An Assessment of the Private Education Sector in Senegal

Draft for Discussion An Assessment of the Private Education Sector in Senegal June 1999 Introduction 1. This report analyses the current private sector role in education in Senegal and explores the investment outlook for private education institutions (schools and tertiary institutions) in the country. In particular, it briefly reviews and describes the existing structure of private sector participation in Senegal's education sector along a number of dimensions, including: • the current level of private activity; • the structure of private institutions (size, ownership, management, legal status, etc.); • the areas of focus/specialisation of these institutions to date; • key drivers and expected growth areas for private education; and • key issues and constraints faced by the private sector. 2. The report then outlines a number of suggested policy and other changes that could be introduced to promote growth in the private sector in education. 3. Annex 1 provides information on the regulatory framework for education in table form. Annex 2 provides a detailed case study of one private school in Senegal. This is drawn from the joint CfBT/World Bank publication, Four Case Studies of IFC Investment in West Africa . Annex 3 outlines the private providers and organisations visited by the World Bank/IFC mission in February 1999. Summary 4. There has been significant growth in the private education sector in Senegal since the 1994 liberalisation of school entry requirements. The number of institutions has doubled since 1994. Over 15 percent of all students are in the private sector. Potential growth areas include tertiary sector provision, private student loans, provision of ancillary services in schools, teacher training, private review and quality assurance and construction and maintenance of school buildings. The key challenges are to increase access to education for the poor, girls and those living in rural areas, and to lift the quality of education delivery. The private sector can play a key role. Important changes that could be considered are better targeting of Government expenditure - away from public higher education and toward lower levels of education, taking steps to improve private school management, introducing private external review of private schools, and examining alternative financing mechanisms for providers and students. Background 5. During February 1999, a joint World Bank/IFC group visited Senegal to explore the investment outlook for private sector schools and universities. One of the primary objectives of the visit was to obtain institutional and regulatory information for the first phase of the on- line Education Investment Information Facility being developed by the World Bank Group (World Bank and IFC) and the private sector. The EdInvest website is 1 www.worldbank.org/edinvest. The visit also enlisted partners for a private sector development conference in Africa, expected to be held in late-1999. The visit discussed options for enhanced private sector participation in education. 6. Given the short duration of the visit to Senegal, and the fact that a scientifically rigorous survey could not be conducted, the information herein must be considered preliminary. Nonetheless, it does provide the reader with a flavour for recent trends and growth prospects for the private education sector in Senegal. Basic Facts 7. The Republic of Senegal is a developing country located on the West Coast of Africa. It is bordered by the North Atlantic, Guinea-Bissau, Mali, Guinea, Mauritania and The Gambia. The official language is French, although Wolof is spoken by a large number of Senegalese. The country has a total land area of 196,720 square kilometres. The capital city is Dakar. Senegal has a population of 9 million and a population growth rate of 2.7 percent. The urban population is growing much more quickly than the average. Currently, 42 percent of the population is urbanised. 8. GDP in 1997 was $US4.8 billion, less than half that of Côte d'Ivoire. Services make up nearly 60 percent of GDP, followed by industry (22 percent) and agriculture (18.5 percent). The industrial sector depends heavily on agro-industry and mining. Real growth has fluctuated considerably since independence, due to changes in crop production, the government's economic policy and export market instability. Real GDP growth was slow during the 1991-1994 period. Since then, the economy has picked up, with growth reaching 5.7 percent in 1998. 9. GNP per capita in 1997 measured $US550 - just above the $US500 average for sub- Saharan African countries. Inflation stood at 2 percent in 1998. The currency is the Communauté financière africaine franc (CFAF), pegged to the euro. The exchange rate is approximately CFAF600 per $US. The Regulatory Framework for Education 10. The key elements of the regulatory framework for education are summarised below and are set out in greater detail in the attached Annex 1: • There are four levels of formal education beyond pre-school--primary, middle, secondary and higher education. The primary cycle lasts six years and culminates in the Certificat de Fin d'Etudes Elémentaires (CFEE) examination. This is followed by four years of Middle schooling, which makes students eligible for the Brevet de Fin d'Etudes de l'Enseignement Moyen (BFEM) and a three year secondary cycle, leading to the Baccalaureat examination. Students can go into either technical training or into general secondary after Middle school. • The education system is governed primarily by the Ministère de l’Education Nationale (MEN). Some professional schools come under the auspices of individual departments (e.g., health). There are also two sub-Ministries - the Ministère de l’Enseignement 2  Technique et de la Formation Professionelle and the Ministère de l’Education de Base et de Langues Nationales. • Private sector education issues are the responsibility of the Division de l'Enseignement Privé, part of the MEN. It has a number of roles including managing entry into the education system and providing information to schools. • The private sector is governed by a series of laws and décrets. Loi 91-22, dated 16 February 1991 is the overarching legislation governing education. Article 3 of this law recognises the role of the private sector in education and training. A second law, Loi 94-82, dated 23 December 1994, governs the status of private education institutions. It defines them, sets out the rules governing their establishment and the rules under which diplomas can be granted. This law significantly liberalised the entry of private education institutions into the education sector. • A series of décrets further specify the rules under which private institutions can operate: - Décret 98-562 of 26 June 1998 sets out the requirements for establishing a private education institution and the conditions surrounding their operation. - Décret 98-812 sets out the rules surrounding the creation, organisation and operation of the Conseil Consultatif de l'Enseignement Privé (COCEP). - Décret 98-563 sets out the requirements for teaching staff and administrators in private education institutions at the basic, secondary and professional levels. - Décret 98-564 sets out the conditions under which private education institutions are recognised for funding purposes and the formula for allocating subsidies for teacher salaries and exams. • The Framework Accord of 2 May 1995 was signed by the Minister of Education and the Higher Education "Collectif". The Accord is aimed at stimulating private sector activity in higher education. Members of the " Collectif" are chartered and can use this label when promoting themselves. • Tuition fees at public schools are limited to $US5.80 per year, unless parents agree to pay more. There are no limits on private school fees. Private and state students pay exam fees. • The 1994 law removed the requirement that school operators had to be Senegalese nationals and educators. The 1994 Act also allowed schools to open once they had submitted a request to establish a school. There is no waiting period. • The only potential constraint is that the request to establish a school is subject to the approval of a number of interested parties. These parties can oppose the opening of a school in the interests of "public order, good morals or hygiene." • Schools can be either authorised or recognised. Only the latter are eligible for subsidies. Schools become recognised once they have been open for two years. 3 • State institutions are funded for teaching and operating costs. They also receive free land and buildings. Recognised private schools receive subsidies from a pool totalling $US1,378,333 per year. This amount has remained constant since 1983, despite significant growth in the sector. Subsidies are based on the number of teachers. Schools in outlying regions get a larger per-teacher subsidy. • Teachers must have a diploma to teach - both in public and private schools. Private school teachers are either "vacataires" or permanent staff members. Vacataires are public school teachers who teach under an individual contract at private schools. Vacataires are used more at the secondary level and in private secular schools. • Private sector teachers are employed on individual contracts for the first two years. The contract is between the principal/proprietor and the teacher. The contract becomes indeterminate at the end of two years. After the third year, there is a collective contract with a salary scale. • Compulsory education begins at age 6. • All students are assessed through common national exams. Private institutions can grant their own diplomas or can be delegated responsibility for granting state diplomas. • Private for-profit schools pay income and social security taxes. There are no duty concessions. There are no tax write-offs for student fees. • There is a compulsory, centrally prescribed curriculum. Schools can modify the national curriculum or offer overseas curriculum (e.g., French) with the special permission of the MEN. • Investors who use a substantial amount of local resources are exonerated from the Minimum Personal Income Tax and the Business License Tax. Firms that locate outside Dakar are exempt from the lump-sum payroll tax of 3 percent. The exemption runs for a period of 5-12 years, depending on the location. The investment code provides for exemption from income tax and duties and taxes. These are phased down progressively over the last three years of the exoneration period. To qualify for investment incentives, small and medium-size firms must invest at least $US8,000, employ at least three Senegalese nationals full-time and keep regular accounts in a standard format. Large firms (those with at least $US333,333 in equity capital) are required to create at least 50 full-time positions for Senegalese nationals, to contribute hard currency of at least $US166,667 and to keep regular accounts. The Education Sector in Senegal Education makes up 27 percent of total government expenditure. In 1997/98, the number of students enrolled in Senegal stood at 1,256,000. The Gross Primary Enrolment (GPE) ratio is 69 percent - below the average for countries in sub-Saharan Africa. The GPE for boys is well above that for girls - 76 percent versus 62 percent. The Gross Secondary Enrolment 4 ratio in 1993 stood at 11 percent. The education sector in Senegal suffers from high repetition and dropout rates. The Private Education Sector in Senegal Students 11. In 1997/98, there were over 190,000 private students in Senegal, the vast majority at the school level. This represented 15.2 percent of all students in Senegal. The private sector share of enrolments varies across the different levels. As shown in Table 1 below, the private sector share of enrolments was 67.9 percent at the pre-school level, 12.2 percent at primary level, 27.5 percent at middle school level and 18.7 percent at the general secondary level. Private enrolments are much higher in urban areas - about 25 percent of all enrolments in Dakar were in private schools. Table 1 Private Education Profile: Students 1997/98 Level Number of Distribution by Students in Students Education Level Private Schools (%) (%) Pre-school 13,504 7.0 67.9 Primary 125,105 65.0 12.2 Middle 42,793 22.2 27.5 Secondary General 10,182 5.3 18.7 Secondary Technical 1,022 0.5 22.1 Total 192,606 100.0 15.3 Source: L'Etat de l'enseignement privé au Sénégal, Ministère de l'Education Nationale, Division Enseignement Privé, Government of Senegal, January 1999. 12. Table 1 also shows that 65 percent of students in private institutions were at primary level, while 22.2 percent were at Middle school level and 5.8 percent were at the secondary level. Smaller proportions were at the secondary level. 13. There has been significant growth in the number of private students in Senegal in recent years. This growth has occurred at the primary, secondary and tertiary levels. The number of pre-schoolers attending private schools actually fell from 1987/88 to 1997/98. As shown in Table 2 below, the number of private students in primary schools grew by more than 120 percent between 1987/88 and 1997/98. Middle and secondary school students rose by lesser, but still significant amounts. Growth has accelerated in recent years due to the liberalisation of entry criteria in 1994. 5  Table 2 Growth in Numbers of Students in Private Schools Level Number of Students in Increase: Private Schools 1987/88 - 1997/98 1987/88 1997/98 (%) Pre-school 14,502 13,504 (6.9) Primary 56,038 125,105 123.3 Middle 32,421 42,793 32.0 Secondary 5,932 10,182 71.6 Total 108,893 191,584 75.9 Source: L'Etat de l'enseignement privé au Sénégal, Ministère de l'Education Nationale, Division Enseignement Privé, Government of Senegal, January 1999. Institutions 14. Different data sources yield different estimates of the number of private institutions in Senegal. In 1997/98, it is estimated that Senegal had anywhere from 800 to 970 private institutions. These private institutions operated at all education levels, except university level. There are no private academic universities. Table 3 below provides a breakdown of the number of private institutions by level of education. Table 3 Private Education Profile: Institutions 1997/98 Level Number of Distribution by Private Market Share Institutions Level of Education (%) (%) Pre-school 193 22.9 71.5 Primary Schools 379 45.1 9.8 Middle Schools 212 25.2 55.9 General Secondary 53 6.3 60.2 Technical Secondary 4 0.5 40.0 Total 841 100.0 18.2 Source: L'Etat de l'enseignement privé au Sénégal, Ministère de l'Education Nationale, Division Enseignement Privé, Government of Senegal, January 1999. 15. Private schools make up just over 18 percent of all schools in Senegal. They dominate the pre-school, middle school and general secondary levels. Public schools are much more prevalent than private schools at the primary level. Most private schools are at the primary level. 16. Catholic schools were the pioneers in education in Senegal, with the Catholic Church being handed control of public schools as early as the 1820s. L' Abbé Boilat established the first secondary college in Senegal in 1843. However, unlike most other West African 6 countries, religious (in this case Catholic) institutions do not dominate the modern-day private education market (Table 4). Indeed, secular private schools make up over three-quarters of all private schools. The dominance of secular schools is particularly strong at the middle and secondary school levels. Table 4 Distribution of Private Students by Catholic versus Secular 1997/98 Level Religious Secular Total N % N % N % Pre-school 95 36.5 165 63.5 260 100 Primary 98 23.4 320 76.6 418 100 Middle 25 10.6 210 89.4 235 100 Secondary 8 14.0 49 86.0 57 100 Total 226 23.3 744 76.7 970 100 Source: L'Etat de l'enseignement privé au Sénégal, Ministère de l'Education Nationale, Division Enseignement Privé, Government of Senegal, January 1999. 17. Private schools are concentrated in urban areas, reflecting the higher ability to pay of urban dwellers. For example, in 1995/96 over around 40 percent of private elementary students were in Dakar, even though Dakar represents less than 20 percent of the population of Senegal. Around 60 percent of Catholic schools are in the main centres of Dakar and Thies. Schools in rural areas have been closing because parents in those regions cannot afford a private education. 18. There is considerable excess demand for places at private schools in Dakar. School rolls are reported to be full some six months before the school year begins in October. Fees 19. Private schools are free to set their fees at whatever level the market will bear. Fees vary according to a number of factors, including whether the school is religious or secular, the level of education, where the school is located and the quality of the education provided. In Dakar, primary school fees range from $US5 to $US25 per month. In the smaller urban areas, primary school fees are around $US6 per month. Fees in rural areas are much lower - usually less than $2.50 per month. Fees at the tertiary level are higher. 20. Monthly tuition fees at Catholic secondary schools in Dakar range from $US25 to $US42. Catholic elementary schools have tuition fees in the range of $US13 to $US25 per month. Tuition fees outside Dakar are lower - in the range of $US6.60 to $US13 per month. 21. The following examples provide a taste of the range of fees at both public and private institutions: • Bamba Makhane Diop II: Public primary school located in a poor neighbourhood of Dakar. Charges fees of $US2.50 per year plus $US.80 per year for internet use; 7 • College Martin Luther King: Public secondary school in Dakar. Charges fees of $US2.50 per year plus $US1.67 per year for use of computers; • Lycée Blaise Diagne: Public secondary school in Dakar. Fees of $US5.80 per year; • Institution Ste Jeanne d'Arc: A private technical tertiary provider in Dakar. Its annual fees are in the $US1,000 to $US1,250 for students studying towards a two year BTS diploma; • Groupe Scolaire Fanaicha: Private comprehensive school in Dakar (see Annex 2). Tuition fees range from $US17 to $US42 per month and annual initiation fees range from $US25 to $US50 for domestic students; • Université Dakar-Bourguiba: Private university in Dakar (see Box 2). Annual student fees (including tuition and other fees) range from $US433 to $US567 per year, depending on the year level; and • Ecole Supérieure de Commerce: Private university in Dakar (see Box 3). Fees range from $US1,458 per year for a two year diploma programme to $US3,750 per year for a two year MBA programme. 22. Fees, particularly at private secular schools, would take out all or a large proportion of the annual income of most Senegalese - estimates are that some 38 percent of Senegalese fall below the poverty line of $US167. In the absence of income targeted assistance to students, this can render private education unaffordable. Box 1 Scholarships from the Communauté Urbaine de Dakar: A Case of Demand Side Financing The Communauté Urbaine de Dakar (CUD) is an agglomeration of five municipalities in Dakar. The CUD offers scholarships to students studying in both the public and private education sectors. Annual funding for the scholarships is around $US667,000 - $US750,000. Half of the money is spent on those studying outside Senegal, with the other half spent on those studying in Senegal. Allocation decisions are made by a local government committee, on the recommendation of officials. Scholarship funding can be renewed. This requires a review. The educational institution is consulted in the decision to renew or not. Currently, the CUD does not track the outcomes for those who have received scholarships (e.g., employment rates, etc). The CUD recognises that this is a gap and will be addressing it. They also want to set up an alumni association to help finance scholarships. They may also examine fundraising from people who have received a scholarship and who have become successful wage earners. Each Tuesday and Thursday, the Scholarship Director meets with 20 or so students (who line up outside his door) to discuss scholarship related issues and to give them a bit of a pep talk on the importance of education. 8 Provider Representatives 23. There are three national bodies in Senegal representing private secular, Catholic and higher education institutions. These are: • L'Union Nationale des Ecoles Privées Laiques du Sénégal (UNEPLAS), which represents secular schools; • The Secrétariat Nationale de l’Enseignement Privé Catholique , which represents Catholic schools; and • The Collectif des Etablissements d’Enseignements Supérieurs , which is a grouping of private higher education providers. The Returns to Education in Senegal • Private returns to investments in education in Senegal have been estimated at 34 percent for primary and 21 percent for secondary education (1985 figures). Social returns are estimated lower for both levels of education —23 percent for primary and 9 percent for secondary. Both private and social returns are lower for secondary than for primary education in Senegal (see Table 5). Table 5 Returns to Investments in Education 1985 Education Level Social Private (%) (%) Primary 23.0 33.7 Secondary 8.9 21.3 Source: Alain Mingat and J-P Jarousse (1985). “L’Analyse des Couts et du Financement de l’Education au Senegal.” IREDU, July 1985. Outlook General View 24. Any view on the outlook for private education in Senegal has to be qualified given the uncertainty around education policy settings and the possibility of external shocks. A good example of the importance of the latter is the devaluation of the CFAF in 1994. This has led to strong growth in domestic private education because many Senegalese could no longer send their children to France to study. 25. There has been considerable growth in the private education sector in recent years. The size of the private education sector has grown considerably since the late 1980s. Growth has been particularly strong since the mid-1990s - the number of private education institutions is estimated to have doubled since 1994 alone. This growth has brought the private sector to the point where it now represents about 15 percent of all students in 9 Senegal. At the pre-school level, the private sector is dominant - with over two-thirds of all students. The private sector share of students at both the middle school and secondary technical levels is over one-quarter and one-fifth, respectively. 26. Given the above, the prospects for continued growth in the private education sector and the potential for private investment in education would appear to be very good in Senegal. Key Drivers of Private Sector Expansion 27. A number of policy, social, demographic and economic factors have driven recent growth in the private sector in education. These are likely to continue in the near-term. The key ones are discussed below. Government Policy 28. One of the key drivers of growth in the private education sector in Senegal has been the favourable regulatory framework. Loi 91-22 of 16 February 1991 has provided a foundation for the expansion of the private sector in education through its explicit recognition of the sector's role in the Senegal education system. Three particular policies have created an environment conducive to private sector growth: • the opening up of entry for new education providers through the introduction of Loi 94- 82 in December 1994. This law allowed non-Senegalese nationals and non-educators to establish private schools; • the absence of government controls on private school tuition fees. This encourages private investment in education from both domestic and foreign investors as it provides them with greater certainty of returns to investment; and • the payment of subsidies to recognised private schools, which allows them to compete with public schools and to make education more affordable for those attending private schools. 29. The 1994 change to entry requirements took place in the context of a major improvement in the implementation of economic reforms across a range of policy areas. These reforms have contributed to reduced inflation, higher economic growth and reduced fiscal and balance of payments deficits in the period since 1994. 30. There are a number of social, demographic and economic factors that should also encourage further growth in the private sector. These are outlined below. Social 31. The people of Senegal, like those in other West African countries, are gaining a greater appreciation for the benefits of private education. This is being driven in part by: • parents and students becoming more sophisticated consumers who demand more out of the education system. This is true of poor and rich parents alike; and 10 • general concerns about the quality of public education. Specifically, parents are concerned about deterioration in the quality of teaching in public schools, the large class sizes and the lack of monitoring of student attendance and progress. Economic/Demographic 32. Economic and demographic factors are also contributing to growth in the overall education market. In particular: • high population growth rates - in the order of 2.7 percent - are leading to a rapid increase in the school age population in Senegal. High repetition rates among students exacerbate this problem; • the continuing low value of the CFAF following the 1994 devaluation continues to make overseas schooling unaffordable for many Senegalese; and • the continuing need for Government fiscal constraints means that resourcing cannot keep up to demand for education in the public sector. Possible Areas for Expansion 33. As noted above, there is likely to be a general expansion in the private sector in education. Nonetheless, a number of specific areas may have greater potential: • tertiary sector provision. Tertiary education provision is likely to be a key area of growth in Senegal. There are already a number of top-flight private tertiary education providers in Senegal - including l'Ecole Supérieure de Commerce de Dakar and l'Université Dakar-Bourguiba. The May 1996 World Bank Higher Education project foresees an expansion in private higher education that will build on existing provision. Two of the models being tested under the "Study of Alternative Models for Teaching and Financing" are greater cost-recovery and the emergence of private universities. As a result of this work, the Government will introduce a number of measures aimed at increasing the share of enrolments at private universities from 5 percent to at least 15 percent. This will also be helped by moves to introduce cost-recovery into public universities; • private student loans. The setting up of a student loan scheme with private sector involvement would help overcome the capital market failure that accompanies investments in human capital. Such a scheme could be particularly attractive for those undertaking tertiary study. Private schemes exist in a number of countries. A key question is whether the current institutional and tax infrastructure is sufficient to sustain a loan scheme; • provision of ancillary services to institutions such as canteens, health and social services in schools. Schools such as Groupe Scolaire Fanaicha use the delivery of such services as key marketing tools. There has already been a considerable amount of privatisation and increased cost-recovery in ancillary services at the higher education level. This has led to significantly reduced costs of delivering such services and 11  increased cost-recovery from students. This success should lead to further efforts in this area; • teacher training. There is a need for a lower cost method of training teachers in order to build a more permanent teaching corps in the private education sector. This opens up considerable opportunities to develop a private training market in that area. This should be aided by moves to cost-recovery in the public education system as it would mean greater competitive neutrality for private teacher training providers; • private provision of review and quality assurance services in education. One of the key areas that the private sector will grapple with is the need to ensure quality. This is especially true given the rapid growth in the sector. Currently, the Division de l'Enseignement Privé (a division of the MEN) and the Inspection Générale de l'Education Nationale, are responsible for private sector issues and quality improvement generally. However, it is clear that they are insufficiently resourced to monitor quality at an increasing number of schools. The development of a private review and quality assurance market could be a significant area of growth; and • construction and maintenance of school buildings. The need to build classrooms to accommodate growth should mean an expansion in private sector activity. There are also possibilities for private companies to build schools and lease them back to educational entrepreneurs and/or the State. Possible Constraints 34. There are a number of factors that could constrain the expansion of the private sector in education in Senegal. Three of the key ones are: • the shortage of skilled and qualified teachers. Private schools use a high proportion of vacataires in the delivery of education services, especially at the secondary level. For example, Fanaicha Comprehensive School has 20 vacataires out of a total teaching staff of 34. The World Bank Country Assistance Strategy (CAS) of April 1998 underlines the need for Senegal to develop a lower cost, more permanent private sector teaching corps. In the view of the CAS, if this is not done "it will not be possible to substantially increase access to primary education" (CAS, p. 7); • access to capital. As with other West African countries, the lack of access to capital remains a constraint to expansion. This is of special significance in Senegal because of the dominance of secular institutions, which do not have Church resources available to fund expansion. Even top-end institutions such as Sup de Co have difficulty accessing capital (see Box 3); and • poor and expensive infrastructure such as electricity, telephones and internet facilities. One tertiary institution indicated that electricity blackouts were common and that internet line charges were very expensive. They had also been waiting for two years to have a second phone line installed. 35. Once concern in other West African countries is that the degree of expansion may be held back by the dominance of the not-for-profit sector. The investment decisions of not-for- 12 profits may not be driven, to the same extent as secular institutions, by economic factors such as rates of return on investment. This should be less of a concern in Senegal, given the dominance of the secular private sector. Box 2 Institution Profile: Université Dakar-Bourguiba Dakar, Senegal Université Dakar-Bourguiba (UDB) is a private, not-for-profit university located in Dakar. It was established in 1995 by Mr Sakhir Thiam, a highly respected Senegalese educator. UDB offers low-cost information technology, management and economics courses. The institution's courses have a practical focus. Teachers at UDB are a mix of academics and practitioners. There are currently 700 students at UDB. There is more demand than there are places at UDB. According to Mr Thiam, students want to attend his private university for a number of reasons including its superior teachers and programmes, better use of students' time and better research. There are also no strikes in the private sector. Fourth year students also benefit from lengthy job placements with teaching practitioners. UDB is currently using interactive teaching techniques, with one teacher delivering a lecture to five classes, with each class being headed by a teaching assistant who can answer questions. Student fees (including tuition and other fees) range from $US433 to $US567 per year, depending on the level. This is made up of a $US25 registration fee, $US8 medical fees and monthly tuition fees of $US50 - $US67. Some students get scholarships from the Communauté Urbaine de Dakar (see Box 1). UDB's key competitor is l'Ecole Supérieur Polytechnique (ESP), a state subsidised institution. Because ESP is state subsidised, it charges much lower fees than UDB - only $US8 per annum. Students at ESP also get very large scholarships ($US60 per month). UDB has had its university programmes reviewed externally by Canadian universities. Mr Thiam is looking for money to finance work on developing an interactive higher education network across West Africa. He would also like to expand the university to accommodate some of the excess demand for places. Strengthening the Private Sector: Possible Policy Responses 36. As noted above, the regulatory environment in Senegal is very favourable towards the private education sector. Although the public sector still dominates the provision of education, there has been significant growth in the private sector since the late-1980s, and especially since the mid-1990s. Nonetheless, a number of changes could be introduced to improve the regulatory environment. Collectively, these changes, discussed below, would be designed to do five things: a improve the targeting of Government spending on education; b introduce innovative financing mechanisms to widen access to investment capital for education sector providers and students; c establish a strong and effective regulatory framework for monitoring performance and raising standards in the private education sector; d promote expansion of the teacher training market; e promote the private education sector, both domestically and externally; and f building private sector capability in the MEN. 13 37. In introducing any changes, it will be important to ensure that they do not create any unnecessary or unjustified barriers to growth in the private education sector in Senegal. a Improve the Targeting of Government Spending on Education 38. One of the most critical challenges facing Senegal is the need to broaden access to girls, the poor and those living in rural areas. Although enrolments for girls have risen in recent years (to 52.9 percent in 1996/97 at the primary level), enrolments remain low - both in absolute terms and relative to boys. Enrolment rates in rural areas are also significantly lower than the overall rate for Senegal. This is particularly true for girls outside the main cities. In 1995/96, primary enrolment rates in the Diourbel, Kaolack and Louga regions were 27.1 percent, 38.2 percent and 40.1 percent. For girls, the equivalent figures were much lower--22.3 percent, 31.9 percent and 32.5 percent. 39. A key reason for these low enrolment rates is that low-income parents cannot afford to send their children to school. These costs come in the form of school fees, as well as ancillary costs such as meals and tutoring. Access to private education would be even more restricted given the private sector's need to charge tuition fees at primary level and higher fees, relative to the state schools, at secondary level. These cost barriers can also result in significant differences in the quality of education that poor and rich parents can access. 40. An essential ingredient to overcoming access barriers for the poor is to ensure that spending is targeted to those who really need it - the poor. Education spending in Senegal is currently very poorly targeted. A recent research report, Le Financement de l'Education au Sénégal, shows that the higher education sector is much more highly subsidised than the primary and secondary sectors. In 1996 alone, spending per student in higher education was: • 27 times higher than per-student spending in primary school; • almost 14 times higher than per-student spending at the middle school level. 41. Higher education spending consumes over 28 percent of the education budget, yet provides access to higher education to only 2.6 percent of the relevant age group. 42. The public higher education system is characterised by an extensive and highly subsidised social welfare system. The extent of these subsidies is outlined in the World Bank's Republic of Senegal Higher Education Project Staff Appraisal Report , of May 1996. Key points from that report include: • most students pay registration fees of only $US8 per year; • until recently, medical services were free for all higher education students; • during the 1993/94 academic year, 12,200 students were subsidised with room and board and full scholarships of $US125 per month (double the country's GDP/capita for an 8 month academic year) or partial scholarships of $US60 per month; • the number of scholarships has since been significantly reduced, but the scholarship amounts have been increased slightly; 14 • students with overseas scholarships receive a special supplement of $US280 per month, on top of the value of the host country scholarship; and • the Government spends CFAF2.8 billion per year on overseas scholarships. Of this, 40 percent is spent on undergraduate programmes that are available locally. Students also receive subsidised meals and accommodation. 43. As an illustration of the subsidies available to higher education, students at Ecole Supérieure Polytechnique pay fees of only CFAF5,000 per year, and also get a scholarship of CFAF36,000 per month. 44. As noted above, a key to increasing access for the poor is to get Government policy working towards that goal. This requires a reorientation of spending toward the poor. This is particularly true if access by the poor is to be broadened to private education as well. In order to generate savings to direct toward expanded access for the poor, the Government could increase targeting in two ways: • redistributing spending from the tertiary education sector to lower levels of education; and • redistributing spending on schools and services from rich to poor within the lower levels of education. Redistributing spending from higher to lower levels of education 45. The first way of generating funds to increase support for the poor would be to target spending at the lower levels of education, by increasing cost recovery at the higher education level. This would free up money that could be shifted to lower levels of education. This measure can be justified on both efficiency and equity grounds. These significant levels of expenditure on higher education have yielded little in terms of return to Senegal - the system is characterised by poor internal and external efficiency, there is significant grade repetition and there is little link between programmes and the needs of the economy. The opportunity costs are also high given the significant challenges that exist at lower levels of education - including low overall enrolment ratios, low quality of public education and significant disparities in access between girls and boys, the rich and the poor and those in urban versus rural areas. 46. Increased cost recovery at the higher education level would ensure that students were taking into account the real costs of their education. It would also mean they would face a more neutral decision between pursuing "traditional" university studies or professional and technical training, as offered by a number of private providers. 47. The Government has recognised the need to address the issues and has taken some steps toward this - with reductions in the number of scholarships, new rules regarding grade repetition, privatisation of ancillary services and moves to increase staff teaching time. These have been met with considerable opposition from vested interests - staff and students. This has forced some back down on reforms. 15 Redistributing spending from rich to poor within the schools sector 48. A second way of generating funds to increase support for the poor would be to target school sector spending toward children from poor families. Currently, funding is based, to a significant degree, on whether the Government owns the school or not. There are subsidies available to recognised schools, but the total pool of funding has been frozen at existing levels since 1983 (despite a doubling in private schools since 1994 alone). These subsidies mean that private schools must charge significantly more than public schools - public schools charge fees equal to few dollars per year while Groupe Scolaire Fanaicha must charge monthly fees in the range of $US17-$US42, on top of annual initiation fees. This restricts the ability of private schools to serve children from poor backgrounds. As a result, there will continue to be gaps in provision, especially in rural areas, thus frustrating the Government's access goals. 49. Alternative targeting criteria could be examined. These criteria could be based around the characteristics of students - for example, the socio-economic status of a child's family or their region of residence (as a proxy for socio-economic status). This would provide a much greater incentive for private schools to spring up to serve children who are poor and/or who live in remote areas. Such a move would also make education spending by Government more equitable - because it would base funding levels on the student's socio-economic status. 50. A move to a demand-side financing system targeted on the basis of characteristics other than who owns the school is important to the long-term sustainability and growth of the private sector in education. This could move funding from those who are better off to those who are poorer. In our view, this is a key to opening up access to private schools to those with fewer financial resources, while recognising the financial constraints that the Government of Senegal is facing. It is essential that private schooling not be the preserve of the rich if it is to be an effective partner with the state. b Introduce Innovative Financing Mechanisms For providers... 51. On their own, sensitising the banking sector and promoting the private education sector (including through EdInvest) can help investors become aware of investment opportunities in the education sector in Senegal. The continuing expansion of the private for-profit education market in Senegal suggests that the returns to investment in this area must be relatively high. 52. Nonetheless, there still appear to be problems with access to capital for education entrepreneurs. The Government of Senegal and the World Bank Group could examine the appropriateness of establishing a wider range of financing alternatives for schools. This could include the creation of mutual funds, credit unions and making greater use of lines of credit and loan guarantees. The Government and the World Bank could work in concert with private education sector representative organisations, as well as groups such as the Groupe de Réflexion sur la Compétitivité et la Croissance (GRCC), the Fondation du Secteur Privé and the Conseil National du Patronat. 16 For students... 53. The Government could also consider introducing a student loan scheme for students at the secondary and higher education levels. This could accompany any moves to target government spending and to introduce greater cost-recovery in secondary and higher education. The objective of the student loans scheme would be to overcome capital market imperfections that mean that students cannot borrow against their investment in human capital. The scheme could provide assistance in the form of a repayable loan to cover tuition fees and possibly living costs while studying. Assistance could be time limited to ensure that students did not have incentives to unduly prolong their studies. 54. The Government could also consider introducing some form of loan scheme (perhaps combined within the student loan scheme) to new graduates in technical and vocational areas. One of the concerns expressed by a number of providers in Senegal was that enrolments in much needed technical training areas were being held back because new graduates in these areas were unable to finance the purchase of expensive equipment and hence could not use their newly acquired skills. The IFC could consider the feasibility of financing loan schemes of this type. c Improved Monitoring of Performance and Raising Standards 55. The Government of Senegal could consider introducing private quality assurance, review and monitoring as a way of ensuring quality provision. There was a general view expressed in Senegal that the recent significant expansion of the private sector needed to be accompanied by measures to ensure that quality remains high in the private sector. Given the current rate of expansion, it is not clear that current school review and monitoring processes are sufficiently resourced or robust. One provider was of the view that existing mechanisms needed to be tightened. 56. As Governments move toward using funding instruments (rather than ownership) as means of achieving educational objectives, it is important that regulatory instruments be strengthened as a check on quality. Any system developed would supplement other factors that currently act to ensure quality - including school reputations and "brands", competitive forces and the availability of national testing information all act to do so. All of these are currently operating in Senegal. Officials from the MEN were quite direct in saying that they did not have to close schools that were not performing, parents did - by voting with their feet. 57. The importance of competition and branding was evident in Senegal. Institutions such as Groupe Scolaire Fanaicha , Sup de Co, l'Institution Ste Jeanne d'Arc and Université Dakar- Bourguiba and others are successfully trading on their reputations - both within and outside Senegal. For example, Groupe Scolaire Fanaicha is positioning itself to become a centre of excellence within the West African region. Equally, Sup de Co sees itself competing with business schools overseas. 58. Private sector quality assurance is already happening in Senegal. In particular, one of the key roles of umbrella groups such as the Secrétariat Nationale de l’Enseignement Privé Catholique and the Higher Education " Collectif" is to ensure maintenance of quality standards among their members. 17 59. Quality assurance functions can be provided by the private sector, with the Government continuing to play a role in terms of guaranteeing that quality is promoted in the education sector. There was interest in Senegal in exploring new ways of assuring quality in private education, including the recognition of private quality assurance bodies to monitor the education sector. This would allow brands to continue to develop that parents and students could use when they make enrolment decisions. 60. The United Kingdom (UK) provides an example of private provision in quality assurance. In the UK, all school inspections are carried out by teams of OFSTED accredited independent inspectors led by a Registered Inspector (RgI). The teams vary in size, from a minimum of three, up to about eight. Each team, in addition to the RgI, will always have one lay member, who should have no paid experience of teaching or managing a school. Only people with appropriate experience who have successfully completed OFSTED's training and assessment can participate in inspection. The allocation of schools to inspection teams is done by competitive tender, with OFSTED awarding contracts on the basis of a value-for- money assessment. OFSTED are also responsible for monitoring the performance of contractors and of individual inspectors, to ensure that quality and consistency is sustained. 61. Moves to improve quality can offer a way of saving money - if they increase the efficiency of the system by reducing repetition and dropout. Wastage is high in Senegal. Repetition rates vary from 11.4 to 31.4 percent, depending on the school level. The high repetition rates at the university level are described as being of crisis proportions. This adds to the cost of educating children and reduces the aggregate number of places available in institutions. d Promote Expansion of Private Teacher Training Market 62. As noted above, a key potential constraint on the expansion of the private sector is the availability of trained teachers. One reform that could be considered would be to encourage private providers to deliver teacher training to ensure an adequate supply of trained teachers. All of the current provision of teacher training appears to be carried out by l'Ecole Supérieure Polytechnique. This would appear to be a fruitful area for private investment given the returns available to graduates. 63. This could be accompanied by increased cost-recovery at public training institutions. Students at l'Ecole Supérieure Polytechnique pay very low fees (around $US8 per annum) and also get a scholarship of $US60 per month (only about half of which is taken up by boarding costs). Not surprisingly, there is considerable excess demand for places at the institution (which does not only provide teacher training). e Promotion of the Private Education Sector 64. There is scope for greater promotion of the private education sector in Senegal - both domestically and externally. One purpose of such promotion could be to sensitise banks to the nature of investment risks and opportunities in Senegal. Many providers, even those who are well-established, expressed the view that access to capital was difficult. Banks expressed some reluctance to invest in education because they perceive education as a "social" rather than "productive" sector. A second purpose could be to promote investment opportunities in the private education sector in Senegal - to both domestic and external 18  investors. The World Bank/IFC sponsored EdInvest website could play an important part in any private sector promotion by linking potential investors with those seeking investment capital. f Building Private Sector Capability in the MEN 65. The capability and resourcing of the Division de l'Enseignement Privé in the MEN could be strengthened to allow it to play a greater policy coordination role within the MEN and to strengthen its "macro" monitoring, data collection and information brokerage role to private sector. It is important that the role of the division be limited and tightly specified in order to avoid any tendency to re-regulate. However, within its confined role, the division needs to be adequately resourced relative to other parts of the MEN. A brief visit to the division suggested it was underresourced - with only one borrowed computer and no photocopier available. Box 3 Institution Profile: Ecole Supérieure de Commerce de Dakar (Sup de Co) Dakar, Senegal Ecole Supérieure de Commerce de Dakar (Sup de Co) is a high-end private university located in Dakar, Senegal. Three schools come under the Sup de Co banner - Sup de Co, Sup de Co Entreprises and the MBA/Finance school. Sup de Co was created in 1993 and received its Government accreditation in May 1995. The institution's focus is very much on professional training and development, rather than a standard French style university education. Sup de Co offers a diploma programme in management, finance, accounting and marketing. diploma programme. It also offers short courses tailored to the needs of specific firms and an MBA programme. The latter is delivered in conjunction with two Canadian universities - the Université du Québec à Montréal and the Université du Québec à Abitibi-Témiscamingue. Sup de Co is not a research university. The diploma is recognised by both the Government and the Chamber of Commerce. All its courses include a significant on-job placement component. Sup de Co's objective is to compete with the top European and American business schools. Sup de Co serves both domestic and foreign students. Currently, there are students from 15 different countries at the institution. Sup de Co is a for-profit limited liability company. They have partners in France (Ecole Supérieure de Marseilles) and sponsors in Dakar (the French, UK and US Embassies). Their only competition in Senegal would be the Institut Supérieur de Management. According to Sup de Co, there is considerable room for growth in the professional education market. In their view, the private sector in Senegal does not yet place enough emphasis on training, yet middle management is weak in many Senegalese firms. The staff at Sup de Co are highly qualified, with 70 percent being practitioners from industry and 30 percent coming from the university. Fees at the institution reflect its high end focus and are considerably higher than most other institutions: • Sup de Co diploma programme: $US1,458 per year for a two year course; • Sup de Co Entreprises programmes: $US833; • Finance: $US1,667 per year for two years; • MBA: $US3,750 per year for two years. A key issue for the management team at Sup de Co is the need to ensure that students have access to capital to finance their investment. They supported the introduction of a student loan scheme. They believe banks see education as too risky an investment and will not provide finance to students. This despite the significant starting salaries that their graduates pull in - $US500 per year (which compares to the minimum wage of $US75). Some of their students do receive scholarships from the Communauté Urbaine de Dakar. Access to capital is also an issue for the institution. They have had to grow by reinvesting their profits into the business. Further growth will require investment capital. They want to expand and are searching for investors. 19 Options for Consideration 66. It is recommended that the following changes be considered in respect of the education policy environment in Senegal: Increased Targeting of Spending a review the funding system with the objective of retargeting expenditure from the higher education sector to the primary and secondary sectors. Initiatives could include: i increase cost recovery for students attending public higher education institutions; ii reduce the amount of scholarship funding provided to students at public higher education institutions, through both reductions in the number of scholarships and the per-student amount of scholarships; b review the school funding system with the objective of introducing demand-side financing mechanisms that link subsidies to student-based targeting criteria (e.g., socio-economic status, ability to pay) and/or region-based targeting criteria (as a proxy for socio-economic status); c consider using the Groupe de Réflexion sur la Compétitivité et la Croissance (GRCC) to oversee and manage the consultation and reform process in the education sector; Innovative Financing Mechanisms d examine the appropriateness of establishing a wider range of financing alternatives for schools, including the creation of mutual funds, credit unions and making greater use of lines of credit and loan guarantees. e examine the desirability and feasibility of introducing a student loans scheme to provide assistance to students undertaking post-secondary professional and technical studies and to students at public higher education institutions once cost-recovery is introduced; f examine the desirability and feasibility of the IFC playing a role in setting up such a student loan scheme; Improved Monitoring and Raising Standards g examine options that would allow the private sector to carry out school reviews and other quality assurance functions; h develop a broader, more sophisticated set of performance indicators that could be used to provide information to parents and to schools on school performance; i capacity build the education sector through for example greater use of organisations such as the Fondation du Secteur Privé and the Conseil National du Patronat, to help lift the quality of management in the private education sector; 20 j examine options that would allow private entrepreneurs to manage public schools on the Government's behalf; Promote Private Teacher Training Market k encourage private education providers to introduce teacher training programmes; l note that the introduction of cost-recovery in public higher education and demand side- financing mechanisms would make it more likely that private providers would enter the teacher training market; Promotion of Private Education m undertake, through private education representative organisations, and other private sector partners such as the Groupe de Réflexion sur la Compétitivité et la Croissance (GRCC), the Fondation du Secteur Privé and the Conseil National du Patronat, an active domestic and external promotion campaign of investment opportunities in private education in Senegal, including use of the EdInvest website n provide more and more accessible information on government regulation of the education sector and investment opportunities; o undertake, through private education representative organisations, and other private sector partners such as the Groupe de Réflexion sur la Compétitivité et la Croissance (GRCC), the Fondation du Secteur Privé and the Conseil National du Patronat, a campaign to sensitise the banking industry to the realities of the education market in Senegal; Strengthening the Private Education Division of the MEN p strengthen the capability and resourcing of the Division de l'Enseignement Privé in the MEN to allow it to play a greater policy coordination role within the MEN and to strengthen its "macro" monitoring, data collection and information brokerage role to private sector; q note that it is important that the role of the division be limited tightly specified as one of policy coordination and "macro" monitoring. Conclusion 67. There has been significant growth in the private education sector in Senegal since the 1994 liberalisation of school entry requirements. The number of institutions has doubled since 1994. Potential growth areas include tertiary sector provision, private student loans, provision of ancillary services in schools, teacher training, private review and quality assurance and construction and maintenance of school buildings. The key challenges are to increase access to education for the poor, girls and those living in rural areas and to lift the quality of education delivery. The private sector can play a big role in both of these. Key changes that could be considered are better targeting of Government expenditure - away 21 from public higher education toward lower levels of education, taking steps to improve private school management, introducing private external review of private education institutions and examining alternative financing mechanisms for providers and students. 22  Annex 1 The Regulatory Framework for Education in Senegal Area Key Points Description of • Four levels of formal education -primary, middle, secondary and higher education. Generally Education Sector six years of primary, four years of middle and three years of general secondary or technical training, followed by higher education. • Predominantly publicly funded and provided. • Education = 27 percent of total government spending. • 1.256 million students enrolled in 1997/98. • Gross Primary Enrolment ratio = 69 percent. Gross Secondary Enrolment ratio = 11 percent. Description of • 191,584 private school students in 1997/98 (15.2 percent of all students) Private Sector in • Private share ranges from 9.8 percent in primary schools to 24.9 percent in Middle schools. Education • 25 percent of students in private schools in Dakar. • 837+ private institutions in 1997/98. 220+ institutions are recognised (can receive subsidies). Regulatory Authority • Education system is governed primarily by the Ministère de l’Education Nationale. Some professional schools come under the auspices of individual departments (e.g., health). There are also two sub-Ministries - the Ministère de l’Enseignement Technique et de la Formation Professionelle and the Ministère de l’Education de Base et de Langues Nationales. • Private sector education issues are the responsibility of the Division de l'Enseignement Privé. It has a number of roles including managing entry into the system and providing information to schools. Governing The private sector is governed by a series of laws and a series of décrets: Legislation • Loi 91-22, dated 16 February 1991 is the overarching legislation governing education. Article 3 of this law recognises the role of the private sector in education and training. • Loi 94-82, dated 23 December 1994 governs the status of private education institutions. It defines them, sets out the rules governing their establishment and the granting of diplomas. This law significantly liberalised the entry of private providers into the education sector. • Décret 98-562 (26 June 1998) sets out the requirements for establishing a private institution and the conditions under which they operate. • Décret 98-812 sets out the rules surrounding the organisation and operation of the Conseil Consultatif de l'Enseignement Privé (COCEP). • Décret 98-563 sets out the requirements for teaching staff and administrators in private education institutions at the basic, secondary and professional levels. • Décret 98-564 sets out the conditions under which private education institutions are recognised for funding purposes and the formula for allocating subsidies for teacher salaries and exams. • The Framework Accord of 2 May 1995 signed between the Minister of Education and the Higher Education "Collectif". The Accord is aimed at stimulating private sector activity in higher education. "Collectif" members are chartered and can use this label for promotion. 23  Annex 1 The Regulatory Framework for Education in Senegal (Cont'd) Area Key Points Private Provider Three organisations represent institutions: Associations • L'Union Nationale des Ecoles Privées Laiques du Senegal (UNEPLAS) represents secular schools. • The Secrétariat Nationale de l’Enseignement Privé Catholique represents Catholic schools. • The Collectif des Etablissements d’Enseignements Supérieurs is a grouping of private higher education providers. Compulsory • Compulsory education from age 6. Schooling Types of schools • Three types of schools - state, private Catholic and private secular. Informal schools also exist. Entry and Exit of • The entry of schools was significantly liberalised with the passage of Loi 94-82 in 1994. Providers School entry is also governed by Décret 98-562. The 1994 law removed the requirement that school operators had to be Senegalese nationals and Educationalists. • The 1994 Act also allowed schools to open once they had submitted a request to establish a school. There is no waiting period. • The only potential constraint is that the request to establish a school is subject to the approval of a number of interested parties. These parties can oppose the opening of a school in the interests of "public order, good morals or hygiene". • Two kinds of schools - authorised and recognised. Recognised schools are eligible for subsidies. Authorised schools are not eligible for subsidies. Schools must be open two years before being recognised. Registration Registration process is as follows: Process for Providers • Individual applies, to the Minister with authority over that area of education, to establish a school. • School gets provisional registration and is inspected after 2-3 months. • If favourable report, then school is authorised to operate. If not a favourable report, then school must be provided with recommendations on what needs to be done to get authorisation. • There are lots of exchanges between different agencies during the authorisation process. Fees State • State schools can charge tuition fees of up to $US5.80. Can go beyond that level if parents agree. Students must pay exam fees. Private • No Government imposed limits on fees. Students must pay exam fees. Curriculum • Compulsory centrally prescribed curriculum. Schools can modify national curriculum or offer overseas curriculum (e.g., French) with the special permission of the MEN. Assessment/evaluat • All students assessed through common national exams - the Certificat de Fin d'Etudes ion Elémentaires (CFEE) examination, the Brevet de Fin d'Etudes de l'Enseignement Moyen (BFEM) and the Baccalaureat. • Public and private students write the same exams. • Private institutions can grant their own diplomas or can be delegated responsibility for granting state diplomas. 24  Annex 1 The Regulatory Framework for Education in Senegal (Cont'd) Area Key Points School Year/Hours of • N/A Operation Resourcing Direct Subsidies State • State institutions are funded for teaching and operating costs. They also receive free land and buildings. . Private • Recognised private schools are subsidised. Authorised schools are not. Subsidies to recognised schools total $US1,378,333 per year. This amount has remained constant since 1983, despite significant growth in the sector. • Subsidies are based on the number of teachers. Schools in outlying regions get a larger per- teacher subsidy. • N/A Teachers • Private schools do not receive free land or buildings. Land/Buildings • N/A Teacher Training Some students receive scholarships to attend university, either domestically or in a foreign country. Scholarships Taxation/Duties Tax/duty exemptions • Private for-profit schools pay income taxes and social security taxes. No duty concessions. for providers • No tax write-offs for student fees. Tax write-offs for tuition fees for parents Zoning • N/A Industrial Relations • Private schools either employ their own permanent teaching staff or use "vacataires". The latter are public school teachers who teach part-time in private schools. • Primary and religious schools use fewer vacataires than do secondary and secular schools. State schools have permanent teaching staff. • Teachers must have a diploma. • Private sector teachers are employed on individual contracts for the first two years. Contract is between principal/proprietor and the teacher. The contract becomes indeterminate at the end of two years. After the third year, there is a collective contract with a salary scale. This scale is not always followed by schools. 25  Annex 1 The Regulatory Framework for Education in Senegal (Cont'd) Area Key Points Broader Investment Environment • Investors who use a substantial amount of local resources as inputs are exonerated from the Minimum Personal Income Tax and the Business License Tax. • Firms that locate outside Dakar are exempt from the lump-sum payroll tax of 3 percent. The exemption runs for a period of 5-12 years, depending on the location. • The investment code provides for exemption from income tax and duties and taxes. These are phased down progressively over the last three years of the exoneration period. • To qualify for investment incentives, small and medium-size firms must invest at least $US8,000, employ at least three Senegalese nationals full- time and keep regular accounts in a standard format. Large firms (those with at least $US333,333 in equity capital) are required to create at least 50 full-time positions for Senegalese nationals, to contribute hard currency of at least $US166,667 and to keep regular accounts. • The Ministry of Finance has established a one-stop window to assist potential investors. 26  Annex 2: Case Study Groupe Scolaire Fanaicha Dakar, Senegal Brief Background on the Education Sector Education for primary school children is compulsory. Schooling is provided by state educational institutions, private religious or lay schools. Increasing pressure is mounting on the private sector to expand since the percentage of enrolled children increases dramatically and the public sector continues to be racked by problems such as the chronic lack of resources, teacher and student dissatisfaction and poor results. Currently 50 percent of the private schools are found in the primary level and 30 percent at the secondary level. The government appreciates that the social rate of return of the investment in basic educational programs is substantial and the central policy is to develop the leverage of the private sector to alleviate the current situation; however, the recent economic situation with the increasing fiscal deficit and a sharp drop in foreign reserves, have led to the severe worsening of the balance of payments, an accumulation of both domestic and external debts, and a decreasing tax base. Fanaicha Comprehensive Schools Fanaicha is situated in the growing suburban community of Dakar-Medina. It is currently in the midst of considerable development as the original one storey building (opened in 1994) ascends with the addition of: (i) three further floors for classrooms and laboratories, (ii) an extensive cafeteria that hosts staff and students alike; (iii) a new crèche for children as young as three-months of age; and; (iv) separate boarding facilities for boys and girls. Clearly driving this expansion is the Sponsor and Principal, Mme. Coumba Toure. Her vision – to create a centre of excellence within the region – is very evident in her speech and her actions. The walls are festooned with messages while the classrooms themselves are beginning to be covered in murals. The floors start with the primary intake, then the middle school on the second floor and, on the third floor, the upper secondary school classrooms and the laboratories. The Working Environment A significant feature of the education sector in Senegal is the role of the ‘vacataires’ – teachers who work part-time in the public service and the remainder in the private sector. There are over 920 schools in the private sector of which the Ministry of Education has chartered some 200. Fanaicha received its charter in 1997. At present it has fourteen permanent staff and twenty ‘vacataires’. Given the recent drop in enrolment from 500 to 250 (Primary –150 and Secondary 100 students) during the period of construction, the staff flexibility provided by the vacataire arrangement must have been crucial. When requests to compare the public and private teaching environments the teachers had the following comments: the classes were smaller (in some suburban classes there could be 80 to a 100 students per class), school was not disrupted by strike action by the teachers or 27 students, there was firm and effective central leadership and there were more teaching resources. Mme. Toure emphasised the need for collaboration with the public sector. She and her Principal, Mr. Diof, are ex-inspectors with many colleagues still in the service. Public inspectors visit the school without warning (there are five full-time personnel in the Ministry’s private education department); copies of minutes of her staff meetings go to this department and her staff are obligated to attend pedagogical workshops held at the Ministry. Her school was one of the 25% approved by the Ministry and it received its grant of land from the government in perpetuity in 1997. The staff stressed how they provided an ‘extended family’ relationship for the students – there were specific rules and regulations, parents received monthly reports and record books that offered continuous assessment, and two Parent Teacher Association meetings were held annually. There were some fifteen boarders in residence comprising both overseas students (Gabon, Mauritania and Mali) as well as Senegalese students. It was felt that additional furniture and equipment (such as a television/video and recreation area) would offer these students more opportunities than were currently available. Although there are no computers besides those used by the administration, Fanaicha aims to offer computer science. Arabic from the kindergarten level and English from Grade 5 – all optional additions to the official curriculum. In addition, the school operates the spacious cafeteria and two school buses as a means of obtaining further income. The IFC’s role The IFC’s role in supporting Mme. Toure was most evident. The Dakar office had assisted in providing greater focus to the proposed developments at inception and greater financial rigor to the original project costing. The IFC’s proposed guarantee amounts to 54% of the project costs of $463,204. Investments in buildings represent almost 70% of this total project cost, which encompasses the upgrading of the existing facilities, cafeteria and library. Mme. Toure has personally invested over $415,000 in support of the project, a strong indication of her commitment to the vision of a regional centre of excellence. Conclusion Fanaicha is a well managed operation energised by the professional vision and financial support of its founder and General Manager, Mme. Toure. The development of the extensive new additions to the original premises within four years of opening maintains the momentum. In addition, the school provides Dakar with a superior quality education institution offering an integrated national curriculum program for students three months old to nineteen years of age. Two challenges appear in the short term: (i) the ongoing need to access funding that will enable the purchase of supplies (e.g. computer hard and software, laboratory materials and better classroom furniture); and (ii) a rapid return of the student catchment that left during the period of construction so that the student population can double back in Year One to the previous total of 500. Demand indicates that this latter challenge should be overcome with considerable ease. 28  Annex 3 Private Institutions and Organisations Visited Senegal January 30 – February 7, 1999 Schools/Colleges/Higher Education Institutions Collège Martin Luther King Ecole Liberté 6A Ecole Supérieure de Commerce de Dakar (Sup de Co) Enseignement Laïc Groupe Scolaire Fanaicha Institut Supérieur de Management Institution Ste Jeanne d’Arc Lycée Blaise DIAGNE Lycée Technique Industriel Lycée Thierno Saidou N. Tall Université Cheikh Anta Diop, ESP Département de la technologie Université Dakar-Bourguiba NGOs Aide & Action Other Agence d’exécution des travaux d’intérêt public contre le sous emploi (AGETIP) BICIS CESAG Collectif des Etablissements d’Enseignements Supérieurs Conseil National du Patronat Fondation Secteur Privé Groupe de Réflexion sur la Compétitivité et la Croissance Office Nationale de la Formation Professionnelle Secrétariat Nationale de l’Enseignement Privé Catholique West African Enterprise Network 29