Lesotho - Second Education Project

Report No. 1628-LSO Appraisal of a Second Education Project in the Kingdom of Lesotho I November 2, 1977 Education Projects Division Eastern Africa Regional Office FOR OFFICIAL USE ONLY U Document of the World Bank 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.  The Country: Lesotho The People: Mosotho (singular) Basotho (plural) The Language: Sesotho CURRENCY EQUIVALENTS US$3. 0.87 Rand (R) RI = US$1.15 RI million US$1,150,000 M-EASURES 1 meter (m) 3.28 feet 1 foot (ft) 2 0.30 meter 1 square meter (m ) 10.76 square feet 1 square foot (sq ft) 0.09 square meter I kilometer (km) = 0.62 mile I mile (mi) 2 1.6093 kilometers 1 square kilometer (km ) 0.3861 square mile 1 square mile (sq mi) 2.59 square kilometers 1 hectare (ha) = 2.47 acres I acre (ac) = 0.4047 hectare 1 kilogram (kg) = 2.2046 pounds 1 pound (lb) = 0.45 kilogram 1 metric ton = 2,205 pounds GOVERNMENT OF LESOTHO FISCAL YEAR April 1 through March 31  FOl OFFICLAL USE ONLY KINGDOM OF LESOTHO APPRAISAL OF A SECOND EDUCATION PROJECT TABLE OF CONTENTS Page No. BASIC DATA GLOSSARY OF ABBREVIATIONS SUMMARY AND CONCLUSIONS ........... ............. i - vi I. INTRODUCTION .......................................... I II. ECONOMIC DEVELOPMENT AND HUMAN RESOURCES .1 Geographic and Socio-Economic Situation .I Development Trends. 2 Manpower Requirements. 4 III. THE EDUCATION AND TRAINING SECTOR. 6 Evaluation of the Sector. 6 Education Policy, Strategy, and Plans. 9 Investment Programs ................................... 11 IV. THE PROJECT ........................................... 12 Objectives and Content ................................ 12 Project Items ......................................... 13 V. COST ESTIMATES, FINANCIAL PLAN, IIIPLEMENTATION, PROCUREMENT, AND DISBURSEMENTS ........................ 19 Cost Estimates ........................................ 19 Financial Plan ........................................ 21 Implementation ........................................ 22 Procurement ........................................... 23 Disbursements ......................................... 24 VI. BENEFITS AND JUSTIFICATION ............................ 24 VII. AGREEMENTS REACHED AND RECOMMENDATIONS .... ............ 27 This report is based on the findings of a mission in January/February 1977 to Lesotho composed of Messrs. D. Klaus (mission leader and economist) and G. Sinclair (architect) of the Bank and 14r. J. CLesswas (general educator) of UNESCO. The project was further reviewed in the field by Mr. Sinclair in June 1977. This docursret has a restricted distribution and may be used by recipients only in the performance of their official dutierz Its contents may not otherwise be disclosed without World Bank authorization.  -2- APPENDICES 1. Manpower and Employment 2. The Education and Training Sector 3. The Construction Industry in Lesotho ANNEXES 1. Comparative Education Indicators 2. The General Education System, 1975 3. GDP, Government Recurrent Expenditures, and Recurrent Expenditures on Education, 1969/70-1973/74, and Estimates to 1985/86 4. Technical-Assistance 5. Programs and Institutions benefiting from the Project 6. Summary of Estimated Project Costs 7. Implementation Schedule 8. Estimated Schedule of Disbursements CHARTS 1. Educational Pyramid, 1975 World Bank 17225 2. Structure of Education, 1977 World Bank 17226 3. Proposed Structure of the Ministry of Education, Youth, Sports, and Culture World Bank 17477 MAP IBRD 12858  LESOTHO BASIC DATA - 1975 Population 1,200,000 (includes an estimated 200,000 temporarily absent in the Republic of South Africa) Population growth rate 2.2% p.a. Modern-sector wage employment within Lesotho 27,500 GDP per capita (1975/76) US$120 equivalent GNP per capita (1975/76) US$180 equivalent Education Primary education (grades 1-7): - enrollments 221,900 - ratio of enrolled to theoretical age group (6-12) 110% Lower-secondary education 1/ (grades 8-10): - enrollments 13,700 - ratio of enrolled to theoretical age group (13-15) 18% Higher-secondary education 1/ (grades 11-13): - enrollments 2,800 - ratio of enrolled to theoretical age group (16-17) 6% Higher education (National University of Lesotho): - enrollments 502 - ratio of enrolled to theoretical age group (18-22) 0.5% Education Exenditures Recurrent expenditures of the Ministry of Education, Youth, Sports, and Culture as a percentage of total Government recurrent expenditures (1975/76) 25% Recurrent expenditures of the Ministry of Education, Youth, Sports, and Culture as a percentage of GDP 5.5% Recurrent expenditures of the Ministry of Education, Youth, Sports, and Culture as a percentage of GNP 3.6% 1/ Includes general-secondary education, teacher training, and vocational and technical education.   GLOSSARY OF ABBREVIATIONS COsC Cambridge Overseas School Certificate CTI Commercial Training Institute DANIDA Danish International Development Agency JC Junior Certificate LAC Lesotho Agricultural College LDTC Lesotho Distance Teaching Center LIPA Lesotho Institute of Public Administration LTI Lerotholi Technical Institute 'IINEDUC Ministry of Education Youth, Sports, and Culture NCDC National Curriculum Development Center NTTC National Teacher Training College NUL National University of Lesotho 0DM Overseas Development Ministry (United Kingdom) RSA Republic of South Africa TSRP Training for Self-Reliance Project TSU Teaching Service Unit USAID United States Agency for International Development   LESOTHO APPRAISAL OF A SECOND EDUCATION PROJECT SUMMARY AND CONCLUSIONS i. This report appraises a second education project in Lesotho for which an IDA credit of US$7.5 million equivalent is proposed. ii. The IDA-assisted first education project (Credit 497-LSO of July 25, 1974) provided US$4.0 million equivalent to assist the Government in ex- panding technical, commercial, and vocational education, establishing a distance teaching center (extension college) for adult education, and aiding the introduction of a new and more practical curriculum in several secondary schools. Implementation is currently about nine months ahead of the schedule elaborated at the time of appraisal, and the project is expected to be sub- stantially completed in January 1978. As of September 30, 1977, over 60% of the Credit had been disbursed. iii. Because of a long history of missionary activity in basic educa- tion, Lesotho has a comparatively high adult literacy rate (an estimated 40% of the adult population), and the country's primary schools have enough places to allow virtually every child to enter primary school. Almost every girl does so; boys, however, traditionally are busy herding cattle, sheep, and goats at the age when they otherwise would be in primary school, so that in fact only 60% of the boys enter primary school. Nevertheless, Lesotho is well on the way to achieving universal entry to primary education. Universal primary education per se cannot be achieved until ways and means are devised to reduce the high dropout rates: at present, two thirds of the boys and half of the girls who begin first grade drop out before they reach the seventh grade. The Government is increasing its efforts to provide more better- trained teachers, and a new Department of Curriculum Development has been established to review curricula. iv. The expansion of general secondary education is being carefully controlled in order not to exceed the country's financial capabilities. Emphasis is instead being given to quality improvement and to the gradual localization of the teaching force. Quality improvement is being brought about mainly through the introduction of a new, diversified curriculum more appropriate to the country's development situation. Specifically, courses such as agriculture, elementary technology, home economics, commercial subjects, and development studies are being introduced alongside the tradi- tional mathematics, science, and humanities. A number of secondary schools have already incorporated some of these subjects into their curriculum on their own, and the IDA-assisted first project financed the introduction of such subjects into six others. The new Department of Curriculum Development is also intended to monitor and evaluate these changes in secondary education. V. One of Lesotho's three technical schools, the Lerotholi Technical Institute in Maseru, is being expanded under the IDA-assisted first educa- tion project. Yet this school and the country's two other technical schools,  - ii - at Lerile a-,d T.eioaleng, respectively, do not produce enough trained person- nel to meet thie demands of the country's development, primarily because so many of the graduates seek more remunerative employment in the Republic of South AErica. The be-eits of such training, however, are not entirely lost to Lesotho, since the migrants send back a large part of their wages in the form of remittances to t_eir families, and as skilled workers they earn (and send back) much more t`han dc unskiilled migrant workers. The Government hopes to expand the facilities at both Leribe and Leloaleng, not only in terms of formal courses for young people, but also in terms of short courses for adults. vi. Planned expansi-ons and qualitative improvements in Lesotho's edu- cational system are expected to cause recurrent costs for education to grow at an estimated 12% p.a. in real terms over the next nine years or so. Gov- ernment current revenues, which depend largely on the Southern Africa Cus- toms Union Agreement, are conservatively estimated to grow at about 10% p.a. over that Deriod. Education's share in total Government recurrent expendi- tures will thus increase, from an estimated 24% of the total in the Govern- ment of Lesotho's Fiscal Year 1975/76 to an estimated 29% of the total in 1985/86. This percentage would be quite high in most other countries, but given Lesotho's unique set of circumstances, it need not be cause for alarm. In the first place, the Ministry of Education's recurrent expenditures in 1985/86 would represenr- less than 5% of Lesotho's GNP in that year, a rea- sonable proportion, and if in --he interim the Government can find an effec- tive means of tapping the migrant workers' resources, overall Government revenues and hence expenditures cculd grow more rapidly than projected. In the second place, Lesotho has no external-defense budget, such that funds which in other countries would be expended on defense may in Lesotho be diverted to other sectors. Finally, the opportunities for high-productivity investment in Lesotho are limited; it is quite possible that the highest mar- ginal returns to investment are in human-resource development. Given these various factors, the projected levels of recurrent expenditure on education do not seem unreasonably high. vii. The proposed project would assist an investment program aimed at (a) establishing a curriculum-development service, including strengthened career-guidance and educational-radio services; (b) expanding the facili- ties for technical education, making it possible to expand enrollments and to introduce courses for adults; (c) establishing a new, permanent Trade-Testing System; (d) expanding the curriculum-diversification program at the level of secondary education by introducing pre-vocational subjects into the curricula of additional general-secondary schools; 5'e) strengthening the institutions which will be responsible for trainirtg teachers of pre-vocational subjects; (f) providing the human resources necessary for the successful functioning of the above services and institutions as well as for the implementation of the project and for formative evaluation of the secondary-level pre-vocational subjects; and (g) preparation of future programs and projects. Specifically, the project would consist of the foll wing: (a) The construction. furnishing, and equipping of a Na- tional Curriculum De-velopment Center;  - iii - (b) Extensions, furniture, and equipment for the technical schools at Leribe and Leloaleng; (c) Office, trade-testing equipment, and a vehicle, for a new Trade-Testing System; (d) Extensions, furniture, and equipment for eleven general- secondary schools; (e) Minor improvements in teacher-education workshop facilities, limited staff housing, and a bus for the institutions (the National Teacher Training College, the Lesotho Agricultural College, and the Lerotholi Technical Institute) which together will train the teachers of pre-vocational subjects; (f) Technical assistance for the training of Basotho teacher- educators, for the Trade-Testing System, for project imple- mentation (an architect, a quantity surveyor, and engineering and procurement consultants), and for formative educational evaluation; (g) Permanent office accommodations, furniture, vehicles, equipment, and operating expenses for project adminis- tration; and (h) Pre-investment activities and studies. viii. The proposed project would centralize and strengthen various curriculum-development activities of the Ministry of Education which are presently carried out on a haphazard basis in such temporary accommodations as can be found. The establishment of a National Curriculum Development Center would enable the country to establish a permanent service for the re- view and improvement of primary and secondary education and their adaptation to the country's development situation. Career guidance, already begun in Lesotho with assistance from Bank staff, would be given permanent facili- ties and would be better able to make students aware of the employment opportunities available to them. The educational radio system, soon to re- ceive a new transmitter, would be strengthened in order to reach great num- bers of the country's youth and adults who do not have access to the formal- education system. ix. The facilities to be provided under the proposed project at the technical school at Leloaleng would enable the enrollment of full-time stu- dents to be increased from 55 to 95 and would also allow the school to in- troduce a course in construction. The enrollment of the technical school at Leribe would be increased from 90 to 120, and the school's new course in elec- trical wiring would be improved. Some 400 adults p.a. would benefit from the short skill-training courses which the schools would be able to offer with assistance from the project. Since students terminating technical courses in Lesotho are not at present adequately evaluated, the project would also pro- vide technical assistance, equipment, a vehicle, and operational expenses over the project period for the establishment of a new, permanent Trade- Testing System.  - iv - x. The project would aid the expansion of the secondary-level diver- sification program by providing the buildings, furniture, and equipment required to introduce pre-vocational subjects into seven general-secondary schools (in addition to the six which received such facilities under the IDA-assisted first education project). Four of the six schools assisted under the first project would receive limited additional facilities to allow them to increase the utilization rate of their practical facilities. The provision of facilities for pre-vocational subjects would free the existing academic facilities part of the time and would allow all eleven schools to increase their enrollments. Since most of the schools are located in rural areas and since most students come from distant areas, a limited amount of boarding and staff housing would be provided under the project as needed. Two of the seven new schools which have been selected for inclusion in the project are located in the hitherto neglected mountain regions of the country. The teachers of the pre-vocational subjects would be taught in joint programs involving the National Teacher Training College, the Lesotho Agricultural Col- lege, and the Lerotholi Technical Institute; minor improvements in teacher- education workshops, limited staff housing, and a bus would be provided under the project to contribute to the success of the joint programs. xi. Most of the technical assistance (specialists in the short term, and fellowships for the training of Basotho for the longer term) required for the successful functioning of the above institutions would be furnished by bilat- eral aid agencies which have already been contacted. The project would pro- vide one specialist and a number of fellowships unlikely to be provided from other sources. Limited technical assistance would also be provided under the project for project implementation and for formative evaluation of the new diversified curriculum at the level of secondary education. Since the housing shortage throughout Lesotho but particularly in Maseru is acute, and since the availability of housing is a critical factor in the willingness of expatriate specialists to accept positions in Lesotho, modest staff housing would be provided for the internationally recruited specialists to be brought in for the project. xii. The independent Project Authority, representing the Ministries of Education, Finance, Planning, Agriculture, Health, Works, and Community and Rural Development, which was established for the IDA-assisted first education project, would be responsible for overall project control. The Project Unit established under the Project Authority for the first project would perform all administrative functions for the second project. The Project Unit is staffed with a director, deputy director, accountant, procurement officer, and supporting staff, all on a full-time basis. The services of procurement consultants would be used where necessary to provide additional support. Per- manent office accommodations for the Project Unit, as well as supplemental operational salaries, furniture, vehicles, equipment, and general expenses would be provided under the project. The Ministry of Works has agreed to establish an architectural team, consisting of two architects, one quantity surveyor, two architectural technicians, and two construction supervisors, which would be located within the Ministry but would be assigned on a full- time basis to the project. Consultants would be appointed to provide engi- neering services. The team would be responsible for the design, construc- tion, and supervision of all project facilities. One of the architects and the quantity surveyor as well as the services of engineering and pro- curement consultants would be furnished as technical assistance under the  -v project. The architect and the quantity surveyor to be furnished under the project, as well as the engineering and procurement consultants, would be selected and appointed on the basis of terms and conditions acceptable to the Association. Standard school accommodation units developed for the first project would be used as extensively as possible for the proposed second project. xiii. The total cost of the project is estimated at US$9.3 million equiv- alent including taxes and customs duties of US$0.4 million equivalent. The foreign-exchange component of US$5.1 million equivalent represents 63% of the total cost including taxes. Construction costs have been estimated as of October 1977, on the basis of quotations received in the first project and other similar projects. The estimates are based upon maximum use of the few local materials and simple building techniques. Recurrent expendi- tures generated by the project are expected to constitute about 3% of the Ministry of Education and Culture's estimated recurrent budget in 1985/86. xiv. Contracts would be awarded in accordance with the Bank Group's Guidelines for Procurement. International competitive bidding would be used except as follows: (a) Construction contracts costing less than US$25,000 equivalent each, which could be negotiated with small unregistered contractors on the basis of a program to be agreed with the Association (the estimated total value of contracts that would be awarded in this category is not expected to exceed US$150,000 equivalent, including contingencies); (b) For the con- struction at the two schools in the mountain regions, where competitive bids are not expected, local building teams would be established and supervised by the Project Unit according to a program to be agreed upon with the Associa- tion (the estimated total value of contracts that would be awarded in this category is not expected to exceed US$900,000 equivalent, including contin- gencies); and (c) Furniture and equipment contracts costing less than US$50,000 equivalent each, which, on the basis of experience with the first education project, are unlikely to attract foreign bidders, would be awarded on the basis of competitive bidding advertised locally in accordance with local pro- cedures acceptable to the Association (the estimated total value of contracts that would be awarded in this category is not expected to exceed US$200,000 equivalent, including contingencies). Architectural sketch designs, draft tender documents, and master lists of furniture and equipment, indicating proposed grouping, would be reviewed by the Association. Review of tender evaluation documents by the Association prior to award would not be required for contracts for civil works costing less than US$200,000 equivalent and for contracts for furniture and equipment costing less than US$50,000 equivalent. Where international competitive bidding procedures are used, (i) domestic manufacturers of furniture and equipment would be allowed a preference of 15% or the existing applicable rate of import duties, whichever is lower, over the c.i.f. price of competing foreign suppliers; and (ii) qualified domestic civil-works contractors would be allowed a preferential margin of 7-1/2% over the bid prices of competing foreign contractors. xv. The proceeds from the credit account would be disbursed as follows: (a) 80% of expenditures for civil works; (b) 100% of foreign expenditures for directly imported furniture, instructional equipment, and vehicles; (c) 100%  - vi - of the ex-factory cost of locally manufactured furniture; (d) 100% of foreign and 50% of local expenditures for technical assistance and for project evalua- tion; (e) 80% of total expenditures for locally procured furniture and equip- ment bought off the shelves, for professional services, and for project admin- istration. Disbursements for project administration would be made against a certificate of expenditure, documentation of which would not be submitted for review but which would be retained by the Borrower and would be available for inspection by the Association during the course of project supervision. xvi. Subject to the condition of para. 7.02, the proposed project forms a suitable basis for an IDA credit of US$7.5 million equivalent on standard IDA terms.  I. INTRODUCTION 1.01 Lesotho became independent in 1966. Since then the Government has made considerable progress in gaining administrative and academic control over the education system, which was previously controlled virtually com- pletely by the missions. The Government has also made considerable progress in reforming its educational system to bring it more into line with the de- velopment needs of the country, and in expanding the system in those areas critical to the country's development. The Bank Group is presently assist- ing the Government of Lesotho with an IDA Credit of US$4.0 million equivalent, signed in July 1974 for a project to (a) expand technical, commercial, and vocational education, (b) establish a distance teaching center (extension college) for adult education, and (c) aid the introduction of a new and more practical curriculum in secondary schools. The project is also providing technical assistance and funds for project implementation. Implementation is currently about nine months ahead of the schedule elaborated at the time of appraisal, and the project is expected to be substantially completed in January 1978. As of September 30, 1977, over 60% of the Credit had been disbursed. 1.02 The second education project now proposed would continue the first project's emphasis on qualitative improvement of the system with limited quantitative expansion in critical areas. It would benefit both the formal and non-formal education systems. In order to improve primary- and secondary-- level formal education, particular emphasis would be given to curriculum re- form through the establishment of curriculum-development services. Technical education would also receive further assistance. Finally, the new, more practical secondary curriculum introduced with the IDA-assisted first project would be extended to a greater number of schools. The proposed project was identified in March 1976 by a Bank Group Mission and pre-appraised in October 1976 by another Bank Group Mission. Project preparation was done largely by the Project Unit established under the first project. In January-February 1977, the project was appraised by a mission consisting of Messrs. D. Klaus (mission leader and economist) and G. Sinclair (architect) of the Bank and Mr. J. Chesswas (general educator) of UNESCO. II. ECONOMIC DEVELOPMENT AND HUMAN RESOURCES Geographic and Socio-Economic Situation 2.01 Slightly smaller than Belgium, Lesotho is a landlocked country sur- rounded by the Republic of South Africa (RSA) and the Transkei Bantustan. Over two thirds of the country is mountainous, with peaks rising to 11,000 feet. A narrow crescent of land in the north, west, and south, ranging in altitude from 5,000 to 6,000 feet, contains most of the 1.2 million popula- tion. Only about 13% of the land surface is cultivated, mainly in the low- lands, the foothills, and the Orange River Valley. Apart from scattered valleys of limited size, the mountain area is suitable only for grazing. Few roads lead into the mountain regions, and the people of these regions are effectively isolated physically from the rest of the country. The mountain areas have also been neglected in terms of schools above the pri- mary level and other social infrastructure.  2- 2.02 Despite its proximity to vast mineral deposits in the RSA, Lesotho has few natural resources other than hydroelectric potential, beautiful scenery, and some diamonds. The country is overwhelmingly rural and agricul- tural: over 95% of the population live in areas classified as rural, and subsistence agriculture (including animal husbandry) is the main activity of 85% of the resident population. In spite of the comparatively high literacy rate (an estimated 40% of the adult population) due to the long history of missionary activity in the field of basic education, the content of instruc- tion has only recently begun to include agriculture and other subjects which are specifically addressed to the needs of rural population. Non-formal training programs for adults have also been neglected until quite recently. 2.03 Economically, Lesotho is one of the 29 countries designated by the United Nations as "least developed"; GDP per capita in 1975/76 is estimated to have been about US$120 equivalent. Agriculture accounts for over one half of GDP and over 70% of the country's export earnings. Services, of which the commerce and catering subsector is the most important, account for about 44% of GDP. Secondary activities (manufacturing, mining, and construction) are of minor importance, accounting for only about 5% of GDP. 2.04 As the dominant feature of Lesotho's geography is its landlocked situation, so its dominant economic feature is its dependence on the South African economy. Rural incomes in Lesotho are so low that about one third of the labor force augments its income by seeking employment in the RSA, where in the past relatively well-paying jobs have been available to virtually all who sought them, unskilled as well as skilled. The remittances and transfers of these migrants, most of whom are unskilled, have become increasingly crit- ical to Lesotho's economy, helping to offset growing trade deficits and im- proving the standard of living of a large segment of the population, espe- cially in rural areas. Many rural families, for example, have transistor radios and can afford to buy the foodstuffs they cannot grow themselves. The amount of migrant remittances accounts for a substantial proportion of GNP, such that GNP per capita in 1975/76 is estimated to have been about US$180 equivalent. In addition to its dependence on the RSA for employment, Lesotho is a member of the Rand Monetary Area and the Southern Africa Customs Union, receipts from which presently account for about 60% of total Government rev- enues. Finally, the rapidly growing tourism sector is based predominantly on South African traffic, and the bulk of the country's merchandise trade is carried on with the Republic. Development Trends 2.05 The Government's long-term socio-economic objectives were first articulated in the First Five-Year National Development Plan (NDP), for the period 1970/71-1974/75, and included the following: (a) to increase agricul- tural output and productivity; (b) to diversify the economy and expand domes- tic employment, in particular by promoting indigenous industries; (c) to ex- pand communications, particularly in the less-favored mountain regions; and (d) to expand technical training and, in general, to reform the education system so as to make it more responsive to the country's development needs. Over the First-Plan period, real GDP is estimated to have grown at an average annual rate of about 5%. This favorable performance was due largely to the recovery of agricultural production from its low level in 1969/70, resulting  -3- in a growth rate of agricultural output of almost 5% p.a. over the period. The fastest-growing sector was commerce and catering, which grew at an average annual rate of 7.5%, largely in response to the expansion of tourism. Due to large increases in the earnings of migrant workers, GNP grew faster than GDP, at about 8% p.a. 2.06 Lesotho continues to face considerable constraints to economic development. In addition to the lack of natural resources (para. 2.02), the vagaries of the weather make crop production a risky business. The tradi- tional land tenure system has adversely affected the efficiency of land use. Natural tree growth is almost nonexistent because of extensive grazing and the use of any available timber for firewood. In the absence of trees, erosion, resulting from rapid runoff after short but heavy rainstorms, has become a serious problem. These factors and deteriorating soil conditions have contributed to some of the lowest crop yields in the world. Overstocking and deterioration of rangelands limit the short- and medium-term prospects for growth of the livestock sector. Rapid population growth (about 2.2% p.a.) places increasing pressure on available land, existing job opportunities, and food supplies. Competition from the South African economy for markets and labor hinders the growth of local industries. Finally, Lesotho's over- whelming dependence on the RSA (para 2.04) is worrisome for a number of reasons. Lesotho is extremely vulnerable to developments affecting migra- tion in t-he RSA over which the Government of Lesotho has no control, such as the gradual mechanization of mining operations in the RSA, greater re- cruitment of native South African workers, or disorders resulting in the sudden return of thousands of Basotho to Lesotho, such as that which occurred in 1974. In addition, Lesotho's financial viability will continue to depend on the Southern Africa Customs Agreement, the terms of which are largely determined by the RSA. 2.07 Barring an abrupt change in Lesotho's economic relations with the RSA, the country's growth prospects for the next few years are generally favorable in spite of the constraints mentioned above. The Second NDP (1975/76-1979/80) restates and expands the objectives contained in the First Plan. It represents a considerable improvement in project content and reflects the increasing knowledge of the country's investment potential as well as the Government's capacity to implement larger and more varied development programs. The Plan's main investment allocations are for rural development, industry, tourism, transportation and communications, and education. With regard to rural development, integrated rural development projects have shown that a concerted effort to combat erosion, combined with a package of inputs, can increase rural productivity and create new jobs. Industry will benefit from the continued activities of the Lesotho National Development Corporation and its subsidiary, the Basotho Enterprises Development Corporation, which are in- creasingly successful in establishing new industrial and handicrafts ventures. A new diamond mine, the Government's largest single investment, will commence production in 1977, providing increased employment, exports, and revenues. Tourism should benefit from a new international-class hotel now being built in Maseru and from new developments in the scenic mountain areas. Invest- ments in transportation will be closely integrated with the programs in rural development and tourism. The program for education will continue the present emphasis on technical and vocational training and pre-vocational skills.  - 4 - 2.08 Until 1974, capital investments in all sectors were fully financed from abroad, but with the recent revision of the customs Agreement in Le- sotho's favor, the Government should be able increasingly to participate in the financing of development projects. In this respect, however, the inter- national community is taking a special interest in Lesotho and appears dis- posed to provide substantial financial and technical assistance to the country over the long term. All things considered, GDP can be expected to grow about as fast as during the First Plan period, and since the prospects (in ths short term at least) are also good for continued increases in migrant workers' remittances, GNP can be expected to grow even faster. Manpower Requirements 2.09 Manpower and employment in Lesotho are discussed more fully in Appendix 1. A more precise picture of Lesotho's employment situation will emerge as the results of the 1976 Census become available. Current estimates of the employment situation are based on the 1966 Census, but initial results of the 1976 Census show that the estimates are quite near the reality. The most striking feature of Lesotho's employment situation has been mentioned (para. 2.04): the fact that over one third of the labor force (an estimated 200,000 people in 1975) is employed in the RSA. An estimated 122,000 of the 200,000 were men employed in the mines, another 48,000 were men in other employment (farms, commerce, industry, South African Railways), and 30,000 were women (most of them domestics). Recent evidence indicates that almost all such employment is temporary and that most male migrants plan their arrivals and departures so as to ensure an adequate labor supply on their rural holdings in Lesotho at peak periods. Nevertheless, the estimated 170,000 men who were employed in the RSA represented about 60% of the male labor force; the proportion is judged to have remained fairly constant over the last several years. With so many men absent from the country, women play a significant role in the economic (farming, marketing, industry, services) as well as political affairs of the nation. The majority of migrants are con- sidered unskilled; nevertheless, as Lesotho produces more skilled manpower, there will inevitably be increased migration of such people due to the sub- stantial differential between wages in Lesotho and those in the RSA. Most Basotho would prefer to work in Lesotho rather than in the RSA, but very few can find employment which is as remunerative as that to be found in the Republic. In addition, the migrants have at present little opportunity for self-improvement and therefore have little hope of obtaining a better job either in Lesotho or in the Republic. 2.10 Only 27,500 people (5% of the labor force) were employed in the modern sector in Lesotho in 1975; about 22,500 people (4% of the labor force) wer2 employed in Lesotho in informal activities including handicrafts. The rest sf the labor force working within the country was employed in traditional agriculture. Over the last Plan period, only about 6,000 domestic jobs were created. The annual increase in the labor force far exceeds new domestic job opportunities; the labor force is expected to increase by some 60,000 people over the present Plan period, but less than half of these will find modern- sector jobs in the domestic economy. Given the limitations to the creation of employment in agriculture, manufacturing and tourism offer the best pros- pects for increasing employment. The existence until recently of a virtually  - 5 - inexhaustible demand for Basotho labor, both unskilled and skilled, in the RSA was useful to Lesotho insofar as it absorbed many thousands of unskilled workers who would not have been employed in Lesotho except at very low marginal returns; on the other hand, the demand for skilled workers in the RSA, at wages much higher than those which employers in Lesotho could afford to pay, caused shortages within Lesotho in several sectors which were critical for domestic development. 1/ Pressures for increased employment of South African blacks, generated in particular by a recession in the South African economy, have caused the South African Chamber of Mines to consider giving preferential treatment to South African blacks when hiring, such that the ability of the RSA's economy to absorb all of the annual increment in Lesotho's labor force may decline. For the foreseeable future, however, Lesotho will have to continue to depend on the RSA to absorb a large part of its unskilled labor force; most of those who cannot find jobs in the RSA will have to be absorbed in agriculture in Lesotho. Meanwhile, Lesotho should continue to expand its skill-training facilities, since additional training enhances migrants' earning capacity and thus increases remittances. The changes in the RSA's employment market are unlikely to affect its demand for skilled labor. Lesotho cannot hope to stop the migration of skilled people, nor can it hope (at least in the short and medium terms) to offer the majority of such people incentives sufficient to keep them in the country. What it can hope to do is to train as many skilled people as possible, thus providing some people (those who earn salaries sufficient to keep them in the country) to implement the country's own development program as well as maximizing the remittances of its migrants. 2.11 The long-term perspective on employment is presently being explored by the Labor-Intensive Construction Unit. This Unit was established on the recommendation of the Bank's special Migrant Workers' Re-Employment Mission which visited Lesotho in September 1974 to investigate the emergency situation caused by the sudden return of thousands of migrant workers in that year. The goals of the Unit are to (a) increase the Government's administrative capacity to deal with another such sudden return of substantial numbers of migrants: (b) assess the feasibility of a long-term labor-intensive employment strategy through an expanded program of public works (to prepare for the time when the RSA might no longer absorb most of Lesotho's unskilled workers); and (c) provide training in supervisory skills. Although one can hope that in the long term the work of the Unit will allow Lesotho to employ more of its labor force at home, it is certain that in the short and medium terms the dependence on the RSA will continue. 2.12 Turning to the manpower needs of the agricultural sector, there existed, in October 1976, 137 posts for agricultural extension assistants in Lesotho, of which only 78 were filled, giving a ratio of about one assistant per 1,000 farm families. On the basis of Lesotho's level of development, a more appropriate ratio would be one assistant for every 600 farm families. Under the Basic Agricultural Services Program (BASP) appraised by Bank 1/ Substantial increases in public-sector salaries in recent years must be seen as justified insofar as they were necessary to keep qualified people in Lesotho.  -6 - staff in October 1976, three existing Farmer Training Centers under the Ministry of Agriculture would be upgraded to produce the required number of additional extension assistants annually. In addition to the quantitative deficit, the existing extension service is ineffective, for a variety of reasons including inadequate research results, poor training of the staff, inefficient means of transportation, relatively little supervision, and lack of an adequate incentive system. The Basic Agricultural Services Program would also address these qualitative problems of the extension service through a general reorganization of the service and the provision of stra- tegic inputs. 2.13 In summary, continued economic development in Lesotho will depend on the extent to which the Government is able to address the country's major problems: scarcity of resources, an overwhelmingly agricultural base, and heavy dependence on the RSA. Major emphasis should continue to be given to expanding the scope of the rural-development projects and to increasing agri- cultural productivity. Efforts should be made to expand local industry to the extent possible and to take advantage of the country's beautiful scenery by promoting tourism. Investments in infrastructure should be closely linked to the foregoing programs. To guard against the day when migrants might no longer be welcome in the Republic, the Government should continue to explore the feasibility of a long-term strategy for labor-intensive employment. Mean- while, however, since the country's greatest natural resource is its people, the country should continue its efforts to reform its educational system and to provide its people with those skills which will bring them the greatest return, whether they stay in the country or whether they temporarily work elsewhere. III. THE EDUCATION AND TRAINING SECTOR Evaluation of the Sector 3.01 Lesotho's education and training sector is described in Appendix 2, and basic data are provided in Annexes 1 and 2 and Charts I and 2. Lesotho's primary schools have enough places to allow virtually every child to enter primary school, and almost every girl does so. Boys, however, traditionally are busy herding cattle, sheep, and goats at the age when they otherwise would be in primary school, so that in fact only about 60% of the boys enter primary school. For this reason, girls outnumber boys in the primary cycle at a ratio of almost three to two. In the last three grades of the primary cycle, the ratio is almost two to one. Many children entered primary school when they were much older than the official starting age of six, but nowadays more and more are beginning school at age six, and the average age of entry is dropping fast. Lesotho is therefore well on the way to achieving universal entry to primary education. Universal primary education per se cannot be achieved until ways and means are devised to reduce the high dropout rates: at pres- ent, 18% of the boys and 10% of the girls who begin the first grade do not continue even to the second grade. Only 33% of the boys and 51% of the girls who begin first grade are likely to reach the seventh grade, and only 15% of  -7- those who begin the first grade go on to secondary school. Overage students account for 26% of total primary enrollments. Since there are so many overaga students in primary schools, a much larger proportion of the 13-18 age group (the theoretical secondary-level age group) is enrolled in primary schools (46% of the age group) than in general-secondary schools (10% of the age group) 1/. 3.02 Most schools in Lesotho are owned by Christian churches and managed by boards which the churches have established. The large measure of autonomy enjoyed by the churches (Appendix 2, para. 1) has not favored the development of education according to a well-conceived plan. The initiative for opening or closing schools still remains with the local churches and/or communities. The Government is presently preparing a plan to rationalize the distribution of primary schools; meanwhile, it would appear that the achievement of satura- tion has already caused the smaller, more inefficient schools to be closed: the number of primary schools peaked at 1,350 in 1970 and has since fallen to 1,078 (1976). During the same period, however, the number of general-secondar schools has risen from 39 to 61, and total general-secondary enrollments have risen in the six-year period from 6,000 students to 16,700 students (an annual average rate of increase of over 18%). 3.03 The Government's control over the school curricula is vested in the Ministry of Education, Youth, Sports, and Culture (MINEDUC) (Chart 3) and exercised through the examination system, consisting of a national examination at the end of primary grade seven, the Junior Certificate (JC) examination at the end of the tenth grade, and the British Cambridge Overseas School Certi- ficate Examination (COSC) at the end of the twelfth grade. Both of the general-secondary-school examinations have a detailed syllabus for each subject, and each school draws up its own work program, choosing its own textbooks and other learning aids in order to prepare its students for the examination. Responding to a request from the Government of Lesotho, the regional tripartite Examination Council 2/ now requires, for the JC, passes in a choice of such subjects as agriculture, elementary technology 3/, home economics, and development studies 4/, including practical tests, which are designed to make the lower-secondary curriculum more appropriate to the country's development situation and needs. Since the COSC is a worldwide examination, it is more difficult for the Government to influence its con- tent. For this reason, the concerned governments plan the takeover of the COSC examination by the regional tripartite Examination Council; financial assistance from USAID will soon be available for this purpose. 1/ It is impossible to extract children of Basotho ethnicity who live in the RSA but regularly attend school in Lesotho from these figures. They probably represent at least 10% of the enrollments. 2/ Members are Botswana, Lesotho, and Swaziland. 3/ Elementary woodwork, metalwork, and technical drawing. 4/ A combination of basic economics and social studies emphasizing the importance of pre-vocational subjects to Lesotho's development.  -8- 3.04 The training of primary and lower-secondary teachers has been con- solidated in the National Teacher Training College (NTTC) in Maseru; however, the NTTC is still heavily dependent on expatriate staff. Upper-secondary teachers are trained at the Faculty of Education at the National University of Lesotho (NUL). Projections of primary-school enrollments and of future needs for teachers show that the output of the NTTC will barely maintain the current 70% proportion of qualified teachers within the primary teaching force, even if there is no change in the present 52:1 pupil-teacher ratio. Projections of general-secondary-school enrollments, however, and of future needs for general- secondary teachers show that the combined outputs of the NTTC and the NUL's Faculty of Education will allow the proportion of qualified national teachers within the secondary teaching force to increase from 43% in 1976 to 100% in 1984, if the student-teacher ratio is kept constant at 26:1 until then. The Government is planning to expand the NTTC to meet the additional demand for primary teachers, and a program is being developed jointly by the NTTC and the Lesotho Distance Training Center (LDTC) (para. 3.06) for the provision of in-service teacher education by distance teaching methods. 3.05 Vocational (post-primary) training in industrial arts and home eco- nomics is offered in eight lower-secondary-level schools. Technical education is given in three upper-secondary-level schools: The Lerotholi Technical In- stitute (LTI) in Maseru, the Technical School of Leribe in the north of the country, and the Leloaleng Trades School in the south. The LTI has been sub- stantially expanded under the IDA-assisted first education project. Leribe and Leloaleng are mission schools, buit the salaries of their teachers are paid by the Government. Both schools have insufficient facilities, equipment, and teachers for the courses they presently offer, several of which have un- economically small enrollments in spite of the great demand for places. All three schools have no difficulty in placing their graduates; indeed, the demand exceeds the supply. Commercial education will be offered in the Lesotho Institute of Public Administration (LIPA) under the Prime Minister's Office and the Commercial Training Institute (CTI) under the MINEDUC which are currently nearing completion under the IDA-assisted first education proj- ect. Formal agricultural education is offered by the Lesotho Agricultural College (LAC) under the Ministry of Agriculture, which provides agricultural and home economics courses at the upper secondary level. Under a UK-assisted project, the capacity of the LAC is being expanded. 3.06 The Lesotho Distance Teaching Center (LDTC) established under the IDA-assisted first education project uses correspondence courses and radio to provide educational opportunities to target groups, often women, who are scattered throughout the country and who do not have the opportunity to follow formal-education courses. Until recently, because of broadcasting limita- tions, the LDTC radio courses have been able to reach only about 10% of the country's population; however, with the arrival of the new transmitter to be furnished by the UK, the LDTC radio broadcasts should reach all but the most remote mountain valleys. The LDTC presently lacks a studio and equipment of its own and uses the facilities of Radio Lesotho, but these arrangements are not optimal.  -9- Education Policy, Strategy, and Plans 3.07 The Government intends to continue to increase its influence and control over the school system. There is as yet no plan to acquire direct ownership of schools, and the MINEDUC follows a policy of involving the school owners, boards and staff in educational development efforts. Although the teachers are employed by the school boards, they are paid (with the exception of untrained general-secondary teachers and those expatriates who are provided under bilateral and multilateral agreements) by the Government through a Teaching Service Unit (TSU) in the MINEDUC. In addition, the Government is increasingly able to influence school programs through the examination system (para. 3.03). The MINEDUC now intends to supplement these measures of control by gathering together the various scattered curriculum-development efforts into a central curriculum-development service, and the MINEDUC has created a new Department of Curriculum Development within the Ministry for this purpose (Chart 3). 3.08 The innovations in curricula which the MINEDUC is undertaking are intended to contribute to the Government's long-term policy of reducing the country's economic dependence on the RSA. The Government calls the IDA- assisted first education project the Training for Self-Reliance Project (TSRP). It intends to continue spreading the diversified secondary-school curriculum to more general-secondary schools until all are covered. There are already a number of schools which are trying to incorporate some of the new pre-vocational subjects (para. 3.03) into their curricula without the Governmernt's help. By aiding schools with capital investment in facilities for the changed curriculum, the Government is, at the same time, exercising some control over the quantitative development of general-secondary educa- tion, as all such schools are being expanded to have three classes at each grade. The Government is at present projecting general-secondary enroll- ments on the basis of not raising transition rates, retaining them at 31% from primary to secondary and 37% from lower to upper secondary. If these rates are held constant, then total general-secondary enrollments are likely to rise at an average rate of 5.5% p.a. from 1976 to 1982, and then drop to an average growth rate of 3.7% p.a. from 1982 to 1985, as compared with an average growth rate of 25% p.a. from 1967 to 1974, and 6% p.a. from 1974 to 1976. 3.09 Enrollments in primary schools are projected to increase at an average rate of 4.1% p.a. until 1979/80, when they will peak. Following that year, the number of overage children in the total should begin to decline, with the result that overall enrollments in primary schools should remain virtually constant for the next six years or so. University enrollments are expected. to reach 800 students by 1979/80, an implied increase of about 65 students per year. If university expansion continues at this rate, enroll- ments would reach about 1,200 in 1985/86. 3.10 Several factors will influence the recurrent costs of education (Annex 3). The most dramatic is an across-the-board salary increase of 25% in early 1977. In the following years, teachers' salaries can, over time, be  10 - expected to rise about as fast as GDP per capita. 1/ The growing number of locally paid teachers will also have an effect on recurrent costs. In par- ticular, at the level of secondary education, only 43% of the general-secondary teaching force of 621 in 1976 were qualified nationals. By 1985, 100% of a much larger general-secondary teaching force (estimated at 1065) will be qualified nationals, and the Government will have to pay almost four times as many salaries at this level as it presently does. Over the period under discussion, general-secondary education will thus account for the greatest increases (in absolute terms and relative to the total) in educational re- current costs. These increases, however, will be to a limited extent offset by a pattern of virtually constant recurrent costs (in real terms) at the university level for five years or so. The levelling-off of costs at the university level should occur because the costs of increasing enrollments should be offset by declining unit costs. The decline in unit costs is expected to occur because university officials plan to increase enrollments while holding the number of teaching staff virtually constant. 3.11 Early in 1977, the Southern Africa Customs Union Agreement was renegotiated in Lesotho's favor, and Government current revenues are conser- vatively expected to grow at a rate of 10% p.a. in real terms. As a result, recurrent expenditures can be expected to grow by at least 9% p.a. in real terms in the next eight years or so, since the Government intends progres- sively to increase its contribution to the capital budget, too. 3.12 The overall pattern of increasing enrollments (paras. 3.08-3.09) and changing unit costs (para. 3.10) are projected to result in a growth in the MINEDUC's recurrent expenditures of about 12% p.a. in real terms until 1985, when the completed localization of the secondary teaching force should result in a slowdown of the increase. Since the MINEDUC's recurrent expendi- tures are projected to rise more rapidly than the Government's total recur- rent expenditures over this period, the MINEDUC's share in the total will rise, from an estimated 24% in 1975/76 to an estimated 29% in 1985/86. This percentage would be extremely high in most other countries, 2/ but given Lesotho's unique set of circumstances, they need not be cause for alarm. In the first place, the MINEDUC's recurrent expenditures in 1985/86 should represent less than 5% of Lesotho's GNP in that year, a reasonable proportion, and if in the interim the Government can find an effective means of tapping the migrant workers' resources, overall Government revenues and hence expendi- tures may grow even more rapidly than the above projections would indicate. In the second place, Lesotho has no external-defense budget, such that funds 1/ Salaries are likely to remain constant for several years and then undergo a dramatic increase, as has been the case in the past, rather than being adjusted upwards in regular annual increments, A deterioration in employment prospects for skilled people in the RSA, for whatever reasons, would make it easier for the Government of Lesotho to resist the pressures for large increases in teachers' salaries. 2/ Although not in all: Burundi reached 30% in 1971; the Ivory Coast reached 34% in 1973 and 40% in 1976, and initial projections for 1977 show that the figure may reach 46%; and the Congo (Brazzaville) reached 50% in 1976.  - 11 - which in other countries would be expended on defense may in Lesotho be diverted to other sectors. Finally, the opportunities for high-productivity investment in Lesotho are limited; it is quite possible that the highest marginal returns are to investment in human-resource development. Given these various factors, the projected levels of recurrent expenditure on education do not seem unreasonably high. Investment Programs 3.13 The Second NDP (para. 2.07) allocates R 11.9 million (US$13.7 million equivalent) for capital expenditures in education over the five- year period 1975/76-1979/80. The priority areas for investment are general- secondary education (41% of the total), teacher training (20%), vocational and technical education (17%), and higher education (13%). The major items to be financed in general-secondary education are facilities for practical studies and laboratories, plus a limited number of new classrooms and hostels for the gradual expansion of secondary education (para. 3.08). The amount allocated for teacher training is for the expansion of the NTTC. The assistance to vocational and technical education will take the form of ex- pansion of existing technical schools at Leribe and Leloaleng and the Bishop Allard Vocational Training School as well as expansion of the Lerotholi Technical Institute being completed under the IDA-assisted first education project. In higher education, the principal need will be for new hostels for the expanding enrollment; eventually, new classrooms and other facili- ties will be needed as well. 3.14 The Second NDP's investment plan for education is well-balanced. Planned expansions at all levels and in all areas have been geared to the country's perceived manpower needs and financial possibilities. The Gov- ernment recognizes that it will have to seek external financing for about two thirds of its total second-plan investment program, but the availability of such financing should be no problem. The only problem will be the coun- try's absorptive capacity; in education, however, even this should not be a problem, given the successful implementation of the IDA-assisted first education project and other ongoing projects. 3.15 In the longer term (after the second-plan period) Lesotho will need continued external assistance for the expansion of its secondary di- versification program. In addition, it faces a unique opportunity to con- solidate and strengthen its primary-education system. In the period 1979/80 to 1985/86, primary enrollments will remain virtually constant (para. 3.09), such that expenditures in primary education may be concentrated in order to improve the quality of primary education and increase its internal efficiency and external productivity. In particular, in a possible third education project, the Bank Group might wish to aid the Government in (i) completing the ongoing school-mapping exercise and using it to rationalize the distribution of primary schools; (ii) completing the good start of the reform of primary- teacher education made with the establishment of the NTTC, with a view to providing all schools with well-trained, competent teachers; (iii) providing buildings and furniture as needed for the new rationalized system; and  - 12 - (iv) supplying all schools with the books and other equipment necessary for effective learning of the new curricula being developed by the new Department of Curriculum Development (para. 3.07). IV. THE PROJECT Objec^fJes and Content 4.01 The project is designed to contribute towards increasing the Govern- ment's ability to deal with the two main elements which at present sustain the country's economy: (1) the agricultural sector, and (2) migrant employ- ment in the RSA. The project would help to increase the focus of primary, secondary, and adult education on rural development as a means of attaining, over the long term, increased self reliance and reduced dependence on the RSA. In the medium term, the project would provide the country with addi- tional skill training designed to maximize the earnings of migrant workers and also to increase the pool of skilled people who might remain in Lesotho. To these ends, the project would assist an investment program aimed at (a) establishing a curriculum-development service, including strengthened career- guidance and educational-radio services; (b) expanding the facilities for technical education, making it possible to expand enrollments and to introduce courses for adults; (c) establishing a new, permanent Trade-Testing System; (d) expanding the curriculum-diversification program at the level of secon- dary education by introducing pre-vocational subjects in agriculture, ele- mentary technology, home economics, and commerce, together with associated development studies, into the curricula of additional general-secondary schools; (e) strengthening the institutions which will be responsible for training teachers of pre-vocational subjects; (f) providing the human re- sources necessary for the successful functioning of the above services and institutions as well as for the implementation of the project and for forma- tive evaluation of the secondary-level pre-vocational subjects; and (g) preparation of future programs and projects. Specifically, the project would consist of the following: (a) The construction, furnishing, and equipping of a National Curriculum Development Center (NCDC); (b) Extensions, furniture, and equipment for two existing technical schools; (c) Office and trade-testing equipment, a vehicle, and operational expenses over the project period for a new Trade-Testing System; (d) Extensions, furniture, and equipment for eleven general- secondary schools;  - 13 - (e) Minor improvements in teacher-education workshop facilities, limited staff housing, and a bus for the institutions (the National Teacher Training College, the Lesotho Agricultural College, and the Lerotholi Technical Institute) which together will train the teachers of pre-vocational subjects; (f) Technical assistance for the training of Basotho teacher-educa- tors, for the Trade-Testing System, for project implementation (an architect, a quantity surveyor, and engineering and procure- ment consultants), and for formative educational evaluation; (g) Permanent office accommodations, furniture, vehicles, equip- ment, and operating expenses for project administration; and (h) Pre-investment activities and studies. Project Items 4.02 The National Curriculum Development Center (NCDC). The proposed project would centralize and strengthen various curriculum-development activities of the MINEDUC which are presently carried out on a haphazard basis in such temporary accommodations as can be found. The MINEDUC has created a new Department of Curriculum Development (para. 3.07) with its own Director, who is responsible to the Chief Education Officer. This De- partment would be accommodated in the proposed new National Curriculum Development Center. The project would thereby enable the country to estab- lish a permanent service which would conduct integrated curriculum-devel- opment activities for the constant review and improvement of primary and general-secondary education and their adaptation to the country's develop- ment situation. Given the importance of women in the country's economic and political affairs (para. 2.09) and in the country's education system (para. 3.01), special effort should be made to ensure that curricula are geared to the needs of women as well as men. The NCDC would also include accommodation for a service for career guidance, including employment coun- seling, the need for which was made even greater as a result of the Gcovern- ment's decision to diversify the curriculum at the level of secondary edu- cation. The Center would also strengthen the educational radio service through the provision of a recording studio, an office for the MINEDUC' s Broadcasting Officer, and a library for tapes and other materials, all to be used by the MINEDUC and by other agencies which prepare educational radio programs. To ensure that the Center is properly launched, considerable technical assistance would be required as is detailed in Annex 4. Various bilateral aid agencies, including ODM, USAID, the Peace Corps, and the British Council, have indicated their interest in providing the required specialists as well as the needed fellowships for the training of nationals. The Gov- ernment is making all necessary efforts to secure the required technical assistance from bilateral sources and has presented a list of probable sources of the various specialists, together with a schedule indicating the timing and the phasing of the technical-assistance program. Since the housing shortage throughout Lesotho but particularly in Maseru is acute, and since the avail- ability of housing is a critical factor in the willingness of internationally  - 4 recruited specialists to accept positions in Lesotho, modest staff housing would be provided for the specialists to be furnished by bilateral agencies (Annex 5). 4.03 A career-guidance service has already been established in Lesotho with the assistance of Bank staff. The MINEDUC is in the process of estab- lishing a Careers Education and Guidance Program in all secondary schools with the ultimate aim of extending the program to all educational levels. There is close liaison with related agencies to ensure that the program is responsive to national manpower needs. Career information is collected, compiled, and disseminated in the form of monthly bulletins and pamphlets sent to schools and through a weekly radio program. Career guidance is to be offered as a subject to all NTTC students. The results of an initial battery of question- naires, sent to graduates of secondary schools, the LTI, the NTTC, and the NUL, are currently being compiled and evaluated and will form the basis for an ongoing tracer study. Accommodation for the career-guidance service would be included in the proposed NCDC. The Government is in the process of obtaining a Peace Corps Volunteer to serve as a specialist in guidance and counseling and expects to receive assistance from the British Council for the profes- sional training of a Mosotho to serve as the MINEDUC's Counseling Officer. 4.04 The Government recognizes the need to make the fullest use possible of radio for educational purposes, since receiving sets are widespread (para. 2.04). The 19-1/2 hours of educational broadcasting time available weekly at present are utilized as follows: the MINEDUTC--12 hours weekly when schools are in session; the Ministry of Agriculture--two 15-minute broadcasts daily (including weekends); the Ministry of Health--two 15-minute broadcasts weekly; and the Distance Teaching Center--two 15-minute broadcasts daily. The broad- casts are transmitted by the Lesotho Broadcasting Corporation, but each agency is responsible for its own program preparation. The Ministry of Agriculture has its own recording studio, but the Ministry of Education and the Distance Teaching Center are without such a facility and difficulties are often ex- perienced in getting programs recorded. The recording studio to be provided under the proposed project would overcome this obstacle. In order to improve the effectiveness of educational broadcasting in Lesotho, the Government has agreed to establish, by March 31, 1978, a Council for Educational Broadcasting under the Lesotho Broadcasting Corporation, with representatives from all agencies providing educational programs, to advise the Corporation on the use of radio for educational purposes and to allocate among the agencies the air time made available by the Corporation for educational broadcasts. The Government expects to receive assistance from the British Council for the professional training of a Mosotho to serve as the MINEDUG's Broadcasting Officer. 4.05 Expansion of Technical Education. Additional facilities would be provided at two upper-secondary-level technical schools, the Leloaleng Trades School and the Technical School of Leribe, enabling them to increase their enrollments to a more economical size. Leloaleng presently offers three-year courses in carpentry, leatherworking, and motor mechanics. The existing outmoded facilities limit class size to an average of 7 students per class, and the school's total enrollment is only 55. The classroom facilities and  - 15 - equipment to be provided under the project would enable the enrollment of full-time students to be increased from 55 to 95 and would also allow the school to introduce a course in construction. Dormitory space already exists for 95 students, but a limited amount of staff housing (Annex 5) would be needed to accommodate the additional teachers for the construction course, since Leloaleng is not located near a town. Leribe presently offers courses in motor mechanics and metalwork, masonry, and carpentry, and is introducing a course in electrical wiring. With 12 to 16 students per class, the total enrollment is presently 90. The facilities to be provided by the project would enable about 30 more students to be enrolled, 15 males and 15 females. Dormitory space already exists for 120 students but a girl's ablution block would be needed, as well as a limited amount of staff housing (Annex 5), since the housing shortage is acute in the nearby town of Leribe. At present, all teachers at Leloaleng are Basotho except for the director of the school, whereas at Leribe, only about half the staff are Basotho. The training needs for complete localization of both staffs are presented in Annex 4. In the short term, expatriate teachers would continue to be needed. Several bilat- eral agencies, including ODM, the Peace Corps, DANIDA, the Government of Ireland, and the British Council, have expressed considerable interest in providing the technical assistance required, in terms of fellowships for the training of Basotho staff as well as short-term expatriate teachers. The Government is in the process of confirming these arrangements for technical assistance. 4.06 The proposed expansions would enable both schools to provide oppor- tunities for adults (both men and women) to obtain skill training in the trades for which the institutions are equipped. At Leloaleng these additional classes would take place mainly during school holidays, and the adult students would occupy the boarding places vacated by the full-time students. Such arrangements would be necessary because the immediate vicinity is sparsely populated and thus unable to provide an economical number of day students. The vacation classes for adults would be nationally recruited and would include many returned miners as well as the wives of male migrants and em- ployees of the Government and of private concerns. Since the school has earned a good reputation, there would be little difficulty in recruiting students. The present staff of the school is willing to provide such vacation courses and would be remunerated by the adult students themselves or by their employers. The school at Leribe is situated in a prosperous and populous part of the country, near the town of Leribe and the growing industrial complex of Ficksburg (just across the border in the RSA). There is already a steady demand from the region's adults for short courses not requiring boarding facilities on weekends and during school vacations. Some of the teaching for these courses could be provided by the school staff, who would be remunerated by the adult students directly. Much of the teaching, however, would be provided by full-time students in the last year of their training, who would be paid a fee for such teaching in the same way as they are presently paid for the production and repair work they do outside school hours. The Gov- ernment has agreed that permanent committees would be formed at both Leloaleng and Leribe to determine the content, form, and frequency of adult programs. The Government has agreed that these committees will be established by June 30, 1978, and that they will include both school staff and interested local personnel.  - 16 - 4.07 Trade Testing. Those students terminating technical courses in Lesotho are at present not adequately evaluated. A Trade-Testing Committee exists under the Ministry of Commerce, Industry, Geology and Mines, and Labor, but it has no permanent facilities and must rely on the use of facilities in the schools where students are taught. Furthermore, the people who actually do the trade testing are unpaid volunteers, and several of them are teachers at the Lerotholi Technical Institute. Some applicants for trade certificates thus have an unfair advantage in that they are tested by their former teachers on the-a very equipment on which they learned. Under the proposed project, a new permanent Trade-Testing System would be established under the aegis of a recent amendment which has been proposed to the Industrial and Commer- cial Training Act of 1975, which will establish the legal basis for the system. An internationally recruited specialist in trade testing would be provided under the project for a period of two years. The Government has agreed that the specialist will be selected and appointed on the basis of terms and conditions acceptable to the Association. The specialist would be expected to establish the new trade-testing system, train local trade testers, and devise, approve, and publish standardized trade tests. The project would also provide office and trade-testing equipment, a vehicle, and operational expenses over the project period for the Trade-Testing System; space is already available within the Labor Department. A house of modest proportions (Annex 5) would also be provided for the specialist, for the reasons given in para. 4.02. The project would also include about two man-months of fellow- ships for local counterpart trade-testing specialists, to enable them to visit other East African countries such as Malawi, Swaziland, or Kenya, in order that they might familiarize themselves with the successful management of existing trade-testing systems in those countries. Upon the departure of the internationally recruited specialist, one of the local counterparts would become responsible for the Trade-Testing System, which would continue to function at Government expense as a part of the Labor Department (Ministry of Commerce and Industry). 4.08 Improvement of Secondary Education. The project would provide the buildings, furniture, and equipment required to introduce pre-vocational subjects into seven additional general-secondary schools (above the six which received such facilifies under the IDA-assisted first education project) to contribute further to the improvement of the quality of secondary education and the bringing of the curriculum more into line with Lesotho's environment. Emphasis on science and mathematics is being increased, and agriculture, elementary technology, home economics, commercial subjects, and development studies are being introduced as regular subjects in the secondary-school program. The provision of pre-vocational facilities would free the existing -zademic facilities part of the time and would allow the seven schools to z=easc their enrollments. Moreover, limited additional facilities would be r id_i at four of the six schools assisted under the first project to allow them to increase the utilization rate of their practical facilities and thereby increase th-eir enrollments. Since the schools are located in rural areas and since suL-:icient staff housing is unavailable nearby, a number of staff houses (Anne: 5) would be provided to accommodate those of the addi- tional teachers of pre-vocational subjects required for the diversified curricuIum who could not otherwise be reasonably expected to find suitable  - 17 - housing. Similarly, since most students come from distant areas and are unable to find housing near the schools, a limited number of boarding places would be provided under the project for those students who at present are inadequately housed and for the additional students whom the project would enable the schools to enroll. 4.09 Because of limitations in terms of available funds and appropriate teachers, the Government plans to limit this second phase of investment in the improvement of secondary education to seven new schools, which would bring the total for the two projects to 13, or 20% of the total of 65 secondary schools reported in early 1977. Since the schools chosen for the first and second projects are among the largest, however, their combined enrollments will represent about 40% of total general-secondary enrollments. In addition, there are some schools which are introducing some of the new subjects without Government investment (para. 3.08). The seven new schools have been selected to insure widespread geographical distribution. In particular, two mountain schools serving remote populations were selected for inclusion in the project. Each of the seven schools would offer those pre-vocational subjects most relevant to the needs of the surrounding region. All seven schools are located in rural areas or at the edges of rural towns. The expansion of the total enrollment of the eleven project schools to about 8,000 is in accordance with the Government's policy of controlling growth in secondary education by expanding existing schools rather than opening new ones. 4.10 With only a 37% transition rate from lower secondary to upper, many of the students completing lower-secondary school would join the rural or urban labor market or go to the RSA to seek employment. Similarly, those who complete upper-secondary school but do not go to the University also need an educational base designed to help them seek suitable job opportunities. The proposed changes in the curriculum are intended to provide this base. The syllabi for the new pre-vocational subjects are being prepared in association with the first project and will be fully introduced in the 1978 school year in the six schools of the first project. It is proposed that the continued elaboration of these syllabi, as well as curriculum development for primary- level education, be carried out in the proposed NCDC (paras. 4.02-4.04). 4.11 The project schools will require additional teachers of pre-voca- tional subjects (para. 4.08). The Government of Ghana has agreed to post eight senior teachers of pre-vocational studies in Lesotho, to be paid local salaries from Lesotho's existing budget for these positions, and to make available training places for Basotho counterparts of the Ghanaian teachers. The Federal Republic of Germany has agreed to make third-country training fellowships available to support this training program, which will begin in September 1978. For the longer term, however, the Government of Lesotho intends to develop a permanent capacity to train teachers of pre-vocational subjects. With DANIDA aid, a home-economics department is being built at the NTTC, which also has a development-studies department, supported by UNDP and UNESCO, and a small commercial-studies department. For the training of elementary-technology and agricultural teachers, the Government is arranging for joint programs between the NTTC, on the one hand, and the Lerotholi  - 18 - Technical Institute (LTI) or the Lesotho Agricultural College (LAC), re- spectively, on the other. For this purpose the LTI, which is being assisted in the first project, will require a minor improvement in its teacher- education workshop facilities; the LAC needs to increase its staff by two agricultural educators, which will necessitate staff housing (Annex 5) for the reasons mentioned in para. 4.02; and the NTTC will require a bus for the movement of its students between institutions. These items would be provided under the project as a contribution to strengthening teacher-education facili- ties for the new pre-vocational subjects. The Government is in the process of obtaining DANIDA assistance for the two new positions at the LAC. In order to minimize the loss of trained teachers of pre-vocational subjects to other employment in the RSA, the Government has agreed that it will review the conditions of service of teachers of pre-vocational subjects from time to time, to ensure that schools offering the diversified secondary curriculum will be adequately staffed. 4.12 The ability of the NTTC to supervise and carry out the training of new teachers of pre-vocational subjects of course depends on its own staffing requirements. By 1978, the NTTC will have a total enrollment of 600 students on campus and 300 interns in the field and will require a staff of 40 teachers on campus and 30 field supervisors. At present it continues to rely heavily on expatriate staff, and only 15 Basotho teachers on the staff are currently undertaking a part-time B. Ed. program at the Faculty of Education of the NUL. There is need for recruitment and in-service training for a further 55 Basotho teacher-educators, and the project proposes to provide fellowships for this purpose. 4.13 Project Administration, Evaluation, and Pre-Investment Activities and Studies. The Project Unit established for the IDA-assisted first educa- tion project would also be responsible for the implementation of the second project. As part of the implementation, the Project Unit would conduct an evaluation of overall project implementation; the Government has agreed that within three months of the Closing Date, a report will be prepared and sent to the Association with a preliminary assessment of the project's opera- tional results and benefits, of the lessons learned during implementation, and of the Association's role in connection with the project. Among other things, the report will compare the project and its original expected benefits with its results as they are seen when the project is nearly completed. 4.14 A comprehensive understanding of the educational results of the proposed second project would of course be apparent only long after the construction of the buildings and the training of the teachers, when a com- plete student cohort would have benefited from an education in the new facilities and under the new progressive programs. Complete evaluation of the educational programs to be assisted under the proposed second project would thus be impossible during the proposed four-year implementation period. Institutions similar to those to be assisted under the proposed second project are being assisted under the first project, however, and still other in- stitutions have introduced the diversified lower-secondary curriculum on their own (paras. 3.08 and 4.09). In order to evaluate these programs, two man- years of technical assistance for formative evaluation would be included in  - 19 - the second project. The Government has agreed that such specialist(s) will be selected and appointed by June 30, 1978, on the basis of terms and conditions satisfactory to the Association. This evaluation will be formative in that its results will be used by the curriculum-development specialists in the NCDC to modify and improve the secondary curriculum. 4.15 Funds have been included in the cost estimates, under the category of Project Administration, for activities and studies leading to a possible IDA-assisted third education project in Lesotho. These funds could be used for the preparation of architectural sketch plans and equipment lists as well as any studies which might prove valuable in the preparation of a third project. In particular, a study of Lesotho's construction industry (Appendix 3) would be undertaken in order to assist, among other things, the development of low-cost school-construction methods, particularly in remote mountain areas. V. COST ESTIMATES, FINANCIAL PLAN, IMPLEMENTATION, PROCUREMENT, AND DISBURSEMENTS Cost Estimates 5.01 The total cost of the project is estimated at US$9.3 million equiv- alent (Annex 6). Estimated costs by project item are summarized below:  -19a- Rand Millions US$ Millions % of Lc,,a. Foreign Total Local Foreign Total Base Cost 1) Construction, Furniture, and Equipment for: (a) National Curriculum Development Center 0.19 0.27 0.46 0.22 0.31 0.53 8 (b) Technical Schools 0.19 0.25 0.44 0.22 0.29 0.51 7 (c) Secondary Schools 1.68 2.21 3.89 1.93 2.54 4.47 64 (d) Consolidation of Secondary Teacher Education, Trade Testing, Technical Assistance, and Pro- ject Administration 0.10 0.14 0.24 0.11 0.17 0.28 4 2) Technical Assistance 0.06 0.25 0.31 0.07 0.29 0.36 5 3) and Preinvestment Activities and Studies 0.40 0.10 0.50 0.46 0.11 0.57 8 4) Architectural, Engi- neering, and Procure- ment Services 1/ 0.09 0.06 0.15 0.10 0.07 0.17 2 5) Formative Evaluation 0.02 0.08 0.10 0.02 0.10 0.12 2 Total Base Cost (October 1977) 2.73 3.36 6.09 3.13 3.88 7.01 100 6) Contingencies (a) Physical Increases (9%) 0.23 0.29 0.52 0.27 0.33 0.60 (b) Price Increases (22%) 0.66 0.80 1.46 0.76 0.92 1.68 Sub Total 0.89 1.09 1.98 1.03 1.25 2.28 TOTAL PROJECT COST 2 3.62 4.45 8.07 4.16 5.13 9.29 1/ Represents about 6 man-years at US$30,000 equivalent. 2/ Includes customs duties and taxes estr-ated at US$0.40 million equivalent.  - 20 - 5.02 Cc-struction, furniture, and equipment costs provided by the Government and reviewed by Bank staff were based upon quotations received in the first education project and other similar projects. The construction costs vary according to location and distance from sources of materials supply. October 1977 building costs (Maseru prices) Por the proposed facil- ities are estimated to be US$160-175 equivalent per m for new gchool con- struction. These compare with costs ol US$140 equivalent per m in Botswana (August 1976), US$162 e2uivalent per m in Swaziland (February 1977), and US$270 equivalent per m in Zambia (September 1976) for similar facilities. The estimates are based upon maximum use of the few local materials and simple building techniques. The cost of new boarding and staff-housing facilities is equivalent to approximately 30% of the total project cost; the provision of these facilities is necessary for the reasons given in paras. 4.02, 4.05, and 4.08. The total area and approximate number of housing units included in the project were agreed with the Government; however, the actual area of each accommodation unit will vary according to the type of institution and local requirements. The housing for the 13 secondary and technical schools proposed in the project is comparable in area to existing accommodations, and about 68 houses, principally for locel teaching staff, will be provided at an average area per unit of about 60 m . A further 15 houses will be provided princi- pally for internationally recrui ed personnel required for the project and would range in area from 60-95 m per unit. These areas are minimal in comparison with existing accommodations of this type. Furniture and equipment costs are reasonable. 5.03 Customs Duties and Taxes. Lesotho forms part of a customs union with Botswana, the Republic of South Africa, and Swaziland (para. 2.04). Items imported for the project would be exempt from direct customs duties and taxes. Reimbursement percentages have been calculated to take into account duties and taxes on civil works and on limited amounts of locally procured furniture, equipment and vehicles. These taxes are estimated at US$0.4 million equivalent. 5.04 Contingency allowances provide 10% for physical increases in the base costs of construction, furniture, equipment, and architectural, engineer- ing, and procurement services. 1/ Estimated price increases are based upon the application of the following annual percentage rates of price escalation from the base-cost date (October 1977) in accordance with the implementation schedule (Annex 7). Construction and Architectural, Furniture Technical Assistance Engineering, and and Evaluation, and Year Procurement Services Equipment Project Administration 1977 16 7.5 5 1978 12 7.5 5 1979-81 8 7.5 5 1/ No physical contingencies have been provided for technical assistance and project administration, with the result that total physical contin- gencies are only about 9% of the total base cost of the project.   - 21 - The estimated price-escalation rates for construction take into account the present high rate of building-cost increases in Lesotho and recent substantial increases in the prices of steel, cement, and other materials. While these relatively high rates are expected to continue for some time, a weakening of the demand for new construction in the RSA is expected to reduce the annual rate of cost increases in the construction sector during project implementa- tion. To offset these cost increases, the Government plans a rapid start of the project by making extensive use of standard accommodation units (para. 5.10) developed for the first education project. 5.05 The Foreign-Exchange Component of US$5.1 million equivalent has been calculated as follows: (a) construction, 52%; (b) equipment, 85%; (c) furni- ture, technical assistance, and evaluation, 80%; (d) architectural, engineer- ing, and procurement services, 40%; and (e) project administration, 20%. Financial Plan 5.06 The total project cost of US$9.3 million equivalent would be financed as follows: Lesotho Govt. IDA Total ----US$ Million Equivalent---- 1. Construction 0.96 3.82 4.78 2. Furniture 0.03 0.44 0.47 3. Equipment 0.01 0.53 0.54 4. Architectural, Engineering, and Procurement Services 0.03 0.14 0.17 5. Technical Assistance 0.07 0.28 0.35 6. Formative Evaluation 0.01 0.11 0.12 7. Project Administration 0.11 0.47 0.58 8. Unallocated 0.57 1.71 2.28 Total 1.79 7.50 9.29 of which taxes 0.40 - 0.40 A credit of US$7.5 million equivalent would represent 81% of the total project cost of US$9.3 million equivalent or 84% of the total project cost net of taxes. It would meet all foreign exchange costs and 63% of local costs net of taxes. 5.07 In any year during project implementation the maximum government contribution to the project inclusive of taxation is not expected to exceed US$800,000 equivalent. Recurrent expenditures generated by the project are expected to constitute about 3% of the MINEDUC's estimated recurrent budget in 1985/86.  - 22 - Implementation 5.08 The project would be implemented over a period of four years including nine months for completion of payments and withdrawals (Annex 7). The project is expected to be completed by March 31, 1981, and the proposed Closing Date would be December 31, 1981. 5.09 <iministration. An independent Project Authority, representing the Mini-i as of Education, Finance, Planning, Agriculture, Health, Works, and Comma- y and Rural Development which was established for the IDA-assisted first .- ation project to Lesotho, Credit 497-LSO, under the Government of Lesotho