Mozambique - Education and Manpower Development Project

Document of The World Bank FOR OFFICIAL USE ONLY C, IZ - 14 07 - ftO2 Repoe No. P-4788-MOZ .MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A. .ROPOSED CREDIT OF SDR 11.7 MILLION (US$15.9 MILLION EQUIVALENT) IV THE PEOPLE'S REPUBLIC OF MOZAMBIQUE FOR AN EDUCATION AND MANPOWER DEVELOPMENT PROJECT April 11, 1988 This doemnent hsa resicted dbMbuWon ad way be used by reipients only in tbe perfonmnce of tbeir ofcida duties. Its contents may not otbenwis be dlscloed without World Bank authoflzatton.  CURRENCY EQUIVALENTS Currency Unit Metical (pl. Meticais) At appraisal US$1 400 Meticais (October 1987) Mo100 US$0.25 At negotiations US$1 450 Meticais (March 1988) o100 o US$0.22 MEASURES --- . l Meter- (m) -328 Feet 1 Square Meter (m-sq.) u 10.76 Square Feet ABBREVIATIONS AND ACRON"- DECCM - Education and Culture Directorate of the City of Maputo - ERP - Economic Recovery Program MINED - Ministry of Education SCHOOL YEAR UNIVERSITY YEAR February - December August - June  FOR OMCLFCL USE ONLY MOZAMBIQUE EDUCATION AND MANPOWER DEVELOPMENT PROJECT Credit and Project SumawarZ Borrower: People's Republic of Mozambique Beneficiary: Mintstry of Education Amount: SDR 11.7 Million (US$15.9 Million) Termss Standard with 40 years maturity Onlendinz Terms: Npt applicable Financing Plan: Government US$ 2.0 million IDA US$15.9 million Total US$17.9 million Economic Rate of Return: Not applicable Staff A&vraisal Report: Report No. 7084-MOZ (April 15, 1988) Ma-p: IBRD No. 20704 This document has a restricted distribution and may be oed by recipients only in the perfoi nance of their official duties. Its contents may not otherwise be disclosed without WorW Bank authb iation.  MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE PEOPLE'S REPUBLIC OF MOZAMBIQUE FOR AN EDUCATION AND MANPOWER DEVELOPMENT PROJECT 1. The following memorandum and recommendation on a proposed development credit to Mozambique for SDR 11.7 million (US$15.9 million equivalent) is submitted for approval. The credit would be on standard IDA terms with 40 years maturity. It will help finance an education and manpower development project. 2. Background. The project has been designed within the context of Mozambique's Economic Rehabilitation Program, the urgent need to respond to pressing manpower shortages in the short-term, and the demands for comprehensive education sector planning in the longer-term. It supports activities that are feasible under the present economic and internal security constraints, and will help create a firmer basis for human resource development. 3. Although the Government has made significant progress in providing education since Independence, Mozambique's education and training sector remains critically underdeveloped. Over 60 percent of the population is illiterate, only 22 percent have two cv more years of schooling, 6 percent have four or more years, ana a mere two percent have secondary level education. The formal education system, though wide at the bottom, with about 500,000 children in the first grade, remains very narrow at the top, with only 1,000 students in the tenth grade and about 300 entering university each year. At the primary level, enrollment expansion has been achieved at the expense of quality and efficiency. Leatning is hindered by large class size (60 students per classroom on average), the short number of classroom hours caused by the imposition of a triple-shift system, and the use of Portuguese as the language of instruct;.in (only about 1% of Mozambican children learn Portuguese at home). At the secondary level, enrollments have increased dramatically since the 1970s but the gross enrollment ratio remains at only 6%, compared with an average of 20% for all sub-Saharan African countries. Only modest gains have been achieved in technical education, and university enrollments have not yet recovered to pre-Independence levels. As a result there is an acute shortage of professionals, technicians, and skilled and semi-skilled workers. These problems are compounded by weak managerial structures at the provincial and local levels, a cumbersome central administrative system, and serious financial constraints. 4. The Government's financial contribution to the sector is substantial, representing about 11% of total Government recurrent expenditures. However, serious constraints are encountered in meeting investment cost requirements, as well as in trying to expand the system without creating a further burden on the already tight financial situation.  -2- Donor assistance to the sector represents about 102 of total foreign aid and is provided mainly by bilateral donors for instructional materials, construction and equipping of technical schools and adult education training centers, as well as for food aid to primary schools. 5. Rationale for IDA Involvement. IDA assistance will be valuable for three reasons. First, the effective linking of education strategies to economic recovery is a complex tsok requiring analytic expertise and institutional capabilities that are not well established in Mozambique. IDA can provide valuable assistance in developing analytical capabilitifts and the required institutioxaal foundation, based on an understanding of macro-economic issues and their sectoral implications. Second, the experience that IDA has in assisting African countries to develop theic education systems can help facilitate more rapid progress towards cost- effective solutions to meet manpower needs. Thl.rd, IDA can facilitate discussion of a long-term strategy for the sector with other donors and assist Mozambique in coordinating aid requirements. 6. Proiect Oblectives. The project is intended as a first IDA operation that would selectively respond to immediate needs while assisting in developing a better krowledge of system requirements and a comprehensive sector strategy. The project's objectives are threefold. First, it will raise the quality ind efficiency of primary education in order to increase literacy and numeracy among primary school-age children. Second, it will strengthen the training system in order to fill critical manpower gaps. Third, it will strengthen the capacity for education sector polity analysis with a focus on financial management and planning. 7. Project DescriRtion. First, the project would raise the quality and efficiency of primary education in the City of Maputo by renovating and enlarging facilities, training school managers and principals, and providing children with essential school supplies. Second, it would strengthen the quality and relevance of training for accountar.ts, office managers, bookkeepers, customs officials, engineers, and econtmists through provision of educational materials and equipment, curricula development, and support of fellowships. Third, the project would improve education sector plannina and financial management through training of budget officers, carrying out studies on financing and management of education and developing a strategy for strengthening the education system in line with objectives of the ERP. 8. The project, to be carried out over six years, provides funds for civil works; furniture, equipment, materials, supplies, and vehicles; technical assistance; training; and salaries and current costs for the Project Management Unit. A Project Preparation Facility (PPF) was approved by IDA in November 1987 to finalize preparatory activities including: topographic site surveys, consultant services for educatiotr planning, curriculum development in the Faculty of Economics at the University Eduardo Mondlane, organization of the Project Management Unit and training of its staff.  .3. 9. The recurrent expenditure implications of the project w4lI be limited to the cost of maintaining project schools in the City of Maputo. There will be no increase in the number of classes or teachcrs at the primary level and no additional personnel will be required at other project-supported institutions. Total cost of the project is estimated at US$17.9 million. A breakdown of costs and the financing plan are shown in .Schedule A. Amounts and methods of procurement and of disbursements, and the disbursement schedule are shown in Schedule B. A timetable of key project processing s.vents and the status of Bank Group operations in Mozambique are given in Schedules C and D, respectively. A map is also attached. The Staff Appraisal Report, No. 7084-MOZ was issued on April 15, 1988. 10. Aareed actions. During negotiations, the Government gave the following asurances. First, it would prepare by March 31, 1992 a strategy for financing and managing the development of the education system on the basis of findings of the financing, management, and mother-tongue languages studies carried out under the project. The strategy would includes (i) a statement on growth targets for the formal education system; (ii) levels of recurrent costs needed to increase coverage of primary, secondary and university education; (iii) a statement of priority investments to be financed between 1990-2000, and (iv) a plan for strengthening the managerial structure and efficient administration of education at national and provincial levels'. Second, the Government would conduct jointly with IDA, annual project implementation reviews not later than April 30 of each year. Third, it would prepare and furnish to IDA for its review and comment reports on the financing, management, language, and manpower development studies. Fourth, it would select, not later than December 31, 1988 all consultants needed to assist the Government in project execution and not later than May 30, 1989 appoint all consultants. Fifth, the Government would introduce in the national budget for 1990 a school maintenance line item and allocate to it funds sufficient to carry out annual maintenance of project schools. Sixth, in accordance with the resettlement plan, the Government would take all necessary measures to ensure that the sites required for the primary school construction program are free of all occupants. 11. Benefits. The project will strengthen Mozambique's educational system to make it more responsive to the country's urgent needs for skilled manpower and effective human resource development. Higher quality primary education will help pupils and the nation develop a stronger foundation for sustainable long-term growth. Upgraded training in commercial fields, engineering, and economics will help alleviate skilled manpower shortages and enhance quality in key areas essential for economic planning, industrial development, and construction activities and will help compensate for the loss of expatriate university-level professionals. Development of a long-term sector strategy, and improvement of MINED's financial management snd planning capability will permit more efficient use of education sector resources. Finally, the project will also build project management skills within the Ministry of Education.  -4- 12. Risks. Risks are twofold. First, Mozambique's experience in managing education projects is still quite limited, there are few trRineo managers, and there is littlo exnerience in project management and in procedures such as international bidding, project monitoring, beeping accounts or performing audits. This risk is being addressed through the creation of a Project Management Unit within MIXED, which will be supported through intensive staff training and the provision of technical assistance. Second, the ongoing security situation presents special difficulties. This risk has been taken into account by targeting project activities predominantly in Maputo, which is a secure area. In light of these design features, the risks would be minimized and the proposed project would constitute a suitable basis for initial investment in educational sector improvement in Mozambique. 13. I am satisfied that the propc%ed credit would comply with the Articles of Agreement of the Associaticn and recommend that the Executive Directors approve the proposed credit. gsrber Conable President Attachments Washington, D.C.  -~ 5 - 8ehetule A MOZAMBIQUE EDUGATION AND MANPOWER DEVEIOPMENT PROJECT ESTIMATED COSTS AND FINANCING PLAN (in US$'OOO) Estimated Costs al Foreizn Total 1. Improving Primary Education 2,556.9 5,559.4 8,116.3 2. Strengthening Post-Secondary Educations 377.2 3,239.3 3o616.5 Manpower Training Improvements - Commercial Institute of Maputo 83.3 763.6 846.9 Faculty of Economics 57.8 725.6 , 783.4 Faculty of Engineering 236.1 1,750.1 ' 1,986.3 3. Sector Planning and Managemnt 719.3 2,307.7 3,027.0 Base costs 3,653.4 11,106.4 14,759.8 tzhysicql contingencies 406.5 1,331.3, 1,737.8 Price contingencies 334.9 1,020.8 1,355.7 Total Proiect Cost 4,394.8 13,458.5 17,853.3 FINANCING PLAN: (in US$ '000) Local Foreian Total IDA 2,396.8 13,458.5 15,855.3 Government 1.998.0 0.0 1.998.0 Total 4,394.8 13,458.5 17,853.3  -6- Schedule B Page 1 of 2 MOZAMBIQUE EDUCATION AN1 MANPOWER DEVELOPMENT PROJECT PROCUREME- METHOD AND DISBURSEMENTS (US$ Million) LCB and local Total ICB shopping Other Cost Civil Worhl:. 8.1 a/ 0.7 b/ 0.3 c/ 9.1 (7.3) (0.2) (0.3) (7.8) Furniture - 0.5 - 0.5 (0.2) (0.4) Equipment, Materials, Vehicles 2.4 a/ 0.8 di 0.6 el 3.8 (2.4) (0.6) (0.6) (3.6) Consultants' Services, Fellowships, Study Trips, Training, Audits, and Studies _ _ 3.3 fl 3.3 (3.3) (3.3) Operating Costs and Salaries - - 0.6 ^/ 0.6 (0.2) (0.2) PPF - - 0.6 0.6 (0.6) TOTAL 10.5 2.0 5.4 17.9 (9.7). (1.2) (5.0) (15.9) NOTE: Figures ln parenthesis indicate the mount to be financed by the IDA credit. a/ Contracts in excess of US$60,000 would be awarded through ICB according to IDA Procurement Guidelines. Qualifying domestic manufacturers would receive a preference in bid evaluation of 15% of CIF price, or the import duty, whichever is lower, and domestic contractors will receive a preference of 7.5Z following IDA guidelines. bI Local contracts for finalizing schools which are already under construction with government financing; IDA contribution would be limited to US$200,000. cl Force account for school repairs and maintenance, with a maximum of US$300,000. d/ Items below US$60,000 might be procured by comparing quotations from at least three reliable suppliers, with a US$600,000 maximum. el About US$600,000 worth of school supplies financed by IDA abd procured through ditect contracting with UNICEF, or through limited competitive bidding, in consultation with IDA, for other qualified contractors with capacity to deliver school kits. fl Includes atchitectural fees, and will be procured following IDA guidelines. &I Procurement through regular Government procedures.  'N -~~~~~~~~~~~7- Schedule B Page 2 of 2 DisburseMents (USC Million) IDA X of Expenditure Category of Expenditure Allocation to be tinanced 1. Civil Works 7.0 100% of foreign expenditures 90% of local expenditures 2. Furniture 0.4 100% of foreign expenditures 90S of local expenditures 3. Equlpment, Materials, Vehicles 3.0 100S of foreign expenditures 901 of local expenditures 4. Consuul,nt Services and Studies 1.5 1001 of total expenditures 5. Training 1.5 1001 " 6. Operating Costs for PROFORMA and DECCM office and salary supplements for PROFORMA* 0.2 1001 7. PPF 0.6 . 8. Unallocated 1.7 : Total 15.9 ESTIMATED IDA DISBURSEMENTS: IDA Fiscal Year , 1989 1990 1991 1992 1993 1994 Amount Disbursed 1.6 1.6 3.0 3.5 3.5 - 2,7 Cuamulative Amount 1.6 3.2 6.2 9.7 13.2 15.9 Percentage of Total 10 20 39 61 83 100 .~~~~~~~~~~-  Schedule C MOZAMBIQUE EDUCATION AND MANPOWER DEVELOP1ENT PROJECT Timetable of Key Process4as Events (a) Time taken to prepares 24 months (b) Prepared by: Government with assistance from UNESCO (c) First IDA mission: October 1985 (d) Appraisal mission departures October 12, 1987 (e) Negotiations$ March 7, 1988 (f) Planned date of effectiveness: September 30, 1988 (g) List of relevant PCRs and PPARs: None  -9- Schedgle D Page 1 of 2 THE STATUS OF BANK GROUP O'tRATIONS IN MOZAMBIQUE A. STATEMENT OF BANK LOANS AND IDA CREDITS (As of February 29, 1988) Amount in US$ Million (less cancellation) Loan or Fiscal Credit No. Year Borrower Project Name lank IDA Undisbursed C16100 198J GOM Rehabilitation Prog. 56.00 18.34 C180oG 1987 GOM Energy TA E Rehab. 20.00 17.67 CA0330 1988 COM Rehab. II 18.62 9.95 C18410 1988 COM Rehab. II 70.00 43.71 164.62 89.67 TOTAL 164.62 of which has been repaid 0.57 TOTAL NOW HELD BY IDA 164.05 TOTAL undisburs .4 89.67  - 10 - Schedule D Page 2 of 2 B. STATEMENT OF IFC INVESTMENTS (As of January 31, 1988) Investment Fiscal Types of Number Year Oblisor Business Loan Equity- Total ----(US$ Million)---- 864 1987 Lomaco Food Processing 2.50 2.50 978 1988 XaiXai Petrochemical = 7.75 7.75 Total gross commitments 2.50 7.75 10.25 Less cancellations, terminations, repayment and sales 0.0 0.0 0.0 Total commitments now held by IFC 2.50 7.75 10.25 Total undisbursed 0.0 7.45 7.45  AU. l "t^.Ot4> orl ) 340 360 3L