Malawi - Fourth Education Project

Document of The World Bank ILte Cop FOR OFFICIAL USE ONLY Report No. P-2940-MAI REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE REPUBLIC OF MALAWI FOR A FOURTH EDUCATION PROJECT March 6, 1981 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS Currency Unit Malawi Kwacha (MK) US$1.00 = MKO.795 MK1.00 = US$1.258 SDRl.0O US$1.275 MEASURES 1 square kilometer (km2) = 0.39 square miles (mi ) ABBREVIATIONS DEVPOL - Statement of Development Policies EPD - Economic Planning Division, Office of the President and Cabinet MOE - Ministry of Education PIU - Project Implementation Unit PSLC - Primary School Leaving Certificate REPUBLIC OF MALAWI FISCAL YEAR April 1 - March 31  FOR OFFICIAL USE ONLY MALAWI FOURTH EDUCATION PROJECT CREDIT AND PROJECT SUMMARY Borrower: Republic of Malawi Beneficiary: Ministry of Education Amount: SDR 32.2 million (US$41.0 million equivalent) Terms: Standard Project The proposed project would assist Malawi in improving Description: and expanding secondary education and the training of secondary schoolteachers. In addition, it would assist the Government in the preparation of a national education plan to provide the basis for future development of the education system. Specifi~cally, the five-year project would finance: (a) construction, furnishing and equipping of five new and the expansion of six existing secondary schools; (b) construction, furnishing and equipping of additional boarding and teaching facilities for Chancellor College at Zomba; and (c) preinvestment studies and technical assistance for preparation of a national education plan. As a result of the project, both enrollment and output of secondary and higher education would increase by about 5 percent per annum thereby providing much needed manpower for middle- and higher-level positions. Relatedly, the project would contribute to expanded educational and employment opportu- nities for women. It would also lead to improved analysis, planning and management of Malawi's education system. There are no major risks to the project except a possible shortage of secondary schoolteachers. Steps have been taken to minimize that risk. This document has a restricted distribution and may be used by recipients only in the performance of | their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  Estimated Costs: US$ Millions Local Foreign Total 1. Secondary Education 17.1 13.0 30.1 2. Secondary Teacher Training 3.3 3.3 6.6 3. Consulting Services 1.3 0.9 2.2 4. Project Administration 0.5 0.2 0.7 5. Preinvestment Studies 0.6 0.4 1.0 Total Base Costs 22.8 17.8 40.6 6. Contingencies (a) Physical 2.2 1.6 3.8 (b) Price Increases 6.1 3.3 9.4 Sub-tQtal 8.3 4.9 13.2 Total Project Costs 31.1 22.7 53.8 (of which taxes) (2.5) - (2.5) Total Net of Taxes 28.6 22.7 51.3 Financing Plan: US$ Millions Local Foreign Total IDA 18.3 22.7 41.0 Government of Malawi 10.3 - 10.3 Total Net of Taxes 28.6 22.7 51.3 Estimated Disbursements: US$ Millions IDA Fiscal Year 1982 1983 1984 1985 1986 Annual 0.5 8.5 16.0 12.0 4.0 Cumulative 0.5 9.0 25.0 37.0 41.0 Appraisal Report: Report No. 3183-MAI, February 18, 1981.  INTERNATIONAL DEVELOPMIENT ASSOCIATION REPORT AND RECOMMENDATIONS OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE REPUBLIC OF MALAWI FOR A FOURTH EDUCATION PROJECT 1. I submit the following report and recommendation on a proposed credit to the Republic of Malawi of SDR 32.2 million (approximately US$41.0 equivalent) on standard IDA terms for a Fourth Education Project. PART I - THE ECONOMY 2. A report entitled "Memorandum on the Economy of Malawi" (Report No. 1677a-MAI) dated September 30, 1977, was circulated to the Executive Directors on October 10, 1977. A Basic Economic Mission visited Malawi from May 11, 1979 to June 15, 1979 and the report is currently under prepara- tion. 3. With a population of 5.7 million (1978) and an area of about 118,500 sq km, Malawi is relatively densely populated. Its main assets are moderately fertile soils, good water resources and a climate favorable to crop production. Unlike its neighbors, Malawi has no known substantial mineral resources. Being landlocked, it has to depend on other countries for access to the sea. 4. Although Malawi has a GNP per capita of only US$200 and has been identified by the United Nations as one of the world's poorest countries, its progress since independence, measured against its natural resources, has been significant. GDP at constant prices grew at an average annual rate of 6 percent between 1964 and 1979. During the same period, real growth of estate agriculture and manufacturing exceeded 10 percent per annum and export volume grew at 4.5 percent per annum. A steadily increasing investment rate (rising from 9 percent of GDP at independence to 22 percent in 1979) has been sup- ported-by heavy inflows of foreign private and public capital as well as by a significant increase in domestic savings (from virtually nil in 1964 to 14 percent of GDP in 1979). 5. Malawi's success in its development efforts has been due in large part to realistic and purposeful planning by the Government. The country's long-term development policies for the period 1971-80 were outlined in the "Statement of Development Policies 1971-80" (DEVPOL) which set out the basic priorities for economic development. The Government is now in the process of replacing DEVPOL with a five-year investment program beginning in 1981/82.  - 2 - 6. As stated in DEVPOL, public investment has been intended primarily to support private efforts in the directly productive sectors through provi- sion of essential infrastructure, public utilities and supporting services. In addition, the Government has attached high priority to investments that assist smallholder agriculture, as 90 percent of the population lives in the rural areas and depends on agriculture for its livelihood. To this end, the Government has undertaken a number of integrated rural development projects in the past, and recently embarked on the National Rural Development Program, an ambitious 20-year program designed eventually to extend agricul- tural services to smallholders countrywide. The Government's decision to emphasize directly productive sectors and related economic infrastructure, coupled with limited amounts of financial and human resources, has resulted in slower development of the social services such as health and education. 7. The Government is in the process of finalizing its five-year public sector investment program, FY82-86. Its priorities for the sectoral allocation of resources are: 22 percent of total public investment expenditure for agri- culture, 35 percent for transport, 10 percent for education, 11 percent for water and health, and 22 percent for other miscellaneous investments. These sectoral allocations reflect the Government's continued emphasis on smallholder development and transport and the increased importance it now attaches to manpower development. 8. In 1977, a population census revealed that the country's population grew at 2.9 percent per annum during the past decade. Projecting the same growth rate for the remainder of the century, HIalawi's population would almost double by the year 2000. This high population growth rate has important implications for the labor/land ratio. Malawi's population density, about 140 per sq km of agricultural land, already is among the highest in Africa, and by the year 2000, will rise to 265 people per sq km. Over 35 percent of total land area is classified as suitable for cultivation and the available arable land area is almost fully utilized. The implications of Malawi's rapid population growth have been discussed with the Government which, at this time, opposes active population control measures. The Basic Economic Report is further analyzing these implications particularly in terms of the cost of social services for a rapidly growing population and the Government's land-use policy. Only about 9 percent of the total population lives in urban areas. However, with the diversification of the economy, urban population is increasing by more than 7 percent per annum, in line with the expansion of wage employment opportunities in the non-agricultural sectors. The population growth issue will be pursued in discussions with the Government of the findings and recommendations of the Basic Economic Report and, as appropriate, through the Bank's sector work and lending. 9. Notwithstanding Malawi's impressive economic performance over the past 15 years, its economy, heavily dependent on two primary commodity exports (tea and tobacco), has remained highly vulnerable to international price fluctuations. Since 1974, the country has experienced periodic balance of payments disequilibria of increasing severity due primarily to (a) rapid escalation in import prices, particularly of fuel and intermediate and capital  - 3 - goods; (b) cyclical swings in export prices of tobacco and tea; and (c) sig- nificantly higher costs of transport for both exports and imports owing to rising ocean freight charges, port congestion in Beira and Nacala, and dis- ruptions of overland transport. 10. While the Government successfully steered the economy through balance of payments crises in the past, the deterioration in the balance of payments since 1978 has been les:3 manageable, primarily due to a 20 percent fall in the terms of trade between 1977 and 1979 when export prices fell 5 percent (due mainly to declineE3 in tea and tobacco prices) and import prices rose about 15 percent. The petroleum import bill doubled from US$21 million in 1977 to an estimated IJS$38 million in 1979. The growing trade deficit was exacerbated by a doubling of the negative balance for non-factor services, due mainly to rising transport costs. In 1978 and 1979, Malawi's current account deficit reached L2 and 15 percent of GUP in contrast to the 7-8 percent average experienced since independence. Because capital inflows have not been sufficient to cover the current account deficits, Malawi has also experienced a sharp drop in foreign exchange reserves. Between end-1977 and end-1979, gross official reserves fell from MK 76 million to MK 51 mil- lion (from the equivalent of four months to one and a half months of imports). Over the same period, net official reserves fell from MK 37 million to minus MK 29 million. In the first half of 1980, the country's external position deteriorated further, owing to a shortfall in the 1979/80 season's maize crop, which has led to emergency grain imports and a sharp drop in the average auction price of flue-cured tobacco which constitutes a large part of Malawi's tobacco crop. 11. In the past, the Government has approached the energy problem through its pricing and tax policies to restrain demand and through invest- ments aimed at identifying and developing new sources. Oil imports have been subject to tariffs at 30 to 60 Fercent rates. The retail prices of gasoline and diesel have been set at US$0.88 and US$0.80 per liter, respectively, while their equivalent import prices are US$0.48 and US$0.45. In connection with fuelwood, which represents some 80 percent of the country's domestic energy consumption, the Government has undertaken to increase wood prices gradually to levels which reflect production costs. The Government has also launched projects in wood energy and ethanol production. At the Government's request, the Bank plans to conduct an energy sector study that would survey the avail- able resources, project future demand and supply, examine alternative sources of energy and explore possibilities for intersectoral substitution. 12. Malawi's fiscal position has also seriously deteriorated over the past two years. From independence through FY78, government expenditures and revenues expanded roughly in line with the increases in GDP; while deficits grew larger, they still, did not exceed 7-8 percent of GDP. In the past two years, expenditure growth has outstripped the increase in revenues by more than 40 percent. The share of government deficits in GDP averaged 10 percent during 1978 and 1979. With the increased deficits came an increased reliance on domestic borrowing mainly from the monetary system, and on foreign borrowing, partly on commercial terms. At the same time, inflationary pressures grew and the balance of payments position deterio- rated. Prices rose at an average rate of 10 percent per annum during 1978 and 1979.  - 4 - 13. Faced with these problems, the Government in 1979 initiated a series of short-term corrective measures which included a two and a half year stand-by arrangement with the IMF amounting to US$32.9 million (SDR 26.3 million). Malawi also obtained US$23.8 million (SDR 19.0 million) from the compensatory financing facility and a US$7.1 million (SDR 5.7 million) loan from the Trust Fund. Unfortunately, a drought and a complete stoppage of all overland ex- ternal transport, owing to political unrest in Mozambique during November and December 1979, forced termination of the stand-by arrangement as the Govern- ment could not meet some of the performance criteria. 14. A new two-year arrangement, drawing on the second to fourth tranches for US$64.8 million (SDR 49.9 million), was approved in May 1980. The two- year program, which coincides with Malawi's fiscal years 1981 and 1982, aims at constraining demand and limiting the balance of payments current account deficit to US$195 million in FY81 and US$169 million in FY82. The performance criteria involved phased ceilings on total domestic credit and on net bank credit to Government and a limit on government (or government-guaranteed) external borrowing of 1 - 12 years maturity. 15. After successfully negotiating the two-year IMF stand-by arrangement, the Government in April 1980 formally requested Bank assistance for a struc- tural adjustment loan. A reconnaissance mission in May made a preliminary assessment of the economy and reviewed the corrective measures which the Government had taken already or was intending to take. An appraisal mission visited the country during August-September, 1980. 16. Because of the Government's limited ability to mobilize resources, the sizeable expansion of Malawi's development program over the past decade has been largely assisted by increased public capital inflows. The net contribution from foreign official sources to the financing of public invest- ment increased from US$17 million in FY68 to about US$103 million in FY79, of which US$23 million were grants. However, in contrast with earlier expe- riences, over 35 percent of the FY79 capital flows were on commercial terms. Such commercial borrowing will have a pronounced effect on future debt servicing. The sources have also been gradually diversified. At independence, Britain was virtually the only source. By 1979 the British contribution had declined to less than 15 percent; multilateral sources, especially IDA, provided about 45 percent, and a variety of bilateral sources, notably Canada, the Federal Republic of Germany, and the United States, accounted for most of the remainder. 17. By the end of 1979, Malawi's external public debt totalled US$606 million, of which US$423 million had been disbursed. Debt service in 1979 amounted to US$25 million, equivalent to about 10 percent of exports of goods and services. At the end of 1978, the Bank's and the combined IDA/Bank shares in Malawi's disbursed debt were 4 percent and 32 percent, respectively, and service on the Bank Group debt accounted for 7.1 percent of total debt service. In 1985, the IDA/Bank share in total disbursed debt is projected to be 30 percent and the service on Bank Group debt to be 10 percent of the total debt service. There has been considerable hardening of the average terms  - 5 - of lending in the past few years; the average grant element of official assistance fell from the 80 percent level of 1971-1975 to 48 percent in 1978 and 23 percent in 1979. On the basis of loans committed by the end of 1979 and on additional capital requirements for the period 1980-85, Malawi's debt service ratio is projected to reach 23 percent in 1985 (as compared with 8 percent in 1978 and 10 percent in 1979). Despite being a poor country, Malawi has been making all reasonable efforts to mobilize domestic resources to fund both its private and public investments. The domestic share of development expenditures amounted to 22 percent in 1979. However this share is unlikely to rise in the near future, as the expansion of the Government s investment program required to achieve a reasonable rate of economic growth and the consequent need for recurrent expenditures for operations and main- tenance will absorb the bulk of additional tax revenues. Foreign exchange will remain a significant requirement in maintaining imports. Hence, external financing will be called upon to cover a substantial portion of total project cost, including some local financing. PART II - BANK GROUP OPERATIONS IN MALAWI 18. Over the past 15 years Malawi has received 21 IDA credits totalling US$183.2 million and four Bank loans totalling US$29.2 million, of which two were on Third Window terms. Of the total Bank Group assistance, US$98.2 mil- lion (46 percent) was for agriculture, US$37.8 million (18 percent) for power development, US$32.4 million (15 percent) for education, US$32 million (15 percent) for roads, US$3 millior. (1 percent) for a development finance comr pany (INDEBANK) and the balance of US$9 million (5 percent) for water supply and to finance feasibility studies for a pulp mill at Viphya. The first Bank loan to Malawi was made on Third. Window terms in June 1976 and the first standard Bank loan in April 1977. The most recent IDA credit, SDR 25.9 mil- lion (US$33.0 million equivalent) for a fourth highway project to develop the Northern Region was approvec on February 3, 1981 and is expected to become effective in May 1981. IFC-s investments in Malawi consist of a loan of US$6 million made in 1976 for a textile mill, another of US$9.5 million for sugar development in 1977, a US$0.6 million equity investment in INDEBANK in 1979, and a US$2.0 million loan to Ma]awi Hotels Limited for tourism in 1979. A US$262,000 equity investment ancl a loan of US$1.7 million for the production of ethanol from molasses were approved on July 29, 1980. A summary statement of Bank Group operations and not:es on the execution of ongoing projects are provided in Annex II. Project implementation has been fully satisfactory. 19. During the next five years, Bank Group assistance to Malawi will continue to emphasize rural development and agriculture, education, water supply and roads. The third phase of the National Rural Development Program already has been appraised, and preparation of a second-phase water supply project for Lilongwe and selected rural areas has begun. Lending for struc- tural adjustment also is expected to figure prominently over the next three years: preparation of the firsi: loan is well advanced. Possible investments in energy, health and development finance companies also are being investigated.  - 6 - PART III - THE EDUCATION SECTOR Overview 20. After independence in 1964, government education policy emphasized supplying middle- and higher-level manpower for the immediate needs of the economy. After 1972, however, due to slow growth in secondary school enroll- ments, combined with rapid economic growth, outputs at both the secondary and higher levels have fallen short of development needs. Consequently, Malawi still relies heavily on expatriates in middle- and higher-level positions. Only 25 percent of the population is literate and only four percent of school age children are full time in secondary education, a figure among the lowest in Africa. Education System 21. The formal education system consists of eight years of primary, four years of secondary, and post secondary and university courses of various durations. Currently, primary school enrollment is 59 percent of the 6-13 age group; however only 17 percent of students entering the first grade complete the full eight-year course. Girls make up 41 percent of total primary school enrollment, but are mucil more likely than boys to dLrop out of the system and, as a result, make up only 26 percent enrollment in grade 8. Traditionally, physical construction of primary school facilities, as well as providing textbooks, equipment and furniture, have been the responsibility of the communities, with the Government providing teachers. However, with the rapid growth in primary school enrollments of around 12 percent per annum in recent years achieving an enrollment of about 59 percent of the age group in 1979/80, the Government has begun taking a more active role. With assistance from IDA, it has undertaken a school mapping study to help determine specific school construction needs, and has started a program to provide a set of basic textbooks to all primary school students and help communities construct 1,000 primary school classrooms. The rapid expansion of primary school enrollments has led to an increase in the student/teacher ratio which is now 62:1 compared with the official policy of 50:1. Bank staff estimate that the annual output of primary schoolteachers will need to increase from the present 700 per year to over 1,300 per year by 1990, the combined output of a further three primary teacher colleges. The Government, in planning to meet this need, intends using internal funds to construct two training colleges and is seeking addi- tional funds from bilateral and multilateral sources for a third teacher training college to be located in Zomba. Starting in 1982, the Malawi Insti- tute of Education is expected to initiate large scale in-service training programs to upgrade qualified and unqualified teachers. 22. Enrollment in secondary education increased from 3,100 in 1962 to 13,400 in 1972 but, since, has grown at an average annual rate of only three percent reaching 16,500 in 1979. At present, almost half of the eighth grade enrollment in primary education consists of children repeating the year with the objectives of obtaining a higher score in the Primary School Leaving Certificate (PSLC) and securing a place in secondary school. Because of a shortage of secondary school graduates, primary teacher training colleges are  finding difficulty in recruiting qualified students for their courses. In addition, the lack of secondary school graduates has resulted in major shortages of middle- and higher-level manpower. 23. Access to secondary education is based solely on PSLC examination results. Selection is made nationally for students to attend the 22 govern- ment boarding schools which have a combined enrollment of 5,600. Thereafter students are selected by district to enter one of the 28 "district day" schools which currently enroll 7,900 students, and most of which provide at least some boarding facilities. In addition, students may attend one of 14 private, usually mission, schoolE enrolling 2,000 students. Overall, secondary school places are available to only 14 percent of those passing the PSLC. Girls are admitted with PSLC scores lower than those of boys but, because of their high dropout rates in primary school, make up only 31 percent of secondary school enrollment. A lower cost alternative to full-time secondary, education -- the Malawi Correspondence College -- is expanding rapidly and in 1979 enrolled 4,800 students. 24. The internal efficiency of secondary education is relatively high: 69 percent of students entering the system pass the Junior Certificate exami- nation after two years and 56 pecent of those continuing pass the Malawi Certificate of Examination given *at the end of the fourth year. The secondary school curriculum emphasizes language, arts, science and mathematics. The Malawi Institute of Education will be helping to improve teaching methods. 25. The Ministry of Education (MOE) has recognized the need for a more rapid expansion of secondary education to meet manpower requirements. How- ever, because of teacher shortages and limited availability of capital, MOE expects enrollment to increase by only about five percent per year from around 16,000 currently to about 28,000 in 1990. Considering the natural population growth rate, the increase would only raise the percentage of children enrolled in general secondary schools froni 3.4 percent to 4.5 percent, still among the lowest in the world. 26. Over 90 percent of the present 800 secondary school teachers are qualified, expatriates constituting 25 percent of the total qualified. Secondary teacher training is conducted at Chancellor College of the University of Malawi. Following MOE's initiative, Chancellor College introduced crash programs to boost the output and quality of teachers. A total of 155 new students entered teaching programns in 1980. Based on a five percent annual growth in secondary education, a 21:1 student/teacher ratio, and a gradual reduction in expatriate teachers, the system will need 100 new teachers per year by 1984 and 130 per year by 1989. 27. In technical education, the Polytechnic and several secondary technical and training schools offering programs in bricklaying, carpentry, joinery, electricity, plumbing, Etc., are meeting the need for skilled industrial workers.  - 8 - 28. Higher-level education, including training of engineers, business managers, and technicians, is expanding. The Natural Resources College, assisted by the Canadian International Development Agency, will provide additional agricultural technicians by the mid-1980s. 29. In non-formal education, several ministries and agencies sponsor adult education programs and, while lack of coordination has often led to duplication of efforts, they have reached a significant number of adults. The Extension Aids Branch of the Ministry of Agriculture has been particularly successful and its mobile units reach an estimated one million people per year. 30. The Office of the President and Cabinet conducts training courses for lower-level civil servants at Mpemba Staff Training College, and plans to establish a new Institute of Public Administration for training and up- grading administrative and development skills of those at the middle- and senior levels. 31. Total education expenditures are currently about 3.5 percent of GDP. Recurrent expenditures on education as a percentage of total government expenditure declined from about 17 percent in 1970/71 to 11.3 percent in 1979/80, proportions low by African standards, reflecting the relatively greater emphasis on directly productive sectors, especially agriculture, and on general administration. Assuming moderate growth in enrollment, improved student/teacher ratios and continued upgrading of educational fac:ilities, educational expenditures, as a percentage of the recurrent budget, should increase to about 15 percent by 1985/86 and to 16 percent by 1990/91, a level of expenditure that would not unduly tax 1Halawi's resources and would still be lower than that of most African countries. Government Objectives, Policy and Programs in the Sector 32. The Government's basic objectives of education development are set forth in the 1973-80 Education Plan in relation to the national development goals stated in DEVPOL, 1971-80. The objectives are to improve the internal efficiency of the education system by ensuring efficient utilization of existing facilities and resources inputs, and to attain a more equitable distribution of educational opportunities in addition to continued efforts to provide the required manpower and to reorient the curricula. In the 1970s, the Government has made considerable progress towards reaching these objectives by: (a) improving the quality of primary education together with a quantita- tive expansion; (b) introducing revised curricula at both the primary and secondary levels; (c) embarking on a major expansion of primary teacher training; and (d) expanding secondary education. The Bank-Group through its first, second and third education projects has assisted the Government in this regard (paras. 36-38). 33. For the period FY82-86, the Government's public investment progr.am assigns high priority to the education sector. The Government expects to double its allocation of capital expenditures to education to 10 percent of the capital development program. These capital expenditures would be accompanied by corresponding increases in the recurrent budget which would be regularly reviewed by the Government and the Association (para. 45). Its  policy will be to continue to build on the achievements to date while further strengthening the quality of its education system. Emphasis will continue to be placed on primary and secorndary education and teacher training. Spe- cifically, the Government intends;: (a) expanding and improving general secondary education to meet the needs of the economy, while continuing to provide a low-cost alternative to secondary education by expanding the Malawi Correspondence College; (b) expanding and strengthening the primary schools through programs to provide textbooks and assistance to communities for constructing schools on a self-help basis; (c) expanding primary and secondary teacher training facilities in line with projected teacher requirements; (d) increasing output of the University of Malawi, technical and agricultural institutes to meet increasing demands for professional and technical manpower; and (e) developing curricula, improving teaching materials and expanding in-service training programs for teachers at Malawi Institute of Education. This policy, though soundly conceived and realistic, is hampered by the absence of an adequate national education plan for the 1980s and the need to strengthen the Government's educational planning capabilities in the MOE and the Economic Planning Division (EPD) of the Office of the President and Cabinet. The project will address these needs through assisting in preparation of a national education plan (paras. 34 and 45). 34. Detailed surveys of the economy, the education sector, the status of human capital and manpower needs over the past three years (para. 35) underscore the significant difference between the numbers of secondary school graduates produced and projected development needs. As a result, the Govern- ment's highest priority in the sector is expanding secondary enrollment which it plans to increase by about 5 percent per year or by 70 percent by 1990. Even with the increase, there would still be an anticipated shortfall of personnel with secondary education of about 9,000 by 1990. To help combat the sh6rtage, the Government plans to prepare a national education plan to increase the efficiency and quality of the education system while expanding output. Specific programs in prLmary education focus on increasing the supply of qualified teachers through expanding teacher training, upgrading unqualified teachers through the Malawi Institute of Education, and improving and increasing availability of textbooks and other materials. As community initiatives form the basis for expanding enrollments through the construction of classroom facilities, modifie,l self-help construction programs are being strengthened by the Government anad will continue to be assisted by MOE through the provision of materiaLs and technical assistance. Such programs will be carried out within the framework of the recently completed school location plan.  - 10 - Bank Group Knowledge of and Assistance to the Education Sector 35. The Bank Group has contributed to Malawi's knowledge of the educa- tion sector as well as provided financial and technical support through its projects. In 1978, Bank staff completed an in-depth Education Sector Survey (Report No. 1781-MAI) and a report on the Status of Human Capital in Malawi in May 1980. These studies have helped the Government pinpoint sectoral needs and priorities as well as levels of new investment in primary and secondary education. In addition, they have served to underscore that education is a sound economic investment with a high rate of return, particularly for secondary education. Last year Bank staff assisted the Government in analyzing the results of the 1979 Malawi Manpower Survey, projecting future manpower requirements through 1990 and delineating various policy options for the education system. These studies, plus the experience gained from projects, have helped to improve Malawi's analytical basis for developing its education system. 36. The First Education Project (Credit 102-MAI, signed in 1967) provided US$6.3 million equivalent for introducing technical subjects in secondary education, expanding secondary schools (about 1,800 additional places) and constructing a new 540 place primary teacher training college. A Project Performance Audit Report (No. 2914 dated March 25, 1980) indicated that the project was on the whole successfully implemented and that it accomplished its overall objectives of expanding enrollment in primary teacher training and secondary education. However, the teaching of technical subjects was not as successful as had been expected because of a lack of interest by students, a shortage of teachers, and the provision of overly sophisticated equipment. These issues have been fully discussed with the Government which, in the light of experience, is no longer expanding the teaching of technical subjects in general secondary schools, and is concentrating on the teaching of these subjects in the specialized technical secondary schools. 37. The Second Education Project (Credit 590-MAI, signed in 1975) provides US$11.6 million for constructing a new 420 place teacher training college in Mzuzu, for an additional 1,800 secondary school places, principally for girls, and for 22 model primary schools designed to serve as prototypes for community self-help construction and as centers of adult non-formal education. The project is expected to be substantially completed by Mlarch 31, 1981 as estimated at appraisal. Most of the quantitative and qualitative goals for primary teacher training and secondary education are being met. How- ever, the primary schools are unlikely to be replicated by local communities without significant technical and financial assistance from the Government and, because of a slow response from other participating agencies and MOE's lack of experience in non-formal education, are only slowly being used as adult education centers. Programs in this field are, however, being developed by the Ministry of Community Development, with assistance from UNICEF and MOE. 38. The Third Education Project (IDA Credit 910-MAI and EEC Credit 12-MAI, for US$22.0 million, signed in 1979) focusses on primary education, including providing the technical and financial support needed for self-help construction of about 1,000 primary school classrooms and supplying about 2.2 million textbooks. It also supports improving management of education and  - 11 - curriculum development, principally through establishing the Malawi Institute of Education; expanding the Malawi Correspondence College; expanding Chancellor College to produce more secondary schoolteachers; and studies and evaluation of the education system that will be used in the preparation of the national education plan (para. 45). Despite the project's relative complexity, the highly competent Project Implementation Unit (PIU) is implementing it well and on time. Bank Group Stategy 39. The Bank Group, througt. its economic and sector work and lending for free-standing education projects, intends to continue supporting the Government's programs to expand and improve primary and secondary education, while assisting in strengthening its education planning and management capabilities. Other priority areas are likely to include management and teacher training. The proposed national education plan will serve as a basis for determining Malawi's specific education needs for FY83-87 (para. 45). PART IT - THE PROJECT 40. The proposed project was identified in March 1979, and prepared by the Government with assistance f:-om the World Bank Group. It was appraised in May/June 1980, and negotiatiols were held in Washington, D.C., from January 14-16, 1981. Mr. S. M. Kakhobwe, Secretary to the Treasury, led the government delegation. A Staff Appraisal Report is being circulated sepa- rately. Annex III provides supplementary project data. Project Objectives and Description 41. The proposed project would assist the Government in: (a) expanding and improving secondary education; (b) increasing the supply of secondary schoolteachers and improving the quality of their training; (c) completing plans for a primary teacher training college at Zomba and an Institute of Public Administration in Lilongwe; and (d) developing a long-term national education plan. The project would help the Government over a five-year period (FY82-86)to reach these cbjectives by: (i) constructing, furnishing and equipping five new and expanding six existing secondary schools; (ii) constructing, furnishing and equipping additional boarding and faculty facilities for Chancellor College at Zomba; (iii) financing preinvestment studies; and (iv) providing consulting services.  - 12 - Detailed Features (a) Secondary Education 42. The project provides for constructing, furnishing and equipping 3,960 secondary school places, 3,842 dormitory places and 195 teacher houses. It would construct five new 480 student schools and expand six existing schools to 480 enrollment. More than half the new places in the six existing schools would be for girls, and the total number of places for girls provided under the project would be 1,849 (47 percent). (b) Secondary Teacher Training 43. The project would support constructing, furnishing and equipping of teaching, boarding, and faculty housing facilities for an additional 168 students at Chancellor College. Additional academic facilities would emphasize science and, with support from this and the third project, the College would be able to expand enrollment to 1,000 and have adequate science and library facilities for a further expansion to 1,200. The additional places provided under these two projects would result in the enrollment of 500 students in secondary teacher programs and, at full capacity, the College would achieve an annual output of about 130 teachers by graduating each year: 55 teachers in the three-year diploma programs, 55 in five-year degree courses and 20 in two-year upgrading courses for diploma-level secondary schoolteachers. The College has initiated a diploma-level program to upgrade primary teachers to the secondary level and a new five-year degree program to train science teachers, and is reviewing the length of the degree program, the content of the program as a whole, including the relative mix of general and education classes, and the incentives needed to attract future graduate teachers to enter the profession. Agreement was reached that the Government would in- crease the annual output of secondary schoolteachers to around 100 a year by 1985; and about 130, by 1990. Starting in October 1981, and annually there- after for a period of four consecutive years, the Government would prepare for the Association-s review a report on its experience in implementing secondary teacher training programs, describing recruitment of students, placement oi graduates and plans for subsequent years, including estimates of expected enrollment and outputs and proposed program or curriculum change!s. Further, as required under the third project, the Government would undertake a tracer study of Chancellor College graduates to determine how many enter the teaching profession (Section 4.03 of the draft Credit Agreement.) (c) Preinvestment Studies 44. At the Government's request during appraisal, the Bank Grov.p evo,- uated the Government s proposal for constructing an Institute of Public Administration. Subsequently, the Bank Group submitted its comments and recommendations to the Government which plans to finalize the proposal and explore financing with other donors or the Bank Group in a future project. The project provides funds for completing architectural design work for the Institute in Lilongwe and a proposed primary teacher training college at Zomba.  - 13 - 45. The proposed project includes funds for assisting the Government to prepare a national education plan guiding educational developments over the next ten years. In addition to establishing operational priorities, the plan would focus on institutional and policy changes and financial and manpower requirements for improving the coverage, efficiency and effectiveness of the entire education system. The plan would be based on selected studies of the education system and on the estimated government resources available to the education sector through 1990. The plan would have two major parts: those aspects of education under the purview of MOE, and those under the aegis of other government departments. EPD would coordinate preparation of the overall plan, with the MOE Studies Coordinator (already provided under UNDP assistance) preparing the first part and EPD, jointly with the relevant departments, preparing the second. The Government has asked UNDP to provide a human resources specialist for 24 months to assist EPD in carry- ing out the plan and for overall human resource planning. Recruitment of the specialist has begun and the position is expected to be filled by September 1, 1981. Draft terms of reference for the specialist were agreed and the Associa- tion would review and comment on the qualifications and experience of the candidate. Draft terms of reference for the national education plan were also agreed, and the plan is expected to be completed by December 31, 1982. About one year after Credit Signing and annually thereafter for four years, the Government and the Association would review the education budget in terms of its adequacy to carry out long-term educational objectives (Section 3.08 of the draft Credit Agreement). Project Implementation 46. The project would be administered by MOE which has overall adminis- trative, financial and academic control of primary, secondary, technical education, teacher training and 1he Malawi Correspondence College. Day-to-day project administration is the responsibility of PIU which was permanently established under the second education project as an integral part of MOE, located in the Planning Section and reporting directly to the Principal Secretary. PIU not only supervises all aspects of Bank Group and African Development Bank projects but oversees implementation of MOE's primary and secondary school programs and the Bank Group-assisted components at Chancellor College. PIU works closely with the Ministry of Works and Supplies to ensure that all of its designs are of all acceptable, uniform national standard. PIU is staffed by a Malawian Program Manager and Deputy, three architects (supplied by the Danish International Development Agency and the British Overseas Development Administration), four assistant architects, a pro- curement officer, an accountant and two assistants. It has been functioning efficiently and effectively and can handle the added responsibility of imple- menting the proposed project. The project would finance .80 percent of PIU's operating expenditures for project administration including salaries, vehicle operating costs and incidental expenses. Agreement was reached that the Government would keep PIU adequately staffed with personnel whose qualifi- cations, experience, and terms and conditions of employment are satisfactory to the Association (Section 3.02 of the draft Credit Agreement).  - 14 - Project Cost and Financing 47. Total project cost inclusive of taxes and duties is estimated at US$53.8 million equivalent, of which US$22.7 million, or 42 percent would be foreign costs. Details of project costs are included in the Credit and Project Summary. The proposed Credit of SDR 32.2 million (around US$41.0 million equivalent) would finance 80 percent of project costs net of taxes, 100 percent (US$22.7 million) of foreign exchange and US$18.3 million of local costs. The Government would provide the remaining US$12.8 million. Procurement and Disbursement 48. Contracts for civil works, furniture and equipment would be awarded by international competitive bidding (ICB) in accordance with Bank Group Guidelines, excepting construction contracts costing less than US$300,000 equivalent each and furniture and equipment contracts costing less than US$100,000 equivalent each. Such contracts would be awarded following competi- tive bidding advertised locally and in accordance with procedures acceptable to the Bank Group; review of tender evaluation documents prior to award would not be required. The aggregate total of such contracts is unlikely to exceed US$1.0 milion equivalent including contingencies. Architectural sketch designs and school layout proposals, draft tender documents and master lists of furniture and equipment, including proposed grouping, have been reviewed by the Bank Group and items have been grouped to encourage competitive bidding and permit bulk procurement. Tendering is expected to begin in April 1981. Where ICB is used, domestic manufacturers of furniture and equipment would be allowed a margin of preference of 15 percent or the existing applicable rate of import duties, whichever is lower, over the c.i.f. price of competing foreign suppliers, and qualified domestic civil works contractors would be allowed a preferential margin of seven and one half percent of the bid prices of competing foreign contractors. 49. Architectural/engineering consultants appointed under the ongoing third project for proposed expansion of Chancellor College have been retained for designing and supervising works at the College in this project. Designs already prepared by PIU as part of a national standardization of designs for secondary school facilities will be used for all the schools. Approxi- mately 35 man-years of consulting services at a cost of US$2.2 million are included in the project. This consists of about 35 man-years at an average cost of about US$5,200 per month to provide 24 man-years of architectural/ engineering and 11 man-years of construction supervision services. In addi- tion, about one year of technical assistance and other services to help prepare the national education plan is estimated at US$100,000 (US$8,300 per month). Other external assistance in preparing the plan is being funded by UNDP (para. 45). Agreement was reached that the Government would employ suitable architectural, engineering, or planning consultants whose qualifica- tions, experience and terms of employment would be satisfactory to the Association (Section 3.03 of draft Credit Agreement).  - 15 - Disbursements and Audits 50. Proceeds from the proposed Credit would be disbursed as follows: 75 percent of total expenditures for civil works; 80 percent of off-the-shelf local expenditures, and 100 percent of foreign expenditures for furniture and equipment; 80 percent of total expenditures for project administration; and 80 percent of local and 100 percent of foreign expenditures for consulting services and costs of preparing the education plan. A schedule of estimated disbursements is provided in the Credit and Project Summary. 51. Separate project accounts would be maintained by MOE for each component. It was agreed that these accounts would be audited by the Auditor General or other independent auditors acceptable to the Association and the audit reports furnished to the Association not later than 9 months after the end of the fiscal year (Section 4.01 (c) of the draft Credit Agreement). Agreement was also reached that the Government would monitor progress of the project and, not later than three months after the Closing Date, or other such agreed date, would prepare and submit to the Association a full report on the execution of the project (3.05 4.b) and (d) of the draft Credit Agreement). Benefits and Risks 52. The project would improve access to secondary education by providing additional secondary school places. An increase of about 1,000 secondary school graduates per year would result from the project, thus meeting a significant proportion of education manpower needs throughout the economy. The project would provide about 47 percent of the secondary school places to girls and would raise their participation in secondary education from 31 percent to 35 percent. The additional secondary schoolteacher training places would increase also the supply of science graduates. The preinvestment studies would lead to the establishment of institutions for training about 210 primary teachers a year who would teach about 11,000 children per year, and for training about 600 civil servanLs per year. In assisting the preparation of the national education plan, the project would help the Government make more effective use of education expeaditures and improve its overall analysis, planning, management and organization. 53. The only significant risk of the project is a possible shortage of secondary schoolteachers. In order to minimize the risk, the Government would prepare an annual review of its teacher training programs, recruitment and placement of secondary schoolteachers and proposals for any necessary program revisions (para. 43). PART V - LEGAL INSTRUMENTS AND AUTHORITY 54. The draft Development Credit Agreement between the Republic of Malawi and the Association and the recommendation of the Committee provided for in Article V, Section 1 (d), of the Articles of Agreement of the Association, are being distributed separately to the Executive Directors.  - 16 - 55. Special conditions of this project are listed in Section III of Annex III. 56. I am satisfied that the proposed credit would comply with the Articles of Agreement of the Association. PART VI - RECOMMENDATION 57. I recommend that the Executive Directors approve the proposed credit. Robert S. McNamara President By Ernest Stern Attachments Washington, D.C. March 6, 1981  - 17 - AEX I TABLE 3A MALAW! - SOCIAL INDICATORS DATA SHEET MALAWI REFERENCE GROUPS (WEIGHTED AVEFACES LAND AREA (THOUSAND SQ. KM.) - MQST RECENT ESTIMATE)-- TOTAL 118.5 AGRICULTURAL 41. 2 MOST RECENT LOW INCOME MIDDLE INCOMF 1960 /b 1970 /b ESTIMATE /b AFRICA SOUTH OF SAHAPA AFRICA SOtUTH OF SAHARA GNP PER CAPITA (USS) 50.0 80.0 200.0 260.0 868.0 ENERGY CONSUMPTION PER CAPITA (KILOGRAMS OF COAL EQUIVALENT) .. 46.0 52.0 80. 0 699.4 POPULATION AND VITAL STATISTICS POPULATION, MID-YEAR (MILLIONS) 3.4 4.5 5.7 URBAN POPULATION (PERCENT OF TOTAL) 4.4 6.4 8.9 17.3 28.9 POPULATION PROJECTIONS POPULATION IN YEAR 2000 (MILLIONS) 11.0 STATIONARY POPULATION (MILLIONS) 32.0 YEAR STATIONARY POPULATION IS REACHED 2165 POPULATION DENS ITY PER SQ. EM. 29.0 38.0 49.0 27.4 61.7 PER SQ. RM. AGRICULTURAL LAND 89.0 113.0 141.0 82.6 126.0 POPULATION AGE STRUCTURE (PERCENT) 0-14 YRS. 43.6 43.9 47.5 44.9 45.5 15-64 YRS. 52.0 52.1 50.0 52.2 51.6 65 YRS. AND ABOVE 4.4 4.0 2.5 2.8 2.8 POPULATION GROWTH RATE (PERCENT) TOTAL 2.4 2.8 2.9 2.7 2. 7 URBAN 4.8 6.6 7.3 6.8 4. 9 CRUDE BIRTH RATE (PER THOUSAND) 53.0 52.0 52.0 47.4 46.8 CRUDE DEATH RATE (PER THOUSAND) 27.0 22.0 20.0 19.6 16.4 GROSS REPRODUCTION RATE 3.2 3.2 3.5 3.2 3. 2 FAMILY PLANNING ACCEPTORS, ANNUAL (THOUSANDS) USERS (PERCENT OF MARRIED WOMEN) .. .. FOOD AND NUTRITION INDEX OF FOOD PRODUCTION PER CAPITA (1969-71-100) 90.0 91.0 101.0 91.8 94.0 PER CAPITA SUPPLY OF CALORIES (PERCENT OF REQUIREMENTS) 86.0 98.0 90.0 90.2 92.7 PROTEINS (GRAMS PER DAY) 55.0 67.0 59.0 53.0 53.0 OF WHICH ANIMAL AND PULSE 5.0 10.3 10.0 18.4 15.6 CHILD (AGES 1-4) MORTALITY RATE 41.0 32.0 27.0 27.7 21.3 HEALTH LIFE EXPECTANCY AT BIRTH (YEARS) 37. 0 42.0 46.0 45.3 50. 1 INFANT MORTALITY RATE (PER THOUSAND) .. 149.0 ACCESS TO SAFE WATER (PERCENT OF POPULATION) TOTAL .. .. 33.0 23.2 31.0 URBAN .. .. 70.0 58.0 66.8 RURAL .. .. 29.0 16.8 ACCESS TO EXCRETA DISPOSAL (PERCENT OF POPULATION) TOTAL .. .. .. 28.9 URBAN .. .. 15.0 67.0 RURAL .. .. POPOLATION PER PHYSICIAN 42400.0/: 38430.0 48198.0 30910.4 14508.2 POPULATION PER NURSING PERSON 12918.0 16344.0 3291.0 5793.2 3279.5 POPULATION PER HOSPITAL BED TOTAL 927.0/1 649.0 546.0 1198.9 1141.5 URBAN 115.0 110.0 RURAL 1312.0 802.0 ADMISSIONS PER HOSPITAL BED .. 36. 3/e HOUSING AVERAGE SIZE OF HOUSEHOLD TOTAL .. .. URBAN .. 3.4/f .. RURAL .. .. 5.0 AVERAGE NL1MBER OF PERSONS PER ROOM TOTAL .. .. URBAN 9 1.7 RURAL .. .. ACCESS TO ELECTRICITY (PERCENT OF DWELLINGS) TOTAL .. .. URBAS .. 16.0/fN RURAL .. ..  - 18 - ANNEX I TABLE 3A MALAWI - SOCIAI. INDICATORS DATA SHEET MAI.AWI REFERENCE GROUPS (WEIGHTED AVEF,ACES - MOST RECENT ESTIMATE MOST RECENT LOW INCOME MIDDLE INCOMF 1960 /b 1970 /b ESTIMATE /b AFRICA SOUTH OF SAPARA AFRICA SOUTH OF SAHARA EDUCATION ADUTUSTED ENROLLIMENT RATICS PR U;ARY: IOTAL 63.0 40.0 59. 0 57. 7 61. 7 :!ALE 81.0 50.0 * 74. 2 69.2 FEMALE 45.0 29.0 73-0* 54.1 51.4 iL-ONDARY: TOTAI 1.0 2. 0 4.8 10.0 20.6 MALF? 1.0 3.0 6.0 13.7 29. 2 FEMIALE 0.3 1.0 2.0 7. 1 14.7 VOCATIONAI ENROL. (I OF SECONDARY) .. 3.0 7.2 6.8 7.0 PUPIL-TEACHER RATIO PRIMARY 41.0 43.0 62*0 45.0 36.6 SECONDARY 14.0 16.0 20 0 25.2 24.3 ADl'LT LITERACY RATE (PERCENT) .. 22. 0 25.0 25.5 CONSU'PTION PASSENCER CARS PER THOUSAND FOPCLATION 1.8 2.0 1.9 3.6 38.8 RADIO RECEIVERS PER THOUSAND POPULATION 1.0 24.0 26.0 31.5 83.5 TV RECEIVERS PER THOUSAND POPULATION 0. 7 .. .. 1.8 NEWSPAPFR ("DAILY GENERAL INTEREST') CIRCULATION PER ThOUSAND POPULATION .. .. 1.8 4.6 24. 2 CINEM,A ANNUAL ATTENDANCE PER CAPITA 0. 3 .. 0.9 .. 0. 7 LABOR fORC. TOTAL LABOR FORCE (THOUSANDS) 1570.5 1980.8 2404.2 FEMALE 'PERCENT) 38. 3 37.8 38.0 33.5 38. 1 AGRICULTURE (PERCENT) 92.0 89. 1 86.0 80. 7 54.3 INDUSTRY (PERCENT) 2. 7 3. 7 5.0 8. 1 17. U PARTICIPATION RATE (PEFCENT) TOTAL 48.2 46.9 45.8 42.2 39.2 'LALE 60. 3 59.2 58.1 55. 1 4R. 4 FIMALE 36.4 35.0 33.9 29.5 29. - ECONOMIC DEPENDENCY RATIO 1.0 1. 1 1.2 1.2 1. 3 INCOMIE DISTRIBUTION PERCENT OF PRIVATE INCOME RECEIVED BY HIGHEST 5 PERCENT OF HOUSEHOLDS .. 29.5 liIGH=ST 20 PERCENT OF HOUSEHOLDS .. 52.9 L.OWEST 20 PERCENT OF HOUSEHOLDS .. 5. 7 LOWEST 40 PERCENT OF HOUSEHOLDS .. 15.0 POVERTY TARGET GROUPS LSTIIATED ABSOLUTE POVERTY INCOME LEVEL (1S$ PER CAPITA) RBARI; .. .. 123.0 138.2 PUFAL .. .. 99.0 86.1 ESTDiATED RELATIVF POVERTY INCOME LEVEL (US$ PER CAPIEA) URBAN .. .. 65.0 107.0 RURAL .. .. 52.0 65.0 ESTDIATED POPULATION BELOW ABSOLUTE POVERTY INC011E LEVEL (PERCENT) URBA'; .. .. 25.0 RURAL .. .. 85. 0 66.9 Not available Not applicable. NOTES /a The group averages for each indicator are population-weighted arithmetic means. Coverage of countries 0o00g the indicators depends on availability of data and is not uniform. Lb inless other,ise noted, data for 1960 refer to any year between 1959 and 1961; for 1970, between 1969 and 1971; and for Most Recent Estimate, between 1974 and 1978. I/c 1962; ,'d 1963; /e 1965; /f 1967; a 1966. Moo1 recent estimate of GNP per capita is for 1979, all other data are as of April, 1980. * Data supplied by EAPED December 1980 October, 1980  - 19- ANEX I DIFINITIOtNS OP SOCIAL IttDCATORS Ntietee Altbough the date are draw ftoo ore eeal ugedte het brtalo n reiale te ehodls he totd thus they may sot he tote- -ai-ealy cemp-rble beoanee of telcof stadarizedd dein~ittes sad concet.usd by difretconrisIacllcin-hedte hedtet, es theIs.,. use ful to descrtheb rdees of gsitude, indicate trends, sad heretertee certein msJor diffsren.. - eneecbri- ThereerecegrepeerrIl th ee euty ru ofte -uletonr end (21 e countY gr-op nih .-meh.t high s orgeiot then the cu-y group of te eujectocutty encet fr 'Cpita Ouplus Oil Teocter` aros wher 'Middle Incm tlertth of rite end Midletees" ischa. houeofsrne se_otlore f tstinel I. herfenc gru.at .h .vsa err Ppepuleies eighe erhm-i IIefo sehIniatrad she- only ebsa at Oseetbolt f thecountIes lsareu hasdeta for that indic-tcr ir the coeag f cuotries -se the indicators depede o- the avilability o of one idic-tne sts tine -o the coutr and reer -c geps toe BeaA (thoseo.. eq.kaI.)etetner Pbvetoin -~ PoPoletIo. dloided by -une c prc bin r- Total - TotaI surface acne copiigln raadilndenr.eceeqot from aI mdice echel It un,iverity le_1. Asri-oltns1 - etimat o sgrioturs- aI -sdeporatily cc permanetly . t'orinto e ne Pereem - Population divided by nuber of prerttcig for crePe, Postures, arket end kittohec garden or to lie follow; 1977 dsto. masndfal grduate oes rcia uss n nitm nee GffP Pit CAPITA 0U91 GNIP Per c-pios -eimtee at tcrrt socket prioss tel- oren)ed idoll dvddb the.Ir eseciv -tI of bep.titahd culated by sam c -nvceo mehod as WrIld tank Atlas (1977-79 hostel; 1960, =vilable in pshlic sad prIvate geeesl-d specilinad hespitel anden 1970, sed 1979deto. hailitetiem cetersj. gepiltl ar-tbliebm tmn peeaetly eteffed ENiMO CONSUThPTIONi Pit CAPITA - Annul -esepticn of tmrie eegy 1(el cr r net istpde, Snce bepie t. pnweer,inod b,Iltp and medicl adliIgnite eroem stur tes d hyr-...e edgttemlelc etr e reaetyee ffd byiaIphysirien (bet by a madical asetetn, tricityli hior f coe r quiclIIt per cc.pits; 1960, 1971. and 1979nre8mdIe etc._ bt fe nptetecidte n rvd tel. include WM. erteolpel geneal ,e sP:tialled heepitels. sa -nc POPOI.ATION ADu VITOAL. STATISTICS hsiesl loelerrua hospiasndmdcledetriyene. Totl eeuaeon.Mi-lee (ilios)- As of July 1; 10.19)0, end 1979 dleneer lsia e i..Tetal number of admsin -Ttoycdehr data, free hoIfpitele dtrided by the number of beds. diffsen dfiirce f urhaores nyeffe_t cempuobtlit) cf deta HOUSING snag, cstr,ies; 1960, 197D, and 1976 data. Avere. Site of Seuehold (e hon ... ush.ld 1- total, urha. enderl Poruleeion Prolectiene A h.n.shold c-niert e agopfidvido.e. h ehar living quatere Poc ielo in veer 2000 - current population P-oJectiene. er ee o 0 sd theirat meal. A bcerdeo lodgee may ccsy sot bei seluded in tons popu.leto by Ig and see and iheIr -octe so tfility rtee.. tha hou.o.old fec tsielticel p Iyce. Pro.ttoe uceetee fr mrtsity caescpriee of three levlsnen A-ere- number efosonrerws-Tnt,ubn n tl-Aeaen ing lit e eapect-ny at bthirib-enreaing ntb -ntry'e Pc ce.pits iscem her of -prsepr coo, In ll urban, -d rural oucupied coveattean levl,en femal loft tpect-ey stailieieg at 77.5 Yea.. The pac- dwellings, d ep1tivly. Docllinge . -'ode ..-P-pe _setsrctrsed nese u dfriliyctess have thees 1-level osuinaI'l sctn ilo n uidpce tertlttyccodiegcitcm evelandPest fetl pn Ig peformnce Accs.o....Rly(eret fdelig)- cetal, b- re. ad rura - Each -tcnny i hnenge c l ems. t.in cembientio,. ef mer-lity C- votcn dwligs w_itht eotrictyi, living q-etece ne percen tage aed fertility tesds for proJecftie PurPoese of toe boho, cad rural dee1ligs repectively. Stationery ccculsti_n-Iseetnt_i_cP.P. poaaico there in to grot-h since the bIrth care ia ..Ie tc the d-ah rate, adlsthegeccure- EDUCATlaNI maie ontet. hi i ahievd ol atrftI lity ret, adoieS dote neletat therep'lacmet lve Io-uit secprodoctio case, shoe each geebn Primacy school - tte al end female - Goots to soeed feml estimatd on the basis of the projected chocteristc of the eeuotiw ramryachd- ge ppuIties noelytelde hide egd61 Ith usy_e 2000, ad the rote of deollee of ferility rat to replet- Year hut adjusted for diffseet lengths of pcimsry edn_ti_w;for mee level.i . h h y-h.-t."pp.-- I cutiter~ith univ--sl ed-otien enrolmet may eneed 100 percen site hue bee ee d Seodar cho ttl sole endCael - Compu-daebo;scnar PenainD-iety :_I.e rqie n es utyxso -pree primac --eosole Per s. ko. - Mid-y... pepoletie Per square kilomt-e (100 1etrs f pdovides genr... vcerq , It1. er1 teacha trta anet-d tPI e or puib; utel f 12to1yer oeg;crspondenc rocaa r ge-caly Pe en.. he. -eicult-1a lend - Cnp-td an aho.- f- grc na lend excluded. 7 . R;I Peclatee. Ant Strutur (percntl - Child-s (0-14 years.), -krin-o ge (15- include teoheic1, industrieS,for osher pregcn whiceprt . Indepa- hA ynrs) an eried(65 yearn an- wd se pervnrgee of mid-yuac coon- deetly o sdprmeeo ecdr ntttoe latin; 1b0. 970,and 979 ate.Our1-t ...h.rrtiI ci mcy n Teedr - 1oe stadete enrolld in Puplteeios Rae trecer - trl- nl ges-b rtes of total aId- Ppriay n seonay..r dvedhy nmeso nceei h Tsrppltosf c 1950-60, 1960-70, end 1970-78.crreodelvls Peultit iGowh Rats (Percen) - urban - cannl groth rate of urhe OPup autltrc-as(toet teeeeut (bet edaduie lotins or 95060,1960-70, an 197079Isper-etage of total adult ppoletice aged 15 yFas andevr crude Birch Rt tee ib edl - Aae Ire births Per thoo-ud of aId-year Ppopluti"n; 1960, 1970, end 1978SAnte eou0it GI.se eRp-d-ntio tesAvrge scme of deaghte-I e-e till bee in sii- r vehticles. -ih I.. I. bl.. ... her norma reproducive eaid if she PIer e p....nt ag, -specific fe-_ Radio tacirec (etc chouaand eels(-All types cf Ic..osia fer radt tlity cases;usal fie -e vrgse ending in 1960, 1971 , and 1977. hratsmt eea ubi e huadc oplco;nrue al Fel Planne- tuotrF annel (thenadel - .A.na ubhe of Icceptere b.d..t c te . eciesi coon tr1ies a. adhin.ad ehe preg.isrtie ufld radio e Psell Pleningfeeceicorex_ f maried' nen -Pretgof maried conre bolished tsug ree of child-heaing age (11-44 years) h. use bleth-c-r 1 de-io.e to ttciee)t hoee enain TI rciesfrbedett nIl maried ers in san age group. gexersi,, pablc ecthousand pupuletion;W--- en fde nicon-d. TI retiec FenOOD S ANDNTRITION to cotcisad heyer ebon rgsaisof t note we in effect. ndan of Peed Pred-rion per Capite 11969-71-IDO( - laden of p- aiaaoa iso ..di-yIgunecaI intrse nenpeer, efne anpeiadia piab.- ,preduti- of all food coumoditien. Production excludeseo. edte n licetice devotd primarily en --redia9 g.u.e none-. It it tcnidsred is n cleder year haste. Comeditiee curer primary gowe 7eg naon to ho "dntly" if it ePppeare a1t lest fou tieseeek iseted ofIsugar)ehc or dible end -otoic catrien- -sj.cffee and Cinem Anutue Attendec _ eCrie r PTear-e:.ad on he nuhe of teear enldd) Agg-rgate prodoction of ec outyIs ted ttickets sold during the peer. i-clodiegedmtel... to doirs-ieti-e netionlusege9 producer price soighte; 1961-65, 19710 ud 97g8 data,ednbieui Per cacita saoy ofcaois(pecets of r-oi-em-ts - Cospted f-oem-il .i. enerIgy Iqoive1eec of ne foodtnuppIitecvajlslbl in c-utr) per o pIts lE o per da.. Arilablo eup,lle cI aprise dometic production, imprteless Tcta! Leber Forc (tho.....de) - tronemically -ctire peree,icldn tepo-%, ad.changes is stock. .istI supplies aeclude exia] feed, seeds, armd force an.I.d oneaploed but e-ludine houseni-e, etudent, etc. IuIite sd in fod prIrsig end losses it dietihuli.toe. aqic- Deiise cvrcecutlsaentcsaet;16,17 n mees eroesimaedby PAt b...ad on physiologica ed i noma aci- 1978 d160ete. . and uto1ditrbtboice of-ppltc,ad elbowing 10 pece- for waste t Aecloe(rto)-lbrfcr in faring, f-tntry. hunting end h..eehld I-It; 1961-b5, 1970, ad 1977 data, fishing as pecree.teg o.f total labor fort; 1960. 1970 and 19'76 date. Per cariton auey of ree-in (acne our del - Proteis --se. of Pee ..pcite IndaeIrv (ercet - inte forc-t enina., cntrcin,mnfactuing se uply cffodPer dcy Ct supplp of fd im defined an abor.- h- an.d 1-ttoiclty este end gce on percntag o .f tota labor force; 1960. qutrnocc fo allcon tote r inbihed by USDA po-ide ft iniu 90ed17 ae 60ed cedSuroy 191-5 19701and1977 date. Per erie to Ste nro irn a Imalat dols -dPrtei SuI'pl of f-od -de ag-eon etrotr f h coto,cd o it Irw.A e ni 8_~~~l Th... .-d- -.-Iate arefre natona eiccip tries dno derivedCrow ltf tables; 960, 197 and 197 dett .dICfM1.OIbtItff-IO P-1- PI.t.i., f hi~~~~~~h I I- I Percetag o Priat ltce d (ht Isco ndkn)-1e7vd yib at961eh;1900 1977and19 d st7. of0,190 hoseods. 7 .. h. LD.pIii. - ofaeprthuadlvebrh,esiaeldelt cervOcw leve(,5 teIca Ita - chnan rrl - Accest lot etr brcet f- ooolein - oa,ubn sdrrd-0 Aslt oet itooso level' is d that I tion levl blo Ahc e- ..i-i netocoppl (iclude trae oooeoseeo stoodhi notaiee afoDable. t1,MI15.d 5- tChcild o eetd -e locaedst mere. the -0 Axtacl fromb j- ~heu dtso be prectnl isoto h esr.Ihtle sdrvdfe h oa fMil' d atrrd irode. and tICM roDI-SPRcBTON to oooin(ra e url b r ae or rura - NomberIo bttplInlo.alh cdbt, end roRl).aecdedby exccet peel to lcyod thB clItocen-Iepng , it orb- wf....ot tif treetnu trotno Anoysi end -roected lparI.tm-aet -t blIth; 19,:t197V ~~~~~~~~~~~~~~,d I19RVd. t..ctoer 98 o.f- -lt m~ecr t.aad weth...er dv eAter-hors sy- tn f c ttf- use o..F POETTAGTRUS pIt:g Eprii-dAen ord--y -e., 'larp leesellecioss. d ...  ANNEX I - 20 - COUNTRY DATA - MALAWI MONEY, CREDIT and PRICES 1975 1976 1977 1978 1979 (Million K outstanding end period) Money and Quasi Money 122.4 121.0 161.0 168.6 170.1 Bank Credit to Public Sector 67.4 88.1 85.7 99.8 121.8 Bank Credit to Private Sector 56.1 76.5 84.9 122.4 170.9 (Percentages or Index Numbers) Money and Quasi Money as X of GDP 21.6 18.5 20.9 19.8 15.8 General Price Index (1970=100) Annual percentage changes in: 100.0 104.5 108.5 118.0 131.1 General Price Index 15.0 4.5 3.8 8.7 11.1 Bank Credit to Public Sector 237.0 30.7 -2.2 16.5 22.0 Bank Credit to Private Sector 13.6 36.4 11.0 44.2 39.6 BALANCE OF PAYMENTS MERCHANDISE EXPORTS (AVERAGE 1976-1978) 1975 1976 1977 1978 1979 US$ Mln. Z (Millions US$) Tobacco 108.5 45.0 Exports of Goods, NFS 179.4 202.6 241.9 260.0 269.0 Tea 39.4 16.4 Imports of Goods, NFS 284.0 246.4 279.1 425.3 468.7 Groundnuts 8.7 3.6 Reavuuce akle,tuxe -104.4 -. -3 3.2 -165.3 -199.7 Sugar 2.9-3 8.0 All Other Commodities65.8 27.0 Total 241.7 100.0 Interest Payments (net) -5.4 -5.5 -5.5 -8.8 -15.0 Other Factor Payments (net) 17.3 -14.2 -20.0 4.0 -22.7 Net Current Transfer 6.1 5.5 23.5 44.8 35.5 EXTERNAL DEBT, DECEMBER 31. 1979 Balance of Current Account -86.6 -58.0 -37.2 -125.3 -201.9 US$ Mln. Direct Private Foreign Public Debt, incl. guaranteed 606.0 Investment 9.9. 8.2 11.1 19.6 20.9 Non-guaranteed Private Debt .. Net MIT Borrowing Total Outstanding & Disbursed Disbursements 42.3 34.0 56.8 87.5 170.0 Amortizations 2.9 3.3 8.4 11.8 15.0 NET DEBT SERVICE RATIO for 1979 Subtotal 39.4 30.7 48.4 75.7 155.0 Other Capital (net) -17.9 -30.1 35.6 31.5 21.4 Public Debt, incl. guaranteed 10.0 Increase in Reserves (+) -47.1 -38.3 57.9 -18.1 - 4.6 Non-guaranteed Private Debt .. Total Outstanding & Disbursed Gross Reserves (end year) 65.5 26.2 88.0 69.9 65.5 Petroleum Imports 22.9 26.1 21.5 36.0 38.1 IBRD/IDA Lending, December 31, 1980 (Mln_HS$ Petroleum Re-exports - - - - - IBRD IDA (Inc. Third RATE OF EXCHANGE Window) Outstanding & Disbursed 25.5 126.1 Undisbursed 3.7 57.1 US$ - K .8861 .9130 .9029 .8438 .8169 Outstanding incl. t Undisbursed 29.2 183.2 K 1 - US$ 1.1545 1.0953 1.1075 1.1851 1.2241 1/ IMF, International Financial Statistics, July 1980 not available February 20, 1981 not applicable  ANNEX I - 21 - ECONOMIC INDICATORS GROSS NATIONAL PRODUCT IN 1979 ANNUAL RATE OF GROWTH (%, constant prices) US$ Million % 1968-78 1979 GNP at Market Prices 1,278.7 100.0 6.3 3.9 Gross Domestic Investment 374.8 29.3 15.4 -19.0 Gross National Savings 137.8 10.8 27.0 -45.4 Current Account Balance -201.9 -15.8 Exports of Goods, NFS 269.0 21.0 6.3 - 0.8 Imports of Goods, NFS 468.7 36.7 7.0 - 1.0 OUTPUT, EMPLOYMENT AND PRODUCTIVITY IN 1979 Value'Added Labor Force V.A. Per Worker US$ Million Z_ Thousand % US$ Miilion Z Agriculture 520.2 42.0 2631 93.0 197.7 45.9 Industry 236.9 19.'J 66 2.3 3,258.9 732.6 Services 463.2 38.0 133 4.7 3,482.7 807.7 1,220.3 100.(l 2830 100.0 431.2 100.0 GOVERNMENT FINANCE Central Government K NLillion % of GDP 19,8/79 1978/79 1975/76-1977/78 Current Receipts 147.8 17.3 13.2 Current Expenditures 14C.4 16.4 12.6 Current Surplus 7.4 0.9 0.6 Capital Expenditures 11:l.5 13.3 8.8 NOTE: All conversions to dollars in t:his Annex ale at the average exchange rate prevailing during the period covered. not available not applicable February 20, 19g1  - 22 - ANNEX II THE STATUS OF BANK GROUP OPERATIONS IN MALAWI A. Statement of Bank Loans and IDA Credits (as of December 31, 1980) Bank incl. Loan or Third Un- Credit No. Year Borrower Purpose Window IDA disbursed Two loans and 12 credits have been fully disbursed 17.00 81.10 S-17-MAI 1974 Republic of Transport Engi- Malawi neering & Services 2.00 0.23 523-MAI 1975 Second Highway 10.00 1.30 590-MAI 1976 Education II 11.60 1.21 1286-T-MAI 1976 Agriculture- Karonga II 9.20 0.68 711-MAI 1977 Water Supply 7.00 6.98 758-MAI 1977 Third Highway 10.50 0.77 823-MAI 1978 Shire Valley Consolidation 10.70 3.34 1610-MAI 1979 INDEBANK First DFC 3.00 3.00 857-MAI 1979 Republic of National Rural MIalawi Development Programme I 22.00 15.99 910-MAI 1979 Education III 14.50 13.48 992-MAI 1980 National Rural Development Programme II 13.80 13.80 TOTAL 29.20 183.20 of which has been repaid 1.71 Amount sold of which repaid TOTAL now held by Bank and IDA 1/ 29.20 181.49 TOTAL undisbursed 3.68 57.10 60.78 1/ Prior to exchange adjustments.  - 23 - ANNEX II B. IFC INVESTMENT IN MALAWI DecenLber 31, 1980 Total Investment Type of Held Undis- Number Year Obligor Business Equity Loan Total by IFC bursed -----(US$ Million)------- 326-MAI 1976 David Whitehead Textiles - 6.0 6.0 5.0 - & Sons (Malawi) Limited 362-MAI 1977 Dwangwa Sugar - 9.5 9.5 9.5 - Sugar Corpora- Production tion Limited 434-MAI 1978 Investment and Development 0.6 - 0.6 0.6 0.1 Development Finance Bank of Malawi Company 502-MAI 1979 Malawi Tourism - 2.0 2.0 2.0 1.6 Hotels Limited TOTALS 0.6 17.5 18.1 17.6 1.7  - 24 - ANNEX II C. BANK PROJECTS IN EXECUTION Credit No. S-17-MAI Transport Engineering and Services Project; US$2.0 Million Credit of June 13, 1974; Date of Effective- ness: August 28, 1974; Closing Date: June 30, 1981 The project helps determine the infrastructural requirements and provides technical assistance for the exploitation of the Viphya forest resources. Necessary transportation studies and the design of the required transport facilities have been completed. Part of the credit proceeds that remained were used to assist in putting together a financial package for the proposed mill. The package is still incomplete, however, and the pro- posed project is still being analyzed by the Government. The Closing Date was extended to June 30, 1981. Credit No. 523-MAI Second Highway Project; US$10.0 Million Credit of December 19, 1974; Date of Effectiveness; February 21, 1975; Closing Date: June 30, 1982 The project consists of reconstructing to two-lane bituminous paved standard the Lilongwe-Kasungu road (about 70 miles), including a bypass around the Lilongwe industrial area and reconstructing the Ligadzi bridge; and a pilot program in one district for improving development and maintenance of district roads. Construction works for the main road are complete and savings of approximately US$3.5 million were realized for this component. Results from the pilot program for district roads improvement and maintenance indicate clearly that the program has been successful and that it is feasible to extend it to other districts. The savings from the reconstruction component are being used to extend the pilot program to three additional districts; accordingly the Credit Agreement was amended by letter of June 9, 1978 and the Closing Date was extended to June 30, 1982. Credit No. 590-MAI Second Education Project; US$11.6 Million Credit of November 24, 1975; Date of Effectiveness; February 24, 1976; Closing Date: December 31, 1981 The project provides for constructing 22 model primary schools as examples for replication by communities and facilities at the schools for a rural education program; it establishes a new primary teacher college; adds practical subjects in selected secondary schools with emphasis on facilities to increase female enrollment. As costs permitted, the project scope was enlarged to include computer facilities for the Malawi Certificate Examination and Testing Board and additional staff housing. All contracts have been awarded and, except for minor additional construction at a number of primary schools, the project has been substantially completed. At the Government's request the Bank Group recently extended the Closing Date to December 31, 1981 to permit completion of all contracts.  - 25 - ANNEX II Loan No. 1286-MAI Second Karonga Rural Development Project; US$9.2 Million Loan of June 24, 1976; Date of EffectivEness: August 18, 1976; Closing Date March 31, 1981 The project, financed on Third Window terms, consists of seasonal- and medium-term credit to farmers, extension service, market complexes, health facilities, boreholes and other infrastructural facilities, agri- cultural and hydrological research, preparatory investments for the National Rural Development Programme, and rehabilitation of berthing facilities at Chipoka Lake terminal. Improvement of Chipoka harbor has been completed. Although understaffing hampers imaplementation efficiency and small cost increases have occurred, the project's progress is satisfactory. Credit No. 711-MAI Blantyre Water Supply Project; US$7.0 Million Credit of June 3, 1977; Date of Effectiveness; April 18, 1978; Closing Date: March 31, 1982 Initial delays in project implementation occurred due to revision of the project's scope, but implemeatation is now proceeding reasonably well. Detailed engineering is substantially complete; bid documents have been issued and awards made on three of the four contracts being financed by the Associa- tion with the award of the fourth contract expected shortly. However, due to the initial delay, commissioning of the works is now scheduled for late 1982, rather than December 1980 estimated at appraisal. Credit No. 758-MAI Third Highway Project; US$10.5 Million Credit of January 18, 1978; Date of Effectiveness: June 29, 1978; Closing Date: June 30, 1981 The project consists of constructing the 52-mile Kasungu-Jenda road to two-lane bituminous surfaced standard; strengthening three short sections of the Zomba-Lilongwe road; and providing consultant services for the supervision of the roads, and for the feasibility and engineering studies of the Jenda-Mzuzu road. Construction works on the Kasungu-Jenda road are almost completed, and strengthening works on the Zomba-Lilongwe road are well underway. Studies for the Jenda-Mzuzu road are nearing completion, and consultants are preparing tender documents.  - 26 - ANNEX II Credit No. 823-MAI Shire Valley Agricultural Consolidation Project; US$10.7 Million Credit of July 7, 1978; Date of Effectiveness: September 6, 1978; Closing Date December 31, 1982 The project is the consolidation phase of the Shire Valley Agri- cultural Development Programme and includes extension services to support increased cotton and foodcrop production, seed multiplication and afforesta- tion programs, production credit, livestock and fisheries development, health and potable water supply facilities, a smallholder irrigation development study and some rural roads. It will provide social and infrastructure services to about 70,000 families. The Valley attained self-sufficiency in food crops for the first time in its history in 1977/78. Cotton produc- tion also regained the levels attained in the early 1970s. Guar bean pro- duction is rising rapidly, but groundnut production is declining. The project had a slow start because of staffing shortages and procurement delays. Although steps have been taken to improve staffing, it remains a problem, with inadequate middle level staff and delays in replacement of senior staff. Civil works and road construction, although somewhat behind schedule, are proceeding well. Production estimates for cotton and maize for 1979/80 show a further decrease from 1977/78 and 1978/79 levels, while guar beans have continued to increase. Apart from maize and guar, the areas planted to crops decreased, and a severe drought from December 1979 through March 1980 also affected yields. Loan No. 1610-MAI Investment and Development Bank of Malawi Limited; US$3.0 Million Loan of July 7, 1978; Date of Effectiveness: November 1, 1978; Closing Date: July 1, 1983 The project provides foreign exchange for financing medium- to large-scale industrial and agro-industrial investments, and will help INDEBANK consolidate its policies and procedures and develop project promotion. To date, US$1.3 million has been committed for three sub- projects and more commitments are expected shortly. Credit No. 857-MAI National Rural Development Programme Project Phase-I; US$22.0 Million Credit of December 21, 1978; Date of Effectiveness: April 5, 1979; Closind Date: September 30, 1983 The project is assisting the Government in implementing the first phase of Malawi's National Rural Development Programme. Over a five-year period it aims to increase output of maize, groundnuts, fire-cured tobacco and rice, and expand milk and meat production. It will strengthen the Ministry of Agriculture and Natural Resources' Central Service, four existing Management Units and establish eight new development areas. It will also complete the consolidation phase of the Lilongwe Land Development Programme. The project is cofinanced by CIDA, DEG, EDF, and ODM. It is proceeding satisfactorily except for staffing and recurrent financing problems.  - 27 - ANNEX II Credit No. 910-MAI Third Edu-cation Project; US$14.5 Million Credit EEC Credit No. 12-MAI June 19, 1979; Date of Effectiveness: September 4, 1979; Closing Date: June 30, 1984 The project is assisting the Government in improving and expanding primary and secondary education and improving curriculum development, in- service training and management of education. Its major components include constructing, furnishing and equ:.pping primary schools; improving and expand- ing primary teacher training, secondary teacher training, secondary and technical schools; providing prinlary school textbooks; establishing an Insti- tute of Education responsible for- curriculum development, in-service teacher training, and materials preparation; and assisting school inspectorates, architectural and engineering services, educational studies and project administration. An EEC Special Action Credit of US$7.5 million was made available to the project. Implementation is proceeding well and on time. Credit No. 992-MAI National Rural Development Programme (NRDP) Project Phase II (Wood Energy); US$13.8 Million Credit of April 25, 1980; Date of Effectiveness: June 9, 1980; Closing Late: December 31, 1985 The project is assisting the Government in its long-term energy development program aimed at increasing forest resources. It will establish a national network of 88 nurseries to produce seedlings for sale to small- holders, who will be encouraged to establish their own woodlots; fuelwood and pole plantations to help meet increasing demands from the commercial and industrial sectors, as well as from urban dwellers; and an energy unit in the Forestry Department of the Ministry of Agriculture and Natural Resources. It will finance preinvestment activities for launching NRDP phase III. Imple- mentation is proceeding satisfactorily.  - 28 - ANNEX III Page 1 MALAWI FOURTH EDUCATION PROJECT Supplementary Project Data Sheet I. Timetable of Key Events (a) Time taken prepare: Two Years (b) Prepared by: Government with assistance from Bank Group. (c) Initial discussion with Bank Group: March 1979 (d) First Bank Group mission: March 1979 (e) Appraisal mission departure: July 1980 (f) Negotiations: January 1981 (g) Planned date of effectiveness: Ninety days after the date of signature II. Special Bank Group Implementation Action None III. Special Conditions of the Credit (a) The Government would (i) prepare and furnish to the Association for review, starting in October 1981 and annually through 1985, a report on the implementation of secondary teacher training programs at Chancellor College describing recruitment of students, placement of graduates, expected future enrollments and number of graduates and program and curriculum changes; and (ii) operate a tracer system for monitoring of employment of graduates of teacher train- ing programs at the College (para. 43). (b) The Government would complete a national educational plan by December 31, 1982 (or such later date as agreed) and review, jointly with the Association about one year from Credit Signing and thereafter annually for a period of four years, its education budget in terms of its adequacy to carry out its long-term educa- tional objectives (para. 45). (c) At least until project completion, the Government would: (i) maintain PIU in existence, with appropriate powers to enable it to carry out effectively its responsibilities for project execution;  - 29 - ANNEX III Page 2 and (ii) keep PIU adequately staffed with personnel whose qualifi- cations, experience and terms and conditions of employment would be satisfactory to the Association (para. 46). (d) The Government would employ consultants whose qualifications, experience and terms of employment are satisfactory to the Associa- tion to: (i) prepare architectural plans and bidding documents for teaching facilities and housing at Chancellor College and (ii) to complete the national education plan (para. 49).   _______ _______ _______ _______ _______ _______ _______ _______I 8 R D 15278R 34- D~~~~~~~~~~~~~~~~~~~ECEMBER i~f ToDARES SALAAM NYIR f