Madagascar - Accounting and Management Training Project

Document of The World Bank FOR OMCIAL USE ONLY Repot No. P-4115-MAG REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATrONAL DEVELOPMENT ASSOCIATION ro THE EXEClITIVE DIRECTORS nN A PROPOSED DEVELOPMENT CREDIT [N AN AMOUNT OF SDR 9.5 MILLION TO ThFE DEMOCRATIC REPUlBLIC OF MAD)AGASCAR FOR AN ACCOUNTING AND MANAGEMENT TRAINING PROJECT Jatnnarv 17, 198h This documne.t has a restricted distributh mad ny be ued by recipients onuly in the perfomnnnce of their offiei dti. lbt coutemlf -y not ohrbwise be dwislsed witnhxt World Bank a.thorizatin.  DEMOCRATIC REPUBLIC OF MADAGASCAR CURRENCY EQUIVALENTS Currency Unit = Malagasy Franc (FMG) USS 1.O = F4G 620 FMG 1U0 = USS 0.16 SDR 1.00 = USS 1.09319 USS l.UO = SDR 0.91475 WEIGHTS AND MEASURES Metric System FISCAL YEAR January I - December 31 GLOSSARY OF ABBREVIATIONS AND .4CRONYMS CCM - Central Tender Board (Commission Centrale des Marches) CFC - Accounting Training Center (Centre de Formation en ComptabilitE) CIDA - Canadian International Development Agency CPA - Certified Public Accountant ILO - International Labour Organization INPF - National Institute of Training and Development (Institut National de Promotion-Formation) ENSCA - National Institute of Accounting and -tanagement Sciences (Insticut National des Sciences de la ComptabiLite et de l'Administratinn d'Entreprises) IMATEP - Malagasy Institute of Planning Techniques (insticut Malgache des Techniques de Planification) MCD - Ministry of Cooperation and Developmaent of France (Ministere de Ia Coop4ration et du Developpement) KINDRA - National Auditing Cnmpany SFA - Special Facilitv Eor Africa (IBRD) Certificates and Degrees: "Baccalaureat" - At the end of upper secondary studies. *Licence" - After three vears of university studies. -Maltrise - After four years of university studies.  (i) FOR OMCIAL USE ONLY MADAGASCAR ACCOUNTING AND MANAGEMENT TRAINING PROJECT CREDIT AND PROJECT SUMMARY Borrower: Democratic Republic of Madagascar Executing Agencies: The National Institute of Accounting and Management (INSCA) The Central Tender Board (CCM) Amount: SDR9.5 million (US$10.3 million equivalent) Terms: Standard IDA terms Project Objectives: The project would assist in the modernization and improvement of the management and operation of public and private enterprises and would support the Government in the implementation of policies geared to the revitalization of the economy. This would be accomplished through: (a) the training of highly qualified accountants, auditors and managers; and (b) technical assistance and training for those responsible for procurement matters. Project Description: (a) Establishment of the National Institute for Accounting and Management (INSCA) including: (i) adaptation and extension of facilities for an enrollment of about 360 full time students; (ii) specialist services for the operation of the school; (iii) fellowships for future Malagasy trainers and; (iv) operational expenditures of the institution. (b) Technical assistance to a unit to be established and attached to the Central Tender Board (CCM) which would be responsible for procurement training and advising, and making recommendations for the improvement of procurement regulations and procedures. Tbis document has a restricted distribution and may be used by recipients only in the performance of their offwl duties. Its contents may not otherwise be disclosed without World Bank authorization.  (ii) Benefits: Through the training of high level managers, accountants and auditors and assistance for improvement of procurement procedures and practices, the project should lead to increased efficiency of enterprises and ultimately of the economy as a whole. Risks: Because the INSCA represents a continuation and expansion of an efficient on-going program and because of the simple and straight-forward nature of the procurement component, ao major risks are foreseen. US$ Million Estimated Costs Local Foreign Total (a) INSCA [excl. T.A. in (c)l 2.69 5.59 8.28 (b) Procurement Assistance 0.02 0.47 0.49 Total Base Costs 2.71 6.06 8.77 Physical Contingencies 0.27 0.60 0.87 Price Contingencies 0.82 1.'4 1.96 Total (a) + (b) 3.80 7.80 11.60 1/ (c) INSCA, T.A. Provided by MCD 2/ - 1.50 1.50 Total Project Cost 3.80 9.30 13.10 - - --US$ Million- - Financing Plan Local Foreign Total IDA 2.50 7.80 10.30 Government 1.30 - 1.30 Sub-Total 3.80 7.80 11.60 I/ Co-financing by MCD - 1.50 1.50 Total 3.80 9.30 13.10 1/ Of which 0.05 million taxes and duties. 2/ The Ministry of Cooperation and Development of France (MCD) will provide about 25 man-years of expert services and 6 man-years of fellowships abroad for INSCA, estimated at about US$1.5 million.  (iii) Estimated Disbursements: US$ Million Equivalent FY87 FY88 FY89 FY90 FY91 FY92 FY93 Annual 2.0 2.0 2.2 2.0 1.0 0.8 0.3 Cumulative 2.0 4.0 6.2 8.2 9.2 10.0 10.3 Economic Rate of Return: not applicable. Appraisal Report: This is a combined President's and Appraisal Report. Map: IBRD 18951  (iv) CONTENTS Page No. PART I THE ECONOMY ......................................... I PART II BANK GROUP OPERATIONS IN MADAGASCAR. .............. 4 PART III ACCOUNTING AND MANAGEMENT IN MADAGASCAR Background ........ . ... .. ...... .. . 8 Training in Accounting and Management ................. 10 Procurement Procedures and Practices ...... .. 13 PART IV THE PROPOSED PROJECT Project Background ....... . . 14 Rationale for Bank Group Assistance . . . 14 Project Objectives . . ..15 Project Components .... 15 Cost and Financing... 16 Implementation ....18 Administration ... 18 Procurement ....19....... 19 Disbursement... 20 Reporting, Evaluation and Auditing . . . .20 Benefits and Risks ....21 PART V RECOMMENDATION .21 ANNEXES Annex I Madagascar - Social and Economic Indicators Data Sheets Annex II Status of Bank-Group Operations in the Democratic Republic of Madagascar Annex III Supplementary Credit Data Sheet Annex IV MBA Executive Program Annex V INSCA Projected Enrollment - 1987-1994 Annex VI INSCA - Teaching Staff and Technical Assistance Annex VII Disbursement Schedule MAP IBRD 18951  INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE DEMOCRATIC REPUBLIC OF MADAGASCAR FOR AN ACCOUNTING AND MANAGEMENT TRAINING PROJECT 1. I submit the following report and recommendation on a proposed Development Credit to the Democratic Republic of Madagascar for SDR - million (US$10.3 million equivalent) on standard IDA terms to belp finance an accounting and management training project. The French Government would cofinance the project through the provision of technical assistance and fellowships on a grant basis estimated at US$1.5 million equivalent. PART I - THE ECONOMY 2. A report entitled Current Economic Situation and Prospects- dated October 25, 1984, was distributed on November 6, 1984, to the Executive Directors and to participants of the Madagascar Consultative Group Meeting, and is available as document 5154-MAG. An economic mission visited Madagascar in September 1985. Its preliminary conclusions are given below. 4Country data sheets are provided in Annex I to this report. 3. Madagascar, with a population of 9.7 million and a GNP per capita of about US$270 in 1984, is among the poorest countries in the world. It is a sparsely settled country, with a population density of about 16 persons per square kilometer. Although the country is generally well endowed with natural resources and a variety of soils, there are considerable regional variations in ecology and climate. The central plateau, the economically most advanced region, has a subtropical to temperate climate. The South is the poorest region, with an arid climate and infertile soils. The eastern region has a tropical climate and, although the region is rich agriculturally, crops are frequently devastated by cyclones. Agriculture accounts for about 40 percent of GDP; about 80 percent of the population lives in rural areas, and agricultural products account for about 80 percent of the country's export earnings. 4. In the decade following independence in 1960, Madagascar's gross domestic product grew at an average rate of 3%, reflecting the country's substantial and varied endowments. Agriculture was the source of much of this growth, while manufacturing, temporarily benefitting from increased protection, gained in relative importance. After 1972, the Government embarked on an inward-looking economic strategy, based on an extension of  -2- the public sector, decentralization to new local institutions (the fokonolona system), and nationalization of industrial, trading and agricultural enterprises. Agricultural production declined owing to an overvalued exchange rate, low controlled proddcer prices, and pervasive state intervention in agricultural marketing. Real per capita GDP fell by more than 25 percent during the decade 1973-83. 5. Toward the end of the 1970s, the Government attempred to stimulate the expansion of the economy through a large public investment program. Rapid industrialization with emphasis on capital intensity and heavy infrastructural expenditure were accompanied by pricing and marketing measures heavily biased in favor of consumers. The share of investment in GDP, which had averaged around 13 percent from 1970 to 1978, increased sharply to 25 percent in 1979-81. The financing of this massive program contributed to a large public sector deficit (nearly 20 percent of GDP by 1980), inflation in excess of 30 percent both in 1981 and 1982, and a sharply increased debt service burden (the debt service ratio rose sharply to 52 percent in 1981 and to 72 percent in 1982). This debt service burden has been largely responsible for the severe shortage of foreign exchange which has been a critical constraint to economic activity. Also contributing to this shortage was a drop in export earnings as the terms of trade for agricultural exports weakened. 6. The ongoing adjustment program. In 1981, the Malagasy Government began implementing stabilization measures (supported by a series of IMF stand-by atrangements) in dialogue with the Bank and the Fund. The most notable actions have been on the exchange rate and on consumer subsidies. In nominal terms the average exchange rate vis-a-vis the SDR in 1985 was FMG675 compared to FMG386 in 1982, and after adjustment for domestic and trading-partner inflation the real depreciation of the Malagasy franc was approximately 25 percent. The Government has more than doubled the nominal price of rice distributed through official channels and substantially reduced the scope of official distribution; consumer subsidies on rice have been virtually eliminated. Madagascar's stabilization efforts also included tax measures (e.g., increase of the value-added tax rate, introduction of an excise levy on electricity consumption, conversion of specific rates into ad valorem for several excise levies and improvements in tax withholding procedures), expenditure cuts, increases in tariffs of public enterprises and sharply curtailed imports. 7. As a resulc of these austerity measures, the overall public sector deficit was reduced steadily trom 18 percent of GDP in 1980 to 5 percent On 1985. The current account deficit on the balance of payments was also reduced from about 18 percent of GDP in 1980 to 10 percent in 1985. Fiscal restraint and tight money played a significant role in reducing annual inflation to an estimated 10 percent in 1985. This  commendable performance at macroeconomic stabilization will need to be sustained in future, and reinforced with measures to mobilize domestic and external resources and introduce structural changes so as to permit resumption of economic growth. 8. As of September 1985, the Government had complied with all performance criteria set in the fifth IMF standby agreement signed in April 1985. Most of the important program targets have been achieved and all scheduled purchases have been effected. In the second review of the current standby, the Government has decided to accelerate the depreciation of the exchange rate and agreed to continue this process under the sixth standby agreement. A mission is scheduled to visit Madagascar in early 1986 to negotiate a program supported by a sixth standby agreement. This agreement is expected to be presented to the IMF Board of Executive Directors in late Spring 1986. A meeting of the Consultative Group scheduled for April 1986 will, among other objectives, attempt to reach an agreement on how to fill the balance of payments gap for 1986, and the Paris Club is expected to meet shortly after the standby is approved. 9. Despite substantial reductions in the volume of imports in recent years, Madagascar's balance of payments situation is still weak, and is expected to remain very difficult through 1990. To a large extent, this is due to poor export performance and heavy debt service obligations, the latter a legacy of large commercial borrowings during 1978-80. To date, Madagascar has obtained four debt rescheduling arrangements from external creditors, enabling it to lower the average debt service ratio during 1981-85 from 80 percent (scheduled) to about 40 percent (actual). In all likelihood, Madagascar will continue to need such arrangements over the medium term, until its economic adjustment strategy aimed at accelerating growth and exports takes effect. 10. Medium-range strategy. As the stabilization measures have taken effect, the Government has focussed increasingly on defining and implementing a medium-range strategy that to put the economy on a sound development path. The short-run emphasis is still very much on recovery, notably in the key agriculture, industrv and transport sectors. The first priority is to stimulate domestic prouoiction through, inter alia, allowing market signals to operate, and encouraging private sector investment. The policy package to promote this includes progressive liberalization of pricing and marketing of agricultural and industrial products, increased reliance on the private sector for investment and management, better management of public sector resources, including public enterprises, export promotion, improved management of foreign debt, and better foreign exchange allocation mechanisms. Operating in a difficult short-term setting, the Government has taken some measures, and is considering more actions to reestablish an economic environment conducive to efficiency. Looking to the medium term, the Government is acting on many fronts to rebuild the institutional capacity to manage the economy, to provide basic public  -4- services, and to promote sound investments, particularly in areas that promise to support diversified exports and to reduce reliance on imports of food and manufactured goods. 11. There are good prospects for further policy and institutional reforms to strengthen economic incentives and infrastructure in Madagascar. The pace of such reforms, however, is constrained very much by scarcity of resources -- particularly foreign exchange -- and qualified staff to help implement economic recovery measures throughout the economy. PART II - BANK GROUP OPERATIONS IN MADAGASCAR 12. IDA credits to Madagascar amount to US$492.6 million (including US$29.9 million from the Special Fund) and Bank loans total US$32.6 million. Bank Group assistance to Madagascar has been concentrated in the key areas of infrastructure (including urban and social infrastructure), agriculture and energy. Since the start of Bank Group involvement in Madagascar, about 34% of Bank Group lending has been for transport, 29% for agriculture, 12% for electric power and petroleum, 12% for industry and water, 3% for technical assistance, 4% for education, 3% for urban development and 3% for cyclone rehabilitation. IFC has four investments in Madagascar in textiles, footwear, and fisheries. Annex II contains a summary statement of past loans and IDA credits as of September 30, 1985. 13. In infrastructure, the Bank has supported nine transport projects with IDA credits totalling USS177.78 million. Six credits (US$147.2 million) were provided for the construction, maintenance and rehabilitation of highways. There have been one Credit (US$11.65 million) in 1970 to improve Madagascar's main port of Toamasina and two Credits in 1974 and 1979 (US$19 million) to support the railway's modernization efforts. Except for the fifth and sixth highway projects, all transport projects have been completed. Urban infrastructure development has benefited in 1980 from a Water Supply and Sanitation Credit for the capital city of Antananarivo (USS20.5 million). In addition, studies for urban development financed by the UNDP with the Bank as Executing Agency led to an urban development project (US$12.8 million) in FY84. In the social sectors, education has been the major recipient of Bank assistance with two Credits in 1967 and 1976 totalling US$11.8 million. A Credit of SDR 9.4 million (US$11.5 million) for an accourting and audit organization and training project which included an important training component was approved in 1981. In November 1984 a USS15 million Development Credit for cyclone damage rehabilitation was signed with the Government. In January 1985, the Executive Directors approved a first industrial sector credit for USS40 million, and in December 1985 a supplemental SFA credit for US$20 million was approved.  14. TLe Bank Group has supported 14 agricultural projects in Madagascar. Five projects have been completed and eight are under implementation. Lending for agriculture has included three livestock development projects, four irrigation projects, two forestry projects, an agricultural credit project, a rice intensification project and a cotton project. Technical assistance support is also being provided under two free-standing projects, one to study investment alternatives in the Plain of Antananarivo area, and the other designed to strengthen institutional development of key sector institutions and to support agricultural policy reform. In April 1985, the Executive Directors approved an irrigation rehabilitation project of US$12 million. In addition, the Bank has appraised and is supervising the IFAD-financed Highland Rice Project (US$30.0 million) to increase rice production by providing agricultural inputs and by reorganizing and strengthening agricultural extension services. 15. Energy projects have also received growing Bank Group attention. In 1978, IDA participated with several co-lenders in the financing of the large Andekaleka Hydroelectric Project, which was successfully completed in June 1982. A US$12.5 million Credit approved in 1980 for petroleum exploration promotion is supporting the Government's efforts to develop a domestic supply of hydrocarbons and to improve planning in the energy sector. A heavy oil exploration Credit (Tsimirozo) in the amount of SDR10.7 million was approved by the Executive Directors on November 16, 1982. 16. Problems have arisen in the execution of a number of projects. The main problems encountered include delays, cost overruns, deficiencies in management and inadequate financial performance of project agencies. Current problems center on difficulties linked to the country's economic crisis, notably the acute shortage of foreign exchange and budget funds and institutional problems related above all to the parastatal system. The Bank approach has been to maintain intensive supervision efforts at the project level and to address the generic problems through every instrument available, from the Consultative Group through the Country Implementation Review (June 1985) down to the macroeconomic, sectoral and project-level dialogue, technical assistance and secondment staff. The Government has been responsive and has welcomed this support. 17. Since the start of our program in Madagascar, eight projects have been completed and audited by the Operations Evaluation Department. The Audit Report No. 1622 of December 1976 on the first Lac Alaotra project concluded that the project was generally successful. However, the Impact Evaluation Report No. 3600 of August 1981 concluded that earlier assessments of project performance had been over-optimistic, and that the actual rate of return was probably negative. The Audit Report No. 1143 of April 1976 of the first education project concluded that the education and  manpower training objectives were satisfactorily achieved. The Audit Report No. 5434 of January 29, 1984 of the first Railway Project concluded that due to overruns and delays in implementation, the project had to be downscaled and that the estimated rate of return was less than 10%. The Audit Report No. 1559 of April 1977 on the Beef Cattle Development Project concluded that the project had contributed little to Madagascar. The Audit Report No. 2143 of July !978 concluded that the Third Highway project was well justified and had a satisfactory rate of return despite substantial cost overruns. Report No. 2299 of December 1978 concluded that the physical objectives of the Tamatave Port project were satisfactorily achieved but pointed out that the institutional objective was not accomplished during project implementation because of inadequacies in the staffing of the port authority. Audit Report No. 5403 of December 28, 1984 covered two agricultural projects: the Morondava Irrigation and Rural Development Project was a profoundly disappointing operation, but the Village Livestock and Rural Development Project contributed to laying the groundwork for more effective services for traditional livestock owners, with good prospects for sustainability. 18. The program for Madagascar has been broadened to include sector lending in support of priority recurrent imports. This process started with the Sixth Highway project, which includes US$10 million for spare parts for the rehabilitation of the private road transport fleet, and is linked to significant changes in policy with regard to road tariffs and regulations. The Industrial Assistance Credit aims at supporting Government efforts in the rehabilitation of the industrial sector by providing spare parts and raw materials to key industries. It also includes a package of policy measures to liberalize prices in the industrial sector, promote exports, reduce import restrictions, rationalize public investment, and formulate a new investment code promoting private initiative. Progress has been made on liberalizing prices, reducing import restrictions and in encouraging experts. A satisfactory Public Investment Program in industry for 1985 (US$10.6 million) was agreed with the Government and a new iniestment code was approved in June 1985. A Credit similar in design for the agricultural sector is being negotiated with the Government. This program includes reform measures to imp.-ove the efficiency of agricultural marketing, strengthen proddcer incentives, define a food security strategy and an agricultural export program, and improve management of public resources for agriculture, as well as agricultural institutions and key services to farmers. 19. The program for Madagascar in the next three or four years will concentrate on the rehabilitation of existing infrastructure and on policy based sectoral adjustment lending to assist the economic recovery by providing resources to increase capacity utilization. It will be closely linked with improvements in Government policies formulated to bring about supply responses in industry and agriculture.  -7- 20. Besides the program of lending for rehabilitation and sectoral policy-based lending, the planned lending in the next two or three years is expected to support projects in education, training, and technical assistance. At the Government's request, the dialogue on the eduration sector has resumed. In technical assistance the principal operation will be a continuation of the Agriculture Services Project, which is providing support to the two Ministries of Agriculture and public agencies involved in agricultural research. A separate agricultural research project is also a distinct additional possibility. 21. Few entirely new projects are under consideration at this time, and are in critical areas. A forestry project is under preparation as well as an energy project and further petroleum lending is a possibility depending on the outcome of current exploration. Another area of interest is flood control and drainage in the Plain of Antananarivo, which are both important to the development of this key area and linked to the previous IDA involvement in the urban development of Antananarivo. Based on the findings of a detailed port sector study carried out under French financing, a second port project is being appraised and will be used as an essential vehicle for institution building of Madagascar's main ports. All these projects will require substantial co-financing. 22. Bank economic and sector work aims at broadening the ongoing policy dialogue with the Government. A major economic mission visited Madagascar in September 1985 and its findings will be discussed at a Consultative Group Meeting scheduled for April 1986. The mission reviewed the current economic situation and prospects, and addressed more specifically the issues of the balance of payments gap and the need for concessional assistance including debt rescheduling. Substantial efforts nave been undertaken to assist the Government to reassess and eformulate its public investment program. A major energy assessment study has been completed and will soon be discussed with the Government. A sector memorandum on transport issues has been discussed with the Government in the context of che preparation of the National Transport Plan for 1986-1990. A sector memorandum on education is under preparation; work on a new agriculture sector memorandum is soon to begin and an analysis of domestic resource costs in the industrial and agricultural sectors is underway to assist the IMF on exchange rate policy. A mission to study population, health and nutrition issues will visit Madagascar in February 1986. Consideration is being given to including Madagascar in the Bank economic research program; a major study on equity and growth may be undertaken. 23. To assist Madagascar's efforts to mobilize external resources on a coordinated basis, a Consultative Group has been established under Bank Group auspices. The fourth meeting is scheduled for April 1986. Between meetings, the dialogue with aid donors has been intensified through  -8- informal meetings organized by the Bank's Resident Mission in Madagascar. The Resident Mission has been strengthened under the Joint Program of Action for Sub-Saharan Africa, and is expected to play an increasing role in local aid coordination and in the policy dialogue with the authorities. Several Bank projects have been appraised jointly with other donors. 24. To assist Madagascar to strengthen its management and policy formulation capacity, substantial technical assistance has been provided through the lending program. In addition to technical assistance projects, several ongoing projects include technical assistance and training components in specific technical fields. A Bank economist has been seconded to assist the Planning Directorate, and arrangements are now being made to second a livestock specialist to the Ministry of Livestock, Water and Forests. PART III - ACCOUNTING AND MANAGEMENT IN MADAGASCAR Background 25. For a few years after independence most managerial positions in enterprises established in Madagascar were still held by French nationals. Subsequent changes in Government and policies affecting the enterprise sector prompted the departure of most of these expatriates. The bulk of those remaining in the country left in 1975 following the nationalization of major foreign-owned enterprises. In this manner, most enterprises lost their senior managerial and financial staff. The resulting shortage of high-level staff has been a major factor contributing to the poor performance of a number of enterprises. Another element which has contributed to the poor performance of enterprises relates to the lack of development of the accounting profession because of the outdated nature of the legislation governing audit and financial reporting and because it does not specify accounting and auditing standards to be met by commercial enterprises and auditors. 26. In its effort to address the above situation, in 1978 the Government requested IDA assistance. During preparation and appraisal for the project the detrimental effect of the above shortage of qualified staff became obvious. For example, of about 500 companies which are required to submit financial statements to the Income Tax Department and which would have needed appropriate audits, no more than 10 percent could have been served by local professionals of acceptable levels of competence since the number and size of private auditing companies in the country is rather limited. With the Government's present strategy of economic rehabilitation and modernization, in particular regarding the industrial sector, the need for high-level accountants, auditors and managers is increasing.  - 9 - 27. In June 1981, a credit for an Accounting and Audit Organization and Training Project in the amount of SDR9.4 million was approved (Cr. 1155-MAG) including the following components: (a) Reviews of existing accounting requirements and professional standards demanded from accountants and auditors in the country, making proposals for improvement, including suggestions for the revision and updating of existing legislation; (b) Establishment and operation of an Accounting Training Center (CFC); (c) Strengthening of RINDRA (National Auditing Company) through the provision of technical assistance and training to its staff; and (d) Strengthening of the management services capability of local management consultant firms through the provision of technical assistance and training to their staff. 28. After considerable delay, the review of existing accounting requirements and professional standards for accountants and auditors is now underway. This review had earlier met opposition from established accounting and auditing firms. To reach a consensus, the Government created a special working group comprised of a number of leading members of the profession. After long discussions, agreement was finally reached in the working group on the need and the scope of the review, detailed terms of reference for the study were prepared and a contract was awarded to a consulting firm. The study began in early 1985 and is expected to be completed soon. The working group will then review the conclusions of the study and make recommendations to the Minister of Finance. To prevent further delays, assurances were obtained at the negotiations for the project proposed in this report, that the new legislation will be enacted before the end of 1987. 29. The CFC, the purpose of which is to train accountants and auditors at various post-secondary levels (licence, maitrise, CPA level) started operations in February 1983, in rented premises, with an intake of 100 selected full-time students in the first year. At present it has about 245 students (about one-third females) in day courses and over 200 in fee-paying part-time evening courses. The rented premises will shortly become insi-ff;cient to house all the accounting and auditing students, who may exceed 300 day students when the three cycles are in full operation. Thus, additional space will have to be procured. Because the CFC had to request the services of an expatriate consulting firm to organize the training programs, its operation has been more costly than anticipated. Thus the CFC will exhaust its financial resources two years earlier than scheduled under the first project. Additional resources needed to finance technical assistance to the CFC are included in the proposed project.  - 10 - 30. The ongoing technical assistance and staff training for RINDRA scarted in mid-1982. RINDRA's management difficulties were resolved in June 1984 with the appointment of a new Malagasy manager. Its financial situation has now improved as RINDRA adopted a more market-oriented policy. As a consequence, RINDRA has shown a hundred percent increase in billings for services from 1983/84 to 1984/85, and for the first time a positive cash flow in the latter year. A management consulting unit has now been established within RINDRA and a contract for technical assistance has been approved. In general the implementation of the project is now progressing well and all components are expected to be completed prior to the March 31, 1988 Ciosing Date. Training in Accounting and Management 31. Accounting and Auditing. Until the creation of the CFC no high level training institution in Madagascar provided degree courses in accounting. Training of lower level accountants (bookkeepers, assistant accountants) is provided by the Chambers of Commerce of Antananarivo and Mahajanga. The latter operates the Commercial Technical School (upper secondary level) with an enrollment of about 170 students (of which about 35 in the thiid and last year of studies). In addition both Chambers provide evening courses in accounting at two levels, mainly for people who are already employed. The numbers of scudents who successfully complete their training are presently extremely limited, about 30 per year. The few accounting courses offered in the University are of an elementary and general nature and form part of the curricula of the economics and management degree courses. 32. To secure enrollment of qualified students, the CFC established strict admission standards. First year intake is restricted to 100 students, who have undergone a lengthy process of entrance examinations and interviews. Notwithstanding the fact that up to now no student financial assistance has been granted at the Center, as compared with the University which provides such assistance to most of the students, an increasing number of applications is being received. Thus, for the first year (February 1983) when the CFC was little known, about 600 students applied; the number increased to about 1,000 for the 1985 term. This increase has been prompted by the good reputation acquired by the CFC in terms of teaching staff, required standards and control, and employment prospects. Furthermore, the initiation of fee paying evening courses had to be advanced by one year, as compared with appraisal estimates, because of strong pressure from enterprises and the public in general. Over 200 students attend these evening courses, many of them from Government agencies and enterprises. The first group of day students graduated at the licence level in December 1985. A limited number will continue to the mattrise level after one more year of study, and a further reduced group,  - 11 - after two years of practice may apply to become an "expert comptable" (CPA). The conditions to become "expert comptable" or "comptable agrd4 will be set once new legislation, rules and regulation for the profession have been approved (para. 28). The "Ordre des Experts Comptables et Comptables Agrees- (Order of Accountants) has only 36 members with no new admissions since 1971. 33. Management. Training in management in Madagascar is provided in the following institutfons: (a) University of Madagascar in Tamatave (Ecole de Gestion). The courses are post-secondary at the undergraduate level equivalent: three-year course for "licence" and four-year course for "maItrise-. The results of the studies in this school have been very disappointing and have markedly deteriorated in recent years. The failure rate has been about 60 percent in first year, and about 50 percent in the following years. Although, over 1,000 students enter first year, no more than 20 to 30 obtain their *maItrise" in any given year. These poor results can mainly be attributed to: (i) deficiencies in secondary education, in particular regarding mathematics and French (language of instruction in the University); (ii) absence of entrance screening as all candidates succeeding their baccalaureat may enter the University; (iii) shortage of qualified teaching staff; and (iv) shortage of reading and other materials. Furthermore, the instruction appears to be overly theorecical in such a manner that it takes time for the graduates to become operationally productive. No significant improvements can be expected in the short term, because these would imply major policy changes regarding higher education, which would have strong political implications, and which can realistically be implemented only gradually (para. 34). (b) Institut National de Promotion-Formation (INPF). This Institute, under the Ministry of Public Affairs, Labor and Social Legislation provides training for low and middle level staff employed in industry and commerce through short-term seminars organized in Antananarivo and other provincial cities on an ad-hoc basis. These seminars cover technical areas (electricity, mechanics) and managerial areas (personnel management, secretarial, low-level accounting). The UNDP has recently extended for three years its past assistance to the Institute. The new project through the International Labour Organisation (ILO) technical assistance is expected to help define a national policy for technical training and establish better coordination of training activities under the various ministries. (c) Institut Malgache des Techniques de Planification in Antananarivo (IMATEP). This institute is entrusted with: (i) the training and upgrading of technicians with planning responsibilities whether within  - 12 - the general government or in public enterprises; and (ii) carrying out economic research. It provides training in planning through long-term courses-(1-2-3 years. depending on the entrance level of the participants) and short-term courses of 2 to 4 months duration. It started operations in December 1982 with a two-year course for 19 participants with a mattrise" degree or equivalent. i (d) Centre de Formation des Cadres in Antsirabe. The Center, under the Ministry of Commerce, started operations in 1982 with financial assistance from the European Development Fund. The Center is entrusted with the provision of high-level, short-term seminars (one to two weeks) for enterprise managers in specific subjects related to organization and management. The training has been of a very high quality. It operates on rented premises and it has only two permanent professional staff (the director and a trainer), while it has so far trained 11 Malagasy trainers, who work on a part-time basis. In 1983, 156 managers participated in the seminars and in 1984, the number increased to about 300. Other management courses are provided at the CFC as part of the curriculum of the full-time accounting and auditing courses and in evening courses at the undergraduate level for people who are employed. The Chambers of Commerce also provide some management related courses, but at a level similar to that offered for accountants (para. 31). 34. Conclusion. The establishment of the CFC filled a critical gap in the training system of Madagascar by providing very much needed high level training in accounting and auditing. The only post-secondary long-term management training is available at the undergraduate level in the University and as indicated above, the results are rather poor (para. 32 (a)). Long-term training in management at the graduate level is not available in Madagascar. The proposed project, by expanding and converting the CFC into an institute for accounting and management, through the addition of a management program at the level of a Master in Business Administracion (MBA), would cover this need (para. 43). In the long run, it is expected that INSCA, which is being developed in line with the European *Grandes Ecoles" may become one of the schools forming part of the future higher education complex. The study on the education sector now under preparation by the Unesco Cooperative Program (para. 22) will pay particular attention to higher education. Procurement Procedures and Practices 35. In the context of a systematic evaluation of local procurement practices in borrowing countries, a Bank mission visited Madagascar in May 1984. Discussions with the Government and subsequent review of legal documentation revealed serious shortcomings in all areas of procurement  - 13 - affecting projects financed from various sources, including the Bank Group. Delays in processing documents led to increased costs and, in combination with unsatisfactory selection of suppliers and contractors, tended to hamper the economic performance of the entities involved. 36. These problems regarding procurement have been caused mainly by the failure to update procurement procedures on the one hand, and on the other, by the introduction of new restrictive practices intended to encourage domestic contractors and suppliers, particularly those in the public sector. Furthermore, staff from technical ministries responsible for procurement matters often lack the necessary specialized training. As a result, the preparation of bidding documents at the level of the implementation agencies is inadequate and requires repeated lengthy revisions. 37. Upon return to headquarters, the May 1984 Bank mission to Madagascar prepared a draft Procurement Assessment Report for the country. This was discussed with the Government in December 1984. The procurement component (para. 47) in the proposed project would assist the Government in the implementation of recommendations included in the report. PART IV - THE PROPOSED PROJECT 38. The proposed project was appraised in January-February 1985. This report is a combined President's and Appraisal report. Negotiations of the proposed Credit in support of the project were held in Washington from December 17 through 20, 1985. The Malagasy team was headed by Mr. Parfait Ralamboson, Director of Programs and Control of the Ministry of Finance. Supplementary project data are included in Annex III. Project Background 39. Because the resources available for the Accounting Training Center (CFC) under IDA Credit 1155-MAG are insufficient to finance the technical assist'nce required until the time when future Malagasy trainers undergoing training abroad return to Madagascar, in April 1984, the Government submitted a formal request for additional Bank Group assistance for CFC. Because of the need to improve the higher level management of enterprises, Government also requested the Bank Group to assist in training managers. Based on a preliminary feasibility study, financed by Canada (CIDA), it was proposed to create a National Institute of Accounting and Management Sciences (INSCA) which, in addition to continuing the regular accounting training provided earlier by CFC, would also provide a management program at the MBA level for professionls who have worked for several years in their profession. This new institution would complement  - 14 - the training provided by the Centre de Formation des Cadres in Antsirabe, which provides only short-term seminars. The proposed project also includes a technical assistance component for the strengthening of procurement procedures which was identified in December 1984 following a Bank procurement assessment mission in Madagascar. There is no provision in the proposed project for further assistance to RINDRA, which already benefits from a high level of technical assistance under the ongoing project until 1988. Rationale for Bank Group Assistance 40. The main project component, INSCA, is a follow-up and expansion of the CFC, developed with the support of IDA Credit 1155-MAG. The success and speed with which the CFC was put in place and started operations, make it essential that Bank Group assistance be continued until the management and operation of the institution can be fully transferred to appropriately trained Malagasy staff in 1993. Based on the findings of the Bank's Procurement Assessment Report of 1984, the proposed project would include a procurement component comprising assistance to the Government in the implementation of the recommendations contained in the report on procurement regulations and procedures, and in the training of staff responsible for procurement within public agencies. Project Objectives 41. The proposed project would assist Madagascar in the implementation of plans for the improvement and modernization of the management and operation of enterprises and other entities (public or private). This would be accomplished by means of: continuation of assistance in the training of accountants and auditors; assistance in the establishment of a high level management training program; and assistance in the establishment of a procurement unit which would provide technical support, advice and training to the various Government departments and enterprises which have responsibilities on procurement matters. The availability of high level accountants, auditors and managers and staff well trained on procurement matters is a crucial element for the success in the implementation of policies introduced by the Government in the industrial, agricultural and other sectors geared to the revitalization and future expansion of the economy. In this respect, the proposed project is complementary to other Bank financed projects such as the Industrial Assistance Project (IDA Credit 1541-MAG). Project Components 42. The proposed project would include the following components, as described below: (a) the establisbment and operation of a National Institute for Accounting and Management (INSCA) and; (b) technical assistance for the improvement of procurement procedures and regulations.  - 15 - 43. Establishment of the National Institute for Accounting and Management in Antananarivo (Institut National des Sciences Comptables et de l'Administration - INSCA). This Institute would represent an expansion and diversification of the Accounting Center (Centre de Formation en Comptabilite - CFC), financed under IDA Credit 1155-MAG and would replace it. INSCA will continue to provide training in accounting and auditing for about 300 day students and 200 evening students. The proposed two-year MBA program (Annex IV) would initially add 40 (20 in the first year and 20 in the second) and later up to about 60 students (30 in the first year and 30 in the second) to full time enrollments. The number of participants for this program was set on the basis of estimates of absorptive capacity of the economy made by specialized UN staff in Madagascar and takes into consideration stringent admission requirements as described in Annex III to this report. The increase in enrollment would depend on the pace of economic expansion and newly identified needs. 44. Because the present rented facilities are inadequate to accommodate projected enrollment (Annex V) additional rental facilities have been identified and will be obtained to accommodate the accounting and auditing training, and the MBA program --for about 350 day students and with the possibility of accommodating up to 400 in the future. The project would include all the necessary works for the adaptation and extension of the rented facilities to the needs of the training programs. 45. The proposed Credit would provide for about 28 man-years of technical assistance, including the services of the Dean of Studies and for about 36 man-years of fellowships abroad for future Malagasy trainers and selected personnel of INSCA. It would also include the provision of furniture and equipment for, inter alia, classrooms, seminar and laboratory rooms, a library and administration and teachers offices, and vehicles, in addition to those supplied under IDA Credit 1155-MAG. It would also provide for a share of the operating costs of the INSCA during the implementation period. The expenditures under this latter item would include teachers' salaries, instruction materials, and other minor items. 46. In addition to the above financing, the Ministry of Cooperation and Development of France (MCD) would provide further technical assistance in the form of about 25 man-years of expatriate teaching staff and about 6 man-years of fellowship training abroad for future Malagasy teachers. The expatriate teachers would be gradually replaced by Malagasy staff undergoing training abroad. The first group of teachers for the accounting and auditing program financed under IDA Credit 1155-MAG and by Canada are expected to return to the country at the latest in September 1987 and the last to be sent for training for the MBA program would assume their teaching responsibilities by 1993.  - 16 - 47. Procurement Assistance Component. This component would consist of the provision of technical assistance and equipment for a unit to be established and attached to the Central Tender Board (CCM). This unit would be responsible for: (a) training in procurement principles and procedures for staff of public agencies; (b) providing general and specialized assistance to these agencies at their request on procurement matters; (c) gathering and analyzing statistical data on procurement; and (d) preparing recommendations for the improvement of procurement regulations and procedures. Specifically, this component would provide for tthree man-years of technical assistance for the services of a procurement speciaJist, lim'ced equipment and supplies. Cost and Financing 48. The total project cost including the technical assistance and fellowships for INSCA to be provided by MCD (para. 46) is estimated at US$13.1 million, of which about US$0.05 million represents duties and taxes and US$9.3 million (i.e., 72 percent) represents the foreign exchange requirements. Cost estimates for civil works were made in consultation with staff of the Ministry of Public Works and of construction and architectural firms. Estimates for the cost of furniture, equipment and vehicles and for the operating costs of INSCA were prepared in consultation with the management of the CFC who have extensive experience in the matter. The cost estimates for technical assistance (specialists and fellowships) are based on applicable UN and MCD rates. The fulfillment of all conditions precedent to the effectiveness of the participation of the co-financier (MCD) and submission of a technical assistance program for INSCA and its implementation schedule acceptable to the Association would be conditions of credit effectiveness. 49. For physical contingencies, 10 percent has been added to the base costs. Price contingencies for imported goods and services are based on projections of international inflation at the following rates: 7 percent for 1986 and 1987, 7.5 percent for 1988, 7.7 percent for 1989, 7.6 percent for 1990, and 4.5 percent for 1991. For local costs, the same rates of inflation as for imported goods and services have been projected on the assumption that local inflation will be offset by adjustments in the foreign exchange rate in accordance with Government policy. On the basis of these assumptions, price contingencies are estimated at 20 percent of the base cost plus physical contingencies. 50. The financing plan for the project provides for IDA assistance of US$10.3 million equivalent (79 percent of the cost net of taxes). This would finance US$7.8 million equivalent of the foreign exchange and about US$2.5 million equivalent of local expenditures. The expert services and fellowships to be provided by MCD (para. 46) have been estimated at about US$1.5 million equivalent. The Government's contribution, net of taxes,  - 17 - would amount to about US$1.3 million equivalent, whicn would represent about 10 percent of the project cost net of taxes. 51. When INSCA is in full operation and the expatriate staff has been replaced by local staff by 1993, the operating cost of the institution is estimated at about US$1.1 million equivalent per year (less than US$3,000 per student year including teacher salaries, administration costs and supplies). The Government would ensure that the students enrolled in the evening courses and in the MBA program of INSCA or their sponsors, would pay a tuition fee adequate to cover the total cost of salaries of teachers for these programs, exclusive of the salaries of the technical assistance staff. Furthermore, by June 30, 1987 the Government will submit to the Association for review a proposal on the feasibility of the introduction of tuition fees for the day students enrolled in the accounting program. Implementation 52. The project would be implemented over a period of about six years. Project completion is expected by June 30, 1992 with a Closing Date of December 31, 1992. The implementation schedule is based upon experience derived from recently completed projects and takes into account the stage of project preparation. A schedule for the technical assistance and fellowhips is provided as Annex VI. This would be refined in consultation with the Association by the Dean of Studies when he takes office in 1986. Terms of reference for the procurement specialist to be financed under the proposed project were discussed during negotiations and will be completed shortly. The staff of the CCM with the assistance of this specialist would prepare the content and timetables for the annual training programs to be provided to Government officials and enterprises staff responsible for procurement matters. These annual programs would be submitted to the Association for approval for each year of the implementation of the project, no later than the 30th of September preceding the calendar year for which the program is intended. Administration 53. The Board of Directors and the Coordinator of the CFC would be entrusted with the implementation of the INSCA component. They have demonstrated that they have the capacity to handle such a component by their satisfactory performance regarding the establishment of the CFC. A condition of Credit Effectiveness would be the legal establishment of INSCA, the appointment of a Board of Directors and of a Pedagogical Committee for the school in which the private sector, and the University would be duly represented, and the structures of which would be agreed upon with the Association. When the INSCA is legally established, replacing the CFC, the management of INSCA would assume the responsibilities entrusted to th'e CFC.  - 18 - 54. The implementation of the procurement component would be the responsibility of the management of the CCM, which has adequate capacity to carry out this task. As is the case with IDA Credit 1155-MAG, an officer of the Ministry of Finance would be appointed to act as a coordinator with the Association on important matters. Communications with the Association on routine project matters would be handled by the managements of the INSCA or the CCM, as appropriate. Procurement 55. Procurement arrangements are summarized as follows: I I l l Procurement Method (USS millions) PROJECT CATEGORY i I l l | | MCD ICB LCB IOTHER N/g_A. 2/ Proce- TOTAL t j ~~~dures 3/ i Civil Works 020 I l 0.20 l l | (0.18)1 l l (0.18) Furniture, equipment 0.96 I 0.14 1 1 i I 1.10 & vehicles 1 (0.96)1 (0.13)1 1 | i (1.09) i I I I i I I Professional services1 | I 0.02 I I 0.02 Technical ass e(0.02) (0.02) Technical assistance 5.76 1 1.50 7.26 and fellowships l l C(5.76) (5.76) Operations & local I I 4.52 4.52 transportation I (3.25)j (3.25) TOTAL j 0.96 1 0.34 5.78 4.52 1.50 13.10 ______ 1TOTAL (0.96)j (0.31)i (5.78) i (3.25) 1(10.30) 1/ Selection and appointment of consultant architect firm and TA services. 2/ Operation cost (local salaries, consumable goods) and local transportation. 3/ Provision of about 25 man-years of expert services and 6 man-years of fellowships by the French MCD estimated at USS1.5 million equivalent. Note: Figures in parenthesis are the respective amounts, including contingencies, to be finance!d under the proposed credit. 56. Contracts for furniture, equipment and vehicles would be awarded on the basis of international competitive bidding in accordance with the Bank Group Guidelines for Procurement. Contracts for civil works, furniture, equipment and vehicles costing less than US$50,000 equivalent after grouping into bid packages may be awarded in accordance with local competitive bidding procedures set forth in the Government's Decree 70-089 of January 28, 1970, subject to the modifications agreed upon during  - 19 - negotiations.4/ The total of all such contracts is not expected to exceed US$140,000 equivalent. Contracts for goods estimated to cost less than FMGIO million and contracts for civil works estimated to cost less than FMG30 million may be procured by direct purchase. 57. When ICB procedures are used qualified domestic manufactuLers of furniture and equipment may be allowed a margin of preference of 15 percent, or the existing applicable rate of import duties, whichever is lower, over the c.i.f. price of competing foreign suppliers. 58. Sketch designs, draft tender documents and master lists of furniture, equipment and vehicles, indicating proposed grouping and cost estimates, would be reviewed by the Association. Items would be grouped to the extent practicable to encourage competitive bidding and to permit bulk procurement. Prior review and approval of bid and tender evaluation documents would be required only for contracts exceeding US$50,000 equivalent. For other contracts and for expenditures for which withdrawals from the credit are made on the basis of statements of expenditures, INSCA and the CCM would maintain fully documented records, which would not be submitted to the Association for review, but would be retained by the borrower and would be available for review by Bank staff in the course of project supervision. 59. All specialists and consultants financed by the Credit would be hired on terms and conditions acceptable to the Association, in accordance with the Bank Group's Guidelines for the Use of Consultants. The curriculum vitae of feilowship recipients financed under the project, courses of study, training institutions they would attend, and cost of the training would be subject to review by the Association. Disbursement 60. Disbursement of the IDA Credit would be made as follows: (a) 90 percent of total expenditures for civil works; (b) 100 percent of foreign expenditures for directly imported construction materials, furniture, equipment and vehicles, or 90 percent of local expenditures if procured locally, including transportation of such materials to its final destination; (c) 100 percent of foreign expenditures or 90 percent of local expenditures for proFessional services; (d) 100 percent of total expenditures for the technical assistance and fellowships for INSCA and for the procurement specialist for the CCM; and (e) 60 percent of operating expenditures on a declining scale agreed upon during negotiations. The schedule of disbursements (Annex VII) is based on, inter alia, experience with the ongoing IDA Credit (Cr. 1155-MAG). The follow-up nature, simplicity and limited number of components of the proposed project justify a shorter than the standard disbursement profile for education projects in the region. 4/ Modifications consist of: (a) registration of bidders in the Registry of Commerce shall not be required for the acceptance of their bids; (b) no procurement shall be made on che basis of selected tendering or direct contracting except in the case of rejection of all bids; (c) bids shall be opened in public, i.e., bidders or their representatives should be allowed to be present; and (d) no special preference will be given to local bidders in the evaluation of bids.  - 20 - Reporting, Evaluation and Auditing 61. Semi-annual progress reports on implementation would be submitted to the Bank Group by INSCA and the CCM by September 30 and March 31 of each year following credit effectiveness. In addition, the Government would send to the Association for comments, within six months from the Closing Date, completion reports prepared by INSCA and the CCM assessing achievement of 3roject objectives. 62. The INSCA and the CCM would maintain separate accounts for all project activities in conformity with the country's accounting practices. These accounts would be controlled according to normal Government financial control procedures, which are satisfactory. The INSCA and the CCM would prepare annual reports summarizing the financial status of all project operations. An audit report for INSCA for all expenditures financed under the project would be performed by an independent auditor acceptable to the Bank Group, and will be submitted to the Group within six months following the end of the Borrower's fiscal year. Benefits and Risks 63. Through the training of high-level managers, accountants and auditors and the assistance for improvement of procurement procedures and the skills of staff responsible for procurement matters, the project is expected to have a positive impact by increasing the efficiency of Malagasy enterprises and agencies, and ult-mately of the economy as a whole. The resulting effects would be particularly important for those public enterprises which are presently operating at a loss. With better management and financial control, and operating within the context of new Government policies regarding prices, foreign trade, etc., it is expected that the burden they place on the national budget and banking system could in due course be eliminated, at which time, they should start making a positive contribution to Government revenues. 64. The proposed program is the icast-cost solution for training accountants, auditors and managers. The alternative of sending students abroad is about four times more costly (a minimum of about USS12,000 equivalent per student year abroad vs. USS3,000 in INSCA). Furthermore the actual cost of sending students abroad is higher if it is taken into account that a significant proportion would not return to Madagascar at the end of their training and would be lost to the Malagasy economy, which would have supported the full cost of their training and education. 65. As the INSCA component is a follow-up of an effective on-going operation, no major risks are foreseen regarding the component. Because of the simple and straightforward nature of the procurement component, no risks are anticipated.  - 21 - PART V - RECOMMENDATION 66. I am satisfied that the proposed credit would comply with the articles of agreement of the Association and recommend that the Executive Directors approve the proposed credit. A. W. Clausen President Attachments Date: January 17, 1986 Washington, D.C.  - ANNEX t Page 1 of A 6AAOASCAR - SOCIALL IOToRS SHEET NAAGASCAR dSFrREnCEGROUPS (SEtIGHTTD AVRIAGE-S) I 'sCT (MOST ruCETr srTwn TE I b' bo~b 4ECE%r1 L0 0t 4AR6CA AP:0L, :NCOPM 9sq! 197Ua r sTlv Aora SOTHO 5SIAMA ^tIIIC 5. lr iAAA Mu (EUSUA SQ. ml) TOTAL s14.0 318.0 187.0 AGRICULrTRAL 11.2 3J.7 1?70.5 GNP Pri CAPITA (Us$) .. .. 113.3 155.8 musT CMDUIUTI0U PM CAPITA (KILOGRAMS OP OIL IqUtV3YL9NnT 28.0 40.0 1-. c2.) 58.1 popUIAIANN VITaL STAmEc POPULATIUN.MID-YIAR (T110SAIIDS) 1342.0 6765.0 9412.0 URhajg PoPULATION (2 or ura} o10.s tX. :O :0.1 32.') POPULATION raacrbous POPUltAYr0 LO tEAAR :eo CHILL) 1S.2 STATIONARY POPUtAnOT ('ILL) ;5.0 POPUlaTtOll !OUIIMN 1.9 POPULATION OsITt PER SQ. KM. 9.1 11.& 16.1 33.2 65.1 Pa SQ. IN. aGRI. LAW 14.a IS.1 n.a 112.S 12.I PorULATION Ac STRMCYUI CZ) 0-14 YES *2.1 43.4 46.3 46.0 43. 15-64 TU 54.2 52.9 10.2 10.8 11.) S5 Al ABOV 3.2 3.3 3.4 2.9 2.? POPULATION CR0WT5 ILATE CE) TOTAL 1.9 7.S 2.b 2.8 .9 uRaU 5.0 5.2 5.3 6.4 5.1 fIrE BIRTH RATIE (PrE 110USD '3.8 63.7 44.7 .7.2 ..,. CUIDC oDATH RATE (PER WOS) 25.0 19.7 17.4 17.3 35.0 GROSS RPRSODUTOH RATE 2.8 1.9 3.2 3.3 .2 PAMILT PLAMIUI ACCTORU. ANNEAL (TOll.S) USERS (L oP MAIED WN) .. .. .. 3.3 S PM am wMazm INDCK Of FOD PO. PER CAPITA (1969-71-100) 89.0 102.0 94.0 83.3 82.9 PER CAPITA SUPPLY O? CALOU7IS CE OF REOWIREHENTS) 109.0 11. :&.3 67.7 98.5 PRTEINS (CRAMS PElR OAY) 41.0 S0.0 59.0 51.9 55.- or axCm ANItML AnD PULSE 18.0 17.0 15.0 Ic 18.7 16.5 CHlLD (CAG 1-*) DEATH RATE 20.2 15.8 10.0 23.1 14.4 LIFE EXPECT. AT S1IR (TEARS) 38.X 44.7 49.& '7.8 52.0 INFArT nSE3T. RATE (PEE T13US) 109.0 69.0 e.0 119.5 I08.J ACCESS TO SAFE WATER ChOP) rOTAL .. 11.0 21.2 Id 27.1 -Z.' aIRS .. 7.0 ao.o 7i 63.5 oT 5 RUItAL 1.0 7.0 #d 19.1 35.8 ACCeSS TO CXCRITA DISPOSAL Ct or PoPuLATION) TCTAL .. .. 9.0 Id 26.5 28.1 URI" .. 8.0 9.0 7a 65. 57. RURAL 9.0 -( 20.S :0.' POPULATlON PeR P*YSICIAN 8720.0 0la70.0 10220.0 /a :7901.1 11791 .7 POP. rPE IURSIIC PERSON 3060.0 If 1350.0 3470D. 7si 1305.4 259.8 POP. PER HOSPITAL ED TOTAL '20:. 156.0 110.0 /a 1273.6 981.1 URANS 150.0 it 210.0 240.0 -28.2 3468.8 RURAL 400.0 77 '80.0 520.0 Ti i:9z.5 'i71n. ADMISSIONS PER HOSPITAL RD 2 mINIS AVERAGE SIZE OF dOIUSENOL3 -3-L 3. ZRSAN S.) CtLAL ' S.9 AvEpAGz "O. or *eRSzYS;lOom RURAL. PECrETNOR OF IcaLLSS t-" 0LECT. ROTAL UBN .. .. . .. RURL .. .. . ..  -23- ANN'iE: r CABACASCAR SOCIAL. KNICATORs DATA SHUET -CADA RSA REVERnzCE 00ou3s (wrZGwTD AvE-A-GES3r7a- MOST (MOT NCCNT ESTATE) /b b__ /b RECENT LOW tICOME .RtICa MID0LE INCOME 0 197d1 ESTIN ATEtk SOUTH OF SANARA AFRICA S. OF SAHARA JIUCA TI AWUSTEu RLROLLNENT LIAT1OS PRIMUA: TOTAL S.0 98.-) 100.0 to 67.1 95.7 ALE 54.0 9.0 77.6 100.' rEU4ALE '5.0 41.2t J S.9 63.2 SECONDARY: TOTAL ;.0 11 0 14.0 Ic 1.I5 17.l MALE 5.') 13. l1.9 21.4 FE%4ALE 3.0 9.0 9.1 14.8 VOCATIOtNAL (S or SeCONDARY) 9.1 8.7 l I PUPIL-TEACERt RATIO YEOWtYA 70.0 65.G O 5.0 44.9 Cl.1 SECONDARY 24.0 0.O 21.0 Ic 27.1 2575 i_nurim PASSMER, CARSJTNOUSANO rOP 4.1 6.8 7.1 /c 3.1 20.8 RADtO RECEVIERB/UoTuSAaD POP 13.3 79.7 20b.5 55.J 10.8 TV RZCB?VERS/THOUSAND Pop .. 0.5 7.7 2.6 zo.s IEISPAR Dt AITLY CCERL NT)ERZST) ClaCitATION PE TIHOUSND POPULATION 7.8 7.J 6.0 5.0 11.6 CZNENA ABIWAL ATTENDACWCAIPITA 0.3 /t 0.7 0-S 0. LNPOt N TOTAL Lama FORCE (THOUS) 2943.0 3570.0 402.0 FEMALE (PETCENT) 46.2 45. 44.I 342 36.2 AGRLICULURI (PERCET) 93.0 90.0 57.0 /d 77.3 54.5 IUSmTY (PERCZENT) 2.0 3.0 4.0 7;[ 9.* 18.3 PARTICIPATION RATE (PERCENT) TOTAL 54.9 52.6 h 8.7 39.3 36.a MALE 60.7 58.8 54.7 J0.9 47.1 FEMAL 49.- '6.7 42.6 28.1 2772 0coUWUC DoPEcScr RATIO 0.6 0.9 1.0 1.3 1.3 IUlm D11ENIIZ PERCENT Of PRIVATE INCOM RECIVCD NlCttST 52 OF HOUSEHOLDS 41.0 I tICNCST ZOS OF HOUSVIOS 60.1 L LOIEST 20S OF HOUSCNOLOS 5.2 2 LOWEST 40S0 o HOUSE7OLS 13.0 j So E TAl C31 ESTXIATED OLUTE POVE INtCOM LEVEL CS PER CAITA) JRum 150.0 /c 165.5 590.7 RURAL 6.0 7- 95.0 275.3 ESTIMATED RELAtVE POVET INCOM LEVEL (USS PER CAtITA) URI" 135.0 Ic 113.1 545.6 Am" *a 0i.o7 67.6 201.1 ESTIMATD POP. *ZLOW A3504.W POVERTY L0CONE LEVEL : ) URB 50.0 /c 3b.6 RURAL o5o0 7.7 61.1 NOT AVALLABL NOT APPLICAILE N O T aS /a Tbe grp averagea for each Indtcaeor are populacta bweLghted arithedtc maoad. Coverage ot couancies monj the LndcmtCor d"pend on awaIlabillty of data and la noc untfore. lb UnIe.. othaguw.. noced. Data tar 1960" rat-e to any year bec.= :959 and 1961; Daca for 1970" between 1969 and 1971; and data Ear "Wnmt llcent CetcIaa between 1981 and L 43. Ic 1977; /d 1960; /a 1973; /t 1962; t& PopulaLIon. .UNE. 1985  -24- ANNEX I MADAGASCAR: ECONOMIC INDICATORS Page 3 of 4 cmS Dm1IC PBRr= 1N 1984 AMnal Rate of Qrwfth USS MsD. Z 1970-78 1978-8 GDP at Mrket Prices 2,382.9 100.0 -0.1 -0.8 (x'a.nmprtx 2,172.4 91.2 0.7 0.0 roMss Destic IvesCzeit 324.3 13.6 -4.4 -6.4 je t AmC at Ral -252.2 -10.6 cpors of Gsod , NFS 388.7 16.3 -0.7 -8.9 ftom ofQ0od sNFS 502.*4- 21.1 -6.2 -9.9 Cumir WR FRMI AND PIRVM Di 1N984 Valm akied.!/ Labor Force VA Er Wor IS Wn. z 2(o z uss AgrimiltuVe 1,007.6 42.3 4,356 88.1 231.3 uIdustry 371.1 15.6 135 2.7 2,749.2 Services 929.6 39.0 40o 8.1 2,324.0 Unallocarr-1 2, 74.6 3.1 54 1.1 1,381.0 Ibtal !Average 2,382.9 100.0 4,945 100.0 482.0 GDaE*WN FDWIE mtral swvertum 1984 1982 1983 1984 urrent Becelpts 243.0 15.2 15.2 1.7.7 0rrtent Expeidibnre 197.7 16.1 14.2 14.4 Omrment Defcirt 45.3 -0.9 1.0 3.3 Capital Exqp ditures 107.6 7.5 7.2 7.8 Fbreizp fiwanxc1g (net) 36.6 5.1 3.8 2.7 MCUEY, CREDIT, and PRICE 1978 1979 1980 1981 1982 1983 1984 - - (BUI1i FM Oitstxang at the EBd of tte Period) - - Mtxley and Quasi Htxiey 141.0 L73.0 206.0 250.0 276.0 271.5 321.0 BEkk Credit to Publlc Sector 49.0 99.0 176.0 238.0 269.0 307.0 338.0 Bank Credit to State Ehterprises 101.0 [21.0 150.0 165.0 198.0 229.6 288.0 and Private Sector -(Percentage or IrdexX %ubers) - - - - - - - mey ard Quasi xMey as % of &DP 29.0 29.1 29.9 30.7 27.7 22.2 23.4 CDP Price rfLatr (1970-100) 195.7 217.9 250.6 313.7 403.9 490.3 543.5 Annual percenrage chaiges in: GDP Price Deflator 6.8 11.3 15.0 25.2 28.6 21.5 10. Bank Credic ro Puclic Sector 75.0 102.0 77.8 33.U 13.7 14.3 10.1 Bank Credit to Scate Ehterprises and privare Sector 5.2 19.8 24.0 10.0 20.0 16.2 25.2 vbte: All conversions to dollars in this table are at the average exlhavge rate prevailing duzng the period covered. .21At market prices. B port duies. December 1985  - 25 - ANNEX I Page 4 of 4 IOAML ME PAVfr *D CAFWL FRO IM cr Bloom .CEN - (As Z 1!O0) - 12 1%3 e4 I/ LS W. ) 135.0 38.8 oQxb& LL- 302aG sa 36 .3B . -la -3.6 1.1 Izm of n & N.F.S 651.7 O7 XL5 COU 47.2 116 ft M&r 19.7 5.7 Pesmm Blarce -271.5 -194.3 -113.8 l.9 I u 7.1 2.0 _ .lIeS 10.7 3.1 Eb= -, N!t 99.0 -112.6 -141.8 itu1az md= 87 2.5 Pdm ' a, Nc -1.4 -1.2 3.5 Pfhv.I z xIr 13.5 3.9 CkIW rrimrMrion 67.0 19.3 Uxrant ACMtt hIa-371 .9 -308.1 -25Z. bt1 347.6 Ia(.0 OjQkn] j3itad fra's 72.3 60.8 67.8 M u. M, 31. i% 3/ r2 MT :zud 121.3 16.8 160. RBJlk Deb, b ie.. g0m_tes 2,034.0 ,-sb=gmwt3 29.9 193.6 VM)8 N1'xQamd Pw D - AL-tltzatkP -181.3 -195.7 -175.4 * L 0*scdfrg & rdsb.md 2.Ma40 D Pal 92.7 1M.9 m.6 W218.9 36.5 41.5 B*-II EMdbC, 1_. "E,,td 5/ W3 2D lb -8.6 14.0 -25.2 US MLh Mis w 1982 1913 194 1ED _k _ sxQirg & xrgd 27.7 30.7 t;l4D - RC 3(9.74 431.65 576.60 thr - I.5 - lBS 0.; O.M O.CD17 O lr d-. UxWsbursi 27.7 42 I/ pwvswaul ~ 3/ Ps CLub acm_ W mteide ai S 12 1 mll1 in 1 190r4; Z4 7rxhk re DFl ae.r, s a,'d riiave M laton CLLib, $15 mUDii JD 1984. f1, axmrs ad cas l acems, asd 4ivDbt zv1o pw3 a Z of gds ard sml. and amdsa.s -5/ AMr efmof dE!bt eci uf ;g Eiir' ,ad kxIltdfrg awl <_ a/ a~~3UB f il E ad W Eg  AN:NEX II -26- Page 1 of 2 STATUS OF BANK GROUP OPERATIONS IN THE DEMOCRATIC REPUBLIC OF MADAGASCAR A. Statement of Bank Loans and IDA Credits (as of September 30, 1985) I/ Loan or Credit Number Year Borrower Purvose Bank IDA Undisbursed (US- Mill-on)- Twelve Credits and Five Loans have been fully disbursed 32.57 139.93 - CR 817-HAG 1978 Madagascar Andekaleka Hydroelectric 40.602/ 3.03 CR 881-MAG 1979 Madagascar Mangoky - Agriculture 12.00 2.24 CR 938-MAG 1979 Madagascar Highways V 24.00 0.57 CR 977-MAG 1980 Madagascar Industrial Bank - BNI 5.00 0.92 CR 1002-HAG 1980 Madagascar Water/Sanitation 20.50 7.95 CR 1016-MAG 1980 Madagascar Petroleum Exploration 12.50 1.66 CR 1064-HAG 1981 Madagascar Agriculture Bank - BTM 11.50 5.30 CR 1086-HAG 1981 Madagascar Plain of Antananarivo T.A. 2.30 .99 CR 1155-HMAG 1981 Madagascar Accounting and Audit 11.50 3.63 CR 1161-HAG 1981 Madagascar Forestry II 20.00 8.04 CR 1211-HAG 1982 Madagascar Village Livestock II 15.00 10.78 CR 1249-HAG 1982 Madagascar Agriculture Institutions 5.70 1.21 CR 1298-MAG 1982 Madagascar Tsimiroro Heavy Oil Exploration 11.50 4.73 CR.1337-HAG 1982 Madagascar Lac Alaoctra 18.00 14.54 CR.1391-MAG 1983 Madagascar Sixth Highway 25.00 15.93 CR.F004-HAG 1983 ------- - 20.00 13.18 CR.1433-MAG 1983 Madagascar Cotton Development 7.90 6.58 CR.F008-HAG 1983 - 9.90 6.19 CR.F1497-MAG 1983 Madagascar Urban 12.80 12.06 CR.1526-MAG 1984 Madagascar Cyclone Rehabilitation 15.00 10.69 CR. 1541-HAG 1985 Madagascar Industrial Assistance 40.00 38.27 CR.1589-HAG3/1985 Madagascar Irrigation Rehab. 12.00 12.00 TOTAL 32.57 492.63 180.49 of which has been repaid 4.88 3.46 TOTAL now outstanding 27.69 489.17 Amount sold of which has been repaid - 6.40 TOTAL now held by Bank and IDA 27.69 489.17 TOTAL undisbursed 180.49 1/ The status of projects listed in Part 'A' is described in a separate report on all Bank/IDA-financed projects in execution, which is updaced twice yearly and circulated to the Executive Directors on April 30 and October 31. 2/ Including a supplemental credit of USS10.0 million of 1980. 31 Not yet effective.  ANNEX II -27- Pdge 2 of 2 B. Statement of IFC Investments (as of September 30, 1985) Loan Equity Total (USS Million) 1977 Sotema - Textile Kill at Hajunga 11.00 0.29 11.29 1980 Bata - Shoe Manufacturing in Antananarivo 1.25 - 1.25 1983 Pecheries de Nossi-Be 2.57 0.18 2.70 1985 Cotona, S.A. at Antisirabe 6.65 0.17 6.82 22.06 November 1, 1985  -28- ANNEX III MADAGASCAR ACCOUNTING AND MANAGEMENT TRAINING PROJECT SUPPLEMENTARY CREDIT DATA SHEET I. Timetable of Key Events (a) Identification April 1984 (b) Project Preparation August 1984 (c) Appraisal Mission January/February 1985 (d) Negotiations December 1985 (e) Planned Date of Effectiveness June 1986 If. Special Bank Group Implementation Action: None III. Special Conditions (a) Conditions of credit effectiveness would be: (i) the fulfillment of all conditions precedent to the effectiveness of the participation of the co-financier (MCD France) and the submission of a technical assistance program for INSCA and its imrlementation schedule acceptable to the Association (para. 48); and (ii) legal establishment of INSCA, the appointment of a Board of Directors and of a Pedagogical Committee for the school in which the private sector and the University would be duly represented, and the structures of which would be agreed upon with the Association (para. 53). (b) The content and timetables for the procurement training program for each year during the project implementation period would be submitted to the Association for approval no later than the 30th of September preceding the calendar year for which the program is intended (para. 52).  -29- ANIIX IV Pae If 4 MADAGASCAR ACCOUNTING AND MANAGEMENT TRAININF, PROJECT tlBA EYECTTIVE PROGRA4 1. Background. The economy of ,Madagascar has been growing. at a.. rkelatlvely low pace in recent years, b6t the Government Is rakinir steps to Improve the economic enviroment in which enterprises (public and private) have to operaee. In addition to changes in policy mear to the revitalization of the economy, and as an integral part of the process, the Government has assigned a high uriority to the development and upgraiiing of bigh level managerial capacities within the country. In this context, the Government requested Bank-Group assistance to expand the Accounting Training Center (CFC) to include a management training program at the MBA level. 2. . A feasibility study financed by CIDA (Canada) was prepared in the second half of 1984, and completed in March 1985, after the Bank-Croun's appraisal mission,requested by the Government to be In the field In late January, had returned to headquarters. Both the feasibility study team and Bank-Group mission concluded that the establishment of the MBA program was a priority, but that its size, as explained below, should be limited in the lnitial years with the possibility of future expansion in accordance with economic growth. and increased needs. 3. Although there is no precise Information on training requirements for high level managers, the limited numher of enterprises of a size which could employ MBA graduates gives a crude indication of the market absortive capacity. The number of these enterprises has been estimated as follows: 40 state enterprises 110 large private enterprises (more than 200 employees) 320 medium size private enterprises (50-200 employees) 470 enterprises (productiom., trade, services) It can not be expected, at this time, that many of these enterprises can dispense themselves with the services of one or more of their senior managers for a two-year period for them to enroll In the MBA program - for short term periods, the staff can participate in the seminars provided by the Centre de Formation des Cadres in Antsirabe. Furthermore, it is very unlikely that the enterprises would be willing to or could replace their present managers by young university graduates without experience in the field. This is, therefore, the rationale for the limited size of the NUS program proposed for the initial years.  -3C- ANNEX IV Page 2 oof 4 4. Obiectives of the MBA Program. The obiectives of the Proaram are AS follows: (a) Contribute to the economic development of the countrv by improving the management capacity and ability of the staff in the higher echelons of state and private enterprises; (b) Maintain higb quality training standards; (c) Prepare participants for practical decision making rather than provide them with a great amount of theoretical knowledge; and (d) Focus the program to main areas relevant to efficient management of enterprises in Madagascar. 5. Tarzet Group. The two-year program would start In 1987 with 20 participants in the first year and would be expanded to 30 by 1q88. Tn terms of tareet group, the participants would he expected initially to he distributed approximately as follows: 60% from state enterprises; 2fl from private enterprises; 10Z from hizh or medium level civil service; and 10! would be university students with at least a -mattrise dekree or a diplome d'ing6nieur-. If basic weaknesses among the candidates of the latter group were identified, they would be required to take remedial courses being provided within the accounting and auditing program prior to admission in the MBA program. 6. Strategy. The main strategy is to provide a program of high standards. This would be achieved through: (a) Selection of a restricted number of participants by applying a set of criteria (to be designed by INSCA) which through tests and interviews would allow to detect hich quality managers or potential manazers ihose main asset would be their motivation and attitude towards decision making within an acceptable level of technical knowledge; (b) Particular ability of the teaching body to train through exchange of ideas and experience usine Malagasv enterprises management problems. They have also to be technically competent in their specific fields and be willing to collaborate with their colleagues to deliver an integrated program; (c) Establishment of strong links of the Institute with the enterprises, main users or graduates, thus securing the relevance of the training to their particular needs. It is crucial to build a zood image of the prczram so that the enterprises are: (i) willinz to invest in !ood managers hy sending them for two vears to INSCA; and (ii) readv to collaborate with the trainers hy a'lowing them to study their specific problems a.d help them elahorate relevant training material derived from actual cases.  -31- ANNEX TV Page 3 of 4 7. Outline of the Program. A tentative curriculum for each of the two years of the MBA program follows. This curriculum is expected to be finalized durine 1986, once the diean of studies for INSCA and about five expatriate teachers for the MBA proeram (expected to arrive In July 1986) are in place. This revision would he done in close consultation with the enterprises. In the future, further revisions of the curriculum may he required;co better fit the changing needs of the -enterprises.- The dean of studies should insure that the needed updatinzs are timelv inmlemented. First Year (1) Introduction - management and organizaCion - quantitative decision making - use of micro-computers (to be emoloyed in the several topics) (2) Accounting - basic accounting - accountinx statements (business and leeal) - cost accountine - organization of accountine devartments (3) Production - types of flows and organizations - measuring/controlling production flow/quality - inventory control, Durchasing (4) Marketing - product mix, price, distribution, promotion - consumer behavior - consumer goods/industrial goods - organization of marketing departments (5) Organizational Behavior - basic concepts: communications, motivation, leadership - personnel management: job and task description Job, and staff evaluation, incentives, promotionfhiring/firinz, human and legal aspects (6) Basic Finance - financial statement analysis - short and long term financine needs and sources  -32- ANNEX IV Page 4-of 4 Second Year (1) Management Information Systems for nonitorine and evaluating different functions: production, marketing, accounting, financine .ata collection, analysis,. report writing . . (2) Procurement: national, international - organization, Procedures (3) Industrial Relations - organization, conflict resolution (4) Political Economics: - basic national economics and Policies - roles/interaction of Government/public and private sector - role of agriculture/industry/services in the countrv (5) External Financing - Project cycles - external -donors-: types of financing objectives, procedures (6) Business Policy - analysis of enviroment enterprise strengths and weaknesses - determination of obiective tree and log-frame at different levels: sector, enterprise, department - elaboration/implementation/monitorfng/evaluation of objectives, strategies, volicies of an enterprise  -33- ANNEX V MADAGASCAR ACCOUNTING AND MANAGEMENT TRAINING PROJECT INSCA PROJECTED ENROLLMENT - 1987-19Q4 Year of Admittance .:1987 1988 .1989 1990. 1991. 1992 1993: 1994 Accounting 1, 1983 - 10 1984 30 10 1985 64 30 10 1986 80 64 30 10 1987 100 80 64 30 10 1988 100 80 64 30 10 1989 100 80 64 30 1990 100 80 64 30 1991 100 s0 64 30 1992 100 80 64 1993 1no 80 1994 i0n Present 274 274 284 284 284 284 2R4 284 NBA 2/ 1987 20 20 1988 30 30 1989 30 30 1990 30 30 1991 30 30 1992 30 30 1993 30 30 1994 30 -in 50 60 60 60 60 -60 Total -' 324 34 3U 3 344 -36 1/ On the basis of recent experience dropout rates are projected at 202 between both first/second year and second/third year and it is assumed that only 30 will follow the fourth year. The 10 students who had initiated their studies 7 years earlier are the CPA candidates returning to the Institute after two years of practice. 2/ Given the uncertaiaty of the absorptive cavacity of the market, the ororran wll be developed graduallv. The enrollment in first year will be 20 participants in 1987 and 30 in 19R8. Training facilities are designed to handle an intake of 40 particiDants per year. The Prowram will start in February of each year.  ANNEX VI -34- Page 1 of 2 INSCA - TEACHING STAFF AND TECHNICAL ASSISTANCE 86 87 88 89 90 91 92 93 Students Intake Ist year Accounting 100 100 100 100 100 100 100 100 MBA - 20 30 30 30 30 30 30 Accounting Program 1. Trainers required (man/year- full-time equivalent) a/ Day courses 14 14 14 15 15 15 15 15 Evening courses 3 3 3 3 3 3 3 3 Sub-total 17 17 17 18 18 18 18 18 2. Origin of trainers (man/year) Malagasy Full-time 7 7 14 15 15 15 15 15 Part-time 5 5 3 3 3 3 3 3 Expatriates (full-time) 5 b/ 5 - - - - - - 4BA Program 1. Trainers required (man/year- full-time equivalent) c/ Total 3 d/ 9 i/ 12 12 12 12 12 12 2. Origin of trainers (man-year) Malagasy - - - 4 5 8 8 12 Expatriates 3 d/ 9 i/ 12 8 7 4 4 - Sub-total 3 / 9 T/ 2 12 TY T12 TY TY Total Expatriate Technical Assistance for Accounting and MBA (man-year equivalent) Trainers 8 e/ 14 12 8 7 4 4 - Dean of Studv f/ I 1 I 1 - - - - Director General g/ 1 / 1 - - - - - Sub-total under project 3 16 13 9 7 4 4 - Fellowships Abroad for Malagasy Trainers (man-year) b/ Accounting h/ 7 9 7 - - - - - MBA i/ HBA 5 11 10 4 - - - - Ph.D. - - - - 4 4 4 -  AMNNEX VI. Page 2 of 2 a/ tlormal teaching load: 2 trainers per group of 30-50 students. b/ Included under ongoing project (cr. 1155-HAG). One trainer is provided by French Cooperation and some of the fellowships by CIDA, Canada and the Provincial Government of Ouebec. c/ Teaching load: 135 hours per man/year (L.5 hour/session; 3 sessions/day; 5 days/week; 36vrreeks/year).. .. . d/ Six expatriate trainers (half of which to start preparation of the 1987 course in July 1987). e/ Includes 5 trainers under the ongoing project. f/ A Malagasy Dean of Study should be appointed to overlap for one year with the expatriate before assuming full responsibility. / A Malagasy Director General should be appointed to overlap for one year with the expatriate before assuming full respo-sibility. h/ All but two of the trainees have alread: started their courses in Canada, the remaining two at present in the CFC, would start in September 1986. L/ 15 trainees would study abroad for 2 year MBA courses starting as follows: 5 in September 1986; 6 in Septembner 1987 and 4 in September 1988. Among them, the best 4 would be selected for a 3 year Ph.D. program. Some drop out is expected. JJ Six full-time (first year) trainers plus six trainers (half year) to start preparation of the second year in July 1987.  -36- ANNEX VII MADAGASCAR ACCOUNTING AND MANAGEMENT TRAINING PROJECT DISBURSEHENT SCREDULE (US millions) Country Accumulated Accumaulated Disbursement Disbursements Disbursements Profile FY Semester Amount (Z) p.a. Amount (Z) p.a. Amount (X) p.8- 1987 1 1/ 1.0 1.0 2 1.0 (19.4) 2.0 (19.4) 0.3 (3.0) 1988 1 1.0 3.0 2 1.0 (19.4) 4.0 (38.8) 1.5 (15.0) 1989 I 1.1 5.1 2 1.1 (21.4) 6.2 (60.2) 3.4 (33.0) 1990 1 1.0 7.2 2 1.0 (19.4) 8.2 (79.6) 5.4 (52.0) 1991 1 0.6 8.8 2 0.4 (9.7) 9.2 (89.3) 7.1 (69.0) 1992 1 0.4 9.6 2 0.4 (7.8) 10.0 (97.1) 8.4 (82.0) 1993 1 0.3 10.3 2/ 2 - (2.9) 10.3 (100) 9.5 (92.0) 1/ From date of Credit effectiveness. 2/ Equivalent to SDR 9.5 million.  I BRD 18951 oe * .lr MADAGASCAR , ACCOUNTING AND MANAGEMENT TRAINING PROJECT Antswanona 4_ AR_Prd *eg - ipmde w_e NYI A" .. Fwee.., Ip ",.1 , p.ldaaow. CA...../o dO, 40~ MYA .kh 14 b- Ajwa,"""' bowA.. Abw.h * *'7Z. ^, r , =I rs R"r~ ~ ~ ~ ~~~~~M r {/4 Cheotf .1'l / Sb An--Anil-I 20~~~~~~~~~ 5'.. ~ ~ ~ ~ ~ ~ ~ ~ ~~I.......... VhS '.re n r { | Jpllb r SW * - _.~~~~~~ > ....... ~~~~bmtr Vank _tso 1* . ,~~. -. ~, - ZAMS/ A,/ -\ ,~ .d ihS a;, m -n ..d ~~~~~ - - - ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ A-t ---ANAI ..WSsme. W J w AFRICAoj oro MADAGASCAR SOUTHi"