Malawi - Fifth Education Project

Document of The World Bank FOR OFFICIAL USE ONLY FILE COPY Report No. P-3446-MAI REPORT AND RECOMMENDATION OF THE PRESIDENT 0F THE INTERNATIONAL DEVELOPM:ENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT IN AN AMOUNT EQUIVALENT TO US$34.0 MILLION TO THE REPUBLIC OF ALAWI FOR A FIFTH EDUCATION PROJECT February 8, 1983 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS Currency Unit = Malawi Kwacha (MK) US$1.00 = MK 1.08 MK 1.00 = US$0.92 SDR 1.00 = US$1.10311 WEIGHTS AND MEASURES 1 hectare = 2.471 acres 1 kilometer = 0.6214 mile 1 meter = 3.28 feet 1 square meter = 10.76 square feet ABBREVIATIONS EPD - Economic Planning Division of the Office of the President and Cabinet IPA - Institute of Public Administration JC - Junior Certificate MCA - Malawi College of Accountancy MCC - Malawi Correspondence College MCE - Malawi Certificate of Education MIE - Malawi Institute of Education MOE - Ministry of Education and Culture MOW - Ministry of Works NRDP - National Rural Development Program PIU - Project Implementation Unit PSLC - Primary School Leaving Certificate PTTC - Primary Teacher Training College FISCAL YEAR April 1- March 31 FOR OFFICIAL USE ONLY MALAWI FIFTH EDUCATION PROJECT CREDIT AND PROJECT SUMMARY BORROWER: Republic of Malawi BENEFICIARY: Ministry of Education (MOE) AMOUNT: SDR 30.9 million (US$34.0 million equivalent) TERMS: Standard PROJECT DESCRIPTION: The proposed project would assist Malawi in improving the quality of primary education, expanding secondary education, increasing the number of trained accountants and accounting technicians, and strengthening the management of the education and audit systems. Specifically, the project would finance: (a) three new primary teacher training colleges, expansion of one existing college and staff training; (b) 25 new Malawi Correspondence College centers (MCC), other necessary additions to MCC headquarters, technical assistance, and training of MCC staff; (c) one new secondary school and expansion of an existing school; (d) a new college of accountancy and related technical assistance and staff training; and (e) studies, technical assistance and fellowships to the Ministry of Education (MOE) and the Auditor General's office. As a result of the project, primary teacher training capacity would be increased by 80 percent and the quality of teaching improved, contributing to significantly improved completion rates. Relatedly, the number of successful MCC students is expected to increase significantly and the need for trained accountants be met through the 1990's. The project would also strengthen the MOE's planning and research capacity and improve the Auditor General's capabilities. There are no major risks to the project except a possible overall shortage of recurrent funds if Malawi'seconomy does not improve in the medium-term. However, as a result of the structural adjustment program, the economy is expected to return to a GDP per capita growth rate which is positive in real terms over the next five years. This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. -ii- ESTIMATED COST: Local Foreign Total --------- US$millions--------- Primary Teacher Training 9.4 8.2 17.6 Correspondence Education 1.8 2.0 3.8 Secondary Education 2.8 2.4 5.2 Accountancy Education .9 1.6 2.5 Studies, Evaluation and Auditing .1 .6 .7 Project Administration .3 .7 1.0 Base Costs 15.3 15.5 30.8 Physical Contingencies 1.5 1.3 2.8 Price Contingencies 5.2 3.2 8.4 Total Project Costs 22.0 20.0 42.0 (of which taxes) 2.0 - 2.0 Total Net of Taxes 20.0 20.0 40.0 FINANCING PLAN: Local Foreign Total ----------US$million--------- IDA 14.0 20.0 34.0 Government 8.0 - 8.0 Total 22.0 20.0 42.0 ESTIMATED DISBURSEMENTS -------------------US$million-------------- 1983 1984 1985 1986 1987 1988 Annual 1.8 7.2 12.2 8.0 4.3 0.5 Cumulative 1.8 9.0 21.2 29.2 33.5 34.0 APPRAISAL REPORT: Report No. 4138, dated January 28, 1983. RATE OF RETURN: Not applicable INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE REPUBLC 0 MALAWI FOR A FIFTH EDUCATION PROJECT 1. I submit the following report and recommendation on a proposed credit to the Republic of Malawi for SDR 30.9 million (US$34.0 million equivalent) on standard IDA terms to help finance the Fifth Education Project. PART I - THE ECONOMY 2. A report entitled "Malawi: Growta and Structural Change, A Basic Report" (Report No. 3082a-MAI) dated February 8, 1982, was circulated to the Executive Directors on March 9, 1982. Annexes to the report were distributed on June 26, 1981. Annex I contains the basic country data. 3. Malawi is a small (118,500 sq km), densely-populated (about six million people in 1981) landlocked country in southeastern Africa. Its main assets are moderately fertile soils, good water resources and a cli- mate favorable to crop production. Unlike its neighbors, Malawi has no known substantial mineral resources. 4. Although Malawi has a GNP per capita of only US$200 and has been identified by the United Nations as one of the world's poorest countries, its progress since independence, measured against its natural resources, has been significant. GDP at constant prices grew at an average annual rate of 6 percent between 1964 and 1979. During the same period, real growth of estate agriculture and manufacturing exceeded 10 percent per annum and export volume grew at 4.5 percent per annum. A steadily increasing investment rate (rising from 9 percent of GDP at independence to 33 percent in 1979) has been supported by heavy inflows of official and private external capital as well as by a significant increase in domestic savings (from virtually nil in 1964 to 14 percent of GDP in 1979). 5. Malawi's development success has been due largely to the realis- tic and purposeful policies of the Government. Public investment has been intended primarily to support private initiative in the directly productive sectors by providing infrastructure, public utilities and support ser- vices. The Government has emphasized smallholder agriculture, as about 90 percent of the population lives in the rural areas and depends on agri- culture for its livelihood. The Government has thus undertaken a number of integrated rural development projects, and, more recently, has embarked on the National Rural Development Program (NRDP), an ambitious 20-year program - 2 - for extending services to smallholders countrywide. The Government's decision to emphasize directly productive sectors and infrastructure has resulted in relatively slower development of social services. 6. Under the Government's current five-year investment program, 22 percent of total public investment has been allocated for agriculture, 36 percent for transport, 10 percent for education, 11 percent for water and health, and 22 percent for miscellaneous investments. These allocations are appropriate and reflect the Government's continued emphasis on smallholder development and transport, and the increased importance of manpower development. 7. The 1977 population census revealed that population grew at 2.9 percent per annum during the previous 10 years. Projecting the same growth rate for the remainder of the century, Malawi's population would almost double by the year 2000. This high rate has important implications for the labor/land ratio, as Malawi's population density, about 140 persons per sq km of agricultural land, already is among the highest in Africa and, by the year 2000, will rise to 265 persons per sq km. Only 35 percent of land area is suitable for cultivation and the available arable land is almost fully utilized. 8. Traditionally, the Malawian Government has been pronatalist. Recently the Government adopted a birth spacing policy which recognizes the health risks of repeated pregnancies and the right of choice of family planning. To this end, it intends to permit family planing services to be provided within the family health context by properly trained staff at health facilities. We intend to assist Government in its new initiative by including family planning services, as appropriate, in the proposed health project and through our sector work, by helping delineate the linkages between population and development as a foundation for formulating, over the longer term, a comprehensive population policy. 9. Malawi's economic performance during the past 15 years was impressive. However, its economy is heavily dependent on three primary commodity exports (tea, sugar and tobacco) and is highly vulnerable to international price fluctuations. Since 1974, there has been periodic balance of payments problems of increasing severity due primarily to (a) rapid escalation in import prices, particularly of fuel and intermediate and capital goods; (b) cyclical swings in export prices of tobacco, sugar and tea; and (c) significantly higher costs of transport for exports and imports owing to rising ocean freight charges, port congestion in Mozambique, and disruptions of overland transport. 10. While the Government successfully steered the economy through balance of payments crises in the past, the deterioration in the balance of payments since 1978 has been less manageable. For reasons outside Malawi's control, the deficits in both the trade and non-factor services grew rapidly. Between 1977-1980 Malawi's terms of trade fell by 40 percent. While export prices declined by 16 percent (due mainly to falling tea and - 3 - tobacco prices), import prices rose by 39 percent, partly because of the steep increase in prices of petroleum products. The petroleum import bill more than doubled, raising its share in total imports from 8.5 percent in 1977 to almost 11 percent in 1980. In more recent years (1980, 1981), agriculture production suffered from the recurring drought and reducing export volumes, necessitating large imports of maize, a commodity in which Malawi had been self-sufficient during most: of the 1970s. Finally, duringl979 Malawi lost its principal access to the sea following sabotage acts on rail lines in Mozambique. Disruptions of the transport system through Mozambique have continued. Malawi's only alternative has been to use air freight and road haulage as principal means of transport for exports and imports, both of which are much more costly than rail transport. As a result of these developments which started in 1978, Malawi's current account deficit deteriorated sharply. From an annual average of about 8-9 percent of GDP in the mid 1970s, it rose to 18 percent in 1978 and 24 percent in 1979 before falling to 8 percent in 1980 and an estimated 12 percent in 1981. Capital inflows did not cover current accounts deficits and foreign exchange reserves fell from the equivalent of over five months of imports to less than two months between 1977-1981. 11. Malawi's fiscal position has also seriously deteriorated. From independence through 1977/78, government expenditures and revenues expanded roughly in line with the increases in GDP, and deficits rarely exceeded 8-9 percent of GDP. In the past four years, expenditure growth has outstripped the increase in revenues and the share of government deficits in GDP averaged 15.6 percent in 1978/79-81/82. The underlying cause of these deficits was the increase in government expenditure to around 35 percent of GDP compared to an average 26 percent for the previous six years. Increases in domestic borrowing, mainly from the monetary system, and in foreign borrowing, partly on commercial terms, were required to finance the rising budget deficits. Inflationary pressures grew and prices rose at an average rate of almost 14 percent per annum between 1979 and 1981. 12. Because of the Government's limited ability to mobilize resources, the appreciable expansion of Malawi's development program over the past decade has been financed in large part by increased public capital inflows. The net contribution from foreign official sources to the financing of public investment increased from US$17 million in FY68, to about US$105 million in FY82, of which about US$48 million were grants. However, borrowing on commercial terms now accounts for about 50 percent of total borrowing. 13. By the end of 1981, Malawi's external public debt outstanding and disbursed totalled US$687 million. Debt service in 1981 (including repayments to the IMF) amounted to over US$100 million, equivalent to almost 30 percent of exports of goods and non-factor services (or 26 percent excluding repayments to the IMF). This compares to a level of about 10 percent in the mid 70s. As commercial borrowing increased, average terms of borrowing has hardened in recent years. The average grant element of external loans is now 40 percent compared with 80 percent during 1971-75. 14. The Government and the IMF agreed to a new standby program for SDR 22 million in August 1982. A first phase of a multi-year stabilization effort, the program aims at reducing both the balance of payments current account deficit and the budgetary deficit. As part of the program, the Government devalued the kwacha against the SDR by 15 percent in April 1982. The other performance criteria involve phased ceilings on net domestic assets of the banking system and on net credit to the Government and a limit on Government external commercial borrowing. Implementation of the standby is proceeding satisfactorily. 15. These short term measures are complemented by a medium term structural adjustment program on which the Government embarked in 1981. The program's principal objectives are to diversify Malawi's export base, encourage efficient import substitution, adjust income policies, improve the public sector's financial performance and strengthen economic planning and monitoring. The Bank's first structural adjustment loan for US$45 million was made in June 1981. Nonetheless, despite substantial international support for Malawi, the country's creditworthiness will continue to deteriorate in the immediate future. On the basis of loans committed by mid-1981 and of additional capital requirements for the period 1982-83, Malawi's debt service is projected to reach over 40 percent in 1982 (including repayments to the IMF). To reduce the hump in payments due in 1982-84 and to keep debt servicing within reasonable bounds, Malawi has recently rescheduled most of its commercial and official debt. Malawi's creditworthiness is, however, expected to improve in the medium term if the structural adjustment program is implemented successfully. While external borrowing is expected to remain high to make up for the shortages in domestic funds to finance Malawi's development program (in FY82, e.g., domestic contribution to capital expenditures was only 27 percent), export growth is expected to average about 14 percent a year in nominal terms during the next five years. This would reduce the debt service ratio to an average of 25 percent over the period. PART II - BANK GROUP OPERATIONS IN MALAWI 16. Over the past 16 years, Malawi has received 25 IDA credits totalling around US$275 million and seven Bank loans totalling US$75 million, of which two were on Third Window terms. Of the Bank Group assistance, some US$105.5 million (30 percent) was for agriculture, US$45 million (13 percent) for structural adjustment, US$73.5 million (21 percent) for human resources development, US$65 million (19 percent) for highways, US$38 million (11 percent) for power development, US$3 million (1 percent) for a development finance company (INDEBANK), and the balance of US$13 million (4 percent) for water supply, technical assistance and to finance feasibility studies for wood industries project. The first Bank loan to Malawi was made on Third Window terms in June 1976, and the first standard Bank loan in April 1977. The most recent operation, a US$4 million credit for the Lilongwe Water Supply Engineering project, was approved on June 24, 1982 and became effective on February 3, 1983. - 5 - 17. IFC's investments in Malawi consist of a loan of US$10.8 million for a textile mill, another of US$9.9 million for the Dwangwa sugar mill, a US$0.6 million equity investment in INDEBANK, and a US$2.0 million loan to Malawi Hotels Limited for tourism. A US$262,000 equity investment and a loan of US$1.7 million for the production of ethanol from molasses were approved in July 1980; another loan of US$0.5 million for ethanol production was approved in February 1982. A summary statement of Bank Group operations and notes on the execution of ongoing projects are provided in Annex II. Project implementation has been generally satisfactory. However, due to depressed world sugar prices, the Dwangwa Sugar Corporation is experiencing financial difficulties and has approached IFC and other project lenders for rescheduling. 18. During the next five years, Bank Group assistance to Malawi will continue to be closely tailored to help Malawi restructure its economy, especially to improve agricultural productivity and the efficiency and effectiveness of public and private enterprises. Towards this end, a second structural adjustment operation is planned for FY84. It is expected to continue to improve the incentives for smallholders, increase efficiency in the productive sectors, better mobilizE: and manage resources and improve institutions. Further investments in transport, human resource development, health and housing are contemplated as well as a wood processing project and a second line of credit to the INDEBANK. The Bank Group's economic and sector work will build on the previous studies (basic economic report, sector work on energy, hEalth and NRDP, etc.) by focusing on five high priority areas which will, over the medium term, help Malawi improve its economic performance: (a) agricultural productivity; (b) public sector management; (c) external transport; and (d) the cost effectiveness of the social sectors. 19. At the end of 1981, the Bank accounted for 7.6 percent and IDA and the Bank combined for 29.6 percent of Malawi's outstanding and disbursed medium- and long-term public debt. Service on the Bank Group debt accounted for 5.0 percent of the total debt service. In 1985, the IDA/Bank share is projected to be about 15 percent of the total debt service. Major multilateral creditors, in addition to the Bank Group, were the African Development Fund and the European Investment Bank. Other lenders include syndicated groups of commercial banks and South African suppliers. Bilateral lending has mainly been from Canada, the United Kingdom, the Federal Republic of Germany and the United States. Disbursements 20. Disbursements of Bank Group loans and credits in Malawi generally have kept close to schedule. As of December 31, 1982, disbursed funds equalled 76 percent of the total amount of effective loans and credits. Nine of the 11 Bank and IDA-financed projects yet to be completed were within 6 months of achieving the disbursement levels scheduled at appraisal. Of the two remaining projects, only one -- the US$7.0 million Blantyre Water Supply Project -- is likely to remain appreciably behind -6- schedule. As of December 31, 1982, disbursements totalled US$4.5 million although they were scheduled at appraisal to be virtually complete. However, all the contracts being financed by IDA now have been awarded and the improvement in disbursements over the past several months should continue. PART III - The Education Sector Overview 21. The lack of trained manpower continues to be a major constraint to achieving Malawi's socio-economic objectives in the 1980s. Currently only 25 percent of the population is literate and only four percent of the school age children are full-time in secondary education, a figure among the lowest in Africa. Outputs at both secondary and higher levels have fallen short of development needs. Prospects are for continued shortages throughout the 1980's necessitating a still heavy reliance on expatriates in middle and high-level positions in the public and private sectors. The major needs of the sector are to improve the quality of primary education, to expand secondary education and to strengthen and expand high priority middle and higher level training programs. Education System 22. The formal education system consists of 8 years of primary, four years of secondary, and post secondary and university courses of various durations. Although primary school enrollment nearly doubled in the 1970's, it still represents only 62 percent of the school age population. Repeater and dropout rates remain high and only 23 percent of students entering the first grade complete the full eight year course. Girls make up 45 percent of total primary school enrollment, but are more likely to drop out than boys and, as a result, make up only 26 percent of enrollment in grade 8. With Bank support, the Malawi Institute of Education (MIE) is studying the causes of high dropout and repeater rates, which are more than likely a result of poor school quality (e.g. lack of textbooks, high student-teacher ratios, poorly trained teachers) and poverty. Traditionally, physical construction of primary school facilities as well as provision of textbooks, equipment and furniture, have been the responsibility of the communities, with the Government providing teachers. However, with the rapid growth in primary school enrollments in recent years, the Government has begun taking a more active role. With assistance from IDA, it has started programs to help communities construct 1,000 primary school classrooms and to provide a set of basic textbooks to all primary school students. English, Chichewa and mathematics textbooks are now available to most primary school children. The rapid expansion of primary school enrollments has led to an increase in the student/teacher ratio which is now 65:1 compared with the official policy of 50:1. This ratio, which is among the highest in the world, underscores the critical - 7 - need for more trained teachers. The primary teacher training program consists of two years of academic and pedagogical training, including six weeks of supervised practice in nearby primary schools. Bank staff estimate that the annual output of primary school teachers will need to increase from the present 770 per year to at least 1,900 per year by 1990 to reduce the ratio to about 60:1. This ratio can only be achieved if the new primary teacher colleges are built and existing capacities expanded. In 1982, the MIE initiated a program to upgrade untrained teachers, train primary school headmasters and school supervisors, and improve teacher training curriculum. The program is being financed by the EEC and technical assistance is provided from UNDP/UNESCO and the British Government. 23. Enrollment in secondary education increased from 3,100 in 1962 to 13,400 in 1972 but, since, has grown at an average annual rate of only 3.7 percent reaching 17,900 in 1980. The lack of secondary school graduates has resulted in major shortages of middle and higher-level manpower. The Ministry of Education and Culture (MOE), recognizing the need for a more rapid expansion of secondary education to meet manpower requirements, expects to increase enrollments by five percent per year to about 28,000 in 1990. This increase would raise the percentage of children enrolled in secondary level schools from 4.0 percent to 4.3 percent, still among the lowest in the world. 24. The Fourth Education Project is providing funds for an additional 3,960 secondary student places, or about 40 percent of the 1990 enrollment targets. However, because of the shortage of teachers, limited availability of capital and high unit costs for full boarding schools, the Government is currently considering less costly means of expanding secondary education,including expanding enrollments in the Malawi Correspondence College, which provides a lower cost alternative to traditional secondary education. 25. Secondary teacher training is conducted at Chancellor College of the University of Malawi. Following MOE's initiative, Chancellor College introduced crash programs to boost the output and quality of teachers. With Bank Group assistance, Chancellor College expects to enroll 450 students in its secondary teacher training programs by 1985 and to produce about 125 teachers per year, which would be adequate to meet needs. 26. Malawi Correspondence College (NCC). Established in 1965, the MCC provides correspondence materials and support for more than 8,000 students per annum. Over 75 percent of MCC students are enrolled at junior secondary school level, 20 percent in upper secondary level and 5 percent in primary level and primary teacher certificate equivalency programs. The secondary program is carried out in 72 centers and 18 night schools; the latter are located on the premises of regular secondary schools. The MCC centers provide full-time classroom accomodation for up to six hours perday. The only requirement for entrance is a primary school leaving certificate and a K 30 fee for correspondence materials. Students prepare - 8 - for the junior and senior secondary school examinations with the assistance of study material and radio programs. Junior secondary level enrollment is one-third of the enrollment of regular junior secondary schools. The 22 percent pass rate at this level is low compared with the 85 percent rate among regular secondary school students. However, these rates compare favorably with other African countries where correspondence colleges are largely made up of students who have failed to gain entry to the normal secondary school system. The cost per graduate in the MCC JC program also compares favorably with that of regular secondary schools in Malawi. However, further improvement is needed. Most centers are located in inadequate buildings with little or no furniture or books and the existing MCC staff requires in-service training. Training of Middle and Higher Level Manpower 27. In technical education, five technical schools assisted by the British Government offer programs in bricklaying, carpentry, electricity, plumbing, etc., and are expected to expand to meet the needs of skilled workers. Higher-level education, including training of engineers, technicians, and business managers at the Polytechnic is expanding. The Natural Resources College, assisted by the Canadian International Development Agency, will provide sufficient additional agricultural and other technicians by the mid-1980s. 28. The Office of the President and Cabinet conducts training courses for lower level civil servants at Mpemba Staff Training College, and Chancellor College trains 30 students per annum in public administration. Plans for establishing a new Institute of Public Administration for training and upgrading administrative and development skills of those at the middle and senior levels are under active consideration. A feasibility study has been completed and funds for design work were included in the Fourth Education Project. However, Government officials no longer consider construction of a new facility as a high priority and are considering utilizing existing facilities to introduce a small-scale in-service training program. IDA will assist the Government in firming up its program. Accounting Education 29. The 1979 Manpower Survey indicated that around 60 percent of the accountants and auditors employed in Malawi were expatriates and that shortages of accountants were expected to increase in the 1980s. The Malawi College of Accountancy (MCA) was established in 1979 with the assistance of the ILO. Housed in temporary facilities administered by the Ministry of Labor and lacking adequately qualified staff, the MCA did not have prestige to attract good students. In 1981 the MCA was transferred to the MOE and is now staffed by a Malawian acting principal, four ILO/UNDP specialists and two Malawian staff members. A new curriculum reduces the part-time courses and provides full time training. Enrollments are expected to increase, provided adequate facilities as well as residential quarters are constructed. -9- Education Financing 30. Total education expenditures are currently about 3.5 percent of GDP. Recurrent expenditures on education as a percentage of total Government expenditure declined from about 17 percent in 1970/71 to 11.2 percent in 1981/82. These proportions are low by African standards and reflect the relatively greater emphasis on directly productive sectors, especially agriculture, and on general administration. Assuming moderate growth in enrollment, improved student/teacher ratios and continued quality S improvements, educational expenditures as a percentage of the recurrent budget should increase to about 14 percent in 1985/86 and 17 percent by 1990/91, a level of expenditure that would not unduly tax Malawi's resources and would still be lower than that of most African countries. 31. The recurrent unit cost for primary education is a low K 13 per student because of the high student teacher ratio. The Government is committed to increasing its budgetary allocations to primary education over the next five years. The recurrent unit cost for boarding secondary education is K 235 which is comparable to the cost in other African countries. The Government is considering reducing these costs by changing its policy of assigning students to schools outside their home districts and increasing the number of non-boarding secondary schools. This and other options will be studied under the proposed project (para. 49). The unit cost for university education is K 3,700 which, although comparable to other African countries, should be reduced. A study of cost-efficiency of post-primary education financed under the Fourth Education Project has provided some information on the possibilities of reducing higher education costs. However, the Government had not yet been able to decide on which combination of policies -- e.g., increasing the student-teacher ratios in some departments and eliminating those with very low enrollments, doing away with the student allowance, controlling transport costs, etc. -- it plans to take and has requested Bank assistance in making specific recommendations for increasing the cost-efficiency of higher education. 32. Unlike most countries in Africa, Malawi charges fees for primary, secondary and correspondence education. The fees were recently increased for the 1982/83 school year at the primary level, covering the purchase of textbooks and consumable materials, and at the secondary level, where fees are charged for tuition and boarding. These charges at present are equivalent to 19 percent of expenditures in primary education, 25 percent on secondary education and around 24 percent at the MCC. At the university level, no fees are charged and students receive a monthly stipend of K 12. Government Objectives, Policy and Programs in the Sector 33. The Government's basic objectives of education development were set forth in the 1973--80 Education Plan in relation to the national development goals stated in DEVPOL, 1971-80. The objectives were to improve the internal efficiency of the eduation system, to attain a more equitable distribution of educational opportunities, to provide essential - 10 - required manpower, and to reorient the curricula. In the 1970s, the Government made considerable progress towards reaching these objectives by expanding primary teacher training and secondary education and establishing the MIE. The Bank Group through three education projects assisted the Government in this regard (paras. 35-37). 34. For the period FY83-87, the Government's public investment program assigns high priority to education. The Government has increased its allocation of capital expenditures to education to 10 percent of the capital development program and has made corresponding increases in the recurrent budget. This increase in educational expenditure is consistent with the Government's structural adjustment program which among other things will improve the efficiency and effectiveness of its programs in education, health and water supply. The higher level of investment in education will help Malawi to meet its urgent manpower needs. Emphasis will continue to be placed on primary and secondary education and teacher training, as well as on improving teaching materials and expanding in-service training programs at the MIE. This policy is appropriate to Malawi's needs. Bank Group Assistance to the Education Sector 35. The Bank Group has provided financial and technical support for four education projects in Malawi and is now the major lender in the sector. All of the projects have been or are being successfully implemented. The First Education Project (Cr.102-MAI, 1967) provided US$6.3 million equivalent for introducing technical subjects in secondary education, expanding secondary schools (about 1,800 additional places) and establishing a new 540 place primary teacher training college. A Project Performance Audit Report (No. 2914, March 1980) indicated that the project was successful and had expanded enrollment in primary teacher training and secondary education. However, the teaching of technical subjects was not fully satisfactory because of a lack of interest by students, a shortage of teachers, and the provision of overly sophisticated equipment. Because of these problems, the Government no longer teaches technical subjects in general secondary schools, but concentrates on teaching them in the technical schools. 36. The Second Education Project (Cr.590-MAI, 1975) provided US$11.6 million for a new 540 place teacher training college in Mzuzu, for an additional 1,800 secondary school places, principally for girls, and for 23 model primary schools designed to serve as prototypes for community self-help construction and as centers of adult non-formal education. The project was largely completed on schedule. The September 1982 project completion report (a Project Performance Audit has yet to be issued) found that most of the quantitative and qualitative goals for primary teacher training and secondary education had been met. However, it also found that the model primary schools, which were built under regular contracting methods, were unlikely to be replicated by local communities without significant technical and financial assistance from the Government. - 11 - Because of a weak response from other participating agencies and MOE's lack of experience in non-formal education, the model schools were slow to be utilized as adult education centers. 37. The Third Education Project (1979, Cr.910-MAI and EEC Cr.12-MAI, for US$22.0 million) focusses on primary education. It incorporates lessons learned from the Second Education Project through the provision of technical and financial support needed for self-help construction of about 1,000 primary school classrooms and through supplying about 2.2 million textbooks. It also supports improved management of education and curriculum development, principally through establishing the MIE; expanding the MCC; expanding Chancellor College to produce more secondary school teachers; and providing support for studies and evaluation of the education system. The MIE has commenced operations and facilities for Chancellor College and the MCC are nearly completed. A large number of textbooks have been delivered to primary schools. The project has experienced delays in the program of studies and evaluation because of the late arrival of technical advisors. The self-help primary school construction program and a small commercial education component are also behind schedule. However, with these exceptions, and despite the project's relative complexity, the Project Implementation Unit (PIU) is implementing the project satisfactorily. 38. The Fourth Education Project (Cr.1123, 1981) is assisting the Government in improving and expanding secondary education (3,960 new student places) and in training secondary school teachers at Chancellor College. In addition, the project includes funds for preparing a national education plan and pre-investment studies for an Institute of Public Administration and a new primary teacher training college. The national plan, which will provide a basis for determining Malawi's specific educational needs for FY1984-1990 period, is under preparation and is expected to be finished in September 1983, nine months behind schedule due to delays in recruiting the technical advisor. Otherwise the project is proceeding satisfactorily. Bank Group Strategy 39. Since 1978, Bank staff have completed: an in-depth Education Sector Survey (1979); an analysis of the 1979 Manpower Survey projecting labor force needs and supply to 1990 and delineating various policy options for the education system (1980);a study of the rate of return to secondary education and of inputs and achievement of primary students (1980); a report on the management training needs of civil servants (1980); an interim evaluation of the MCC (1982); and an up-dated education sector memorandum (1981). These studies, plus the experience gained from projects, have helped to improve the analytical basis for developing Malawi's education system while highlighting the high rate of return of investments in the sector. - 12 - 40. The Bank's economic and sector work will continue to be an important vehicle for facilitating Government efforts to address key educational policy issues such as cost recovery, financing, and manpower development. Through its lending for free-standing education projects, the Bank Group intends to continue to support the Government's program to improve the quality of primary and secondary education, to strengthen specialized training programs and to improve manpower planning and development management capabilities. PART IV - The Project 41. The proposed project was identified in July 1981, and prepared by the Government with assistance from the Association. It was appraised in June 1982, and negotiations were held in Washington, D.C. on January 21, 1983. The Government delegation was led by Mr. Chadwick Mphande, Principal Secretary, Ministry of Finance. A Staff Appraisal Report is being circulated separately. Annex III provides supplementary project data. Project Objectives and Description 42. The proposed project will help meet Malawi's education and training needs by (a) improving the quality of primary education, (b) expanding the supply of secondary school graduates, (c) increasing the numbers of trained accountants and accounting technicians, and (d) strengthening management of the education and auditing systems. The project would help the Government reach these objectives by providing for: (i) three new primary teacher training colleges, expansion of an existing college, and training of staff for the four institutions; (ii) 25 new centers for the Malawi Correspondence College (MCC), improvement of facilities at existing centers, expansion of office space and improving facilities at the MCC headquarters in Blantyre, and training for MCC teachers and management and technical staff; (iii) a new secondary school and renovation and expansion of an existing secondary school; (iv) a new college of accountancy, training of accountancy teachers and related technical assistance; and (v) studies, technical assistance and fellowships to improve the effectiveness and management of the education and auditing systems. - 13 - Detailed Features 43. (a) Primary Teacher Training. Three new teacher training colleges would be established and one existing college expanded to serve each of Malawi's three regions. The new Zomba Teacher Training College (540 places) would be located next to the Malawi Institute of Education in Domasi, and would serve the Southern Region. The proposed Kasungu Teacher Training College (540 places) would serve mainly the rapidly-growing fo Central Region, and the new Karonga Teacher Training College (300 places) would serve the relatively underpopulated Northern Region, the development of which has been assigned high priority by the Government. A 400-place 9 primary school, to be used as a demonstration school, would be constructed adjacent to each of the new training colleges. In addition, the existing St. Joseph's Girls Teacher Training College at Bembeke in the Central Region would be expanded from an enrollment of 120 to 300 to serve the Central and Southern Regions, and a neighboring demonstration primary school would be renovated. Because of the lack of alternative accommodation, full boarding would be provided at the colleges, and 129 housing units would be constructed for teaching and support staff. 44. At full operation, the four colleges would enroll an additional 1,560 students, increasing teacher training capacity by 80 percent and providing about 780 trained teachers per year in two-year study courses. By 1988-89, a total of 1,740 primary school teachers would be trained per year at existing and new institutions. It is estimated that this increase in output would meet needs for new primary teachers by 1990, but would be sufficient only to reduce the student teacher ratio to about 60:1. Agreement was reached that the Government would, not later than September 30, 1983, provide the Association with an acceptable staff training program for the four project institutions (Section 3.06 of the draft Development Credit Agreement). The broad outlines of this plan have already been reviewed and found to be satisfactory. The institutional, financial and personnel arrangements for such training are already in place, and Chancellor College and the MIE will be jointly responsible for the program. The Government and the British Council are expected to meet most of the training costs but the project includes K 150,000 to ensure implementation of the training program. 45. (b) Correspondence Education. The project would establish facilities for 2,960 student places in 25 new centers for the MCC. All but * one of these centers would serve students nDw studying in makeshift quarters. To provide for planned increases in staff at MCC central and regional headquarters, the project would finance additional administrative space and staff housing as well as additional equipment and needed transport. 46. The project would also include local training to improve the skills of MCC teachers and headquarters sta:Ef; nine man-years of overseas training for graphic artists, printshop operators and management staff, participation by MCC staff in international conferences of correspondence - 14 - institutions; and technical assistance to improve evaluation methodology. It was agreed that the Government would, not later than December 31, 1983, appoint to the MCC a deputy principal and five additional subject specialists (Section 3.07 of the draft Development Credit Agreement). This additional staff is needed to improve the MCC's programs. 47. (c) Secondary Education. A new rural secondary school would be established in the Lilongwe District, which is Malawi's fastest-growing district, with a population of about 600,000 and only about 640 secondary school places. The project would provide facilities, including boarding, for 480 students, as well as staff housing. The project would also renovate, expand and re-equip the Livingstonia Secondary School in the Northern Region and double its enrollment to 480. The school is in a state of disrepair and threatened with closure if repairs are not made soon. 48. (d) Accountancy Education. The project would support establishment of permanent facilities for the Malawi College of Accountancy (MCA) on the grounds of the Malawi Polytechnic in Blantyre. The new MCA would have classrooms and offices to serve 215 students, as well as dormitory accommodation for 125 students and staff housing. At its full operatio.n, the MCA would turn out 110 accounting technicians and 30 certified public accountants annually. This output will meet Malawi's needs for trained accountants through the 1990s. The MCA and the Polytechnic would coordinate their activities and facilities and share teaching staff. A draft agreement to this effect, acceptable to the Association, was submitted by the Government during negotiations. Agreement was reached that the Government would, not later than September 30, 1983, furnish the Association with a detailed plan for the training of Malawi accountancy trainers (Section 3.09 of the draft Development Credit Agreement). A draft plan has already been discussed and is acceptable to the Association. 49. (e) Studies, Evaluation and Auditing. The project would provide funds to continue the program of studies and evaluation initiated under the Third Education Project (para. 37). The studies would include: (a) a feasibility study to determine to what extent boarding facilities could be reduced through better location of secondary schools or new admission policies; (b) review of the cost-effectiveness of the primary school self-help construction program supported under the Third Education Project; and (c) additional yet to be agreed on studies to evaluate educational programs and prepare future projects. It was agreed that terms of reference, costs and timing of studies would'be subject to the Association's approval (Section 3.02 (b) of the draft Development Credit Agreement). Ten man-years of fellowships would be included to strengthen the MOE's planning and research capacity. To strengthen the Auditor General's office, which is responsible for auditing all Government accounts, including Bank Group financed projects, an expatriate auditing expert would be funded for three man-years to advise the Auditor General and to train staff on the job. Six man-years of fellowship training at overseas auciting institutions would also be included. Agreement was - 15 - reached that the Government would by December 31, 1983, appoint an audit specialist whose qualifications, experience and terms of employment are acceptable to the Association (Section 3.08 of the draft Development Credit Agreement). Project Implementation 50. The project would be administered by the MOE which has overall administrative, financial and academic control of primary, secondary, and technical education, and teacher training, the MCC and the MCA. Day-to-day project administration is the responsibility of the Project * Implementation Unit (PIU) which was permanently established under the Second Education Project as an integral part of the MOE's Planning Unit. The PIU has successfully implemented all the IDA as well as African Development Bank education projects. The PIU is presently staffed by a Malawian project manager, a procurement officer, and an accountant, as well as additional professional and supporting staff. DANIDA is supplying a chief architect, two architects and one engineer. To strengthen the Unit's accounting capabilities, the project would provide five man-years of services of a financial controller. The project also provides funds for overseas training of a Malawian architect and quantity surveyor who, on their return, would replace expatriate staff. It was agreed that the Government would maintain the PIU with its present responsibilities and ensure that it is adequately staffed by qualified professionals. The qualifications and experience of the project manager, senior architect, senior procurement officer, and financial controller would be acceptable to the Association (Section 3.01 of the draft Development Credit Agreement). The PIU has been functioning efficiently and effectively and can handle the added responsibility of implementing the proposed project. Starting in January 1986, the project would finance the PIU's operating expenditures (excluding salaries) for project administration. Prior to 1986, such costs will be financed under the Fourth Education Project. The project does not include financial assistance for local salaries of PIU staff since after January 1986 these would become the full responsiblity of Government. The Government regularly allocates funds for maintenance of its facilities and will do so for all facilities built under the project. Project Costs and Financing 51. Total project costs inclusive of taxes and duties are estimated at US$42.0 million equivalent, of which US$20.0 million, or 47 percent would be foreign costs. Details of project costs are included in the Credit and Project Summary. The proposed Credit of SDR 30.9 million (around US$34.0 million equivalent) would finance 85 percent of project costs net of taxes, including 100 percent of foreign exchange costs and 64 percent (US$14 million) of local costs. The Government would provide the remaining US$8.0 million. Physical contingencies of 10 percent were added to the costs of civil works and professional services and 5 percent to all other categories. Price contingencies for foreign costs are 8 percent in 1983, 7.5 percent in 1984, 7 percent in 1985, and 6 percent - 16 - thereafter. Price contingencies for the local cost component of civil works are 18 percent in 1983 declining to 13 percent in 1988, and for other categories are 12 percent in 1983 declining to 9 percent in 1988. The cost estimates include 21 man-years of technical assistance as well as 17 man-years of consultant services for architects, engineers, and supervision of construction (US$2.8 million), at an average cost of around US$6,000 per month, for salaries, international travel and subsistence. The costs are based on recent consultant contracts for similar work in Eastern Africa and include the cost of local architectural, engineering and supervisory services. Agreement was reached that the Government would employ consultants and experts whose qualifications, experience and terms and conditions of employment would be satisfactory to the Association. They would be selected in accordance with the Bank Group's "Guidelines for use of Consultants" (Section 3.02 of the Development Credit Agreement.) Procurement 52. Contracts for civil works, furniture and equipment would be awarded by international competitive bidding (ICB) in accordance with Bank Group Guidelines, excepting civil works contracts costing less than US$300,000 equivalent each (estimated at US$3.5 million equivalent including contingencies) and furniture and equipment contracts costing less than US$100,000 equivalent each (estimated at US$0.8 million equivalent including contingencies). Such contracts would be awarded following competitive bidding advertised locally and in accordance with procedures acceptable to the Bank Group; review of tender evaluation documents prior to award would not be required. Contracts for goods and equipment estimated to each cost less than US$10,000 equivalent, but not exceeding US$25,000 in aggregate, would be procured under local shopping procedures. Architectural sketch designs and school layout proposals, draft tender documents and master lists of furniture and equipment, including proposed grouping for all facilities, would be reviewed by the Bank Group and items grouped to encourage international competitive bidding and permit bulk procurement. Where ICB is used, domestic manufacturers of furniture and equipment would be allowed a margin of preference of 15 percent of the existing applied rate of import duties, whichever is lower, over the c.i.f. price of competing foreign suppliers, and qualified civil works contrators would be allowed a preferential margin of seven and one half percent of the bid prices of competing foreign contractors. Suitable sites for two of the three new PTTC's and for the MCA have already been selected. The Government has also chosen sites, subject to field review by the Association, for the new secondary school in Lilongwe, the Kasungu PTCC and the 25 MCC centers. Disbursements and Audits 53. Proceeds from the proposed Credit would be disbursed as follows: (a) 80 percent of total expenditures for civil works and operational expenditures for project administration; (b) 100 percent of foreign expenditures, 100 percent of local expenditures ex-factory, or 80 percent - 17 - of local expenditures for locally procured furniture, equipment, vehicles and transportation of furniture and equipment to school sites, and (c) 100 percent of foreign expenditures or 80 percent of local expenditures for professional services, technical assistance, fellowships and training. A schedule of estimated disbursements is provided in the Credit and Project Summary. The schedule is based on the country average profile used in Bank Group operations in Malawi. Disbursements for operational expenditures under project administration, local transportation expenses of furniture and equipment to school sites, and local training would be made against 9 statements of expenditure, documentation for which would not be submitted for review but would be retained by the Government for inspection by the Bank Group during project supervision. The PIU has satisfactory institutional capacity in this regard. All other disbursements would be fully documented. Separate project accounts would be maintained by MOE for each component. Accounts would be audited by independent auditors acceptable to the Association not later than six months after the end of the fiscal year (Section 4.01(c) of the draft Development Credit Agreement). It was agreed that the Goverrment would monitor progress and, not later than six months after the closing date, would prepare and submit to the Association a full report evaluating the project (Section 3.04(d) of the draft Development Credit Agreement). Following procedures established under previous education projects, semi-annual progress reports on the project would be submitted to the Bank. Benefits and Risks 54. First, the project would improve the quality of primary education by training an additional 800 primary school teachers per year thereby helping to redress the deterioration in the student-teacher ratio. The improved quality of instruction by trained teachers is expected to increase student completion rates from 23 percent to 32 percent in the 1990's. The project would also improve output of secondary education by providing additional secondary school places and by significantly increasing the number of successful MCC candidates for the junior certificate. The establishment of the MCA would meet Malawi's needs for trained accountants and technicians through the 1990's. The technical assistance and training provided to the Auditor General's office vould strengthen and up-grade the Government's auditing capabilities. The cost-effectiveness studies, feasibility studies and assistance to MOE's planning unit would help the Government make more effective use of education funds and improve its analytical and policy making capabilities. 55. There may be a risk of insufficient funds for recurrent costs required for expected improvement and expansion of the education system. After its completion, the project would generate an additional US$1.2 million equivalent per annum or around 3 percent of the projected recurrent budget for education. This amount is relatively small and is expected to be met from the budget. However, assuming relatively modest growth of the education system, the education sector's share of the recurrent budget is expected to increase to 17 percent in FY90. This level - 18 - of expenditure is needed to maintain and improve the quality of Malawi's education system and is consistent with Government's longer term plans and projected revenues. Further, as a result of the Government's actions taken under its structural adjustment program, it is expected that Malawi will return to a positive GDP growth rate per capita over the next five years. Agreement was reached that the Government would, on an annual basis, starting one year from the signing of the Credit Agreement, annually review with the Association its education budget proposals for a period of four years to determine their adequacy to carry out Malawi's educational objectives (Section 3.10 of draft Development Credit Agreement). PART V - LEGAL INSTRUMENTS AND AUTHORITY 56. The draft Credit Agreement between the Republic of Malawi and the Association, and the Recommendation of the Committee provided for in Article V, Section 1(d) of the Articles of Agreement of the Association are being distributed to the Executive Directors separately. 57. I am satisfied that the proposed Credit would comply with the Articles of Agreement of the Association. PART VI - RECOMMENDATION 58. I recommend that the Executive Directors approve the proposed credit. A.W. Clausen President Attachments Washington, D.C. February 8, 1983 -19 - ANNEX I Page 1 of 5 TABLE 3A MALAWI - SOCIAL INDICATORS DATA SHEET MALAWI REFERENCE GROUPS (WEIGHTED AVE GES AREA (THOUSAND SQ. EM.) - MOST RECENT ESTIMATE)- TOTAL 118.5 MOST RECENT LOW INCOME MIDDLE INCOME AGRICULTURAL 41.4 1960 /b 1970 /b E!TIMATE /b AFRICA SOUTH OF SAHARA AFRICA SOUTH OF SAHARA GNP PER CAPITA (US$) 60.0 90.0 200.0 250.8 1053.2 ENERGY CONSUMPTION PER CAPITA (KILOGRAMS OF COAL EQUIVALENT) .. 48.0 67.2 66.5 610.1 POPULATION AND VITAL STATISTICS POPULATION, MID-YEAR (THOUSANDS) 3419.0 4513.0 6050.0 * URBAN POPULATION (PERCENT OF TOTAL) 4.4 6.4 9.6 17.8 28.3 POPULATION PROJECTIONS POPULATION IN YEAR 2000 (MILLIONS) 11.9 STATIONARY POPULATION (MILLIONS) 42.9 YEAR STATIONARY POPULATION IS REACHED 2130 POPULATION DENSITY PER SQ. KM. 28.9 38.1 49.5 27.7 54.7 PER SQ. KM. AGRICULTURAL LAND 90.0 114.3 141.7 86.7 129.9 POPULATION AGE STRUCTURE (PERCENT) 0-14 YERS. 45.5 46.8 47.3 44.8 46.0 15-64 YRS. 52.1 50.8 48.9 52.3 51.1 65 YES. AND ABOVE 2.4 2.4 3.8 2.9 2.8 POPULATION GROWTH RATE (PERCENT) TOTAL 2.4 2.8 2.9 2.7 2.8 URBAN 4.5 6.6 7.0 6.2 5.2 CRUDE BIRTH RATE (PER THOUSAND) 53.0 51.6 56.1 47.3 47.2 CRUDE DEATH RATE (PER THOUSAND) 27.2 23.2 22.4 19.5 15.7 GROSS REPRODUCTION RATE 3.4 3.4 3.8 3.2 3.2 FAMILY PLANNING ACCEPTORS, ANNUAL (THOUSANDS) USERS (PERCENT OF MARRIED WOMEN) .. FOOD AND NUTRITION INDEX OF FOOD PRODUCTION PER CAPITA (1969-71-100) 90.0 91.0 96.0 88.7 90.7 PER CAPITA SUPPLY OF CALORIES (PERCENT OF REQUIREMENTS) 95.2 99.7 96.9/c 90.2 93.9 PROTEINS (GRAMS PER DAY) 65.5 71.6 68.2/c 53.1 54.8 OF WRICH ANIMAL AND PULSE 13.6 19.0 18.6/c 18.4 17.0 CHILD (AGES 1-4) MORTALITY RATE 49.3 45.4 39.1 26.7 23.9 HEALTH LIFE EXPECTANCY AT BIRTH (YEARS) 37.2 41.6 44.2 45.6 51.0 INFANT MORTALITY RATE (PER THOUSAND) 206.8 193.6 171.9 129.9 118.5 ACCESS TO SAFE WATER (PERCENT OF POPULATION) TOTAL .. .. 33.0/d 23.9 URBAN .. .. 70.0/F 54.9 RURAL .. .. 29.0/ 18.5 ACCESS TO EXCRETA DISPOSAL (PERCENT OF POPULATION) TOTAL .. .. .. 25.8 URBAN .. .. 15.0/d 63.1 RURAL .. .. .. 20.2 POPULATION PER PHYSICIAN 35247.4 38429.8 41007.0 32097.3 14185.2 POPULATION PER NURSING PERSON 12917.6/e 9051.7 3833.7/c 3264.6 2213.2 POPULATION PER HOSPITAL BED TOTAL 866.0 649.3 743.8 1225.0 1036.4 URBAN 115.0/e 155.7 82.2/c 249.5 430.8 RURAL 1312.0/e 895.7 1484.4/c 1712.1 3678.6 ADMISSIONS PER HOSPITAL BED .. 32.1 39.0 HOUSING AVERAGE SIZE OF HOUSEHOLD TOTAL .. URBAN .. 3.4/f RURAL .. 5./g AVERAGE NUMBER OF PERSONS PER ROOM TOTAL .. URBAN .. RURAL .. ACCESS TO ELECTRICITY (PERCENT OF DWELLINGS) TOTAL .. URBAN .. 16.0/f RURAL .. - 20 - ANNEX I Page 2 of 5 TABLE 3A MALAWI - SOCIAL INDICATORS DATA SHEET MALAWI REFERENCE GROUPS (WEIGHTED AVE GES - MOST RECENT ESTIMATE)- MOST RECENT LOW INCOME MIDDLE INCOME 1960 /b 1970 /b ESTIMATE /b AFRICA SOUTH OF SAHARA AFRICA SOUTH OF SAHARA EDUCATION ADJUSTED ENROLLMENT RATIOS PRIMARY: TOTAL .. 35.0 62.0 63.2 83.3 MALE .. 45.0 73.0 72.7 96.1 FEMALE .. 26.0 51.0 50.3 80.4 SECONDARY: TOTAL 1.0 2.0 4.0 10.2 15.3 MALE 1.0 3.0 5.0 13.2 19.4 FEMALE 0.3 1.0 2.0 6.6 11.3 VOCATIONAL ENROL. (% OF SECONDARY) 23.6 2.9 4 .9 7.9 4.7 PUPIL-TEACHER RATIO PRIMARY 40.9 43.8 65.0 47.4 38.6 SECONDARY 13.7 16.2 21.0 26.2 23.4 ADULT LITERACY RATE (PERCENT) .. 22.1/1 25.0 34.0 35.6 CONSUMPTION PASSENGER CARS PER THOUSAND POPULATION 1.9 2.2 1.9/d 3.0 31.9 RADIO RECEIVERS PER THOUSAND POPULATION 0.8/e 23.5 42.6 34.8 71.8 TV RECEIVERS PER THOUSAND POPULATION 0.7 .. .. 1.7 17.9 NEWSPAPER ("DAILY GENERAL INTEREST") CIRCULATION PER THOUSAND POPULATION .. .. 5.3 2.9 19.1 CINEMA ANNUAL ATTENDANCE PER CAPITA 0.3 .. 0.3/h 1.1 0.6 LABOR FORCE TOTAL LABOR FORCE (THOUSANDS) 1570.3 1981.5 2527.6 FEMALE (PERCENT) 38.7 38.1 36.7 34.1 36.5 AGRICULTURE (PERCENT) 92.0 89.0 86.0 78.4 56.5 INDUSTRY (PERCENT) 3.0 4.0 5.0 9.2 0.7 PARTICIPATION RATE (PERCENT) TOTAL 45.9 43.9 41.8 41.4 37.0 MALE 57.5 55.3 53.6 53.9 46.9 FEMALE 34.8 32.9 30.3 29.1 27.2 ECONOMIC DEPENDENCY RATIO 1.0 1.1 1.2 1.2 1.3 INCOME DISTRIBUTION PERCENT OF PRIVATE INCOME RECEIVED BY HIGHEST 5 PERCENT OF HOUSEHOLDS 32.6/i HIGHEST 20 PERCENT OF HOUSEHOLDS 5o.671 LOWEST 20 PERCENT OF HOUSEHOLDS i 1.4TI LOWEST 40 PERCENT OF HOUSEHOLDS .. 2i.571 POVERTY TARGET GROUPS ESTIMATED ABSOLUTE POVERTY INCOME LEVEL (US$ PER CAPITA) URBAN .. .. 123.0 134.3 507.0 RURAL .. .. 99.0 82.9 200.6 ESTIMATED RELATIVE POVERTY INCOME LEVEL (US$ PER CAPITA) URBAN .. .. 65.0 96.4 523.9 RURAL .. .. 52.0 60.4 203.6 ESTIMATED POPULATION BELOW ABSOLUTE POVERTY INCOME LEVEL (PERCENT) URBAN .. .. 25.0 39.3 RURAL .. .. 85.0 69.0 Not available Not applicable. NOTES /a The group averages for each indicator are population-weighted arithmetic means. Coverage of countries among the indicators depends on availability of data and is not uniform. /b Unless otherwise noted, data for 1960 refer to any year between 1959 and 1961; for 1970, between 1969 and 1971; and for Most Recent Estimate, between 1978 and 1980. /c 1977; /d 1976; /e 1962; If 1967; /g 1972; /h 1975; /1 1966; /4 1968. May, 1982 - 21 - ANNEX i Page 3 of5 DEIFINITIONS OF SOCIAL INDIUCTO% 5-,e -3 f '- Noten: Albthogb ihe data are den fro, sortes generaly judged the eost authoritatie and reltable, it should a3so be oted that thep may nt be inter- nattonally Coparable becae of the back of standurdied definitions and coepts ased by differentrcotrieu in collcting th. dato. Th data are., thtle~s, useful to d~ecrib ordern of agn ide, ndiCtatetrendu, and rhartertze rentain anjor diffren~es b,treen rntreu. Therefereore gr1u ar(1) the ~a c-untry group of tha bject Country rd untrySnontthe o thtgher areralnhor ntt¾rrt group of the ubjectncontry (except for "High Irrar oil Exporters" group nerde "Middle Incoe North Africa and giddle faut" in choan beCaus of stronger soro-tulturaiaffinitetn). I -:rhe -eferenC rudata the averaeu ar nopulaetionehtedotarthmetcaroaa toreachrlndecatrand ho only un majority of the Countries ina group han data for that indtcator. Since the coverage of countries aong the iLdicators depnds or t ho avatlablity of data ord Is not un~or, caotioo nune reercined to relating averages of to indicator to anther. Tfese averaes are nly uatal in tcroarfog the vau ute ndicator ut a tame nmong the country and referenre group,. _AM (thousand sq.k.) P-0ola-t io Per ospital Bed - total. urban, and rra - Poruanton (total. Total - Tat1 surface area copritng land ara and inland w~sero; 1979 data. tron, und rural) divided by their rnnpectie nber of bonpital bedn Agriculturai - Fntiate of agricltural area used temporarily or perCanently ivailabe it publi and private general and specialiaed tosptal and re- for crop,. pastures, narhrs and kitchen garden nr to lie fallew; 1979 data. 9abiitatiouaenters. Hospitals are eutablishments peronentIly staffed ly ar leont one phyican. stablthmenta providieu rincpally cuto- GNP PER CAPITA (US$) - GSP per espita astiantes at turreut karket prices. cal- li ce are ot included. natal hronpitalh., h _oen, Include health ~uted by sameroonverson -ethod an World tank . tlu (1978-80 bae); 1960, t.d oediral d ene nt permanney etuffed hr phys inan (bt by a 1970, and 1980 data. tdcal asnistant, nure, midnife, etc.) wuhch often in..patientiacoao- atton and ptro a it. ed range of mntoal faciliet tor I tuttu- ENERGY CONSUMPTIN PER CAPITA - A-nal consption f omrtcial energy (cnaI Ical punpose urban hoaspttal, teclde WHO Princial/generol hoepitals, and lignite, petroieun natural gas und hydro-, Cucleur and geothermal eler- und rurl hospitaln, lal1 or rual honpltal1 and mdical and tcernity tricity) to kilograms of roa lqalent per capita; 1960. 1970, and 1979 inntors. Spectalized hospitals are inluded orly under total. duta. Adisions ner hospial Bed - Total n.ber of rdnirs n to nr discharges ran bopitols divided by the nucber l hede. POPULATION AND VITAL STATISTICS Total PNpulation, Mid-Yenr thoauads) - a of July 1; 1960, 1970, and 1980 HOUSING data. Avege Die of Doehold (petrn pr hoeold) - total, orten, and rural- Urban Populatio (rrent of total) - Ratio of urban to natal populatton; 1 boutehold consatt of a graap on indtvda_3 wharo share l tIn quarter different defoitions of urban oroas ay affect comparability af data end their nain eals. A boarder or lodger may a .a ot h inc,lded ht pare on orount ; 1960, 1970, nd 1990 data. the hoosehold for stti- a1 purpoes. Population Projections Avnrage number tf persons pereroomu- total,orban,andral -avrageour- Poputation ar 2000 - Cutrent Population projec-tione re based o 1980 ren of person per rono i l urban, ord oal otcuptedtaonvntioal total population by age ord set and teir notiality and ferttltty rates. lieelinga, respetively. Dellitgs elud non-peranenr structures and Pra ti araet.eru fo notait taeotes r ie athree levelsassun- m.occupied at. ing life expotancy ar bieth increeng whth rountry'a per capita income dccess te Elecrtiy (aerrent of dwellinge) - tl, ua, ad rl - evt e, and temale lite expertancy ttabilizing at 77.5 years . The para- dontntonai dwellings with 1-ectrticity 4o liig quaters ea Kercentage eeters for fIortiity rate rlso hrve thrne levelsassuning decli-n in tf total, urban, and rrel dwelligo repertivl. fertility aording to ino lovel and past faml3y planning perforoance. Each outry is then assigned ane of thesa nine rombina-ton of ortality EDIUATI_N and fertility trends fot prjetio purposes. lo Jauted Enrollmnt Ration Stationarn Kp,tino-I..tatl~ryI opulailon there ta n grth sin Primaty lchoal - tral. alo rad fteale - Grosn total. ale and femaie the birth ratr i eqal ro the death rose, and also the agestructurere- enrliani ni ull rgea oh the primray leved a percentages of ropetive niins aotant. This to ahi~eed oty anter fertilty tre darl notdro primary schori-age paop aato; normally inclu hilra ,ged 6-11 the replaceent level of nit tet repreducton rane, ohen each generation years bot adjusted lor different lengths of rlmapr eduation; fan ofomtenrelaces ltself exatly. The at.onary pop t~u t.oiz a ~ontenith uvealc duatinnro nayrxnd lo Per.ent estimated 0n the basis of the projected characteristics of te populaton since ear papils are belw ur above the ofticiol shool age. i rtheyar 2000. and the rate f declin of fEtilty ratenoreplace- eo2darysool - total, ale and foale - Compued a abc-io; atondary ent lerel. eantequireoat least for year- of approoed pritary instroction; earctouary populaton_ i reache - rhe rear we nsattonarr populatron providesugnnral, vocationat, ao tea tra g hitructions eoo apils sie eill be reched. anually of 12 to 17 years of age; corespondene courose are genrall ropuhacion Drenst excladed. Per nq. k. - Mid-year poputro per squne kiloeter (100 hetares) of c1ational erollmet (prC-ent af sonr.dry) - VIoational ini:o total ara; 196, 1971 ord 1979 dura. include techntcal, intustal, or other prograns nhs:t operaar ndepend- Per en. dn. agricIturah land - Comp-ted es above lot agricultrl land ently or as departments of secondary institutonn. only; 1960, 1971 and 1979 dota. p_iteaher ratyolp iar, end secondary- otal stdantsenrolled in Popul_at_onAgr Structre percCnt) - Children (D-14 yeare), working-ege (15- p ärary and econdary lee dirided by ubers of tochera is tho Syea >and retired (?5 ytarsand oer) as perrertages ofid-year pop- correspondinglevel. hittar; 1960, 1970. and d980 data. Plt literacy rate (percent) - Literate adult. (ab to ror ana nrtea) Population Groeth Rate (Peent) - toi - Annua growtt rasts of total eid- a apercentage af Otal adult poulation aged 15 year end ven. year populatio far 1911-6, 19960-7, and 1970-al. Ponriation Groeth Rato (percent) - orban - Annual growth rutan af urban ppu- CONsUMPTION lettons for hall-bl. 1965-70, and 197-8. Pasaenger ra (rar thousand ropuldtoLn) -.Pa ,sene re compre aotar _rude Birtrh atn (per thoand) - nnual lim birtlh pnr thouan d of id-year cri seating lea than eight persns; ecl u ambuladn, heartes and population; l960, 197, ord 1980 deta. etl,tery nehles. Crae Death dato (ner thoand) - Annual draths per tIhouand of cld-year .adio Receiver (per thouand populatio) - All types of recotrs ton rulla population; 1960, 1971. ord 1980 data. hr;adcata teneal public per thuand or population; excluren Ironi Rerrductio dae - erage nmer of daughters a a n ill ben in l icnsed r ei ln countries and in yer e.n rentrration of radio har normal reproduc~ive period If ste experienes prenent age-specift fer- sto uan tefecrt; data far tent years er not be opearatLe ncer tility rataes; anally fine-yer averages ending In 1960, 1970, ond 1980. Co.stcurthren aboliahed licening ,amilY Flnnin - AcPtlr-, anua (tousanda) - Annal nubr af acceptors f aReivrs (per thoand populoo) - TV n rectrrs for bradca-t ta at birth-contro1 deliCes unden napite af ational family, lanning progran. generad publtc r thousard polaton; excluden u ned fl rrrere Family Plannin-Uers (percnt of married wmen) - PercnCtagn of arried i countrice ond in yearsn ret egistration of TV sets tr lo effect. ome of chÅld-beerhn gage (15-44 years) wo ne birth-cotrol deotresto f esaper Ctrrclation (r thouand populatiop) - Shaw tho avrage nir- al narrid nom to sa act group. culanhor of "dolly gra~l iteret unespore". defined asa pridital publicrtion deroted prtiaily to rording generat nes. dtoir oridered FOOD AND NUTRlTION to be "daIlo if it appears an letat rae tiseaa wk. Inden nf Fod Productin per lira (969-71-100) - leden et per .apita an~nal Inona Annuat Atrandanre renrcapta per Year-DBaed rr tho naber of production of eli frd commodite. Productio exclodest eed and feod and tickett scid during tho pear, inclrdingdnitro to drive-in rinman te or calendar your bacnt. Commodisterover r_iary goda (e,g. sugarcane ond -obiln nits. trstead of sogar) which are edible and otaIn nut-r.ents (e.g. -offee and itu are tercludd). Agsregate produttion of narh country is baied o l33R PORCE nationai aerage producer pre , eights; 1991-b6, 1970, and 1991 data. "otal LatorFrce (thnand,) - Enoir,aally rctive person, including Pir capita supply af cares (perce of requirements) - Computed iran arted furces and uemployed but excladtng hoeie stdents, ear., energy e"uivalent of et fond Cupplies available in Cout per capit covering pauatio rf all tgte. Deflnttons la vrous countehn era pun day. AvaIlable nupplies comprise doaestic yrndr.ttbon, p ipots lesa not _ .c parabl, 1961, 1971 anr 198. dato. exparts, and zhanges to stork. Not nupplies enxcle nemal feed, teeds, tenale (peeent) - Female laborr or rcentoge of total aho force. qutnities ased in fotd processing, -d losiet in dlstrbutrn. Raquito- AgriCltare (percent) - Labor Iore to faring^ forestry, huoting and mnts nere estmated by FA basd or physirlogical nda or normal actf- fisbing ra prcentrage tf trtal labor fotre; 160, 1970 and 1980 data. nisy and heult con.iderirg e~nronental temperture , body eights, agr Industny (peroert) - Labot forre Lo mining. .otru.tiro, nataca-turing and sex distribution of populatlon, and alloing 10 pernt fro naste on and electricity wtr and eau an - ercentae of total laor forta; bousahold leve; 1961-65, 1970 rnd 1977 dat. 196, 1910 and 1980 data. Per cata upply at rot hornen par dy) - Potern cntnt af penrcarita Prticipation noae (yerreot) - toal m aP_ ord ~female - prtictpatir or .et suply o faood per day. nit nupyly of foad ln dfioed ss aboe. te-- activity roten are connuted en trial, -ale. aod 1em1s labor force an quiresenta for al1 rontris te tabishd by 1UDA proide for minimum Ierentages or tral, al nano teale popation rf alt anor recpec~trv el allowances rf 60 grams rf total protei per day ond 20 graes of onital und 1960, 1970, and 1980 tota. Thne are based an 1Lt participattinaes pule proten. o bich 10 grana should be anal rotetn, Thee stad-- refleting ae-sex -trucreo of roi yu.lati.r, ond long ti,r rod. A- ardsaei oer than thoe. f 75 2dgr total prteinud23 gr.a f f.eestimateae fro national noaroes. an1ial proti on urnaerae lot the worid, proposed by r t il the Tird Economic Dependenay Rato - a~ o topuaio under at and t ano over World Food Survey; 1961-t5, 1971 and 1977 dat,. to the total lar fore. Per apita protei supply fomaal d ~ .pue - Pr-~.in spply of fod de- trad froanls and pulses in grant per day; 191.65, 1970 and 1977 data. ICOME DISTRlIBUTION Child (ages 1-4) Deach dat (per shousand) - dnaal deathi per tho~uand in ¯erretae or Private lucoer (both ln cast ord kind) - dareived by 'richeo agegroup1-4 yer, tochidren t hisae grop, fr ot deoping con- 5 pert, richest 20 peret poet 20 percent, and poort 40 percert trie data derea from lfe tablon; 1960, 1971 and 190 dato, of household HJÄLn PWVERTY TARGET GRWPS Life Epoetancy at Birth (onar) - Arage numer af yrart of life remaining _The frllowig esti,ata are torr ayproxrmat ares of poverty - els as birth; 1%9, 1970 and 1980 data. and should be hnterpreted with conidarble cutio. Infant ortaity_Rate_p_rthusnd) - Annaal death of infant. ander ore yeat Estisated Absolute Povrty Incte Level (il per taPito) -auranad trl - af agn perthoand line birtha; 1960. 1970 and 1981 data. Aboalate ponerty intt level ia that inco level beloW which a miniCal access to dafe Water fpercent af population) - tatal, urban, and rural - Nur- rn tr ul ly adequnae dIor plon esential r-fod requironante in not ber of people (total, urban, anr tal) with reonable ace~t saft affordable. nate. sunply (includestated turfare watern r ontrated btrueneotaminated Entlmated Relativa Proety nomn Levl (US1 reratia -- urban nd eutal - noter toch ou that fram protected borehols, ipring, and sanitary <lle) as Rutal relatie pove.rty Ince levI is one-third tf avera per capita pe age~~ f thairraretive populations. In an urban area a pblic penonal t-ecoe of the coutnry, drha henrl in derived frn she rul fontai or standpos Ictated not mare than 200 motorn Iram a haese may be leael it1 h adjusment for higher cost if linng in usban areas ceneidered an being witbi, reasonable acceos af that houte. Inrura areon Eseted Population Beiow beelute Poverry tnotme Lenei (ynrcet) - urban renasoable scces would imply that the houeife 00 mmero af tho haehold ond rural - Pertent of populatin (urbar td itral) ho ore raboolt dnot ha tsl ped dsprroporttionte at otda in fetchihg he por" family's nwater aeeds, Aoess ta Eoreta Disposal (p.eent of populatin) - oal, urban, and ..ral - Nuber af people (tol, urban, and rural) nened by exceta dispnsal as percensagen of thetr renpeetive polation~. Excrota disposal -y include th colleion and dcapenal, with ar ithout traent, et liman exrete and a~eter by water-borne spaten or theusof ris privten and eat- lar inatalations. Polalton per Phylima - P dolation dtatded by nunber f pratsing physi- naonomic ad Socinl DanC D£,nivsn elans qualified frm a medical nchool at unersity levei. Eonmelc Analyso~ end rojtn Depatment Popainiae per e-aing Persn - Population divided by umber of ptratiig lay 1982 malm and femaln graduate nrses ~ a~ imtent nre. rteical nurses nd enring axil aie. -22 - ANNEX I Page 4 of 5 MAIAWI ECONCMC INDICATORS GROSS NATIONAL PRODUCT IN 1981 ANNUAL RATE OF GROWTR (%, constant prices) US M1n. % 1973-1980 1981 GNP at Market Prices 1,257.5 100.0 5.1 -1.3 Gross Domestic Investment 255.3 20.3 8.1 -25.9 Gross National Saving 89.0 7.1 -2.8 -10.8 Current Account Balance -166.3 -13.2 - - Exports of Goods, NFS 341.7 27.2 6.0 -2.5 Iports of Goods, NFS 433.6 34.5 0.5 -16.2 OUTPUT, EMPIDYMENT AND PRODUCT=IVY IN 1981 Value Added Labor Force V.A. Per Worker US Kn. % Thousand % US$ % of Ave. Agriculture 477.1 39.5 2,798.7 93.3 170.5 42.2 Industry 221.9 18.4 85.8 2.9 2,586.3 642.7 Services 508.4 42.1 116.1 3.9 4,378.9 1,088.2 Total 1,207.4 100.0 3,000.6 100.0 402.4 100.0 GOVERNMENT FINANCE Central Government (K MLn.) % of GDP 1980/81 1980/81 1977/78-1979/80 Current Receipts 199.2 16.8 17.0 Current Expenditure 183.7 15.5 14.8 Current Surplus 15.5 1.3 2.2 Capital Expenditures 174.9 14.7 12.0 External Assistance (net) 83.3 7.0 9.5 MONEY, CREDIT and PRICES 1977 1978 1979 1980 1981 (Million K outstanding end period) Mney and Quasi Mbney 122.7 133.2 144.7 177.9 218.4 Bank Credit to Public Sector 44.2 61.9 96.4 128.3 206.3 Bank Credit to Private Sector 87.7 122.3 170.8 182.4 191.8 (Percentages or Index Niumbers) Money and Quasi Money a % of GDP 17.0 16.9 16.6 17.9 18.4 lplicit GDP deflator (1978=100) Annual Percentage changes in: 99.9 100.0 102.7 114.9 137.6 Implicit GDP deflator 12.8 0.1 2.7 11.9 19.8 Bank Credit to Public Sector 6.1 7.9 11.0 12.9 17.4 Bank Credit to Private Sector 12.2 15.6 19.6 18.3 16.1 NOTE: All conversions to dollars in this Annex are at the average exchange rate prevailing during the period covered. Mhy 1982 - 23 - ANNE I Page 5 of 5 MALAWI TRADE PAYMENTS AND CAPITAL FIDWS BALANCE OF PA)MENTS MERCHANDIS EXPOMTS (AVERAGE 1979-1981) 1977 1978 1979 1980 1981 U$ Kn. % s(Mi llions U9) Tobacco 123.0 45.5 Exports of Goods, NFS 241.8 220.1 256.7 341.3 341.8 Tea 36.4 13.5 Imports of Goods, NFS 279.1 387.5 465.5 508.2 433.6 Groundnuts 14.2 5.3 Resource Balance -37.3 -167.4 -208.8 -166.9 -91.8 Sugar 46.1 17.1 All Other Ccmmodities 50.6 18.7 Total 270.3 100.0 Factor Payments (net) -25.5 -4.7 -42.6 -52.1 -70.4 Net Current Transfers Private 5.5 5.9 -0.4 -6.4 -4.1 EXTERMAL DEBT, DEC]MER 31, 1981 Balance on Current Account -57.3 -166.2 -251.8 -225.3 -166.3 US mn.) Direct Private Foreign Public Debt, incl. guaranteed 687.0 Investment 5.5 9.7 13.5 5.9 6.0a Non-guaranteed Private Debt Net NLT Borrowing Total outstanding & Disbursed 687.0 Disbursements 99.7 135.7 125.4 159.9 124.1 Amortizations 15.3 18.7 19.3 32.9 36.2 NET DEBT SERVICE RATIoc for 1981 Subtotal 84.4 117.0 106.1 127.0 87.9 Capital Grants 19.9 38.9 46.6 50.0 49.9 Other Capital (net) -6.9 -29.4 44.3 35.8 -17.4 Other Items n.i.e. 12.3 11.9 29.9 15.8 19.2 Public Debt, Incl. guaranteed 26.1 Increase in Reserves (+) +57.9 -18.1 -11.4 +9.2 -20.7 Non-guaranteed Private Debt Total Outstanding & Disbursed 26. 1 Gross Reserves (end year) 84.4 72.2 63.2 72.8 55.8b IBRD/IDA lending, Dec. 31, 1981 Petroleum Imports 23.7 30.1 46.8 55.0 47.2a (Kn U$) Petroleun Re-exports - - - - - IBRD IDA (Inc. Third RATE OF EXCEANGE Window) US$ - K .9029 .8437 .8169 .8121 .8953 Outstanding & Disbursed 52.3 145.1 K 1 - US 1.1075 1.1853 1.2241 1.2314 1.1169 Undisbursed 22.9 109.1 Outstanding including Undisbursed 75.2 254.2 a Estimate. b Through September 1981. I c Ratio of debt service payments to exports of goods and non-factor services excluding repayments to IMF. Not available Not applicable My 1982 - 24 - ANNEX II Page 1 of 6 THE STATUS OF BANK GROUP OPERATIONS IN MALAWI A. Statement of Bank Loans and IDA Credits (as of December 31, 1982) Bank incl. Loan or Third Un- Credit No. Year Borrower Purpose Window IDA disbursed Five loans and 16 credits have been fully disbursed 71.20 120.93 - 711-MAI 1978 Malawi Water Supply 7.00 2.48 823-MAI 1978 " Shire Valley Consolidation 10.70 .32 1610-MAI 1978 INDEBNANK First DFC 3.00 1.14 857-MAI 1979 Republic National Rural Development of Malawi Program I 22.00 8.64 910-MAI 1979 " Education III 14.50 5.64 992-MAI 1980 National Rural Development Program IT 13.80 8.89 1099-MAI 1981 Highway IV 33.00a 16.13 1123-MAI 1981 " Education IV 41.00b 31.15 2027-MAI 1981 " Technical Assistance 1.00 .81 1183-MAI 1981 " National Rural Development Program III 7.30c 7.06 1272-MAI 1982 Lilongwe Water Supply Eng. Project 4.00d 4.00 TOTAL 75.20 274.23 86.26 of which has been repaid .77 3.39 (amount sold) (of which repaid) TOTAL now held by Bank and IDA1 74.43 270.84 TOTAL undisbursed 1.95 84.31 86.26 a Credit of SDR 25.9 million. b Credit of SDR 32.2 million. c Credit of SDR 6.5 million. d Credit of SDR 3.6 million (not yet effective). - 25 - ANNEX II Page 2 of 6 B. IFC INVESTMENT IN MALAWI December 31, 1982 Investment Number Year Obligor 326-MAI 1976/ David Whitehead Textiles - 10.8 10.8 7.4 1.7 618-MAI 1982 & Sons (Malawi) Limited 362-MAI 1977 Dwangwa Sugar - 9.9 9.9 8.8 - Sugar Corporation Limited 434-MAI 1978 Investment and Development 0.6 - 0.6 0.6 - Development Bank FinancE of Malawi Company 502-MAI 1979 Malawi Tourism - 2.0 2.0 2.0 1.6 Hotels Limited 543-MAI 1981/ Ethanol Company Manufactur- 614-MAI 1982 Limited of ing Alcohol Malawi from Molasses 0.2 2.2 2.4 2.4 - TOTALS 0.8 24.9 25.7 21.2 3.3 - -26 - ANNEX II Page 3 of 6 C. STATUS OF PROJECTS IN EXECUTION December 31, 1982 Credit No. 711-MAI Blantyre Water Supply Project; US$7.0 Million Credit of June 3, 1977; Date of Effectiveness: April 18, 1978; Closing Date: September 30, 1983 Initial delays in project implementation occurred due to revision of the project's scope, but implementation is now proceeding reasonably well. Detailed engineering is complete and awards have been made on all the contracts being financed by the Association. However, due to the initial delay, the Bank has agreed to a postponement of the closing date to September 30, 1983. BWB has also, with the help of the Bank, reassessed its financial position and agreed on a revision of the covenanted rates of return because of slower-than-anticipated growth in water demand, a reduced need for debt service, and higher rates of revaluation of fixed assets than used at appraisal. Credit No. 758-MAI Third Highway Project; US$10.5 Million Credit of January 18, 1978; Date of Effectiveness: June 29, 1978; Closing Date: December 31, 1982 The project consists of constructing the 52-mile Kasungu-Jenda road to two-lane bituminous surfaced standard; strengthening three short sections of the Zomba-Lilongwe road (parallel financed by the OPEC Special Fund); and providing consultant services for the supervision of the road, construction, and for the feasibility and engineering studies of the Jenda-Mzuzu road. Construction works on the Kasungu-Jenda road, strengthening works on the Zomba-Lilongwe, and the studies for the Jenda-Mzuzu road are complete. Final disbursement is underway and the Credit will be closed shortly. Credit No. 823-MAI Shire Valley Agricultural Consolidation Project; US$10.7 Million Credit of July 7, 1978; Date of Effectiveness: September 6, 1978; Closing Date: December 31, 1982 The project is the consolidation phase of the Shire Valley Agricultural Development Program and includes extension services to support increased cotton and foodcrop production, seed multiplication and afforestation programs, production credit, livestock and fisheries development, health and potable water supply facilities, a smallholder irrigation development study and some rural roads. It has provided social and infrastructure services to about 70,000 families. The Valley attained self-sufficiency in food crops for the first time in its history in 1977/78. Crop production targets, with the exception of guar beans, have not yet been reached. Ongoing project works have been recently completed. An adequate extension ratio has been reached. The Credit will be closed shortly. - 27 - ANNEX II Page 4 of 6 Loan No. 1610-MAI Investment and Development Bank of Malawi Limited; US$3.0 Million Loan of July 7, 1978; Date of Effectiveness: November 1, 1978; Closing Date: July 1, 1983 The project provides foreign exchange for financing medium- to large-scale projects in industry and agro-industry and agriculture and is helping INDEBANK consolidate its policies and strengthen its capabilities in project promotion, appraisal, implementation and follow-up. The line of credit is now fully committed; and as of April 20, 1982, disbursements amounted to US$1.23 million and are expected to be completed shortly. Credit No. 857-MAI National Rural Development Program, Phase I; US$22.0 Million Credit of December 21, 1978; Date of Effectiveness: April 5, 1979; Closing Date: September 30, 1983 The project is assisting the GovErnment in implementing the first phase of Malawi's National Rural Development Program. Over a five-year period it aims to increase output of maize, groundnuts, fire-cured tobacco and rice, and expand milk and meat production. The project has ailso improved basic services (water supplies, roads and health facilities). It is strengthening the Ministry of Agriculture's Central Service and four existing Management Units and has established eight new development project areas. It is also completing the consolidation phase of the Lilongwe Land Development Program. The project is cofinanced by CIDA, DEG, EDF, and ODA. It is proceeding satisfactorily except for recurrent financing problems which have been addressed by the First Structural Adjustment Loan. The entire NRDP program was jointly reviewed by IDA and Government in FY1982 and recommended changeS are being introduced to improve its cost-effectiveness. Credit No. 910-MAI Third Education Project; US$14.5 Million Credit of EEC Credit No. 12-MAI June 19, 1979; Date of Effectiveness: September 4, 1979; Closing Date: June 30, 1984 The project is assisting the Government in improving and expanding r primary and secondary education and management of education. Its major components include self-help constructing of primary s2hools, improving and expanding primary and secondary teacher training schools, providing primary school textbooks; expanding technical education; establishing an Institute of Education; assisting school inspectorates; and providing for educational studies. An EEC Special Action Credit of US$7.5 million was made available to the project. Implementation is proceeding well and on time, although some delays have been experienced in the components for commercial education, primary school construction and educational studies. The Institute of Education has begun to function. A large number of textbooks have been delivered to schools. Vehicles have been delivered to school inspectorates. A specialist has initiated the educational studies. The EEC Credit has been fully disbursed. - 28 - ANNEX II Page 5 of 6 Credit No. 992-MAI National Rural Development Program, Phase II (Wood Energy); US$13.8 Million Credit of April 25, 1980; Date of Effectiveness: June 9, 1980; Closing Date: December 31, 1985 The project is assisting the Government in its long-term energy development program aimed at increasing forest resources. It has established a national network of about 80 nurseries to produce seedlings for sale to smallholders, who are being encouraged to establish their own woodlots; fuelwood and pole plantations to help meet increasing demands from the commercial and industrial sectors, as well as from urban dwellers; and an Energy unit in the Ministry of Forestry and Natural Resources. Seedling sales to farmers, which has been going more slowly than expected, have now picked up. Overall, the project is proceeding on schedule. Credit No. 1099-MAT Fourth Highway Project; US$33.0 Million Equivalent (SDR 25.9 million) Credit of February 20, 1981; Date of Effectiveness: July 16, 1981; Closing Date: December 31, 1984 The project is assisting the Government in developing the economic potential of the northern region by constructing and improving the only remaining sections of the principal north-south road. In addition, the project will promote the maintenance of the main, secondary and district road networks and provide consultant services and training. The construction of the major paved road sections plus improvements of the existing road between Luwawa Turnoff and Mbowe to a low gravel standard is progressing satisfactorily and implementation of other components is well underway; the maintenance study and the DRIMP extension study are about to be completed. Credit No. 1123-MAI Fourth Education Project; US$41.0 Million Equivalent (SDR 32.2 million) Credit of March 26, 1981; Date of Effectiveness: October 2, 1981; Closing Date: December 31, 1985 The project is assisting the Government in improving and expanding secondary education and the training of secondary school teachers. Five new secondary schools are being constructed and equipped, and six existing secondary schools expanded. Additional boarding and teaching facilities of Chancellor College are being built and equipped. In addition, the project is assisting the Government in the preparation of a national education plan to provide the basis for future development of the education system. The study is underway and expected to be finished in September 1983. Satisfactory progress is being made in constructing the secondary schools and at Chancellor College. - 29 - ANNEX II Page 6 of 6 Loan No. 2027-MAI Technical Assistance Project; US$1.0 Million Equivalent Loan of June 25, 1981; Date of Effectiveness: September 30, 1981; Closing Date: March 31, 1984 The project, which complements the Structural Adjustment Loan, is helping finance consultant services for studies of the livestock, meat and dairy industries. The Malawi Development Corporation's financial position and export marketing capabilities is also being examined and strengthened. Other studies are being carried out as needed to support the Structural Adjustment Program. After initial delays, the MDC and livestock studies have been completed and the results will be available for Bank review and ccmment in March. In addition, the Government has carried out a study of the Agricultural Development and Marketing Corporation to address the major organizational, financial and managerial constraints hindering its performance. It has also employed a firm of consultants to help develop a restructuring package for the major private enterprise. A plan of action is being developed which is expected to be available for Bank review and comment in April. Credit No. 1183 National Rural Development Program (NRDP) Phase III Project; US$7.3 Million Credit (SDR 6.5 million) of October 13, 1981; Date of Effectiveness: May 28,1982; Closing Date: September 30, 1986 The project constitutes a third phase of the Karonga-Chitipa Rural Development Project as part of the activities o: the National Rural Development Program. As such it will benefit from the experience and lessons of previous years. The project will, over a four-year period (1981/82-1984/85), strengthen project management capabilities, continue to support the development of the agricultural production potential of the Karonga and Chitipa districts and strengthen agricultural extension, training, research and credit and marketing facilities. It also contains provision for improving water supply and for improved management and evaluation of project a2tivities. The project has experienced start-up implementation difficulties with regard to management, input supplies (fertilizer) and staffing shortfalls. To improve the situation, Government has recently appointed a new management team and is addressing fully the fertilizer requirement for the FY83/84 and subsequent crop seasons. Credit No. 1272 Lilongwe Water Supply and Engineering Credit; US$4.0 million Credit (SDR 3.6 million) of June 24, 1982; Date of Effectiveness: February 3, 1983; Closing Date: June 30, 1986 The three-year project is financing master plan studies to determine the optimum long-term program for water supply and sewerage/sanitation development in Lilongwe and identify a water supply project that would form the program's first phase. The latter project is the subject of the feasibility study, detailed engineering design and the preparation of contract documents. The project is preceeding satisfactorily. The Lilongwe Water Board has appointed an engineer/manager and is in the process of recruiting a chief accountant. Engineering consultants have been selected to carry out the master plan, feasibility studies and engineering designs; contract negotiations are underway.  】BRD 16689 ，斗