Somalia - Third Education Project

Document of The World Bank FORI OIFFRCAL USE ONLY Report No. P-1969-SC REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE SOMALI DEMOCRATIC REPUBLIC FOR A THIRD EDUCATION PROJECT July 28, 1977 This 1ccumentlhas restricted distributlon and rany be used by -reciplents only In the, peronannce of their-officlal duties. Its contents may not othemise be diselosed wlthout -world BankD. ntorimftlon.  EQUIVALENTS Currency Unit - Somali Shilling (So. Sh.) US$1 - So.Sh. 6.295 So.Sh.1 - US$0.159 So.Sh.lm - US$159,000. Government of Somalia Fiscal Year January 1 - December 31  FOR OFFICIAL USE ONLY SOMALIA - THIRD EDUCATION DEVELOPMENT PROJECT CREDIT AND PROJECT SUMMARY BORROWER: Somali Democratic Republic AMOUNT: US$ 8.0 million equivalent TERMS: Standard PROJECT DESCRIPTON: The project would assist in consolidating recent achieve- ments in primary education and adult literacy by improving the quality of education through curriculum development, in-service teacher training and production of teaching materials. It would promote basic education and skill training through programs of non-formal education and assist in meeting identified needs of specialized manpower in the fields of animal husbandry, forestry, supportive health services and trade testing. The project faces no special risks, although realization of expected benefits will depend on sufficient testing of the materials to be developed under the revised curricula, and the Regional Adult Education and Training Centers may encounter some difficulties due to lack of sufficiently experienced ad- ministrators of non-formal education at the regional level. ESTIMATED COST: (US$ Million) Local Foreign Total Curriculum Development Center .1 .2 .3 Textbook Printing .3 2.4 2.7 Regional Adult Education and Training Centers .2 .7 .9 National Trade Testing and Training Center .0 .1 .1 Livestock and Forestry School .4 .8 1.2 Health Institute and Schools of Nursing .6 .7 1.3 Project Unit and Administration .1 .1 .2 Survey of Public Administration and Management Training Needs .1 .0 .1 Technical Assistance .2 1.0 1.2 Base Cost 2.0 6.0 8.0 Contingencies: Physical (9%) .2 .5 .7 Price (34%) .8 2.2 3.0 Total Project Cost 3.0 8.7 11.7 Total Project Cost net of taxes and duties 2.6 8.7 11.3 I This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  FINANCING PLAN: (US$ Million) Local Foreign Total % IDA 0.7 7.3 8.0 71 African Development Fund 0.3 1.4 1.7 15 Gpvernment 1.6 - 1.6 14 Total Project Cost 2.6 8.7 11.3 100 APPRAISAL REPORT: Report No. 1334-SO dated July 26, 1977.  INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED DEVELOPMENT CREDIT TO THE SOMALI DEMOCRATIC REPUBLIC FOR A THIRD EDUCATION PROJECT 1. - I submit the following report and recommendation on a proposed development credit to the Somali Democratic Republic for the equivalent of US$8.0 million on standard IDA terms to help finance a Third Education Project. The African Development Fund (ADF) would participate through parallel financing of the textbook printing component in the amount of 1.5 million ADF units of account (about US$1.7 million). PART I - THE ECONOMfY 1/ 2. A Bank economic mission visited Somalia in April/May 1976 and the resulting Country Economic Memorandum was distributed to the Executive Directors on April 18, 1977. Country data sheets are attached as Annex I. 3. The Somali Democratic Republic was formed in 1960 by a merger of the former Italian Trust Territory of Somalia and the British Protectorate of Somaliland. Following a decade of parliamentary rule, the Government was taken over by the military in 1969. The Supreme Revolutionary Council, con- sisting of army and police officers, was the highest decision-making body until mid-1976 when a political party, the Somali Revolutionary Socialist Party, was formed and became the key political institution. 4. In 1970 the Government announced its adherence to a program of scientific socialism, emphasizing egalitarianism and social justice, develop- ment through the public sector, nationalization of certain foreign enter- prises, and the formation of cooperatives. While the Government has always stated that there is room for private initiative in Somalia and several privately financed projects have been implemented, the main emphasis has been given to development of the public sector. The Government's development efforts have been characterized by what have become national virtues: auster- ity and self-reliance. Somalia joined the Arab League in February 1974. This step has significantly increased the country's receipts of assistance from the Arab oil-surplus countries. 5. Somalia is located on the horn of Africa with three thousand kilo- meters of coastline on the Gulf of Aden on the north and the Indian Ocean on the east. It has an area of 637,700 square kilometers. The topography varies from a hot and arid coastal plain, which gives way to sparsely wooded savannah, to rugged mountains, agricultural plateaus and lowlands of varying fertility and rainfall. Much of the country is arid; water supplies are scattered and often unreliable, and periodic droughts bring great hardship to 1/ Part I - The Economy has been reproduced from the President's Reports for the recently approved Roads III and DFC projects.  - 2 - both the people and their livestock. Only a small proportion of the land, approximately 13%, is arable. While the existence of several minerals has been confirmed, exploration is still in the early stages and commercial viability remains to be proved. Lacking other known resources, development plans center on agricultural and livestock development. However, progress in the development of stock-raising and agriculture will depend upon careful management of scarce land and water resources. 6. With an estimated per capita income in the order of US$100 in 1975, Somalia is classified by the UN as one of the 25 least developed countries of the world. Of the total population of approximately 3 million, about two-thirds are nomads and semi-nomads, who depend on livestock for their livelihood and about 20-25% are farmers cultivating land along the Juba and Shebelli rivers and in the higher-rainfall Northwest region. The small monetary sector of the economy provides only limited opportunities for employ- ment. Apart from the traditional export of livestock, commercial agriculture is mainly centered on the production of bananas for export, in which Italian concession holders are still important, and the production of sugar for the domestic market. Manufacturing and other sectors of the economy are re- stricted in their potential by the small size of the market, poor infra- structure, and the shortage of capital and entrepreneurial experience. No income distribution data exist, but we estimate that about 70% of the popu- lation live at subsistence levels of about US$200-250 per family of five in 1975. Social services are still very inadequate; the school enrollment ratio was until recently among the lowest in the world but has taken a great leap forward in the past two years. Recent Economic Performance 7. There is little economic data on Somalia. Even basic figures such as GNP, population, number of livestock, or output of major agricultural crops are only rough estimates. Therefore, it is extremely difficult to measure economic performance except in a very rough and ready manner. 8. Poor rainfall in 1973 and a virtual absence of rain during 1974 and the first half of 1975 led to widespread crop failures. The drought hurt exports of livestock and bananas, the two largest earners of foreign exchange, and required large imports of maize, sorghum, rice and sugar. The drought affected the entire central and northeastern parts of the country involving a large part of the population, mostly nomads. The Government moved quickly to respond to the situation and began to set up relief camps in November 1974. Relief camp population peaked at about 270,000 in late May and early June 1975, with nearly 400,000 other people being assisted outside the relief camps. While the Government's foodgrain reserves were almost totally ex- hausted by the end of 1974, food aid was received in sufficient volume to cope with the immediate problem of hunger. However, despite prompt action by the Government and the response of foreign aid donors, the loss of human lives reached 19,000 by the end of summer 1975. Given the size of the disaster, this was a relatively low figure and is an indicator of the growing effective- ness of the Government. However, there was extensive loss of livestock, estimated at 20-25% of the national herd.  - 3 - 9. The drought was finally broken in 1975 when the summer rains were quite good. Meanwhile, the Government established a number of agricultural settlements in the south and fisheries settlements along the coast to provide a permanent livelihood for the inhabitants of the relief camps. In August 1975, the relief camps were disbanded and about 110,000 people were resettled in the three agricultural areas and about 15,000 were settled in three loca- tions along the coast which have potential as fishing ports. The remaining 100,000 or so inhabitants returned to nomadism. The Drought Rehabilitation Credit (623-SO) is assisting the three agricultural settlements. 10. Somalia's manufacturing sector consists of a few relatively large- scale public-owned enterprises and a large number of small private enter- prises. Out of an estimated value added in industry of US$20 million in 1973, the most recent year for which sectorwide statistics are available, about 80% was in the public sector. Most of the industries are agro-based, depending upon locally produced raw materials. After making strong progress in the period 1968-70, relative stagnation started in 1971 and lasted until 1973; however, indications are that the industrial activity has picked up in 1974- 75, especially in the public sector. Several significant manufacturing investments were made in the latter period such as a brick factory, a flour and pasta mill, grain mills, and a corrugated carton factory. In addition, expansion and modernization of existing plants, especially the sugar complex and the textile factory, will come to fruition in the near future. Also, the expansion of the fishing fleet is contributing to the improved performance of the fish factory. Construction has started on a 500,000-ton oil refinery financed by Iraq. 11. Somalia's fiscal performance has continued to be encouraging, and public savings through current budget surpluses will remain an important goal of the Government. Together with the many self-help projects, the ability of the country to help finance its investment plan is the most con- crete embodiment of the national policy of self-reliance. The turning point came in 1971 when the Government first succeeded in reversing a ten-year history of budget deficits. Since then, a surplus has emerged every year. However, the increasing supply of all types of governmental services nation- wide and the recurrent cost implication of the recent large public investments will make it increasingly difficult for the budget to act as a generator of savings in the economy. 12. To raise the revenues required to finance a high level of gov- ernmental activity will require a reform of the tax system and identification of new sources of revenue. Specifically, since the Government has invested heavily in the parastatal sector, where financial performance has been poor, ways of improving efficiency are necessary to ensure that they generate a larger and growing source of revenue. A World Bank mission recently studied state firms and has discussed its findings with the Government. The Bank plans to continue this dialogue with a view to assisting the Government to improve the operational efficiency of the parastatal enterprises.  13. Somalia's balance of trade on goods and services has been in deficit since Independence. The gap has grown from US$18.6 million in 1970 to US$106 million in 1975, largely as a result of rapid growth in im- ports. Imports have risen steadily from US$56.8 million in 1971 to US$178 million in 1975. Fast import growth is taking place in spite of the Govern- ment's comprehensive import licensing system and of selective measures to constrain imports of some goods. Measures to compress non-essential imports can only have limited impact, since development-related imports already accounted for 40% of the total in 1974 and undoubtedly account for a higher share at present. The remaining import bill is dominated primarily by non- compressible items such as food. Exports, on the other hand, jumped from US$31.9 million in 1970 to US$85.3 million in 1975. A stronger than expected performance in livestock and meat products is largely responsible for the high exports of 1975. Also, higher banana prices more than offset a marked decline in volume exported (down about 20% from 1974). However, the main positive developments in 1975 concern unrequited transfers and capital inflows. As a result of the drought, Somalia received the equivalent of US$65.8 million in cash grants and food and other assistance in kind valued at more than US$36 million. Capital inflows totalled US$41.5 million. These factors led to an overall balance of payments surplus of US$51.9 million. However, since exports of livestock are likely to drop in the future as nomads restock their herds and unrequited transfers may fall to pre-drought levels, future years will probably show roughly balanced transactions with neither large gains or losses in reserves. 14. Foreign aid has at times been the sole source of financing for investment. In recent years it has been supplemented by modest sums of public savings. However, for the foreseeable future, foreign assistance will continue to play a major role in the development of the country. The Somali Government is well aware of this fact and while pushing for self-reliance by emphasizing domestic savings and self-help programs, it has mounted a major effort to attract commitments of funds from the OAPEC countries. The large inflows of foreign funds during 1975 indicate that the effort has been successful. Given the poverty of Somalia and the resulting very limited capacity to provide local financing from its own resources, provision of a significant amount of local cost financing by external aid agencies is justified. 15. The source of foreign assistance has been changing from the western countries (except for the EEC which continues to have a fairly large program) towards the socialist group (mainly China and the Soviet Union) and the Arab countries and Arab funds. Loans from the socialist countries typically bear interest at 2-1/2% but have rather short maturities (10-15 years) while the Arab countries tend to have terms which, while soft compared to commercial rates, resemble Third Window more than standard IDA terms. 16. The total public foreign debt of Somalia as of December 1975 was approximately US$433.7 million, of which about US$250 million was disbursed and outstanding. IDA commitments as of December 1975 accounted for 14% of total debt outstanding. Although a large share of this debt is on fairly soft terms, the debt service ratio has increased from 3.4% in 1972 to about 4% in 1975, and will probably triple by the 1980's. At present, IDA's share  of debt service is negligible and is projected to account for about 3% of Somalia's total debt service payments in 1981. In view of the country's poverty and uncertain export prospects, Somalia should concentrate its efforts on obtaining assistance on the softest terms possible. Development Planning Achievements 17. The long-range objectives of the Government are strongly influenced by the desire to be self-reliant. In line with this goal, the Government is seeking to make the country self-sufficient in agriculture through both an expansion of the area under cultivation and the development of irrigation. In this process the Government intends to provide permanent settlement for many of the nomads. Considerable emphasis is given to modernizing and mobilizing the population. Of central importance for achieving these objectives are education, rural literacy and self-help programs such as the agriculture and public works "crash" programs. Finally, the Government places emphasis on developing infrastructure, especially transportation and communications, which are necessary to facilitate the above objectives. 18. Since the bulk of the population is engaged in herding or in sub- sistence farming, a development strategy for Somalia must start with agri- culture and livestock as a base. The major development goals of the Somali Government include self-sufficiency in foodgrains, the partial substitution of other food imports (oils, rice) and improvement of the lot of the tra- ditional nomadic herdsmen through settlement programs and improvements in livestock production and marketing facilities. The current Plan's emphasis on irrigated agriculture is meant to make the country less dependent on the erratic pattern of rainfall, and assure more stable and predictable increases in output. Attention is also being given to projects in rainfed agriculture (mainly through the Self-Help Program, the Rainfed Crop Production Project under the Juba-Shebelli Area Emergency Settlement Scheme, and the North-West Region Agricultural Development Project) which focus on making the best use of the limited amount of rainfall. Improvements in livestock production and marketing are being promoted by the IDA-financed Trans-Juba Livestock Project designed to provide market access to the nomads in the southern part of the country and the Kuwait Fund-financed Northern Rangelands Project with emphasis on rehabilitation of the denuded rangelands in the North. The Plan continues to base its development of industry on the processing of domestic raw mate- rials to substitute for imports. 19. The 1974-78 Five-Year Plan, as originally conceived, was probably overly ambitious and its implementation has been rendered even more difficult because of the recent disastrous drought which forced the Government to con- centrate resources on measures to save the drought-stricken population. A review of Plan implementation after two years shows rates of implementation of 46.2% and 40.8%, respectively, in 1974 and 1975. If adjustments for invest- ments outside the Plan (mainly drought relief and rehabilitation) were made, they would show implementation rates (in financial terms) of about 60% in 1974 and 55% in 1975. In absolute terms, annual investment therefore increased from about So. Sh. 340 million in 1973 to an average of So. Sh. 500-600 mil- lion in 1974-75. These figures suggest an increase in the country's capacity to absorb investment funds.  - 6 - 20. The Covernment's achievements over the past several years have been impressive by any standard. Before the present Government came to power in 1969, the economy was stagnant and the Government financially unviable. Today the economy is developing in a dynamic manner and a far higher level of public services is being supplied. Whereas a few years ago, a bilateral budget support grant was necessary to finance the deficit in a current budget which financed a dismally low level of services, today, even though the country has been beset by national calamities and is carrying on new tasks, the budget is not only balanced but actually produces a modest surplus. 21. Two fields where the Government's achievements have been particu- larly outstanding have been in the settlement of nomads and in education. As noted above (para. 9), within a period of less than one year beginning in the summer of 1975, more than 100,000 nomads were transported from the arid range- lands of the North and settled on unutilized agricultural areas in the South. Land clearing is taking place and irrigation facilities are being built. Small harvests have already been reaped and this has encouraged both the Gov- ernment and the settlers. In education, the Government has concentrated on two aspects: basic education as a necessity for people, young and old, to enable them to effectively participate in the social, economic and political process; and specialized manpower training as a requirement for national de- velopment. With respect to the former, the mass literacy campaign conducted in the years 1973, 1974, and 1975 at a cost of So.Sh. 100 million (US$16 million) has resulted in an increase in the adult literacy ratio from about 5% to about 50-60%, according to the Government's own estimates. The formal primary school enrollment ratio has risen from less than 15% of the relevant age group a few years ago to approximately 34% at present, and universal primary education is a goal that possibly could be achieved by the early or mid-1980's. A script, introduced by the Government in 1972, made the writing of the Somali language possible for the first time, and this re- moved one of the major constraints to progress in the field of education. With respect to manpower development, the Government is concentrating on the training of high- and middle-level personnel in its principal develop- ment sectors--agriculture and livestock. PART II - BANK GROUP OPERATIONS IN SOMALIA 22. Starting in 1965 IDA has made 13 credits totalling about US$88 million, about 50% of which has been made for transportation development, including construction of two trunk roads and a new deepwater port and associated extensions at Mogadiscio, and most recently, improvement of the Hargeisa-Borama road. IDA credits were also made for education in FY71 and FY75, for livestock development in FY74, and for a development finance com- pany project earlier this year. Lending for agriculture commenced in FY76 with two credits for a drought rehabilitation project and a North-West Region agricultural development project. No Bank loan or IFC investment has been made to Somalia. Annex II contains a summary statement of IDA credits as of May 31, 1977 and notes on the execution of ongoing projects. Performance on ongoing projects has been generally satisfactory. However, as the pace  of development continues to rise, absorptive capacity constraints are likely to become increasingly evident, especially in the field of agriculture where projects are rather complex and implementation experience is limited. We will therefore, in preparing and appraising new projects, pay particularly close attention to implementation capacity. 23. We plan to concentrate our efforts on the country's directly productive sectors -- agriculture and livestock -- and also on education and transportation. While agriculture and livestock offer potential for development, most rural development activities are only at the beginning stage. Moreover, agricultural development in Somalia is particularly diffi- cult because most of the people in the rural areas are nomadic. For these reasons, we plan that much of our future lending will be in the agriculture and livestock sectors, and this will be complemented with near equal atten- tion on education. In addition to these sectors, we plan to support the Government's industrial development efforts (and assist in the formulation of an industrial development policy) through our country economic work and future DFC projects. An initial water supply project is also envisaged. 24. In order to help Somalia make the best use of assistance available from neighboring Arab countries, and also to ensure that IDA funds have the greatest impact, we have agreed with the Government to spread available IDA resources over a relatively large number of projects. Accordingly, the Association will make a major contribution to project identification and preparation, but in most cases would finance a small share of project costs and would help mobilize complementary funds from other external sources. This strategy requires extensive use of Bank Group staff, which is fully justified in view of Somalia's state of development and its strenuous efforts to improve its absorptive capacity. 25. To facilitate the development and implementation of the Associa- tion's growing operational program in Somalia, we have recently established a one-man resident mission. The mission will represent the Bank Group in its dealings with the Government, will assure an efficient and smooth day-to- day working relationship with the Government, and will help coordinate co-financing arrangements on the basis of the strategy outlined above. PART III - EDUCATION IN SOMALIA 26. Policy and Programs. Somalia's education policy is designed to achieve the national development goals of social justice and self-sufficiency in agricultural production through provision of basic educational opportuni- ties to all and of trained manpower required for identified development needs. It focuses on maintaining and reinforcing recent educational achievements and calls for a spirit of austerity and self-help among the people. In order to build a society in which the masses can effectively participate in social, economic and political activities, priority has shifted to primary and adult education from secondary education. This shift was made in 1975 when compul- sory, free primary education was introduced and made a target for the not-too- distant future. The structure of education has been changed by increasing  - 8 - the age of entry to primary school from six to seven years and by reducing the primary education course from eight to six years. The four-year secondary education course has been maintained, and its size is geared to future man- power needs. Emphasis has been placed on adult literacy and nonformal education programs, while specialized manpower needs in agricultural, animal husbandry, paramedical and vocational skills are being met through institu- tional and on-the-job training programs. 27. Recent Achievements. Over the last few years, Somalia has made remarkable progress in expanding the educational system. Total primary school enrollment increased from 97,000 in 1973 to 220,000 in 1975, which raised the primary school enrollment ratio from 13% to 34%; among the settled populations the ratio is as high as 60%. A massive literacy and health campaign in 1974-75 enrolled over one million adults. Today, some 1,500 adult learning groups have been formed for three-year basic education programs. Literacy classes are compulsory for the 50,000 adult nomads who were settled in connection with the drought rehabilitation program. Three of the ten nomadic training centers being established under the second IDA education project are located in the settlement areas to cater to these adults. Literacy materials and textbooks are distributed free of charge, and radio programs have become an important tool in strengthening adult education. 28. These achievements have been possible because of bold Government decisions regarding introduction of a script, the restructuring of the primary education cycle and the employment of teachers without formal qualifications. In 1972 the Government adopted the Latin script for Somali, previously only a spoken language, and made Somali the official language of the country. This decision was the most important element in making the literacy campaign possible. Textbooks for primary education were written in Somali and are being tested and introduced in the system; in 1975 the State Printing Agency produced one million copies of such textbooks. By 1978 textbooks for secon- dary education are also expected to be written in Somali on the basis of a revised secondary school curriculum. To cope with the sudden and rapid expansion of primary education, the Government set top priority on the estab- lishment of a new primary teacher training school, which was financed under the second IDA education project and is now in operation. Furthermore, the Government shortened the primary teacher training program from the regular two-year course to a one-year accelerated program and continues to rely on national service volunteers -- secondary school graduates serving one year as teachers before they take up employment or proceed to higher education. Although the Government has been successful in mobilizing the population to build schools and to serve as temporary teachers, it is aware that quantita- tive expansion is being carried out at the expense of educational quality, and that measures are urgently required to improve teacher quality through in-service training, appropriately developed teaching materials and better education administration. 29. The implications of achieving universal primary education are far- reaching. Over the next ten years, an average of 1,600 new primary school teachers will be required annually, an output eight times as great as in the recent past. An average of 650 classrooms per annum will have to be built, in addition to the 500 classrooms built in 1976 alone for the rehabilitation  settlements. Due to the large intake of nomadic children settled in 1975, more than 100,000 students are expected to complete primary school in 1981 and about 70,000 per annum thereafter, as compared to 7,000 in 1976. The large number of primary school leavers will eventually place increasing pressure on secondary school enrollment which has recently remained at a constant level of about 10,000 students. Consequently, the Government intends to carry out a reassessment of its policy for secondary education development, since continuation of the present high transition rate of 60% would, imply secondary school graduation of 23,000 students in 1984, as compared to the present level of 2,000. Long-term development of secondary education will have to be geared to the manpower requirements of the Develop- ment Plan. With the increasing school population and the drive for adult literacy, the development and provision of appropriate teaching/learning materials require immediate attention. It is estimated that over the next several years, an average of 2.3 million textbooks per annum needs to be produced and distributed. 30. Institutional Developments. The Ministry of Education was re- organized in 1976. A new Department of Teacher Training and Curriculum Development is responsible for developing and revising curricula, preparing textbook manuscripts and operating the in-service teaching training program. This Department will address the need for a qualitative evaluation of the recent changes in the sector. The Department of Nonformal Education is responsible for programs of adult and women's education; these programs will be implemented through the establishment of regional adult education and training centers which will strengthen the regional organization, super- vision and materials distribution of the rapidly expanding multi-functional programs. 31. In order to meet specialized manpower requirements, the National Trade Testing and Training Center is being developed, and a Livestock and Forestry School will be established to train personnel in the fields of animal husbandry and forestry. A Polytechnic will be completed in 1977 with a capacity of 800 for craftsmen and technicians. Additionally, the Government plans to strengthen the Health Personnel Training Institute and the Mogadiscio School of Nursing, as well as to establish a new School of Nursing in Kismayo. Expansion of the National University is proceeding rapidly in accordance with the guidelines provided in the 1974-78 Development Plan. 32. Financing. Education in Somalia is free, apart from secondary school boarding fees. Between 1969 and 1974, the combined recurrent expen- diture of the Ministry of Education and the Ministry of Culture and Higher Education was about 7% of the central Government's recurrent expenditure. However, as a result of the rapid growth of the sector, expenditure has increased to about 14% at present and by 1980 is expected to reach 20%, which would be comparable to the current share of recurrent expenditure in many African countries. Recent capital investment in education surpassed its targeted proportion in the first two years of the 1974-78 Development Plan and represented 8% of total development investment as compared to the planned level of 5%. Based on actual disbursements, IDA assistance for 1974-75 accounted for about 30% of the total capital investment in education.  - 10 - 33. Total planned investment in the sector, about So. Sh. 191 million over five years, allocated about 25% to primary and secondary education, 21% to technical and vocational education, and 26% to higher education. Invest- ment in education facilities for nomads and teacher training is expected to account for 19% and 7%, respectively. The Government's financing strategy essentially consists of supporting the construction of primary school class- rooms from its own budget and seeking foreign assistance for improvement and expansion of post-primary educational institutions. The Plan assumes that external sources will finance about 70% of total investment, while Government participation, which was almost nil under the previous Plan, will be some 30%. The ongoing second education project and the proposed third education project are expected to represent a major source of external assistance during the project period. PART IV - THE PROJECT Introduction 34. A report entitled "Somalia - Appraisal of a Third Education Proj- ect" (No. 1334-SO) is being circulated to the Executive Directors separately. A supplementary project data sheet is attached as Annex III. This project was prepared by the Somali Government with UNESCO assistance in May 1976 and was appraised by an IDA mission in July 1976. Negotiations were held in Washington on February 22 and 23, 1977. The Somali delegation was headed by Mr. Abdurahman Nur Herzi, Minister of Finance. Presentation of this project to the Executive Directors was postponed to FY78 since no further funds could be made available to Somalia out of the Fourth IDA Replenishment. Background 35. The proposed project would be the Association's third lending operation in the education sector in Somalia. The first project (Cr. 247-SO) assisted in the improvement of teacher, secondary and technical education, agricultural extension work, and the establishment of a Project Unit and a School Design Unit; it was satisfactorily completed in September 1976. A recently prepared project completion report has identified implementation lessons which have been taken into account in designing the proposed project. For instance, the civil works component has been kept comparatively small, and emphasis has been kept on the utilization of force account and self-help methods. Also, special provisions have been made to ensure the timely imple- mentation of the technical assistance component, as well as the strengthening of the Project and School Design Units. The second project (Cr. 511-SO) also supports teacher and secondary education, as well as fishery training and a special education program for nomads; implementation is on schedule. Project Objectives 36. The proposed project aims at consolidating recent quantitative achievements in primary education and adult literacy by improving the quality  - II - of education. It also seeks to promote basic education and rural skill training through nonformal education programs particularly addressed to women and the rapidly expanding number of primary school leavers. Furthermore, the project supports the training of specialized manpower in accordance with identified needs and national development priorities. Project Description 37. The project would assist, over a six-year period, an investment program to improve the quality of education through curriculum development, teacher upgrading and production of teaching materials. It would establish a system of regional centers to strengthen the administrative structure of nonformal education. Training for specialized manpower in animal husban- dry, forestry and paramedical services would be provided, and the existing system of vocational trade testing and training would be improved. Project administration would be strengthened, and specialist services provided, as would a survey of public administration and management training needs. Specifically, the project would consist of: (a) Construction, extension, renovation and/or equipping of the following institutions: (i) a new Curriculum Development Center; (ii) extension to the State Printing Agency, including about three years of incremental printing materials for textbook production; (iii) seven Regional Adult Education and Training Centers; (iv) equipping of the National Trade Testing and Training Center; (v) a new Livestock and Forestry School; (vi) a new Health Personnel Training Institute; (vii) renovations to the Mogadiscio School of Nursing; (viii) a new School of Nursing in Kismayo. (b) Equipment and incremental operating expenses for the Project and School Design Units; (c) A survey of public administration and management training needs; (d) The cost of specialist services and fellowships associated with the above items.  - 12 - Project Features 38. Curriculum Development Center. The Curriculum Development Division of the Ministry of Education is responsible for development of curricula, syllabi, and teaching aids and materials for general, technical and teacher education; it also assists in teacher training. Its workload has increased to the extent that existing staff and physical facilities require reinforce- ment to permit the efficient execution of work. The project would provide for construction and equipping of a new Curriculum Development Center. Specialist services would be provided for curriculum development, production of teaching aids and training of Curriculum Development Center staff in education evalua- tion. Sixteen man-years of overseas fellowships for the Center's staff would also be provided; completion of the fellowship training program would occur shortly before the new Center begins to operate. 39. Textbook Printing. The State Printing Agency is the only printer for both the public and private sectors in Somalia. In 1975 the State Print- ing Agency produced about one million textbooks for the Ministry of Education. During the next 10 years, it is estimated that an average of about 2.3 million textbooks per annum will be required for primary, secondary and nonformal education, and for teachers' guides. This estimate exceeds the present printing capacity of the Agency. The project would provide for printing equipment, the construction of additional physical facilities, specialist services to train local staff in the operation, maintenance and repair of printing equipment and in printing layout, and incremental printing materials (paper and other printing supplies) for about three years of the expanded textbook production program. Under an agreement between the State Printing Agency and the Ministries of Education and of Culture and Higher Education, the new facilities would be used exclusively for the printing requirements of the Education Sector. 40. Regional Adult Education and Training Centers. Although the scale of the 1973-75 mass literacy campaign cannot be maintained, the Government is determined to ensure the permanency of what has been achieved and to strengthen literacy with functional skills. It plans to establish a Regional Adult Education and Training Center (RAETC) in each region, to develop and improve the system of nonformal education. The RAETCs would act as regional support and resource centers to provide the necessary organization, supervision and materials distribution for adult learning groups. They would offer a broad, basic adult education course of three to six months duration, which would include rural skills training particularly addressed to women and to the rapidly expanding number of primary school leavers, and would support ongoing radio education programs which broadcast information and advice on agriculture, livestock production and forestry. The project would provide construction materials and equipment for the establishment of a RAETC in seven priority locations which have been identified. The selection of construction sites for the PRAETCs as agreed with the Association, would be a condition of credit effectiveness (Developmnent Credit Agreement, Section 6.01 (a)). Con- struction of the centers would be under the direction of the Project Unit  - 13 - and would utilize a self-help scheme successfully used in previous education projects. The project would also provide radio receiving and recording sets for distribution to adult learning groups within the catchment area of each of the proposed centers. A specialist would be recruited by September 30, 1978 to advise on the development of training courses in village technology (handicrafts, carpentry, simple mechanical and electrical works, construction and similar skills), to help train Somali craftsmen as instructors for the centers, and to supervise the establishment and carrying out of skill train- ing (Development Credit Agreement, Section 3.06 (a)). 41. National Trade Testing and Training Center. In 1974 a trade testing unit was organized under the Ministry of Labor and Sports to develop and administer trade tests, in order to classify trade and vocational skilled workers and to develop a more precise basis for the formulation of wage policies. The Government intends to utilize trade tests results as a tool for job placement, for qualitative improvement in vocational and technical train- ing, and for keeping abreast of the manpower supply situation. Trade testing in Somalia, however, is still in an early stage. The system is not well organized; guidelines and procedures are not fully established; testing facilities are lacking; and testers are inadequately trained. To improve the system, the project would expand and develop the National Trade Testing and Training Center in Mogadiscio to serve as headquarters for the trade testing and staff training program. Assistance from the project would consist of trade testing equipment in mechanical, electrical, and woodwork trades. Specialist services in trade testing and vocational training would be provided to assist in improving the organizational structure, formulating policies and procedures and staff training. Fellowship training would also be provided to enable staff from the Center to observe trade testing programs in other countries. 42. Livestock and Forestry School. Development of the livestock indus- try in Somalia requires m,lodern animal production techniques focusing on the improvement of livestock breeds, feeding, range management, and the processing and utilization of animal by-products. This will require complimentary intensification of ongoing programs of forest and range management, reforesta- tion and water shed development. The National University is expected to graduate sufficient degree holders in animal husbandry to meet higher level manpower requirements. However, facilities for training middle-level techni- cians in animal husbandry and forestry are not available in Somalia. The project would establish a 360-place Livestock and Forestry School where four-year post-primary courses would be offered in animal husbandry and forestry. Instructors for the animal husbandry course would be recruited from graduates of the College of Animal Husbandry and Veterinary Science of the University. For the forestry course, however, since qualified instructors would not be available locally, the project would provide six man-years of fellowships for training abroad of graduates of the National University to serve as forestry instructors. 43. Health Personnel Training Institute, Mogadiscio School of Nursing and Kismayo School of Nursing. The Health Personnel Training Institute in  - 14 - Mogadiscio trains all supportive health personnel for the country except nurses, who are trained at the Hargeisa and Mogadiscio Schools of Nursing. Within the next ten years, output from the Institute is expected to meet manpower requirements in accordance with the planned expansion of health services. The Institute, however, is housed in an inefficient and antiquated building. The Government plans to construct a new Institute and to transfer its community-oriented nursing course to the Mogadiscio School of Nursing, to allow the new Institute to concentrate on the training of supportive health personnel. To accommodate the added nursing course, the School of Nursing would be renovated. The Institute and the School of Nursing are adequately staffed with Somali instructors; three World Health Organization health education specialists currently provide technical assistance. The project would finance the construction and equipping of the new Institute and the renovation of the Mogadiscio School of Nursing. The project would also provide for construction and equipping of a new 60-place School of Nursing in Kismayo, where there is an acute shortage of trained nurses and where the population is rapidly increasing as a result of the concentration of many development projects in the area, including the resettlement program (para. 9). 44. Survey of Public Administration and Management Training Needs. One of the most serious problems Somalia faces is the lack of trained and experienced Somali administrators and managers to administer existing Govern- ment services and development programs. The Somali Institute of Development Administration and Management and the Institute for Accounts and Surveyors currently conduct training programs for administrative, managerial and cleri- cal personnel. However, their training programs are not well attuned to existing demand in terms of type, number and quality of manpower required. The project would provide one man-year of specialist services in public administration and management manpower planning as well as equipment and logistical support to assist the Government in conducting a comprehensive survey of the manpower training needs in public administration and manage- ment. The Somali Institute of Development Administration and Management has been designated to carry out the survey. By October 30, 1977, a plan for executing the survey would be submitted to the Association for review, and within the following six months, the administration and management manpower specialist would be recruited, the necessary equipment procured and the survey started (Development Credit Agreement, Section 3.06 (b)). Project Execution 45. The Project Unit established for the implementation of the first and second IDA education projects would be responsible for the financial and administrative control of the project including liaison with the Association. The School Design Unit would design and supervise the construction of project institutions, for which standard plans and construction documents developed for the first and second education projects would be utilized to the maximum extent possible. The Project and School Design Units have already been strengthened by the appointment of two building supervisors and a draftsman. They would be strengthened further by the appointment of an additional ac- countant and an architect, both of which appointments would be an additional  - 15 - condition of credit effectiveness (Development Credit Agreement, Section 6.01 (b)). Including five years of architectural services, the project would fi- nance a total of ten specialists, who would provide 16 man-years of services at an estimated cost of US$55,000 equivalent per man-year. By September 30, 1982, six months prior to completion of the project, the Project Unit would prepare terms of reference for a project evaluation committee and would fur- nish the same to the Association for review (Development Credit Agreement, Section 3.06 (c)). The committee's evaluation report would be submitted to the Association within six months after completion of the project (Develop- ment Credit Agreement, Section 3.06 (d)). The Curriculum Development Center Director would chair the committee and provide leadership in planning and conducting the evaluation. Project Cost and Financing 46. Total project cost (excluding about US$0.4 million of taxes and duties) is estimated at US$11.3 million equivalent, of which US$8.7 million or about 77% represents foreign exchange requirements. A summary of cost estimates is contained in the Credit and Project Summary. Costs are based on estimated February 1977 prices. Physical contingencies of 10% on the base costs of civil works, equipment, furniture and printing materials and of 5% on technical assistance and project administration have been included. A cumulative price contingency of 34% has also been included to cover esti- mated price escalation from the base cost date in accordance with the imple- mentation schedule. Total (physical plus price) contingencies represent about 45% of the base cost of this project. 47. The African Development Fund would finance the civil works, printing equipment and technical assistance items of the textbook production component. IDA would finance textbook printing materials and all other project components. The Government would contribute US$1.6 million equivalent towards meeting local costs. Total project costs would be shared in the following amounts and proportions: (US$ million) Local Foreign Total Percent IDA 0.7 7.3 8.0 71 ADF 0.3 1.4 1.7 15 Government 1.6 - 1.6 14 Total Project Cost 2.6 8.7 11.3 100 The proposed IDA credit would be on standard terms to Government. It would cover about 84% of foreign exchange costs and US$0.7 million of local costs. The financing of local costs is justified for the reason given in para. 14. The ADF loan would be on concessional terms similar to IDA's. It would finance the balance of foreign exchange expenditures and about US$0.3 million  - 16 - of local costs. The Government's contribution would be spread over six years and is within its financial capacity in light of past and projected capital expenditures for education. 48. Procurement. Contracts for civil works, construction materials, equipment (including vehicles and furniture) and printing materials (including paper) would be awarded on the basis of international competitive bidding in accordance with World Bank guidelines; orders would be grouped to the extent practicable. Qualified domestic civil works contractors would be allowed a preferential margin of 7-1/2% over bid prices of competing foreign contrac- tors. Imported building materials would be procured by the National Agency for Building Materials. Due to delays in shipment and the clearing of mate- rials through customs in the previous education projects, the Agency will procure required materials according to semi-annual forecasts by the Project Unit in order to ensure adequate supplies during construction (Development Credit Agreement, Section 3.07). Contracts for less than US$50,000 equiva- lent for furniture and equipment (estimated in aggregate at about US$350,000 equivalent, excluding contingencies) would be awarded on the basis of com- petitive bidding, advertised locally and in accordance with procedures sat- isfactory to the Association. Domestic manufacturers of furniture and equip- ment would be allowed a preference of 15% or the existing rate of import duties, whichever is lower, over the c.i.f. price of competing foreign sup- pliers. Due to the small size and remote locations of the seven Regional Adult Education and Training Centers, their construction and procurement of local materials would be through force account by regional councils utilizing a self-help scheme under the direction of the Project Unit. Disbursement 49. The proceeds of the credit would be disbursed over a six-year period and would cover all foreign expenditures to be financed by IDA and 50-100% of certain local expenditures (Development Credit Agreement, Schedule 1). Disbursements would be fully documented with the exception that disbursement for project administration and the management survey would be against certificates of expenditure for which documentation would be retained by the Borrower and reviewed by the Association in the course of project supervision. Expenditures incurred for project administration and the manage- ment survey would be maintained in a separate account which would be audited annually, and these audit reports would be available to the Association (Development Credit Agreement, Section 3.08). The closing date of the credit is September 30, 1983. Benefits 50. The benefits expected from the proposed project would relate to the quality of education, manpower development and institution building. The project would improve educational quality through curriculum development and the provision of teaching-aids, primarily textbooks, and through the develop- ment of regional centers for the improvement of adult education. Since Somalia will continue to rely for several years on unqualified teachers, an  - 17 - adequate provision of appropriately developed textbooks is essential to enable learning and is likely to benefit particularly the students from the most disadvantaged groups of society. The project would benefit manpower develop- ment through the expansion of specialized training institutions to provide middle-level technical manpower for the rural development programs. The Livestock and Forestry School and the Health Personnel Training Institute would be the only institutions in the country for the training of animal husbandry technicians, forest rangers and para-medical personnel, and their outputs would meet long-term development needs. Institution building would be promoted through further development of school design and implementation capacity. More significantly, the capabilities of the existing institutions for curriculum development, teaching aids preparation, trade testing, produc- tion and distribution of educational materials, and administration and man- agement of adult education would be extended. Risks 51. The major risk associated with the project is that the pressure to supply books in Somali as soon as possible to a rapidly increasing enroll- Lient might induce insufficient testing of the materials to be developed in line with revised curricula. A second risk is that in the initial stages of their operation, the Regional Adult Education and Training Centers may en- counter some difficulties due to the lack of experienced administrators of nonformal education at the regional level and to the need for improvisation. However, the accomplishments made by Somalia over the last three years in the areas of textbook development and adult education indicate that these risks are not likely to be large. To reduce them further, technical assistance and fellowships for overseas training would be provided according to a carefully designed schedule. The risks are also counterbalanced by the Government's objectives and strategy for education development, which have fostered re- markable progress in expanding educational opportunities within manpower guidelines and budgetary constraints. PART V - LEGAL INSTRUMENTS AND AUTHORITY 52. The draft Development Credit Agreement between the Somali Democratic Republic and the Association, the recommendation of the Committee provided for under Article V, Section l(d) of the Articles of Agreement of the Associa- tion, and the text of a draft resolution approving the proposed development credit are being distributed to the Executive Directors separately. 53. Features of the Development Credit Agreement of special interest are referred to in Annex III of this report. 54. Additional conditions for effectiveness of the Development Credit Agreement are: (i) the selection and provision of construction sites for each of the seven Regional Adult Education and Training Centers; (ii) the appointment of an architect to the School Design Unit and of an additional  - 18 - accountant to the Project Unit; and (iii) the effectiveness of the ADF loan (Development Credit Agreement, Section 6.02). 55. I am satisfied that the proposed credit would comply with the Articles of Agreement of the Association. PART VI - RECOMMENDATION 56. I recommend that the Executive Directors approve the proposed development credit. Robert S. McNamara President Attachments Washington, D. C. July 28, 1977  a. m ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 1~~~~ S a. a S~~~~~~~~~l a: o , tC C * ae C 00P~0 0 b.0 a aSO a 0 OSO S ,W O S, .~q0 *WO -- -S a *5 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 7O aD 00,. 0 000 * * 000 * C Z "It .. a . a I.. 0 &CT X.X ... a. .-* -. r. 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