the BVMAC and the Douala Stock Exchange to cooperate closely so as to form in the long run only one single stock market, in order to ensure their profitability and their survival on the sub-regional market which is small and dominated by Cameroon in terms of the number of enterprises. Moreover, the role of the private sector is acknowledged as the engine of regional integration and growth. However, measures to develop the regional private sector have not been prepared, even though actions in the area of peace, security, governance, infrastructure and the free movement of goods and persons contribute towards the improvement of the overall framework for the conduct of business. 3.5.26 To sum up, in general, in view of the constraints, potential and backwardness of the region in terms of integration, the various ECCAS programmes, though ill-assorted, seem to be relevant. At regional level, their effective implementation, under a long-term overall strategy, will depend essentially on (i) the consolidation of the political will of Member States and the atmosphere of peace and security; (ii) the strengthening of the institutional capacities and human resources of the General Secretariat of ECCAS, as well as of the RECs and the lead specialized institutions that are responsible for designing and successfully implementing the regional strategy and programmes; (iii) the development of strategic partnerships not only between ECCAS and CEMAC but also with other lead sub-regional specialized institutions; and (iv) the speeding up of the effective establishment of the CCI by all Member States in order to ensure the self-financing of the community. The regular payment by the States of their financial obligations is one of the cornerstones of success of ECCAS and the other institutions. Measures taken to this end since the revival of the community have helped recover a part of arrears of contributions accumulated between 1985 and 2003, including those of the period of quasi-inactivity of the community. However, these measures must be pursued to recover the remaining arrears, in particular through the signature of the agreements relating to the CCI. Lastly, it would be necessary to prepare in the long run an ECCAS comprehensive strategy to ensure coherence between the various programmes.

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IV. Bank Group Assistance 4.1 Assessment of Cooperation between ECCAS and the Bank 4.1.1 Cooperation between the Bank and ECCAS is carried out not only at the level of individual Member States under CSPs but also within the context of multinational operations. At national level, the Bank has a project portfolio in each Member State. Two ECCAS countries, namely Gabon and Equatorial Guinea, are middle-income countries which can only borrow non-concessional resources from the ADB window. The other States have access to ADF concessional resources, and some eligible countries are also supported by the Bank through debt relief under the HIPC initiative and the new post-conflict countries facility. Since the beginning of its operations in ECCAS zone in 1967 until the end of 2004, the Bank has financed 525 operations in all eleven countries for a total amount of about UA 5 618.07 million (including 240 operations for an amount of UA 2 397.03 million for CEMAC countries). 4.1.2 The country strategies of the Bank remain focused on poverty reduction, through support for economic growth, the development of business opportunities, jobs and incomes, as well as specific actions for poor people aimed at improving their living conditions (education, health, HIV/AIDS and basic infrastructure). These strategic orientations generally translate into the selection of the following sectors: social, agricultural (food security), transport, public utilities and support to economic reforms. Emphasis is also placed on institutional support in order to strengthen the capacities of the public sector to carry out its essential missions. At the same time, through its ADB window, the Bank financed projects in the private sector, particularly in Cameroon. For all ECCAS countries, Bank resources were primarily allocated to the transport sector (22.9%), followed by agriculture and rural development (19.6%), multisector (16%) and urban development (13.1%). The other areas of intervention are industry and mining, social sector and energy. 4.1.3 The following operations are among Bank financing in the area of regional integration: the Libreville Higher Institute of Applied Technology, Gabon (2000); the African Onchocerciasis Control Programme (2000); the Regional Environmental Information Management System (2000); a research and development pilot project on integrated pest management for subsistence farming in the Lake Chad Basin (2002); the study on the interconnection of the electrical grids of ECCAS member countries (2003); and the Congo-Oubangui-Chari regional HIV/AIDS Initiative(2003). The Bank also contributes to the capital and financings of BDEAC. It has recently approved, respectively in November 2004 and April 2005, a support project for strengthening the capacities of the General Secretariat of ECCAS and the COSCAP project. 4.1.4 The Bank’s interventions in Central Africa at national and regional levels must back up each other. However, they have so far been based essentially on national development strategies rather than on the regional dimension, thus reflecting to a large extent the conflicts and weaknesses of integration in Central Africa, particularly in terms of capacities. This situation is due in large part to the fact that the implementation of some multinational projects depended on the national structures of the countries involved in these operations. This results in the weak institutional development of RECs. The complementarity of the two levels of assistance should be further optimized, in order to enhance the impact of the Bank’s operations on growth and poverty reduction, in particular under NEPAD. In addition, the Bank’s experience in implementation of multinational projects, both in ECCAS zone and with other RECs, has shown the importance of the commitment of States to these initiatives and of cofinancing mechanisms. It has also shown that the effective implementation of these projects is dependent on good governance, peace and stability at regional level, as well as the harmonization of policies and the existence of an appropriate regulatory framework.

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4.2 Rational, Goals and Principles of Bank Strategy for ECCAS 4.2.1 The goal of the RIASP for Central Africa is to serve as a framework for support to poverty reduction in ECCAS countries, by taking advantage of the benefits of economic integration and regional cooperation and by strengthening complementarity with the CSPs. Indeed, regional integration goes beyond mere juxtaposition of economies to create synergies, use positive externalities and create opportunities for private sector activity in a more vast unified area, through the broadening of markets, the coordination and harmonization of policies and streamlining in the management of resources and ills of a transnational nature. For the Bank, it is a matter of assisting these countries to overcome the main constraints on economic integration and regional cooperation outlined above, in particular by ensuring the coherence of the various programmes and plans of action of ECCAS. 4.2.2 It is evident from the above analysis that the main problems of a regional dimension concern the fragility of the security situation; the weakness of the institutional and financial capacity of RECs to design and implement regional programmes; obstacles to the free movement of persons, goods and capital within the community; lack of harmonization of policies; inadequate transport and energy infrastructure; poor environmental management; and food insecurity and weak social indicators notably as regards HIV/AIDS. It should also be noted that though programmes and plans of action exist in most of these domains in ECCAS, it is not the case with respect to the multilateral convergence and surveillance of macroeconomic policies and integration of the financial market where only CEMAC has made progress. 4.2.3 The Bank’s assistance strategy for ECCAS is based on the guiding principles of subsidiarity, broadening of private sector participation, strategic selectivity, coordination with the other development partners and open regionalism. Subsidiarity implies that national interventions, which remain the main channel of Bank assistance to RMCs, will be strengthened by multinational operations through RECs. In fact, the RECs have received a mandate from the Member States in essential integration activities such as the harmonization of policies and the institution of the FTA and the common market. For greater efficiency and on the basis of the Bank’s past experiences, the implemention of some multinational activities could be based, at the institutional level, on an organization of national structures while developing synergies with the RECs, particularly in investment, social or agricultural projects. Increased private sector participation implies focusing on activities aimed at increasing economic opportunities, through the improvement of the business environment, reduction of factor costs and elimination of administrative and physical barriers to free movement and facilitation of trade. 4.2.4 In terms of strategic selectivity, the Bank will focus on essential areas of integration, NEPAD and the development of cooperation in the rational use and management of regional public property and ills, in accordance with its mandate, Vision and policy and in coordination with the other partners. The CSPs should also take into account the regional strategy of ECCAS in their national approach. Concerning open regionalism, it should be noted that in Central Africa, the principle of a two-speed but convergent integration is unavoidable in the short and medium term. Indeed, while backing the achievements of the CEMAC sub-region in certain areas, the Bank could consider, in coordination with other partners, the modalities of extending the achievements of this zone to the entire ECCAS, particularly in the area of multilateral surveillance and financial market integration. Efforts to ensure harmonization with the other regional blocs such as COMESA and SADC could also be considered in the context of an overall strategy for the harmonization and rationalization of the RECs to be adopted by the States. Dialogue should play a key role in this domain.

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4.3 Priority Focus of Bank Group Assistance Programmes 4.3.1 Bank group assistance to Central Africa targets the following three strategic thrusts: (i) building of the capacities of the principle RECs and support to regional economic integration; (ii) development of regional infrastructure; and (iii) support to regional cooperation in the management of issues of regional concern. Capacity building and support to regional economic integration are prerequisites in so far as the principal RECs, notably the General Secretariat of ECCAS and, to a certain extent, the Executive Secretariat of CEMAC do not have adequate capacity to design and implement regional programmes. In addition, considering the urgent nature of some essential integration functions, support actions for this purpose must be carried out jointly with capacity building activities. Moreover, these types of operations are instruments of dialogue indispensable both for the implementation of institutional and financial reforms of RECs and for the development of synergies between them. The thrust concerning the development of regional infrastructure, falls within the NEPAD implementation framework. Indeed infrastructure constraints are enormous in Central Africa. In addition, the Bank is a strategic partner of NEPAD. 4.3.2 Lastly, the third thrust that aims to support regional cooperation in the management of issues of regional concern, also falls under NEPAD. It aims to strengthen national operations through the transnational dimension in areas of paramount interest to the Bank with regard to poverty reduction, sustainable development and the achievement of the MDGs, through coordination, harmonization of policies and rationalization in the use and management of common resources and problems. Emphasis will be placed on the fight against HIV/AIDS, food security and support to the implementation of the COMIFAC Plan of Convergence on the conservation and sustainable management of the Congo Basin forests. These areas of intervention are in keeping with the priority thrusts of the Vision and Strategic Plan of the Bank. They aim to take up the major challenges of integration in Central Africa and accelerate poverty reduction. 4.3.3 The RIASP is results-based through indicators and monitoring mechanisms adapted to the constraints and institutional capacities of the region’s structures. The mechanism and indicators retained will help ensure the monitoring and assessment of the impact of the Bank’s interventions on development at the regional level (cf. Table 4.1: RIASP Results Framework and Annex IV: Matrix of Thematic Results).

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Box 2: RIASP Participatory Approach The RIASP for Central Africa was prepared using a participatory approach, involving the holding by the Bank of consultations with (i) the lead community institutions in Central Africa ; (ii) the bodies of NEPAD ; (iii) authorities of RMCs, notably those in charge of integration and NEPAD ; (iv) the private sector (chambers of commerce, private sector board, manufacturers’ union, etc.) ; (v) civil society organizations and NGOs ; and (vi) development partners. In particular, the Bank worked closely with the General Secretariat of the Economic Community of Central African States (ECCAS), the Executive Secretariat of the Central African Economic and Monetary Community (CEMAC), the Development Bank of Central African States (BDEAC), the Bank of Central African States (BEAC), the Central African Banking Commission (COBAC), the Central African Power Pool (CAPP), the International Centre for Bantu Civilizations (CICIBA), the African Timber Organization (ATO) and the representation of the Economic Commission for Africa in Central Africa (ECA/CA). Discussions focused on the evolution of the integration process in Central Africa, constraints, prospects and Bank Group assistance in this direction. Missions were fielded to six ECCAS Member States in October-November 2004, namely Gabon (seat of the ECCAS General Secretariat), Central African Republic (seat of the CEMAC Executive Secretariat), Cameroon (seat of BEAC), Congo (seat of BDEAC), Angola and Democratic Republic of Congo. In each country, discussions were held with the authorities, private sector organizations and representatives of civil society, with a view to recording and taking into account their various concerns in the preparation of the RIASP. The Bank also held extensive consultations with donors on the ground in the countries visited, notably the resident missions of the European Union, UNDP, World Bank and FAO. On these different occasions, the mission particularly emphasized the need to coordinate donor interventions in ECCAS, especially on account of the choice of this community, firstly, as the lead regional economic community(REC) in Central Africa by the African Union (AU) and, secondly, as a focal point for the implementation of NEPAD in Central Africa. Moreover, in conjunction with the Initiative Network in Central Africa (INICA), established within the OECD, a video-conference was organized with other integration actors on the ground. Discussions focused on the role of ECCAS in key functions of integration in Central Africa and in the implementation of NEPAD, the building of the capacities of ECCAS and the role of the private sector and local actors. Members of the network also submitted their observations. Finally, the RIASP validation workshop bringing together the principal regional organizations and the other stakeholders was held in Libreville on 14 July 2005. It permitted exchanges of views on the paper, the updating of information, validation of the Bank’s areas of concentration and the outcome indicators and to make recommendations with a view to ensuring the efficient implementation of the elements of the strategy. A. Capacity Building and Support to Regional Economic Integration 4.3.4 Capacity building : in this area, the Bank approved in November 2004 an institutional support project to build the capacities of the ECCAS General Secretariat, which is the institution’s executive organ, in order to enable it to set up an appropriate organizational structure and to implement the action programmes adopted by Member States. Activities under the project, notably technical assistance, training and organization of workshops, are structured in two phases. The first phase will concern reorganization and support to the priority work programme during the first year while the second, which will last two years and will be implemented after the adoption of the organization chart, will cover the setting up of a new structure, recruitment and more consistent support to the ECCAS work programme for effective capacity building. The project equally comprises the putting in place of an accounting and data processing system. It will also serve as an instrument of dialogue in the implementation of institutional and financial reforms, especially the organizational structure and the CCI which is a potential source of financial autonomy of ECCAS. 4.3.5 Similar support is envisaged for the CEMAC Executive Secretariat. Institutional reforms at this level concern notably the strengthening of the collection of the community integration tax (TCI) and the effective operation of FODEC. The Executive Secretariat must also draw up and implement an action plan stemming from the recommendations of institutional, organizational, accounting and financial audits. The Bank will encourage cooperation between the CEMAC and ECCAS Secretariats through the established partnership frameworks, exchange of information and studies on macroeconomic convergence, financial integration, regional private sector, harmonization of policies and tax systems. These two institutions should be able to set themselves up as effective regional development actors capable of designing and implementing

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coherent macroeconomic and sector policies. Strong political will should also be expressed at the highest community level, especially through the adoption of a comprehensive harmonization and rationalization strategy by both institutions. 4.3.6 Similarly, the Bank could support some specialized regional institutions intervening in areas in keeping with its mandate or strategy such as BDEAC, COMIFAC and possibly OCEAC as concerns HIV/AIDS control. BDEAC must play a key role in the promotion of industrial and financial integration by developing the private sector and mobilizing regional and external savings. The Bank is planning to contribute to building the capacities of BDEAC, in keeping, in particular, with its policy concerning cooperation with sub-regional finance institutions. It will pursue the training and retraining of BDEAC managerial staff begun in 2003. COMIFAC could be supported in the implementation of the convergence plan, in particular capacity building, promotion of the training of managerial staff and the institution of good governance in the conservation of the forests of the Congo Basin. The Bank will also ensure the establishment of the sub-regional financing mechanism adopted by the Heads of State. 4.3.7 Outcome indicators for ECCAS General Secretariat are : (i) the 2006-2009 work programme is implemented to the satisfaction of Member States; (ii) an organization chart adapted to the missions of ECCAS is put in place in 2006 ; qualified experts and a viable accounting system are available in 2006 ; (iii) experts of ECCAS and member countries are sensitized and trained in 2006 and 2007 in the implementation of the CCI and in the operation of the free trade area ; and (iv) the CCI is operational and the General Secretariat’s 2007 budget is approved at the end of 2006. In CEMAC, the indicators are as follows: (i) institutional, accounting and financial procedures are improved by 2008; (ii) TCI collection and FODEC are strengthened by 2008 and (iii) the operation of the CET is improved by 2008. Regarding BDEAC, indicators will concern the number of qualified experts recruited and the number of managers trained in accordance with the human resources development plan, as well as the number and volume of loans to the public and private sectors. COMIFAC indicators will relate to the number of managerial staff recruited and the number of States applying COMIFAC levies. 4.3.8 Support to key economic integration functions : these functions generally relate to the facilitation of trade, the creation of a common market and institution of a common trade policy, the harmonization of macroeconomic and sector policies and tax systems, as well as monetary and financial integration. Within the context of ECCAS, activities to support the regional integration process will be carried out concurrently with capacity building, especially within the framework of the General Secretariat institutional support project. These activities will seek to provide training and technical assistance in trade negotiation, facilitation of trade, implementation of NEPAD and community infrastructure projects, as well as the construction of the FTA and conditions for setting up and operating the Cooperation and Development Fund (FCD). Under the project, a mid-term review will be conducted in 2006 to evaluate the progress made and assess new capacity building and integration support needs. 4.3.9 The Bank will contribute to ensuring that ECCAS adheres to the FTA schedule: to that end, it will assist the ECCAS General Secretariat in the analysis of tariff and nontariff barriers to the development of intra-community trade as well as the necessary actions. It will also help ECCAS to popularize the CCI and the Revenue Loss Compensation Fund at the level of public services and economic operators. Moreover, in the area of energy, the Central African Power Pool (CAPP), a specialized institution of ECCAS, will receive Bank support in the harmonization of energy production and marketing policies. As concerns institutional support to CEMAC, the Bank will help this community, which forms a customs union, to address difficulties in the operation of its macroeconomic convergence and multilateral surveillance mechanism, as well as in the effective

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and uniform application of fiscal and customs reforms concerning VAT, TEC and the removal of nontariff barriers between Member States and with third countries. 4.3.10 Furthermore, the basic functions of macroeconomic convergence and harmonization of policies and integration of the banking and financial sector within ECCAS States will be effected following a gradual and joint regional-country approach, given that they are not part of the ECCAS short-term programme. In addition they require minimum capacity and scope. Hence, most of these issues will continue to be addressed and strengthened, particularly within the framework of policy dialogue, especially as part of economic reform support programmes undertaken by the Bank in the various countries, in conjunction with the Bretton Woods institutions. As concerns the banking and finance sector, the Bank could co-finance with the World Bank the project to modernize payment systems and methods within CEMAC, considering its mandate within the framework of NEPAD and the importance of the project in the facilitation and expansion of community trade. In the medium and long term, the Bank could envisage a second level of intervention, depending on the progress made for the meantime in the building of capacities of CEMAC. In this respect, it could focus on conditions for developing synergy between CEMAC and ECCAS. Hence, it will examine ways of extending the achievements of CEMAC to the entire ECCAS by carrying out studies, particularly on issues of macroeconomic convergence, financial integration, harmonization of policies and tax systems and regional private sector development opportunities and constraints. The bank could equally support the formulation of an ECCAS overall strategy, in conjunction with other partners in particular ECA. These different studies should provide elements to initiate dialogue with community authorities. Likewise, the Bank could possibly consider the opportunities for harmonization with other RECs in the continent, notably SADC and COMESA. 4.3.11 As concerns ECCAS, the outcome indicators are: effective free movement of persons within ECCAS by 2008; implementation of the schedule for reduction of custom duties, that is: 50% by 1 July 2004, 70% by 1 July 2005, 90% by 1 July 2007 and 100% by 1 January 2008 ; the FCD is operational and integration projects that can be financed by CCI resources are identified by ECCAS in 2007 ; NEPAD and PDCT-AC action plans are implemented normally from 2006-2007. For the launching of the second Bank intervention phase, indicators by 2009 will concern the harmonization, implementation and monitoring of energy policies and the identification of constraints and conditions of convergence and multilateral surveillance, private sector development and integration of the banking and financial sector in Central Africa. In addition, indicators specific to CEMAC zone by 2009 are: the multilateral surveillance mechanism is operating effectively; Member States prepare three-year programmes on schedule and comply with convergence criteria; the CET and community VAT are rigorously applied; all Member States are implementing the Regional Investment Charter; the payment system is improved; and integrating projects in Member States are financed by FODEC. 4.3.12 Cross-cutting issues: cross-cutting issues, notably population dynamics, gender issues, promotion of good governance and mainstreaming of environmental concerns are key factors of Bank Group operations. These issues have both a national and regional dimension. Hence, they will be addressed during the formulation and implementation of specific national and regional projects, particularly projects related to cooperation in the areas of food security, environment and HIV/AIDS control which is a main thrust of the RIASP. It should be noted that dialogue and sectoral studies will play a major role in these areas. Within the framework of NEPAD and given its mandate, the Bank will lay special emphasis on governance. In this regard, it intends, through country operations, to continue to strengthen its knowledge base in the area of governance and reforms related thereto by preparing Country Governance Profiles (CGP) and conducting economic and sectoral studies. Cameroon and Chad’s CGPs have already been prepared. These documents which will be prepared for other ECCAS countries, will help clarify regional policy dialogue in the area of governance, strengthen the integration component of national reform programmes and

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contribute effectively to the implementation of the African Peer Review Mechanism (APRM) of NEPAD. At this level, the country outputs will be assessed in terms of rehabilitation of the macroeconomic framework, implementation of reforms based on the CGP and adoption of the APRM by all Member States. 4.3.13 Role of the private sector: the private sector is henceforth the main engine of long-term economic growth of countries whose development is ensured notably through the creation of an enabling environment for competitiveness of activities, direct investment and the expansion of SMEs. Such an environment will entail the rehabilitation of the macroeconomic framework, improvement of the general business climate, establishment of an appropriate institutional and legal framework, liberalization of domestic and external markets, availability of qualified and competitive labour, existence of quality physical infrastructure, reduction of factor costs, development of the banking and financial sector and provision of incentives through the investment code. Hence, the Bank’s private sector strategy will focus on national interventions, through support to institutional reforms, investment projects and direct operations. On the basis of the subsidiarity principle, the Bank will place emphasis on the implementation of community guidelines in countries, especially by supporting reforms. In this respect, it is worth noting, among other things, the incorporation into national legislation of the Regional Investment Charter and the Community Guideline relating to VAT in the CEMAC zone. 4.3.14 However, the role of the Bank at the regional level will consist in creating and broadening opportunities for private sector activity through the harmonization of policies and tax systems, free movement of goods and persons, opening of markets and facilitation of trade through the improvement of physical and financial infrastructure, as well as actions in favour of the establishment of the FTA, the customs union and the common market. In addition, as part of its policy on cooperation with sub-regional financial institutions, the Bank will strengthen partnership with BDEAC, whose principal missions include the financing of the regional private sector, including micro-credit. The Bank will also seek to foster and initiate private-public partnerships (PPP) in Central Africa, especially through private sector and civil society professional and consular organizations. The Bank’s strategy will thus focus on PPP for the development of infrastructure and SMEs. It could also draw on the BDEAC and ECA/Central Africa partnership in its support of private sector development through, in particular, the setting up of a Guarantee Fund and the preparation of a profile of the private sector at the regional level, as it does at country level. Outcome indicators will be based on the following elements: free movement of persons is effective by 2008, customs union is effectively operational from 2008, a regional profile of the private sector is prepared in 2006, all CEMAC Member States are effectively implementing the Regional Investment Charter and Community Guideline on VAT, quantitative and qualitative increase in regional infrastructure in the areas of banking and finance and transport and energy and contribution towards the increase of resources allocated to the private sector by BDEAC. B. Regional Infrastructure Development 4.3.15 In its capacity as lead agency in the area of infrastructure under NEPAD, the Bank prepared, in 2002, a Short-Term Action Plan (STAP) for 2002-2007 which was adopted by the Heads of State Committee on NEPAD. STAP/Central Africa focuses on priority investments in the areas of energy, transport, water resources and information and communication technologies (ICT). Given the weak capacities of regional organizations and the subsidiarity principle, the Bank will continue to prioritize the national structures of countries involved in multinational infrastructure projects, while developing coordination and monitoring with RECs. Within the framework of the implementation of STAP, the Bank is already financing, in the amount of UA 2.5 million, a study on the interconnection of electric power grids in Central Africa. It is planning to participate in the financing of projects that will be identified at the end of the study. The Bank will complete, by the

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end of 2006, the preparation of the NEPAD Medium-Term Action Plan. Outcome indicators are: (i) harmonization of energy policies, laws, regulations and standards by 2009; and (ii) interconnection of national grids by 2009. 4.3.16 In the area of transport, the Bank will support the implementation of the Consensual Transport Master Plan for Central Africa (PDCT-AC). To this end, it has an Infrastructure Project Preparation Facility (IPPF-NEPAD) special fund intended to help RMCs, RECs and related institutions to design viable and quality regional infrastructure projects and programmes, thus making it easier to find partners for their implementation. Studies will also be conducted on the role of RECs in multinational infrastructure projects, because of their weak capacities in this area and the need to involve them particularly in monitoring and evaluation. The support of such a fund in the financing of feasibility studies will contribute to strengthen the ECCAS General Secretariat and CEMAC Executive Secretariat by enabling them to play, in the long run, a more active role in the promotion of regional integration in Central Africa. The Bank will also encourage the development of private-public partnerships (PPP) in the area of infrastructure in Central Africa. It will also provide support to the mobilization of resources for the PDCT_AC, in coordination with ECCAS, CEMAC, BDEAC and other partners, in particular ECA. The outcome indicators will focus on the efforts made in the implementation of the PDCT-AC, in particular the building of air security control capacities, the number of kilometres of tarred roads linking, by 2009, the capital cities of the region, the number of feasibility studies conducted and the number of PPPs initiated. C. Support to Regional Cooperation in the Management of Common Issues 4.3.17 The Bank’s strategy will focus on combating endemic diseases, notably the HIV/AIDS pandemic. A situational analysis in Central African countries shows that national HIV/AIDS control efforts need to be strengthened through a regional approach. In fact, the spread of the epidemic is to a large extent beyond the control of a single country as it is associated with the movement of people due particularly to conflicts and to the mobility of migrant workers and traders. The involvement of the supreme community bodies through closer cooperation in the development of regional programmes is necessary to supplement national responses. In addition, HIV/AIDS is a cross-cutting component of NEPAD which impacts on the other priority areas. 4.3.18 As mentioned earlier on, the Bank is already assisting groups of West and Central African countries in HIV/AIDS Initiatives. In September 2003, it approved an ADF grant of UA 6 million for the support project of the Initiative for countries along the Congo and Oubangui-Chari Rivers (Congo, CAR, DRC and Chad). In the same vein, the Bank will support two other initiatives in other Central African countries: the Lake Chad Basin Initiative (LCBI) bringing together CAR, Chad, Niger, Nigeria and Cameroon ; and the Great Lakes Initiative Against AIDS (GLIA) comprising Burundi, Kenya, Uganda, DRC, Rwanda and Tanzania. These initiatives are aimed at effectively assisting countries in the achievement of the MDG relating to HIV/AIDS control through the strengthening of prevention measures and the management of infected and affected persons, the taking into account of population migratory movements and the promotion of coordination at the multi-sectoral and sub-regional levels. On the basis of open regionalism, the Bank will use the experiences of these initiatives to develop synergy with ECCAS and OCEAC which was chosen by the governing bodies of ECCAS to support the implementation of the regional HIV/AIDS control strategy. 4.3.19 The Bank will examine conditions of intervention in the ECCAS HIV/AIDS control strategy and Plan of Action. It will focus on the three main thrusts of the above-mentioned initiatives, namely: (i) harmonization of country interventions; (ii) building of capacities of grass-roots communities in each country to organize them into interest groups; and (iii) support for the putting in place of pilot information systems for transborder monitoring. These experiences will

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help to focus effectively on components of the ECCAS strategic framework, relating to the HIV/AIDS health information system in Central Africa and the special programme for men in uniform. In addition, the Bank will monitor progress in the setting up of the Regional HIV/AIDS Fund. It will also strengthen coordination with other donors in the mobilization of resources, development of institutional mechanisms and the fight against public health hazards such as malaria, tuberculosis, sleeping sickness and Ebola. Outcome indicators by 2009 will be based on: the establishment of an information system, rate of condom use, HIV/AIDS prevalence in the overall population, pregnant women and men in uniform. Other KAP type indicators (Knowledge Aptitude and Practice in the face of disease), disaggregated by socio- economic characteristics, will also be developed. 4.3.20 Strengthening of food security: despite undeniable agricultural potential, food production in the region cannot satisfy the needs of the population. In spite of food imports and aid, a large portion of the population is still faced with food insecurity. This situation has negative effects on the development of the region, as a result of its impact on health expenditure and labour productivity. The methods utilized impede sustainable development. In fact, the farming techniques used hamper the long-term productivity of natural resources. With rapid population growth, more severe environmental degradation is to be feared if environment-friendly farming techniques are not developed and extended. Hence, Bank Group support will focus on sustained improvement of agricultural productivity and food security in the region. The Bank is, therefore, considering a support project to strengthen food security in the ECCAS region, and intends to conduct a study on the formulation of a common agricultural policy and a regional food security programme. This study will help to deepen the strategic analysis of the regional food security situation and constraints, supply and demand of food products in the region and intervention of the different partners, propose strategies and approaches for strengthening food security (harmonization of national agricultural policies, facilitation of trade, protection of plants, availability of seeds and plantation equipment, agricultural research and transfer of technology, etc.) and envisage mechanisms for monitoring, coordination and consultation between stakeholders (governments, ECCAS, donors and civil society). 4.3.21 Within the framework of the Regional Programme for Food Security, the Bank plans to support the formulation followed by the co-financing of a multinational agricultural research project the implementation of which will contribute to the achievement of the objectives of the RPFS. Indeed, given that agro-ecological zones extend across political frontiers and that a technique developed in one of the ECCAS member countries could be used in other countries presenting similar characteristics, it is imperative to develop a regional agricultural research system which will allow for the sharing of responsibilities between the countries/institutions according to their comparative advantages. The relevant outcome indicators are the formulation of a common agricultural policy by the end of 2008, the formulation of a RPFS support project by 2006 progress towards the eradication of extreme poverty and food insecurity, which are MDG targets. 4.3.22 Lastly, concerning the environment, it will be necessary to effectively supplement efforts made by individual countries in the conservation and sustainable management of the forests of the Congo Basin through support at regional level to the COMIFAC Convergence Plan. Emphasis will be laid on capacity building, promotion of the training of managerial staff and institution of good governance in the conservation of forests of the Congo Basin. The following table summarizes the pillars, objectives and expected outcomes.

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Table 4.1 : RIASP Outcomes Framework

Long-term /higher level Outcomes Expected by ECCAS

RIASP Expected Outcomes (2005-2009)

Links with ECCAS Focal Areas

PILLAR I : Build the capacities of major RECs and back up regional economic integration support activities

- An organization chart tailored to the missions of ECCAS is put in place in 2006 ;

- ECCAS has, in 2006, qualified experts with regard to its missions, as well as an appropriate and stimulating work environment;

- An efficient accounting system is established in 2006; - The CCI is operational and the General Secretariat has a 2007 budget

approved at the end of 2006;

Area 2 *

- Free movement of persons is effective by 2008 ; - Customs union is effectively operational from 2008 ; - ECCAS work programme is implemented to the satisfaction of Member

States and partners from 2006 ;

Areas 2, 3 and 4*

- The ECCAS General Secretariat effectively monitors the establishment of the FTA and the common market;

- The ECCAS General Secretariat effectively ensures the coordination of NEPAD activities and the Consensus Transport Master Plan for Central Africa from 2006 ;

- The FCD is operational and ECCAS identified in 2007/2008 integration projects which can be financed out of CCI resources;

- The statistical database on foreign trade and intra-community trade is available in 2007/2008.

ECCAS has an overall strategy by 2008.

Areas 2, 3 and 5*

- The collection of the TCI is strengthened and operation of the TEC and

FODEC is effective ; - Institutional and accounting procedures of CEMAC Secretariat are

improved ; - Constraints and conditions for extending multilateral monitoring to

ECCAS and the financial sector are specified ;

Areas 2, 3 and 10*

- Partnership between the Bank, BDEAC and the regional private sector is strengthened ;

- Amount of resources allocated to the private sector by BDEAC is on the increase ;

- PPPs in Central Africa have been initiated, notably in the area of infrastructure, and with professional organizations ;

- Regional Investment Charter and community directive relating to VAT are implemented by CEMAC States ;

- The regional private sector profile prepared by 2007; - The banking and financial sector and the payment system are improved

by 2008/2009;

Areas 2, 3 and 10*

1. Build ECCAS General Secretariat’s action and intervention capacities

2. Implement the programme of

activities of ECCAS General Secretariat

3. Improve the design and

monitoring and evaluation of integration programmes and projects

4. Strengthen the capacities of

CEMAC and cooperation with ECCAS

5. Strengthen the capacities of

private sector support institutions 6. Strengthen capacities to manage

regional issues

- Nearly all Member States have adopted the APRM of NEPAD and ; - Capacities of COMIFAC are built ; - COMIFAC self-financing mechanism is effective.

Areas 1 and 2*

PILLAR II : Promote the development of regional infrastructure under NEPAD - At least three economic corridors by road are opened by 2009 ; - A transport infrastructure master plan is adopted by 2006 and a donor

conference is organized ; - At least two infrastructure PPPs are initiated by 2009;

Areas 3, 4, 5, 8 and 9*

- Air safety control capacities in Central Africa are built by 2008, in particular as a result of COSCAP ;

- Air transport safety and efficiency are improved by 2008 ; - Economic and technical regulations are laid down and harmonized in

accordance with ICAO standards and practices by 2008 ; - At least one air transport PPP is initiated by 2009;

Areas 2, 3, 4 and 5*

- Policies, rules and procedures of all modes of transport are harmonized by 2009 ;

Areas 3 and 5*

1. Ensure the interconnection by road of the capitals of ECCAS Member States and promote mobility

2. Develop air transport and air

transport safety 3. Foster the interconnection of

modes of transport 4. Harmonize energy policies, laws,

regulations and standards 5. Improve the supply of and access

- Electric power grids interconnection master plan is prepared in 2006 ; - Policies, laws, regulations, standards, etc. are harmonized by 2009;

Areas 3and 5*

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Long-term /higher level Outcomes Expected by ECCAS

RIASP Expected Outcomes (2005-2009)

Links with ECCAS Focal Areas

to electricity and reduce its cost

- Percentage of regional connectivity attained by 2009 ; - Number of PPPs initiated by 2009 ; - Percentage of rural communities connected to the electric power grid

Areas 3 and 5*

PILLAR III : Support regional cooperation in the management of regional issues 1. Support food security in the

region

- The strategic thrusts of the Regional Food Security Programme are operational by 2007 ;

- The common agricultural policy is formulated by 2007 ; - A regional agricultural research programme is implemented by 2008;

Areas 3, 8 and 9*

2. Control the spread of HIV/AIDS - national interventions are harmonized at regional level; - The capacities of grass-roots communities are built ; - A pilot transborder information system is put in place by 2009 ; - Increased use of condoms ; - Drop in HIV/AIDS prevalence in the population (pregnant women and

men in uniform) to below the rates observed in ECCAS countries in 2000/2001

Areas 1, 3, 4, 6 and 9*

3. Contribute towards the conservation and sustainable management of forests of the Congo Basin

- The COMIFAC three-year priority programme is effectively implemented by 2009.

Areas 2 and 7*

* NB : Cf. Annex V. Area 1 : Peace and security ; Area 2 : Capacity building ; Area 3 : Promotion of trade ;Area 4 : Free movement of persons ; Area 5 : Regional infrastructure development and maintenance ; Area 6 : HIV/AIDS control ; Area 7 : Environmental protection ; Area 8 : Food security ; Area 9 : Gender and development ; and Area 10 : Others. 4.4 Overview of the Medium-Term Indicative Work Programme 4.4.1 The medium-term indicative work programme covers the period from 2005 to 2009 (cf Annex III). It contains a combination of programme and project financing activities (ADB and ADF loans, ADF grants and, possibly, NTF and OPSD) and other non-project activities such as technical assistance, dialogue, organization of seminars and economic and sectoral studies. The matrix of thematic outcomes is presented in Annex IV. Project and Programme Financing Activities 4.4.2 Financing activities concern Bank Group loans and grants to support integration programmes and projects covering the three main pillars, namely capacity building and support to regional economic integration, regional infrastructure development and support to regional cooperation in the areas of HIV/AIDS, food security and the environment. In addition to new operations planned for 2005-2009, the pillars also integrate projects and programmes already approved which are in line with the Bank strategy. 4.4.3 Capacity Building and Support to Regional Economic Integration : these activities will be carried out essentially under ADF grants to RECs and some specialized institutions. In this respect, the ECCAS General Secretariat institutional support project was approved in November 2004. The other projects identified include: institutional support to CEMAC Executive Secretariat (2006) ; institutional support to BDEAC (2005/2006) ; institutional support to COMIFAC (2005/2006); and support for the modernization of CEMAC systems and means of payment (2005/2006). The institutional support project of ECCAS whose activities will start up in 2005 will serve as a framework for most capacity building and integration support activities until end 2007/early 2008. A mid-term review will be carried out in 2006 to evaluate progress. This review will determine whether it is advisable to pursue and/or strengthen Bank support by identifying new needs, in conjunction with the other donors. The Bank could also envisage to prepare, in coordination with other partners, in particular ECA, an ECCAS overall strategy and conduct studies

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on multilateral surveillance, regional private sector development and integration of the finance sector. 4.4.4 Regional Infrastructure Development : countries which are directly involved in multinational operations will play a key role. RECs will be involved in monitoring. In the area of transport, the Bank will contribute to the financing of feasibility studies and projects featuring among the 14 PDCT-AC priority projects, in particular the Pilot Programme for Facilitation of Transport on the Douala-Bangui and Douala-N’Djamena Corridors (2006-2008). With regard to air transport, the Bank approved the COSCAP project in April 2005 on ADF financing. In addition, the Bank is taking part in discussions concerning the setting up of a new airline in CEMAC zone. In the energy sub-sector, interventions will concern projects stemming from the interconnection of electric power grids, approved in 2003. 4.4.5 Food Security : these operations concern the ECCAS General Secretariat and countries directly involved. From 2005, the Bank will finance a project to support the strengthening of food security, with a view to assisting ECCAS in: (i) the formulation of a common agricultural policy; and (ii) the formulation and implementation of a regional programme for food security (RPFS) . In addition, the Bank plans to co-finance with other donors, from 2006/2007, the formulation of the agricultural research component of the RPFS (development and transfer of technologies). The purpose of these actions is the sustainable improvement of the productivity of natural resources in the region, harmonization of national agricultural policies, promotion of trade in goods and services, and regional integration and easing of market access. Special attention will be paid to the protection and conservation of the environment, coordination of agricultural development activities and food security, efficiency of monitoring and evaluation systems, and building of institutional capacities for planning, implementation and monitoring-evaluation of food security programmes. 4.4.6 HIV/AIDS Control : in addition to support for the initiative for countries along the Congo and Oubangui-Chari Rivers approved in September 2003, the other two initiatives (LCBI and GLIA) will be financed from 2005. Moreover, the Bank will develop synergy between these initiatives and ECCAS, as well as with regional specialized institutions in the area of HIV/AIDS. All this financing and possibly others will be in keeping with the strategic framework and plan of action of ECCAS for HIV/AIDS control. Non-project Activities 4.4.7 Dialogue, Seminars and Workshops: the Bank will strengthen dialogue at bilateral and community levels, in order to speed up the integration process in Central Africa. In particular, dialogue will focus on: (i) peace, security and good governance; (ii) self-financing of the community, which is a pre-condition for the effective implementation of the regional integration programme ; (iii) development of strategic partnership between ECCAS , CEMAC and other sub-regional specialized institutions, with a view to enhancing the supervision and intensification of the institutional partnership to achieve effective integration in Central Africa; (iv) free movement, the FTA and facilitation of trade; (v) advocacy for a framework for consultation on matters of harmonization and coordination; (vi) formulation of an overall and coherent strategy at the levels of ECCAS and CEMAC; (vii) accession to the African Peer Review Mechanism (APRM); (viii) harmonization of some programmes and initiatives with RECs of other regions (ECOWAS, SADC, COMESA), particularly in the areas of food security, the environment, HIV/AIDS, malaria and other diseases; and (ix) implementation of common guidelines on the management of oil resources. 4.4.8 Institutional support to RECs, country economic reform programmes, economic and sector studies, missions, correspondence and coordination with the other development partners will constitute essential instruments of this dialogue. The Bank’s participation in fora on initiatives

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such as the Group of Friends of the Great Lakes Region of Africa which seeks to put in place a Stability, Security and Development Pact for the Great Lakes Region and the consolidation of peace, will also contribute to this dialogue. The Bank will continue to take part in such dialogue which aims at consolidating peace and promoting regional cooperation in the Great Lakes. 4.4.9 The main elements of the studies will aim to enhance the participation of the private sector at regional level and other basic integration issues which are not, or only to a small extent included in the programme of ECCAS. The Bank could help, in cooperation with ECCAS General Secretariat, BDEAC and other partners, to formulate a regional strategy specific to the private sector. Studies will be conducted and seminars and workshops organized on the promotion of the private sector at the regional level and the role of related regional bodies. Other studies could be conducted on issues related to the harmonization of macroeconomic policies, the definition of an overall integration strategy in Central Africa, conditions for implementing regional economic reform programmes and the integration of the banking and financial sector. Financing Issues 4.4.10 Under ADF X (2005-2007), the deputies reiterated their commitment to regional integration by increasing the special allocation for multinational projects to 15 % of the total budget of US$ 5.4 billion, compared to 10% under ADF IX. Moreover, the Bank will adopt an approach consisting in seeking co-financing to support certain multinational operations, notably in the areas of infrastructure, HIV/AIDS control, food security and the environment. As concerns the eligibility of countries for ADB (Gabon and Equatorial Guinea) or ADF resources, the Bank will pursue its different rate policy and will, as appropriate, combine loans and grants according to the appropriate percentages, in order to facilitate the transnational supply of goods. 4.5 Collaboration with other Development Partners 4.5.1 The lead donors financing the regional integration process in Central Africa are the Bank Group, the IMF, the World Bank, the EU, France and UN specialized agencies. Because of the long period of inactivity of ECCAS between 1992 and 1997, donors focused their support on the CEMAC zone. However, since the revival of ECCAS in 1998, the EU, UN specialized agencies and the ACBF have marked their return in the areas of peace and security, capacity building, food security and HIV/AIDS. The EU is supporting MARAC and conflict prevention in Central Africa under the 2003-2007 PIR and since 2003, there have been ongoing negotiations between EU and ECCAS on the issues of competitiveness in Central Africa, facilitation of trade through the removal of trade barriers, as well as on health and phytosanitary measures, trade and services, investment, competition and intellectual property. The UNDP is also financing, since 2003, a capacity building project, to support the free movement of persons, promotion of trade and investments. ECCAS has signed partnership agreements with other organizations, namely ECA, UNAIDS, WHO, UNICEF, UNESCO and FAO in their respective areas of competence. The Bank will coordinate its activities with these partners and will, as far as possible, play a catalytic role, but it will be the progress made by ECCAS in the areas of capacity building and reforms which will be decisive. The Bank also plans to strengthen partnership and will encourage co-financing within the framework of NEPAD, notably in the area of infrastructure. 4.5.2 In addition, the Bank will foster consultations with all the donors involved in activities with CEMAC. These include in particular, the IMF which, since 2003 has initiated consultations with CEMAC on macroeconomic policy and trade facilitation issues. Also included is the World Bank, which, in 2003, prepared a CEMAC regional assistance strategy which targets the financial sector, transport infrastructure, forests and the environment, and HIV/AIDS. Finally, the World Bank, the EU and France respectively carried out an economic and financial audit, an

43

organizational audit and an institutional audit of CEMAC in 2004. The Bank will monitor the implementation of the recommendations of these audits, in particular within the framework of the envisaged institutional support to CEMAC. 4.6 Monitoring of Outcomes An effort was made to base the strategy on results, though ECCAS and the other community institutions do not yet have adequate capacity to ensure effective monitoring. In ECCAS, the monitoring of capacity building and integration support activities will be carried out mainly by the Steering Committee and the Institutional Support Project Implementation Unit of the General Secretariat. The technical assistance provided under the project will also help strengthen monitoring capacities, notably as regards the FTA, NEPAD, transport and the establishment of a statistical database. With regard to infrastructure and other investment projects, coordination will be established between the ECCAS General Secretariat and national structures of countries involved in the said projects. A similar approach will be adopted with regard to support to other community institutions, notably CEMAC, BDEAC and COMIFAC. In addition, the design of operations will encourage information sharing between ECCAS and other community institutions. The aim is to enable ECCAS in particular to centralize, in the long run, information relating to multinational projects within its competence. The mid-term review of the ECCAS General Secretariat institutional support project will also help define modalities for the building of monitoring capacities. The competent services of the Bank, its Regional Office in Gabon (GARO) and the country offices will provide the necessary monitoring of the activities of ECCAS, the other community institutions and RMCs. Moreover, close coordination with other donors, notably the Bretton Woods institutions and the EU, will contribute towards efficient monitoring. The Bank will also focus on the ECA/Central Africa/ ECCAS/CEMAC tripartite coordination framework put in place April 2003 to strengthen monitoring and cohesiveness in the implementation of the RIASP. V. Risks 5.1 The first risk is the possible renewal of conflicts in the region, which could delay the achievement of the objectives of regional integration. This risk is however limited in view of the political will reaffirmed by Heads of State and Government to implement COPAX, consolidate peace and strengthen economic integration throughout the region. 5.2 The second risk is lack of adequate human and financial resources by the ECCAS General Secretariat to boost the integration process. This risk is also mitigated by the implementation of the institutional support project which will enable the General Secretariat to acquire qualified human resources and by the progress made in the introduction of the CCI. The dialogue embarked upon by the Bank with ECCAS authorities which has recorded some progress in reforms will be pursued. The gradual return of partners over the last few years is also likely to mitigate this risk. 5.3 Another major challenge which could constitute a risk for the successful implementation of the RIASP is differing political will to implement measures stipulated in the various protocols and the development programme agreed upon at regional level. Some Member States tend to take a long time to sign and ratify the ECCAS protocols. Others, on the other hand, give greater consideration to CEMAC than ECCAS, while others seem to be more involved with SADC and COMESA. This problem is aggravated by an overlap of regional integration mechanisms which may undermine the already limited financial, administrative, institutional and technical resources of the countries of the region. This is a serious risk that should be the subject of intense dialogue in collaboration with other development partners, and possibly within the framework of the African Union. The consolidation of the current renewed interest of States in ECCAS may mitigate this

44

risk. Moreover, the Bank intends to coordinate with the other partners to support studies aimed at ensuring better coordination of programmes. VI. Conclusion and Recommendation 6.1 Conclusion The Central African region is confronted with institutional, economic and social constraints which prevent it from meeting the challenges and taking advantage of the opportunities offered by the new context of globalization. However, the recent mitigation of conflicts in the region and the advent of NEPAD bolstered the revival of ECCAS in 1998. Efforts made under COPAX have helped to improve the political, economic and social situation of most countries of the region. The new strategic context of strengthening regional economic communities (REC) in Africa, the expression of a community will to raise ECCAS to the rank of other RECs in order to ensure the economic and social development of the region and the implementation of NEPAD are arguments in favour of support to the ECCAS recovery programme. To this end, the Bank will back the efforts of ECCAS Member States at the regional and national levels as concerns; (i) institutional capacity building and backing for regional economic integration support activities; (ii) development of regional infrastructure under NEPAD; (iii) support to regional cooperation in the management of issues of common concern; and (iv) dialogue. It will also support the development of the private sector and civil society organizations. 6.2 Recommendation The Boards of Directors are invited to approve the strategy and the strategic orientation proposed in this Regional Integration Assistance Strategy Paper for Central Africa for the 2005-2009 period.

Annex I MAP OF ECCAS

Regional Integration Assistance Strategy Paper (RIASP) Economic Community of Central African States (ECCAS)

This map has been provided by the staff of the African Development Bank exclusively for the use of the readers of the report to which it is attached. The names used and the borders shown do not imply on the part of the ADB Group or its members any judgment concerning the legal status of a territory nor any approval or acceptance of those borders.

Annex II

YearECCAS

CountriesAfrica

Develo- ping

Countries

Develo- ped

CountriesB asic Ind icators Area ( '000 Km ²) 6 667 30 061 80 976 54 658Total Population (m illions) 2002 112 732 831,0 5 024,6 1 200,3U rban Population (% of Total) 2002 34,0 38,6 43,1 78,0Population Dens ity (per Km ²) 2002 54,1 27,6 60,6 22,9GN I per C apita (U S $) 2002 568 650 1 154 26 214Labor Force Partic ipation - Total (%) 2002 44,1 43,3 45,6 54,6Labor Force Partic ipation - Fem ale (%) 2002 44,2 41,0 39,7 44,9Gender -R elated Dev elopm ent Index Value 2002 0,333 0,475 0,655 0,905Popul. Liv ing Below $ 1 a Day (% of Population) 1994 … . 46,7 23,0 20,0

D em ograph ic Ind icatorsPopulation Grow th R ate - Total (%) 2002 2,7 2,2 1,7 0,6Population Grow th R ate - U rban (%) 2002 4,7 3,9 2,9 0,5Population < 15 y ears (%) 2002 46,1 42,3 32,4 18,0Population >= 65 y ears (%) 2002 2,9 3,3 5,1 14,3Dependency R atio (%) 2002 95,9 86,6 61,1 48,3Sex R atio (per 100 fem ale) 2002 97,1 98,9 103,3 94,7Fem ale Population 15-49 y ears (% of total populat 2002 22,8 23,9 26,9 25,4Life Ex pectancy at Birth - Total (y ears) 2002 42,6 50,6 62,0 78,0Life Ex pectancy at Birth - Fem ale (y ears) 2002 41,6 51,7 66,3 79,3C rude Birth R ate (per 1,000) 2002 46,6 37,3 24,0 12,0C rude Death R ate (per 1,000) 2002 20,5 15,3 8,4 10,3Infant M ortality R ate (per 1,000) 2002 113,3 81,9 60,9 7,5C hild M ortality R ate (per 1,000) 2002 199,8 135,6 79,8 10,2M aternal M ortality R ate (per 100,000) 1990-98 541 641 440 13Total Fertility R ate (per w om an) 2002 6,3 4,9 2,8 1,7Wom en U sing C ontraception (%) 1990-99 8,9 40,0 59,0 74,0

H ealth & N utrition IndicatorsPhy sic ians (per 100,000 people) 1997-99 13,4 57,6 78,0 287,0N urses (per 100,000 people) 1997-99 49,5 105,8 98,0 782,0Births attended by Trained Health Personnel (%) 1997-99 20,3 44,0 56,0 99,0Access to Safe Water (% of Population) 2000 43,2 62,1 78,0 100,0Access to Health Serv ices (% of Population) 1993-98 57,7 61,7 80,0 100,0Access to Sanitation (% of Population) 2000 31,3 60,5 52,0 100,0Percent. of Adults (aged 15-49) Liv ing w ith HIV/AI 2001 7,1 7,1 1,3 0,3Inc idence of Tuberculos is (per 100,000) 2000 89,1 109,7 144,0 11,0C hild Im m unization Agains t Tuberculos is (%) 2000 68,1 76,4 82,0 93,0C hild Im m unization Agains t M eas les (%) 2000 52,6 67,7 73,0 90,0U nderw eight C hildren (% of children under 5 y ear 1995-2000 31,9 25,9 31,0 …Daily C alorie Supply per C apita 2001 1 823 2 444 2 675 3 285Public Ex penditure on Health (as % of GDP) 1995-99 1,7 3,3 1,8 6,3

Education Ind icators Gross Enrolm ent R atio (%) Prim ary School - Total 2000/01 90,7 89,2 91,0 102,3 Prim ary School - Fem ale 2000/01 83,4 83,7 105,0 102,0 Secondary School - Total 2000/01 12,3 40,8 88,0 99,5 Secondary School - Fem ale 2000/01 10,6 38,1 45,8 100,8Prim ary School Fem ale Teaching Staff (% of Tota 1995-98 20,5 50,9 51,0 82,0Adult Illiteracy R ate - Total (%) 2001 31,5 37,9 26,6 1,2Adult Illiteracy R ate - M ale (%) 2001 23,3 29,2 19,0 0,8Adult Illiteracy R ate - Fem ale (%) 2001 39,4 46,4 34,2 1,6Percentage of GDP Spent on Education 1996-98 1,5 5,7 3,9 5,9

Environm ental Ind icatorsLand U se (Arable Land as % of Total Land Area) 2000 7,4 6,2 9,9 11,6Annual R ate of Deforestation (%) 1992-97 0,6 0,7 0,4 -0,2Annual R ate of R efores tation (%) 1990 10,9 10,9 … …Per C apita C O2 Em iss ions (m etric tons) 1998 0,2 1,2 1,9 12,3

Source : ADB Statistics Div ision; U N AIDS; World Bank Liv e Database and U nited N ations Population Div ision.

COMPARATIVE SOCIO-ECONOMIC INDICATORS ECCAS COUNTRIES

ECCAS SOCIOECONOMIC INDICATORS

Annex III Page 1 of 2

Indicative Work Programme 2005-2009

REGIONAL APPROACH BILATERAL APPROACH Degree of

Involvement Support to ECCAS and other Lead RECs

in Central Africa Development

Partners RBCSP Implementation Development

Partners

Programme and project financing

activities (loans and grants)

1. Capacity building and back up of regional economic integration support activities

1.1 ECCAS General Secretariat Institutional Support Project (2004-2007) 1.2 CEMAC Execuctive Secretariat Institutional, Support project (2006) 1.3 Building of the capacities of BDEAC through training courses at the Bank

(continuing) and an institutional support project (2005/2006) 1.4 COMIFAC Institutional Support Project (2006) 1.5 BEAC Payment System Support Project (2005/2006) 1.6 BDEAC private/public sector line of credit. 2. Regional infrastructure development under NEPAD (transport and

energy) 2.1 Pilot Programme for the Facilitation of Transport on the Douala-Bangui and

Douala-N’Djamena Corridors (2006-2008) 2.2 Contribution to the financing of projects among the other PDCT-AC priority

projects (2006-2009) 2.3 COSCAP Programme (April 2005) 2.4 One to two electricity projects stemming from the study on the

interconnection of electrical grids (2006-2009) 2.5 Private sector line of credit 3. Support to regional cooperation in the management of issues of common

concern 3.1 Support to the strengthening of food security in ECCAS region (2005) 3.2 Cofinancing of the formulation and putting in place of the agricultural

research component of the RPFS 3.3 HIV/AIDS Initiative for countries along the Congo and Oubangui-Chari

Rivers (2003) 3.4 HIV/AIDS Initiative of Countries of the Lake Chad Basin (2005) 3.5 HIV/AIDS Initiative of Countries of the Great Lakes (2005) 3.6 Support to the implementation of COMIFAC Convergence Plan

Bretton Woods institutions UNDP and other UN specialized agencies, ACBF, EU, ECA,AFD, Bilateral partners NEPAD partners EU, World Bank, Arab Funds, bilateral partners, AFD World Bank, EU, UNDP, FAO, UNAIDS, WHO, other UN specialized agencies, bilateral partners

Strengthening of national capacities and economic and social reforms - Improvement of capacities for economic management and

monitoring of public sector programmes and projects - Reform and modernization of public administration - Appropriate exchange rate policies - Fiscal and customs reforms - Financial sector reforms - Improvement of business climate Investment programmes and projects (with integrating

effects) - Sectoral reforms and harmonization of national policies with

regional policies - Regulation - Infrastructure programmes and projects (transport,

electricity, ICTs) - Participation of private sector and PPP - Privatization programmes National projects with effects on integration - Agriculture and rural development programmes and projects - Education/health - Gender mainstreaming and incorporation of environmental

and regional integration issues into strategies and design of programmes and projects

Bretton Woods institutions, UNDP and UN specialized agencies, ACBF, EU, ECA, AFD, bilateral partners NEPAD partners, EU, World Bank, Arab Funds, bilateral partners, AFD World Bank, EU, UNDP, FAO, UNAIDS, WHO, other UN specialized agencies, bilateral partners.

Non-project activities

1. Capacity building and back up of regional economic integration support

activities 1.1 Dialogue and monitoring of the institution of the CCI, FTA, free movement

and other ECCAS/CEMAC integration activities 1.2 Mid-term review of capacity building and regional integration activities 1.3 Studies relating to Multilateral Surveillance, Financial Sector and Regional

Private Sector Profile 1.4 Support to an overall long-term ECCAS strategy

Bretton Woods institutions, UNDP and other UN specialized agencies, ACBF, EU, ECA, AFD, bilateral partners

Dialogue on economic reforms and regional integration issues, in particular peace and security, financial contributions and free movement of goods and persons Incorporation of integration issues in RBCSP and life cycle of projects Sectoral economic studies (SES)

Bretton Woods institutions, UNDP and other UN specialized agencies,

Annex III Page 2 of 2

REGIONAL APPROACH BILATERAL APPROACH Degree of

Involvement Support to ECCAS and other Lead RECs

in Central Africa Development

Partners RBCSP Implementation Development

Partners 1.5 Capacity building course for BDEAC managers 1.6 Joint ECCAS-CEMAC-BDEAC and professional organization dialogue 1.7 Organization of regional seminars and workshops on regional integration and

private sector participation. 1.8 Support and technical assistance to NEPAD Secretariat in the area of banking

and financial standards and in the implementation of the APRM 2. Regional infrastructure development under NEPAD (transport and

energy) 2.1 Conduct of technical feasibility studies of PDCT-AC projects (NEPAD -

IPPF) 2.2 Implementation of NEPAD Medium-term Plan of Action 2.3 Support and technical assistance to NEPAD Secretariat in the area of

infrastructure 2.4 Organization of donor conferences and workshops on infrastructure 2.5 Dialogue and monitoring of the establishment of AIR-CEMAC 2.6 Dialogue/study on air safety control of non-CEMAC countries 2.7 Study on the interconnection of electrical grids of ECCAS countries (2003) 2.8 Technical assistance for the monitoring and evaluation of RECs and PEAC 3. Support to regional cooperation in the management of issues of common

concern 3.1 Dialogue and monitoring of COPAX activities (peace and security and

governance) 3.2 Seeking for cofinancing in the area of food security, environment and

HIV/AIDS control 3.3 Coordination with national programmes and projects as well as with the other

RECs 3.4 Assistance for the establishment of the Pilot HIV/AIDS Information System

and relations with OCEAC 3.5 Monitoring of the Regional Fund to fight HIV/AIDS

NEPAD partners, EU, World Bank, Arab Funds, bilateral partners, AFD World Bank, EU, UNDP, FAO, UNAIDS, WHO, other UN specialized agencies, bilateral partners

Country Governance Profiles (CGP) Dialogue and technical assistance in the implementation of the APRM Incorporation of integration issues in institutional support activities and capacity building Financing of feasibility studies of projects with effects on integration (NEPAD-IPPF and others)

ACBF, EU, ECA, AFD, bilateral partners

Annex IV Page 1 of 7

ECCAS : RIASP : Matrix of Thematic Outcomes Pillar 1 : Build the capacities of lead RECs and back up regional economic integration support activities

ECCAS Long-term Strategic Objectives

RIASP Short-term Achievements (over 3 to 5 years)

Bank Priorities and Performance

ECCAS Development Outcomes (objectives)

Main Sectoral Issues or Constraints

RIASP Products and Achievements (Bank

Interventions)

Intermediate Indicators of RIASP Achievements

Strategies/Actions for Intermediate Indicators

and Achievements

Bank Interventions in the Sector

Interventions of other Donors and

Partners in the Sector

1. To build ECCAS General Secretariat’s capacities for action and intervention

Unsuitability of present structure and inadequacy of capacities in relation to missions

- An organization chart adapted to the missions of ECCAS is put in place;

- ECCAS has qualified experts and an appropriate and stimulating work environment ;

- The CCI is operational and the 2007 budget is approved in 2006

- Number of job profiles approved by the Member States in 2005-2006 ;

- Number of managerial staff recruited according to the profiles identified in 2006 ;

- Number of States that have signed the CCI convention.

- Supervision missions - Mid-term review - Dialogue and

monitoring of the implementation of the CCI

- ECCAS General Secretariat Institutional Support Project (2004-2007)

UNDP ACBF

2. To implement the programme of activities of ECCAS General Secretariat

Lack of managerial staff, tools and expertise

- ECCAS work programme is implemented to the satisfaction of Member States

- Quarterly reports of the PAI ;

- Annual reports of the General Secretariat

- Supervision missions - Mid-term review - Dialogue and

monitoring of the implementation of the CCI

ECCAS General Secretariat Institutional Support Project (2004-2007)

- UNDP - ACBF - Other UN

specialized agencies.

3. To improve the design and monitoring and evaluation of integration programmes and projects

Inadequate capacities and absence of mechanisms

- The General Secretariat of ECCAS effectively carries out the coordination of activities of the FTA, NEPAD and PDCT-AC from 2006 ;

- The FCD is operational and ECCAS identified in 2007 integration projects that can be financed by the CCI

- FTA : Reduction of customs duties : 50% by 1/7/04, 70% by 1/1/05, 90% by 1/1/07 and 100% by 1/1/08

- Number of integration projects to be financed by the FCD in 2007

- Quarterly reports of the PAI ;

- Annual report of the General Secretariat ;

- Supervision missions - Mid-term review - Dialogue and

monitoring of the implementation of the CCI

- Establishment of a statistical database on external and intra-community trade.

- ECCAS General Secretariat Institutional Support Project (2004-2007)

- Strengthening of PEAC

- Establishment of a mechanism for coordination with funded multinational projects

- UNDP - ACBF - ECA - Other UN

specialized agencies

- EU.

4. To build the capacities of CEMAC and strengthen cooperation with ECCAS

Need to implement the recommendations of CEMAC audits and to strengthen its mechanisms, while enhancing dialogue with ECCAS and extending the achievements of

- The institutional and accounting procedures of the Executive Secretariat of CEMAC are improved ;

- Collection of the TCI is strengthened and FODEC is

- Implementation of the recommendations of 2003-2004 audits

- Number of States implementing the TEC ;

- Report of the Executive Secretariat on the audits ;

- Progress report of the Executive Secretariat

- ECCAS General Secretariat Institutional Support Project (2004-2007)

- CEMAC Executive

- Bretton Woods institutions

- EU. - UNDP - ACBF

Annex IV Page 2 of 7

ECCAS Long-term Strategic Objectives

RIASP Short-term Achievements (over 3 to 5 years)

Bank Priorities and Performance

ECCAS Development Outcomes (objectives)

Main Sectoral Issues or Constraints

RIASP Products and Achievements (Bank

Interventions)

Intermediate Indicators of RIASP Achievements

Strategies/Actions for Intermediate Indicators

and Achievements

Bank Interventions in the Sector

Interventions of other Donors and

Partners in the Sector

CEMAC operational ; - The functioning of TEC is

appropriate ; - Constraints and modalities of

extension to ECCAS of multilateral surveillance and the financial sector are specified

- Studies conducted on multilateral surveillance and financial sector

- application of CCI (0.4%);

- consultative meetings/missions between CEEAC and CEMAC.

- BDEAC report on FODEC ;

- Report of Joint ECCAS-CEMAC commissions

- ECCAS-CEMAC dialogue on the basis of studies conducted.

Secretariat Institutional Support Project (2006)

- Building of the capacities of BDEAC (training courses and institutional support project)

- ECA - Other UN

specialized agencies

5. To strengthen the capacities of private sector support institutions

Weakness of both the national and regional private sector ;

- Major obstacles: administrative, infrastructure, weak financial and payment systems

- BDEAC, potential private sector financing vehicle, but weakness of its capacities ;

- Poor regional organization and initiatives.

- Partnership is strengthened with BDEAC which supports the private sector in Central Africa ;

- PPPs are initiated in Central Africa, particularly in infrastructure and with professional organizations ;

- The banking and financial sector of countries is rehabilitated ;

- The CEMAC payment system is improved

- The amount of resources granted to the private sector by BDEAC is on the increase ;

- Number of PPP initiated in Central Africa ;

- Number of seminars organized on the private sector in Central Africa

- Number of CEMAC States implementing the Regional Investment Charter

- Building of the capacities of BDEAC

- Joint- ECCAS -CEMAC-BDEAC dialogue with professional organizations

ECCAS,, CEMAC and BDEAC progress report on the private sector

- Preparation of Regional Private Sector Profile in 2006

- ECCAS General Secretariat Institutional Support Project (2004-2007)

- CEMAC Executive Secretariat Institutional Support Project (2006)

- Building of the capacities of BDEAC (training courses and institutional support project)

- BEAC Payment System Support Project (2005/2006)

- BDEAC line of credit

- Regional seminars

- BDEAC -Bretton Woods

institutions - EU - UNDP - ACBF - ECA - Other UN

specialized agencies

Annex IV Page 3 of 7

ECCAS Long-term Strategic Objectives

RIASP Short-term Achievements (over 3 to 5 years)

Bank Priorities and Performance

ECCAS Development Outcomes (objectives)

Main Sectoral Issues or Constraints

RIASP Products and Achievements (Bank

Interventions)

Intermediate Indicators of RIASP Achievements

Strategies/Actions for Intermediate Indicators

and Achievements

Bank Interventions in the Sector

Interventions of other Donors and

Partners in the Sector

6. To build capacities for the management of property and ills of a regional nature

States must be prepared to adopt the APRM of NEPAD (5 States have so far adopted it). Adoption by Heads of States of Central Africa (February 2005) of the convergence plan, the Treaty on the Sustainable Management of Forests and the COMIFAC self-financing mechanism

Nearly all countries have adopted

the APRM

- COMIFAC capacities are

strengthened ;

- The COMIFAC self-financing mechanism is effective

- Number of States that have adopted the APRM of NEPAD (at least 10)

- Number of managerial staff recruited by COMIFAC

- Number of States applying the COMIFAC levies

- Country governance profile and assistance to Secretariat

- Dialogue - COMIFAC progress

reports

COMIFAC Institutional Support Project

-Bretton Woods institutions

- EU - UNDP - ACBF - ECA - Other UN

specialized agencies

- Bilateral partners

Pillar 2 : Promote the development of regional infrastructure under NEPAD ECCAS Long-term Strategic Objectives

RIASP Short-term Achievements (over 3 to 5 years)

Bank Priorities and Performance

ECCAS Development Outcomes (objectives)

Main Sectoral Issues or Constraints RIASP Products and Achievements (Bank

Interventions)

Intermediate indicators of RIASP Achievements

Strategies/Actions for Intermediate Indicators

and Achievements

Bank Interventions in the Sector

Interventions of other Donors and Partners in the Sector

1. To ensure the interconnection by road of the capitals of ECCAS Member States and to promote mobility

- No two capitals are linked by tarred road, except the Kigali-Bujumbura link: real obstacles to trade

- Relatively high construction cost of a km of tarred road

- Political and administrative obstacles to free movement

- At least three economic corridors by road are built by 2009 ;

- Master plan of transport infrastructure adopted by 2006, and a donor conference is organized ;

- At least two PPP in the area of infrastructure are initiated by 2009.

- Number of km of regional roads tarred in 2005-2009 ;

- Number of feasibility studies conducted in 2005-2009

- Amount of financing mobilized in 2005-2009 ;

- Number of PPP initiated in the area of infrastructure ;

- Conduct of feasibility studies (NEPAD-IPPF, other donors) ;

- Implementation of the NEPAD Medium-Term Plan of Action;

- Organization of a donor conference

- Supervision missions ; - Strengthening of

monitoring-evaluation at the level of RECs

- Dialogue, in particular free movement

- Pilot Programme for the Facilitation of Transport on the Douala-Bangui and Douala-N’Djamena Corridors (2006-2008)

- Contribution to the financing of projects among the 12 PDCT-AC priority areas (NEPAD-IPPF, donor conference, co-financing of projects)

- Bretton Woods institutions ;

- EU - BDEAC - Arab Funds

2. To develop air transport and air transport safety

- The region has poor air transport links and air transport costs are

- Capacities for air security control in Central Africa are

- One autonomous and operational regional

- ICAO and FAA Audit Reports ;

- ir Security Control Capacity Building

- France - EU

Annex IV Page 4 of 7

ECCAS Long-term Strategic Objectives

RIASP Short-term Achievements (over 3 to 5 years)

Bank Priorities and Performance

ECCAS Development Outcomes (objectives)

Main Sectoral Issues or Constraints RIASP Products and Achievements (Bank

Interventions)

Intermediate indicators of RIASP Achievements

Strategies/Actions for Intermediate Indicators

and Achievements

Bank Interventions in the Sector

Interventions of other Donors and Partners in the Sector

and ensure harmonization in the area of air transport

very high ; - Difficulties and problem of

profitability of national airlines ; - Constraints of air security and

safety and need to implement the Yamoussoukro Declaration on the Liberalization of Air Transport.

strengthened ; - The security and efficiency of

air transport are improved ; - Economic and technical

regulations are established and harmonized according to ICAO standards and practices

- Air transport costs are reduced ;

- At least one regional airline and viable private airlines are operating ;

- CEMAC capacities for monitoring regional programmes and projects are strengthened.

Agency for the control of air security with international security standards is established by June 2008 ;

- DAC and AOC completely autonomous before 2010 ;

- Harmonized technical regulations adopted in 2006;

- Reduction by 15% of air transport costs and time from 2008 ;

- Number of regional and private airlines;

- Air transport unit with at least 3 agencies set up within CEMAC in 2006 and strengthened in 2008

- Minutes of meetings of the CCSDY and Ministers ;

- Status and supervision reports of the programme ;

- ICAO statistics; - Effective mobilization of

contributions to the financing of the programme

- Dialogue and follow-up of the establishment of AIR CEMAC

Programme (COSCAP) in West and Central Africa (2004-2007)

- Air CEMAC dialogue - Dialogue on the control

of air security in non-CEMAC countries

- IFFAS - CEMAC - ECOWAS/GAB - Others (Airbus,

Boeing, FAA)

3. To foster the interconnection of modes of transport

Absence of the interconnection of modes of transport (roads, railways and waterways);

Poor interconnection of national railway lines,

- Electrical grids interconnection master plan implemented in 2006 ;

- Policies, legislation, regulations and standards are harmonized by 2009

- NEPAD’s medium-term plan of action is prepared in 2005 and implemented by 2015 ;

- The transport infrastructure master plan is adopted by 2006

- Conduct of feasibility studies (NEPAD, IPPF, other donors) ;

- Implementation of NEPAD’s Medium-term Plan of Action ;

- Strengthening of monitoring-evaluation at the level of RECs

- Dialogue

- Conduct of feasibility studies (NEPAD IIPPF, other donors) ;

- Implementation of NEPAD’s Medium-term Plan of Action ;

- Dialogue

- Bretton Woods institutions ;

- EU - BDEAC - Arab Funds

4. To harmonize energy policies, legislation, regulations and standards

Drastic shortages of electricity in countries of Central Africa, contrasting with the rich potential of the region. Need to interconnect national grids which requires the adoption of uniform policies, legislation and standards

- Electrical grids interconnection master plan implemented in 2006 ;

- Policies, legislation, regulations and standards are harmonized by 2009.

- Conduct of study on the interconnection of electrical grids in 2005;

- Status and supervision reports of the electrical grids interconnection project ;

- Building of the monitoring -evaluation capacities of CAPP

- Study on the interconnection of electrical grids of ECCAS countries (2003)

- One or two electricity study on the interconnection of electrical grids

- Bretton Woods institutions

- EU - Arab Funds - Bilateral partners - BDEAC

Annex IV Page 5 of 7

ECCAS Long-term Strategic Objectives

RIASP Short-term Achievements (over 3 to 5 years)

Bank Priorities and Performance

ECCAS Development Outcomes (objectives)

Main Sectoral Issues or Constraints RIASP Products and Achievements (Bank

Interventions)

Intermediate indicators of RIASP Achievements

Strategies/Actions for Intermediate Indicators

and Achievements

Bank Interventions in the Sector

Interventions of other Donors and Partners in the Sector

5. To improve efficiency and access and reduce electricity costs

- Electricity is a major constraint on the competitiveness of enterprises and on the well-being of the population ;

- Decay of electricity infrastructure causes about 30% of losses, compared with a standard of 10% to 15% ;

- The region has 1.3 million consumers for a population of 113 million;

- Considerable load shedding in most countries ;

- Exorbitant electricity costs.

- Grid interconnections have been initiated ;

- Drop in grid losses ; - The number of consumers has

increased ; - Electricity PPPs have been

initiated ; - The kwh cost has fallen in

some countries.

- Percentage of regional connectivity implemented by 2009 ;

- Kwh/per capita consumption ;

- Percentage of rural communities connected to the electrical grid ;

- Number of PPP initiated in Central Africa ;

- Price of kwh per country.

- Conduct of the study on the interconnection of electrical grids ;

Strengthening of the monitoring-evalution of CAPP ;

- Search for cofinancing Dialogue

- Study on the interconnection of electrical grids of ECCAS countries (2003)

- One or two electricity projects stemming from the study on the interconnection of electrical grids

- Regional seminars - BDEAC line of credit

- BDEAC -Bretton Woods

institutions - EU - Arab Funds - Bilateral partners - ACBF - UNDP

Annex IV Page 6 of 7

Pillar 3 : Support regional cooperation in the management o f issues of regional concern ECCAS Long-term Strategic Objectives

RIASP Short-term Achievements (over 3 to 5 years)

Bank Priorities and Performance

ECCAS Development Outcomes (objectives)

Main Sectoral Issues or Constraints RIASP Products and Achievements (Bank

Interventions)

ECCAS Development Outputs (objectives)

Main Sectoral Issues or Constraints

RIASP Products and Achievements (Bank

Interventions)

ECCAS Development

Outputs (objectives)

1. To support food security at regional level

- About 40% of the community’s population is suffering from nutritional deficiencies

- Remarkable regional food production potential but constrained by trade fluidity and policy problems (lack of coordination, use of an inappropriate methods with negative consequences on sustainable development)

- Low agricultural productivity and urgent need for an efficient and harmonized research policy ;

- Unequal distribution of labour and arable land ;

- Need to render operational the Regional Programme for Food Security (RPFS) and to formulate a common agricultural policy.

- The RPFS strategic thrusts are operational by 2007 ;

- A common agricultural policy is prepared by 2007 ;

- An agricultural research programme is implemented by 2008-2009 ;

- Food productivity and supply are on the increase in the member countries by 2010 ;

- Progress is made with regard to the MDG relating to food security in the member countries

- Conduct of a study on the formulation of the RPFS and a common agricultural policy in 2006 ;

- A multinational agricultural research programme is cofinanced by 2007-2008 ;

- Trends in food supply in the States ;

- Trends in MDG relating to food security in the States

- Coordination with national programmes and projects ;

- Coordination of donors and search for cofinancing ;

- Establishment of mechanisms for the monitoring and evaluation of the food situation, in the States and coordination with ECCAS and other lead RECs ;

- Dialogue, in particular free movement

- Strengthening of common programmes with other RECs

- Study on the formulation of the RPFS and the common agricultural policy (2005/2006)

- Cofinancing in the formulation and implementation of the agricultural research component of the RPFS (development and transfer of technologies), 2007-2008

- National agricultural project (CSP)

- World Bank - FAO - EU. - BDEAC - Arab Funds

2. To control the spread of HIV/AIDS

- Rapid spread in sexually active population (young people-women) ;

- Inadequate prevention ; - Reception constraints in health

facilities of countries and inappropriate and inadequate management of infected and affected persons ;

- Inadequate consideration of the cross-border dimension of HIV/AIDS and obstacle to the free movement of persons ;

- Bleak prospects and declining life expectancy.

- Interventions are harmonized in countries ;

- Grass-roots community capacities are strengthened ;

- Prevention is intensified and effective ;

- The information system functions ;

- Drop in HIV/AIDS prevalence in the population

- The strategic framework and plan of action for the fight against HIV/AIDS are operational in 2006 ;

- Amount of resources and number of interventions of the Regional Fund to Fight HIV/AIDS

- Rate of condom use in 2006-2009 ;

- HIV/AIDS prevalence rate in 2006-2009 (population, pregnant women and men in uniform) .

- Regional initiatives (GLIA, LCBC, Congo-Oubangui-Chari Initiative) are implemented normally in countries ;

- Regional initiatives are implemented in ECCAS ;

- pilot information system is established in 2006-2007 ;

- Links between ECCAS and OCEAC are strengthened ;

- Regional Fund to fight

- Congo-Oubangui-Chari Rivers Riparian Countries Initiative (2003) ;

- Lake Chad Basin Countries Initiative (2005) ;

- Great Lakes Countries Initiative (2005)

- Dialogue and/or study on relations between ECCAS and the Initiatives, OCEAC, Information System and the Regional Fund.

- EU - World Bank - UNAIDS - WHO

Annex IV Page 7 of 7

ECCAS Long-term Strategic Objectives

RIASP Short-term Achievements (over 3 to 5 years)

Bank Priorities and Performance

ECCAS Development Outcomes (objectives)

Main Sectoral Issues or Constraints RIASP Products and Achievements (Bank

Interventions)

ECCAS Development Outputs (objectives)

Main Sectoral Issues or Constraints

RIASP Products and Achievements (Bank

Interventions)

ECCAS Development

Outputs (objectives)

HIV/AIDS is established.

3. To contribute to the conservation and sustainable management of the Congo Basin forests

- Global stake of the Central African forest (second forest reserve after Amazonia)

- The Congo Basin (3 700 000 km²) harbours the continent’s biggest water resource

- 4/5 of African dense forest, rich in various species

- Need for a common approach to conservation and sustainable management

- Putting in place of COMIFAC Sub-regional Convergence Plan and signature of the Treaty on the Conservation and Sustainable Management of Forest Ecosystems

The COMIFAC Three-year Priority Programme is effectively implemented by 2009.

- COMIFAC’s capacities are

strengthened ;

- COMIFAC self-financing mechanism is effective

- Dialogue - COMIFAC progress

reports

COMIFAC Institutional Support Project

-Bretton Woods institutions

- EU. - UNDP - ACBF - ECA - Other UN

specialized agencies

- Bilateral partners

Annex V Page 1 of 5

ECCAS PROGRAMME : Key Areas of Intervention, Objectives, Strategy and Indicators Intervention Areas Objectives Strategy Dates/Targets/Indicators

Area 1 :

Peace and Security

To promote peace and security in Central Africa

To build capacities in the areas of peace

and security, conflict prevention and democratization

To demobilize and rehabilitate ex-

servicemen

- Ratification of the Mutual Assistance Pact relating to COPAX by Member States which have not yet done so

- Conduct of the study on conflict prevention - Operationalization of MARAC and FOMAC - Strengthen civil society participation in conflict prevention and

democratization of Member States - Strengthen cooperation with the United Nations, AU, EU and

other RECs - Implementation of the convention relating to the Demobilization

and Rehabilitation Programme (PMDR) - Support to national structures for the collection and destruction of

light weaponry

- Effective ratification : 2005 - TOR adopted (ECCAS and EU); implementation in 2005 - MARAC and FOMAC provided with office automation and

communication equipment in 2005 - Camping equipment for small squads of 2000 men in

2005/2006 - Plan for training in data collection and processing prepared

and implemented in 2005-2006 for the technical staff of ECCAS and Member States

- Training plan for FOMAC standby contingents - Strategy for the participation of OCS prepared in

2005/2006 - Establishment of the Regional Elections Observatory - Formal Programme of Cooperation with UN, AU, EU and

other RECs - Increased demobilized resources - Demobilization : 2004-2005 ; rehabilitation : 2005-2006

Area 2 :

Capacity Building

To build ECCAS General Secretariat’s capacities for action and intervention

To ensure the reorganization of ECCAS

by designing and implementing a new organization chart tailored to the General Secretariat’s missions

To implement the General Secretariat’s

programme of activities and ensure the formulation and monitoring-evaluation of integration programmes and projects

- Ensure the reorganization of ECCAS by designing and implementing a new organization chart tailored to the General Secretariat’s missions

- Recruit technical assistance to implement the priority work programme and provide in-service training for staff

- Recruit competent cadres using competitive and transparent standards, respecting equity and gender equality.

- Prepare and implement a plan for the training of staff in service and to be recruited

- Put in place an appropriate and stimulating work environment

- The ECCAS 2006 and 2007 work programme is implemented;

- An organization chart tailored to ECCAS missions is introduced in 2006;

- In 2006, ECCAS has qualified experts tailored to its missions;

- An efficient accounting system is introduced in 2006;

- The CCI is operational and the General Secretariat’s 2007 budget is approved at the end of 2006

Area 3 :

Trade Promotion

To set up the ECCAS FTA ; To set up the ECCAS Customs Union ; To set up the ECCAS common market ; To adopt a common trade policy To strengthen the competitiveness and

- Create conditions for the effective implementation of the Community Decision relating to the FTA and the establishment of a customs union ;

- Harmonization of policies and legal and regulatory frameworks

for the free movement of factors of production ; - Close cooperation between ECCAS and CEMAC in the area of

trade negotiations

- The schedule for reduction of the FTA preferential tariff is

rigorously respected by 2007 ; - The Capital Loss Compensation Fund is operating

effectively; - The Customs Union is established in 2008; - The Member States have adopted a common trade policy

Annex V Page 2 of 5

Intervention Areas Objectives Strategy Dates/Targets/Indicators

effective participation of ECCAS in the global economy

- Start of negotiations with a view to setting up a common market - Improvement of competitiveness by putting the region’s natural

resources to good use and promoting ECCAS as an attractive destination for investments

- Implementation of industrial and mineral resources development

strategies.

by 2008; - The common market is effective by 2015 ; - The industrial and mining sectors are diversified by 2015

Area 4 :

Free Movement of Persons

To remove administrative barriers to

the free movement of persons

Create conditions for the implementation of the Community

Decision relating to the free movement of persons

The free movement of persons is effective between ECCAS

States in 2008

Area 5 :

Development and Maintenance of Regional Infrastructure

To make up for the dramatic inadequacies in the area of infrastructure, particularly transport and energy infrastructure

To implement the infrastructure

component of NEPAD To enhance the efficiency and reduce

the costs of operations ; To improve accessibility to and

facilitate mobility in rural areas ;

Implement the Consensus Transport Master Plan for Central Africa (PDCT-AC)

Implement the NEPAD Short-term Action Plan (STAP) Prepare and implement the NEPAD Medium-and Long-term

Plan of Action Promote PPPs for the construction of infrastructure ; Introduce methods of recovery of costs of construction and

maintenance of infrastructure; Liberalize markets for all modes of transport ; Interconnect modes of transport and harmonize policies,

legislation, rules and regulations, etc. ; Improve access to appropriate technology Implement the Joint Cooperative Development of Operational

Safety and Airworthiness Project (COSCAP) Develop air transport in Central Africa Eliminate obstacles to the movement of persons, goods and

services across borders. ENERGY Electrical energy strategies : • Promotion of the establishment of energy pools through the

strengthening of the interconnection of electrical grids ; • Improvement of access by rural communities

- Transport Infrastructure Master Plan adopted by 2006;

- At least three road economic corridors are developed by 2010

- The NEPAD Medium-and Long-term Plan of Action is prepared in 2005 and implemented by 2015

- A sector donor conference on transport infrastructure is organized by 2006;

- Ensure linkage by land between the capitals of ECCAS States by 2015

- Port facilities for landlocked countries are built by 2008;

- The Congo-Oubangui-Sangha Basin Commission (CICOS) started its activities in 2005

- Railways are interconnected by 2015;

- Markets are liberalized by 2008;

- Policies, rules and procedures for all modes of transport are harmonized by 2008;

- Cost recovery is generalized by 2013;

- The movement of persons, goods, services and capital is effective by 2008

- Study on electricity master plan conducted in 2006 - Interconnection of national grids by 2008 - Strategy for the strengthening of capacities and energy

resources in Central Africa by 2006 - Harmonization of policies, legislation, regulations,

Annex V Page 3 of 5

Intervention Areas Objectives Strategy Dates/Targets/Indicators

For kerosene and gas : • Joint exploration and development of resources ; • Harmonization of policies and legislation ; • Overall institutional building, research and information sharing Other energy sources Develop new and renewable energies (NRE)

standards, etc. by 2008 - 50% regional connectivity by 2010 ; - Establishment of an Energy Pool in Central Africa by 2010 - Access of 50% of rural communities to a modern power

supply by 2020 - Joint operation and implementation by 2010 - Harmonization of policies and legislation by 2007 - Institutionalized exchange of information by 2006 - Institution building programme put in place by 2005 - Identification of research programmes by 2005 - Regional research programme by 2007 - Identification of NRE and related programmes by 2007

Area 6 :

Combating the HIV/AIDS

Pandemic

To prevent the spread of HIV/AIDS, particularly among the most vulnerable groups ;

To mitigate the impact of HIV/AIDS in

the affected population To harmonize policies and legislation

relating to HIV/AIDS prevention and control ;

To mobilize and coordinate resources

for an effective multi-sectoral response to HIV/AIDS.

Develop and improve clinical treatment standards and strategies ; Put in place a regional HIV/AIDS control strategic framework Improve the surveillance of the disease at regional level; Develop the culture of human integration Develop capacities for analysis, action, initiative, intervention,

entrepreneurship, communication and joint negotiation Establish a Special Regional Fund to Fight HIV/AIDS Incorporate HIV/AIDS in peacekeeping and prevention

activities (COPAX) Strengthen sectoral coordination with other HIV/AIDS control

initiatives at regional level

- Extend all OCEAC condoms to the entire Central Africa in 2005

- Strategic framework prepared in 2004, and operationalized in 2005-2006;

- Establishment of the Regional Observatory for the Defence and Protection of the Rights of People Living with HIV/AIDS (PLWHA);

- Issues of HIV/AIDS are integrated into the agenda of the meeting of Rectors of Universities of ECCAS Member States;

- Establishment of an HIV/AIDS health information system in Central Africa;

- The Heads of State Special Regional Fund to Fight HIV/AIDS is operational in 2006

- Introduction in 2005 of a special regional programme for men in uniform, in joint peace-keeping operations and in military schools

- Reduce by 25% the spread and prevalence of HIV/AIDS, in particular among young people in all Member States by 2008

Area 7 :

Environmental Protection

To ensure the conservation and sustainable management of forest ecosystems

To manage forest resources in a

concerted manner

- Implement the United Nations Convention to Control Desertification (UNCCD);

- Promote renewable energy ; - Develop the Lake Chad Basin ;

- COMIFAC Sub-regional Self-Financing Mechanism effective in Member States by 2008;

- Building of the capacities of COMIFAC by 2008;

- Effective implementation of the COMIFAC three-year priority programme by 2009

Annex V Page 4 of 5

Intervention Areas Objectives Strategy Dates/Targets/Indicators

- Adopt an African strategy for the management of disaster risks. Implement the COMIFAC Sub-regional Convergence Plan for

the Sustainable Management of Ecosystems of the Congo Basin

Area 8 :

Food Security

To facilitate the availability of supply of diversified food products

To strengthen producers’ knowledge of

productive species To put at the disposal of producers

highly productive species and varieties To establish an early warning system to

manage and prevent food crises To disseminate national experiences at

regional level To disseminate at regional level

information on availability, storage and surplus of products

To encourage agricultural production in

agroprocessing To strengthen plant health prevention To strengthen chambers of agriculture

and producer associations To organize regional forums and

seminars to prepare countries for negotiations with third parties

- Intensify and diversify food production through the development of agricultural infrastructure;

- Develop agricultural research, extension and dissemination of

findings; - Produce and market high-yield seeds and seedlings in Member

States; - Manage and prevent food crises among vulnerable groups

(refugees and displaced people, etc.); Integrate the regional dimension into national agricultural

policies; - Promote an improved management of information to strengthen

food security and intra-and extra-ECCAS trade in agricultural products;

- Promote private sector initiatives and partnership of agricultural

produce processing SMEs; - Strengthen the health security of foodstuffs and production

inputs in order to foster intra and extra-ECCAS trade; - Foster intra-ECCAS trade; - Strengthen the capacities of ECCAS member countries to

participate effectively in multilateral trade negotiations on agriculture under WTO

- Infrastructure development : 2004-2008 - Establishment of a framework for coordination and

harmonization of RFSP by 2007 - Strengthening of national research systems and promotion

of adapted research structures : 2005-2009 - Increase in the production of improved seeds in terms of

quality and quantity : 2005-2009 - Initiation of a regional food products storage plan : 2005 - Creation of an enabling legal environment : 2005-2009 - Improvement of the environment of the productive system :

2005-2009 - Monitoring and analysis of agricultural policies : 2005-

2009 - Improvement of the steering of food security and poverty

reduction : 2005-2009 - Increase in quantity and quality of agricultural products at

competitive prices: 2005-2009 - Analysis of the impact of WTO rules and regulations on

national food security policies, and recommendations for actions and negotiations: 2006-2007

Area 9 :

Gender and Development

To eliminate all forms of discrimination, inequality, exclusion and prejudices ;

To promote human rights ; To ensure the effective participation of

women and men in all domains of activity and at all levels of society in order to achieve the sustainable development of Central Africa ;

- Prepare explicit gender policies ; - Strengthen mechanisms for coordination of gender

mainstreaming efforts and for the harmonization of such efforts at regional level ;

- Adopt women empowerment policies and strategies, in particular

gender sensitive budgeting practices, positive discrimination, etc ;

- Prepare women capacity building programmes.

- Policies and frameworks prepared by 2007 ; - Implementation mechanisms put in place by mid-2008 ; - Gender sensitive planning, budgeting and implementation

processes adopted by end 2010 ; - Specific programmes for the economic empowerment of

women prepared by end 2010.

Annex V Page 5 of 5

Intervention Areas Objectives Strategy Dates/Targets/Indicators

To build the capacities of women in all

domains, in particular the political, economic, social and cultural domains

Area 10 : Others :

- Macroeconomic Policy Convergence and Surveillance;

- Financial Sector Integration

To improve macroeconomic frameworks

To strengthen the banking and financial

system

- There is no established regional strategy in this area by 2009; - There are rather national programmes, particularly in country

relations with the IMF (Programmes and consultations Article IV)

Annex VI Page 1 of 1

Trends in Macroeconomic Indicators in Central Africa (ECCAS)

Indicators 1996 1997 1998 1999 2000 2001 2002 2003

2004 Average 2000 – 2004

1. Real GDP growth (%)

3.9

5.8

4.4

1.7

1.5

6.8

7.2

4.7

13.6

6.8

including CEMAC 2.0 12.2 6.6 4.1 5.0 13.1 5.6 5.7 19.9 9.9 2. GDP per capita (US$) 356 380 330 345 347 346 379 450 560 416.4

including CEMAC 725 698 637 669 663 660 718 889 1074 800.7 3. Inflation (%) 91.3 37.6 16.3 27.9 41.3 22.8 11.8 9.3 6.3 18.3 including CEMAC 7.0 5.9 2.3 -0.8 2.1 5.3 3.4 1.7 -0.8 2.3

4. Primary budget deficit (-) (% of GDP) -1.4 -4.1 -8.1 -6.6 -1.1 0.1 -2.0 -0.2

1.1

-0.4

including CEMAC -1.8 -0.7 -4.6 -0.4 4.8 2.0 1.3 4.0 5.4 3.5 5. Gross domestic investment (% of GDP)

23.1

20.2

23.1

18.1

17.9

25.9

25.3

26.1

24.0

23.8

including CEMAC 20.1 21.7 23.9 19.8 19.5 25.6 24.7 22.9 19.4 22.4

6. Gross domestic savings (% of GDP) 18.8 20.4 11.6 12.3 19.0 11.1 14.0 15.5

19.1

15.7

including CEMAC 14.9 20.6 15.8 16.6 22.6 20.6 17.4 20.0 19.3 20.0 7. Real export

growth (%) 4.8 7.5 2.1 -1.8 6.9 -4.1 9.1 2.4 16.9 6.2

including CEMAC 2.9 13.8 1.4 -0.6 11.9 -5.1 0.7 2.7 20.3 6.1 8. Trade balance

(% of GDP) 19.9 15.6 9.0 14.1 26.0 17.3 16.3 14.3 21.0 19.0

including CEMAC 17.1 15.3 7.6 11.7 22.4 15.5 10.6 12.4 19.6 16.1 9. Current account balance

(% of GDP) -4.1 -4.0 -13.0 -8.9 3.2 -6.7 -4.9 -3.6 1.8 -2.0 including CEMAC -4.7 -0.9 -8.8 -4.5 3.7 -2.7 -7.0 -3.5 -1.0 -2.1 10.Terms of trade

(%) 15.8 -1.6 -22.3 20.2 31.5 -10.5 2.5 5.5 21.3 10.1 including CEMAC 11.0 -4.3 -16.9 9.0 23.5 -5.8 3.9 8.1 14.8 8.9 11. Outstanding external debt (% of GDP)

129.0 118.3 138.5 136.5 116.0 118.3 97.2 86.2 58.2 95.2

including CEMAC 99.7 94.1 100.5 98.5 86.8 90.7 78.5 71.8 44.9 74.5 12. Debt service (% Exports of goods

and services) 29.1 22.5 28.2 23.5 24.5 24.2 41.9 20.2 10.6 24.3

including CEMAC 25.1 17.9 17.6 11.0 12.1 13.7 12.8 21.2 10.5 14.1 Sources : ADB (Statistics Division) and IMF

Annex VII Page 1 of 1

Table VII.1 and Graph VII.1 GDP/Per capita Index Disparity (base 100= average GDP/per capita, ECCAS, 2003)

0 200 400 600 800 1000 1200 Angola

Cameroon

Equatorial Guinea

Gabon

Rwanda

Chad

ECCAS

Source :Calculation by the authors from ADB statistics

Table VII.2 and Graph VII.2 Source :ECA

COUNTRY INDEX 2003

Angola 224 Burundi 21 Cameroon 176 Central Afr. Rep. 79 Equatorial Guinea 912 Congo 290 Gabon 1098 DRC 27 Rwanda 45 Sao Tome and Principe

91

Chad 82 CE MAC 199 ECCAS 100

ECCAS : Distribution of Working Population per Remuneration Type (%)

% Non-remunerated agricultural sector 46 Non-remunerated industrial sector 5 Non-remunerated services sector 11 Unemployed persons 22 S/total : Non-remunerated population 84 Remunerated agricultural sector 5 Remunerated industrial sector 3 Remunerated services sector 8 S/total : Remunerated population 16 Aggregate 100

Graph 2.3ECCAS: Distribution of Working Population

Per Remuneration Type (2003)

46

5

11

22

84

5

3

8

16

0 20 40 60 80 100

Secteur agricole nonrémunéré

Secteur des services nonrémunéré

Main d'œuvre nonrémunérée

Secteur industrielrémunéré

Main d'œuvre rémunérée

Percentage of Working Population

Annex VIII Page 1 of 1

ECCAS : Intra-community Export Distribution

(Annual Average 1997-2002)

Country Intra-community Exports (US$ millions )

%

ANGOLA 7.22 3.5 BURUNDI 1.78 0.9 CAMEROON 110.53 53.4 CONGO 25.19 12.2 GABON 21.92 10.6 EQUATORIAL GUINEA 23.58 11.4 CAR 3.00 1.4 DRC 9.06 4.4 RWANDA 1.99 1.0 SAO TOME AND PRINCIPE

0.01 0.004

CHAD 2.48 1.2 TOTAL 206.76 100 Source : ADB

ECCAS : Intra-community Import Distribution (Annual Average 1997-2002)

Country Intra-community Imports

(US$ million) %

ANGOLA 23.91 10.3 BURUNDI 1.70 0.7 CAMEROON 35.21 15.2 CONGO 36.18 15.6 GABON 28.48 12.3 EQUATORIAL GUINEA 16.19 7.0 CAR 18.53 8.0 DRC 43.58 18.8 RWANDA 7.95 3.4 SAO TOME & PRINCIPE 1.09 0.5 CHAD 19.14 8.2 TOTAL 231.96 100

Annex IX Page 1 of 1

Table 2.7 Intra-community Export Trends

Intra-community Exports (in % of total exports)

Annual Average

Country 1997 1998 1999 2000 2001 2002 1997-2002 ANGOLA 0.28 0.14 0.24 0.08 0.12 0.11 0.13 BURUNDI 0.94 1.13 1.82 4.18 6.40 7.49 3.68 CAMEROON 6.17 7.89 6.47 5.59 5.89 5.55 6.23 CONGO 0.82 1.25 1.10 1.03 1.22 1.33 1.18 GABON 0.52 0.70 0.53 0.57 0.67 0.79 0.65 EQUATORIAL GUINEA 8.74 2.45 1.95 1.76 2.17 2.12 2.07 CAR 5.53 1.10 1.23 1.25 1.90 1.98 1.44 DRC 0.51 0.72 0.73 0.81 0.88 0.76 0.78 RWANDA 1.33 1.83 3.59 1.92 1.22 1.39 1.86 SAO TOME & PRINCIPE 0.07 0.04 0.05 0.05 0.07 0.08 0.06 CHAD 2.55 1.39 1.78 4.78 2.94 3.58 2.73 ECCAS 1.51 1.77 1.35 1.07 1.27 1.29 1.31 Source: ADB

Table 2.8

Intra-community Import Trends

Intra-community Imports (in % of total imports)

Annual Average

Country 1997 1998 1999 2000 2001 2002 1997-2002

ANGOLA 0.45 0.54 0.47 1.64 0.87 0.85 0.87 BURUNDI 0.98 1.04 2.36 1.07 0.87 1.00 1.23 CAMEROON 3.47 0.98 1.72 2.31 2.70 2.54 2.12 CONGO 3.04 3.00 4.27 3.99 3.41 3.65 3.61 GABON 4.10 4.13 2.36 1.36 1.36 1.87 2.14 EQUATORIAL GUINEA 13.99 9.99 3.96 3.24 4.22 3.39 4.71 CAR 18.37 14.60 15.91 11.74 10.18 11.05 12.83 DRC 2.24 2.68 3.68 6.78 7.76 6.80 5.54 RWANDA 1.50 2.03 2.38 3.35 3.24 3.20 2.84 SAO TOME & PRINCIPE 2.14 1.88 1.70 2.81 2.27 2.19 2.14 CHAD 9.75 18.90 16.75 7.35 3.45 3.23 7.43 ECCAS 2.91 2.81 2.62 2.90 2.50 2.52 2.65

Annex X Page 1 of 1

Millennium Development Goals Indicators in Central Africa Goal 1 : Eradicate extreme poverty and hunger Target 1 : Halve, by 2015, the proportion of people whose income is less than a dollar a day Target 2 : Halve, by 2015, the proportion of people who suffer from hunger Proportion of people living on less than one dollar a day (%): 50.0 (more than 55 million people) The goals will not be achieved before 2015 Goal 2 : Achieve universal primary education Target 3 : Ensure that, by 2015, all boys and girls complete a full course of primary schooling 2000-01 Total enrolment ratio in primary education (%) 90 .7 Enrolment ratio in primary education - girls (%) 83.4 Literacy rate of 15-24 year- olds (%) 60.0 The goals will be achieved before 2015 Goal 3 : Promote gender equality and empower women Target 4 : Eliminate gender disparity in primary and secondary education 2000-01 Total enrolment ratio in secondary education (%) 12.3 Enrolment ratio in secondary education - girls (%) 10.6 Ratio of literate women to men (15-24 years-olds) ( %) 75.0 Disparities are not wide in secondary education and, hence, the goals will be achieved. However, the achievement of

goals from the point of view of parity at the economic, legal and political levels is a challenge to be met in all countries of the region.

Goal 4 : Reduce child mortality Target 5 : Reduce by two-thirds, by 2015, child mortality 2002 Under-five mortality rate (per 1000) 113.3 Infant mortality rate per 1000 live births 199.8

Proportion of children immunized against measles (%) 52.6 Proportion of children immunized against tuberculosis (%) 68.1 It seems acceptable that Central Africa will achieve the target of reducing by two-thirds infant mortality in 2015.

However, the gap in urban and rural areas and between countries remains; which shows that increased efforts are necessary to reduce these disparities.

Goal 5 : Improve maternal health Target 6 : Reduce by two-thirds, in 2015, the maternal mortality ratio Maternal mortality ratio (per 100 000 births) 541 (1990-98) Proportion of births attended by skilled health personnel (%) 20.3 (1997-99) The disparity in the maternal mortality ratio between countries is low. Regarding the proportion of births attended

by skilled health personnel, which influences the maternal mortality ratio, it varies from country to country. It is unlikely that this goal will be achieved in 2015. Goal 6 : Combat HIV/AIDS and other diseases The prevalence rate of 7.1 is high. Sustained efforts should reduce it. This is a priority goal. Goal 7 : Ensure environmental sustainability Target 7 : Integrate the principles of sustainable development into common policies and reverse the present trend of

loss of environmental resources in the north and south of the region (water and wind erosion, increased desertification) Target 8 : Reduce by half, by 2015, the proportion of people without sustainable access to safe drinking water Target 9 : Achieve, by 2020, significant improvement in the lives of 1 000 000 slum dwellers. Agreements in the areas of sustainable development, environment, forest management and control of desertification

exist at regional level. They are the expression of national policies. A lot of efforts have been made in this direction. There are serious constraints in the face of factors indigenous to the dominant bioclimatic system. Efforts should be focused on the effects of human activity whose impact on the environment should be reduced. In this way, it is possible to achieve the goals.

Sources : United Nations

Annex XI Bank Group Approvals by Sector to ECCAS Countries, 1967-2004 (UA million) Sector Number Amount % Agriculture and Rural Development 129 857.91 19.0Industry, Mining and Quarrying 16 251.49 5.6Transport 95 953.04 21.1Water Supply and Sanitation 52 429.03 9.5Power Supply 19 283.85 6.3Communication 13 185.82 4.1Finance 18 107.05 2.4Social 102 639.24 14.1Urban Development Environment 2 1.85 0.0Multisector 58 813.68 18.0 Total Loans and Grants 504 4,522.97 100.0 Other Approvals 21 1,095.10 n.a. HIPC Debt Relief 8 895.96 n.a. Equity Participation - - - Guarantees 1 9.28 n.a. Loan Reallocation 10 148.56 n.a. Post Conflict Country Framework 2 41.30 n.a. Total Approvals 525 5,618.07 n.a. Source : ADB Statistics Division 0: Magnitude zero n.a.: Not applicable

Annex XII

ECCAS: Bank Group Multinational Operations (in UA)

as at

15 June 2005 Projects by Sector Approval

Date Signature

Date Effectiveness

Date Completion

Date Source Amount Amount

Disbursed

A. Agriculture 3.680.000.00 2.047.434,00

- LCBC : Pilot Project for Support to Research Development on the Integrated Control of Pests

10.5.2000 15.9.2000 5.1.2001 31.12.2005 ADF Grant 1.400.000.00 1,165,43400

in Agriculture in Lake Chad Basin - PRGIE 07/07/2000 16/10/2000 1/10/2001 31/12/2005 ADF Grant 2.280.000.00 882.000.00 B.Utilities 2.500.000.00 0.00

ADF Grant 2.500.000.00 - Study on the Interconnection of Electrical Grids of ECCAS Member Countries

21/07/2003 25/09/2003 25/09/2003 31/12/2007

C. Transport

1.300.000.00 0.00

COSCAP Programme 27/04/2005 - - - ADF Grant 1.300.000.00 0.00 D. Industrial Sector 0.00 0.00 E. Social Sector 10.600.000.0 3,411,487.1

10/05/2000 15/09/2000 05/01/2001 30/12/2004 ADF Grant 2.000.000.00 2,000,000.00- African Onchocerciasis Control Programme - ISTA 10/05/2000 26/7/2000 26/12/2000 31/12/2004 ADF Grant 600.000.00 405.570.62 - APOC Phase II 16/10/2002 16/5/2003 16/5/2003 31/12/2007 ADF Grant 2.000.000.00 1.005.916.45- Congo-Oubangui-Chari Riparian Countries Initiative

11/09/2003 13/02/2004 30/11/2004 31/12/2007 ADF Grant 6.000.000.00 0.00

F. Multi-sector 2.590.000.00 0.00

17/11/2004 14/01/2005 14/01/2005 31/12/2007 ADF Grant 2.590.000.00 0.00 ECCAS General Secretariat Institutional Support Project Grand Total 20.670.000,00 5,458,921.10Grand Total Net of Cancellations

Disbursement Rate 26.41

Annex XIII Page 1 of 4

ECCAS PROFILE (ECONOMIC COMMUNITY OF CENTRAL AFRICAN STATES)

1 LOCATION ECCAS BP 2112 Libreville Gabon Tel : +241-44 47 31 Fax:+241-44 47 32 e-mail: ceeac.orgsr@inet.ga Website : www.ceeac-eccas.org 2. MEMBER STATES Angola, Republic of Burundi, Republic of Cameroon, Republic of Central African, Republic Gabon, Republic of Congo, (Brazzaville) Republic of Congo, Democratic Republic of Equatorial Guinea, Republic of Rwanda, Republic of São Tome and Príncipe, Democratic Republic of Chad, Republic of 3. HISTORY AND CONTEXT During a summit meeting in December 1981, the leaders of the Central African Customs and Economic Union (UDEAC) agreed in principle to enlarge the Economic Community of Central African States. ECCAS was set up on 18 October 1983 by the members of UDEAC and members of the Economic Community of Countries of the Great Lakes (CEPGL) (Burundi, Rwanda and Zaire – as it was called at the time), as well as Sao Tome and Principe. Angola played the role of observer up to 1999 when it became member. ECCAS has been functioning since 1985 but remained inactive during most of the 1990s. ECCAS was designated as pillar of the African Economic Community (AEC) but official contacts between the AEC and ECCAS took place only in October 1999, largely due to the inactivity of ECCAS since 1992. ECCAS signed the protocol on relations between the AEC and the Regional Economic Communities in October 1999. The AEC recalled the importance of ECCAS and the key role it plays in Central Africa during the third preparatory meeting of its Economic and Social Council (ECOSOC) in June 1999.

Annex XIII Page 2 of 4

The second extraordinary meeting of ECCAS was held in Libreville on 6 February 1998. It was chaired by Pierre Buyoya, President of Burundi. The Heads of State present at this summit undertook to revive this organization. The Prime Minister of Angola also indicated that his country would become a full member of the organization. The Council then approved a budget of 10 million French Francs for 1998 and entrusted the Secretariat with the following activities:

� obtain assistance from the ECA (UN) for the assessment of the operational activities of the Secretariat ; assess the contributions due by the Member States ; and review the salaries and salary structure of staff of the Secretariat;

� organize an extraordinary meeting of the Council of Ministers as soon as

possible to evaluate the recommendations of the ECA (UN); the Council shall then prepare proposals to put in place a new administrative structure of the Secretariat and the reviewed contributions due by each Member State.

The Council also requested the countries of the region to find permanent peaceful solutions to their political problems. The Chairman, President Buyoya of Burundi, also requested the Member States to back up the lifting of the embargo imposed against his country. The Member States present fully supported his request. At the mini-summit of ECCAS Heads of State held during the investiture ceremony for President Bongo of Gabon on 21 January 1999. The Heads of State discussed problems concerning the functioning of ECCAS and decided to create at the General Secretariat a Department responsible for the promotion of Peace and Security, entrusted to the Republic and Angola. Angola joined the community formally during this summit. The Tenth Ordinary Conference of Heads of State and Government was held in Malabo in June 2002. This summit adopted the Protocol relating to the establishment of a Network of Central African Parliamentarians (REPAC), as well as the Rules and Procedures of the Central African Peace and Security Council (COPAX), the Defence and Security Commission (CDS), the Central African Multinational Force (FOMAC) and the Central African Early Warning System (MARAC). Rwanda was officially admitted, after having renewed its membership. The Eleventh Ordinary Conference of Heads of State and Government which was held in Brazzaville in January 2004 welcomed the fact that there are enough ratifications of the Protocol establishing COPAX to warrant its coming into force. The summit also adopted the following Declarations concerning: the launching of the Community’s free trade Area; the implementation of NEPAD in Central Africa; HIV/AIDS Control and gender equality Some members of ECCAS are also members of CEMAC (Central African Economic and Monetary Community) to which belong Chad, Central African Republic, Congo Brazzaville, Gabon, Equatorial Guinea and Cameroon. On 24 January 2003, the European Union concluded a financial agreement with ECCAS and CEMAC on condition that both should merge into a single organization, ECCAS ,having responsibility for peace and security in the sub-region.

Annex XIII Page 3 of 4

4 GOALS ECCAS seeks to achieve a collective autonomy, raise the standards of living of the local population and maintain economic stability through harmonious cooperation. Its ultimate goal is to establish a common market of Central African States. At the Malabo Conference of Heads of State and Government in 1999, four priority areas of activity were identified, namely :

. Develop capacities to maintain peace, security and stability, which are essential conditions for economic and social development; . Develop physical, economic and monetary integration; . Develop a culture of human integration; and . Establish an self-financing mechanism for ECCAS.

5. STRUCTURE

.i Conference of Heads of State and Government; ii Council of Ministers; iii Court of Justice; iv. General Secretariat (a secretary-general elected for four years and three

deputy secretaries general); V Consultative Commission; and vi. Specialized Technical Committees

6. PEACE AND ACTIVITIES RELATING TO SECURITY The Central African States adopted a non-aggression pact, during the Yaounde (Cameroon) meeting, before the end of the 5th meeting of the UN Advisory Committee on Security in Central Africa. The pact was adopted on 9 September 1994 after five days of meetings and deliberations between the military experts and the ministers of Cameroon, Central African Republic, Congo, Equatorial Guinea, Gabon and Sao Tome and Principe. At the summit conference of the Permanent Security Council for security issues in southern Africa which was held in Yaounde on 25 and 26 February 1999, the Member States decided to set up an organization responsible for the promotion, maintenance and consolidation of peace and security in Central Africa which would be called Central African Peace and Security Council (COPAX). The Protocol relating to COPAX has already entered into force. The technical bodies of the Council are :

1. Central African Early Warning System (MARAC) which gathers and analyzes data for early warning and prevention of crises.

2. Defence and Security Commission (CDS) where army chiefs of staff and

police and gendarmerie chiefs of the different Member States meet. Its role is

Annex XIII Page 4 of 4

to plan, organize and advise entities taking decisions in the community to implement military operations, when necessary.

3. Central African Multinational Force (FOMAC), a non-permanent fore made

up of military contingents of Member States whose goal is to establish and carry out peace, security and humanitarian aid missions. The by-laws of COPAX, CDS, MARAC and FOMAC were adopted in June 2002 during the tenth ordinary conference held in Malabo.

In January 2003, Gabon organized a regional peacekeeping exercise, “BIYONGHO 2000”, to enhance the capacities of ECCAS Member States in the areas of peacekeeping and prevention and control of conflicts. This exercise is a direct application of the French concept dubbed RECAMP (Building African Capacities for peacekeeping). Extraordinary summits of ECCAS and CEMAC held in Libreville on 23 June 2000. The Ministers of Foreign Affairs of ten Central African countries met in the Democratic Republic of Congo on 16 and 17 August 2001 to discuss security in this region torn apart by war. The summit was held under the auspices of the United Nations. Rwanda refused to take part in the summit. The meeting of army chiefs of staff was held in Brazzaville in October 2003, resulting in the creation of a peacekeeping squad which can intervene in areas of instability. The meeting also recommended that military planners of ECCAS Member States should form a group responsible for details of the squad force. The army chiefs of staff also suggested the establishment of a common centre to train the peacekeeping force and carry out the military manoeuvres every two years. The first manoeuvres are scheduled to take place in Chad. Pursuant to the recommendation of the meeting of army chiefs of staff of member countries held in Brazzaville in December 2004 and validated by the Council of Ministers of Defence , and at the proposal of the statutory Council of Ministers, the 12th ordinary session of the Conference of Heads of State and Government decided to create a Regional Chief of Staff and a Regional Standby Brigade. This Regional Brigade, in keeping with the objectives of COPAX and the related African Union Road Map, comprises pre-positioned units in each of the member countries. The Regional Chief of Staff will be temporarily installed in Libreville, Gabon.

Annex XIV Page 1 of 2

LIST OF TREATIES AND PROTOCOLS

Name of Protocol Date of Signature Status of Enforcement

Treaty establishing ECCAS 18/10/1983 Yes Protocol Instituting the Network of ECCAS Parliamentarians (REPAC)

17/06/2002 Yes

Mutual Assistance Pact Between ECCAS Member States

24/02/2000 Yes

Protocol relating to the Central African Peace and Security Council

24/02/2000 Yes

Protocol on the Rules of Origin of Products which will be Exchanged Between Member States of ECCAS

18/10/1983 Yes (integrated into the Treaty)

Protocol concerning Nontariff Obstacles to Trade

18/10/1983 Yes (integrated into the Treaty)

Protocol relating to the Reexportation of Goods within ECCAS

18/10/1983 Yes (integrated into the Treaty)

Protocol on Transit and Transit Facilities 18/10/1983 Yes (integrated into the Treaty)

Protocol relating to Customs Cooperation Within ECCAS

18/10/1983 Yes (integrated into the Treaty)

Protocol concerning Revenue Loss Compensation Fund

18/10/1983 Yes (integrated into the Treaty)

Protocol on Freedom of Movement and Right of Settlement of Nationals of ECCAS Member States

18/10/1983 Yes (integrated into the Treaty)

Protocol concerning ECCAS Clearing House 18/10/1983 Yes (integrated into the Treaty)

Protocol relating to Cooperation in the Domain of Agricultural Development Between ECCAS Member States

18/10/1983 Yes (integrated into the Treaty)

Protocol relating to Cooperation in the Domain of Transport and Communication Between ECCAS Member States

18/10/1983 Yes (integrated into the Treaty)

Protocol relating to Cooperation in the Fields of Science and Technology Between ECCAS Member States

18/10/1983 Yes (integrated into the Treaty)

Protocol concerning Cooperation in the Area of Energy Between ECCAS Member States

18/10/1983 Yes (integrated into the Treaty)

Annex XIV Page 2 of 2

Name of Protocol Date of Signature Status of

Enforcement Protocol concerning Cooperation in the Area of Energy Between ECCAS Member States

18/10/1983 Yes (integrated into the Treaty)

Protocol on Cooperation in the Fields of Human Resource Development, Education, Training and Culture Between ECCAS Member States

18/10/1983 Yes (integrated into the Treaty)

Protocol relating to Cooperation in the Area of Tourism Between ECCAS Member States

18/10/1983 Yes (integrated into the Treaty)

Protocol on the Simplification and Harmonization of Business Procedures and Documents within ECCAS

18/10/1983 Yes (integrated into the Treaty)

Protocol relating to the Situation of Landlocked, Island, Partially Island and Semi-Landlocked Countries and/or Countries Belonging to the Category of Least Developed Countries.

18/10/1983 Yes (integrated into the Treaty)