Senegal - Second Education Project

CIRCULATING COPY FILE COPY To BE RETURNED TO REPORTS 0PV DOCUMENT OF INTERATIONA-L BANK=FOR RECONST STRONAN-DEVLOMEN~T- INTERNATIONAL DEVELOPMENT ASSOCIATION For-ExcW . k Greolsq aff ia8ip iDEINTJAL7 Report No. P-1506-SE REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE REPUBLIC OF SENEGAL FOR A SECOND EDUCATION PROJECT January 14, 1975 The confidentiality of this report must be strictly observed. It was prefared for exclusive use of the Bank Group Staff. It may not be published, quoted or cited without Bank Group authorization. The Bank Group does not accept responsibility for the accuracy or completeness of the report. T _be I bumaier u_e  CURRENCY EQUIV.LENTS Currency Unit = CFA Franc (CFAF) EXCHANGE RATES Currency Unit Official Floatine (as pf February 1, 194h) US$1 CFAF 230.21 CFAF 240.00 CFAF 1,000 uS$h.20 US$ 4.25 CFAF 1,000,000 US$4,200 US$4,250 The CFA Franc is officially valued at the eauivalent o.f FF 0,02. As the French franc is now floating relative to the US dollar, the T1S d3oJ2ar/ CFAF exchange rate is subject to change. The exc!iange rate on November 30, 197T of US$1 = CFAF 240 was retained for conversions made in this report. FISCAL YEAR July 1 - June 30  INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE REPUBLIC OF SENEGAL FOR A SECOND EDUCATION PROJECT 1. I submit the following report and recommendation on a proposed development credit to the Republic of Senegal for the equivalent of US$15.0 million on standard IDA terms to help finance an education project. PART I: THE ECONOMY 2. A report entitled "The Economy of Senegal" (212-SE) was distributed to the Executive Directors on September 10, 1973. Country data appear in Annex I. Past Development 3. During the 1960's, the Senegalese economy experienced virtual stagnation, as real output increased less rapidly than population, and per capita GNP declined. Two factors were responsible for this situation. First, with independence, Senegal lost its privileged position as the center of French West Africa and therefore had to adjust to reduced economic, administrative, and political dimensions. Secondly, the difficulties of adaptation to the new situation were compounded in the latter part of the decade when ground- nut production fell by 50 percent due to unfavorable weather and falling export prices. In 1971, a combination of several favorable factors includ- ing the recovery of weather conditions, increased incentives for rural pro- duction, promising results of rural diversification, and a successful drive to promote industrial exports seemed to mark the beginning of a period of considerably higher growth. As it turned out, the economic upturn was brief as 1972 brought the Sahel's most severe drought in this century. 4. In 1972, agricultural and livestock production fell by more than 25 percent, setting back the standard of living of the rural population (representing 70 percent of the total) below the level reached in the early 1960s. Food emergency operations helped avoid widespread starvation, but notwithstanding this aid both the fiscal and balance of payments situations sharply deteriorated in 1973 and early 1974. 5. During 1973, the balance of payments situation was characterized by substantial reserve losses. At the end of the year, net reserves stood at minus US$28 million, the lowest level since independence. The main under- lying factors in 1973 were a sharp drop in groundnut production and exports and  - 2 - a continued increase in imports, mainly of foodstuffs. Even unusually high aid inflows, including substantial food aid, were not sufficient to finance the deteriorating trade balance. In 1974, both imports and exports increased markedly, by an estimated 37 and 57 percent respectively, following rapidly rising prices and slightly higher quantities of Senegal's major exports (groundnuts, phosphate and petroleum products) and imports (food, petroleunm and general imports). The more rapid climb in exports will result in a nar- rowing of the goods and non-factor services deficit from an all-time high of US$88 million in 1973 to an estimated US$50 million, still a high figure for Senegal. With the help of a US$18 million drawing under the IMF oil facility, the net reserve position of Senegal is expected to remain unchanged in 1974. 6. During 1972 and 1973, under the impact of the drought public fin- ances also took a serious turn for the worse. Public savings net of amortiza- tion, which had substantially improved during the preceding years, w7ere all but wiped out in 1972/73 and 1973/74 as revenues were affected by the decline in economic activity and recurrent expenditures were further increased by the consequences of the drought. Thus, at mid-1974 and in spite of a 70 percent increase in groundnut export prices, a large part of which was transferred to the Stabilization Fund, the public finance situation was more tense than it had been since 1960. A marked increase in salaries to compensate for the rapidly increasing cost of living, substantially higher debt service payments and perhaps miost importantly, heavy consumer subsidies to dampen the effect of sky rocketing food import prices, were mainly responsible for this situation. Prospects 7. Faced with this difficult financial position, the Government took a number of steps in November 1974 which are expected to bring about a very substantial improvement in public finances. 8. Consumer prices for rice, sugar, and groundnut oil were raised to bring them more closely in line with world market prices. Thus, the rice subsidy was completely eliminated (an increase of 70 percent in the consumer price), the price of sugar was increased by 90 percent (leaving a subsidy of about 20 percent) and that of groundnut oil was raised by 43 percent (leaving a subsidy of about 20 percent). The remaining subsidies are to be eliminated at a later date. At the same time, producer prices for groundnuts, rice, and cotton were increased substantially (40 percent for groundnuts, 35 percent for cotton and 20 percent for rice) to stimulate production and offset the effects of accelerating inflation. Also, Government salaries were raised by 16 percent on the average, but ranging from 60 percent for the lower salaries, to 3 percent for the higher salaries, to compensate for the rapid increase in basic commodity prices. It is estimated that the net effect of these measures will be to save about US$25 million for the Government in FY75, and US$35 million in FY76, or 12 percent of the Central Government current revenues. 9. Also, following the five-fold increase in world market phosphate prices and the revision of the tax agreement between the Government and the major phosphate mining company in the country, Government revenues from this  sector will be considerably increased in the coming years. The good 1974/75 harvest will improve the Government revenue picture further. 10. Thus the public finance situation in FY75 is expected to show a marked improvement as compared to FY73-74, although Government participation in the financing of public investments will remain small for the rest of this fiscal year. In the following years, however, the public sector should be able to finance about 20 - 25 percent of public investments, and sustain a rate of increase in investments of about 5 percent p.a. in real terms. In view of the magnitude of Senegal's external capital requirements and the severe constraints on Government's ability to mobilize additional domestic resources, it will continue to be necessary for external lenders to finance a portion of the local costs of high priority projects. 11. The measures mentioned above will also have a favorable effect on the balance of payments situation in 1975. In that year, as the good 1974/ 75 harvest will more than offset the effects of an expected deterioration in the terms of trade, the balance of payments is expected to be in equili- brium. For the period 1976-78, it is estimated that the terms of trade index for Senegal will continue to fall, mainly as a result of an expected drop in groundnut oil and phosphate prices of about 20 and 30 percent respec- tively between 1975 and 1977. Therefore, as no major increase in the export volume is anticipated, Senegal's exports are expected to stagnate in the coming years, resulting in an estimated annual average balance of payments gap of about US$20-25 million during 1976-77. After 1978, a new phosphate mine is expected to come into production, while phosphate prices are expected to resume their upward trend. These prospects combined with a more favorable long-term outlook for groundnut production could result in a healthier balance of payments position towards the end of the seventies. 12. Weather conditions will remain critical to Senegal's growth prospects. But with the rapid development of irrigated agriculture which started in the 1960s, the agricultural development of areas less affected by rainfall fluc- tuations (Casamance, Eastern Senegal) and substantial gains in industry, tourism and fisheries, by 1980 weather conditions should be a less decisive factor than today. The Fourth Development Plan (1973/74-1976/77) continues to give highest priority to rural development (36 percent of the total), housing/public utilities (18 percent) and transport infrastructure (16 percent). Industry and tourism, quite justifiably, see their share increase from 5 to 10 percent of the total. Assuming average rainfall conditions, Senegal's growth in real terms in the remainder of the 1970s will be of the order of 4.5 percent or about 2 percent per capita, which is still a considerable improvement over the past decade. Creditworthiness 13. The terms of foreign aid to Senegal have been progressively harden- ing over the years. The proportion of grant aid declined from 85 percent in the mid-sixties to 50 percent in FY72. Faced with a severe shortage of public  - 4 - savings, the Government borrowed heavily on the Eurodollar market in the past two years, in order to avoid a slowdown in public investments and to finance acquisitions and participations by the public sector. Starting in FY74, this led to a substantial increase in the public debt service which is expected to absorb about 60 percent of public savings in FY75. This ratio should decrease again in the coming years, following the marked improvement expected in the public finance situation. As far as the balance of payments is con- cerned, at 5-6 percent of export earnings, Senegal's external debt service is still very low. But Senegal will have to remain prudent in its public debt management particularly with respect to Eurodollar-type borrowing, given the manageable but still difficult balance of payments and foreign exchange reserves situation expected in the coming years. PART II: BANK GROUP OPERATIONS IN SENEGAL 14. The Bank Group has had 19 operations in Senegal to date. Total lending amounts to US$84 million (net of cancellations), including eleven IDA credits, four Bank loans, one blend of Bank and IDA funds and three IFC operations. Annex II contains a summary statement of Bank loans, IDA credits and IFC investments as of October 31, 1974 and notes on the execution of ongoing projects. 15. Execution of these projects, apart from the Railway Project and the Site and Services Project, is moving forward without exceptional delays. The Procurement for the railway has been slow due to time consuming contract approval procedures, but most project components have now been received or ordered. The railway's operating and financial deterioration has been stopped and measures taken by Government have resulted in a slight improvement. The Site and Services Project is about one year behind schedule. The main causes for the delay were the unexpected need to pass a law, rather than a decree, to reorganize the executing agency (OIILM), the delay in recruitment of technical assistance and the difficulty experienced by OHLM in getting prompt cooperation from other ministries and government agencies involved in project execution. Terracing of the first sub-site for Dakar was finished 17 November as opposed to the earlier estimate of August and with an unexpected cost reduction. There is a possibility that some families will, therefore, be able to take formal possession of their sites by February 1975. Some of the agricultural projects, such as the Terres Neuves Project and the Casamance Rice Project, were hampered by delays in receiving the Government's counter- part contribution; however, owing to efforts of the project authorities, physical implementation of these projects is proceeding generally according to schedule. 16. In view of Senegal's need for substantially higher capital inflows, the scale of Bank Group lending is expected to increase significantly in the future. The Bank Group share of foreign aid disbursements is expected to increase from 10 percent in 1969-71 to 25 percent by 1979. The Bank Group would continue to be the third largest aid donor (after France and the European Economic Community).  -5- 17. The objectives of Bank Group project lending in Senegal fall under four main headings. Top priority will continue to be rural development, in- cluding intensification of groundnut production and diversification into new crops and new regions (e.g., the proposed Sine Saloum and Livestock Projects). As in the past, our agricultural lending is expected to exceed one third of the total. Secondly, we shall assist diversification of the economy by lending for the growing sectors of tourism, industry and fisheries (e.g., the proposed tourism infrastructure project on the Petite Cote and a possible Ship Repair Project, based on studies financed under Loan S-3SE). Thirdly we shall con- tinue investment for modernizing and expanding the country's infrastructure (e.g., two proposed highway projects and a proposed fishing wharf at Dakar Port). Finally we shall continue lending to reorient and expand the country's education system, as in the proposed project. PART III - EDUCATION IN SENEGAL 18. In the past, education in Senegal, largely patterned on the French system, has been oriented towards the preparation of a small minority for higher education rather than towards the needs of the majority of students for a functional education relevant to the practical needs of everyday life. Only 38 percent of the 6-12 age group were enrolled in primary school in 1973 and even this relatively low participation rate conceals significant regional disparities. This means by the year 2010, 62 percent of those in the 42-48 age group will not have had even the barest formal education. The primary school enrollment rate is expected to reach only 50 percent of those eligible by the year 2000. Lower secondary schools in Senegal suffer from large classes and high repeater rates and lack the facilities, materials and trained teachers for science and practical subjects. The recruitment of students for upper secondary education on the basis of national examinations continues the bias in favor of the urban, better-off students in contrast to rural areas which have been traditionally less favored. 19. The output of Senegal's education system at the lower skill level exceeds quantitative requirements. However, there are also qualitative im- balances. About 11,000 of the 16,000 students who complete primary school each year do not go on to secondary school and are thus likely to seek employ- ment, particularly in urban areas, where their lack of maturity and specific skills makes it difficult for them to find employment in the modern sector. In rural areas, primary leavers stand a better chance of employment on family farms, especially if part-time training programs, designed to strengthen the students' ties with the rural sector, can be implemented. Research and development are required to make primary education cheaper and more relevant for both urban and rural sectors and also to develop non-formal training programs to equip primary leavers with skills to make them more employable. At the middle level, given the need to fill some positions with experienced personnel upgraded from the skilled level, there may be a slight surplus from the education system. However, shortages of trained personnel, in particular for new economic activities, justify the creation of new training facilities.  - 6 - And at the upper level, output from the University, the new Ecole Polytech- nique and the IDA financed IUT (Institut Universitaire de Technologie)should be sufficient to meet requirements of the modern sector particularly since a proportion of high level manpower requirements must be filled by upgrading of existing experienced staff. 20. The major constraints to educational development in Senegal are in the following areas: i. Senegal's recurrent expenditures on education repre- sent about 25 percent of the national recurrent budget. Therefore, possibilities for additional allocations to the sector are limited. The Government is already taking measures to reduce financial pressures by shortening the length of the primary program by one year. It will be important in the future to maximize the use of existing facilities and teachers and to establish imaginative low cost programs in areas where expansion is important. ii. Planning and management are weak and must be improved to up- grade the content and efficiency of the existing system, and to explore new types of educational structures and programs. iii. The lack of practical, employment-oriented programs in secondary education and of teachers to implement them are serious obstacles to producing students whose knowledge is relevant to the country's needs. iv. The absence of practical education and training programs for children not selected for further education beyond the primary level. 21. In general, the government's strategy is coherent from economic, social and pedagogical viewpoints and attacks priority areas. Specifically, the Government seeks: the qualitative improvement of the lower secondary program by the introduction of practical scientific and technical courses which prepare for further education, formal and on-the-job training or family care; the development of vocational training/upgrading programs presently lacking; the development of education programs for rural and urban primary school leavers and illiterates in the same age group; and the exploration of alternatives to the ill-adapted, long and expensive primary program. It also seeks to improve the planning, management and evaluation of ongoing and pro- posed education/training programs. The strategy is also tactically and pedagogically sound. Basic education aims at providing the minimum skills and knowledge for participation in development and the lower secondary programs seeks to extend and complement this minimum program by giving a practical, scientific and technical orieuitation to those students who will enter the system's higher levels and eventually find employment in the modern sector. At the same age level, primary leavers require more specific prepara- tion for work and the Government intends to pursue the development of non- formal education programs for both rural and urban areas. Measures to correct inefficiencies at the other levels of the system are also in order: the management of upper secondary schools, for example, must be improved; the University of Dakar requires progressive adaptation to the country's needs;  - 7 - and technical and vocational education requires consolidation and closer links with employment. However, qualitative improvement, in particular, giving a more scientific and technical bias to upper secondary and university education, depends on improving the level of entering students, particularly in practical and scientific knowledge and skills. 22. The Bank Group has previously been involved in the development of the Senegalese educational system. The first education project (Cr. 253-SE, for US$2.0 million) was designed to rehabilitate existing training facilities for skilled manpower for industry and agriculture and to provide the ex- panded facilities needed to train upper level technical staff. The project comprised the construction and equipment of an upper level technician training institute, equipment for two existing technical lycees and for the National Marine Training School, and construction and equipment for an existing agri- cultural school. The first project would have been broader in scope if evolv- ing plans for educational reform had been further advanced at the time of its appraisal. After delays in the appointment of architects, agreement on archi- tectural designs and the appointment of acceptable consultants for the reorgani- zation of the National Marine Training School, project implementation is now proceeding satisfactorily. 23. France has been the major source of external assistance in Senegalese education, principally in the form of salaries of expatriate teachers. France, Canada and FED have also assisted in financing the recurrent costs of the Uni- versity of Dakar. Canada is contributing Can.$7.4 million towards the construc- tion of a 350-place higher polytechnical school which will begin graduating business administration/management students in 1978. PART IV - THE PROJECT 24. The project was prepared by a UNESCO mission in April, 1973, and appraised by the Association in May/June, 1973. In order to commence work on designs so that construction could begin shortly after approval of the credit, the Government requested the Association to reallocate funds under the First Education Project (Credit 253-SE) to finance the design work under the Second Project. This reallocation was approved in October 1973. Consult- ing architects, acceptable to IDA, have consequently been selected and con- tracts signed. Negotiations for the project were held in December, 1974. The Senegalese delegation at these negotiations was led by His Excellency Mr. Ousmane Seck, Minister of Plan and Cooperation. A credit and project summary is attached as Annex III. The appraisal report (No. 518 SE) is being circulated separately to the Executive Directors. Description of the Project 25. The Second Project would reinforce and expand the scope of the First Project in meeting modern sector requirements through the introduction of more  - 8 - practical and scientific programs in lower-secondary education, through speci- fic vocational training, and through better planning and management of the education system. The project would also address the need for formal and non- formal education in rural areas. Lower Secondary Education 26. The project includes, by way of assistance to lower secondary education: (a) construction and equipment of eleven lower-secondary centers for the teaching of science, technology and domestic science, together with technical assistance for program development and training/upgrading of teachers (US$5.0 million); (b) the construction and equipment of four lower-secondary schools in departmental capitals to replace existing temporary facilities and also provide them with practical facilities for the teaching of science and technology (US$1.7 million) 27. The introduction of the science/technology centers represents a major qualitative improvement of lower secondary education, by shifting from theoretical instruction towards practical training which would provide a foundation for further education and for later employment. The centers would each serve several schools, so as to permit close pedagogical super- vision and economies of scale in the use of facilities, teachers and equip- ment. WThen the centers and schools become fully operational they will serve about one quarter of the lower secondary school population, or 14,000 children per year. A tracer system would monitor later educational progress and employ- ment of students trained. (Section 4.03, draft Credit Agreement). Vocational Training 28. The project includes, by way of assistance to vocational training: (a) a Hotel/Tourism training and upgrading center, for 380 trainees and a 50 room "hotel d'application", to be located in Dakar (US$1.4 million); (b) conversion of facilities, minor construction and equipment at an existing Dakar Vocational Training School (CQID) to house a new industrial upgrading program. Technical assistance for instructors and scholarships for national trainees would also be financed (US$1.2 million); (c) Mtinor construction and equipment for the National Marine Training School to permit the implementation of reorganized programs (US$0.2 million).  -9- 29. The Hotel/Tourism center would help ensure the orderly development of Senegal's rapidly growing tourism industry by improving the quality and conditions of training. The proposed center, to be located on the western corniche at a suitable tourist site, would be operated in close coordination with the industry, which would select the trainees, supervise training and participate financially in the center's recurrent cost, of which 20 percent would be met by the anticipated profits of the "h6tel d'application". Tech- nical assistance will be needed to assist the Government in operating the center. The Government has requested that the United Nations Development Program (UNDP) provide the services of experts for this purpose. 30. The existing industrial training center (CQID) is adequate to handle Senegal's pre-employment vocational training needs. The main shortcoming of industrial training is the need for upgrading the skills of those already employed. The present project would take advantage of the under-utilization of CQID's physical facilities and equipment *and convert some of them to house new upgrading courses. The center for upgrading would have a capacity of 400 employees for 6-8 week courses. To ensure constant adaptation of programs to employers' needs, an advisory boars would be established. (See Section 4.03 of the draft Credit Agreement). 31. The proposed credit would provide US$239,000 for rehabilitation of buildings and for equipment at the National Marine Training School, an item included originally under the First Education Project (Credit 253-SE). In light of delays in the selection of consultants to perform a study of cur- ricula, equipment and selection procedures required before the detailed pro- grams and equipment list could be finalized, the Government requested and the Executive Directors approved (Memorandum IDA/R73-108 of October 17, 1973) that the proceeds (US$ 210,000) be reallocated to the financing of architectural designs, preparation of equipment lists and the design of initial training programs for teachers for the proposed project. Non-formal Rural Education 32. The project would also provide for the initial phase of an experi- mental scheme of village education centers (Enseignement Moyen Pratique - EMP) to offer primary school leavers and youths or adults who had never attended primary school with a blend, as appropriate in each case, of practical train- ing in agricultural and related occupations and in the elements of literacy and numeracy. This scheme would include: construction and equipment of 30 experimental rural education centers; equipment for an instructor training center and regional and departmental staff training and supervision teams; and specialist services to aid in program development and initial instructor training (US$2.2 million). 33. Enseignement Moyen Pratique is designed to deal with the practical educational needs of youth living in rural areas. Because of the limited absorptive capacity of the modern sector and the relatively few students who enter secondary school most young people have to seek employment or self- employment in the traditional urban or rural sector, particularly the latter.  - 10 - During the 1970s about 11,000 primary school graduates and 60,000 young people with incomplete or no primary education will enter the labor force each year. EMP would reinforce the education primary school graduates have already received and orient them towards rural employment by teaching practical skills, crafts and other occupations useful to the rural community. For those without primary education whose practical experience already equips them for rural work, non- formal education would allow them to acquire new skills to take advantage of agricultural development schemes. The basic principle of the EMP curriculum, adopted by the Government, is alternation between theoretical courses and practical work, the EMP center and the village. The practical training would usually be activities directly benefitting the village. Centers would be established throughout Senegal in areas where development schemes are under- way or planned in order not to raise aspirations about progress which cannot be fulfilled. Villagers themselves would be active in the EMP's management to ensure the centers' relevance to genuine community needs. Although the expenditure required to equip the centers is high relative to a primary school, it is essential in this initial phase to explore a broad range of training courses and to use a variety of inputs to discover the most economical and effective combinations of equipment and personnel. By the third year of operations, about 3 to 5 percent of the equivalent age group in rural areas would be involved in EMP. Because of its experimental nature, evaluation would be a critical part of the EMP project in order to extend the concept in the future to larger numbers of people. The Government has recently begun the preliminary preparation studies for a practical, non-formal community-based urban program for the EMP age group. At the request of Government part of the specialist services to be provided under this credit would be used to assist in these studies. (See Section 3.09 of the draft Credit Agreement). Basic Education Study 34. Consultants would be financed to aid the Directorate of Planning and Research in its studies related to the reform of primary education, partly on the experience gained from EMP (US$0.2 million). The objective is to define a cheaper, more relevant form of basic education which might to some extent use national languages and allow local populations to participate in the management of the education system. Educational Planning 35. Technical assistance (US$0.3 million) would also be financed for the newly organized Directorate of Planning and Research of the Ministry of Education to help in the organization and management of schools, program evaluation, analysis of educational costs and the interpretation of manpower data for educational planning. Management and Implementation 36. The existing project unit (headed by the Director of Public Works) would provide technical services for project administration: recruitment of specialists, contract administration, procurement, and supervision of project  implementation by the consulting architects and other design and equipment consultants. An engineer to act as Deputy Director with day-to-day decision making powers related to project implementation, has been appointed to reinforce the project unit, together with an additional building engineer, a site super- visor and appropriate clerical staff. Responsibilities for design and equip- ment specifications, determination of specialist profiles, as well as all other decisions concerning pedagogical matters, would be entrusted to officials of the Ministries or agencies concerned with individual project items. Costs and Finances 37. The proposed IDA credit of US$15.0 million would finance the US$8.1 million foreign exchange costs of the project as well as well as US$6.9 mil- lion of the local costs or 79% of the US$19.0 million total project cost net of taxes. Remaining project financing would be provided by the Republic of Senegal. Procurement and Disbursement 38. The civil works (US$7.6 million), for the construction of the 47 buildings required for schools would be widely dispersed and too small to attract the interest of overseas bidders. Such contracts would therefore be awarded on the basis of competitive bidding, advertised locally, in accordance with local procedures which are acceptable to IDA. Furniture, equipment and teaching materials, estimated to cost about US$2.5 million, would be procured where possible through contracts of at least US$100,000 which would be placed following international competitive bidding in accordance with IDA's guidelines. Small orders of less than US$5,000, up to an aggregate of US$150,000, would be placed following quotations obtained from suppliers. A preference of 15 percent or the prevailing tariff, which- ever is lower, would be given to local manufacturers of equipment, furniture and teaching materials. 39 . The credit would be disbursed against (i) 100 percent of the c.i.f. costs, including delivery, of imported furniture, equipment and materials; (ii) 100 percent of total expenditures for locally produced furniture, equip- ment and materials net of taxes; (iii) 63 percent of total expenditures for civil works; and (iv) 100 percent of total expenditures for specialist services, technical assistance and scholarships. Any undisbursed balance of the credit at project completion would be allocated for goods and services related to the project and mutually acceptable to the Government and IDA. PART V: LEGAL INSTRUMENTS AND AUTHORITY 4