Tanzania - Fourth Education Project

DOCUMENT OF INTERNATIONAL DEVELOPMENT ASSOCIATION Not For Public Use Report No. P-1169-TA FILE COPY REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED DEVELOPMENT CREDIT TO THE UNITED REPUBLIC OF TANZANIA FOR A FOURTH EDUCATION PROJECT March 15, 1973 This report was prepared for official use only by the Bank Group. It may not be published, quoted or cited without Bank Group authorization. The Bank Group does not accept responsibility for the accuracy or completeness of the report.  CURRENCY EQUIVALENTS Currency Unit: Tanzania Shilling (TSh) US$1 = TSh7.l4 TShl = US$0.14 TSH1,000 = US$140 TShl,000,000 = US$140,000 Fiscal Year : July 1 - June 30  INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED DEVELOPMENT CREDIT TO THE UNITED REPUBLIC OF TANZANIA FOR A FOURTH EDUCATION PROJECT 1. I submit the following report and recommendation on a proposed credit to the United Republic of Tanzania for the equivalent of US$10.3 million on standard IDA terms to help finance a Fourth Education Project. PART I - THE ECONOMY General 2. An economic mission visited Tanzania during August and September 1971. Volume I of the mission's main report (AE-26) together with annexes was distributed to the Executive Directors on May 22, 1972 and June 22, 1972. An updating mission visited Tanzania in August and September 1972 and its report was distributed to the Executive Directors on December 11, 1972. Basic data on the Tanzanian economy are given in Annex I. 3. Tanzania celebrated its first decade of independence in December 1971. In the past eleven years gross national product increased in real terms by some 65 percent to the present level of about $1.5 billion. During the same period, life expectancy at birth increased from 35 to 41 years, infant mortality declined from 250 to 160 per thousand live births, maternal mortality declined from 4.7 to 2.7 per thousand deliveries, and the primary school enrollment rate increased from about 28 to 37 percent of the relevant age group. While this sample of economic and social indicators shows that significant progress has been made, it also gives some idea of the magnitude and difficulty of the development tasks facing the country. For example, while GNP grew at 4.7 percent per annum in real terms during these years, these gains were to a large extent offset by the growth of population and with the result that per capita income increased at only 2.4 percent per annum. 4. Tanzania was one of the few African states to emerge with a one-party system at the time of independence. The system has since been consolidated, and the interests of political and economic leader- ship have been brought together. In economic policy making the long term objective of social equality prevails over economic interests of minority groups, and some progress towards reducing inequality of income distribution within the category of employed workers has been  -2- made, but large gaps continue to exist between urban and rural standards of living. Economic Performance and Resource Mobilization 5. Although short of the targets enunciated in the Second Five- Year Plan (1969-74), Tanzania's effort to mobilize both domestic and foreign resources has been impressive. The marginal national savings rate was in fact as high as 50 percent in 1970 and 1971. However, the absolute levels of savings (about 25 percent of GDP) were lower than expected because the growth rate was lower. Recurrent revenues (excluding profits from parastatal corpanies) amount to about 25 percent of monetary GDP at market prices, and the overall rate of taxation is one of the highest among developing countries of comparable economic structure and per capita income level. In terms of current foreign aid disbursements, the Peoples Republic of China is presently Tanzania's principal donor, supplying about 75 percent of the net capital inflow in 1971. In terms of outstanding commitments, however, the Bank Group is the largest donor to Tanzania followed by Sweden, Norway and the Soviet Union. Including Tanzania's notional one-third share of the debt of the East African Community Corporations, the IBRD is presently carrying 13.Q percent of Tanzania's total external debt and IDA 9.6 percent. Most capital aid, to Tanzania is made available on very favorable terms; about 50 percent of the total is tied to procurement in the donor country. Supplier credits have been kept to minimum. The overall debt service ratio is around 9 percent, which although quite manageable is higher than projected because of a shortfall in exports. In view of the poor market prospects of Tanzania's main export crops, it is important that aid be kept as soft as possible so as not to over- burden the balance of payments. Current Constraints 6. The investment rate has recently levelled off after reaching a record high or nearly 33 percent of monetary GDP at market prices in 1971. This is more than the country can sustain in the long run, but the investment rate is expected to decline somewhat following the completion of the Tanzanian portion of the Chinese financed Tanzania- Zambia railway project near the middle of 1974. This project has accounted for about one quarter of total investment in Tanzania in recent years. The combination of exceptionally high investment rates and lower than planned national savings gave rise to severe pressures on resources, resulting in some price inflation between 1966-1967. In addition, the balance of payments situation became very tight because much of the investment required imported goods and equipment. These pressures have now eased somewhat as a result of credit restrictions  -3- and a temporary contraction of capital expenditures by Government ministries. Even with the expected decline in the rate of investment and recovery in national savings, Tanzania will require a continued capital inflow in excess of the foreign exchange component of high priority projects; some foreign financing of local expenditures will therefore be justified. 7. The increased rate of investment has not been significantly reflected in the growth of gross national product. This was mainly a result of the heavy bias in these investments towards infrastructure. As a consequence, the Government has decided to shift the emphasis of its investment programns to more productive quick yielding investments, particularly those which generate increased export earnings. The effects of these new policies can already be seen, particularly in the rural sector which will for the foreseeable future remain the mainstay of the country's economy. Policies and programs designed to raise agricultural production and provide the necessary institutional support are being developed and implemented. Rural Development 8. To establish a viable framework under which essential services can be economically delivered to a scattered rural population and con- comitantly to reflect Tanzania's socialist ideals and organization in the countryside, the Government is promoting and supporting the establishment of cooperative or "ujamaat' villages. In such villages most or all of the land is communally owned and production is organized on a communal basis. Only the very basic infrastructural needs are provided by the Government, and self-help and local initiative are the keys to the production success of these cooperatives. Normally these villages have to function success- fully for some years before they become eligible for registration as cooperative societies and consequently for credit. About 15 percent of the rural population is now concentrated in some 4,500 ujamaa villages, but only about 200 of these have so far qualified for registration as creditworthly cooperatives. 9. The response to the ujamaa movement has not been uniform throughout the country; progress has been particularly slow in areas where small farmers are already engaged in the production of well established cash crops and hence often do not feel the necessity to change to a new and untried way of life. While the Government is anxious to speed up the formation of ujamaa villages, it recognizes that the movement will gain ground and be successful only if the principle of voluntary association is preserved. The process of bring- ing the bulk of Tanzania's rural population into ujamaa villages will take a long time, and it is still too early to assess the full signi- ficance of the movement for agricultural production. However, there are indications that the program could in due course have a significant, favorable impact on the rural sector.  -14- 10. To make Government more responsive to the needs of rural deve- lopment and better able to respond to local initiative, greater power and responsibility for the formulation and execution of development projects was recently given to regional and district authorities. The Government expects that this important decentralization of its adminis- trative structure will increase the country's absorptive capacity and facilitate the shift in emphasis of public sector investment from social and economic infrastructure to agriculture and rural development in general. It is too early to assess the impact of decentralization, since in the early stages difficulties in determining the most desirable distribution of authority between the central Government and the regions are bound to arise and the transfer of high ranking officials from Dar es Salaam to the regions is inevitably at the expense of the smooth functioning of the central Government. In the longer term, however, considerable improvements in project identification, preparation and implementation, should be possible as a result of this new structure. Other Sectors 11. While the rural, agricultural sector has to play a major role in Tanzania's development, other sectors offer possibilities for a broadening and diversification of the economic base. This is despite a number of considerable disadvantages. Industrial growth, which was until recently rapid, has slowed as the most obvious possibilities for import substitutions are now nearing their limits. The small domestic market severely limits the scope for further industrial expansion, and the East African Comnon !iarket has not yet realized its potential. Frequent duplication of new industrial ventures in East Africa continues, and trade and currency restrictions between the three member countries are tending to increase rather than decline. In light of these limiting factors, the Tanzanian Government is placing increasing emphasis on promoting small industries catering to the needs of the rural popula- tion and on processing crops, such as cashew nuts, for export. The contribution of the transport sector to the economy is exp)ected to increase significantly with the completion of the railway to Zambia and the complementing Bank financed expansion of Dar es Salaam harbor. Economlc activity along the railway line in both countries is also expected to surge ahead following its completion. Tourism is another sector with considerable potential, and the Governnment is presently considering a ten-year plan for the development of this important source of foreign exchange earnings. Consultative Group 12. A meeting on Tanzania of the Consultative Group for East Africa was held in Paris from January 16-17, 1973. The relatively slow growth  of agricultural production and the increased importation of capital goods had caused severe pressure on resources, but temporary investment cutbacks and credit restrictions had successfully overcome the resulting financial pressures. The Group noted with satisfaction the Government's policy of pursuing its development goals under conditions of financial stability and its intention to maintain or increase domestic savings which are already high in comparison with many developing countries. The Group recognized that external aid inflows would have to increase substantially, and that most if not all capital assistance would have to be made avail- able on soft terms in order to avoid an excessive debt servicing burden in the future. Expropriations 13. In pursuit of its development and social policies, Tanzania has nationalized a number of enterprises, many of them foreign owned, over the past six years. Between February 1967 and April 1971 banks, insurance companies, sisal estates and industrial companies were taken over by the state and satisfactory compensation arrangements have been made or are expected to be concluded shortly with the former owners. In April 1971 legislation (The Acquisition of Buildings Act) was enacted empowering the President on behalf of the state to acquire any rental or commercial property, the construction cost of which was over 100,000 Tanzanian shillings ($14,000). About three thousand properties were acquired under the Act. The Act provides for compensa- tion and contains a formula which in general terms states that compensation will be limited to the cost of construction of the building less ten percent for each year the building has been owned. The Act, however, provides for an Appeals Tribunal to which an owner of expropriated property may appeal in respect of the acquisition of his building or the amount of compensation. The Tribunal is authorized to restore property to previous owners. Moreover, the President has power under the Act to return the building or to pay compensation above that provided for under the formula in the Act, and the Tribunal may make recommenda- tions to the President on such additional compensation. A committee has also been established outside the Act to return properties to owners who can prove that they have suffered hardship as a result of the acquisition. Some five hundred and sixty claims and appeals have been made and are being dealt with in the order they were lodged; less than ten percent of these are on behalf of foreign owners. To date about two thirds of the total have been dealt with under the  -6- various review procedures; about ten foreign cases have been settled so far, all in favor of the claimant. There remain about forty foreign cases at various stages of the review procedure, none of them having yet exnausted the local remedies available. PART II - BANK GROUP LENDING TO TANZANIA l4. Tanzania joined the Bank, IDA and I@C in 1962. Beginning with an IDA credit for education in 1963, it has so far received eleven credits and three Bank loans amounting to $120.2 million. In addition, Tanzania has been a beneficiary of 8 loans, totalling $197.3 million which have been extended for the development of common services operated on a regional basis by Tanzania, Kenya and Uganda through their association in the East African Community. The only IFC investments in Tanzania to date, totalling $4.4 million, were made in the Kilombero Sugar Companlr in 1960 and 1964. This comoany en- countered financial difficulties, and in 1969 IFC and other investors sold their interest in the company to the Government. Annex II contains summary statements of Bank Loans, IDA Credits and IFC investments in Tanzania and the East African Community organizations as of March 1973 and notes on the execution of ongoing projects. 15. Our lending program, reflecting the emphasis the Tanzanian Government attaches to agricultural development is increasingly focus- ing on directly productive activities in the rural sector. Up to the end of FY 72 ten out of fourteen loans and credits were for infrastrac- ture. All but one of the Loans to the East African Community Organiza- tions, of which Tanzania is a beneficiary, have been extended for imorovements in transoortaticn and communications. However, the approval by the Executive Directors of the Flue-Cured Tobacco Project (Credit No. 217 TA) in October 197( opened a new phase in our lending. The Smallholder Tea Development Project (Credit No. 287 TA) was approved in March 1972; the forthcoming livestock project constitutes a major development effort in this sector. A project to support the expansion of Navy Bean production ancd processing is being examined and may be presented for consideration by the Executive Directors later this year, and a project for expanding cotton production was appraised in February. The GovTernment of Tanzania has received three IDA credits for education totalling $12.9 million which have supported general secondary education, the expansion of primary teacher training, and technical and agricultural training. Although a few problems were encountered, progress has been generally satisfactory.  -7- 16. Our Permanent Mission in East Africa, which was involved in the preparation of three of the above projects, is currently assisting Tanzania in preparing a regional rural development project and a cashew nut development project. Our capability to provide such assistance has proved to be particularly valuable in a country where project preparation capacity is and for some time will be limited. Tanzania is developing an institutional structure, stress- ing greater regionalization and development of ujamaa villages, designed to promote and respond to development initiatives. These institutions are still in their formative stages, and related organizational and staffing difficulties have sometimes resulted in the project delays referred to in Annex II. Bank Group projects supporting these institutions have reinforced their viability at an early stage. 17. In addition to our Tanzanian projects, we plan to continue our support of East African Community projects. A loan of $26.5 million to the East African Harbours Corporation was approved by the Executive Directors on November 21, 1972. A loan of $31 million to the East African Posts and Telecommunications Corporation has been negotiated. PART III - EDUCATION IN TANZtNIA Education Strategy 18. Tanzania's formal and non-formal education programs form a nation-wide learning system geared to rural development within the ujamaa community concept. The system is divided into 18 Regions and 64 Districts. The Regional and District Officers direct the operation of public primary schools, while the Ministry of Education controls secondary, technical, teacher training, and higher education. Non- formal education for adults and for specific community needs is flexible and directly reinforces community action. The objectives of the Tanzanian education system as set forth in the 1967 Arusha Declaration and subsequently confirmed are: a) to develop the knowledge and skills of the labor force relevant to national economic growth;  -8- b) to engender understanding and enthusiasm for communal participa- tion in building a rural-oriented, socialist society with basic necessities for all people; c) to stress the individualts role within the family, the obligation of everyone to work, and the self-reliance of each community; and d) to enhance both economic growth and equality of income distribution by reducing the difference between the real incomes of urban workers and the rural masses. Tanzania has spEcific goals for skill sufficiency, uni- versal primary education, and adult access to non-formal education. These are discussed below. 19. To date Tanzania's actual education developments have been in accordance with its announced strategy, and the Government has a good record of accomplishments in gearing secondary and higher education to the manpower needs of the modern sector. Leadership and managerial capacity at the local level are major bottlenecks and are points of emphasis in the proposed project. Expansion of the education system is better planned than in many developing countries. Under the Second Five- Year Plan (1969/70 to 1973/74), 11 percent of the capital program was earmarked for the Ministry of Education. Because of financial constraints actual expenditures on education have fallen short of plan targets. About 20 percent of the central Government's recurrent expenditures are allocated to education; the share is expected to rise to 24 percent by 1984/85. This rise will be sufficient to meet the additional recurrent burden of planned education investments in secondary and higher educa- tion, and in teacher, technical, and vocational training as well as phased development of the primary and rural learning systems. Implementation of Education Strategy 20. In spite of the shortfall, total expenditure on education in 1970/71 amounted to 4.5 percent of GDP, nearly all of which was financed by public resources. Total Government expenditure grew at the rate of 16.5 percent per year during 1964/65 to 1970/71, while annual outlays fcr education increased at the rate of 14.5 percent per year, the slower growth due primarily to financial constraints on capital expenditure. However, recurrent Government spending on education grew rapidly and absorbed an increasing share of the Government's total expenditure: 21 percent in 1970/71 compared with 17 percent in 1964.  -9- Primary Education 21. Primary education in Tanzania is a seven year system starting at age seven. Swahili is the language of instruction, but English is taught at each level. Fees vary by region and by grade; exception based on need is allowed. Public primary school enrollment has increased from nearly 500,000 to over 900,000 from 1961 to 1971. In 1971 about 37 percent of the primary school age group was attending school (compared with 17 percent in Ethiopia, 44 percent in the Ivory Coast, and 65 percent in Kenya) while grade I enrollment included about 48 percent of children aged seven. There were about 4,500 primary schools in Tanzania in 1971, of which 400 were private (enrolling nearly 30,000 students). Nearly 90 percent of those who enter primary school terminate their formal education at some level of the primary school system; the curriculum is designed for them ratiier than. for the iiinc-r-vt.- who proceed to secondary school. Increasing emphasis is being given to agriculture, home science, and simple craft work. 22. The Government has set the goal of realizing universal primary education (UPE) by 1989. However, financial constraints may prevent achievement of this target, and the Government is studying ways of reducing the costs. General Secondary Education 23. General secondary education consists of a four-year lower secondary course followed by two years of pre-university education. Secondary enrollment is determined by manpower needs; from 1961 to 1971 it tripled to over 32,600. In 1971 secondary enrollment was 1.9 percent of the 14 to 19 year age group, extending from 2.5 percent at the lower level to 0.6 percent at the upper. Private secondary schools in 1971 had one quarter of the total secondary school population; the private share is increasing. No fees are charged in the public schools. All secondary instruction is in English. Dropout and repetition rates are negligible. After completing four years of secondary school, pupils take the National School Certificate examination, and after six years they take the NIational Higher School Certificate examination. These examinations were first instituted in 1971, replacing the East African examination which in turn had replaced the Cambridge University examinations. 24. Secondary school standards are reasonably good. The curricula in history, geography, and biology have been adapted to local needs. Until recently practical subjects have not been stressed, but more attention is now directed towards agriculture, commerce, craft training, and home science. In 1967 only 15 percent of the teachers were Tanzanians; by 1971 this percentage had risen to 60. Because of low population density, nearly three-fourths of secondary students are boarders; only in Dar es Salaam schools do day pupils outnumber boarders.  -10- Day pupils require study facilities at the school since many homes lack adequate facilities. Boarding students perform considerably better than day students. Both the cost of boarding facilities and the low student- teacher ratio (19:1) result in high unit costs for secondary schools. Community Education Centers (CECs) 25. In line with the Government's rural development strategy- (paragraph 8 above) the Government is introducing a program of Community Education Centers. These centers complement rural development activities and emphasize the priorities given to ujamaa settlements. They are to serve as primary schools and make available basic facilities for instruc- ting adults in crafts, agriculture, work-oriented literacy, home science, and health care. These multifunctional and non-formal education centers will serve to integrate those bypassed by formal education programs. Technical Education and Vocational Training 26. Vocational training is the responsibi:Lity of the Ministry of Labor and Social Welfare. This Ministry is developing a National Industrial Training Program including an apprenticeship scheme with the ILO, UNDP, and the Canadian International Development Agency (C IDA). At present, vocational training is provided in Dar es Salaam in a center opened in 1968 with IUDP/ILO support. This center has a 300 place capacity and an annual output of l10 craftsmen. The National Apprenticeship Scheme sponsored by the Ministry of Labor and small training centers operated by religious groups and parastatal organiza- tions have an annual output of about 200, marny of whom require further training before they become proficient craftsmen. Government depart- ments and industrial concerns provide short specialized courses for managers and commercial workers. 27. Two secondary technical schools provide four-year post-primary programs with an engineering orientation and leading to the School Certificate. Their combined enrollment is 1,200. The Dar es Salaam Technical Coilege which has been assisted by the Second Education project (Credit 149-TA) is at present the ornly institute for advanced technical education in Tanzania. It offers both full-time and part-time day and evening courses, most of th.em at the technician level; its 1971 enroll- ment in the three year full-time technician course was 420. The College is short of experienced teaching staff, partly because expatriate teachers have been phased out rapidly. The Government with assistance from tuhe Federal Republic of Germany is establlshing a new technical college at Arusha. The college will offer a four-year program, three years to be spent in college and one in industry. Planned intake is for 120 students per year, with an output of 100 technicians yearly. 28. Tanzanian engineers at the university degree level currently study either at the University of Nairobi or e:Lsewhere outside the country. The Federal Republic of Germany is supporting a Faculty of  -11- Engineering at the University of Dar es Salaam which is expected to open in July 1973. Intake to the four-year course after completion of secondary grade 6 will be 120 students per year. Primary Teachers and Teacher Training 29. In 1971 there were nearly 20,000 teachers in public primary schools and about 500 in private schools. About 6,000 teachers were qualified to teach upper primary grades, and 12,700 were qualified for lower primary grade instruction; the remainder were unqualified. With a student/teacher ratio of 45:1, more teachers are needed. There is an ample supply of candidates for primary teacher training courses. In 1971 there were 4,200 students in 21 Primary Teacher Training Colleges (PTTCs) offering two-year pre-service training for primary teachers with an out- put of 2,400. About 600 students were enrolled in a one-year "crash" program which has not yet been evaluated. In-service courses for practicing teachers are also offered. With increased emphasis on regional development and autonomy, the Government plans one PTTC in each of the 18 regions. New PTTCs are now under construction or are being expanded, two of which are being assisted by the Second Education Project (Credit 149-TA). Secondary Teachers and Teacher Training 30. In 1971 there were 1,706 secondary school teachers in public secondary schools of whom 1,064 were Tanzanians. The student/teacher ratio was low at 19:1, and the Government is reluctant to increase it in view of the relative inexperience of Tanzanian teachers who are steadily replacing expatriate teachers. Nevertheless, the low ratio is difficult to justify in view of the financial constraints under which the country is forced to operate. In 1971 private secondary schools employed 405 teachers, a large number of them expatriates. The student/teacher ratio in these schools was higher than the public schools (26.5 to 1) because of the more experienced and highly trained faculties. 31. Diploma level teachers for secondary grades 1 through 4 are trained in a two-year course at the Dar es Salaam Teacher Training College. Courses offered include training for technical subjects and domestic science. Total 1971 enrollment was 240. Graduate teachers are trained at the University in three-year courses; recent total enrollments have averaged 600. Planned outputs of teachers are adequate to meet require- ments until 1980. Higher Education 32. The University of Dar es Salaam comprises Faculties of Arts, Law, Medicine and Science, and Agriculture. The University Department of Education annual-ly enrolls 600 students in a three-year degree course to train secondary school teachers. An Institute of Education gives in- service courses and develops curricula. Both degree and diploma courses  -12- are offered; the total enrollment is about 1,600. Establishment of the Faculty of Engineering mentioned above will assist industrial growth. Health and Health Education 33. Although their precise effects on economic growth are difficult to measure, short life expectancy and a high incidence of illness in Tanzania adversely affect the productivity of the labor force. In Tanzania, 41 percent of the population is affected by tuberculosis of the lung. Child mortality is high: one child in ten in rural areas dies of malnutrition, pneumonia, or diarrhea before reaching 5 years of age. Infectious and parasitic diseases, including malaria, affect two-thirds of the population. 34. The Government's strategy is to develop a rural based system including rural health centers with satellite dispensaries, and rural hospitals at the regional and district levels equipped to provide major curative facilities. The facilities are complemented by health services at the national level, provided in major hospitals at Dar es Salaam, Moshi, and Mwanza, and in three Government hospitals specializing in tuberculosis, mental disease, and obstetrics. Tanzania can meet all its targets for rural health facilities within the next ten years without having to increase the recent average rate of investment in health services. To finance the additional recurrent costs of operating the system, the Government has recently decided to increase its recurrent health budget by at least 10 percent per year: a manageable increase. 35. Tanzania's health strategy provides for medical auxiliaries to operate the country's health care facilities at all levels, under the general supervision of physicians. Key auxiliary personnel are Medical Assistants (MAs) and Rural Medical Aides (RMAs) who operate, respectively, the rural health centers and the dispensaries. Assistant Medical Officers and Medical Assistants also staff the hospitals substituting to a large extent for physicians. Although the supply of auxiliary personnel has been inadequate, training has increased and is now expected to keep pace with the country's expanding network of health care facilities. 36. The role of the physician or Medical Officer (MC) is to manage the health care system and to serve as supervisor, practitioner, and teacher for the cadre of auxiliaries. About 950 MOs, or one per 25 auxiliaries will be needed by 1985. Another 5@0 will be required to staff Dar es Salaam hospitals, national consultation hospitals, the University Medical Faculty, and to direct training of medical auxiliaries and allied staff in over 60 schools and centers. The health care system will require about 1,400 doctors in Government and private employment by the mid-1980's. To reach this figure and to replace expatriate physicians, 1,300 new Tanzanian doctors are needed for employment during the period 1972-1985.  -13- 37. Doctors are presently trained at the University of Dar es Salaam and in foreign medical faculties (including Makerere where no places will be available for Tanzanians after 1977). Experience has shown that foreign medical training does not orient future physicians towards the practice of social medicine in Tanzania's rural environ- ment, and the Government plans to rely solely on the Dar es Salaam Medical Faculty after 1975. However, the supply of Medical Officers will not keep pace with the development of the health system unless the medical faculty of Dar es Salaam is expanded from the present intake of 35 students per year, of whom about 30 graduate. The total supply of about 420 new MOs in 1972-1985 from the faculty falls short of estimated needs by some 880, leaving unfilled 68 percent of the MO posts required by 1985. The inadequate supply of medical doctors would- result in ineffective direction of the system and deterioration of train- ing standards at the next level of qualification. In order to avoid jeopardizing the entire health program, the Government proposes to expand the Faculty of Medicine and to implement compensatory measures. PART IV - THE PROJECT 38. An appraisal report entitled "Appraisal of a Fourth Education Project in Tanzania" is being circulated separately. A Credit and Project Summary are provided as Annex III of this report. 39. This project was identified by a mission of the Overseas Liaison Committee (OLC) of the American Council on Education, commissioned by the Bank Group to analyze the education sector in Tanzania. The Association discussed the OLC report of Novenxber 1971 with the Government of Tanzania in January 1972. The project was appraised in June and July of 1972. Negotiations were held from February 1, 1973 to February 6, 1973. The Tanzanian delegation was led by Mr. E. K. Meena, Principal Secretary in the Ministry of National Education. 40. The proposed project would be the fourth IDA credit for educaticn in Tanzania. It would develop education and training facili- ties for children and adults in ujamaa villages, expand and improve pre- service and in-service training of primary school teachers, expand secondary and vocational education, and provide additional facilities to train medical doctors. Project Items 41. General Secondary Schools. The proposed project includes three general secondary schools. The output of graduates from these schools would overcome a projected shortfall of secondary school graduates in the 1973 to 1985 period of about 3,000. The school would have a class size of 35 students, and a diversified curriculum with agriculture, commerce, crafts,  -14- and home science options during the final two years. The project would provide for 1,920 additional students, board 1,260 of them, and provide housing for 72 staff members. 42. Primary Teacher Training Colleges. Two new colleges included in the project will reduce a foreseen deficit; of 400 primary teachers per year for the next 15 years. Annual output would be about 360 teachers. The facilities include full boarding capacity and housing for about half the teaching staff. The colleges are in the less developed southern area of Tanzania and would serve as focal points for training teachers in their regions, and for commercial activities connected with rural develop- ment. The project would also increase the capacity of an existing teacher training college at Bagamoyo from 120 to 360 students. The Bagamoyo facility provides instruction to enable primary school teachers to assume the responsibilities of community leadership in ujamaa villages and permits trainees from remote areas to visit the capital and attend lectures by national leaders. The project would provide for 240 additional places, all of which would be boarding places, and would provide housing for 15 staff members. 43. Vocational Training Centers (VTCs). Two proposed centers at Tanga and Mwanza would help alleviate the shortfall in the supply of skilled workers and reinfcorce the Government's policy of decentralizing industrial development. The new centers would each have a capacity of 300 trainees, an annual output of about 150 craftsmen, and would offer ad hoc courses to meet special industrial needs. The project would create places for 600 additional students. 4a. Medical Facilities. The project wculd provide teaching facilities for a Rural Health Center in Bagamoyo and additional facilities for the Faculty of Medicine at Muhimbili Hospital in Dar es Salaam. The 2.cilities which would permit the annual output of physicians to be increased from 30 to about 65 in line with government policy would be geared to medical teaching and would include laboratories, workshops, seminar rooms for an additional 145 students, boarding facilities for l40, and 33 new staff housing units. The Muhimbili Hospital and the Faculty of Medicine are presently managed by separate adminis- trations. The Government agreed to put into effect an arrangement of management structure acceptable to the Association for the effective coordl.na- tion of the Muhimbili Hospital and its associated clinics with the expanded Faculty of Medicine, as a teaching hospital. 45. Community Education Centers (CECs). The project would provide for construction and equipment of eight CECs expected to be located in developing ujamaa villages in the Dodoma region, with additional student places for about 2,400.  46. Technical Assistance. The project would finance a total of 49 man-years of technical assistance and 35 man-years of fellowships for staff development at the Faculty of Medicine, strengthening of the project implementation unit, and identification of management training needs and preparation of a national plan to develop management training. h7. Project Costs and Financing Plan. The total project cost is $14.6 million equivalent net of taxes. The $10.3 million credit would finance 71 percent of total project cost. The proposed credit would meet the estimated $5.9 million foreign exchange component and $4.4 million (51 percent) of the local costs; the Government would finance the remaining $4.3 million. The estimated capital costs of the project institutions are reasonable compared with similar construction costs in other African countries. 48. Project Administration. The project unit already established in the Ministry of Education under the Second IDA education project would be responsible for project implementation. To accommodate the new work load the unit would be augmented by twelve man-years of technical assistance. The project unit would organize, design, implement, and supervise the project institutions and prepare contract documents, thereby eliminating the use of consultants except for preparation of the manage- ment training plan and design of the teaching facilities for extensions to the Medical Faculty where specialist consultants would be employed. A condition of effectiveness would be the appointment of a project coordinator in consultation with the Association and the provision of suitably equipped premises for the project unit. (See section 8.01 of the Development Credit Agreement.) Implementation would be completed within five years of the effective date of the Credit Agreement. Procurement Arrangements O9. Except for civil works and locally manufactured construction materials at the CECs and VTCs, contracts for civil works, furniture and equipment would be awarded on the basis of international competitive biddirgin accordance with the Association's guidelines for procurement. Construction work at the CECs and VTCs would not be suitable for international competitive bidding due to their small size and remote locations and the availability of voluntary labor at the village level. For the CECs, construction work would be performed by a mobile construction unit attached to the rural training center. Imported construction materials, furniture and equipment would be procured through international competitive bidding. Locally manufactured construc- tion materials would be procured through local competitive bidding. Pre- qualification procedures for civil works contracts would be acceptable to the Association. All civil works contracts for the first and second education projects were won by local contractors and this is likely to be repeated. The bulk of instructional equipment would be procured abroad  -16- and furniture locally. Contracts for books would be awarded in accordance with the normal book procurement procedures of the Borrower. Items would be grouped to the extent practicable to encourage competition and to permit bulk procurement. Domestic manufacturers would be accorded a pre- ferential margin of 15 percent,or the existing rate of import duties, whichever is lower, above the C.I.F. price of competing importers. Disbursements 50. Disbursements would be made against the C.I.F. price of imported construction materials, equipment and furniture; the ex-factory price of locally manufactured equipment and furniture; 80 percent of total expendi- tures for technical assistance and 65 percent of expenditures for civil works and locally procured construction materials. PART V - LEGAL INSTRUMENTS AND AUTHORITY 51. The draft Develooment Credit Agreement between the Association and the United Republic of Tanzania and the Recommendation of the Committee provided for in Article V, Section I (d) of the Articles of Agreement and the text of a resolution approving the proposed credit are being distributed to the Executive Directors separately. The draft agreements conform to the normal pattern for credits for education projects. 52. I am satisfied that the proposed credit would comply withthe Articles of Agreement of the Association. PART VI - RECOMMENDATION 53. I recommend that the Executive Directors approve the proposed credit. Robert S. McNamara President By: J. Burke Knapp Senior Vice President Attachments  ANNEX I Page I of 2 pages COUNTRY DATA - TANZANIA AREA 2/ POPULATION DENSITY 937,062 km- 13.6 million (mid-1972) 15 per km;2 Rate of Growth: 2.7 (from '66 to'75 ) .. per km2/of arable land POPULATION CHARACTERISTICS (1967) HEALTH (1970) Crude Birth Rate (per 1,000) 47 Population per physician 21,900 Crude Death Rate (per 1,000) 20 Population per hospital bed 790 Infant Mortality (per 1,000 live births) 165 INCOME DISTRIBUTION DISTRIBUTION OF LAND OWNERSHIP 7% of national income, lowest quintile *- % owned by top 10% of owners (All land owned by highest quintile *- % owned by smallest 10% of owners the State) ACCESS TO PIPED WATER (1970) ACCESS TO ELECTRICITY (1970) 7% of population - urban 80 % of population - urban 3 - rural 10 - rural NUTRITION (1970) EDUCATION (1970) Calorie intake as % of requirements 69 Adult C iteracy ra(9 % Per capita protein intake 43 grams per day Primary school enrollment % 37 1/ GNP PER CAPITA in 197 1 US $ 100 GROSS NATIONAL PRODUCT IN 1971 ANNUAL RATE OF GROWTH (%. constant prices) US $ Mln. % 1960-65 1965-70 1971 GNP at Market Prices 1,332 100.0 5.0 4.5 4.5 Gross Domestic Investment 370 27.5 .. 14.3 27.5 Gross National Saving 286 21.5 5.7 10.8 Current Account Balance - 90 - 6.7 Exports of Goods, NFS 338 25.4 7.4 6.4 Imports of Goods, NFS 433 32.5 .. 9.4 20.0 OUTPUT, LABOR FORCE AND PRODUCTIVITY IN 1971 Value Added Labor Force- V. A. Per Worker U-S$ Mln. 7. Mln. % US $ 7. Agriculture 521 39 5.3 91 98 43 Industry 1.59 12 0.1 2 1590 694 Services 651 49 0.3 3 2170 948 Unallocated 0.1 4 Total/Average 1331 100.0 5.8 100.0 229 100.0 GOVERNMENT FINANCE General Government Central Government Mln.) 7. of GDP ( Shs Mln.) % of GDP 197 197 196 -7 1971/72 197 1 1965-70 Current Receipts (No information available but totals 1913 20 16 Current Expenditure for all items only slightly higher than 1824 19 16 Current Surplus for Central Government) 89 1T Capital Expenditures 1440 15 7 External Assistance (net) 839 9 3 1/ The Per Capita GNP estimate is at 1970 market prices, calculated by the same conversion technique as the 1972 World Atlas. All other conversions to dollars in this table are at the average exchange rate prevailing during the period covered. 2/ Total labor force; unemployed are allocated to sector of their normal occupation. "Unallocated" consists mainly of unemployed workers seeking their first job. not available not applicable  ANNEX I Page 2 of 2 pages COUNTRY DATA - TANZANIA MONEY, CREDIT and PRICES 1965 1969 1970 1971 1971 1972 (Million Shs outstanding end period) Money and Quasi Money .. 2194 2620 3174 Bank Credit to Public Sector .. Bank Credit to Private Sector .. (Percentages or Index Numbers) Money and Quasi Money as % of GDP .. 26% 29% 33% General Price Index (1963 = 100) .. 130 134 138 150 Annual percentage changes in: General Price Index .. 1.6 2.7 3.3 8.7 Bank credit to Public Sector .. .. Bank credit to Private Sector .. BALANCE OF PAYMENTS MERCHANDISE EXPORTS (AVERAGE 1969-71) 1969 1970 1971 US $ MLn % (Millions US $) coffee 37 16 cotton 33 14 Exports of Goods, NFS 285 318 338 sisal 22 9 Imports of Goods, NFS 277 361 433 diamonds 26 11 Resource Gao (deficit = -) + oJ3 _-r9g cashew 17 7 Interest Payments (net) - 3 - 3 - 2 All other commodities 103 ; Workers' Remittances Total 237 lqQ,0 Other Factor Payments (net) Net Transfers + 9 +12 + 7 EXTERNAL DEBT, DECEMBER 31, 19712/ Balance on Current Account +1 -3 -90 US $ Mln Direct Foreign Investment 3 - 1 1 Net MILT Borrowing 28 85 116 Public Debt, incl. guaranteed 314 Disbursements 34 93 142 Non-Guaranteed Private Debt Amortization 6 8 26 Total outstanding & Disbursed 314 Subtotal 31 _ 117 1/2/ Capital Grants *- .. .. DEBT SERVICE RATIO for 1971- Other Capital (net) .. .. -18 8% Other items n.e.i -20 -51 -1_ Increase in Reserves (+) +3 -15 - 5 Public Debt, incl. guaranteed 8% Non-Guaranteed Private Debt Gross Reserves (end year) 80 65 60 Total outstanding & Disbursed d% Net Reserves (end year) 74 55 L2 RATE OF EXCHANGE IBRD/IDA LENDING, February 1973 (Million US 31 Through - 1971 IBRD IDA US $ 1.00 = Sh 7.14 1.00 = US $ 0.14 Outstanding & Disbursed 25 50 Undisbursed 17 32 Since - 1971 Outstanding incl. Undisbursed 2- US $ 1.00= Sh 7.14 1.00 = US $ O.14 1/ Ratio of Debt Service to Exports of Goods and Non-Factor Services. 3/ Excluding IBFJ lending to East African Community. 2_/ Including Tanzania's notional one-third share in the external debt of the East African Community. , not available . not applicable Eastern Africa Region (P - 1D March 14, 1973 July 18, 1972 EPD/PRD  ANNEX II Page 1 of 5 pages THE STATUS OF BANK GROUP OPERATIONS IN TANZANIA A. STATEMENT CF BANK LQANS AND IDA CREDITS TO TANZANIA AS AT JANUARY 31, 1273 (U.S.$ million) AMOUNT LESS CANCELLATIONS NO. YEAR BORROWER PURPOSE BANK IDA UNDISBURSED 45 TA 1963 Tanzania Education - 4.6 _ 48 TA 1964 Tanzania Roads - 14.0 - 80 TA 1966 Tanzania Agricultural Credit - 5.0 - 518 TA 1967 TANESCO Power 5.2 - - 115 TA 1968 Tanzania Supplementary Roads - 3.0 .4 132 TA 1968 Tanzania Ranch Development - 1.3 .2 142 TA 1969 Tanzania Roads - 15.5 - 586 TA 1969 Tanzania Roads 7.0. - 3.0 149 TA 1969 Tanzania Education - 5.0 3.1 217 TA 1970 Tanzania Tobacco - 9.0 8.5 715 TA 1970 TANESCO Power 30.0 - 14.9 232 TA 1971 Tanzania Education - 3.3 3.3 265 TA 1972 Tanzania Roads - 6.5 6.4 287 TA 1972 Tanzania Smallholder Tea - 10.8 10.4 Total 42.2 78.0 of which has been repaid - Total now outstanding 41.9 78.0 Amount sold: .1 of which has been repaid .1 0 - Total now held by Bank and IDA 41.9 78.0 Total undisbursed 50.2  ANNEX II Page 2 of 5 pages B. SUMMARY STATEMENT OF BANK LOANS FOR COMMON SERVICES GUARANTEED BY KENYA, TANZANIA AND UGANDA AS AT JANUARY 31, 1973 (U.S.$ million) Amount less cancellations NO. YEAR BORROWER PURPOSE BANK UNDISBURSED 110 EA 1955 EARC 1/ Railways 24.0 _ 428 EA 1966 EARC 2/ Railways 32.4 1966 EAHC 2/ Harbors 5.6 - 483 EA 1967 EAPTI C/ Telecommunications 13.0 .2 638 EA 1969 EAHC Harbors 35.0 19.8 674 EA 1970 EARC Railways 42.4 36.4 675 EA 1970 EAPTC Telecommunications 10.4 7.2 843 EA 1972 EADB Development Finance 8.0 8.o 865 EA 1972 EAHC Harbors 26.5 3/ 26.5 Total 197.3 98.1 of which has been repaid _21.0 Total now outstanding 176.3 Amount sold: 24.4 of which has been repaid 20.0 4.4 Total now held by Bank 171.9 Total undisbursed 98.1 1/ Loan made originally to East African High Commission and guaranteed by the United Kingdom 2/ Loan made originally to East African Common Services Authority i/ Loan not effective  ANNEX II Page 3 of 5 pages C. FROJECTS IN EXECUTION -1 There are currently nine projects under execution. AGRICULTURE SECTOR Credit No. 132-TA - Beef Ranching Development Project: $1.3 Million Credit of October 31, 1968; Closing Date December 31, 1973 Initial management difficulties were overcome by replacing managers with more experienced staff. Drought conditions brought high cattle mortality on one ranch. A problem of low fixed meat prices was alleviated by a substantial increase in 1972. The project is expected to be fully disbursed by the scheduled closing date (December 1973). This project has demonstrated the feasibility of establishing an efficient beef industry in Tanzania. Credit No. 217-TA - Tobacco Project: $9 Million Credit of October 9, 1970; Closing Date September 30, 1976 Implementation of this project is running behind schedule because of slow farmer recruitment due to lack of clear directives by the Government to regional officials regarding resettlement policy. However, following Central Government intervention farmer recruitment has shown signs of improvement and the project should now gain in- creasing momentum. An IDA supervision mission which visited Tanzania in October 1972 reviewed the project and accepted adjustments to the design of village water systems and changes in the curing and grading facilities in the new villages. The project is being kept under very close supervision. 1/ These notes are designed to inform the Executive Directors regarding the progress of projects in execution, and in particular to report any problems which are being encountered, and the action being taken to remedy them. They should be read in this sense, and with the understanding that they do not purport to present a balanced evaluation of strengths and weaknesses in project execution.  ANNEX II Page 4 of 5 pages Credit No. 287-TA - Smallholder Tea Project: $10.8 Million Credit of March 3, 1972; Closing Date December 31, 1976 This project became effective on July 26, 1972 and only $375,000 have so far been disbursed from the credit account. Because of delay in the effectiveness of the credit, the project has commenced about six months behind schedule. On both these credits, a lack of understanding of IDA procure- ment procedures by the Project Authorities has been the cause of consi- derable delay. This matter was discussed recently with the Government and it is proposed to send an IDA mission to Tanzania in the near future to hold a seminar on procurement procedures for the benefit of concerned staff. POWER SECTOR Loan No. 715-TA - Kidatu Hydroelectric Project: $30 Million Loan of December 14, 1970; Closing Date June 30, 1976 This project has encountered four major problems: (i) price escalation during the 1971 bidding process because of high interest rates and because of new legislation during 1972; (ii) currency parity rate adjustments which have increased costs; (iii) unfavorable rock conditions encountered during underground escavations causing cost increases and the possibility of serious delay; and (iv) vacancy in the top management position for the entire year in 1972. All these problems have contributed towards possibility of serious delay and cost increases which may be one-third higher than the original estimate. The Govern- ment is now considering a request jointly to the Bank and a bilateral source for supplementary finance in 1976. TRANSPORTATION SECTOR Credit Nos. 48-TA/115-TA - First Highway Project: $14 Million Credit of February 5, 1964 and Supplementary Credit of $3 Million of March 21, 1968; Original Closing Date December 31, 1971; Revised Closing Date June 30, 1973 Engineering and construction work on this project has been completed, but arbitration proceedings in respect of a contractor's claim ended only in June 1972. The Government has accepted the award and U$450,ooo remains in the credit account for disbursement against payments to be made in respect of arbitration awards.  ANNEX II Page 5 of 5 pages Loan No. 586-TA and Credit No. 142-TA - Second Highway Project: $7 Million Loan and $15.5 MiJllion Credit of February 24, 1969; Original Closing Date December 31, 1972; Revised Closing Date December 31, 1973 Construction work on this project has also been completed, but outstanding claims by both contractors and consultants are substantial. To enable the Government to settle these claims, the Closing Date of the Loan has been postponed to December 31, 1973. Credit No. 265-TA - Third Highway Project: $6.5 Million Credit of August 6, 1971; Closing Date December 31, 1974 The project consists of (i) improvement of paved standard of the existing Mtwara-Masasi road (200 km), (ii) betterment of 475 km of agricultural feeder roads in the Geita district and in the Mara region by two departmental units to be established, (iii) pre-invest- ment studies for the project roads and another 250 km of high priority roads, and (iv) continuation of the staffing and training program initiated under the first highway project. Due to delays in completing contracts with consultants and finalizaing tender documents, commencement of construction work has fallen about one year behind schedule. The consultant's contracts are now being finalized. EDUCATION SECTOR Credit No. 149-TA - Second Education Project: $5.0 Million Credit of May 29, 1969; Closing Date September 30, 1973 A shortage of counterpart funds in FY 72 for scheduled construction of about five project institutions was a main cause of the project falling 12-18 months behind schedule. Contracts for 24 of the 28 project institutions have been awarded with construction completed on 16 of the institutions; construction on the remaining four is expected to start by July 1973. The project will likely be completed with a total 24 month delay beyond the original schedule. Credit No. 232-TA - Third Education Project: $3.3 Million Credit of February 5, 1971; Closing Date June 30, 1975 This project is about 12 months behind schedule because of site access problems in the areas near the Northwestern border, technical services bottleneck now resolved, and technical assistance recruitment difficulties. The project will probably be completed 12 months behind schedule.   ANNEX III Page 1 of 3 pages TANZANIA - EDUCATION PROJECT CREDIT AND PROJECT SUMMARY Borrower: United Republic of Tanzania. Amount: US$10.3 million equivalent in various currencies. Terms: Standard IDA terms. Project Description: The proposed project would assist the Government to implement its education development program by the following: (1) The construction, furnishing and equipping of: (a) three general secondary schools (b) two pre-service primary teacher training colleges (c) two vocational training centers (d) eight community education centers (2) The extension and the supplementary furnish- ing and equipping of: (a) one in-service primary teacher training college (b) the Faculty of Medicine of the University of Dar es Salaam (c) the Rural Health Center in Bagamoyo (3) The provision of a total of 49 man-years of technical assistance and 35 man-years of fellowships. Project Administration: Project Unit in the Ministry of Education. Estimated Cost: The total project cost is $14.6 million equivalent. The foreign exchange component amounts to $5.9 million, or 40 percent of the total project cost. The IDA credit of $10.3 million equivalent would cover all foreign exchange costs and $4.4 million (51 percent) of local costs.  ANNEX III Page 2 of 3 pages US$ million Local Foreign Total 1. Physical Facilities 3 secondary schools 2.81 1.25 4.06 2 new primary teaching colleges 1.70 0.71 2.41 2 new vocational training centers 0.44 0.55 0.99 8 new Community Edu- cation Centers 0.29 0.12 0.41 Extension of primary teaching college 0.45 0.19 o.64 Extension of Faculty of Medicine and Rural Health Center 0.83 0.41 1.24 2. Technical Assistance 0.36 1.54 1.90 3. Contingencies 1.83 1.10 2.93 Total Project Cost 8.71 5.87 14.58 Categories of Expenditure: US$ million Component Local Foreign Total 1. Construction (including professional services) 6.09 2.32 8.41 2. Furniture 0.34 0.11 0.45 3. Equipment 0.09 0.80 0.89 4. Technical Assistance 0.36 1.54 1.90 5. Contingencies 1.83 1.10 2.93 Total Project Cost 8.71 5.87 14.58  ANNEX III Page 3 of 3 pages Estimated Disbursements: C.Y. 1273 1974 1975 1976 1977 1978 Cumulative Total US$ 0.05 1.39 3.30 3-83 1.54 0.19 US$10.3 million Procurement Arrangements: International competitive bidding for civil works (other than the construction of CECs and VTCs), furniture and equipment and construction materials for CECs in accordance with the Association's Guidelines for Procurement. 15 percent preference for local suppliers. Consultants: Consultant services: for preparation of the management training plan, for design of the teaching facilities for extensions to the Medical Faculty, and for quantity surveyors employed to assist the project unit for Civil Works. Appraisal E'eport: Report No. 50a-TA dated March 5, 1973 Regional Projects Department - Eastern Africa Regional Office   U G A N D Ar lom -j ~vl 130 C T O R I A hK E N Y A3 TANZANIA , . ' kb~koba 2> FOURTH IDA EDUCATION PROJECT 7\'] RWt^/ A N D A 49 s[a | P Bukimo Region boundaries ,$;tA | //t y <sS - g } ~~~~~~~~~~~~~~~~~~~~~~District boundaries |Internotionol boundaries Nonslo" != - LzAKEt '-- Main roads 2 tr*Ngo'oz /Nla:nirembe(3 .> -M'lwnnzo ",- fNrOIV' ) Railways iN M >,o / df } > - 6j/ o/ :/\ r ---TAN-ZAM railway , | B U R U N D I ) / > a~Nyo lik,n9u X Monduli gK Moshi i iq / *gti~~~bondo us ) g }> m AFRtICA $ nyongkS <\ 4 $ y ni o cngoni 0 <) 9 0 /Mcny~~~~~~~~~~~~~~~~Kon,bo, Do om So ~ ( E X \ F) S / S J / S % I rI u 200 Newola .pondo oa /