Mozambique - Second Education Project

Document of The World Bank FOR OmCIAL IJSE ONLY c~4 2ZZOO - MO?. Repxt No. P-5341-MOZ MENORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIDNAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT OF SDR 38.7 MILLION (US$53.7 MILLION EQUIVALENT) TO THE PEOPLE'S REPUBLIC OF MOZAMBIQUE FOR A SECOND EDUCATION PROJECT NOVEMBER 15, 1990 This document has a resticted dbtion and may be used by recient only in tbe.performanceof ther offhid dufieas Its contents may not otherwise be dissed without WorM ak authoriztion.  CURRENCY EQUIVALENTS Currency Unit - Metical (pl. Meticais) At appraisal US$1.00 = 890 Meticais (February 1990) MtlOOO = US$1.12 At Negotiations US$1.00 - 930 Meticais (October 1990) MtlOOO = US$1.08 MEASURES 1 Meter (m) - 3.28 Feet 1 Square Meter (m. sq.) = 10.76 Square Feet ABBRViATIONS AND ACRONYMS AFDB - African Development Bank EEC - European Economic Community ERP - Economic Rehabilitation Program FINNIDA - Finnish International Development Agency GDP - Gross Domestic Product GEPE - Education Projects Management Unit ICB - International Competitive Bidding IDA - International Development Association LCB - Local Competitive Bidding MINED - Ministry of Education MINFIN - Ministry of Finance NGO - Non-Governmental Organization NORAD - Norwegian Agency for Development Cooperation SETEP - State Secretariat for Technical and Vocational Training SIDA - Swedish International Development Agency UNDP - United Nations Development Programme UNICEF - United Nations Children's Fund GOVERNMENT FISCAL YEAR SCHOOL YEAR UNIVERSITY YEAR January 1 - December 31 February 1 - December 31 August 1 - June 30  FOR OmCMIL USE ONLY PEOPLE'S REPUBLIC OF MOZAMBIQUE SECOND EDUCATION CREDIT CREDIT AND PROJECT SUMHARY Borrower: The People's Republic of Mozambique Beneficiary: Ministry of Education and the University Eduardo Mondlane Amount: SDR 38.7 million (US$ 53.7 million) Termst Standard, with 40 years maturity Financing Plan: a/ Government US$ 9.4 million IDA US$53.7 million UNDP US$ 4.8 million TOTAL US$67.9 million Economic Rate of Return: Not applicable Staff Appraisal Report: Report No. 8676-MOZ Map: IBRD Nos. 22385 and 22466 Note: a/ Includes taxes and duties of US$4.9 million. This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED SECOND EDUCATION CREDIT TO THE PEOPLE'S REPUBLIC OF MOZAMBIQUE 1. The following memorandum and recommendation on a proposed development credit to the People's Republic of Mozambique for SDR 38.7 million (US$53.7 million equivalent) is submitted for approval. The credit would be on standard IDA terms with 40 years maturity. It would help finance a second education project. The project would be financed on a parallel basis by UNDP for approximately US$4.8 million. 2. Background. Confronted with severe economic problems in 1987, caused by security problems, debilitating external shocks, and inappropriate economic policies, the Government of Mozambique began to pursue an extensive adjustment program. In its current phase (1990-1992) the Economic and Social Rehabilitation Program, as it is now called, places strong emphasis on poverty reduction and social sector development, with particular attention to improving education. 3. The principal issues confronting the education sector at this time concern the need to improve quality and efficiency, especially in primary education, within the confines of very limited resources. The current education system is extremely deficient, due in part to large inadequacies in the availability and quality of instructional materials, teachers, and school facilities. The war has led to the destruction of over half of all primary schools, and most of the remaining facilities are badly dilapidated. Only about 50 percent of primary school age children are enrolled, compared to 73 percent for sub-Saharan Africa. Dropout and repetition rates are high: for each primary school graduate, the system expends 28.6 student-years worth o_ resources -- 4.7 times as much as if every student went through without setback. Similar losses are also pervasive at higher levels. At the university level, quality is poor and costs have skyrocketed as a result of low enrollments and high boarding and staff costs. The low number of graduaten is insufficient to respond to the country's manpower needs. Management and planning in the sector are weak and there is insufficient coordination of national and donor resources in education to ensure that the limited resources are directed toward the highest priority needs of the sector. 4. Recognizing the extent and urgency of the challenges it faces, the Government has prepared a comprehensive sectoral plan, which was developed with assistance from IDA in the context of (i) the implementation of the first IDA education project (Education and Manpower Development Project, Credit 1907-MOZ, effective October 1988), (ii) the preparation of this proposed second project, and (iii) the analysis done for the recent Public Expenditure Review and Country Economic Memorandum. As part of this process, Government presented the plan to a donor coordination meeting for a ten-year education strategy and a development plan covering the first three years of that period. This meeting led to consensus on the direction of the education sector and the development of this project. Priority will be given to improving quality and efficiency, through the strengthening of inputs (textbooks, teacher training, curricula, etc.). The resulting reduction in wastage will free up more school  -2- places for additional students. Expansion through investment in new schools will be minimal initially, then increase in the second half of the ten year period. Other priorities include strengthening post-secondary education and skill development at all levels, to contribute to relieving the country's extreme shortages of skilled manpower and specialists in key professions. A crucial part of this effort will be to revitalize the university, particularly in the teaching of economics, engineering and the basic scie.ces. S. Many donors have been supporting the education sector, including: the World Food Program (food for boarding schools); NORAD (provision of textbooks); SIDA (curriculum evaluation, textbook adaptation and free distribution, educational research and improvements in the Ministry of Education's (MINED) management); AFDB (rehabilitation of teacher training centers); UNICEF (teacher training, community outreach and special programs for war traumatized children); FINNIDA (rehabilitation of the secondary school in Nacala); and UNDP (education planning). NGOs work with the educational needs of the 500,000 children among the displaced population. At the University, numerous donors assist with staffing and scholarships. The EEC is financing construction and equipment for remedial science teaching during the first semester. The Netherlands contributes to this program as well with technical assistance and is continuing its assistance to the science faculties. The Rockefeller and Gulbenkian Foundations are both assisting the University with studies useful for strategic management development. The donor coordination meeting recognized the need for donors to work more closely in education and follow-up meetings are taking place. 6. Proiect Objectives. The main objective is to facilitate the implementation of the ten year sector development plan, focusing especially on: (i) improving quality and efficiency in primary education through strengthening critical and strategic inputs to effective learning; (ii) upgrading the effectiveness of the university for national capacity-building in essential skill specialties, by improving teaching of the basic sciences, engineering and economics and by promoting better long-range strategic planning at the university; and (iii) strengthening the management of the education sector. 7. Proiect Description. In line with these objectives, the project will support improvements in: (i) primary education through financing of pre- service and in-service teacher training; pedagogical support and distance education; rehabilitation and limited expansion of schools in Maputo Province and City, Dondo, Beira and Nacala; and pilot-testing of five quality- improvement initiatives (i.e., local language instruction, flooding classrooms with reading materials, student achievement testing, extramural programs and student health interventions); (ii) university education through the strengthening the faculties of economics, engineering and the basic sciences, and through further refining the university's ten-year development program; and (iii) management in the education sector through improvements in planning and financial management, training of ministry personnel, and establishment of maintenance systems.  - 3 - 8. A breakdown of costs and the financing plan are shown in Schedule A. Amounts and methods of procurement and the allocation of the proposed IDA credit by disbursement category and the disbursement schedule are shown in Schedule B. A timetable of key project processing events and the status of Bank Group operations in Mozambique are given in Schedules C and D, respectively. Maps No. 22385 and 22466 are attached. The Staff Appraisal Report No. 8676-MOZ, dated November 15, 1990 is also attached. 9. Rationale for IDA Involvement. The ten-year strategy for education that the Government has developed with IDA assistance, and the major steps that must now be taken to implement the strategy, are crucial elements of the Government's overall Economic and Social Recovery Program. Success will require resolution of numerous complex issues for which Mozambique has limited experience and capacity, and thus requires assistance. Other external assistance agencies are unable to meet this need entirely, and both they and the Government are looking to IDA to play a significant role in supporting the restructuring and reconstruction of the sector. 10. Agreed Actions. The Government has agreed to implement the long-term development plan outlined in its Letter of Education Development Policy and the attached Action Matrix. Specifically, in line with its ten year development plan, the Government has agreed to do the following: as a condition of Credit Effectiveness: select and employ the agreed key staff members at GEPE (Education Projects Management Unit) with qualifications satisfactory to IDA; as Conditions of disbursement: (a) for the schools to be constructed and rehabilitated, present a legally binding agreement with SIDA on the financing of a textbook policy and program; present a detailed implementation plan to IDA for the five primary education initiatives and carry out the site resettlement plan satisfactorily; and, (b) for the rental of radio studios in the distance education pilot project, present evidence that it has entered into a satisfactory contract providing rental at cost (for educational purposes) rather than at commercial rates. During negotiations, the Government also agreed to the following dated covenants: by July 31, 1991, complete and furnish to IDA a plan for the implementation of a longer school year to be implemented in 1992; by December 31, 1992, complete and furnish to IDA a subsector plan for higher education; by December 31, 1993, complete and furnish to IDA a subsector plan for vocationalltechnical education; annually, by October 31, conduct an implementation review jointly with IDA; include in its budget from 1993 on, the amounts needed to maintain its new university structures, and from 1996 on, the amounts needed to maintain its new or rehabilitated primary schools; and annually, by March 31, provide evidence to IDA that it has complied with the agreed budget allocations to the sector and taken steps to ensure that the recurrent salary bill in the Ministry of Education and the University is not increased due to this project. 11. Benefits and Risks. The project will contribute significantly to furthering the goals of the Government's Economic and Social Rehabilitation Program in regard to educational development. Specifically, the project will improve the management of the education sector, make more classrooms available for primary education, enhance the teaching of science, engineering and economics at the university, and improve efficiency in education at all levels. At the primary level, children in four cities would benefit from  - 4 - additional classrooms. In Maputo, the project will provide a tbird of all classrooms needed by 1993, and in Beira, Dondo and Nacala, the project would provide between 60 and 70Z of all classrooms required by 1993. The main risks are three. First, the continuing civil unrest might disrupt project execution or damage project assets. To minimize this risk, the project will focus on the secure areas, which include most urban and semi-urban centers and some rural districts. Second, the limited capacity of the implementing institutions might delay implementation. To mitigate this possibility, the project includes measures to strengthen implementation capacity. Third, the substantial coordination required among the many Government and donor agencies involved may be hard to sustain during the six-year project lifetime. To address this issue, a thorough consultation process has been undertaken during project preparation, involving a series of workshops and seminars and a donor conference, and plans have been made to continue this process during project implementation with annual project seminars. 12. Recommendation. 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. Barber B. Conable President Attachments Washington, D.C. November 15, 1990  Schedule A .MOZA~MBIQU'E SECOND EDUCATION PROJECT ESTIYATED COSTS AND FINANCING PLAN a/ 11.001 C1WIy 0111 en0 USS '4D # teo S Local0 POMea. 1014. LOcal #o"is" Ttalt., iuaus C"ot ..................... ........ . ................... ..... .......... ........ ......................... .. A, llt1A* tWTION ttt ITT TM ,-; , ; ---- Tt t........ _................ u SCIUe 1"A 01144 1 * 34 241 1 t14 < 3 4 U 1 31 tmmtm S 10t*M * S. 0?* 3 2 073 3 44 913* 201011 S_T h * 471 3 1.311 * 4 320 0 III 4 1-43 I 1.4 4 14 4 OISTinb _KvItuI 100 O1. 1* 1 1.1?" 4 "334 1.3117 t 1 01 4*1 4 ... .__. _.__..... __... .. ___... .............. ........ ...................._._....... ....... Se-Votal t aa T t3t8 a.01 0 2.01.0 4.34- *.43 1 3.084 1 4.1302 O1 0O 3. TIAIlS Wtfil. uaaaiM tlu"btcu 345.4 311 , 9i 0 340 3341 4 0.17 is S _56 aCUEWls WAL1TeM at I tS4. 12.3 at * a* 114 *3 0 am U* i. 33 1 30.4 2331 2 3" 44 * m I gxla"L*& bgvil*1 40 a 4 03 60 tOoD3 I 0 ............... ................... ___ -- -------.. ---- _ _ ---__----................... 115*6M lU* 1 34Tat ,70 * *0 03 1 1741 t 3 * O44 7 11 13$T 0 St*-Toltal ZU1AIV20 010.4 l.314.4 3344 1.043 1 1.312-S is 3 3. SCO 4$ TMtT&Tltft e tA 4 4.411i l0.I. 20 :0.44O 7.1 1 t0.431 2 "2 3. .42. 1 13 40 , _______ ___ ~~~~~.. ........ .................. _ ...__.___. _.. S%0-Total palh" 1SaCAlIOM 444&ITY 113 1 t 7 .120 4 14.601.? 3.04.0 I 11 111.112 .3 o s. t* S. WvgslT OVAL twlWmI7 -. t_s^ .*. ...... *n * *s ...... 2 ----------- I. 143103 ain41411 OCVIIPUSI 11.4 2331 0 260. 10.3 310.4 360.5 03 3. 60*10 rlam"?1 1.1. I" .113 a 12 * l.1l 4 1.21 4 3 i. _tUtt FACITA 413.4 9 "4 3 .04, I . 13 4 4. 041I*6 lACOIJI 2.2n.S 410. 0 4.366.3 2.444 4.444 .466- S4 .s Sti-Total S=0gRSITV OMLITY 1 t _Wt101 3.2.4 4.4.3 CZ.44 7 3.442 044. 3. 10.3974 ST 22 C. n3444a a u 1 TSI6411 -.. tW_60 *tMhItis _ 7 VIPJISIA. uiU6inUT 12 37 2 .310.6 1.40 4 141 1 '.41 1 1.064 St 3 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~- ; ; - .. . . . . - - -- - -- - -- - - ....... _ __ S2. 100*60 C? 3 0 SiU*A. S.tm t 34 0 . 1.0 S 14 *.11 0 2.0 4 *. 4 3.slt lam. T6t6 see t C11) 11 34.1 0 30 1.040 2 3.44 S114 I s is * C7IlStt W4.5 407 *40. 24.00 4 43.44 4431 4f 24.4164 40.112 01 10 Oigonl ContIu40laee 1.914 0 .300 en06 2.030I .04 0 5.06411 3 60 3I ...._. ..___.....__._ ..... ... ...___..... __ ......... ___ __ .... ... ................. .... ..._ totes P'J1C1 COSTS 21.101 0M.30.261 443.143 4 31.4 S 426.?0114 6.917 7 s 41 ;...... ........-- .. - -- ........ ..... ...-- . . --... ....... a/ Includes US$4.9 million in taxes and duties. FINANCING PLAN (USS million) IDA VNDP GOVERNMENT TOTAL Foreign 34.3 3.3 0.4 a/ 38.0 Local 19.4 1.6 4.0 25.0 Taxes - . 4.9 4.9 TOTAL 53.7 4.8 9.4 67.9 a/ These foreizn exchange costs reflect expenditures which the government will incur for maintenance. Note: Figures do not add up due to rounding  -6- Schedule B Page I of 2 MOZAMBIQUE SECOND EDUCATION PROJECT PROCUREMENT AND DISBURSEMENT ARRANGEMENTS PROCUREMENT ARRANGEMENTS a/ bI (US$ million) (US$ Million) Procurement Method Total Project Element ICB LCB Other c/ Cost Civil Works Total 19.99 8.09 1.18 29.25 (IDA) (18.99) (6.47) (0.70) (26.16) Furniture Total 5.50 0.62 0.0 6.12 (IDA) (5.17) (0.43) (0.0) (5.60) Equipment, supplies Total 6.24 0.22 2.16 8.62 vehicles, materials (IDA) (6.24) (0.21) (2.10) (8.55> Consultant services,Total 0.0 0.0 11.83 11.83 fellowships, (IDA) (0.0) (0.0) (6.25) (6.25) training, studies, seminars, study tours Incremental Total 0.0 0.0 8.33 d/ 8.33 operating & (IDA) (0-0) (0.0) (7.14)d/ (7.14) maintenance rent & per diem Incremental Total 0.0 0.0 3.76 d/ 3.76 salaries (IDA) (0.0) (0.0) (0.0) (0.0) TOTAL 31.73 8.93 27.26 67.92 (30.40) (7.11) (16.19) (53.7) a/ Includes US$4.9 million in local taxes and duties. b/ Figures in parentheses are the respective amounts financed by the IDA credit. ci Includes force account for school rehabilitation by school maintenance units; local shopping for furniture items produced by artesanal manufacturers; local shopping for small equipment and supplies; international shopping for library books for university and secondary schools; local and international shopping for school reconstrv-ion materials for scattered rural districts. d/ Not applicable for procurement.  Schedule B Page 2 of 2 ALLOCATION AND DISBURSEMENT OF IDA CREDIT (US$ million) IDA Percentage of Expenditure Disbursement Category Allocation to be Financed Is Civil Works 17.0 ) lOO1 of foreign expenditures ) 502 of local expenditures 2s Furniture, Vehicles, Equipment, Supplies, Materials 10.8 1002 of total expenditures 3s Technical Assistance, Studies, Fellowships, Training Courses, Seminars, Study Tours, Audits 4.8 1002 of total expenditures 4s Incremental Operating Expenses (a) vehicles and equipment operation 3.0 1001 of total expenditures (b) building operation and maintenance 1.5 1002 of total expenditures a] S Rent for Radio Studios 0.9 1002 of total expenditures 6: Unallocated 15.7 TOTAL 53.7 a/ To a maximwm of 300 classrooms in 1991; 800 in 1992; 1300 in 1993; 1800 in 1994 and 1995. ESTIMATED DISBURSEMENTS (US$ million) IDA Fiscal Year 91 92 93 94 95 96 97 Annual 3.2 4.3 8.6 10.7 10.8 8.0 8.1 Cumulative 3.2 7.5 16.1 26.8 37.6 45.6 53.7  Schedule C MOZAMBIQUE SECOND EDUCATION PROJECT Timetable of Key Project Processing Events (a) Time taken to prepare: 14 months (b) Prepared by: Government with iDA assistance (c) First IDA Mission: December 1988 (d) Appraisal mission departure: February 17, 1990 (e) Negotiations: October 1990 (f) Planned Date of Effectiveness: May 1991 (g) List of relevant PCRs and PPARs: None  -9- Schedule D Page 1 of 2 THE STATUS OF BANK GROUP OPERATIONS IN MOZAHBIQUE A. STATEMENT OF LOANS AND CRZDITS As of September 30, 1990 Amount in US$ million (less cancellantion) Loan or Credit Fiscal No. Year Borrower Purpose Bank IDA Undisbursed 0 Credit(s) closed C16100-MOZ 1985 MOZAMBIQUE Rehab Program 45.00 .48 C18060-MOZ 1987 MOZAMBIQUE Energy TA & Rehab 20.00 16.94 CA0330-MOZ(S) 1988 MOZAMBIQUE Rehab II 18.60 3.44 C18410-MOZ(S) 1988 MOZAMBIQUE Rehab II 70.00 .17 C19070-MOZ 1988 MOZAMBIQUE Educ I 15.90 13.76 C19490-MOZ 1989 MOZAMBIQUE Urban Rehab 60.00 49.60 C19890-MOZ 1989 MOZAMBIQUE Health & Nutrition 27.00 26.20 C20210-MOZ(S) 1989 MOZAMBIQUE Rehab III 90.00 53.54 C20330-MOZ 1989 MOZAMBIQUE Esehold Egy Credit 22.00 20.40 C20650-MOZ 1990 MOZAMBIQUE Trns Reh (Beira Corr) 40.00 38.97 C20660-MOZ 1990 MOZAMBIQUE Econ & Fin Mgmt 21.00 21.45 C20810-MOZ 1990 MOZAMBIQUE Industrial Enterpris 50.10 52.82 C20820-MOZ 1990 MOZAMBIQUE Small & Medium-Sea 32.00 32.21 C21750-MOZ 1991 MOZAMBIQUE A.::i Rehab & Dev 15.40 16.56 TOTAL number Credits - 14 527.00 346.63 TOTAL *** of which repaid 527.00 TOTAL held by Bank & IDA 527.00 TOTAL undisbursed Notes: (S) Indicates SA/SECAL Loans and Credits *** Total Approved, Repayments, and Outstanding balance represent both active and inactive Loans and Credits.  - 10 - Schedule D Page 2 of 2 MOZAMBIQUE SECOND EDUCATION PROJECT Statent of IfC Invoetment. as of Soptmbr a0, 1990 Original Comitm1nt Principal Canc llatione Inv*etments Including Repyments Writ, off* Syndicate Held by the Country Exchange and Exchange Sa le Corporation Obi0lstor AdluetenXt Rodemptions Adjustmentn Pending (Shedule 8) Mozam6iqu, Lamco 2,500.0 0.0 700.0 0.0 1,80.O Xai XcI 7,300.0 0.0 2,600.0 0.0 5,200.0 Tote I Mozamblque 10,800.0 0.0 8,800.0 0.0 7,000.0  SD 22385 TANZANIA ZAMBIA INDIAN 4:4 MALAW1I) > \ KNS 4 q \ / ~~~~~~~~~~~~~~~~NAMPUl r TETE s G > R xu ~~~~~~~ZAEZZ MANICA( X t 5 X eg ~~~~~~~~~~ ~ ~~MOZAMBIQU1E w- SECOND EDUCATION 3 R .Y ~~~~PROJECT ZIMBABWrWE SOF U POPULATIN <8 < ~~~~SPEANG POGUESE Numbo of Porugues. } t \ ~~~~~~~~~~~~~~~Speakr. by Cliv: / 5 a O '~~~~~~~~~~ 1,000 10,000 2P / >@ less than 1,OOD2r \ \ {> e~~~~~~~~~~~~~~~ Provinrc Capitals ( GAZA 0 _2_s Notional Capital 9 1 Inham>) ~~~~~~~~~~~~~Provnce Boundarie SOUTH V \t5 X -I~~~~~~~~~~~~~~~nterrKdool Boundaries SOUTH~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~U AFRICA R Z~ 1 USim. . . JUNE 1990  P 1ThEgGfO 'A1RE OUNU >S S J \ 34 33 - TANZANIA ANGOLA - &=W . ,.W '- L' CF_ -)O~D/ C P N A 0 -P> X @ : ; :;27 0Mt ' E A DA PR \ I v v f WN I AS S A X//X/zZW ANCUABE e ZAMBIA 9 MALAW . VS F Vi AA AFNOSM SX4 ,. ! S M A U A AE P E y S FS $f/b!.EMBA I~~~~~~~~~~~~~~~~0 E [A SCA CUAB T 3`2- M ARRUPA A D- Z;A M B O G I L CITMOP I AL MALAWIA )ARA VIA U A EM1W ~GORA~9P SGORNOS4l\ 6 -14' Z~~~~~~~~~~~~~~~~~ IA M A L E <s^ AM P VE4,\< M ~ /