Malawi - Fourth Education Project

Document of The World Bank FOR OFFICIAL USE ONLY FILE CfrY Report No. 3133-MAI STAFF APPRAISAL REPORT A FOURTH EDUCATION PROJECT IN THE REPUBLIC OF MALAWI February 18, 1981 Education Projects Division Eastern Africa Regional Office This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS Currency Unit = Malawi Kwacha (MK) US$1.00 = MK 0.795 MK 1.00 = US$1.258 SDR 1.00 = US$1.275 MEASURES 1 meter = 3.28 feet 1 square meter (m2) 10.76 square feet 1 kilometer (km) 0.62 mile 1 hectare (ha) = 2.47 acres ABBREVIATIONS EPD - Economic Planning Division of the Office of the President and Cabinet IPA - Institute of Public Administration JC - Junior Certificate MBC - Malawi Broadcasting Corporation MBS - Malawi Book Service MCC - Malawi Correspondence College MCE - Malawi Certificate of Education MOA - Ministry of Agriculture MOE - Ministry of Education MOW - Ministry of Works PIU - Project Implementation Unit PSLC - Primary School Leaving Certificate REPUBLIC OF MALAWI FISCAL YEAR April 1 - March 31  FOR O]FFICIAL USE ONLY MALAWI STAFF APPRAISAL REPORT A FOURTH EDUCATION PROJECT Table of Contents Page No. BASIC DATA I. SOCIO-ECONOMIC DEVELOPMENT AND MANPOWER NEEDS .... .......... 1 Geographic and Socio-Economic Situation ........ ............ 1 Development Objectives and Trends ..... .................... I Manpower Situation and Needs ............................... 2 II. THE EDUCATION AND TRAINING SYSTEM .......................... 4 Overall Policy ................ . . . 4 Structure, Administration and Planning ..... ................ 4 Primary Education .................. ................. 5 Secondary Education ................................... . 6 Secondary Teacher Training ................................. 8 Training of Middle and High Level Manpower . . . 9 Non-formal Education ....................................... 10 Financing and Cost of Education ... 10 III. BANK GROUP EXPERIENCE AND LENDING STRATEGY IN TH15 SECTOR 13 Past Experience and Lessons Learned ...... ................. 13 Lending Strategy . ......................................... 15 This report is based on the findings of a mission which visited Malawi in June 1980 and comprised Mr. G. Sinclair (Architect/Mission Leader), Mrs. N. Shields (Economist), Mr. L. Wolff (Education Planner), Mr. C. Fuller (Public Administration Specialist/Consultant), and Mr. C. Hammerschmidt (Architect/Consultant). 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.  Table of Contents (Continued) Page No. IV. THE PROJECT ...... .. . 15 Objectives and Composition ................................ 15 Secondary Education ....................................... 16 Secondary Teacher Training ................................ 17 Pre-investment Studies .................................... 18 Reporting and Evaluation .................................. 19 Female Participation in the Education System ... ........... 19 Summary of Technical Assistance ........................... 19 V. PROJECT COST AND FINANCIAL PLAN ........................... 20 Project Cost ........ ...................................... 20 Financial Plan ............................................ 22 VI. PROJECT IMPLEMENTATION , PROCUREMENT AND DISBURSEMENT 22 Implementation ............................................ 22 Procurement ............................................... 24 Disbursements . . . 24 VII. BENEFITS AND RISKS ........................................ 25 Benefits .................................................. 25 Risks ..................................................... 25 VIII. AGREEMENT REACHED AND RECOMMENDATIONS .................... 25 ANNEXES Annex 1 - Supporting Tables and Charts Table 1. Forecast of High and Middle Level Manpower - 1980/1990 2. Selected Higher Level Employment, 1979 3. Comparative Education Indicators 4. Secondary School Enrollments and Teacher Requirements - 1978-1990 5. Public Enrollment Unit Cost and Recurrent Expenditure - Formal Education - 1978/1990 6. Expenditure on Education 1975/76 to 1979/80 7. Summary of Enrollment and Estimated Project Costs 8. Estimated Schedule of Disbursements Chart 1. Full-time Enrollment and Population Pyramid, 1978 2. Structure of the Formal Education System 3. Organisation of the Ministry of Education 4. Implementation Schedule Annex 2 - Selected Documents and Data Available in the Project File MAP - IBRD No. 15278R  REPUBLIC OF MALAWI BASIC DATA 1979/80 General Per Capita Income US$200 Annual Growth Rate (1966-77) 2.9% Area (Including Lake) 118,500 sq.km Area (Land only) 94,300 sq.km Population 5.9 million Education School year October-August Gross Enrollment Ratios: Primary Education (6-13 age group) 58.9% Secondary Education (14-17 age group) 4.0% Higher Education 0.3% Central Government expenditures on Education 1979/80 as percentage of total Government expenditures Capital 4.1% Recurrent 11.3% Total 10.2% Total Ministry of Education expenditures as a percentage of GDP 3.5%   REPUBLIC OF MALAWI APPRAISAL OF A FOURTH EDUCATION PROJECT I. SOCIO-ECONOMIC DEVELOPMENT AND MANPOWER NEEDS Geographic and Socio-Economic Situation 1.01 L4alawi is one of the least developed countries in Africa with a GNP per capita in 1979 of about US$200 equivalent. The results of the 1977 census indicate that within the last decade, population growth has averaged about 2.9% per annum. Most of Malawi's estimated 5.9 million people (1979) live in rural areas. With an average density of about 59 per sq. km. of total land and 136 per sq. km. of arable land, M4alawi is one of the most densely populated coun- tries in Africa. However, the population is unevenly distributecl throughout the country, varying from 88 persons per sq. km. in the more populous southern regions to 23 per sq. km. in the North. Development Objectives and Trends 1.02 The Government's socio-economic goals are clearly outlined in the Statement of Development Policies 1971-1980. The main emphasis in the document is on economic growth, and this is to be achieved largely through growth of the private sector. During the last decade the Government has fostered the develop- ment of this sector by creating an environment in which foreign investment is welcomed. It has also encouraged local initiatives and participation through the Government-owned Malawi Development Corporation. The Government's policy since independence has been to invest its own resources in directly productive rather than social sectors, and its investment expenditures have mostly been directed to such income-generating activities as small-holder agriculture, infrastructure and public utilities which cannot easily attract private invest- ment. 1.03 Since independence in 1964, economic progress in Malawi has been remarkable. Between 1964-75, GDP in constant prices grew at an average annual rate of 6.5%, and per capita GDP at 3.8% per annum over the same period. Since 1978, the economy has stagnated because of unfavourable weather conditions, high fuel costs, and a 70% drop in the price of cured tobacco. In agriculture the rate of growth dropped from 14% per annum in 1975 to 3.7% in 1978 and 2.8% in 1979. Fuel shortages in late 1979 adversely affected the construction, tran- sportation and distributive sectors. Despite economic uncertainties, real GDP from 1980 to 1985 is still projected to grow at an average annual rate of about 5.3%. 1.04 Unlike many developing countries, the revenue account of the Malawian Government was in surplus from 1972 to 1978, and the official policy continues to be one of fiscal restraints aimed at producing a balanced budget. However, the rise in recurrent expenditure due to new development projects, combined with  -2-- a reduced rate of growth of revenue, virtually eliminated surpluses in 1978/79 and 1979/80. Manpower Situation and Needs 1.05 At the time of independence, given the small number of citizens with post-primary education, the most urgent need was to train the essential manpower required by the Government to assume control of and develop the economy. Prior- ity was given to making up the deficiencies at higher education levels until the minimum high level manpower requirements had been attained. The 1971 Manpower Survey analysis projected these needs to 1980. "The Education Plar of Malawi 1973-80", subsequently prepared, set broad goals for the developmernt of the edu- cation system during the period. The quantitative objectives of the plan were not fully implemented, in part because of Government's fears of excessive secon- dary school output which might lead to unemployment of secondary school leavers. Following several years of very slow growth of the secondary education system combined with a period of rapid economic growth (para. 1.03), the outputs from the education system at both the secondary and higher level now fall far short of the country's development needs (para. 1.09). Recent studies in Malawi indi- cate a very low unemployment rate among secondary school leavers and high social rates of return to secondary education.(l) 1.06 To enable the Government to plan its objectives and strategy for human resource development in the 1980's, a new Manpower Survey was undertaken in 1979 with the primary objectives of: (a) estimating future manpower requirements, and (b) assessing the severity of present manpower shortages, Job vacancies and dependence on non-Malawians, especially in the high and middle level positions. 1.07 Forecasts of manpower requirements for Malawi prepared by Bank staff take into consideration the recent downturn in the economy (para. 1.03). Annex 1, T-1 illustrates the effect of different assumptions as to productivity increases on estimated manpower requirements. Based on an expected 5.3% p.a. GDP growth rate (para. 1.03) for the 1980's and on modest productivity increases and low dropout from the labor force (reflecting the comparatively young age of the group currently employed), the total number of higher and midd-Le level posi- tions are expected to grow from about 120,000 in 1979 to about 158,000 in 1985 and about 203,000 by 1990, distributed by educational level as follows: (1) Re: Staff Working Paper No. 420.  -3- University Upper Lower and Higher Secondary Secondary Total 1979 No. of Positions 29,900 37,600 52,500 120,000 % of total 24.9 31.3 43.8 100 1985 No. of Positions 39,800 51,200 67,400 158,400 % of total 25.2 32.3 42.5 100 1990 No. of Positions 51,300 67,300 84,200 202,800 % of total 25.3 33.2 41.5 100 1.08 Preliminary analyses of the Manpower Survey indicate that the labor market continues to rely heavily on non-Malawians at the high and middle level positions. For example, 43% of all administrative and manageriaL personnel, 39% of all architectural and engineering staff, 57% of all accountants and auditors, 30% of all secretaries and 20% of all farm managers are non-Malawians. Although the total number of non-Malawians in relation to total employment is small (5 per 1,000, Annex 1, T-2), their impact on the economy is great because they tend to hold decision making positions. Non-Malawians are often employed because the available local candidates may have received training which is neither relevant to nor suitable for existing vacancies. 1.09 Based on Ministry of Education (MOE) estimates, both enrollment and output of secondary and higher education is expected to increase by about 5% p.a. over the next ten years. This increased output would not bIe sufficient to close the gap between supply and demand for high and middle level personnel and for the foreseeable future Malawi is unlikely to be able to obtain self- sufficiency of skilled manpower. The cumulative shortfall between output and requirements for upper and lower secondary level personnel by 1990 would be 14,000 and 18,000 respectively, and the shortfall of personnel with higher edu- cation would be about 10,900. Even if economic growth is lower than expected, the lack of skilled manpower would still constitute a serious constraint to development. The shortfall could be met partially by additional employment of non-Malawians, but Government policy is gradually to reduce its dependence on this source of expertise. Additional expansion of secondary and higher educa- tion beyond the projected 5% p.a. increase will be difficult in view of the cap- ital and recurrent cost implications. The most likely scenario is therefore employment of school leavers in occupational levels higher than their general education level and a continuation of the lack of appropriately educated man- power as a key constraint on Malawi's economic development.  -4- II. THE EDUCATION AND TRAINING SYSTEM Overall Policy 2.01 After independence in 1964, Government policy within the education sector emphasized the provision of middle and high level manpower required for the economy (para. 1.05) and, accordingly, emphasis was initially placed on expansion of secondary education from the extremely low base of 3,100 students in 1962 and on the establishment of the IJniversity of Malawi. The "Education Plan of Malawi 1973-1980" (para. 1.05) established broader goals for the educa- tion system. It gave priority to improved internal efficiency and more equit- able distribution of educational opportunities as well as continued efforts to meet manpower requirements. On the basis of these broader goals, the Government gradually turned more attention towards improving access and efficiency in pri- mary and secondary education, as well as to improving overall management of the sector. 2.02 As a result of the Government policy of giving higher priority to directly productive sectors rather than to social services, the development of the educational system has lagged behind that of other sectors. In 1979, only 25% of the adult population were estimated to be literate. Enrollment in grades 1-8 was equivalent to 59% of the 6-13 age group (Annex 1, C-i). In addition, only 17% of the children entering primary school completed primary education, which was often given in inadequate facilities, with little or no furniture or equipment (paras. 2.06 and 2.07). Only 4% of the relevant age group were in full-time secondary education (including general, technical, and teacher train- ing courses), a figure which is among the lowest in Africa. The output of agri- cultural, industrial, and commercial technicians from specialized secondary and higher institutions falls short of manpower demands (para. 1.09). Structure, Administration and Planning 2.03 The formal education system (Annex 1, C-2) consists of eight years of primary education, four years of secondary education (two years of junior secon- dary and two years of senior secondary), and three to five years of higher edu- cation (three years for a diploma and four to five years for a degree). The MOE has administrative, financial, and academic control of primary, secondary, technical teacher and in-school radio education. The MOE is also officially responsible for the autonomous University of Malawi, which consists of Chancel- lor College (arts and science as well as secondary teacher training), Bunda Col- lege (agriculture), the Polytechnic (engineering and business), and Kamuzu Col- lege of Nursing. The Ministry of Agriculture is responsible for non-formal farmer training. Various other training programs are undertaken by the Minis- tries of Health, Works, Agriculture, and Community Development. The Malawi Broadcasting Corporation (MBC), a parastatal corporation, broadcasts numerous educational and cultural programs, and the Malawi Book Service (MBS), another parastatal organization, is responsible for bulk purchase and distribution of textbooks. The Malawi Certificate Examination and Testing Board (MCETB) is  -5- responsible for all educational tests. Coordination between the MOE and the above-mentioned autonomous agencies is satisfactory. 2.04 The MOE itself is divided into academic, administrative, accounting and personnel departments (Annex 1, C-3). While the quality of higher level officials is good, administration is weakened by the fact that almost one-third of the senior professional officer posts are vacant. Planning has also been limited and the Government has not prepared a comprehensive education develop- ment plan since 1973. This has led to ad-hoc decision making and has made it difficult for the MOE to obtain adequate financial support from the economic planning and finance offices of the Government. The Inspectorate or field supervisory staff, responsible for teacher and headmaster evaluation, school maintenance, management of school fees, and introduction of new curricula and textbooks, needs training, upgrading and additional staff. In order to study and systematically improve the quality of education and administration, the Government has officially established an Institute of Education to centralize curriculum development, teaching materials preparation, and in-service training. This Institute, which is scheduled to become operative in 1982, will have full- time curriculum and training personnel. Primary Education 2.05 The quality of primary education must be improved as a means of pro- viding basic literacy to the population, raising farmer and worker productivity, and serving as a base for further education and essential skill training. For- tunately the Government is now actively assisting the improvement of primary school quality. Needs are very great because of relatively low enrollment and completion rates (para. 2.02). About half the students in grade 8 repeat the year in the hope of obtaining higher grades in the Primary School Leaving Certi- ficate (PSLC) examination thus qualifying for admission to secondary education. Girls make up 41% of total enrollment but are much more likely than boys to drop out before completing the full primary school program; as a result they make up only 26% of enrollment in grade 8. 2.06 The physical facilities available to the primary education system are grossly inadequate. Most primary schools have little or no furniture or equip- ment and buildings are rudimentary, in many instances with roof structures in a serious state of decay as a result of termite infestation. Although tradition- ally all physical construction has been left to the communities, the Government recently constructed 23 prototype primary schools, and now has programs for the construction of 1,000 classrooms of a more durable type under self-help, con- tract and force account methods (para. 3.03). The MOE is completing a nation- wide school mapping survey to help determine specific school construction needs and to rationalize school locations in accordance with population, geographic features, and equity requirements. 2.07 Until 1979 local authorities had full responsibility for the provision of education materials. They were expected to buy all expendable school  -6- materials and equipment through utilization of school fees which they collected and which range from K 2.00 to K 6.50 per student. However, these fees were sufficient to cover only one half to one third the overall textbook requirements and consequently very little in the way of other supplies such as furniture and teaching aids has been provided. The MOE has recognized the particular impor- tance of textbooks, and, with IDA assistance (Credit No. 910-HtAI), has initiated a program to gradually take responsibility for financing a large portion of the costs of textbooks, beginning with basic English, Chichewa and Arithmetic text- books. From 1979, students' fees have been collected by the IMCE and will be used to purchase additional textbooks, materials, furniture and equipment. In line with Government policy to encourage the expansion of primary eiducation, these fees have not been raised since 1972 and are not expected to be increased. 2.08 The rapid expansion of primary school enrollment over the past few years has led to an increase in the average number of students per teacher to 62 to 1, compared to the official policy of 50 to 1, and only 56X of teachers are fully qualified. Although a new teacher training college at Mzuzu is expected to enroll 540 students in 1980-81, primary teacher output is still expected to be inadcntinre to meet needs. Based on minimum improvements in the student teacher ratio, overall output should increase from the present 700 per year to over 1,300 per year by 1990. The Government plans to construct two new teacher training colleges as funds become available, and is seeking additional funds from bilateral and multilateral sources for a third new college. In the mean- time, starting in 1982, the Institute of Education is expected to initiate large-scale in-service training programs to upgrade unqualified teachers. Secondary Education 2.09 After independence, enrollment in secondary education increased rapidly from 3,100 in 1962 to 13,400 in 1972. However, after 1972, enrollment grew at an average rate of only 3% per annum to reach 15,500 in 1978, and 16,500 in 1979. This low enrollment growth has affected the entire education system. At the primary level, almost half the enrollment in the eighth grade consists of children repeating the year in order to get a higher score on the PSLC examina- tion and hopefully secure a place in secondary schools. Because of a shortage of secondary school graduates, the primary teacher training colleges are having difficulty recruiting students for their courses. The M4alawi Correspondence College (MCC), which offers an alternative to secondary education, has expanded rapidly since its establishment in 1965. In 1979 the IICC enrolled 4,800 stu- dents and is presently facing difficulties preparing and evaluating its radio and correspondence programs. The shortage of secondary school graduates has also resulted in major shortages of middle and high level manpower (para. 1.09). 2.10 Access to secondary education is based solely on results in the PSLC examination. Children with the highest grades are selected on a national basis to attend one of the 22 national boarding schools enrolling in 1978/79 a total of 5,600 students. After these schools are filled, students are selected on a district basis and enter one of 28 "district day" schools enrolling 7,900  -7- students. Most of these district schools provide at least some boarding facili- ties. In addition, students may attend one of 14 private schools enrolling 2,000 students. Overall, secondary school places are available to only 14% of the children who pass the PSLC. Girls make up only 31% of secondary school enrollment, a result of their high dropout rates in primary education. As a matter of policy, girls passing the PSLC examination are admitted to secondary schools with lower scores than boys. About 50% of all secondary school students have parents with less than a full primary education; thus the secondary school system appears to be an effective and positive influence on upward social mobil- ity. 2.11 Internal efficiency of secondary education is relatively high but could be improved. Of the total number of students entering the system, 69% pass the Junior Certificate (JC) examination which is given at the end of the second year, and 56% of the students who continue to upper secondary education pass the Malawi Certificate of Education (MCE) examination which is given at the end of the fourth year. These rates have remained relatively stable over the past ten years. Girls generally have a slightly lower pass rate than boys on these examinations, and "district day" school students have a lower pass rate than national boarding school students. 2.12 The secondary school curriculum emphasizes language, arts, science, and mathematics. The new Institute of Education (para. 2.08) can be expected to help strengthen teaching methodology through the introduction of more active teaching/learning activities. Recently the MOE introduced technical subjects (home economics, needlework and dressmaking, metalwork, and woodwork) into a number of schools. In home economics, the supply of teachers, student interest and examination results have been satisfactory. The results with regard to metalwork and woodwork have not been as positive because of high operational costs, lack of student interest, and teacher shortages, and the MOE has there- fore decided for the time being not to expand teaching of these subjects. Malawi's mixed experience with a diversified curriculum is similar to that of a number of other countries. A Bank research project is systematically evaluating the results of this type of curriculum in several countries. 2.13 Most boarding secondary schools have adequate physicaL facilities, including laboratories, libraries, and workshops. However, many of the "dis- trict" schools have inadequate teaching facilities, and provide makeshift, often overcrowded and unhealthy, dormitories. The MOE policy is to provide full dor- mitory space for all "district" schools, with the exception of those located in the three major urban centers, where dormitory space would be limited to 50% of enrollment. The MOE is also planning to double enrollment in most 240-place schools to 480; this policy will permit more efficient utilization of space and teachers. 2.14 The MOE has now recognized the need for more rapid expansion of secon- dary education to meet manpower needs (para. 1.09). However,-because of teacher shortages (para. 2.15) and limited availability of capital, the MOE expects  -8- enrollment to increase by only about 5% per year, from 16,500 in 1S979 to about 28,000 in 1990. After the natural rate of population growth is taken into con- sideration, this increase would only raise the percentage of children enrolled in general secondary schools from 3.5% tD 4.5%, a significant increase but still among the lowest enrollment ratios in the world (Annex 1, T-3). Further increases could be met only through massive capital investments which for the time being are not available either internally or externally. Secondary Teacher Training 2.15 Over 90% of the present 800 secondary school teachers are qualified, holding either degrees or diplomas. Expatriates make up about 200 of the 720 qualified teachers. Until 1973, Soche Hill College, located in Blantyre, was responsible for secondary teacher training. At that time Chancellor College, the arts and science college of the University of Malawi, became responsible for secondary teacher training. The output of teachers declined from 40 in 1973 to 10 in 1979, because of neglect of the teacher training function by Chancellor College authorities and also because of interest by students in higher paying jobs in the civil service and private industry. As a resuLc, shortages of teachers, particularly in the sciences, are now putting serious restraints on enrollment growth. 2.16 In 1978, at the initiative of the MOE, Chancellor College introduced a crash two-year diploma program to enable 40 qualified primary school teachers to be trained to teach at the secondary level. In October 1980, the College initiated a degree-level science teachers program for older students who have temporarily stopped their schooling. The College is now planning to provide incentives for regular degree students to take an additional year of pedagogical studies to qualify them to teach in secondary schools, and is also expanding its regular secondary teacher training program. The total number of 155 new stu- dents entering teaching programs in October 1980 will be made up as follows: upgrading primary teachers to secondary level (two-year course) 40 students; science teachers program (five-year course) 20 students; upgrading diploma level secondary teachers to bachelor level (two years) 30 students; diploma level course for non-teachers (three years) 40 students; "normal" entry to education programs (three or five years) 25 students. To meet these needs the College has recruited additional lecturers and professors to train secondary school teach- ers. The College is considering revision of the curriculum so as to provide earlier introductions to pedagogical studies, which are now concentrated in the fourth and fifth years of study. It has also been discussing the possibility of reducing the lengthy five-year degree course to four years. 2.17 Based on a 5% per annum growth of enrollment in secondary education, a 21:1 student teacher ratio and a gradual reduction of expatriate teachers, the secondary education system will need 100 new teachers per year by 1984 and 130 per year by 1989 or a total of 1,060 from 1981 to 1990 (Annex 1, T-4). About half of these teachers would complete the three-year diploma course and half would complete the five-year degree course. In accordance with the MOE policy,  -9- an additional 25 teachers annually already in possession of diplomas would be upgraded to degree level. Training of Middle and High Level Manpower 2.18 Five technical schools train skilled workers in areas such as brick- laying, carpentry, eiectricity and mechanics. These programs, enrolling about 900 persons per year, are well staffed and produce an adequate number of work- ers with skills appropriate to industry's needs. The courses last up to three years and blend periods of craft training and related on-the-job experience. Trade test certificates are given to the trainees as they achieve the appropri- ate levels of competence during their period of training. 2.19 The principal commercial education institutions training typists, secretaries and bookkeepers are presently various correspondence schools and poorly equipped private schools which charge high fees. Some general secondary schools provide training in commercial skills but this is normall!y inadequate for all but the lowest level positions. To improve commercial education, the MOE will introduce training for bookkeepers and secretaries into three existing technical schools. A shortage of accountants and business administrators is being met through an expansion of the Malawi Polytechnic as well as through expanded in-service upgrading of junior accountants. 2.20 The output from Colby College of Agriculture (secondary level) of 160 agricultural technicians p.a. is insufficient to meet future needs, especially in relation to the National Rural Development Program being assisted by numerous bilateral and international agencies, including the Bank Group. To meet these needs a multi-purpose Natural Resources College with an expected output of 380 agricultural technicians p.a. will be constructed adjacent to Colby College, with assistance from the Canadian International Development Agency. Since this College is not expected to provide these technician outputs until 1984-85 at the earliest, the Government has maximised the output of students at Colby College through minor improvements to existing facilities and increased staffing levels. Enrollment in Bunda College, which trains higher level agricultural technicians and scientists, has increased rapidly and at 870 students in 1978/79 is ade- quate to meet this type of manpower needs. 2.21 Enrollment in the Polytechnic, which trains engineers, technicians, and business managers, has been gradually increasing to 350 in 1978 and, with a planned development to reach 700 by 1985, should be sufficient to meet manpower needs. Enrollment at Chancellor College in arts and sciences, secondary teacher training, public administration, and law has remained relatively stagnant since 1969-70 and now stands at about 700. In addition to requirement:s for additional secondary school teachers (para. 2.17), Chancellor College needs to expand its output in the sciences and in public administration. In part because of the recent crash programs for secondary school teachers, (the College's) science laboratories are overused, science equipment is being stored in hallways and there is a shortage of large lecture halls and of seating capacity in the  -10- library. Expansion of Chancellor College to about 1,200 as planned would increase the student/faculty ratio from the present low 9 to 1 to about 12 to 1 through larger enrollments and more effective use of large lecture classes. 2.22 In 1978, the Mpemba Staff Training College, responsible for training of lower level civil servants, trained 500 civil servants, principally in cleri- cal, secretarial and bookkeeping courses. At higher levels, Chancellor College has a degree course in public administration but graduate output in 1979 was only 14. The Government has proposed to establish a new Institute of Public Administration (IPA) in Lilongwe , to be responsible for in-service training of middle and higher level civil servants. A survey of civil servants shows that the greatest needs are in accounting, personnel, and management/decision making. Courses to be held at the IPA would include (a) induction courses for recent entrants to the civil service, (b) review courses for those who have been in the civil service for two years, and (c) numerous ad-hoc courses for the ministries based on needs. A new facility to be eventually constructed in Lilongwe should have teaching and boarding facilities to accommodate up to 100 civil servants at a time. UNDP is providing technical assistance for the initial establishment of the IPA, the cost of which is presently estimated at about US$4.0 million equivalent plus contingencies. Non-formal Education 2.23 Numerous agencies and organizations provide non-formal education and training. In particular, the agriculture extension service of the Ministry of Agriculture (MOA) is among the best organized in Africa, with one extension worker to every 1,500 families in project areas and with 59 farmer training centers. The Extension Aids Branch of the MOA prepares radio programs, leaflets, single topic films, and puppet shows and its mobile units reach an estimated one million people per year. Other major agencies and programs include the Ministry of Community Development, with programs in literacy, child-care, and community development and the Ministry of Youth and Culture with the Young Pioneers program for out-of-school youth. The agricultural programs have been evaluated and found to be effective, but little evaluation has been done of other programs and overall coordination is weak. The MOE has esta- blished "rural education centers", within 23 model primary schools with finan- cial assistance under the Second IDA Education Project (Credit 590-MAI), but historically the MOE has not worked in non-formal education and other agencies have only recently become active in the development of programs in this field. Financing and Cost of Education 2.24 Total public education expenditures in Malawi in 1979/80 represented about 3.5% of GDP. This percentage, which is among the lowest in Africa, reflects the Government's philosophy of placing relatively greater emphasis on directly productive sectors rather than social sectors. In 1979/80 education received only 4.1% of the total capital budget. Foreign assistance continues to be the major source of capital investment in education and throughcut the 1970's  -11- has accounted for about 80% of all capital investment in the sector. Recurrent expenditure on education as a percentage of total Government expenditure shows a decline from about 17% in 1970/71 to 11.3% in 1979/80 reflecting the relatively greater priority given to other sectors over this period. In 1979/80, 40% of recurrent expenditure on education was devoted to primary educat:ion, 15% to secondary education, 23% to the University of Malawi, 14% on administration and the balance to other types of education. The main changes in the distribution of recurrent expenditure by level and type of education in the period 1970-79 were a decrease in the share of secondary education from 18% to 16% and an increase in the share of other types of education. This lack of emphasis has resulted in shortages of critical manpower needed for developmenit (para. 2.02). 2.25 Recurrent costs to the Government in 1978/79 were about MK 12 per stu- dent at the primary level, MK 210 at the secondary level, MK 573 for teacher training, MK 77 at the Malawi Correspondence College and MK 2,988 at the Univer- sity level. The low public recurrent cost per student at the primary school level reflects high student/teacher ratios and the use of student fees to finance a significant portion of primary school costs. Secondary school unit costs compare favorably with that of other similar East African countries. Pri- mary teacher training unit costs tend to be higher than secondary school costs because of lower student teacher ratios. 2.26 Bank staff estimates of increased enrollment for all educational lev- els and their recurrent cost implications are summarized below and presented in more detail in Annex 1, T-5. r  -12- PUBLIC ENROLLMENTS AND RECURRENT EXPENDITURES 1979/80 1990/91 (estimated) (projected) Enrollments Enrollments As a iO Total As a NO Total of Rele- expend- of Rele- expen- vant Age iture No. vant Age diture 2/ No. Group (K'000) Total Group (K'000) Administration 2,828.0 3,363.6 Primary Education 656,703 58.9 1/ 8,220.2 986,845 66.7 1/ 18,249.8 Secondary General Education 14,377 3.5 1/ 2,995.7 24,578 4.5 1/ 6,092.0 Primary Teacher Training 1,641 0.2 974.6 2,801 0.2 1,977.9 Technical & Vocatio- nal Education 831 0.3 310.0 1,421 0.4 630.7 Malawi Correspondence College 4,796 1.0 336.6 10,094 1.6 842.5 University of Malawi 1,455 0.3 4,739.3 3,062 0.5 11,862.9 TOTAL 20,404.4 43,019.4 As a % of total recurrent budget 11.3 16.3 As a % of GDP 2.7 3.1 1/ Including private school enrollment 2/ 1979-80 prices  -13- 2.27 These projections (Annex 1, T-6) of enrollments and Government expen- ditures on education are based on the following assumptions: (a) primary school enrollments will grow at 4.3% p.a., (b) enrollments in secondary, technical, and primary teacher training schools will grow at 5% p.a., (c) enrollment at the University of Malawi will grow at 6% p.a., and (d) the Malawi Correspondence College will grow at 7% p.a. The projected growth of public secondary school enrollments is expected to be higher than the average 3% p.a. rate of growth since 1973 and reflects anticipated increases due to the proposed project. The projections are also based upon an average 2% p.a increase of unit costs in real terms for all educational levels and administrative costs except for primary education where a 4% p.a. increase is assumed, reflecting an anticipated reduc- tion in the present high student teacher ratio from 62:1 to 50:1. These projec- tions also assume that the GDP would grow at a rate of 5.3% p.a. up to 1985/86 and thereafter at 6% p.a. and that the Government's total recurrent expenditure would remain at 19% of GDP - the same level it was in 1978/79. The rate of growth of GDP assumed in this analysis reflects the slowdown in the economy since 1979. 2.28 On the basis of the above assumptions, the education sec:tor's share of the recurrent budget would rise from 11.3% (1979/80) to 15.3% by 1985/86 and to 16.3% by 1990/91. This level of expenditure is a minimum needed to keep the education system from impeding development. It would not greatly tax Malawi's resources, and would still be lower than the prevailing level in rmost African countries. However, it would require a significant shift of emphasis by the Government towards the social sectors. Future education costs could be lowered if the Government adopts cost saving devices. For example, an increase in the student teacher ratio at secondary level from its current 20:1 to 25:1, and at University level from 9:1 to 12:1 would reduce 1985/86 recurrent expenditure from the projected 15.3% to about 14.4% the total Government budget. III - BANK GROUP EXPERIENCE AND LENDING STRATEGY IN THE SECTOR Past Experience and Lessons Learned 3.01 The Bank Group has financed three education projects in Malawi. The First Education Project (Credit 102-MAI of US$6.3 million equivalent, signed in 1967) focused on the introduction of technical subjects in secondary education, on a limited expansion of secondary schools (about 1,800 additional places) and on the construction of a new 540-place primary teacher training college. The project as originally conceived was virtually completed in about five years as scheduled. A cost underrun permitted the addition to the project of a Post and Telecommunications Training Center to serve not only Malawi but also Botswana, Lesotho and Swaziland. 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 with regard to expansion of enrollment in primary teacher training and secondary education. However, the  -14- teaching of technical subjects was not as successful as had been expected because of a lack of interest by students and a shortage of teachers, as well as provision of overly sophisticated equipment. For the time being, the Government does not plan to further expand the teaching of technical subjects in secondary schools. The teacher training college was initially unable to recruit suffi- cient numbers of MCE holders reflecting the general shortage of such secondary school graduates. 3.02 The Second Education Project (Credit 590-HAI of US$1i.6 million equivalent, signed in 1975) continues the emphasis of the First Education Pro- ject on secondary and primary teacher education, including the construction of a new 420-place teacher training college in Mzuzu, and provision of 1,800 addi- tional secondary school places, principally for girls. The project also sup- ports the construction of 23 model primary schools designed to serve as proto- types for community self-help construction as well as to function as centers for adult non-formal education. After some initial delays, the project is being satisfactorily implemented and is expected to be completed and fully disbursed by the revised Credit Closing Date of December 31, 1981, a delay of about nine months from the original date. A full assessment of the Second Education Pro- ject has not yet been made, but preliminary reviews carried out in the course of routine supervision indicate that most of the quantitative and qualitative goals at the primary, secondary, and primary teacher training levels are being met. However, the primary schools, built using conventional contracting procedures, are unlikely to be replicated by the local communities without additional Government financial and technical assistance. The schools have yet to be fully utilized as adult education centers as originally conceived as a result of lack of interest by Ministries other than Education. Belatedly programs are now being developed with the participation of Ministry of Community Development and UNICEF. 3.03 The main focus of the Third Education Project (IDA Credit 910-MAI and EEC Credit 12-MAI totalling US$22.0 million, signed in 1979) is on primary edu- cation, including support of a program to construct 1,000 primary school class- rooms, using self-help, conitract and force account methods, and a program to supply about 2.2 million textbooks to primary school children. The project also supports improved management and organization of education and curriculum development through the establishment of the Malawi Institute of Education, through the provision of vehicles for district education officers, and through support for studies and evaluation of the education system that will be used in the preparation of a national education plan. The project provides minor sup- port to secondary commercial and agricultural education, and finances a signifi- cant expansion of the Malawi Correspondence College, a lower cost alternative to secondary education. Chancellor College of the University of Malawi is also being expanded to produce additional secondary school teachers, a preliminary requirement before expansion of secondary enrollments. Despite the project's relative complexity, the highly competent Project Implementation Unit (PIU) is satisfactorily implementing the project as scheduled.  -15- 3.04 The Bank Group's knowledge of Malawi's education sector has increased considerably in the last seven years, not only through project work but also through a program of economic and sector analyses. In 1978 Bank staff completed an in-depth "Education Sector Survey" (Report No. 1781-MAI). During 1980 Bank staff actively assisted the Government in analyzing the results of manpower and tracer studies. Furthermore, Bank staff are in continuous dialogue with the Government officials on education policy issues. Lending Strategy 3.05 The Bank Group's present strategy in Malawi is to support a major expansion of secondary education to alleviate clearly identified manpower shor- tages and to expand and improve quality of primary education. The Government has recognised the critical role of the education system in the context of national development and is committed to expansion of the secondary school sys- tem; as a result, the highest education priority at this time is at this level. A National Education Plan, which the Government intends to prepare, will serve as a basis for continued Bank Group response to the education and training needs of Malawi. Priority areas likely to require Bank Group support would be a further expansion of secondary education and additional primary and secondary teacher training. Future assistance may also include higher level management train lg. Because of the erosion of the education sector's share of the national budget over the past decade and in view of demonstrated long-term man- .ower needs, the Bank Group would regularly review and discuss with the Govern- ment the adequacy of its education budget to meet its long-term educational objectives. IV. THE PROJECT Objectives and Composition 4.01 The proposed project would provide much needed middle level manpower through the expansion and improvement of secondary education and through the training of secondary school teachers. The project would also assist the Government to improve the quality of primary education and strengthen the civil service through pre-investment studies which would lead to the establishment of a new teacher training college and an Institute of Public Administration for the training of higher level Government staff. Financing of expenditures incurred in the preparation of a National Education Plan is also included. Specifically the project would include the following:  -16- Principal Objective Items Beneficiaries Provision of key middle Construction, furnishing, 3,960 new students level manpower and equipping of 3,960 and 1,440 students additional secondary in existing school student places, facilities. including expansion of six existing schools to enrollment of 480 and construction of five new 480-place schools. Construction, furnishing 168 new students and equipping of 168 and about 800 additional places at students in Chancellor College existing facilities principally for or in those shortly secondary teacher to be constructed. training students. Improved quality Pre-investment studies, About 420 new of primary level including preparation of students and about education architectural drawings, 10,500 primary for a new teacher school children to training college. be taught each year by graduates of the college. Strengthening of the Pre-investment studies, 100 civil servants civil service including preparation at one time; about of architectural draw- 600 per year. ings, for a new Institute of Public Administration in Lilongwe. Improvement of the Preparation of a national The entire education education system education plan. system. Secondary Education 4.02 The provision of a total of 3,960 new secondary school places would increase total enrollment in secondary education by about 24% and enrollment in "district" schools by 50%. It would meet more than one third of MOE's planned enrollment increases to 1990. The additional number of secondary school gradu- ates from these schools (about 980 p.a.) would meet a large proportion of the  -17- requirements for additional middle-level manpower through 1990 (paras. 1.07- 1.09), although shortages at this level would continue to be significant. 4.03 Specifically the project would provide for the construction, furnish- ing and equipping of 3,960 district secondary school student places, 3,842 dor- mitory places and 195 teacher houses. Five new 480-student schoo:Ls would be constructed and six existing schools would be expanded to 480 enrollment. The new and expanded schools were selected by the MOE on the basis of existing pri- mary school enrollment and demands for secondary schooling and form part of the MOE's long term plans to double secondary school enrollment. The schools are scattered throughout the country (see map) with a preponderance in the more heavily populated southern region. Improvement of the six existing schools and construction of five new schools would bring to 34 the number of schools assisted by Bank Group education projects out of a total of 69 public and private secondary schools. 4.04 In accordance with the MOE's policy, one third of the places in the project schools would be reserved for girls. Since five of the six existing schools to be expanded presently enroll few girls, more than half of the new places in the expanded schools would be for girls and the total number of girls' places provided under the project would be 1,849 (47%). 4.05 Each of the five new 480-place schools would receive the minimum facilities necessary to implement the secondary school program, and these would include two science laboratories, a library, home economics facilities, and a dining hall to accommodate 240 per sitting which would also be used as an assem- bly hall for the school. Because of the long distances children need to travel, boarding places would be provided for all children except in the three new urban schools in Lilongwe, Blantyre, and Zomba, where dormitory places would be pro- vided for only 50% of the students. In accordance with the MOE policy and in order to attract qualified teachers, housing would be provided for 75% of all teaching staff. Each of the six existing schools would receive the facilities needed to expand from 120/240 to 480 enrollment. Secondary Teacher Training 4.06 In order to ensure an adequate supply of teachers, the proposed pro- ject would support the construction, furnishing, and equipping of teaching, boarding and faculty housing facilities for an additional 168 students at Chan- cellor College of the University of Malawi. The proposed project would support the construction, furnishing, and equipping of one physical science laboratory, two biology laboratories, two chemistry laboratories, two physics laboratories, one science workshop, one geography lab and equipment to link Chancellor College to computer facilities presently operated by the Malawi Certificate Examination and Testing Board (MCETB) which is also located in Zomba, as well as a student common room and kitchen facilities, 168 dormitory places, 12 senior staff houses, and 11 technical staff houses. With the support from the Third and pro- posed Fourth IDA-assisted Projects, Chancellor College would be able to expand  -18- its enrollment to 1,000, compared to its 1978 enrollment of about 600, and would have adequate science and library facilities for further expansion to 1,200 enrollment. Local funds are expected to provide for expansion of arts and humanities to enable the College to reach its goal of 1,200 enrollment by 1985- 86. 4.07 The additional places provided under the Third and proposed Fourth Education Projects would result in enrollment of 500 students in secondary teacher training programs. At full capacity, the College would achieve an annual output of about 130 teachers per annum by graduating each year 55 teach- ers in the three-year diploma programs, 55 teachers in five-year degree courses, and 20 teachers in two-year upgrading courses for diploma-level secondary school teachers. As previously noted (para. 2.16), the College has initiated a diploma-level program to upgrade primary level teachers to teach at the secon- dary level and a new five-year degree program to train science teachers. The College is also 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 types of incentives needed to attract future graduate teachers to enter the profession. Starting October 1981, and annually thereafter for a period of four consecutive years, the College would prepare for review by the Bank Group a report on its experience in implementing secondary teacher training programs, including recruitment of students and placement of graduates and its plans for the subsequent years, including estimates of expected enrollments and outputs and proposed program or curriculum changes. As required under the Third Educa- tion Project, the College would also undertake a tracer study of Chancellor Col- lege graduates who enter the teaching profession. Pre-Investment Studies 4.08 Because of the relatively higher priority presently placed on secon- dary education by the Government, financing is not included in this project for the construction of an Institute of Public Administration in Lilongwe and a new primary teacher training college in Zomba. Both of these components are, how- ever, justified for eventual financing either through a future Bank Group educa- tion project or alternatively through bilateral or multi-lateral assistance should this become available. Bank staff have assisted the Government through the preparation of relevant documents justifying and describing the proposed new facilities. In order to further assist the Government to advance the eventual construction dates for these two facilities, the proposed project would finance the costs of all architectural design work for the two institutions up to the construction tender stage. All aspects of this proposed work would be monitored by the Bank Group to ensure that the components would qualify for possible future Bank Group financing. 4.09 The project also includes provision of US$100,000 equivalent for up to 12 man-months of consultants services, fellowships, travel and other expenses to support the preparation of a National Education Plan. The Plan would have two major parts: (a) those aspects of education under the direct control of the MOE  -19- which would be undertaken by a studies co-ordinator already provided to the MOE under UNDP assistance, and (b) those aspects of education that are under the aegis of other Government departments. The Economic Planning Department (EPD) of the Office of the President and Cabinet would co-ordinate preparation of the overall plan and in this respect the Government plans to seek an additional two man-years of specialist services from UNDP to support EPD's activities. This long-term plan would review and summarize the progress made in education in Malawi, and would project growth and change in the education system up to 1990. The plan would pay particular attention to meeting needs for trained manpower, to financial implications of growth of the education system, to teacher needs and to improvement of the organization of the education system. It would be based on numerous studies of the education system which were recently completed or are to be undertaken. The National Education Plan would be completed by December 31, 1982, and about one year from the signing of the Credlit and annu- ally for four years thereafter, the Government, jointly with the Bank Group, would review the education budget in terms of its adequacy to carry out the Government's long-term educational objectives. Reporting and Evaluation 4.10 Semi-annual progress reports would be prepared by the P-IU and submit- ted for review by the Bank Group within one month following the end of the reporting period. Not later than three months after the Credit CLosing Date, the MOE would provide the Bank Group with a report which evaluates the execution and initial operations of the proposed Fourth Education Project, its costs, benefits, the performance of the Government and the Bank Group, and significant lessons learned during project implementation. Female Participation in the Education System 4.11 Although girls make up over 40% of enrollment at the primary level, they are much more likely to drop out than boys and consequently mnake up only 26% of the enrollment in grade 8 (para. 2.05). In accordance with the MOE pol- icy at least one third of the places in all project schools would be reserved for girls. Since the six existing schools being expanded under the proposed project have little female enrollment, more than half of the new places in expanded schools would be for girls. Girls' places to be provided under the proposed project would be 47% of the total. As a result of the proposed pro- ject, female participation in secondary education would rise from 31% to 35%. Summary of Technical Assistance 4.12 The proposed project includes about 36 man-years of technical assis- tance consisting of: (a) one man-year of specialist services to support the preparation of a National Education Plan (para. 4.09); (b) 24 man-years of pro- fessional services of architectural consultants (para. 6.02); and (c) 11 man- years of professional services for the supervision of construction (para. 6.02).  -20- V. PROJECT COST AND FINANCIAL PLAN Project Cost 5.01 The total cost of the project is estimated at US$53.8 million equivalent including duties and taxes estimated at US$2.5 million equivalent. The estimated costs and foreign exchange components are given in Annex 1, T-7, and summarized below: Estimated Cost by Project Item Malawi Kwacha % of (Millions) US$ (Million Base Local Foreign Total Local Foreign Total Cost 1. Civil Works, Furniture, and Equipment for (a) Secondary Schools 13.59 10.32 23.91 17.09 12.98 30.07 74.2 (b) Secondary Teacher Training 2.59 2.67 5.26 3.26 3.36 6.62 16.3 2. Professional Services 1.05 0.70 1.75 1.32 0.89 2.21 5.4 3. Project Administra- tion 0.37 0.13 0.50 0.47 0.16 0.63 1.6 4. Pre-investment/ Studies 0.48 0.32 0.80 0.60 0.40 1.00 2.5 Total Base Cost (February 1981) 18.08 14.14 32.22 22.74 17.79 40.53 100.0 5. Contingencies (a) Physical (9%) 1.74 1.26 3.00 2.19 1.58 3.77 (b) Price Increases (21%) 4.88 2.64 7.52 6.14 3.32 9.46 Subtotal 6.62 3.90 10.52 8.33 4.90 13.23 Total Project Cost 24.70 18.04 42.74 31.07 22.69 53.76 Of which taxes 1.99 - 1.99 2.50 - 2.50  -21- 5.02 Civil works, furniture and equipment costs are based upon tenders received during 1978-80 for the Second and Third IDA Education Projects and for similar development projects in Malawi. The February 1981 base construction costs are estimated as follows: US$390 per square meter for secondary schools and $570 per square meter for University construction. These costs compare favorably with costs for similar facilities in other countries in the region as follows: Kenya US$325-400 (1980), Tanzania US$325 (secondary schools 1979-80), Zambia $335-400 (1977). The costs estimated for Malawi reflect the impact of substantial increases in the prices of fuel, imported construction materials and local taxes over the past two years, as well as difficulties experienced with materials supplies imported through the M4ozambique ports of Beira and Nacala, upon which Malawi is highly dependent. The base cost per student place for academic and communal facilities is estimated at US$2,800 in secondary schools and US$7,450 per university place which are reasonable. About 25% of total con- struction costs for secondary schools are for staff housing. This provision is essential to attract qualified teachers particularly to rural locations and is in accordance with Government policy. Schedules of accommodation are functional and appropriate for the educational objectives of the project. The cost of the architectural and engineering consultants and construction supervisors (para. 6.02) is estimated at an average of US$60,000 per man-year. The cost of one man-year of technical assistance and other services to help prepare a National Education Plan is estimated at about US$100,000. 5.03 Customs Duties and Taxes. In line with Malawian policies and prac- tices, items imported specifically for the project would be exempted from cus- toms duties and taxes. Certain items are expected to be purchased locally off the shelf and reimbursement percentages have been calculated to exclude duties and taxes estimated at US$2.5 million equivalent on imported materials and fuel used in construction, and for local purchases of furniture and equipment. 5.04 For physical increases, 10% has been added to the base costs for civil works and for professional services; 5% has been added to base costs for furniture and equipment. Estimated price increases are based upon the applica- tion of the following annual percentage rates of price escalation from the base cost date (February 1981) in accordance with the implementation schedule (Annex 1, C-4). 1981 1982 1983-84 Foreign 9.0% 8.5% 7.5% Local 16.0% 12.0% 10.0% The estimated price increases for construction are based on recent trends and forecasts by the Ministry of Works (MOW), PIU and quantity surveyors based in Malawi. These rates have been reviewed by Bank Group staff and found appropri- ate. 5.05 Foreign Exchange Component. The foreign exchange component of US$22.7 million equivalent has been calculated as follows: (a) civil works, profe'-ional services and pre-investment studies 40%; (b) furniture 55%; (c) equipment 90%; and (d) project administration 25%.  -22- Financial Plan 5.06 An IDA Credit of SDR 32.2 million (US$41.0 million equivalent) would represent 80% of the total cost of the project net of taxes. The Credit would finance the foreign exchange costs and 64% of local costs net of taxes. The overall financing plan would be as follows: US$ MILLION EQUIVALENT GOVERNMENT IDA TOTAL 1) Civil Works 7.92 23.75 31.67 2) Furniture 0.24 2.19 2.43 3) Equipment 0.26 2.33 2.59 4) Professional Services 0.44 1.77 2.21 5) Project Administration 0.13 0.50 0.63 6) Pre-investment Studies 0.20 0.80 1.00 7) Unallocated 3.57 9.66 13.23 TOTAL 12.76 41.00 53.76 of which taxes 2.50 2.50 5.07 In any year during project implementation, the maximum Government cap- ital contribution including taxes would be about US$3.7 million equivalent. This is 2.3% of the 1980/81 capital development budget or 47% of the education capital budget which indicates the dependence of the Government on external assistance for education. Recurrent costs generated by the project are estimated at about US$1.8 million equivalent per annum or about 4% of the estimated total recurrent expenditures of the MOE in 1985/86 when the project is expected to be fully operational. The Government has indicated that it has the capacity to finance this increase, and future Bank Group supervision missions would continue to monitor the financing of these costs. VI. PROJECT IMPLEMENTATION, PROCUREMENT AND DISBURSEMENT Implementation 6.01 The project would be implemented over a period of about 4-1/2 years. The project is expected to be completed by June 30, 1985 with a Closing Date of December 31, 1985 including six months for the completion of payments and with- drawals. This is in line with experience in implementing two previous education projects in Malawi (paras. 3.01-3.03). Construction of the main element of the program, the secondary schools, is expected to start during 1981 and to be phased over a period of about 3-1/2 yeas. This relatively short implementation period is possible as a result of the use of standardised accommodation units  -23- designed by the Project Implementation Unit (PIU). The PIU is an integral part of the planning unit of the MOE and is responsible for the overall implementa- tion of the MOE's primary and secondary school programs and for the monitoring of the Bank Group-assisted components at Chancellor College. The PIU is func- tioning well and has a Malawian Program Manager and deputy. Technical support for the architectural staffing of the Unit is provided by Danish International Development Agency and assistance from the UK. The PIU, established within the MOE for the implementation of two previous IDA-assisted Education Projects, would perform all administrative functions for the proposed Fourth Project. 6.02 Professional Services. Architectural/engineering consaltants appointed to undertake the design and supervision of the construction of the proposed expansion at Chancellor College under the ongoing Third IDA Education Project would be commissioned to undertake the design and supervision of works at the College under the proposed project. Standardised sketch designs already prepared by the PIU as part of a general standardisation of educational designs for secondary school facilities will be used for all schools. These designs and accommodation standards are economical and acceptable to the Bank Group. Archi- tectural consultants (equivalent to 24 man-years of services) will be appointed to prepare site layouts including services, cost estimates and to undertake post-contract supervision. Included also would be about 11 man-years of spe- cialists services for additional construction supervision. All consultants financed under the proposed project would be selected and appointed on terms and conditions acceptable to the Bank Group. 6.03 Site Selection. Sites for 10 of the proposed 11 secondary schools have been selected and are appropriate. Final selection of the remaining site in the Blantyre urban area is, however, not expected to pose any problems as sites are available. Land would be provided free to the project by the communi- ties included in the program. Sufficient land is already available at Chancel- lor College. 6.04 Chancellor College Construction. The Third IDA Education Project also included a program for the expansion of the College. Construction works on the housing and dormitory program are well advanced as a result of priority given to this phase of the development by the University authorities. Design works on the main academic facilities are, however, at an early stage and will be undertaken concurrently with planning of the academic facilities under the proposed Fourth Project. This will permit the planning of these facilities to be undertaken as a single integrated process that would allow a planned develop- ment of Chancellor College for up to 1,200 students or almost double the present academic accommodation. For greater construction efficiency and to simplify a potentially complicated construction program, it is proposed to interchange cer- tain facilities between the Third and proposed Fourth IDA Education Projects so that the delineation of specific project contractual and financing requirements can be simplified. On this basis all library and classroom facilities would be provided under a revised Third Education Project construction prcgram and all science laboratories would be under the proposed project. Both projects would provide student hostel and staff accommodation. Construction works would be tendered simultaneously, and as a result, the building of academic facilities is expected to make an early start during 1982.  -24- 6.05 The Construction Industry. Malawi has an active construction industry with some 20 firms registered as being qualified to undertake construction con- tracts in excess of MK 1.0 million. Problems were experienced during late 1979 with supplies of fuel and imported materials reflecting Malawi's dependence on the often congested Mozambique ports of Beira and Nacala. They are likely to continue and have been taken into consideration in the costing of the project. The value of building construction output during 1977 was estimated at M4K 28 million. The maximum annual value of construction under the project is estimated at about MK 10.0 million in 1983. Procurement 6.06 Contracts for civil works, furniture and equipment would be awarded on the basis of international competitive bidding in accordance with the Bank Group's Guidelines for Procurement except for construction contracts costing less than US$300,000 equivalent each and furniture and equipment contracts cost- ing less than US$100,000 equivalent each. Such contracts would be awarded fol- lowing competitive bidding advertised locally and in accordance with procedures acceptable to the Bank Group. The aggregate total of such contracts is unlikely to exceed US$1.0 million equivalent inciuding contingencies. 6.07 Architectural sketch designs and school layout proposals, draft tender documents and master lists of furniture and equipment including proposed grouping would be reviewed by the Bank Group. Items would be grouped to the extent practicable to encourage competitive bidding and to permit bulk procure- ment. Review of tender evaluation documents by the Bank Group prior to award would not be required for construction contracts costing less than US$300,000 equivalent each and for furniture and equipment contracts costing less than US$100,000 equivalent. 6.08 Where international competitive bidding procedures are used, (a) domestic manufacturers of furniture and equipment would be allowed a margin of 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 (b) qualified domestic civil works contractors would be allowed a preferential margin of 7-1/2 % of the bid prices of competing foreign contractors. Disbursements 6.09 Disbursements (Annex 1, T-8) would be on the basis of: (a) 75% of total expenditures for civil works; (b) 80% of total expenditures (including salaries) for project administration, (c) 80% of local off the shelf, 100% of local expenditures ex-factory, or 100% of foreign expenditures for furniture and equipment (including PIU vehicles); and (d) 80% of local or 100% of foreign expenditures for pre-investment studies, travel, fellowships, and consultant services. Disbursements for local expenditures for project administration would be made against statements of expenditure, documentation for which would not be submitted for review but would be retained by the Government for inspection by the Bank Group during project supervision. Experience with previous Bank Group-assisted education projects has demonstrated that the PIU has satisfactory institutional capacity to use the statement of expenditure procedures. All other disbursements will be fully documented.  -25- 6.10 Project expenditures would be audited in accordance with sound audit- ing principles by a Government appointed auditor satisfactory to the Bank Group. Audit reports should be provided to the Bank Group within nine months of the end of the fiscal year. VII - BENEFITS AND RISKS Benefits 7.01 The project would provide an additional 3,960 places for secondary students which would result in an annual production of almost 1,000 secondary school graduates. These graduates would meet a significant proportion of the incremental needs for skilled manpower throughout the economy. About 47% of the secondary school places to be provided would be for girls; therefore girls' par- ticipation in secondary education would increase from 31% to 35%. The project would also improve life for children from the lowest socio-economic levels of society. A study made of the socio-economic status of secondary school students showed that about 50% of all students had parents with less than a full primary education. This finding is similar to that of other studies in Africa, where large numbers of secondary school students have come from the lowest socio- economic groups. The project would also provide an additional 168 places for Chancellor College students for training as secondary school teachers and would also strengthen the training of scientists in Malawi who are currently in short supply. Support for a National Education Plan would assist the Government in making more effective its expenditure on education and would strengthen the Government's overall planning capacity. Risks 7.02 There are no major risks in the physical implementation of the pro- ject. The only significant risk or uncertainty is a possible shortage of secon- dary school teachers. In order to minimize this risk, Chancellor College of the University of Malawi would prepare for review by the Bank Group an annual report of its teacher training programs, the recruitment and placement of secondary school teachers and proposals for any necessary revisions of its programs (paras. 4.07). VIII. AGREEMENTS REACHED AND RECOM4MENDATIONS 8.01 Agreement was reached with the Government on the following principal points: (a) starting October 1981 and annually thereafter for a period of four consecutive years, Chancellor College would prepare for review by the Bank Group a report on its experience in implementing secondary teacher training programs,  -26- including recruitment of students and placement of graduates, and its plans for the subsequent years, including estimates of expected enrollments and outputs and proposed program or curriculum changes (para. 4.07); (b) (i) the Government would prepare a National Education Plan by December 31, 1982, and (ii) about one year from the signing of the Credit and annually for four years thereafter, the Government, jointly with the Bank Group, would review the education budget in terms of its adequacy to carry out its long term educational objectives (para. 4.09); and (c) a report evaluating the lessons learned during project implementation would be sent to the Bank Group for review within three months after the Credit Closing Date (para. 4.10); 8.02 Subject to the conditions above, the proposed project is suitable for an IDA Credit of SDR 32.2 million (US$41 million equivalent) on standard IDA terms.  uAL AWE FOURr8 EDUCATION PROJECT (in thousanids) 1. Emg iuiyeotiranth -. liedinn LH,IEa:tec Groatl- 3. Low _pioyment Orouth 1979 1980 1985 1990 1980 I9Y3 199 i980 19085 1990 1. Pouts requiring U"lm,r- n yLnrdl no .t3:nnaaLnt: TotaL number of positions 29.9 33.1 42.1 56.5 31.8 39.8 5..3 31.5 36.6 45.3 Of oh) oh a) Stock at beginning of period 23.5 24.9 25.9 31.9 34.9 25.9 31.9 24.9 25.9 31.9 b) Ufuiled -icancius from pLeviou- period 6.4 5.0 6.8 8,4 5.0 5 5 S.1 5.0 5.2 2.9 o) Requirement doe to attriti-n - 0.4 1.8 1.9 0.4 1.0 1.9 0.4 1.8 1.9 d) Requirmenit due ti gro-th - 2.8 7,6 12.3 1.5 4.6 11.4 1.2 3.7 8.6 TotaL mne positio-s 6.4 8.2 16.2 22.8 6.9 13.9 19.4 6.6 10.7 13.4 Outpyut f institutions 1.4 1.4 7.8 8.5 1.4 7. 7.5 _1.4 _ 7.9 8.5 Unfilled vacameies at enu of petiod 5.0 6.8 8.4 14.3 5.5 n.1 19.9 3.2 2.9 4.9 2. Pootu-eqoiriug MCI .nr -qui-aLe.t: TotaL 1u-ber of positione 37.6 40.6 53.6 72.9 40.2 52.2 67.3 39.8 47.9 58.6 06 whicb a) Stoek at beg-uning of period 33.5 34.9 35.6 40.4 34.9 35.6 40.4 34.9 35.6 40.4 b) UDfilled vacancies fron previous poriod 4.1 2.7 4.2 9.0 2.7 3.8 6.6 2.7 3.4 3.3 o9 Requirt due to attiltion - 8.8 4.0 4.1 0.8 4.0 4.1 0.8 4.0 4.1 d) RequLrement doe to gr>wth - 2.2 9.8 19.4 1.8 7.8 16.2 1.4 4.9 10.8 TotaL sew po-ltitn- 4.1 5.7 18.0 32.5 5.3 15.6 25.9 4.9 12.3 18.2 OutpuL of iustitutionu 1.4 1.5 9.0 12.9 1.5 3.0 12.9 L_.5 9,0 12.9 UDfilled voranoirs at end of period 2.7 4.2 9.0 _19.6 3.8 6.6 14.0 3.4 3.3 5.3 3S. Posts requiring JC or eqoiva-Iet: Total number of positions 52.5 55.3 71.7 97.6 54.7 67.4 84.2 54.4 64.0 78.5 Of uhiIh a) Otunk ot boginnsu of period 35.6 37.4 38.3 48.3 37.4 38.3 48.0 37.4 38.3 48.0 b) Unfilled vaeanoion from prenions period 6.9 5.1 16.1 19.3 5.1 15.5 15.0 5.1 15.2 11.6 e) Reqsieeueut don to attrition - 8.9 4.3 4.4 0.9 L,3 4.4 8.9 4.3 4.4 d) Requirement dun to gro-th - IL.9 13.0 25.9 11.3 9.3 16.8 11.0 6.2 s4.5 TotaL non ponitions 6.0 i7.Y 33.4 47.6 .7.3 29.1 36.2 17.0 25.7 30.5 Output of igstitatin. _1.8 18_ 1 _4. 18.0 8 14.1 18.0 1 8 14.1 18.0 UnfilLed v--ncies at end of period 5.1 16.1 19.3 31.6 15.5 15.0 18.2 15.2 11.6 12. 5 (ALternate S-enario if f Primarv Schnol Leaver. are Mp!-7oed in JE Level Postions) 3b. Posts requiring JC or equivaient: TotaL number of positions 52.5 55.3 71,7 97.6 54.7 67.4 84.2 54.4 64.0 78.5 Of whieh a) Stook at beginning of period 35.6 39.8 43.1 58.3 39.8 43.1 58.3 39.8 43.1 58.3 b) Unfilled macanuses free previous perotd 6.9 2.7 11.3 8.8 2.7 10.7 4.5 2.7 10.4 1.1 c) Requirement duo to atteitio- - 0.9 4.6 5.0 0.9 4.6 5.0 0.9 4.6 5.0 d) Requirement due to growth - 11.9 12.7 25.5 11.3 9.0 16.4 LL.O 5.9 14.t Total ne- positions 6.9 15.5 28.6 39.3 14.9 24.3 25.9 14.6 20.9 20.2 Output of institutions 4.2 4.2 19.8 26.7 4. 2 19.8 26.7 4.2 19.8 26.7 Omfilled ...anoi-s at end of pefiod 2.7 11.3 8.8 i2.6 15.7 4.5 -0.8 10.4 1.1 -6.5 NOTES: 1) Stick (S) is -oeputed as foLLows: S= Sr-I J;..1 + mt.t 1 where 'ii_L =ondmher leanlig the labor market (doe Os st ritton) n: period t-I and nt..l = ontput of es Oltatuiono ae period t-I 2) Attrttiun mber retirlug or dying. The asoumd r a to is 1.57. pa. fur university gradnates and 7.51. for tier. TOo asas:nptioo is that univernity graduates hunt a higher Life enpertancy. 3) JOE Junior Certificate obtained after 10 ye2rs of educati-n 4) MCE = Malawi Certificate obtaimed Rfter 12 years of education 5) Normal aumber of yearn of pei-lay education is 8 years 6) iOgh eP1ym-nt gcowth pro3ection ansumes no change tn productiviity; i t Pj ti growh wiL foLLow :t trtnds ohiol: ovoragud 0:00 14 p.. Iow growvth ptojeetin- assumes produ-tivity growth will average 2R p.a. S -X3L: "A. AdnDytis of Meinwia' 1979 M-aspo:aer S-:r-vn" at.: 7vor 24, 1980.  - 28 - ANNEX 1 MALAWI Table 2 FOURTH EDUCATION PROJECT SELECTED HIGHER LEVEL EMPLOYMENT, 1979 Total Non- Percentage Occupational Category Employment Malawian Non-Malawian 1. Professional/ Technical and related workers 21,716 2,859 13.2 Of which; (a) Chemists, Physicists. Scientists and Engineers not elsewhere specified. 681 53 7.8 (b) Architects, Engineers, Town Planners 534 and related Technicians 1,386 38.5 (c) Surveyors & Engineering Technicians 1,257 349 27.8 (d) Doctors/Dentists and related Assistants 579 189 32.6 (e) Nurses, Midwives & related Health Assistants 941 249 26.5 (f) Accountants & Auditors 712 408 57.3 2. Administrative and Managerial Workers 4,127 1,772 42.9 3. Clerical and related Workers 23,706 3,028 12.8 Of which; (a) Stenographers & Typists 2,105 648 30.8 (b) Bookkeepers & Cashiers 3,443 702 20.4 4. Managers (Wholesale & Retail) 225 120 53.4 5. Farm Managers & Supervisors 3,314 669 20.2 6. Production, Supervisors & Foremen 3,645 661 18.7 TOTAL 56,733 9,120 16.1 Source: "An Analysis of Malawi's 1979 Manpower Survey" Date: November 24, 1980.  - 29- * 0 NP/ 2 N09 ii T0TAL31 OF0 PURLIC 1 r iPRO. I S.R1 Zn ;CAPITR 0E1:SPOI OCTO LITEC- 1 9.ICOoPLE- ST-:C.RCP09ES3SC ISTS-UIN S SI A S 3TO o. S. FGR :ACy 3ENROLTN 3EN TStIALARY lOtION RATE 14SENRUL3EA3E9LLI * 2ARKETI 91000LtC:DEAUTEOIEXP ALLUICATEDI RATE SWATIat :RTE FUAtOOR ROLATION 3PFIJM PRI.30AT1)J :01 ER RATIUI2 PU. PRICES; EWP., S TO TO: SI U 3NET 3PI.C.IEAO TO GNP/ 1TO SEC. 3NT 311-GUS YR:OLL(U.3 (uS$10 16NL S FDsu. :PRT, 3EC. I).:ADVLT3T3 II) :CCOLh()STEO s CAPITA S I5) 3() sE0 I I I S 3 S S :(1) 33 12) 1 15) ; (A) I (5) I Ce) S(T)I (t)T S (9) u) (I OD (3 (9 ADvANCES AUTRA TA TS5.e200 5.30 8.SET OAT Sty 1ST 99 9R 9 30 260 2.0 99 50 19 6. CANADA 7R 23,0 9,ITO ~~~7.30 e:TF 9 39 2 99 99 I10 21. 2.) 10 9 I 2.0 51030090 !.ACP.TO 61,~4 9,60 9.0! I52 . . 9 0 O.. .. 10 9 21 [2.200 1090 Ti131.6 4, .E ao.TE 90,31STY IIUT;; 99 990 991 25 2.20 99C 95RY 20C 0,690 M,60HERLANDA TA l.9 .390G 9,00 22.40D 20 35 29 99 96 93 I: 2.0F 99 92 13 12.30 'AC EALAND T3 3.1G '.2000 5.2 . 39 DR 29 99 9 9 26 . 99 NT 19 20.0 NORAY T , R0A 7.2 I;.4 59 29 15 99 99 99 16 1.5 99 62 it I11.3 SWEDEN 70 0,~b '2 Rto RP I'. 3 2 12 99 999 99 16 *.. 907 ROc 15 30.001 0.0. 75 So.0 3.70S T.I 13.9~ ~~ Os Al IA 99 99 ... 4 2.0 ... NA 17 21.0 U.0.A. TO 212.2 97 00 5A 1.00 ... 57o A 9 0 9 2 .. 99 997 19$ 9100 EUROPE GRECE- ~ 76 9.1 2,59o 2.6 10,9 ST 20 21 ReR 99x 020 SI 2,0 TOE 00x 27 0500 IrELAD TA 31b,20 93 39 AIly 910 l4Y 0 I 00 99A 35 9 A05 65o 39 I.T PORTUGAL 77 ~~~~9I1 ,So 3. 10.9 41 22 15 70r 02 60 I9 I 2.2 TO 0 D 0.00 010661 75 212 1.2 0 90 04 A 19 13 90 001,, .. 21 ... 90 99X 22 10.0 APR16 TA ~~~~~~35BG 2,990 2.0 102 099 2o RA LOSTX.Y 304 .. .. TR 30 T.O AFRI2CA ILOEI 9 0 1,6 . 214 T? IRA 269 21K 359 090$ ROOT ITO 4.39 50207 3507 3TK 9.00K6 BENIN TA 02 Ao 7.2 36.40 403 231) OlU 11D 4900 TO0 537 25.a 450 110 39