Document of The World Bank Report No: 22962-MOZ PROJECT APPRAISAL DOCUMENT ON A PROPOSED CREDIT IN THE AMOUNT OF SDR 47.1 MILLION (US$ 60 MILLION EQUIVALENT) TO THE REPUBLIC OF MOZAMBIQUE FOR A HIGHER EDUCATION PROJECT February 4, 2002 Human Development 1 Country Department 2 Africa Regional Office CURRENCY EQUIVALENTS (Exclhange Rate Effective) Currency Unit = Meticais SDR 1.0 = US$1.27114 (October 2001) US$1.0 = M22,824 (October2001) FISCAL YEAR January 1 -- December 31 ABBREVIAriONS AND ACRONYMS BP Bank Procedures (World Bank) CAS Country Assistance Strategy CBP Capacity Building Project (in support of UEM; closed Sept. 2001) CFAA Country Financial Accountability Assessment CFPP Primary Teacher Training Institute (before 1998) COESCT Higher Education, Science and Technology Advisory Council EIA Environmental Impact Assessment ENM Nautical School of Mozambique ESSP Education Sector Strategic Program FDI Foreign Direct Investment FMS Financial Management System GP Good Practices (World Bank) GDP/GNP Gross Domestic Product/Gross National Product GIU University Installation Unit GoM Government of Mozambique HEl Higher Education Institution HEP Higher Education Project HIPC Heavily Indebted Poor Countries ICT Information, Communication and Technology IDA International Development Association (World Bank Group) IFC International Fir.ance Corporation (World Bank Group) IMAP Primary Teacher Training Institute (after 1998) ISCTEM Higher Institute of Science and Technology ISUTC Institute for Transport and Communication ISPU Higher Polytechnic and University Institute ISRI Higher Institute for International Relations MESCT Ministry of Higher Education, Science and Technology MINED Ministerio da Educacao (Ministry of Education) MDLN Mozambique Distance Learning Network MPF Ministry of Planning and Finance OD Operational Directives (World Bank) OP Operational Policies (World Bank) OPN Operational Policy Note (World Bank) PCU Project Coordination Unit PEES Plano Estrategico do Ensino Superior (Higher Education Strategic Plan) PMR Project Management Report PIM Project Implementation Manual RAP Resettlement Action Plan QIF Quality Enhancement and Innovation Facility UMB Mussa Bin Bik University UCM The Catholic University of Mozambique UEM Universidade Eduardo Mondlane (Eduardo Mondlane University) UP Universidade PedagogicalPedagogical University Vice President: Callisto Madavo Country Manager/Director: Darius Mans Sector Manager/Director: Dzingai Mutumbuka Task Team Leader/Task Manager: Soren Nelletnann MOZAMBIQUE HIGHER EDUCATION PROJECT CONTENTS A. Project Development Objective Page 1. Project development objective 2 2. Key performance indicators 2 B. Strategic Context l. Sector-related Country Assistance Strategy (CAS) goal supported by the project 2 2. Main sector issues and Government strategy 3 3. Sector issues to be addressed by the project and strategic choices 8 C. Project Description Summary 1. Project components 10 2. Key policy and institutional reforms supported by the project 13 3. Benefits and target population 14 4. Institutional and implementation arrangements 15 D. Project Rationale 1. Project altematives considered and reasons for rejection 17 2. Major related projects financed by the Bank and other development agencies 18 3. Lessons leamed and reflected in the project design 18 4. Indications of borrower commitment and ownership 19 5. Value added of Bank support in this project 19 E. Summary Project Analysis 1. Economic 20 2. Financial 20 3. Technical 21 4. Institutional 21 5. Environmental 22 6. Social 23 7. Safeguard Policies 24 F. Sustainability and Risks 1. Sustainability 25 2. Critical risks 25 3. Possible controversial aspects 26 G. Main Credit Conditions 1. Effectiveness Condition 27 2. Other 27 H. Readiness for Implementation 28 I. Compliance with Bank Policies 28 Annexes Annex 1: Project Design Summary 30 Annex 2: Detailed Project Description 34 Annex 3: Estimated Project Costs 43 Annex 4: Cost Benefit Analysis Summary, or Cost-Effectiveness Analysis Summary 44 Annex 5: Financial Summary for Revenue-Earning Project Entities, or Financial Summary 54 Annex 6: Procurement and Disbursement Arrangements 59 Annex 7: Project Processing Schedule 70 Annex 8: Documents in the Project File 72 Annex 9: Statement of Loans and Credits 74 Annex 10: Country at a Glance 76 Annex 11: Guideline and Eligibility Criteria for the Quality Enhancement and Innovation Facility 78 Annex 12: Description of Higher Education Institutions 83 MAP(S) IBRD No. 29996 MOZAMBIQUE Higher Education Project Project Appraisal Document Africa Regional Office AFTH1 Date: February 4, 2002 Team Leader: Soren Nellemann Country Manager/Director: Darius Mans Sector Manager/Director: Dzingai Mutumbuka Project ID: P069824 Sector(s): ET - Tertiary Education Lending Instrument: Sector Investment & Maintenance Theme(s): Education Loan (SIM) Poverty Targeted Intervention: Y Program Financing Data [ ] Loan IX] Credit [] Grant [ I Guarantee [ 3 Other: For LoansiCredits/Others: Amount (US$m): Proposed Terms (IDA): Standard Credit Grace period (years): 40 Commitment fee: 0.75 Financing Plan (USSm): Source Local Foreign Total BORROWER 11.12 0.00 11.12 IDA 23.37 36.63 60.00 Total: 34.49 36.63 71.12 Borrower: GOVERNMENT OF MOZAMBIQUE Responsible agency: MINISTRY OF HIGHER EDUCATION, SCIENCE AND TECHNOLOGY Address: Av. Julius Nyerere, 1586, Maputo, Mozambique or www.mesct.gov.mz Contact Person: Lidia Brito, Minister Tel: Mobile: 258-82-322026 Fax: Email: mesct.lbritooteledata.mz Estimated disbursements (Bank FYtUS$m): FY J 2002 2003 2004 2005 2006 2007 Annual 0.05 4.35 12.20 15.50 18.90 9.00 Cumulative 0.05 4.40 16.60 32.10 51.00 60.00 Project implementation period: 2002-2007 Expected effectiveness date: 06/01/2002 Expected closing date: 05/31/2007 Oct PAD VFD Rs. 4. 2M A. Project Development Objective 1. Project development objective: (see Annex 1) This project is a continuation of the World Bank support to the education sector in Mozambique. This support derives from the development of a national strategy for higher education approved by the Council of Ministers in August 2000 and builds upon the detailed Plan of Operationalization of the strategy subsequently developed by the Government of Mozambique (GoM) and approved by the Council of Ministers on July 3, 2001. The World Bank is one of the partners supporting the Government in implementing this ten-year long program aimed at the nation-wide strengthening of higher education. The Government's goal for this period is to achieve a diversified, flexible, integrated and cost effective higher education system, and to train the high level labor force urgently needed for the socio-economic development of the country. The development objectives of the proposed Higher Education Project (HEP), in line with the national objectives, are to: (a) enhance internal efficiency and expand the output of graduates; (b) improve equitable access (gender, location and socio-economic), and (c) improve the quality of the teaching-learning process and the relevance of the curriculum. Project activities are intended to support the elements of the national program covering the higher education system within public, private and nonprofit higher education institutions (HEls), and in the new Ministry for Higher Education, Science and Technology (MESCT). 2. Key performance indicators: (see Annex 1) Progress towards the project development objectives will be assessed in terms of: (a) An increase in the absolute number of students graduating in all HEls, from 786 in 2000 to 1,500 in 2006; an increase by 5 percentage points in the number of students from the North (10% to 15%) and Center (30% to 35%) enrolled in public HEls by the year 2006; (b) A reduction in the licenciatura completion time by increasing the admission/enrollment share from 16.3% (1,471 admitted/9,021 student enrolled in 1999) to 18.3% (20% is the ideal) in public HEIs by 2006; (c) Curriculum changes in selected faculties that show evidence of increased use of new and updated materials and computers for word processing, information gathering, and data analysis. (d) Qualitative reforms in the teaching-learning process, in selected faculties, that provide strong evidence of an increase in the use of student centered, project-oriented approaches, integrated with computer use, and providing a measurable increase in the proportion who pass rather than fail each course. The individual HEIs will also develop a specific set of indicators. B. Strategic Context 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project: (see Aimex I) Document number: IDA/R2000-76. Date of latest CAS discussion: June 1, 2000. The approved CAS for Mozambique was designed around the Government's Five Year Program and its emerging Poverty Reduction Strategy Paper (PRSP) discussed at the Board on September 25, 2001 -2 - (IDA/SecM2001/0550). It has three pillars: (i) increasing economic opportunities through private sector led growth; (ii) improving governance and community empowerment; and (iii) strengthening human capabilities -- central elements for encouraging innovation and competitiveness in order to promote employment and achieve the greatest impact on poverty. The CAS acknowledges that Mozambique's capacity to develop human resources at all levels is vital both for the attainment of long term sustainable and equitable economic growth, thereby reducing poverty, and, more immediately, for increasing the supply and quality of high level skills, experience and innovation in the labor force, for the purpose of achieving these goals. 2. Main sector issues and Goverrnment strategy: Background Summary. Since the first elections in 1994, Mozambique has been one of the fastest growing economies in the world, but it remains one of the poorest countries, with a per capita income of US $210 (2000). Further sustained economic growth is critical for long term social and economic development and reduction in poverty levels. Concurrently, Mozambique is facing an acute shortage of high level professional skills which are critical for sustaining investments, improving public service delivery and providing leadership for the country. Aside from the shortage of professionals in the economy -- such as doctors (I to 50,000), agriculture specialists, managers, accountants (there are no Mozambican certified accountants in the country), pharmacists (7 to 16 million people), engineers etc., -- the education system itself is suffering from a lack of teachers with a college degree to teach at the post primary level. At the same time, the higher education system needs to be better integrated and overall delivery improved: the quality of higher education graduates in some areas is low, the content of the curriculum inadequate to meet changing labor market requirements, research is limited and not oriented towards areas of country development, women and students from the northern areas are severely under-represented and the number of university students graduating each year is very low (about 800 for a country of 16 million people), resulting in a very high cost per graduate for publicly financed HEls. These issues are a major concern of the Government. The Government, as part of its overall strategy for education, has therefore intensified its efforts to strengthen the higher education sub-sector. The Bank and donor support to the basic education sub-sector, including secondary education, is already fully funded and under implementation within the framework of the US$700 million sector wide "Education Sector Strategic Program" (ESSP). The Bank has accordingly accelerated its support for the development of a project for the tertiary education sector. The economy, prospectsfor growth and poverty alleviation. GDP growth averaged 5.5% annually between 1987 and 1996 and 11% annually between 1997 and 1999. In 1998, the formal modern sector accounted for more than one third of the GDP of US$3.5 billion and about 60% of domestic revenues (World Bank Growth Prospects Paper, 2000). At the same time, investor confidence has grown. Between 1996 and 1998 merchandise exports increased by 42% and Foreign Direct Investment (FDI) now represents a tenfold increase over FDI in the early 1990s. FDI is high relative both to the size of the economy and to other African countries. While some recent figures imply a peaking of infrastructure investments and modem sector development, other signs suggest that foreign investor confidence is growing rapidly and FDI sources are becoming more diverse. Mozambique is expected to continue to grow at 7 to 8% per annum over the next five years. Maintaining high economic growth rates and long term prospects for poverty alleviation, supporting investment in new areas, expanding employment opporunities, and increasing national income and government revenues will continue to rely on the formal modern sector and depend on foreign investor confidence and investments -- areas heavily dependent on the availability of high level managerial and professional skills. - 3 - Achievement and constraints in primary and secondary education. The education system and the country as a whole continue to suffer from a very limited number of higher level graduates. Only 3% of the population have attended secondary school, technical education or higher education. Enrollment into upper secondary education has increased almost ten times since 1993. There are now about 9,000 students enrolled and 4,000 students graduating every year. However, due to the expanding economy and the limited number of upper secondary schools, the shortage of secondary graduates persists. Progress is being made, as enrollment into primary education has almost doubled (by 900,000 children) since 1993 (see also Annex 4). As a result, in 1998, the primary gross enrollment rate reached 92%. However, only one out of three children completes grade 5. In response to this attrition rate, substantial efforts are underway to improve the quality of teaching and learning and increase the retention of students. A similar trend is evident at the lower secondary level and the upper secondary pre-university level. External efficiency: laborforce - structure, demand and supply. The labor force reached 9.7 million in year 2000, an increase of about 60% since 1990. Approximately 9%, or about 800,000 people, are employed in theformal modern sector. However informal labor market surveys show that there are virtually no Mozambicans employed in middle and higher level management positions in the largest foreign companies. Many industries are currently facing the need to replace an aging stock of educated professionals trained in the period preceding the civil war, and now nearing retirement Thus far, the country has relied on imported labor to meet demands for professional or highly trained staff. This strategy has not only failed to build capacity in the country, but has pushed the Government to limit the employment of foreigners in companies through legislative measures, thus, possibly jeopardizing future investments, if the number of Mozambican professionals is not rapidly increased. Further evidence of excess labor market demand is provided by frequent reference to students from the engineering and economic faculties of Eduardo Mondlane University (UEM) leaving for employment before completing their thesis and formally graduating. Conservatively assuming zero growth Mozambique will have to replace about 1,200 professionals every year to fill the available jobs in the public sector alone. In comparison, in 1998, the total number of new higher education graduates in Mozambique was only 786 (World Bank, Education Cost and Financing Study, 2000/PEES, GoM, 2000). Under the current positive and realistic growth scenario evidenced by the present level of investment, the shortfall of professionals and the demand for graduates and high level professionals will be even greater. Finally, in addition to demand for normal replacement, the prevalence of H1V/AIDS is likely to have a deleterious impact on overall attrition rates and increase further the number of professionals required. Higher education issues The central sector issues for the higher education sector are described in detail in the Government's Strategic Plan for Higher Education, 2001-2010, Working Document 1 (see under www.mesct.ov.mz). Among key issues are the following: Supply and coverage The higher education system reflects the country's history. At first there was only one university, Eduardo Mondlane University (UEM), offering courses modeled on the Portuguese system, with 5-6 years of study leading to a single qualification (licenciatura) along with a limited number of shorter degree programs. During the civil war coverage remained limited. After the peace agreement in 1992, UEM remained the main provider of higher education, accounting for about 75% of total enrollment of which about 25% were women. New admissions remnained fairly stable between 1992 and 1995, at around 1,000. However in the last five years the system has begun to expand, albeit on a weak financial basis (see also Annex 4. Economic Analysis). By 1999 total higher education enrollment had increased to 11,619 and new admissions doubled from 1,088 - 4 - in 1995 to 2,155 in 1999. At the same time the number of applicants to public HEls continues to be five times that of the available vacancies (PEES, Working Document, GoM, 2000). This situation is due to the high social demand in relation to available space and not all of this number have the requisite qualifications for the course they wish to pursue. At the same time, largely because of cost factors, the number of vacancies in the private HEIs in some areas is higher than the number of applicants. Concurrently, there are certain programs or areas of education that are not offered by the public HEls, but are in high demand by both the public and private sectors -- such as accountancy (there is no degree program equivalent to Chartered Accountant (ACA or ACCA), Certified Public Accountant (CPA), or "Revisor Oficial de Contas" (ROC), tourism (there are no tourism schools or programs), informatics engineering, dentistry, pharmacy and business. In addition there is an acute shortage of teachers for the teacher training colleges and secondary schools of the rapidly expanding education sector. There are currently ten HEls in Mozambique as shown in the table below (see Annex 12 for details). Name/Ownership Year Established/ Location (+ Number of Number of Upgraded to HE Branches) Courses Students Status (2001) (1999) Public Institutions Eduardo Mondlane University (UEM) 1962 (renamed Maputo 22 6,800 Pedagogic University (UP) 1976) Maputo + Branches 12 1,987 1985 (renamed in Sofala & Higher Institute for International Relations (ISRI) 1995) Nampula 1 234 Nautical School of Mozambique (ENM) Maputo City 3 N.A. Acaderny of Police Sciences (ACIPOL) 1986 Maputo City 2 127 Upgraded 1991 Maputo Province Private Institutions 1999 Private Denominational Institutions Catholic University of Mozambique (UCM) 9 1,035 Beira + Branches in Mussa Bin Bik University (UMB) 1995 Narnpula & Niassa 3 133 (in 2000) Nampula Private Profit Institutions 1998 Higher Polytechnic and University Institute 8 919 (ISPU) Maputo City + 1995 Branch in 7 644 Higher Institute of Science and Technology of Quelimane Mozambique (ISCTEM) 1996 Maputo City 3 200 Institute of Transport and Communication (ISUTC) 1999 Maputo City I,v I Private sector involvement and the emergence ofthe non-government sub sector. As indicated above perhaps the most significant and dramatic development of the past seven years in Mozambican higher education has been the end of the state monopoly over its provision. The private and religious LEls which have emerged offer altematives to the older public institutions, bring healthy competition and functional complementarity. While they face similar issues of low academic quality and inadequate leaming environment and materials, they demonstrate what can be done in terms of creative attention to issues of demand driven education, accountability, teacher management and performance evaluation. More generally they illustrate, and disperse to the public, the idea that higher education can be delivered and managed in many different forms. Fiscalframework andfinancing of higher education. Higher education is consuming up to one fourth of overall public spending for education in Mozambique (see Annex 4 for details). Public funding is allocated - 5 - in the form of institutional grants; only public HEls are eligible for receiving these. The level of financing is defined by the actual level of expenditures by category (staff costs, equipment maintenance, etc.) in the preceding budget periods and is the subject of negotiations between the Ministry of Planning and Finance (MPF) and the management of separate HEls. This kind of fiscal framework provokes a tendency for education management to inflate institutional demands for inputs. It also undermines incentives for revenue generation or savings in public budget allocations, as the transfer of funds between categories of the public budget is prohibited and all potential savings are expected to be returned to the MPF. Self-generated funds in public institutions (up to 14% of state budget financing at UEM) and donor financed projects are recorded and managed separately from public financing, thus, resulting in reduced efficiency in management. Public financing is covering staff costs, educational inputs and many non-educational expenditures (staff housing at UEM, student bursaries, food etc.). Tuition fees in public institutions are very low (below US$100 per year) while students in private institutions contribute, at a minimum, ten times more. Public HEls operate several student scholarship schemes that provide financial assistance to most needy students. Graduation rates and internal efficiency. The number of new graduates in public HEIs remained approximately 260 a year between 1992 and 1994, increasing slightly to 398 graduates in 1995 and 483 graduates in 1998. Expressed as a proportion of total student numbers however, the public graduation rate is very low, at only around 47% per year (the net graduation rate is less than 10% (see Annex 4)). The low level of graduation points to a high degree of wastage and low efficiency of the public system. This combined with intemal inefficiencies of institutional govemance and management, entailing low utilization of staff and facilities, has resulted in the low graduation rates and high costs per graduate. The average public expenditure per student is at par with average per capita spending in Anglophone and Francophone Africa (see Annex 4), but because of the low internal efficiency the cost per graduate is very high. Quality and relevance. Another issue is the situation that many courses and programs offered at public HEls, are outdated, of limited relevance and quality and do not respond to the demands of a fast growing economy, specific needs in individual provinces, or emerging sectors. Furthermore, and more important, the style of learning is often rote learning, in a situation where problem solving and innovative skills are what employers seek (The 100 Biggest Companies in Mozambique, KPMG, 2000). This is exacerbated by the limited motivation and incentive for academic and administrative staff in public HEls to improve their teaching, learning and research and respond to changing times. In general, research facilities, library and educational materials are limited and outdated, with correspondingly deleterious effects on the overall learning environment. Sector integration and capacity for policy design and implementation. The HEls are not well integrated and articulated, with limited possibilities for students to move across comparable programs within or between institutions. Furthermore, general policy coordination and monitoring of sector performance is weak. Equally important for understanding the development of higher education in Mozambique is the fact that for many years the university system operated under a centrally planned economy, paying limited attention to internal and especially external efficiencies and such issues as the allocation and management of resources. Finally, in the absence of a definitive legal framework, there is an inadequate demarcation of responsibilities and articulation between the new Ministry and the HEls. Equity: gender, provincial access and socioeconomic disparities. As described in Annex 4 there are still severe geographical disparities of access between Maputo and most other provinces, resulting from a concentration of HEls in the south, where job opportunities are greatest and the life style most attractive. - 6 - Between 1990 and 1999 about 60 % of students were from Maputo or the South, compared with only 10% from the North and 30% from the Centralprovinces. Although increasing demand for higher education has brought an expansion of HEls, this expansion continues to benefit the higher income groups (Education Costs and Financing Study, 2000). At the same time the weak financial solidity of the newer private HEls points to the inadequacy of resources among students. Finally, in public HEls less than 1/3 of students are female. This is partly due to the limited number of girls graduating from secondary education. Government strategy lssues: The three issues driving the Government's initiative in higher education were the need to: (a) meet social demand for higher education through expansion of access and enhanced equity, (b) respond to labor market demand and national skill requirements, and (c) increase efficiency in the use of available resources. Strategic plan process andpolicy initiatives: Signaling the seriousness of its intent to address these issues, the Govemmentformed a new Ministry of Higher Education Science and Technology (MESCT) in early January 2000 with a view to strengthening the coordination and direction of policies in the sector. Together with the Higher Education Task Force established in October 1999, this accelerated the preparation of the National Strategic Plan for Higher Education (PEES). The strategy has been the subject of extensive participatory consultation and was refined in a national seminar, "Expansion with equity, guarantee of quality" in July 2000 opened by President Chissano. The strategy, approved by the Council of Ministers in August 2000, forms the basis for a variety of initiatives undertaken in Mozambique higher education (see also sections D.4: Government's Commitment). The overall objectives of the strategy are expected to be met through a comprehensive set of initiatives and policies. These include nationalpolicies and a fiscal framework for the system of higher education at large as well as actions and measures carried out at institutional level within the framework of institutional autonomy. The Plan for the Operationalization of the Strategy was approved by the Council of Ministers on July 3, 2001. By introducing a nation-wide vision of higher education, and by suggesting a comprehensive set of measures to achieve this vision, the Government is proposing significant innovation and seeking to turn a disconnected set of independent institutions into a coherent national system of higher education. While the 1993 Higher Education Law provides the legal framework it is envisioned that the new measures for such a system will be provided under the revision of the Law on higher education. The proposed law, including a national fee policy, will provide the grounds for stable and more transparent resource allocation and a fiscal framework for higher education, built on formula-based institutional grants and contractual obligations of public institutions for service delivery. An increasing share of public financing will be allocated in the form of support for payment of student tuition. Some public financing would become available to support educational innovation. The nation-wide approach will be reflected in the national regulatory framework that will facilitate innovation in higher education and enhance the quality of academic programs. Public resources will be invested in the diversification of higher education through support for increased variety in the programs and courses being offered, greater geographic spread of educational provision (including expansion in the North and Center of the country) and the introduction of new types of educational institutions and distance education. Opportunities for private providers of higher education, diversification of providers and the non-arbitrary allocation of public funding will define the new external environment for autonomous higher education institutions and provide incentives for increased efficiency in service provision. Actions and measures: The Strategic Plan also envisions a comprehensive set of measures at the - 7 - institutional level that would support improvements in the intemal efficiency and cost-effectiveness in the sub sector. These measures include reform of curriculum, reduction in time of licenciatura programs and implementation of a bachelor and master degree in existing institutions. This will be complemented by the introduction of programs of shorter length and different design, tailored to meet labor market needs and the requirements of individuals (including evening programs, one to two year long programs, associate degree etc.) that will require new 'college' type institutions. Expansion of remedial programs (general and in maths and science) for graduates of secondary schools would also contribute to improved graduation rates and higher efficiency within educational institutions. Curriculum reform will be complemented by large scale training activities and up-grading of the cadre of faculty for existing and new educational programs. Instructional excellence will be encouraged by the introduction of faculty evaluation in public institutions and promotion of new ideas and teaching methods through the Quality Enhancement and Innovation Facility (QIF). Measures to increase utilization of resources (space, equipment, staff time) will be undertaken. Within a framework of institutional autonomy, measures will be undertaken to improve the quality of professional institutional management, ensure internal support for academic excellence and develop incentives for additional revenue generation and cost savings. Constraints: The sector is however, also faced with numerous constraints. Leading and coordinating this reform process is a complex task for a new Ministry. The intention is to build a balance between the programs to be implemented by the new Ministry and those at the institutional level, in which the Ministry focuses on overarching issues such as systemic planning, coordination, regulation, monitoring and evaluation. The Ministry will be also taking the lead in such initiatives as the development of alternative models for structuring an integrated higher education system, including new types of HEls and programs. The current project is seen by the Govermnent as an important instrument in sector-wide strengthening, and increased participation, especially by smaller and private HEIs and provincial governments. The strategy as a whole defines the potential and momentum for change on which the Bank project is being built. The specific activities to be supported under the PEES are outlined in the Plan of Operationalization of the Strategy for Higher Education and described in the draft Letter of Sector Policy. 3. Sector issues to be addressed by the project and strategic choices: While, the project will support the entire national program as outlined in the Plan of Operationalization, there are specific issues that the project will address: (a) Limited capacity and operational efficiency of the sector. The project regards the development and improvement of system wide operational capacity and efficiency as an issue of first order priority. It will be addressed first, through strengthening the policy and fiscal framework for higher education (new legislation, building capacity of the Ministry for Higher Education and for the establishment of the Higher Education, Science and Technology Council (COESCT). Second, it will support measures for strengthening the operational capacity of the Ministry and institutions of higher education, focusing on the skills of management staff in the areas of planning, budget management, monitoring and policy implemnentation. Third, more in-depth diagnosis of the sector efficiency issues will be undertaken and used as a background for policy changes in the area of resource allocation and resource utilization, including formula based budgeting, measures for cost-saving and revenue generation by individual institutions and internal institutional staffing and teacher motivation issues. The introduction and use of ICT and improving capacity and financial management are key elements. (b) Low quality, variable relevance, and weak market linkages. The issues of academic quality and relevance are the second set of core issues selected for attention by the project. They will be addressed - 8 - through support for curriculum reform, expansion of remedial programs, and the introduction of programs of shorter duration and manifest need. In order to improve the quality of instruction and the teaching-learning process, the project will finance improvements of the learning environment - in particular library and IT facilities - and training staff for new teaching methods and course content. Improved market linkages will be strengthened by the project through developing demand driven financing principles (provincial scholarship program), innovations and the development of programs and courses of high market demand - tourism and hotel management, teacher training, general, public, and private business management. This will also include support for the development of a degree program in accountancy, identified as a high priority by the Government in the Country Financial Accountability Assessment (CFAA). (c) Access inequities, slow graduation rates, restrictedpipeline. Issues related to equity, access and low graduation rates constitute the third area of project attention. These issues will be addressed through a combination of interventions on the supply and demand side. Improved operational efficiency at institutional level, better quality and more relevant course content, achieved within the current public resource envelope, will increase the output of graduates. Additional actions on the demand side (putting additional resources into a scholarship program), support for new types of institution, opening up for private sector diversification, geographic diversification of existing institutions (UEM and UP) and the introduction of distance education (the Mozambique Distance Learning Network) and other delivery modes will ease geographic and gender inequality in access. The latter will be supported through a number of secondary school scholarships for girls under the on-going ESSP and extending pre-university courses (remedial courses through distance education or counseling groups of teachers). Strategic choices Mozambique reflects in extreme form issues that face higher education in most countries on the African continent. These issues will not be resolved quickly or neatly; they require long term commitment and a gradual approach. The context in which decisions about focus, selectivity and concentration take place is one of a reform process that is just beginning. The country is working towards a supportive policy framework and ultimate vision for higher education. The project can encourage, stimulate and support government steps in these directions but can not itself create them. Within this context there are a number of strategic choices that the Government and the project team have made during the design of the project. Higher education investment. It could be argued that the country's state of poverty and the slowly changing enrollment profile provide little basis for investment in higher education at this time. Neither the Government nor the Bank share that view for several reasons. First, the extent and severity of Mozambique's shortage of highly trained professionals for technical, managerial and economic policy leadership is unique in Africa and an impediment to growth and investment and to national direction of it. The shortage of capacity has to be urgently addressed in order to counter increasingly strong constraints to national economic and social development. Second, sizable programs are being implemented by the Government, the Bank and other donors aimed at strengthening primary and secondary education, expanding enrollment and increasing graduation rates. In this context support for higher education does not diminish investment at the lower levels, but rather complements it. These investments are not substitutable. Third, a major goal of the Government is to strengthen a system of education and, within this, an integrated higher education sector is an important component. Efficient and effective higher education is vital for strengthening secondary education, both in terms of staff training and in setting standards and positive backward linkages. -9- Fourth, there can be little doubt that in Mozambique an increase in the number of well trained and committed doctors, teachers and engineers will provide the potential human resource pool for the delivery of services currently inaccessible to poorer segments of the population. Finally, there is a public good argument For a country with a painful colonial and post colonial history, in a continent itself tom by strife, ethnic cleavages and mismanagement, nation-wide higher education can play an important unifying and leadership role in helping to define the identity of Mozambicans and the mission of the Mozambican nation. Institution - oriented versus system-wide orientation of the project. The bulk of current public provision for higher education is covered by a single large university - UEM. A narrow follow-on operation to the Capacity Building Project (CBP), Cr. 2436, targeted at the premier university (UEM) was considered in 1999. While UEM will continue to play a critically important role in the provision of professional skills and postgraduate research and education, economic and social development requires diversification. Diversification of the sklll mix, increasing geographic diversity of service provision and the institutional presence of institutions of higher education in various parts of the country. Thus, continuance of a single institution option was not regarded as a desirable one. The recent rapid expansion in the private provision of higher education demonstrates the potential of alternative modes of service provision and speaks in support of system-wide public policy in higher education (UlEM's share of this total number of students has declined from 76% in 1995 to 59% today). The project took this as a guiding principle and will provide support not only for existing public institutions of higher education but also for system wide improvement and innovation. Sector expansion versus capacity building and efficiency improvement As an alternative to rapid expansion of the system, the project will contribute to strengthening higher education, initially through improved efficiency of service delivery, enhanced academic quality and reinforced management capacities in existing institutions. The project is emphasizing more intensified utilization of resources and assets already available. It is recognized that for specific areas, notably teacher training and management, where supply is short, the situation could justify an increased intake. Such expansion would initially be incorporated into the project. More energetic expansion of the sector might be supported at later stages of the project on the basis of demonstrated operational efficiency. C. Project Description Summary 1. Project components (see Amnex 2 for a detailed description and Aimex 3 for a detailed cost breakdown): The Higher Education Project, will have three components: (1) System-wide Reform and Development; (2) Institutional Development and Investments: (a) Eduardo Mondlane University, (b) Pedagogical University, (c) Higher Institute for International Relations, (d) Mozambique Distance Learning Network, (e) Quality Enhancement and Innovation Facility; and (3) Provincial Scholarships. 1. System-wide Reform and Development This component will finance activities to support overall policy, system reform and development. The purpose is to create a dynamic system of higher education which is integrated, more efficient in its resource utilization and diversified, as well as structured in ways that enable it to deliver types of learning which contribute directly to economic development and social welfare. A prerequisite for this systemic reform is the development of the Ministry itself -- the strengthening of its institutional, technical and managerial capacities -- so that it can fulfill its government-mandated leadership and coordination role for higher - 10 - education in Mozambique. Activities will include technical assistance, minor rehabilitation work, training, studies and workshops for the development of: (i) new regulatorv, fiscal and accountability frameworks; (ii) new pedagogical teaching methods and programs; (iii) the use of ICT in the delivery and teaching of higher education; (iv) an accreditation system; (v) new or altemative sources of funding; and (vi) a HLV/AIDS prevention and support proaram for students. 2. Institutional Development and Investments This component will support comprehensive sub-projects in the higher education sector aimed at improving efficiency, academic and pedagogical quality, research and scope of service delivery by specific institutions in their defined areas of specialization and in specific geographic locations. It has five sub-components: (a) Eduardo Mondlane University. The overall objective of this sub-project is to improve the graduation rate and efficiency in resource utilization while improving the quality of programs, learning environment and pedagogical methods used in the classroom. Investments in curriculum reform -- improving pedagogical teaching methods and including more interactive and project oriented methodologies -- will be a necessary first step. This will require enhancing the capacity of the UEM academic staff to teach more relevant and advanced courses, promote capacity for self-study, and as elsewhere, to use ICT as an integral part of their instructional strategy and providing intemet and PC access to students, thereby improving IT capabilities. Short tern training of teachers and further revision of the curriculum using assessment based on intemational standards, will ensure higher standards of relevance and quality in programs and in their mode of delivery by the teaching staff. This sub-project will support the following key activities: (i) curriculum and academic reform and extemal quality reviews in disciplines selected by the institutions; (ii) academic and administrative staff development; (iii) reform of financial management. university management and administration, and efficiency improvements: establishment of efficient computer based financial and academic management and infonnation systems, based on the analysis and recommendations of the study by extemal management consultants; (iv) central library/ICT: the establishment of a central library with advanced ICT capability and the possibility of serving the information needs of other public and private institutions in Mozambique; and (v) new facilities. (b) Pedagogical University. An adequate supply of well trained secondary school graduates is central to GoM's efforts to improve the quality and efficiency of secondary education. UP plays a key role in this regard as the institution responsible for the training of secondary school teachers and the training of trainers for primary school teachers. The HEP will support UP with the implementation of its plan to improve the quality of its programs and broaden their scope by supporting: (i) new facilities: new and improved teaching facilities and student accommodation; (ii) curriculum development: the development of revised curricula; (iii) academic and administrative staff development; (iv) program development: development and start-up of new courses; and (v) financial. manaczement and efficiency improvements. (c) Higher Institute for International Relations. As part of the strategy of stratification of the institution and programs, ISRI is broadening its course offerings beyond its traditional intemational relations programs. As a first step a program in public administration is to start in 2001. To enable ISRI to offer a broader range of quality programs to a larger number of students the project will provide ISRI with support towards the following sub-components: (i) new facilities: the necessary teaching, library and student facilities improvement; (ii) academic and administrative staff development; (iii) program development and implementation supervision; and (iv) IT development and improvement in financial and - 11 - information management. (d) Mozambique Distance Learning Network. The project will support the development of a new "Mozambique Distance Leaming Network" (MDLN). Distance-education programs will be designed by the academic staff of higher education institutions, developed in collaboration with the technical support staff of the MDLN's central unit and delivered through a network of distance-learning centers located throughout the country. Student guidance, tutorial support and evaluation would be provided by the higher education institutions originating specific programs. The regional distance-learning centers would be operated by existing private and public institutions throughout the country. The first programs would be in-service secondary teacher upgrading to address the problem of the large number of unqualified teachers currently employed in secondary schools. In addition, a distance-learning alternative for pre-service teacher education in French, English, math and science will address the expected sharp increase in secondary teacher education numbers required by the proposed expansion of the secondary school system. These programs will be developed in collaboration with UP. Other programs may include upgrading programs for business, economics and law, which would be developed in collaboration with UEM. This sub-component will support the cost of the following activities: (i) HR Capacity building: training and institutional capacity building in design, development, delivery, management and evaluation of distance-learning; (ii) Network infrastructure: Minor civil works, equipment, consultant services staff and operating costs for establishing the central unit and the regional learning centers and the communication (probably Vsat) network; and (iii) Program and pilots with institutions: Materials development and program implementation costs. (e) Quality Enhancement and lnnovation Facility (QIF). The Quality Enhancement and Innovation Facility (QIF) will provide financial support for quality improvements, capacity building and innovations in academic and research programs, and in institutional management and administration in higher education. The Facility will operate three programs, offering different types of financial support for investments in innovations and capacity building to improve relevance, efficiency and quality of academic programs, institutional management and research: (i) the Institutional Program will provide grants or repayable loans to public and private higher education institutions (HEls) that are not already participating in the institutional development component, to finance investments to support upgrading and capacity building of staff (through Staff Fellowships for postgraduate education and other training for teaching and management staff), and innovations to improve quality and efficiency of existing programs (through curriculum development, provision of equipment and learning materials etc.) and to develop and introduce new academic programs to improve equity of access and meet changing skill requirements; (ii) the Academic Staff Program will provide small grants to individual academic staff or groups of staff to enable them to invest in development of new skills, teaching methods or learning materials, and the design and introduction of innovations and improvements in curriculum and delivery of courses and academic support of students; and (iii) the Research Program will provide small grants to support basic or applied research which develops linkages or other forms of collaboration with Mozambican industry and the productive sector or with other national or intemational research and higher education institutions. - 12 - 3. Provincial Scholarships This component will, on a pilot basis before expanding nationally, initiate the introduction and operation of a publicly run and publicly financed scholarship scheme that will provide financial assistance, student outreach and academic advisory services on a grant basis to benefit students who graduate from secondary schools in the provinces of Cabo Delgado, Gaza and Tete. The program will cover the tuition. travel, subsistence and lodging costs of candidates from disadvantaged (social and gender) groups. Those selected for academic and financial support can make use of it in any public or private higher education institution. Provincial government, educational administration, local employers and NGOs will be involved in program governance. I Indicative Bank- % of Component Sector Costs % of financing Bank- ______________________ (USSM) Total (USSM) financing 1. System-wide Reform and 7.17 10.1 6.09 10.2 Development 2. Institutional Development and 62.10 87.3 52.06 86.8 Investments 3. Provincial Scholarships 1.85 2.6 1.85 3.1 Total Project Costs 71.12 100.0 60.00 100.0 Total Financing Required 71.12 100.0 60.00 100.0 2. Key policy and institutional reforms supported by the project: The direction and scope of the policies and reforms to which the project will contribute are described in the PEES. Specifically, the following initiatives will be supported by the project: (a) Establishment of a nation-wide regulatory, institutional and organizationalframework for the higher education sub-sector and introduction of an accreditation system and quality assurance mechanisms. This will include full definition of: the roles of the Council on Higher Education Science and Technology (COESCT) and the MESCT as a supervisory, coordinating and policy development agency; a nation-wide mechanism for quality control and accreditation of programs and institutions; and the functions of professional, employer and management associations (Council of Rectors) with regard to policy formulation and its implementation. The project will support the design of the accreditation system and quality control mechanisms. (b) Reinforcement of the Fiscalframework for the sector. This will include: the design of criteria and introduction of formula-based, demand-driven financing for individual institutions and fee policy; an annual agency contract between all public institutions and the Government (already in place for UEM); an increasing share of public funds allocated to the sector through the demand-driven scholarships. (c) Stimulation of Curriculum reform. This will include the design, and introduction of 3 year long Bachelor, 2 year long Master, 2-3 years long PhD, reduction in the duration of current licenciatura degrees and 2 year long associate degree programs serving as relevant and more flexible alternatives for the current highly specialized five-year long "licenciatura" programs. Curriculum reform will also include the development and introduction of new academic programs in the areas of high labor market demand, in particular, public administration, business administration, accounting, tourism, and hotel management - 13 - (d) Evaluation system of staffperformance and remuneration. The project will support the design and introduction of faculty evaluations in all public institutions in the context of the on-going salary and civil service reform. (e) Introduction of cost-saving and operational efficiency measures in existing institutions. These measures will include the contracting out/commercialization of the non-core services of educational institutions, internal financial decentralization, consolidated institutional budget management, and the rationalization of teaching schedules in order to improve facilities' utilization. qj Expansion of revenue generating activities in public higher education institutions. Public institutions of higher education under the project will develop a set of measures to expand revenue-generation activities (faculty starting on-campus consulting services, the introduction of short term fee-based training programs in the areas of high market demand, partnerships between public HEls and private businesses). (g) Introduction of institutions of new type/distance education. The project will support gradual diversification of the types of program and institutions providing higher education (college-type institutions and distance education offering programs in one or several educational fields, according to the needs of the local economy, are favored models). 3. Benefits and target population: Target population. Upper secondary and higher education students, academic and administrative staff in public, private and nonprofit HEls and the MESCT. Beneficiaries. The project will generate external and internal benefits with multiplier effects: (a) External benefits (i) The number of highly skilled professionals will be increased, thereby strengthening public service efficiency while also improving the preconditions for expansion of the private sector and businesses, encouraging new investments, and increasing productivity and economic growth, all of which will lead to the long term reduction of poverty. (ii) The population at large will benefit from the improved access and service delivery, as a result of the increased numbers of high level professionals, including doctors, nurses, accountants, and especially teachers for the expanding school system. (b) Direct benefits (i) Existing and future students in the secondary and higher education system, and employees in both the public and private sector, will directly benefit from an increased range, duration, quality and mobility of course offerings. (ii) The number of students currently enrolled (11,619) will increase to about 15,000 by the year 2006. (iii) About 9,000 upper secondary school graduates will benefit from increased pre-university training (iv) 500 students will receive financial support. (v) In the long run, secondary school graduates and other qualified students from under-represented regions and groups (i.e. students from the North and Central Regions, female students, and students from lower socioeconomic background) will be - 14 - among the main beneficiaries. (vi) Almost 1,400 academic staff in public (1,022 teaching staff) and private (335 teaching staff) institutions will benefit from increased training opportunities to upgrade professional skills, an improved teaching environment, and expanded research opportunities. (vii) 10 institutions of higher education will benefit from the project to become more competitive, efficient and responsive through the contribution of the component activities. 4. Institutional and implementation arrangements: See section E. 4 and the PIM under www.mesct.gov.mz on Institutional and Organizational Arrangements for more elaborate details. Ministry of Higher Education, Science and Technology. MESCT will have overall responsibility for the execution of the national program and project through existing management structures of beneficiary higher education institutions (HEls). Project oversight and project coordination will be under the new Ministry within an established Project Coordination Unit (PCU) temporarily established for the duration of the project. A number of technical assistance consultants, including component coordinators, procurement and financial management specialists will be hired. Specific activities will be implemented through existing structures in MESCT and HEls. Higher Education, Science and Technology Advisory CounciL The overall project strategic coordination will be in the hands of the Higher Education, Science and Technology Advisory Council (COESCT) advising the Minister on the development and implementation of higher education, science and technology policies. Projectperiod and implementing agencies. The project will support the Government's 10 year program, covering phase I and 2 (2001-2004, 2005-2007) and will be implemented over a 5 year period, from June 1, 2002 until May 31, 2007 through the MESCT and the HEls. Implementation at institutional level and administrative arrangements. MESCT and HEIs will be involved in the implementation of the project (see the PIM under www.mesct.iovmnz. Specifically: Project Authority/ Implementation Components Coordination 1. System-wide MESCT MESCT/lnstitutions Reform and Development I 2. Institutional Development and Investments 2 (a) UEM UEM UEM 2 (b) UP UP UP 2 (c) ISRI ISRI ISRI 2 (d) MDLN MESCT/MDLN MDLN/institutions 2 (e) QIF MESCT Institutions/staff 3. Provincial MESCT Provincial Governments Scholarships - 15 - Overall responsibility for the project implementation will be with the Rectors of these institutions and implementation will use existing institutional structures. Each institution will appoint two-three key focal points for project implementation. A pool of procurement and financial management consultants will be hired to support each HEls. HEI staff will be trained. To ease project overview it was agreed to establish an electronic distribution list and a joint web-page (www.mesct.gov.mz) to keep all parties involved and informed of on-going activities and the processing and sharing of bidding documents and operational manuals. Finally, the focal points identified in each institution received training in Bank procurement, disbursement and financial management before and after appraisal and will receive further training through continuing courses (see also section D, 4.2). Implementation support. Because of its inherent complexity this project requires particular care in planning and support for project implementation, including the timely allocation of funds and detailed attention to procurement, reporting and monitoring procedures (as described in Annex 2) Procurement capacity and Bank operational experience. The criteria for eligibility of the institution-based projects is based on the extent of existing administrative capacity and experience with Bank operations. UEM has more than seven years of experience in managing the Capacity Building Project and, as mentioned above, intensified Bank operational training has already begun. See Annex 6 for elaborate details. Financial management, disbursement and audits (see Annex 5 for full details) The individual HEls will be accountable and responsible for the implementation of the institution-based projects and overall responsibility will be with the MESCT. Reporting to the Minister a Project Coordination Unit [PCU (formerly the FMU)] will be responsible for the day-to-day management of the credit under the MESCT. The PCU will be responsible for administering and supervising activities financed under the respective sub-components. In particular, the PCU will be responsible for preparing consolidated activity plans and progress reports and for ensuring that the project's financial management arrangements will be acceptable to the Government, the World Bank and other Cooperating Partners. The principal objective of the project's financial management system (FMS) will be to support management in their deployment of limited resources, with the purpose of ensuring economy, efficiency and effectiveness in the delivery of outputs required to achieve desired outcomes, that will serve the needs of the people of Mozambique. Specifically, the FMS must be capable of producing timely, understandable, relevant and reliable financial information that will enable management to plan, implement, monitor and appraise the Project's overall progress towards the achievement of its objectives. For the Project to fully deliver on the aforementioned objectives, it's FMS will be developed in accordance with the Financial Management Action Plan presented in Annex 5. Salient features of the Action Plan include: the retention of a Financial Management Consultant to advise on the selection and installation of the Project's computerized FMS (using a spreadsheet and/or an integrated accounts package), to prepare the Project's Financial Procedures Manual (including records management) and to train staff in the operation of the system; the establishment of a representative Financial Management Board; the recruitment of an national qualified Financial Manager/Financial Management Consultant; the appointment of Project Accountants for each of the participating institutions and the availability of support staff; capacity building; the establishment of a Fixed Assets Register and a Contracts Register; monthly bank reconciliations and quarterly reporting of financial information; cash flow management including variance analysis; and an annual external audit that will be undertaken on terms of reference acceptable to the Bank. - 16 - By credit effectiveness, the MESCT will not yet have in place a FMS that can provide, with reasonable assurance, accurate and timely informnation as required by the Bank for PMR-based disbursements i.e. the Project Management Report (PMR). Thus, in the short-term, existing disbursement procedures, as outlined in the Bank's Disbursement Handbook, will be followed, i.e. Direct Payment, Reimbursement and Special Commitments. However, the successful implementation of the Project's FMS under the supervision of the Project Accountant should facilitate the conversion to PMR-based disbursements within 18 months of credit effectiveness. In that regard, a financial management review of the Project will be undertaken by a World Bank Financial Management Specialist within 12 months of credit effectiveness to assess progress. Monitoring and evaluation. The MESCT has established an "Observatory" for monitoring and evaluation. it will be used for monitoring the project and overall program and system performance. The project will support the development and introduction of a sector performnance monitoring system to be established within the "Observatory". Project implementation will be monitored on the basis of overall project performance and component indicators. It will be done on the basis of quarterly and annual project reports and indicators of higher education sector performance to be developed within the project. They will reflect both progress toward achieving development objectives of the national program as well as internal project performance. Additionally, the MESCT and the individual HEls will monitor other key performance indicators for the monitoring of the national program. An annual study on specific project aspects in addition to the regular progress reports will be prepared. The TORs for the annual study will be decided every year. D. Project Rationale 1. Project alternatives considered and reasons for rejection: (See also section B3, Sector Issues and Strategic Choices) Public intervention and Bank support versus market regulation. The Education Sector Cost and Financing Study (2000) estimates the unit cost at a public university to be about 6 times the average per capita income of US$210. While, the emergence of private HEis over the past few years demonstrates that there is a financial basis for private providers, recent IFC interaction with these institutions has identified financial solidity problems, along with under-funding in relation to the cost of providing quality courses and programs. Clearly, in Mozambique, the cost of higher education, lack of credit facilities and financial means among students signifies a weak market and argues strongly for government and donor support to both public, private and nonprofit HEls, particularly in view of the limited number of providers. In this context student loan-schemes were also rejected for immediate inclusion. Competitive Fund versus detailed institution based projects/lnnovation Facility. The issue of establishing a general fund to which the HEls could apply was rejected. This was considered premature both from an operational point of view (a culture of competition does not exist and there is limited experience and capacity for managing such a facility and dealing with the complexity involved in deciding on criteria and processes for the approval and flow of resources), and taking into account the small number of players and teaching staff (often the same individual can be found teaching at both public and private HEls). Instead it was concluded that the project could lay the foundation for changing the pattern of resource allocation to the sector in the future by establishing a provincial scholarship scheme with free school choice and by establishing a 'competitive' innovation facility, which would reward new ideas from wherever their source in any HEls rather than exclude any institutions. - 17- Lending instrument: SIM versus APL. An APL (Adaptable Program Lending) instrument was considered, but a more traditional lending instrument (Sector Investment and Maintenance Loan) was considered a more appropriate vehicle for Bank assistance for the following reasons: (i) variation in the state of readiness of different activities and institutions within the project; and (ii) the fiscal framework will constitute a principle for enacting sustainable changes in the sector while aligning resources to policies and performance. Thus, while it was agreed with the Government that the Bank implicit commitment is for 10 years or more, support would be given through a series of discrete credits. 2. Major related projects financed by the Bank and/or other development agencies (completed, ongoing and planned). Latest Supervision Sector Issue Project (PSR) Ratings i ____________ __________ j (Bank-financed projects only) Implementatlon Development Bank-financed Progress (IP) Objective (DO) Quality, access and management. Capacity Building Project, Cr. S S Secondary and higher education. 2436 (1994-2001) Quality, access and management. Education Sector Strategic U S Primary and secondary education Program, Cr. 3172 (1999-) Quality, access and management. Second Education Project, Cr. S S Primary and secondary education. 2200 (1991-1998) Other development agencies AuS-AID/Oxfam AuS, Kellogg Scholarships/Fellowships/HlV- Foundation, US-AID AIDS FNUAP, Ford Foundation, Institutional Support/Capacity Building Consortium of Foundations, EU, Research/Studies/Scholarships Government of France, Government of Capacity building, program Italy, Government of the Netherlands, development, training. Portugal, NUFFIC, NUFFU, Rockefeller Foundation, Gulbenkian Foundation, SIDA (Sweden). - IP/DO Ratings: HS (Highly Satisfactory), S (Satisfactory), U (Unsatisfactory), HU (Highly Unsatisfactory) 3. Lessons learned and reflected in the project design: (a) The most pertinent lessons for this project are those leamed from the Capacity Building Project with UEM which was the forerunner to this project. The design has taken account of these lessons in the following manner: (i) giving initial systemic and priority attention to capacity building and management training at all levels including, procurement and financial management; (ii) integrating project implementation measures into the HEI structure; (iii) building flexibility into the design to permit the possibility of adaptation to changing need; (iv) ensuring the early preparation of implementation and procurement plans; (v) drafting clear contracts and operating procedures for twinning arrangements; and (vi) adopting more realistic longer term time tables for scholarships and study abroad activities. Other higher education projects in the region, most notably Ghana and Kenya, offer useful lessons, for both design and implementation stages, while outside the region the project in Vietnam is particularly instructive. - 18 - (b) While, quality enhancement is a primary objective, care is being taken to ensure that quality, relevance and equity purposes are not eroded by enrollment expansion driven by political considerations. The Ghana experience, as well as the cost differentials between HEls, have persuaded this project to adopt reduction in the cost per graduate (proxied as a reduction in the enrollment/admission ratio) as the main performance indicator for monitoring the balance between expansion and quality as well as improvements in efficiency. (c) Mozambique, like Kenya, is moving from a situation of a dominant national university to an integrated system of multiple differentiated institutions. The Kenya experience underscores the importance of a project design in Mozambique that provides for an appropriate balance between decentralization of responsibilities to universities and central coordination while preserving the institutional autonomy which is an important part of the Mozambican tradition. (d) The higher education project in Vietnam supports a regular survey of all HEIs to collect data on universities' financial operations, student-teacher ratios, drop out, repetition and graduation rates and other performance indicators, which are used to monitor institutional performance and can also be used to monitor project implementation at the HEI level. It also supports a regular graduate tracer study and development of career advisory services in HEls to improve linkages with the labor market. HEls that apply for investment funds from the project have to demonstrate that they are using data collected through the annual institutional and graduate tracer surveys in their own internal strategic planning, including curriculum reform and the introduction of new courses to respond to labor market needs. This project will pay particular attention to developing similar data collection practices and associated incentives for HEls in Mozambique. (e) As noted above the current implementation progress of the ESSP is rated unsatisfactory, mainly due to lack of Government procurement capacity and a change in project approach to school construction which, combined with a large inflow of donor funding (18 donors and US$300 million), has resulted in a disbursement lag. However, this is expected to be resolved shortly. Nevertheless, the proposed project has therefore early on focused on procurement arrangements and training and agreed that the locus and capacity at UEM will be retained. While IDA is only one of the partners in the sub-sector, no other donors are considering major contributions. 4. Indications of borrower commitment and ownership: Govemment's commitment and ownership has been very strong, as demonstrated by: (i) the establishment of a new Ministry and the President's appointment of someone from the sector itself as its first Minister; (ii) the fast development of the national strategy (PEES), which included extensive stakeholder discussions throughout the country, and within the higher education community, that culminated in a national seminar in July 2000 under the concept "Expansion with equity, guarantee of quality"; and (iii) the endorsement of PEES by the Council of Ministers in August 2000, the approval of the Plan of Operationalization of the Strategy on July 3, 2001, the program underpinning the PEES, and the approval by the Council of the revised Higher Education Law 1/93 of June 2001, on October 2, 2001. 5. Value added of Bank support in this project: The Govermnent perceives several key dimensions of value that Bank involvement will add. They include: (i) knowledge within the Bank team of the experience of higher education system reforms in Africa and elsewhere; (ii) technical expertise and practical experience in the successful design and implementation of major higher education projects; (iii) responsiveness and flexibility in being able to provide support from - 19- the on going CBP project and to speedily apply PHRD and Norwegian Trust funds to project planning and preparation; (iv) prior involvement in the CBP pernits the application of lessons leamed and more important it has enabled the Bank team to establish relationships of trust and the experience of continuity that can now be extended to a new project; (v) encouragement to other donors--Sweden, the Netherlands, US-based Foundations, Portugal, and USAID are becoming involved; and (vi) familiarity with structures of administrative, financial and procurement management for the Ministry. E. Summary Project Analysis (Detailed assessments are in the project file, see Annex 8) 1. Economic (see Annex 4): O Cost benefit NPV--US$ mnillion; ERR = % (see Annex 4) O Cost effectiveness * Other (specify) A detailed economic analysis was conducted for the project as described in Annex 4. The key issues and findings derived for the project from the economic analysis are as follow: Over the past decade, there has been substantial growth in the number of HEls and this has resulted in a subsequent increase in student enrollment. This trend indicates the high social demand for post-secondary education that exists in the country. On the other hand, there is a great disparity in access to higher education among those who come from different geographical locations, gender and socioeconomic backgrounds. Only 40% of the students in HEls are from the Northern and Central provinces which represent 75% of the total population. Thirty percent of the total enrollment in higher education are female students. Due to data limitation, it is not possible to estimate the direct relationship between students' economic status and access to higher education, but available data suggests that 70% of fathers and 50% of mothers of students who enrolled in public HEls have secondary education or higher, while less than 3% of men and 1% of women have similar levels of education in the country as a whole. Thus, it is necessary to narrow targeting criteria to ensure that public subsidies are used to decrease these inequities. The Project was designed to address these issues by introducing scholarships, grants and a distance learning network and support to innovation in the type of delivery of education. internal efficiency of the higher education system was estimated by the following two methods: (i) admissions as a proportion of enrollment (if the system were fully efficient, the proportion of new admissions to total enrollment would be 20% since Licenciatura requires 5 years of study time); and (ii) percentage of graduates who complete all degree requirements within the official prescription time. Using the first method, the admission to total enrollment rate declined from nearly 20% in 1992 to 14% in 1998 although it rose slightly again to 16% in 1999. Based on the estimation of the second method, the graduation rates are about 7% at UEM and 10% at ISRI (Institutional records). One of the factors that contributes to the inefficiency of the education system is the high level of student repetition (drop out might be one of the main issues but there is no data to confirm it), which increases wastage of public resources. Some possible reasons for the high repetition are: (i) insufficient curriculum and length of program (5 years program which are not structured as credit units); (ii) inadequate pedagogical methods; and (iii) inadequate school managemnent and resource allocation. The project will also address these issues by focusing on each higher education institution (institutional development and investments at UEM, UP and ISRI) as well as by means of the quality enhancement and innovation facility. 2. Financial (see Annex 4 and Annex 5): NPV=US$ million; FRR = % (see Annex 4) The Govemment is making a larger financial contribution than is immediately evident from the PAD, notably through in-kind contributions, land and an US$22 million increase in the budget for the higher - 20- education sector over the period. No other donor is currently planning to formally co-finance the project; however, some donors (e.g., the Netherlands, SIDA, the Ford and Rockefeller Foundations) will finance other parts of the proposed government plan. With the anticipated increase in self-generated revenue and operational efficiency improvements in the HEls the overall financial sustainability will improve. Fiscal Impact: Fiscal affordability was examined by whether total consolidated recurrent expenditure (which includes the additional recurrent expenditure that is generated from the proposed investment under HEP - US$5.4 million over five year) will fit within the MPF's Medium Term Fiscal Framework (MTFF) recurrent ceiling. The MTFF recurrent budget for the six year period will grow from US$15.2 million in 2001 to US$20.9 million by 2006 or an estimated US$91 million for the period, resulting in a total increase of US$14 million to the sector above the 2001 budget level. The total MTFF higher education ceiling for the period is US$ 22 million above the 2001 budget. This is equivalent to an 8% growth rate per annum. After the approval of the Plan of Operationalization, the GoM has further agreed to increase the share of total public expenditures to higher education by 0.2 percent-points (within the increase in total education expenditure of US$32 million). In this context, the total consolidated recurrent expenditure (including additional recurrent costs from HEP estimated at US$5.4 million) will be well within the adjusted MTFF ceiling. Moreover, if the internal efficiency of higher education system were to be increased (i.e. an annual increase of 5% in graduation rates) by implementing the Project, efficiency gains from this measure would be around US$11 million by the end of 2006. While most school supplies are exempt from Value Added Tax (VAT), further efforts are currently being made in order to enact more fiscal policies aimed at supporting the emerging private higher education sector. The GoM has approved fiscal provisions that exempt all teaching materials and laboratory equipment, didactic and scientific and audio-visual materials are also exempt from paying import taxes. In addition the GoM guarantees the payment of all and any import taxes of goods aimed at education through the Tri-annual Public Investment Plan (PTIP). The government has also approved mechanisms offsetting VAT fiscal obligations for goods aimed at educational purposes, by mainly issuing titles without resorting to having to release funds. 3. Technical: Physical contingencies are estimated at 10% for civil works, 5% for equipment. Price increases are estimated at 2% for the five year project period. 4. Institutional: Lack of capacity at sector and institutional levels is a serious problem in Mozambique higher education. Key sector wide institutional issues were identified in the process of preparation of the Strategic Plan for Higher Education for 2000-2010 and the underlying national program as described in the PIM under www.mesct.zov.mz. The detailed institutional and organizational arrangements for UEM and MESCT, staffing and TORs have been completed. In order to initiate the capacity building process a number of activities were completed during the project preparation phase. The project itself will address institutional and capacity issues. (See section C. 1 and www.mesct.gov.mz for detailed explanation). 4.1 Executing agencies: The national program and project will be executed by the Ministry for Higher Education, Science and Technology (MESCT) and all the HEls. See also section C.4 Institutional and Implementation - 21 - arrangements and www.mesct.gov.mz. 4.2 Project management: See section C.4 and Annexes 5 and 6 and www.mesct.fov.rmz. 4.3 Procurement issues: See also Annex 6. Procurement capacity risk is rated high. The capacity to carry out procurement activities in Mozambique is limited and delays in the procurement process are common. However, under the Capacity Building Project involving the UEM, and the PIU and GIU (Gabinete de lnstalacaos de UEM) for civil works, about seven years of experience in procurement processing has been built and the project will try to retain this capacity where it exists and share its experience. Both UEM and MESCT have identified staff and the institutional arrangements for managing the new project. Some of the key procurement problems are: (i) addenda to contracts; (ii) delays in rehabilitation works; (iii) financial and procurement management of twinning arrangements with extemal institutions; and (iv) overcommitment of fellowships/scholarships beyond project closing date. As each institution is autonomous, but project oversight will be the responsibility of the MESCT, there will be a high level of complexity in the flow of funds and processing of procurement documents. To mitigate this risk the procurement and financial management staff will be contracted by effectiveness - in UEM as of October 1, 2001, the staff have been identified and contracted. Core civil servants are receiving training in procurement, disbursement, financial management and budget planning The organizational and staff arrangement has been tested via the implementation of the PHRD (which has been disbursed in half the anticipated time). The organizational set-up will however depend on the ability of the consultants and staff to prepare detailed annual implementation plans, thus, placing great pressure on the timely elaboration of institutional and faculty plans. To build this capacity the project has from its beginning relied on a highly participatory process, owned by the staff, focusing on the development of departmental and faculty plans and budget, in continuing cycles of iteration between priorities, budget, plans and implementation arrangements. 4.4 Financial management issues: See also section C.4 and Annex 5 of the Financial Management Assessment Report that concludes: "Although the country fiduciary risk is assessed as high according to the CFAA, nevertheless, provided the financial management proposals outlined in the Financial Management Assessment Report are satisfactorily addressed in practice, the Project Financial Management Risk is assessed as being moderate". Financial management capacity is weak in Mozambique. The project will address this issues in two ways. One is through the project itself where the establishment and development of the accountancy profession is one of the key priorities. The second is focused on the financial management arrangement for the project. 5. Environmental: Environmental Category: B (Partial Assessment) 5.1 Summarize the steps undertaken for environmental assessment and EMP preparation (including consultation and disclosure) and the significant issues and their treatment emerging from this analysis. 5.2 What are the main features of the EMP and are they adequate? 5.3 For Category A and B projects, timeline and status of EA: Date of receipt of final draft: Framework 12131/02/ continuous for each new site. - 22 - The civil works defined in the project are confined to existing campuses and public sites and therefore do not entail any environment or resettlement issues. However, during appraisal it was agreed that any new site construction or rehabilitation of student dormitories (sanitary facilities), and if a relocation of ISRI into a new building is required, these changes should be carried out in accordance with Bank requirements for environmental and resettlement documentation. This condition should also coverfuture and unknown site construction which may emerge under the support to the private sector from the Quality Enhancement and Innovation Facility. It was therefore agreed to include such issues early on to provide the Government with the tool to ensure compliance. Therefore, it was agreed to change the classification from C to B. However, as a consequence of this, the project could not disclose appropriate EIA and RAP documentation prior to appraisal. Thus, it is not in strict compliance with Bank policy on disclosure of EIA and RAP documents. The draft RAP/EIA TORs and framework are included as agreed during negotiations and reflected within the Minutes of negotiations. Specifically, EIA and RAP documentation will be completed for any each new site construction as a condition for disbursement, reviewed and disclosed by the Bank and Government. The TORs for the preparation of the general framework will be included in the PIM under nAww.mesct.gov.mz. Standard guidelines will be included under this. The key social issues addressed by the project are those arising from inequities in access to education, employment and income which derive from disparities in regional development, urban rural cleavages, gender and family wealth. (See comments below) 5.4 How have stakeholders been consulted at the stage of (a) environmental screening and (b) draft EA report on the environmental impacts and proposed environiment management plan? Describe mechanisms of consultation that were used and which groups were consulted? During the appraisal mission and negotiations, a discussion with the Government of Mozambique and other stakeholders was held, with a view to putting in place the adequate mechanisms which will ensure that the development of new institutions in the third or fourth year of the project will take adequate account both of environmental issues and the fate of any Mozambicans occupying any land. The Govemment will disclose any EIA or RAP issue on its public site www.mesct.2ov.mz. 5.5 What mechanisms have been established to monitor and evaluate the impact of the project on the environment? Do the indicators reflect the objectives and results of the EMP? Complete review by the Bank and disclosure is a condition of disbursement for any future new site construction. 6. Social: 6.1 Summarize key social issues relevant to the project objectives, and specify the project's social development outcomes. The key social issues addressed by the project are those arising from inequities in access to education, particularly between the Northern and Central provinces and the South, employment and income opportunities which derive from disparities in regional investment and development, urban rural cleavages, and gender and family wealth. Another issue is the fact that the rapidly growing economy is taking place in a context where there is a limited pool of qualified human resources. This has led to hiring an exceptionally high number of expatriate professionals which has brought some tension in various fora. 6.2 Participatory Approach: How are key stakeholders participating in the project? Key stakeholders are identified in this project as HEI rectors, managers, faculty, staff, students, parents, employers, and MESCT officials. As outlined in the World Bank's Strategy for Higher Education, the consultative process used in Mozambique is an example to follow: Extensive consultations have taken place throughout the country to introduce stakeholders to the new national higher education system and its - 23 - mission as portrayed in the PEES (see section D.4 Borrower Commitment). 6.3 How does the project involve consultations or collaboration with NGOs or other civil society organizations? As mentioned in section 6.2 above and D.4 the PEES was extensively discussed with civil society and the public and through extensive media coverage (TV, print and audiovisual). The PEES was discussed in each province and during a number of roundtables and workshops. Through project preparation, close collaboration was achieved with an American NGO, the Gulbenkian Foundation and two US-based foundations that work extensively on higher education issues in Mozambique. Also, the team has had access to information from the Forum for African Women Educationalists (FAWE) and from the Association for the Development of Education in Africa (ADEA) which has just completed a major study on the prevalence and consequences of HlV/AIDS in African universities and is expected to produce another study on innovations within higher education across the continent. As a result a draft agreement for the involvement of the Rockefeller, Ford or Gulbenidan Foundations has been prepared. The proposed provincial scholarship scheme will bring closer involvement of local authorities and parents. 6.4 What institutional arrangements have been provided to ensure the project achieves its social development outcomes? Immediately available measures include: (i) introducing a provincial scholarship grant scheme: (ii) creating new institutions/distance education; and (iii) introducing an innovation facility. Longer term intentions include: (i) introducing a uniform national more equitable selection form that evaluates academic preparation and assesses candidates potential; (ii) designing special preparatory courses to enable entering students, who are not as well prepared as more advantaged students, to overcome academic preparation gaps; and (iii) using public and private funds to provide student accommodation adjacent to HEIs, with a particular emphasis on disadvantaged groups. 6.5 How will the project monitor performance in terms of social development outcomes? Key project performance indicators covering the above have already been included. This will be complemented by the annual progress reports. 7. Safeguard Policies: 7.1 Do any of the following safeguard policies apply to the project? Policy Applicability Environmental Assessment (OP 4.01, BP 4,01, GP 4.01) * Yes 0 No Natural Habitats (OP 4.04, BP 4.04, GP 4.04) 0 Yes * No Forestry (OP 4.36, GP 4.36) 0 Yes 0 No Pest Management (OP 4.09) 0 Yes 0 No Cultural Property (OPN 11.03) 0 Yes * No Indigenous Peoples (OD 4.20) 0 Yes * No Involuntary Resettlement (OPIBP 4.12) 0 Yes 0 No Safety of Dams (OP 4.37, BP 437) 0 Yes * No Projects in International Waters (OP 7.50, BP 7.50, GP 7.50) 0 Yes 0 No Projects in Disputed Areas (OP 7.60, BP 7.60, GP 7.60)* 0 Yes 0 No 7.2 Describe provisions made by the project to ensure compliance with applicable safeguard policies. For any new site construction, the Development Credit Agreement will include a disbursement condition that requires a complete EIA and RAP to be reviewed and accepted by the Bank and disclosed in a timely manner. - 24 - F. Sustainability and Risks 1. Sustainability: The project relies on two critical assumptions: (a) Program and reform sustainability: enactment of regulatory framework, funding formulae, revision of public service categories to allow recognition of the new proposed BA and Associate degrees and fulfillment of covenants and programs to improve efficiency and quality in the HEls; and (b) institutional stability and establishment of the MESCT and COESCT. (a) Program and reform sustainability. Maintaining the momentum of a reform program which consists of numerous diverse innovations, located within larger structural, cultural and institutional change, will not be easy. The introduction of shorter courses and programs in the areas of highest demand will improve the labor market relevance of the type of education provided and strengthen linkages between the sector, key employers and the public and private sectors as a whole. These linkages will encourage cost covering contributions, in the form of fellowships, research contracts and direct support from the private sector and donor agencies, as well as stimulating parental inclination to pay fees for particular courses and programs and, hence, contribute to the sustainability of these programs. The Scholarship and Innovation schemes and the backing for reform which is at the heart of this project will provide specific and general incentives to the reform program. Overall, the past and future commitment to the higher education reform lies with the institutions and academic staff rather than a specific individual. (b) Institutional sustainability. The first years of the project will support the development of MESCT capacity to formulate policy, monitor and coordinate sector performance. However, the implementation of the project and national program will reside within the existing autonomous HEIs. Issues of a general nature will continue to be discussed in the association of institutions and COESCT. The fact that the reform programs are designed and owned by the institutions themselves will evoke commitment, effectiveness and sustainability. Equity-driven commitment to institutional development across provinces, on the part of religious foundations, assistance agencies and the government itself, is a force that will help to sustain institutions and branches outside Maputo. 2. Critical Risks (reflecting the failure of critical assumptions found in the fourth column of Annex 1): Risk Risk Rating Risk Mitigation Measure From Outputs to Objective Macro economic situation deteriorates and M Current growth prospects are positive. The fiscal system fails to sustain the costs of Bank is assisting the Government through expanded system of higher education resource transfers under the HIPC and PRSP process and structural and institution building credits. Covenants on cost-saving, revenue generation and efficiency gains will free up resources and reliance on public resources. Economic decline or decline in FDI and M Expansion of the higher education will be investors confidence suppresses demand supported in the areas where the supply gap is for skilled labor (more graduates) the largest, demand elasticity is lower and utilization of acquired skills broader. There is a huge skills gap that will not be filled for years Reforms are not sustained and H Current commitment is high and the proposed itnplemented in public HEls and therefore external and internal conditions set for -25- fail to improve efficiency sustaining reforms will mitigate the risk of lack of commitment From Components to Outputs Government loss of commitment to a N Strong Government commitment to a national national reform strategy (1) strategy, the pace of project preparation and dedication to it are matters of public record. The project supports the Government in its intention to rapidly put in place the legislative and fiscal framework that will accelerate implementation of the strategic plan for higher education. Varying capacities (management, H Log frame and management training have procurement, financial) of HEls to initiate already been provided. The project design and manage chosen reform programs (2). provides flexibility to allocate funds according to the demonstrated capacity of individual HEIs to utilize them. Bank operation training has been initiate and will become an recurrent event. TA will be put in place. Model program on which provincial S The project requires a draft outline of an action scholarship scheme is based difficult to plan and then careful piloting of the new replicate and transfer to other provinces program, in the selected provinces, using (3). experienced staff to train new managers, before an extension of the scholarship scheme. M institutional differences over the choice of The MDLN will operate under a consortium approach to distance education (2:d) with participation of all interested HEls. Other Political pressures override economic and institution-led initiatives will complement each educational considerations in design and other and converge over time. location of new colleges and branches Provincial and national consultations have (2:d,e). established a framework of possible options and further consultations will be used to decide the rational design for new types of institution. MESCT slow to take on staff & M The project requires the recruitment & training develop its managerial and regulatory of key staff to have occurred before capacity (1) negotiations. Continued capacity building in MESCT is an immediate and priority focus of the project Overall Risk Rating M Risk Rating - H (High Risk), S (Substantial Risk), M (Modest Risk), N(Negligible or Low Risk) 3. Possible Controversial Aspects: ln a country not long beyond independence and a subsequent civil war, with political differences that have a geographical dimension, the speed and manner in which education is used to meet economic needs and redress historical imbalances and inequities are inevitably matters of debate and controversy. Fortunately, the debate is less over the need for economic development and political integration than over the best way to achieve it. - 26- G. Main Credit Conditions 1. Effectiveness Condition (a) the external Auditors have been appointed; (b) the Borrower has adopted the PIM, in form and substance satisfactory to the Association; (c) the Project Account has been opened; (d) the Borrower has established a financial management system, in form and substance acceptable to the Association, including the development of a financial procedures manual and the appointment of financial management staff for the Project Coordinating Unit with experience acceptable to the Association; (e) the Borrower has submitted the final Letter of Sector Policy in a form and substance satisfactory to the Association. 2. Other [classify according to covenant types used in the Legal Agreements.] (a) the Borrower shall cause UEM, UP and ISRI to approve an action plan for generating institutional cost savings and first measures of that plan to be taken twelve months after project effectiveness; (b) the Borrower shall cause UP and ISRI to make 3 year-long Bachelor degree programs in selected areas, shorten licenciaturas to 4 years, all operational three years after project effectiveness; (c) review with the Association implementation progress on the Letter of Sector Policy and Strategic Plan at Mid-term review; (d) by December 31, 2004, discuss with the Association implementation of a higher education funding policy; (e) by December 31, 2004, complete at least 4 departmental external quality reviews in three institutions by mid-term review; (f) the Borrower shall ensure that the share of UP and ISRI generated revenue increases by 5%-points. Dated covenants for UEM (a) the Borrower shall cause UEM to make 3 year-long Bachelor degree programs in selected areas, shorten the licenciatura degree to four years duration (except for medicine and architecture), introduce graduate degree programs, all operational two years after project effectiveness; (b) the Borrower shall cause UEM, by December 31, 2002, to have established a student monitoring system (and agreed with the relevant university bodies) to monitor student programs (rate of graduation, admissions and drop-outs); (c) the Borrower shall cause UEM by mid-term review of the project, to produce an action plan approved by the relevant university bodies, which includes numerical targets (in terms of percentage improvement in graduation rates, percentage of increase in proportion of students who graduate without repetition or with no more than one year of repetition, percentage of reductions in proportion of students - 27 - who repeat or drop out of courses and reduction in average years of study per graduate) in each department/program, and specifies actions taken to improve the indicators in departments/programs showing poor performance; and (d) the Borrower shall cause UEM to ensure that the share of UEM generated revenue increases from 14% of state budget financing in 2001 to 17% by 2003 and to 20% by 2006. Disbursement conditions (a) the Borrower shall for disbursement for each new construction site outside the existing campuses of each one the HEls, under or Part B.1, B.2, B.3 and the Public or Private Beneficiaries under Part B.5 of the Project, respectively, unless Borrower shall have submitted to the Association an EWAIRAP, in form and substance satisfactory to the Association; (b) the Borrower shall for Part B.5 - Quality Enhancement and Innovation Facility, of the Project (Grants and Sub-loans related with Micro-projects) receive: (i) the first evaluation report, duly approved by MESCT's QIF evaluation committee and reviewed by IDA, listing all eligible activities for project financing; (ii) thereafter, disbursements under this category will be made exclusively for specific, planned activities, which are part of evaluation reports. (c) the Borrower shall for Part C.2 of the Project (Provincial Scholarships) receive (i) the first list of eligible students, upon approval by provincial Governing Boards and reviewed by IDA; and (ii) thereafter, disbursements will be made for eligible students, who meet the eligibility criteria and have been endorsed by the respective Governing Board. H. Readiness for Implementation El 1. a) The engineering design documents for the first year's activities are complete and ready for the start of project implementation. E 1. b) Not applicable. 1 2. The procurement documents for the first year's activities are complete and ready for the start of project implementation. 1 3. The Project Implementation Plan has been appraised and found to be realistic and of satisfactory quality. 1 4. The following items are lacking and are discussed under loan conditions (Section G): 1. Compliance with Bank Policies O 1. This project complies with all applicable Bank policies. O 2. The following exceptions to Bank policies are recommended for approval. The project complies with all other applicable Bank policies. The future construction or rehabilitation work under Part B of the Project (Component 2), involving the possible construction of a new student dormitory in the provinces of Nampula (US$0.6 mill.) and Beira (US$0.6 mill.) of the Pedagogical University and the possible re-location of the Higher Institute for Intemational Relations (US$2.0 mill.) which is currently located in a renovated villa, had to be introduced during appraisal (representing 5% of total project). Therefore, through discussions between the -28 - Government of Mozambique and the Bank, it was agreed that, because of the late addition of new construction sites to the project, the environment and social assessment classification should be changed from the Bank's previous assessment of 'C' to a 'B' for the purposes of Operational Procedures Bank Procedures (OP/BP) 4.01. This would provide the government with the tools for ensuring that environmental standards and any possible resettlement issues would be adequately addressed for any new site construction for a Higher Education Institution outside any public land. Consequently, an Environmental Impact Assessment ("EIA") and a Resettlement Plan ("RAP") became a prerequisite prior to negotiations. However, appraisal was already finalized for the proposed Project and most of the subprojects details were not known at the time of appraisal, which prevented the Borrower from preparing an EIA and a RAP in the required timely manner. In applying both OP/BP 4.01 and Operational Directives (OD 4.30), the Project documents have been modified to ensure that the EIA and RAP will be carried out prior to commencement of any construction activities in new sites in public lands, and that these works will be carried out in a manner consistent with the requirements of both OP/BP 4.01 and OD 4.30. However, the project is still viable even if the 'new construction' is not performed or authorized. The Borrower with support of IDA has prepared the draft terms of reference for the EIA and RAP in a form and substance satisfactory to the Bank. The TORs will require the Borrower to conduct the EIA and RAP for each individual new construction site prior to commencement of the works on these new sites, and to design and implement suitable mitigation measures including another site, if any is needed, based on the findings of the EIA and RAP. During Negotiations the Borrower also agreed to a framework for both EIA and RAP in a form and substance satisfactory to the Bank. The disbursement conditions will be specifically directed towards the disbursement of the proceeds of the Credit for expenditures under the Project component related to each individual new construction site. These arrangements will ensure that subprojects that do not comply with accepted environmental standards are not financed under the Project. SorenN + ~ NeDzingai Mutumbuka Team Leade Sector Manager/Director Country Manager/Director - 29 - Annex 1: Project Design Summary MOZAMBIQUE: Higher Education Project Key Perfonrance Data Collection Strategy Hierarchy of Objectives Indicators CritkaIl Assumptlons Sector-related CAS Goal: Sector Indicators: Sector/ country reports: (from Goal to Bank Mission) To develop human resources * Increased supply and * Public and private sector a Adequate supply of well at all levels for the attainment quality of high level skills, employment surveys with prepared secondary school of long term sustainable and experience and innovation estimates of labor market leavers to ensure a sufficient equitable economic growth at to the labor force, demand and supply. number of qualified entrants current levels, thereby * Sustained economic * Regional and gender for HE. securing the reduction of growth analysis of HE enrollment * Continued growth of GDP poverty, and more * Reduced social and * Household survey, poverty and employment immediately to increase the geographical disparities in reports opportunities. supply and quality of high access to higher * Continued commitment to level skills, experience and education, employment the PEES and national innovation in the labor force, and income. program for the purpose of achieving * Reduced poverty these goals. Project Development Outcome I Impact Project reports: (from Objective to Goal) Objective: Indicators: To (i) enhance the intemal * Absolute number of * Regular monitoring and * lncrease in public budget efficiency and expand the students graduating analysis of aggregate allocated to HE in line output of graduates; (ii) increased from 786 in enrollment statistics and with the LSP, as a result improve equitable access; and 2000 to 1,500 in 2006 in of progression rates of growth in GDP and (iii) improve the quality of all HEls; (graduation, repetition, allocation of HIPC funds, teaching learning and the drop out) relevance of the curriculum. * Increased by 5% point the * Monitoring and analysis * Sustained capacity of number of students from of enrollment statistics by labor market (public and the North (from 10% to gender, regional origin of private) to absorb 15%) and Center (from students, HE institution, increased supply of 30
Groupe de la Banque mondiale · Project Appraisal Document
Mozambique - Higher Education Project
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