Zambia - Fifth Education Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 3573-ZA STAFF APPRAISAL REPORT A FIFTH EDUCATION PROJECT IN THE REPUBLIC OF ZAMBIA April 20, 1982 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 US$1.00 = Kwacha 0.87 Kwacha 1 - US$1.15 Ngwee (N) 100 = 1 Kwacha Kwacha 1 = SDR 1.132804 (02/28/82) MEASURES 1 Meter (m) = 3.28 Feet (ft) 1 Square Meter (m2) = 10.76 Square Feet (ft2) 1 Kilometer (km) = 0.6214 Miles (mi) 1 Hectare (ha) = 2.471 Acres (ac) GLOSSARY OF ABBREVIATIONS AfDF - African Development Fund CIDA - Canadian International Development Agency CSO - Central Statistical Office MOE - Ministry of Education and Culture mWS - Ministry of Works and Supply NORAD - Norwegian Agency for International Development PIU - Project Implementation Unit (Unit III under the MWS) SIDA - Swedish International Development Authority TNDP - Third National Development Plan,1979-1983 UNZA - University of Zambia REPUBLIC OF ZAMBIA FISCAL YEAR January 1 - December 31  FOR OFFICIAL USE ONLY STAFF APPRAISAL REPORT A FIFTH EDUCATION PROJECT IN THE REPUBLIC OF ZAMBIA Table of Contents Page No. BASIC DATA I. SOCIO-ECONOMIC DEVELOPMENT AND EMPLOYMENT .... .............. 1 Geographic and Socio-Economic Setting ...................... 1 Recent Developments and Prospects .......................... 1 Labor Force and Employment ................................. 2 II. THE EDUCATION SECTOR AND MAJOR ISSUES IN EDUCATION DEVELOPMENT ................................................ 3 Educational Reform Proposals and Recommendations .... ....... 3 Education Finance .......................................... 5 Education in the Third National Development Plan .... ....... 6 Assessment of Government Plans and Policies .... ............ 7 Role of the Bank Group in Zambian Education Development .... 11 III. THE PROJECT..13 Objectives ............ 13 Project Components ......................................... 14 Basic Education (Junior Secondary Schools) .... .......... 14 Secondary School Maintenance Program .................... 15 Reform Implementation Study ............................. 16 Technical Assistance ....................................... 16 Female Participation in the Education System .... ........... 16 Unesco assisted the Government in preparing the project in November/December 1980. This report is based on the findings of an appraisal mission which visited Zambia in March 1981 and included Mr. L. Swahn (Technical Educator, Mission Leader) and Ms. A. De Leva (Economist) of the World Bank Group, Messrs. T. Davis (General Educator, Consultant) and 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.  Page No. IV. PROJECT COST AND FINANCIAL PLAN .......................... 17 Project Cost ......... .................................... 17 Customs Duties and Taxes ............................... 18 Contingency Allowances ................................. 18 Foreign Exchange Component ............................. 19 Financial Plan ............................................ 19 V. PROJECT IMPLEMENTATION, PROCUREMENT, DISBURSEMENT AND AUDITING 19 Implementation ........................................... 19 Administration ........................................ 20 Reporting and Evaluation .............................. 20 Professional Services ................................. 20 Site Selection ........................................ 21 Procurement ......... ..................................... 21 Disbursement ......... .................................... 21 Special Accounts ......................................... 22 Auditing .......... ....................................... 22 VI. BENEFITS AND RISKS ....................................... 23 VII. AGREEMENTS REACHED AND RECOMMENDATIONS .... ............... 23 APPENDIX I - Description of the Education System ANNEX I - Tables and Charts Table 1 - Comparative Education Indicators 2 - Central Government E]xpenditures on Education, 1975-80 3 - Primary School Enrollment, 1965-80 4 - Secondary School Enrollment, 1971-80 5 - Distribution of COSC Results, 1980 6 - Output of Primary School Teachers, 1975-80 7 - Output of Secondary School Teachers, 1975-80 8 - University of Zambia Graduates, 1968-80 9 - Summary of Technica:L Assistance 10 - Summary of Enrollment and Estimated Project Costs 11 - Estimated Cost by Category of Expenditure 12 - Implementation Schedule 13 - Schedule of Disbursements Chart 1 - Organization Chart -- Ministry of Education and Culture, 1980 2 - Structure of the Education System, 1980 3 - Education Pyramid 4 - Interim Structure of the Education System 5 - Final Structure of the Education System ANNEX II - Selected Documents and Data. Available in the Project File MAP No. 15735R  REPUBLIC OF ZAMBIA BASIC DATA Population (1980) 5.7 million Population growth rate 3.3% p.a. GNP per capita (1980) US$566 Education (1980) Literacy Rate 44% Primary education (Grades 1-7) - enrollment 1,040,000 - as percent of age group 7-13 years 95% - percent of enrollment which is female 47% Secondary education (Forms I-V) enrollment 95,000 as percent of age group 14-19 16% - percent of enrollment which is female 35% University of Zambia enrollment (regular, fulltime) 4,010 - percent which is female 18% Education Expenditures Government expenditures on education as percentage of total expenditures of the Government (Prel. estimate 1980) - Recurrent 12.1% - Capital 11.7% - Total 12.1% - As percentage of GDP 4.5%  t1 U1  REPUBLIC OF ZAMBIA APPRAISAL OF A FIFTH EDUCATION PROJECT I. SOCIO-ECONOMIC DEVELOPMENT AND EMPLOYMENT Geographic and Socio-Economic Setting 1.01 Zambia, with an area of 752,600 km2 and a population of 5.7 mil- lion, is a landlocked country, rich in both agricultural and mineral resources. The population is growing rapidly (3.3% in 1978-80), and becom- ing increasingly urban (the share of urban population rose from 30% in 1969 to 43% in 1980) with the main poles of urban attraction being mines and cities along railway lines. 1.02 Zambia's heavy dependence on copper (foreign exchange resources, fiscal revenues, employment) makes the economy extremely vulnerable to developments in world copper markets. Also because it is landlocked, the country is vulnerable to political instability in neighboring countries, which has in the past induced high defense expenditures and resulted in disruption of the country's access routes to the sea. Real GNP per capita remained approximately constant between 1965 and 1976; since then, it has fallen steadily, and in 1980 was about 22% lower than the average for the previous 12 years. Recent Developments and Prospects 1.03 Zambia-s current economic difficulties were triggered by a 40% fall in the price of copper in 1975 setting off a balance of payments and public finance crisis, which in the absence of a subsequent improvement in the copper price evolved into economic depression. These problems were com- pounded by a decline in copper ore grade and several years of drought which reduced agriculture production and the absence of appropriate policies to cope with the situation. The net effect was an annual average 2.5% decline in real GDP between 1977 and 1980 and large fiscal and balance of payment deficits. 1.04 Zambia's Third National Development Plan, 1979-83 (TNDP) contained the following development objectives: (a) economic diversification to promote agriculture and agro-allied and small scale industries to lessen dependence on copper; (b) more productive use of investment; (c) increased employment; (d) reduction of income disparities between rural and urban dwellers; and (e) better monetary and fiscal management to achieve reasonable price stability. However since 1979, because of the severity of the above-mentioned negative factors, there has been little progress toward achieving these long-term objectives. 1.05 The medium term outlook for the future of Zambia's economy is somewhat brighter: (a) the political situation in neighboring Zimbabwe has  - 2 - stabilized; (b) some improvement in the price of copper is foreseen; and (c) the Government has began to initiate a set of policy reforms which are supported by an IMF Extended Fund Facility (approved in May 1981). Labor Force and Employment 1.06 In 1980, Zambia-s labor force was estimated at 1.8 million, of which over half were employed in traditional agriculture, about 21% in the modern wage sector and the rest were either unemployed or working (mainly self-employed) in informal occupations. Systematic employment data are available only for the modern wage sector. About three-fourths of those working in this sector are employed by the Government or by parastatal enterprises (including mines). 1.07 During the first half of the 1970's employment in the wage sector increased slowly, but steadily, at about 2.8% per year. However, as a consequence of the 1975 collapse of copper prices it declined by over 6% in 1976 and stagnated through 1979. Partly as a consequence of the rees- tablishment of trade with Zimbabwe, emnployment in 1980 increased by 3.3% or only half a percentage point below the TNDP projected rate. Wage Employment, 1970, 1975, 1980 (in Thousands) Average Annual Growth Rate (%) 1970 1975 1980 * 1970 - 1980 Agriculture, Forestry, and Fisheries 34.6 36.1 39.6 1.4 Mining and Quarrying 57.6 64.8 60.7 0.5 Manufacturing 38.2 44.3 49.0 2.5 Construction 68.8 71.7 43.6 -4.5 Transport and Communications 22.3 22.1 25.4 1.3 Services ** 121.5 154.5 165.8 3.2 Total 343.0 393.5 384.1 1.1 Source: Central Statistical Office * Average for quarter ending in June. ** Excludes domestic servants. 1.08 A policy of generous wage increases which made employment in the modern sector more attractive than other work opportunities has been a major inducement for rural-urban nigration. At the same time, in recent years this policy has resulted in considerable cutbacks in private sector  wage labor, thus contributing to increasing urban unemployment. However, the development of mainly home-based informal activities such as small repair shops and retail trade outlets has provided some relief to the unemployment situation. 1.09 The TNDP estimates that with a labor force growing at about 4% per year, some 63,000 new jobs would need to be created each year if an increase of the unemployment backlog is to be prevented. Even if the rather optimistic wage employment growth rate of 3.8% per year projected in the TNDP were to be achieved, the modern sector would absorb only about one-fourth of the annual additions to the labor force; thus, traditional agriculture would have to provide the bulk of new employment. In order to cope with this situation the TNDP emphasizes the provision of incentives for self-employment in the rural areas through an integrated package of extension services, land clearance, adoption of labor-intensive techniques, and farmer training. 1.10 Although no comprehensive updated manpower study is available for Zambia, the TNDP includes indicative projections of manpower supply and demand. These projections are based on enrollments and admission policies of existing educational institutions and limited employment surveys for particular sub-sectors undertaken by the Central Statistical Office (CSO) and the University of Zambia (UNZA). These studies reveal shortages in the skilled, technical and professional occupations, particularly engineers, senior secondary school teachers, medical personnel at all levels, tech- nicians and professionals for the mining sector and managerial and super- visory staff for all sectors. They also reveal that in urban areas there is substantial unemployment and underemployment among low-skilled or unskilled labor. With its plans to foster agriculture, the Government expects that enough income earning occupations will be created in agricul- ture or in activities supporting agriculture to absorb the increase in the rural labor force as well as induce surplus urban labor to revert to agriculture. II. THE EDUCATION SECTOR AND MAJOR ISSUES IN EDUCATION DEVELOPMENT 2.01 General. A description of the education system is contained in Appendix I. Annex I, T-1 are comparative education indicators, C-1 through C-3 are the organization of the Ministry of Education and Culture (MOE), the structure of the education system and the education pyramid, respec- tively. Educational Reform Proposals and Recommendations 2.02 A general feeling that education was not producing the attitudes and skills conducive to self-reliance and national development caused the Government to undertake a review of the sector between 1974 and 1978 to determine and analyze its shortcomings. Concern arose particularly because  of the growing number of primary and secondary school leavers and dropouts who remained unemployed after schooling. After extensive national debate the document "Educational Reform Proposals and Recommendation" (Reform) was published in June 1978. The paper contains an in-depth evaluation of the existing system, formulates specific proposals for action, sets priorities for future development, and outlines an investment program for the sector during the next decade, starting from the beginning of the TNDP. 2.03 The aims of national education in Zambia, according to the Reform, are to provide each person, within his/her capacity, opportunities to: inter alia obtain an education based on personal interest, abilities and needs; attain intellectual excellence and acquire practical skills or experience; and contribute to the economic and social development of Zam- bia. 2.04 The existing education structure will be modified according to the schematic diagrams which are shown in Annex I, C-4 and C-5. The most important features of the proposed near structure are: (a) Full-time basic education will begin at the age of seven and continue until the completion of Grade 9. The new structure will have three successive stages of full-time education as follows: 1. Basic Education. The ultimate goal is to provide a nine-year universal basic education system. Due to insufficient number of school places available at present in Grade 1 and Form I (the future Grade 8), the achievement of this target cannot be accomplished in the immediate future but over a 10 to 15 year period through phased expansion of facilities and increased resources. When nine-year universal basic education is ultimately achieved, there will be a continuous program from Grades 1 through 9 with the curricula organized on the basis of six years of primary and three years of junior secondary education. 2. Second Stage. At the end of Grade 9, students will be selected to enter a fu-ll-time general education program for Grades 10-12 (presently, Forms III to V), or they may pursue specialized training programs such as the assistant nurses' course, trades training, primary school teacher training or similar courses. Some of those who leave full- time education at this stage may pursue in-service training programs in various sectors of the economy and/or take advantage of continuing (part-time) education programs. 3. Third Stage. Within this stage of education, there will be a wide range of fields of study for Grade 12 graduates, such as advanced specialized programs leading to diplomas  - 5 - in teaching, technology, nursing, agriculture, etc., and programs at university level. (b) Continuing Education. This part of the education system will cater to adults or youths who have left full-time education or may never have entered it, but wish to pursue education and training by part-time study. The following are the principal areas: (i) literacy education designed to achieve universal literacy through intensification of ongoing programs; (ii) part-time formal studies by correspondence and/or evening courses, to provide access to the various levels of the system; and (iii) in-service education aimed at increasing the understanding, competence, and productivity of persons in the world of work and to enable workers to improve their vocational and professional skills. Education Finance 2.05 Education in Zambia is free through the university level. On average in the past five years (Annex I, T-2), Government recurrent expen- ditures on education have accounted for about 14% of total annual recurrent expenditures and capital expenditures for about 9% of the respective total. Notwithstanding, steady yearly increases in enrollments (primary 3%, secon- dary 5%, university 13%), education recurrent expenditures in real terms fell by over 15% between 1976 and 1978 and stabilized thereafter. This can be attributed mainly to the decline in teachers real wages since 1976, the last year in which a cost of living adjustment was granted. This situation is reflected in the decline in education cost per student as follows: 1976 1980 (in US$ of 1980) Primary 103 71 Secondary 556 381 University 7,594 3,750 Also contributing to the decline in unit costs have been the phasing out of boarding for primary schools; a sharp reduction in the provision of educa- tional materials to students; the deterioration of the quality boarding services in secondary education; and an increase in student:teacher ratios at the university level. A comparison of Zambia-s unit costs in 1980 with those in other countries in the region can be seen from the following estimates for the 1979/80 school year:  Zambia Malawi Lesotho Botswana (in US$ of 1979/80 Primary 71 16 28 157 Secondary 381 262 195 840 University 3,750 4,100 3,340 6,890 The differences among the four countries with regard either to the propor- tion of boarders in secondary schools and/or that of expatriate teaching staff provided on a grant basis are not sufficiently large as to alter the countries ranking in terms of their unit costs. 2.06 As it is difficult to assume that teachers' salaries can continue to fall in real terms and, as there is only limited scope for increasing student:teacher ratios, Zambia is not expected to be able to reduce sub- stantially unit costs on these two counts. Thus, because of its present financial constraints, Government's efforts in the short-term should be directed at preventing any significant increase in real wages or decline in student:teacher ratios. Education in the Third National Development Plan 2.07 The Government's immediate strategy for implementing the Reform's goals are contained in the TNDP. Bank Group staff have reviewed the proposed reform and agree with its basic recommendation to improve the quality, equity and efficiency of the education system. Although the TNDP indicates agreement with the ultimate goals of the Reform, it also expres- ses caution about the rate of implementation during the Plan period (para. 2.04.a.1). In this respect the Government, at the recommendation of Bank Group staff, is planning to undertake a study of the development of the formal education system as set forth in the Reform, which would serve as a guideline for future investment in the sector (para. 2.30). The TNDP investment program includes elements outlined in the paragraphs which follow. 2.08 Basic Education. (Grades 1-7, Former Primary School and Grades 8-9 of Former Junior Secondary School The TNDP aims at providing facilities for all children from the age of seven to ,enter school and continue until they reach Grade 7. Enrollment is estimated to increase from 962,000 in 1978 to 1,154,000 in 1983. Total investment of K 177 million (1977 prices) is estimated to be needed for construction of about 4,500 classrooms, 5,000 staff houses and other school requisites. The Government would provide K 24 million (about 14% of the capital expenditures) and che remainder of about K 153 million is to be raised from other sources or provided through self-help schemes. Grades 8 and 9 (the former first two grades of junior secondary school) will ultimately become the two last grades of the nine-year universal basic education cycle. The TNDP aims at increasing the progression rate from Grade 7 to Grade 8 from 19% in 1980 to about 21% in 1983.  2.09 Senior Secondary Education (Grades 10-12). The TNDP target is to maintain about 50% progression from Grade 9 to Grade 10 to meet the increasing demand for Form V graduates for the labor market and tertiary training institutions. 2.10 Teacher Training. The achievement of the goal for increased enrollment in Grades 1 through 7 will require about 5,000 new primary school teachers to be employed during the TNDP period. To achieve this goal, eight existing primary teacher training colleges should be extended, each from 300 to 500 students capacity, and a new resource center attached to all the primary teacher training institutions. At secondary level, the two existing Teacher Training Colleges in Kitwe and Kabwe would be expanded to a capacity of 500 students each and a third college of a similar size would be required during the TNDP period. 2.11 Curriculum Development. The MOE would embark upon a comprehensive program for curriculum reform including re-orientation of teachers, produc- tion of related school materials and purchase of books and equipment. The new Education Services Center, constructed and equipped under the Bank-assisted Third and Fourth Education Projects (paras. 2.26 and 2.27) will play an important role in implementing this program. 2.12 Technical and Vocational Training. The Government-s plans include the establishment of three new Trades Training Institutes in the Eastern, Western and North-Western provinces where no technical education or voca- tional training institutions exist. However from the point of view of manpower needs, this program appears premature. Other investment in this subsector would be used to improve the utilization and efficiency of exist- ing facilities. 2.13 University of Zambia. The TNDP also includes the establishment of the new Solwezi Campus, the Ndola Campus, and the improvement of the Lusaka Campus. However, in recognition of the country-s economic constraints, recent (October 1980) adjustments to the Plan emphasize only the develop- ment of a School of Environment Studies and a School of Business Administration and Accountancy on the Ndola Campus and a modest improvement in the buildings and equipment of the Lusaka campus, while the development of the Solwezi Campus will be postponed. A revised university development plan to that effect is under preparation and was scheduled to be ready in late 1981. Assessment of Government Plans and Policies 2.14 Overview. The Government's plans and policies for development of the education and training sector in the TNDP concentrate on a gradual expansion of the formal education system in order to obtain greater equity at the basic education level and an improvement of quality in output at the secondary education level. This is not expected to have an immediate effect on alleviating the shortage of manpower in technical and other  .- 8 - professional occupations (para. 1.10). However, during the 1970s, educa- tion policy has emphasized the establishment of institutions of secondary and higher learning in which Bank Group assistance has played an important role (para. 2.23). The capacities of these institutions are not yet fully utilized primarily because of the poor quality of output from various levels of the secondary school system. The Government's intention to implement gradually the Reform so as to improve efficiency and quality in the education system is therefore sound and is expected ultimately to increase and improve the output of needed skilled and professional manpower for the industrial, mining, health, agricultural and education sectors. 2.15 Basic Education. An assessment of the required investment for introducing a nine-year universal basic education system, based solely upon 1980 numbers, shows that 60,000 additional school places in Grades 1-7 and 200,000 in Grades 8 and 9 would be required to enroll every child at the appropriate age of entry from seven to sixteen years. This would also require an additional 9,250 teachers. hlence, in the short and medium terms it appears that universal basic education is feasible only for Grades 1-7, where it has already achieved an enrollment of 95% within the appropriate age range; total age group enrollments for Grades 8-9 will be gradually increased as the system can be realistically financed and serviced. Due in large part to financial constraints, only 19% of the present Grade 7 graduates are able to continue with full-time education up to the end of Grade 9. The retention of this percentage through the mid-1980s is depend- ent upon an input into the system of at least 6,000 places at the junior secondary level. It is the Government's clear policy that national progression rate of 22% from primary to junior secondary level, achieved in the mid-1970s, should not be allowed to fall to 15% (the TNDP states a progression rate of 21% as the target, para. 2.08). Therefore, the proposed additional junior secondary schools would assist the Government in carrying out an important element of national policy. 2.16 It is obvious that the plan to attain Universal Basic Education "over a 10 to 15 year period" (para. 2.04 (a)l) is not realistic, and that a new program for the future medium- and long-term development of the education system, within the framework outlined in the Reform proposals, has still to be established. It is the Government's intention therefore to introduce a study of the development of the formal education system in relation to the proposed Reform (para. 3.07). Annex I, T-3, includes primary school enrollments for the period 1965 to 1980. 2.17 Secondary School Maintenance Program. This ongoing program sup- ported by the Bank Group-assisted Third Education Project (para. 2.26) and the Norwegian Agency for International Development (NORAD) is given high priority in the TNDP. A well conceived program is being developed which should assist the MOE in protecting its investment in physical facilities and equipment and the proposed project supports the second phase of this program (para. 3.04).  - 9 - 2.18 Senior Secondary Education. Further expansion of the senior secon- dary school system (para. 2.09) is considered to be of lower priority than junior secondary school expansion. Although undoubtedly there will be pressure to increase the number of senior secondary school places, the present capacity of the system is sufficient quantitatively (about 11,000 student places in each of Forms IV and V) to provide an adequate output for existing and planned tertiary education and training for the next decade (Annex I, T-4). The Government-s intention to improve the quality of the output of Form V graduates appears a sound policy, and successful implemen- tation is anticipated with the increased output of graduate teachers from the UNZA and the Secondary School Teacher Training College. Annex I, T-5 provides an analysis of the results of the Form V COSC examination. 2.19 Teacher Training. Given the large expansion initially envisaged in the TNDP (para. 2.10), the most pressing problem confronting the education system would be a shortage of qualified teachers. However, assuming a more realistic growth, based on the project currently proposed, the supply of trained teachers (Annex I, T-6 and T-7) for the proposed schools should be adequate. A recent MOE working paper indicated that the output of teachers at the junior secondary level is matching requirements to such an extent that the recruitment of expatriates is no longer necessary--even in subject areas such as mathematics and science. Further, the eight existing Primary Teacher Training Colleges are expected to increase their enroll- ments through a more efficient utilization of existing facilities as a result of the addition of Resource Centers to be provided each college under an agreement with the Swedish International Development Authority (SIDA) which will also provide recurrent funds for their operation. Secon- dary Teacher Training is also being financially supported by SIDA and other bilateral funds through a project which would establish a new college in Lusaka. Hence, existing and planned teacher training facilities have the capacity to provide an adequate supply of trained teachers for the expected expansion of upper Basic Education including the upgrading of teachers to improve the quality of instruction in the schools. 2.20 Curriculum Development. The recently completed curriculum development center, including the new printing workshop which has a print- ing capacity of about 10,000 books per day, should increase the efficiency and effectiveness of work in curriculum development. SIDA and NORAD are providing ample incremental funds for educational materials production. The present 42 staff of the curriculum development center will be increased by two experts provided by Unesco and funds will be supplied for fellow- ships for staff development through a new UNDP project currently being negotiated. The curriculum for the secondary schools contains numerous practical subjects which emphasize the development of skills useful for later employment in industry and commerce (woodwork, metalwork, homecrafts, commerce and agriculture).  - 10 - 2.21 Technical and Vocational Training. Zambia's educational policy for technical education and vocational training has been to concentrate resour- ces on full-time pre-employment training in technical colleges and trades training institutes followed by on-the-job training in industry. This approach is in contrast to apprenticeship training, which is not considered suitable primarily because of job immobility resulting from such schemes. The Government's plan includes the establishment of three additional trades training institutes (para. 2.12) which, due to the underutilization of existing training institutions, appears to be inappropriate considering also the lack of adequate manpower justification. 2.22 Tertiary Education. This level of education includes numerous programs administered by various institutions. Successful completion of Form V or other equivalent programs is the normal requirement for entry to university or college. Some Form V graduates could continue their educa- tion through part-time study in areas of possible development that are relatively inexpensive and have considerable potential in Zambia. As discussed in para. 2.13, UNZA is at present planning new programs which appear worthwhile and sound. The Government funding of the various schemes however remains doubtful in view of the severe financial constraints. At present, UNZA will utilize the Zambia Institute of Technology for the new programs, but further expansion of the tertiary level of the educational system, would require additional infrastructure. Annex I, T-8 includes UNZA graduates by degree from 1968 to 1980. 2.23 Revised 1981-83 Investment Program. Shortly after the completion of the TNDP it became evident that under the country-s current financial difficulties it would not be possible within the estimated time span to implement all investment projects included in this Plan. Consequently, a revised investment program for 1981-83 had to be prepared. In this new program, investment in education was substantially scaled down and only the Government-s highest priority projects were retained. These included mainly on-going projects totally or partially financed from external grants or loans and new projects for which external financial assistance had already been identified, e.g. the proposed IDA project. The projects in this group are in the fields of primary education (Bank and NORAD); secon- dary education, including a school maintenance program (Bank, NORAD and SIDA); teacher training and education services (Bank, the Netherlands and SIDA); and technical education and vocational training at the various levels (Bank and SIDA). All these projects are complementary; their development has involved substantial inter-agency coordination and they address the most urgent education and manpower training needs of Zambia. A few new projects for which no external financial assistance has been iden- tified are also included in the revised three-year investment budget. These projects, for which full justification for external assistance has not been provided, will most probably have to be postponed until the finan- cial situation of the country has become substantially stronger.  - 11 - Role of the Bank Group in Zambian Education Development 2.24 General. The Bank Group has provided US$69.0 million(l) to Zambia for education projects with a total investment cost of about US$107 million equivalent. The projects, particularly the First and the Second Education Projects, have placed emphasis on the expansion and improvement of secon- dary, technical, higher education, and teacher training in line with the need to alleviate the acute shortage of trained local high- and mid- dle-level manpower in the years following independence. This was in line with the Bank's criteria for assistance to education development in the early 1970s. A shift in emphasis occurred gradually with the Third and Fourth Education Projects which gave increased attention to farmer and health training, and adult education as well as to the improvement of supportive educational services (e.g., curriculum development, educational research, school broadcasting). The first two Bank Group-financed projects have been completed. In addition, the Bank financed an education component in an urban project (Loan 1057-ZA) and an array of project-related training as part of various infrastructure projects. The total cost of Bank Group financed education and training components of projects in sectors other than education is estimated at about US$6.0 million equivalent. 2.25 The First Education Project (Loan No. 592-ZA), approved in April 1969 in the amount of US$17.4 million, was designed to provide quantitative expansion and qualitative improvement in the education system to meet urgent manpower needs. The project included nine new secondary schools and improvement to 56 existing secondary schools, two primary and two higher teacher training colleges and a technical school. The project was com- pleted in March 1979, some four and one half years beyond the original closing date with a cost overrun of about 18%. The project completion report issued in June 1979 noted that the project (involving 70 institu- tions) was considered by the Bank Group and the Borrower to have been too large and ambitious for a first operation of the type in the country. The decline in copper prices resulted in shortages of Government counterpart funds and also contributed to the delay. Another lesson learned was that the standardized construction system using locally manufactured prefabri- cated elements had shortcomings in the design and technology although cost savings were undoubtedly realized initially. The need to formulate and schedule, much earlier in the project implementation cycle, the teacher training programs and the general introduction of new curricula is also a * lesson learned. The education objectives of the project were basically achieved, albeit slowly. A project performance audit report on this project is under preparation. 1. Includes a US$11.0 million equivalent grant to the Government by NORAD which is being administered by the Bank Group under the Third Education Project.  - 12 - 2.26 The Second Education Project (Loan No. 645-ZA), approved in Novem- ber 1969 in the amount of US$5.4 million, was designed to increase the supply of high level manpower in selected fields by providing extensions to the UNZA Schools of Engineering and Education. The project, as originally approved, was basically completed in December 1975, about two and one half years beyond the original August 1973 closing date. However, the project was amended to utilize savings realized mainly from the civil works com- ponent for new facilities for the Schocl of Agricultural Sciences. The modified project was completed and the proceeds of the Loan were fully disbursed by March 1979. A project comtpletion report, issued in June 1979, noted that the facilities provided were being effectively utilized, although in the case of the School of Engineering, not yet to full capacity. It noted that the wastage of students from the UNZA was high after the first year which could be attributed in part to the poor quality of entrants particularly in the science subjects. It was also realized that improvements could be made in the efficiency of the university system through the strengthening of its general planning capacity. A project performance audit report on this project is under preparation. 2.27 The Third Education Project (Loan No. 900-ZA), approved in May 1973 in the amount of US$33.0 million which includes a subsequent NORAD grant of US$11.0 to the Government, consisted of: (a) expanding the output of medical assistants; (b) in-service training for agricultural staff and farmer training; (c) curriculum development services; and (d) additional facilities for secondary schools and teacher training colleges. The project included about 115 man years of technical assistance for project implementation, planning, administration and fellowships. The project was substantially completed by the original closing date, September 30, 1979, but was postponed to March 31, 1980 to permit project accounts to be final- ized. However, substantial savings were realized in the technical assis- tance component due to grants and the project was amended to utilize these savings for 12 new primary schools and the development of a first phase of a maintenance program for secondary schools with coordinated assistance with NORAD. The primary school component work is about six months behind schedule due to delays by the Government in releasing conterpart funds. This is being closely monitored by the Bank Group. An initial review of the objectives of the original components of the project indicate that the educational objectives are expected to be achieved. 2.28 The Fourth Education Project (Loan No. 1356-ZA), approved in Decem- ber 1976 in the amount of US$13.3 million, is designed to improve education administration, business education and training of agricultural staff and farmers; technical assistance and evaluation studies. The overall progress in implementing the project is satisfactory and the project is expected to be completed prior to the original March 31, 1983 Closing Date. 2.29 Lessons Learned from the past projects include: (a) projects should be of a size that can be implemented within a reasonable time frame; (b) timely release of budgetary allocations by the Government is essential; (c) special programs for training should be implemented concurrently with  - 13 - the hardware components; and (d) required technical assistance should be coordinated with other donor agencies at an early stage of project prepara- tion. Coordination of assistance with other donor agencies is essential since NORAD, SIDA, the Arab Fund for Economic and Social Development, African Development Fund (AfDF), Canadian International Development Agency (CIDA), Unesco, UNDP, etc. are providing major inputs to the education sector. 2.30 The proposed project takes into consideration the lessons learned by: (a) keeping the size of the project: (i) within the Government-s ability to finance; and (ii) in particular, the construction component, within the capacity of the constructioa industry for timely implementation; (b) by more advanced preparation of the designs of the facilities; and (c) early coordination of the technical assistance component with NORAD. Existing teacher training programs should be able to provide adequate staffing for project schools (para. 2.19). Since the proposed maintenance component is a continuation of an ongoing program which is being success- fully implemented, no risks are envisaged to carry out this component. The continuation of an ongoing maintenance program should accelerate implemen- tation of that component. 2.31 Lending Strategy. The Bank Group strategy for future lending in the education and training sector should be to assist the Government in its efforts to implement the Reform and thereby improve the quality, equity and efficiency of not only its basic education system but the education system as a whole; to support occupational training at all levels for increased Zambianization of high- and middle-level manpower and to enhance employment opportunities. The Bank Group should continue to coordinate its lending program closely with other donor agencies. The proposed study of the development of the formal education system vis-a-vis the Reform (paras. 2.07 and 3.07), which is to be supported by SIDA, aims to plan and organize in detail the practical implementation of the Reform from an educational, financial and organizational point of view, and should serve as a guideline for future investment in the education sector. The study would also review the assistance being provided by other Donor Agencies and its impact in the education sector. III. THE PROJECT Objectives 3.01 The proposed project would assist the Government in carrying out high priority components of its Education Reform as contained in its TNDP. Specifically, it addresses the equity of the basic education system by providing increased educational opportunities in deprived rural areas. It would assist in improving the efficiency of the education system by intro- ducing within the first phase of the Reform, junior secondary schools, which are to become an integral part of basic education. The junior secon- dary schools proposed are all to be located in rural areas. This would be  - 14 - consistent with the main thrust of the TNDP to reduce dependance on the mining sector and emphasize agriculture. This would provide incentives for the population to remain on the land thus slowing down rural-urban migra- tion (para. 1.04). The project would also continue the efforts to develop and improve a school maintenance program. It has been designed in conjunc- tion with and would complement ongoing development programs assisted by numerous donor agencies and by previous Bank Group assisted education projects. Project Components 3.02 Basic Education (Junior Secondary Schools). This component would include facilities and equipment for eight new junior secondary schools. This program has the highest priority in the Government-s education development plans since it will be the first expansion of the secondary school system since the completion of those schools financed under the Bank-assisted First Education Project in 1969. Because of the expansion of the primary school system, the progress-ion rate between Grade 7 of the primary school and Form I of the junior secondary school has declined nationally from about 22% during the 1970s to the present 19%. This would drop to approximately 15% by the mid--1980's, if additional facilities are not provided. The present progression rate to the Form 1 level of educa- tion in the areas selected for the project, ranges from nil to about 17%, against the 19% national average. The additional places proposed including three new schools to be financed by AfDF would only sustain an 18% rate and fall short of the 21% goal of the TNDP. 3.03 Of the eight schools, six would provide three-stream entry and two schools would provide four-stream entry for Grades 8, 9 and 10. The three-stream schools would enroll 360 puLpils and four-stream schools would enroll 480 pupils giving a total 3,120 aLdditional places. Two schools would be day-schools and the remainder would provide boarding for about 70% of the enrollment. With the development of the educational system and gradual implementation of the Government-s policy of universal basic educa- tion to Grade 9, the need for boarding facilities would decrease. Boarding facilities have therefore been designed for easy conversion into standard classrooms catering to an additional 3,840 day-pupils. Each boarding room for 20 students, with loose furniture, will be identical in size to a classroom for 40 students. The sites have been selected and the buildings designed in such a way that maximum flexibility is available for expansion of the schools either through local community 'self-help' schemes or through Government input. For example, three-stream schools may be developed into four streams by the addition of three classrooms while further laboratory workshops or admiristration accommodation would not be required. The schools have been designed basically for 40 pupils to one classroom, with added laboratory, domestic science and workshop facilities. Hence, all students would have a "home" classroom, which can be used by pupils for studies and homework in the evening, thus allowing considerable economy in eliminating, inter alia, the need for a library reading room and individual pupil storage lockers (experiences in previous Bank Group  - 15 - projects have shown the latter not to be satisfactory). It will also simplify the scheduling of classes and diminish other organizational problems now affecting secondary schools through a class rotation system. Laboratories and workshops will be furnished with fixed installations only along walls for flexible use of facilities. Equipment would be kept to a minimum and would mainly consist of hand tools for students' practical work and demonstration kits for the teachers. 3.04 Secondary School Maintenance Program. An evaluation report of the Government's existing secondary school maintenance system issued in 1977 emphasized the necessity for the establishment of an improved maintenance program to prevent deterioration of existing facilities and equipment. The report noted that the maintenance and renewal of buildings and equipment, as carried out by the Public Works Department and Mechanical Services Branch, were inadequate for the existing secondary schools. A new secon- dary school maintenance program (Phase I) was therefore established in 1980 with financial assistance under the Bank-assisted Third Education Project. 3.05 The maintenance program is administered by the Project Implementa- tion Unit (PIU) under the Ministry of Works and Supply (MWS). NORAD is providing the program-s technical assistance requirements. The program coordinator arrived in January 1981, and six additional specialists fol- lowed thereafter. The Government intends to maintain the program on a permanent basis to ensure maximum benefits from its investments in secon- dary school buildings and equipment. A satisfactory work program has been prepared by a NORAD/Government team which sets forth the organization, administration and an implementation schedule. This report will be con- tinuously reviewed and updated as experience is gained in carrying out the program. During the first and second phase, the maintenance program is expected to improve buildings, furniture and equipment in secondary schools which have fallen into serious disrepair. Thereafter the program s costs would be reduced as it focuses on routine maintenance in all secondary schools. Following the initial program of two-and-a-half years, NORAD has indicated it would agree to continue its technical assistance program (about 21 man-years) for an additional two-and-a-half years (para. 3.08) while local counterparts are being trained as replacements. 3.06 The proposed project would provide support to the second phase of the program for renovation (civil works), and for procurement of needed repair materials, spare parts, equipment and essential transport. The program also encourages self-reliance for maintenance at the schools by giving special maintenance and repair courses to the technical teachers. These teachers will to a great extent be able to organize maintenance in the schools using existing workshop tools and machinery and utilizing the students for the work. The Government confirmed NORAD's technical assis- tance commitment including the training of local counterparts (paras. 3.05 and 7.01a) and also confirmed its intent to continue operating the estab- lished maintenance program after the phasing out of the external financial support upon completion of the proposed project (para. 7.01b).  - 16 - 3.07 Reform Implementation Study. To determine the most economic and efficient method to implement the Government's Education Reform, MOE would undertake a comprehensive study to produce a detailed plan for the full transition of the present education structure into the new structure (para. 2.04). This plan would in the future govern all investments in new school facilities, curriculum development, and teacher training programs. The Government confirmed that the study would start not later than December 31, 1982, and be completed by December 31, 1983 (para. 7.01c). SIDA is to assist in the financing of the study and will provide the necessary specialists to assist the MOE in carrying out the task. Satisfactory terms of reference have been prepared. Progress in carrying out this study would be monitored by Bank staff during project supervision, including consult- ation on the findings. 3.08 Technical Assistance. NORAD is expected to provide about 35 man-years of specialists' services (Annex I, T-9). The PIU would be allo- cated about 21 man-years for the maintenance program (para. 3.05) and 14 man-years for project implementation (para. 5.02). 3.09 Female Participation in the Education System. Participation of females in the formal education system in 1980 was as follows: (a) at the basic education level (Grades 1-7), females represented about 47% of the total enrollment, varying from 49% at Grade 1 to about 41% at Grade 7; and (b) at the secondary level (Forms I-V), females represented only about 35% of the total enrollment, varying from about 38% in Form I to about 28% in Form V. The Government's policy is to provide equal educational oppor- tunity for boys and girls. The percentage of female participation has been increasing over the past ten years, and this trend is expected to continue.  -17 - IV. PROJECT COST AND FINANCIAL PLAN Project Cost 4.01 The total cost of the project is estimated at US$39.2 million equivalent, including custom duties and taxes estimated at about US$2.3 million. The estimated costs and foreign exchange components are given in Annex I, T-1O and T-11, and are summarized as follows: Kwacha (millions) US$ (millions) % of ---------------------- --------------------- Base Local Foreign Total Local Foreign Total Cost I. Civil Works, Furniture, Equipment & Vehicles 1. Junior Secondary Schools 8.73 10.72 19.45 10.03 12.32 22.35 81 2. Maintenance Program 1.22 1.68 2.90 1.41 1.93 3.34 12 Sub-Total I 9.95 12.40 22.35 11.44 14.25 25.69 93 II. Professional Services 0.48 0.32 0.80 0.55 0.37 0.92 3 (Consulting Engineers) III. Project Administration 0.45 0.45 0.90 0.51 0.52 1.03 4 Base Cost (March 1981) 10.88 13.17 24.05 12.50 15.14 27.64 100 (Total I - III) IV. Contingencies 1. Physical (10%) 1.08 1.32 2.40 1.25 1.51 2.76 2. Price (29%) 3.49 4.15 7.64 4.00 4.78 8.78 Sub-Total IV 4.57 5.47 10.04 5.25 6.29 11.54 Project Cost (I - IV) 15.45 18.64 34.09 17.75 21.43 39.18 of which duties and taxes (2.00) - (2.00) (2.30) - (2.30) 4.02 Construction, furniture and equipment costs have been derived from quotations received for similar items in the ongoing Third and Fourth Education Projects and other similar projects, reviewed in consultation with staff of MOE, MWS, and PIU with adjustments reflecting changes of existing standardized building designs and master lists of furniture and  - 18 - equipment. These modifications have resulted in a reduction of the estimated unit cost for secondary schools through simplification of build- ing designs, maximum use of local materials, simple building techniques, and elimination of unnecessary sophisticated equipment. The proposed schedules of accommodation meet the minimum requirements and are func- tional. Furniture and equipment would be of the type pertinent to the basic needs of the country and the educational objectives of the project. The base unit costs of construction vary from US$320/m2 to US$530/m2 (at the official exchange rate) depending on location with an average of US$430/m2. These costs reflect: the global economic situation which is characterized by high import rates, inflation and energy cost; the tran- sportation difficulties associated with a land locked country; the rural locations of the schools; and a construction industry that is uncertain about its future including difficulties in procuring scarce materials. Although a direct comparison of unit cost of construction is difficult, the cost (US$430) in this project compares with unit cost in other Eastern Africa countries as follows: Malawi US$390 (1981); Kenya US$330-US$400 (1981); Lesotho US$331 (1981); and Comoros US$350 (1981). 4.03 The technical assistance component is to be provided by NORAD (para. 3.08). The cost of professional services (consulting engineers) (para. 5.04) equivalent to about 120 man-months of services, is estimated at an average rate of US$7,500 per man-month. This includes salaries, travel, subsistence, overhead, and fees. 4.04 Customs Duties and Taxes. Items directly imported for educational purposes are exempt from import duties and taxes. The project has been costed net of import duties and taxes on those items, but includes taxes estimated at about US$2.3 million equivalent representing duties and taxes on imported but locally procured construction materials, equipment, fuels, and on services. 4.05 Contingency Allowances. For physical contingencies, 10% has been added to the base cost of all project components. Price contingencies have been calculated by applying to the base costs (as of March 1982), the following percentage rates of price escalation in accordance with the implementation schedule (Annex I, T-12): Local Foreign 1982 15% 8.5% 1983-86 12% 7.5% The local price increases are based on recent trends and forecasts by the MWS (for construction) and the PIU for furniture and equipment, inter alios. These rates have been reviewed by Bank Group staff and have been found appropriate.  - 19 - 4.06 Foreign Exchange Component. The foreign exchange component has been calculated as follows: (a) civil works, 53%; (b) equipment, including vehicles, and furniture, 85%; and (c) professional services and project administration, 40%. Including contingencies, Financial Plan 4.07 The total project cost of US$39.2 million equivalent would be financed by an IDA Credit of SDR 22.2 million (US$25 million equivalent) representing about 68% of the project cost net of taxes and would finance the foreign exchange component and about 23% of the local currency cost as follows: US$ millions equivalent Govt. Bank Group Total 1. Civil Works 7.80 9.90 17.70 2. Construction Materials - 6.00 6.00 3. Furniture 0.20 0.90 1.10 4. Equipment and Vehicles 0.20 1.00 1.20 5. Professional Services 0.50 0.40 0.90 6. Project Administration 0.50 0.30 0.80 7. Unallocated (Contingencies) 5.00 6.50 11.50 Total 14.20 25.00 39.20 of which duties and taxes (2.30) - (2.30) 4.08 The Government's counterpart funds of US$14.2 million equivalent would be phased over about five years with an estimated maximum contribu- tion of US$3.0 million equivalent required in any single Zambian fiscal year. By 1986, when the proposed project becomes operational, the addi- tional recurrent costs generated by the project, estimated at about US$1.1 million in 1980 prices, would represent less than 1% of total Government recurrent expenditures for education in 1980. V. PROJECT IMPLEMENTATION, PROCUREMENT, DISBURSEMENT AND AUDITING Implementation 5.01 The project would be implemented over a period of five and one half years, including six months for completion of payments and finalization of accounts. The project is expected to be completed by September 30, 1987, with a proposed Closing Date of March 31, 1988 (Annex I, T-12).  - 20 - 5.02 Administration. The PIU, established in the MWS for the implemen- tation of the Third and Fourth Educaticin Projects, would be responsible for the financial and administrative control of the proposed project, including liaison with the Bank Group, and coordination with various ministries and agencies involved in the project. Ihe Director of the Buildings Branch of the MWS, a Zambian, has previously served as a part-time Director of the PIU. In July 1981, he assumed on a full time basis, the position of Direc- tor of the PIU. In addition, the Unit is staffed with a full-time assis- tant director and other senior staff provided by NORAD, namely, a project architect, a maintenance coordinator, a procurement specialist, a financial controller, and three supervisory engineers. NORAD is expected to continue its support for the PIU (paras. 3.06, 3.08 and 7.01 a). Appointments to the key positions in the PIU (Project Director, Assistant Project Director, Procurement Specialist, Financial Controller, Project Architect and Main- tenance Coordinator) would be in consultation with the Bank Group. Training of local counterparts would be continued under this project. 5.03 Reporting and Evaluation. Following procedures established under the Third and Fourth Education Projects, semi-annual reports on implementa- tion progress would be submitted to the Bank Group within two months fol- lowing the periods ending January l and June 30. Not later than five months after the project closing date, the PIU, in cooperation with the MOE, would provide to the Bank Group, a report evaluating the execution, initial operations, costs and benefits of the project and performance of the Government and the Bank including lessons learned. Government produced a good evaluation of the results of the First Education Project. 5.04 Professional Services (Architectural/Engineering/Quantity Surveying). The Buildings Branch of the MWS would be responsible for designs, the preparation of tender and contract documents, and supervision of construction for the junior secondary schools. These services would be provided by MWS at no cost to the project, except for the engineering services (structural, mechanical and electrical) which the MWS is unable to provide. The cost of the engineering services is therefore included in the proposed project. Consultants would be selected in accordance with Bank Group guidelines. Sketch designs for the new junior secondary schools prepared by the MWS architects have been reviewed by the Bank Group staff and found to be satisfactory. The designs are based on MWS standards, proven as reasonable cost, durable buildings. However, improvements in the designs of water and sanitary facilities are required since in a number of instances schools have been closed because of health hazards resulting from inappropriate design. The services of consulting engineers would include the new design of more efficient water and sanitary facilities for the project, and related supervision under the direction of the MWS (para. 5.02). The services required under the maintenance program including, inter alia, working drawings, specifications, preparation of tenders and procurement documents, construction supervision and supervision of repair of furniture and built-in equipment, would be the responsibility of the PIU, which is adequately staffed for that purpose (para. 3.05).  - 21 - 5.05 Site Selection. Sites for all the junior secondary schools have been selected and no problem is foreseen regarding their acquisition as all land is owned by the Government. The satisfactory topographical plans have been received for four of the sites, setting out information on serv- ices available at each site, the distances to the nearest Government authorities, health centers, and services, and the number of students within the catchment-areas and information on other existing schools, if any, within the catchment-area. Information on the sites of the remaining four schools would be sent to the Association by about April 30, 1982 (para. 7.02). Procurement 5.06 Contracts for civil works, construction materials, furniture, equipment and vehicles would be awarded on the basis of international competitive bidding in accordance with the Bank Group's Guidelines for Procurement, except as follows: (a) civil works under the maintenance program would be carried out by departmental forces of the MWS utilizing force account methods (estimated at US$1.3 million including contingen- cies); (b) construction materials, furniture, equipment and vehicle con- tracts each to cost less than US$50,000 equivalent (total estimated at US$0.6 million); and (c) locally procured transportation services for furniture and equipment (total estimated at US$0.3 million including con- tingencies). Previous experience indicates that due to the small size and scattered locations, the use of the MWS departmental forces would be the most economic and efficient method to carry out the work under the main- tenance program. Contracts for items (b) and (c) would be awarded on the basis of competitive bidding, advertised locally and in accordance with local procedures satisfactory to the Bank Group. The aggregate value of contracts to be awarded by ICB is estimated at US$34.0 million including contingencies. 5.07 When ICB is used, domestic manufacturers would be allowed a preference of 15% or the existing applicable rate of import duties, whichever is lower, over the c.i.f. price of competing foreign suppliers. 5.08 Sketch designs, draft tender and contract documents and master lists of construction materials, furniture, equipment and vehicles (includ- ing proposed grouping) would be reviewed by the Bank Group. Items would be grouped to the extent practicable to permit bulk procurement. Review of tender evaluation documents by the Bank Group prior to award would not be required for civil works contracts costing less than US$250,000 equivalent and contracts for construction materials, furniture, equipment and vehicles each costing less than US$50,000 equivalent. Disbursement 5.09 Disbursement (Annex I, T-13) would be on the basis of (a) 60% of expenditures for civil works; (b) 100% of foreign expenditures for imported construction materials, furniture, equipment, and vehicles and 90% of  - 22 - ex-factory cost when manufactured locally, or 75% of total expenditures for imported goods when procured locally; I(c) 75% of total expenditures for local transportation services for furniture and instructional equipment; and (d) 100% of foreign expenditures or 40% of expenditures for profes- sional services and project administration. All disbursements would be fully documented except for disbursements for operational expenses under project administration and for work executed by departmental forces (force account) which would be made against statement of expenditures, documenta- tion of which would not be submitted for review but would be retained by the Borrower and would be available for inspection by Bank Group staff in the course of supervision. The estimated disbursement schedule (Annex I, T-13) for the project shows a shorter implementation period (five and one half year) than for education and other sector projects, country-wide as a result of: (a) the advanced stage of preparation of the project com- ponents; (b) the proven, efficient performance of the PIU in implementing the Third and Fourth Education Projects; (c) the expected continued efficiency of the technical assistance provided by NORAD; and (d) a less complex project than in the past. Special Accounts 5.10 In order to ensure that funds for the project would be made avail- able when needed, a Special Account, operated by the PIU, would be estab- lished in the Bank of Zambia with an initial deposit of Kwacha 1.0 million (SDR 1.07 million) which would be withdrawn from the Credit account after effectiveness. The account would be replenished on the basis of documen- tary evidence, to be provided to the Bank Group by PIU, of payments made from the account for goods and services required for the project. 5.11 In order to ensure that the Government s counterpart funding also would be available when needed, the Government would establish a separate Project Advance Account into which it would deposit, at the beginning of each quarter, its share of project costs. Establishing the Project Advance Account and depositing the initial amount, estimated at Kwacha 700,000 would be a condition of Credit effectiveness (para. 7.03). Auditing 5.12 Auditing would be required oni an annual basis for all expenditures financed under the project with particu]Lar attention to those reimbursed under statements of expenditures. Auditing would be performed by auditors acceptable to the Bank Group, applying satisfactory auditing procedures. Audits would be submitted to the Bank Group within six months following the end of the Borrower's fiscal year. The PIU currently has an arrangement with a private consulting auditing firm which audits all accounts. Their reports are submitted to the Bank Group and to the Auditor General