Chad - Third Education Project

FILE COPY Document of The World Bank FOR OFFICIAL USE ONLY Report No. P-2205-CD REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT To THE REPUBLIC OF CHAD FOR A THIRD EDUCATION PROJECT May 10, 1978 | Thb document ha a resticted didutrboen* and my he _e by reciients only in the perfornmace of I their ofcial dute.. Its cotests my mot otherwise be disclosd without World Bank authoriton.  CURRENCY EQUIVALENTS Currency Unit : CFA Franc (CFAF) US$1.00 : CFAF 245 1/ CFAF 1,000 : US$ 4.08 ABBREVIATIONS FAC Fonds d'Aide et de Cooperation French Bilateral Assistance Fund INSE Institut National des Sciences de National Institute of I'Education Education Sciences UNDP United Nations Development Program -NCDF United Nations Capital Development Fund UNIC-EF United Nations Children's Fund 1/ Floating Exchange rate CFAF tied to the French Franc (50-1).  FOR OFFICIAL USE ONLY CHAD THIRD EDUCATION PROJECT CREDIT AND PROJECT SUMMARY Borrower: Republic of Chad Amount: US$8.3 million Terms: Standard Project The proposed project is designed to support a program Description: to improve primary education in rural areas by replacing existing dilapidated schools and by undertaking a series of studies aimed at introducing a more efficient administration of education. The project would also assist the Government to improve secondary technical education and to open the Agricultural Technician Training Centre in Sahr. The pro- posed project consists of the following main components: (i) constructing and equipping 200 buildings for up to 60 rural primary school complexes; (ii) technical assistance, and provision of staff, to a. establish a permanent schoolbuilding unit within the Ministry of Civil Engineering; b. train building site supervisors and tech- nicians; and c. supervise school construction; (iii) technical assistance to develop and introduce curricula for the Industrial Technical Secondary School at N'Djamena; (iv) technical assistance to undertake studies of education financing, public administration and primary education; (v) technical assistance to the Agricultural Technician Training Centre in Sahr; and (vi) provision of staff, equipment and operating expenses for the project office. The main benefit of the project would be the improvement of physical facilities for the teaching of 18,000 primary school pupils, who at present attend school under lamentable condi- tions. The proposed school-construction component would be 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.  - ii - part of a comprehensive program that also includes the in- troduction of a new curriculum, teacher training and improved school supervision. The studies to be financed by the project would benefit the entire student population by paving the way for much needed reforms in education financing and public administration. Finally, the project would enable the Gov- ernment to open the Agricultural Technician Training Centre constructed under the First Education project. The project faces risks associated with the difficulties of organizing the construction of a large number of small buildings at very scattered rural sites in a country with poor communications. Technical assistance and training have been included in the project to minimize these risks. Estimated Costs: 1/ Project Cost Summary -----(US$ thousand)---- % of Local Foreign Total Base Cost Project Item Primary School Construction Construction of primary schools 1.4 3.3 4.7 64 Establishment of Building Unit 0.6 1.1 1.7 23 2.0 4.4 6.4 87 Studies - 0.2 0.2 3 Technical Education Curriculum Development - 0.3 0.3 4 Agricultural Technician Training Centre - 0.3 0.3 5 Project Office 0.1 - 0.1 1 Base Cost Estimates 2.1 5.2 7.3 100 Physical contingencies 0.1 0.3 0.4 Expected price increases (20%) 0.5 1.0 1.5 Total project costs 2.7 6.5 9.2 Financing Plan: Local Foreign Total IDA 2.7 5.6 8.3 UNDP 0.0 0.6 0.6 UNCDF 0.3 - 0.3 1/ Net of identifiable taxes. All project goods and services would be imported duty free as is customary for IDA-financed projects in Chad.  - iii - Estimated Disbursement: IDA FY 1979 1980 1981 1982 1983 Annual 0.7 2.2 2.3 2.4 0.7 Cumulative 0.7 2.9 5.2 7.6 8.3 Appraisal Report: Appraisal of a Third Education Project in Chad, No. 1712-CD dated May 4, 1978.   INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE REPUBLIC OF CHAD FOR A THIRD EDUCATION PROJECT 1. I submit the following report and recommendation on a proposed development credit to the Republic of Chad for the equivalent of US$8.3 mil- lion on standard IDA terms to help finance a Third Education Project. The United Nations Development Program and the United Nations Capital Develop- ment Fund would co-finance the project by providing grants of US$0.6 mil- lion and US$0.3 million respectively. PART I - THE ECONOMY 1/ Background 2. The following paragraphs incorporate the conclusions of an Economic Memorandum (Report No. 1340-CD) which was distributed to the Board in July 1977 and was based on missions that visited Chad in 1976 and March 1977. The findings of a short economic mission that went to Chad in November 1977 are also incorporated in this report. 3. With scarce natural resources, a harsh climate, limited social and economic infrastructure and a pervasive lack of skilled manpower, Chad faces unusually large handicaps in its economic development. Hligh transportation costs to and from the outside world compound the problem. The main centers of activity of this vast landlocked country are about 2,000 km from the sea; in early 1976 freight rates from the port of Douala in Cameroon to Southern Chad were about US$130/ton for bulk goods and US$180/ton for general goods. 4. In 1976, Chad's GNP per capita was estimated at US$120. Chad is therefore one of the poorest countries in Africa and is classified as one of the world's 29 "least-developed" countries by the United Nations. Close to 90 percent of the population, estimated at about four million, lives in rural areas deriving its livelihood from agriculture and livestock. About half of the rural population lives in the southwest, where rainfall levels are rela- tively favorable to agriculture (about 1,000 mm/year). In this region millet and sorghum are grown as subsistence crops and cotton as the predominant cash crop. The other half of the country's inhabitants are mainly pastoralists living in the dry grassland belt with lower and less reliable rainfall. Recently, efforts have been made to intensify traditional rice growing on the flood plains of the Logone River and to accelerate the development of the rich polders in the Lake Chad area. 5. During the 1960s, real GDP increased about 2 percent annually. The highest growth rates were achieved in the market economy (mainly import substitution industries and services), while the growth rate of livestock 1/ Substantially unchanged from the Second Livestock Project (Report No. P2187-CD).  - 2 - and subsistence crops probably did not reach that of population, which was estimated at about 2.1 percent per year. Incomes have risen faster in the small urban sector than in the rural areas and, within the latter, producers of cash crops have gained more than pastoralists and subsistence farmers. Recent Developments 6. Three factors have affected economic growth and the financial situation since the late 1960s: internal security problems, droughts, and a deterioration in the terms of trade. The rebellion that broke out in 1968 rendered large areas insecure and cut off traditional cattle routes. Since then the internal conflict has flared up occasionally. At the time of writ- ing a cease fire has been agreed upon between the Government and the opposi- tion, but not fully respected. A meeting between the parties is scheduled for June 7. Due to military activities in some areas and to a lack of main- tenance funds, wells were neglected and the water supply for livestock dwindled. Animal disease control suffered a setback. The impact of the in- ternal security problems was compounded by severe droughts, which occurred in three of the five years 1969-1973. Water levels in the rivers reached an all-time low, and Lake Chad shrank to one-third of its normal size. Livestock losses were substantial, resulting in a reduction in the cattle herd by one- third. Foodcrops were also severely affected: in 1972 production of millet and sorghum fell to about 70 percent of pre-drought levels and to about 60 percent in 1973. Emergency food sh;ipments from abroad helped the hard hit areas. With the return of normal rainfall, food production recovered to pre- drought levels in 1974/75. However, in 1976, a localized drought occurred in Chad's Sahelian zone affecting agricultural output and requiring the re- sumption of food aid. Drought again occurred in 1977 but with a comparatively limited impact. 7. After the 1973 drought, cotton production picked up considerably reaching a record volume of 175,000 tons in 1975/76. The upturn in cotton production stimulated industry, transportation and trade. However, cotton production decreased in 1976/77 to about 150,000 tons and in 1977/78 to an estimated 130,000 tons. The principal factors responsible for the continued fall were inadequate rainfall leading to conflicting needs between foodcrop and cotton production and the declining motivation of extension agents whose salaries have stagnated since 1970. Offtake from livestock has decreased substantially, after an upsurge in the drought years because of emergency slaughterings, reflecting the reduction of the herd and the beginning of reconstitution efforts. While the livestock sector was also constrained by past marketing policies, the Government has recently improved the situation by adopting a more liberal approach through the establishment of an export cooperative involving state and private enterprises. Finally, the economy has borne the full impact of variations in the terms of trade due to increased import prices and fluctuations in cotton export prices. The terms of trade worsened by about 11 percent between 1972 and 1974, improved with the increase of commodity prices between 1975 and 1977 and began to deteriorate again in mid-1977 with the decline in cotton prices. This deterioration is expected to persist through 1978.  - 3 - 8. Until 1968 the Government succeeded in balancing the budget, and fiscal performance was satisfactory despite development constraints. After 1968 expenditures began to grow more rapidly than revenue as military spending increased; security and defense expenditures now account for about one-third of the current budget. The drought also increased demand for Government relief services while reducing revenues. 9. Higher import prices and the rise in Government employment--as a means of containing unemployment, especially among school leavers--also contributed to the Government's financial difficulties. Combined with stagnant public revenues these factors resulted in an increase in budgetary deficits from CFAF 2.0 billion in 1970 (15.5 percent of revenues) to CFAF 4.4 billion in 1976 (about 30 percent of revenues). The Government financed part of this deficit with limited domestic resources, but the remainder of the gap was covered by accumulation of payment arrears to local and foreign suppliers and creditors. Arrears of payments were estimated to amount to CFAF 10.5 billion by end-1976, or about 70 percent of budgetary revenues for that year. For this reason, foreign budgetary assistance, which had been instru- mental in closing the gap in the past, was stepped up in 1976. The use of part of this assistance to repay local and foreign suppliers, as well as the Government's efforts at containing expenditures, have stemmed the growth of arrears and reestablished confidence on the part of suppliers. 10. The Government's recent attempts to stabilize public finances have included measures to increase revenues by collecting tax arrears and raising the cotton export tax, as well as measures to reduce expenditures by main- taining a freeze on wages and limiting the increase in public employment. The Government has also restricted purchases of certain materials and supplies, ceased budgeting for investment purposes, and deferred maintenance of capital assets. To isolate resources for priority uses, the Government has reinstated the Road Fund, to finance road maintenance, and established the Autonomous Amortization Fund, for debt repayment. With the help of the IMF, authori- ties are reviewing the fiscal structure to improve revenue collection and to increase resources. Structural changes will be implemented only gradually, however, and will not contribute, in the immediate future, to alleviating the critical shortage of public revenues. Therefore, the effectiveness of most Government services will continue to be hampered. External Aid 11. Since 1973, aid flows have been substantial, with grants alone almost equalling tax revenues in 1973 and 1975, and exceeding them by 24 per- cent in 1974. Total disbursements of external aid in 1973-1976 were US$327 million, three-quarters of which were grants. In 1976, aid disbursements reached a record level of about US$105 million. Aid from OPEC countries rose from zero in 1972 to 10 percent of total aid in 1973 and 18 percent in 1975 and in 1976. Nearly two-thirds of official aid disbursements came from bilateral donors (France, 52 percent; USA, 5 percent; Germany, 4 percent; Canada, 3 percent), the remainder from multilateral sources (FED, 26 percent;  -4 - UN organizations, 6 percent; IDA, 3 percent). External aid financed prac- tically all public investments. Up to 1975, the inflow of foreign aid offset the large deficits in the current account of Chad's balance of payments so that its reserve position with the Central Bank was stable. Since 1974 private investment in petroleum research has also helped to offset increas- ing deficits. Moreover in 1976, record cotton sales, along with stagnating imports, substantial foreign aid and private investment, produced an unpre- cedented balance of payments surplus of about US$25 million. At the end of 1976, net foreign assets stood at about US$4 million compared to a December 1975 low of minus US$19 million. 12. Chad's external debt is a considerable burden for a country with such limited resources. At the end of 1976 total outstanding external debt (including undisbursed) was estimated at approximately US$250 million or about 52 percent of GDP for that year. Of this about 40 percent had been disbursed. The largest increase in outstanding debt occurred between 1973 and 1975 during the worst period of the recent drought, at a time when the Government was undergoing severe budgetary difficulties. These difficulties also led to Chad's increasing inability to service the debt, resulting in the accumulation of arrears of about US$10 million at the end of 1976 equivalent to about 25 percent of overall arrears due to creditors and suppliers. For 1976, the external public and guaranteed debt service due, excluding arrears, was estimated at US$10.5 million or 9 percent of exports of goods and non- factor services; it is estimated under reasonable assumptions that the annual debt service will remain at about the same level in the mid-1980s. While the ratio of debt service to exports is manageable, the bulk of service payments has to be financed by budgetary revenues. The debt service ratio with respect to budgetary revenues, excluding arrears, was estimated at 17 percent in 1976. The Government has established a Caisse Autonome d'Amortissement re- sponsible for overall debt management and administration. The Caisse is financed with earmarked revenues and its Director reports directly to the Head of State. The Bank has assisted the Caisse Autonome in setting up debt reporting and monitoring procedures. The Government has successfully reached a debt rescheduling agreement with France for debt owed to Caisse Centrale de Cooperation Economique. Furthermore a rescheduling agreement for arrears owed to Air Afrique has recently been concluded. The Government is also discussing rescheduling of debts with other bilateral creditors. Prospects 13. Chad's development potential lies primarily in agriculture and related activities. The Government is carefully exploiting available in- vestment opportunities (textiles, sugar, edible oils and soaps, irrigated agriculture) and has obtained FED and FAC support to launch a south Chad agricultural development program aimed at improving cotton production and crop diversification. This program is part of an overall interim develop- ment plan which, in addition to cotton productivity, emphasizes the im- provement of Chad's domestic and international transport infrastructure as well as the delivery of basic services, particularly primary education. Recently, the Government announced the discovery of oil in the northwestern  - 5 - and southern parts of the country. For the time being, Government is con- centrating on solving its domestic petroleum supply problems through the construction of a small import substituting refinery. This would somewhat reduce the trade gap while providing some extra budgetary resources. Pros- pects for a larger oil development project are uncertain. Other mineral prospects are being investigated by a UNDP team. 14. The fiscal situation is a serious obstacle to development, since the Government cannot contribute to the financing of required investments nor finance all recurrent costs of ongoing and new high-priority projects. The Government has undertaken a review of the tax system with the help of the IMF and has, recently, increased export taxes on cotton. However, the narrow tax base and the rising cost of maintaining even the present level of public services, make it unlikely that substantial budgetary sav- ings can be generated during the remainder of the 1970s. In view of Chad's financial constraints, its poverty and modest growth prospects, external funds should be provided on the most concessionary terms possible. Moreover, in the next few years foreign aid agencies should finance a high proportion of total project costs, including local costs and some development-related recurrent costs. PART II - BANK GROUP OPERATIONS IN CHAD 1/ 15. Development of Chad's agriculture, transportation and human re- sources continues to be the main objective of Bank Group assistance to the country. Eleven IDA credits to date amount to US$62.6 million. Six credits and a supplementary credit were for agricultural projects, two credits for transport projects and two credits for education projects. Finally one credit, which was approved in September 1977 for a Sahelian Zone project, includes mostly agricultural development schemes and also has transport and rural water supply components. Five of the eleven projects are either completed or near completion; four are progressing satisfactorily; and two have yet to commence. Delays have occurred in project implementation mainly due to lack of counterpart funds and supplies, but also because of building design problems and late signing of consultant contracts. A common constraint to development in all sectors is insufficiency of Government funds for maintenance and recurrent costs. Annex II contains a summary statement of IDA credits as of March 31, 1978, and notes on the execution of approved projects. 16. In agriculture our main objectives are: (a) to help Government assure a sufficient food supply for the growing urban as well as the pre- dominantly rural populations; (b) to help expand income from cattle exports; and (c) to protect Chad's overall economic base against the vagaries of climate. In rainfed agriculture, past IDA lending has been designed to raise 1/ Substantially unchanged from the Second Livestock Project (Report No. P2187-CD).  rural productivity mainly through the provision of infrastructure, equipment and storage facilities. In irrigation, IDA is assisting in the financing of the Sategui-Deressia and Lake Chad Polders Projects which will produce, among other products, rice, wheat and cotton. The Sahelian Zone Project will initiate drought-alleviating measures that will sustain or step up crop, livestock and forestry exploitation in the zone. Our First Livestock Project assisted the Government with the rehabilitation and construction of Sahelian pastoral wells and with studies of the livestock sector; the Second Livestock Project, with animal health services, animal husbandry, and pastoral develop- ment, pastoral wells, credit and marketing components, will further expand our assistance in this sector. 17. In transportation, we are giving priority to road maintenance and to improvement of feeder roads and agricultural export routes. The first project helped to focus Government's attention on the importance of road maintenance and provided the necessary physical means to carry out a five-year maintenance program. Our Second Highway Project and the road component of the Rural Proj- ects Fund are designed to improve feeder roads; a proposed Third Highway Proj- ect, recently appraised, would build on the experience gained under the First Highway project to strengthen the maintenance capacity and transport planning and operations while maintaining and improving about 5,000 km of primary and secondary roads in the south and in the Sahelian Zone. We are also consider- ing projects which would improve Chad's transport links with the sea, although much of the improvement will come. from transport investments in the coastal countries. 18. Two education projects in 1968 and 1971 assisted the Government in constructing institutions for training both teachers and agricultural and industrial technicians--the most needed skills in the economy. The proposed Third Education Project would mainly improve primary education in rural areas and follow up on the first two projects. 19. Chad's severe financial and manpower constraints limit investment opportunities and necessitate special arrangements for counterpart funds, recurrent costs, training and institution building. IDA and other donors have assisted the Government in financing local costs. Recurrent cost-fi- nancing problems have been resolved in different ways: by designing proj- ects which promote cost recovery; by establishing special funds replenished with earmarked revenues; and by providing technical assistance grants which do not increase the burden of debt service. Furthermore some donors, pri- marily France, make direct contributions for covering recurrent cost ex- penditures in many sectors including education. 20. Most of our operations in Chad have been coordinated with other donors and several projects are being executed under joint or parallel fi- nancing. The recent focus on the problems of the Sahel has increased the number of donors seeking cofinancing with IDA. The amounts of co-financing tentatively pledged in FY78 and FY79 is likely to match the proposed IDA lending to Chad during this period. IDA lending accounted for 17 percent of total outstanding external public debt at the end of 1976 and on average represents 4 percent of Chad's projected debt service over the 1977-1985 period.  PART III - THE EDUCATION SECTOR Structure 21. Chad's educational system follows the French pattern. Six years of primary education are followed by two cycles of secondary education, the first lasting four years and the second three. After a total reliance on France and other francophone West African countries for higher education, a national university was opened in 1971 in N'Djamena offering a range of two- and three-year courses, including the humanities, law and the biological and physical sciences. The primary teacher training program consists of a com- bination of seven years of secondary level education and training and four years of practical experience. Until 1974, secondary school teachers were trained in a two-year course at a higher teacher training college in Brazzaville, Congo. They are now to be trained in a two-year course at the new university in Chad. Technical education (at three lycees) begins after a minimum of two years of general secondary education; artisan training and the training of nurses and midwives begin after primary school. Finally , there is a large number of specialized courses of different duration offered under the jurisdiction of Government ministries other than the Ministry of Education. These courses are generally designed to serve the manpower needs of the Administration. Quality of Education 22. The quality of both primary and secondary education in the country is low. The curricula are biased toward the preparation of students for higher levels of education and ultimately for employment in public administra- tion. They do little to prepare students for work in agriculture or related processing industries where most will eventually be occupied. Rural primary education in Chad is weak and children are being taught under poor physical conditions by underqualified teachers who do not have the assistance of teaching materials and equipment. Primary school facilities are among the worst in Africa with 65 percent constructed of mud or, more frequently, temporary strawmat; they provide so little protection from the sun, wind, dust and rain, that school attendance frequently depends upon the weather. While proper facilities alone would not guarantee an improvement in the quality of primary education, other efforts being planned and implemented by the Govern- ment in teacher training and curriculum reform may be wasted without concur- rent improvement in physical conditions. Access to Education 23. From 1956 to 1976, primary school enrollments increased at an aver- age annual rate of 13 percent, from 18,000 to over 200,000 students. Most of this expansion occurred prior to 1966; during the last decade the average annual growth rate fell to about 3 percent. Public secondary education did not exist prior to 1947, and as late as 1964 there were only 480 secondary school students in the entire country. By 1976, however, there were over 13,000 students enrolled at 30 secondary educational institutions, implying an  - 8 - impressive average annual growth rate of 35 percent. Currently, 17 percent of all students in the last year of primary school gain admission to secondary schools. Because of the very low quality of rural primary schools, almost all those who enter secondary schools are from urban areas. There are over 1,000 students at institutions of higher education abroad and about 550 enrolled at the new national university in N'Djamena. 24. Although universal and free primary education is the national policy, only 25 percent of the school-age population is enrolled. This is due to the difficulty of providing facilities and teachers in sparsely pop- ulated regions, particularly in the north and east. Urban areas are better served than rural areas in terms of schools offering all six primary grades as well as in terms of quality and number of teachers. A consequence of these regional constraints is that the enrollment rate, while low, is nevertheless five to six times higher in the southwest than in other areas. 25. The participation of girls in primary education has been improving rapidly and is about 26 percent of primary school enrollments. Government policy and Chadian law provide that women should have equal access to education, and although it is a slow process, this is gradually being achieved as social restrictions are relaxed, and facilities are being built. Financing Education 26. The Government's financial problems are reflected in the trend of public expenditures for education. For over two decades, enrollments have increased at a more rapid rate than total expenditures for education with consequent declining per-student outlays. During the period 1970-1976, total real expenditures on education actually declined because budgeted increases have been insufficient to offset inflation. The education system has become entirely dependent upon external aid for capital development and heavily dependent upon France for recurrent budgetary support, including the cost of expatriate school teachers. Nevertheless, in the face of substantial outlays for national defense, the Government has attempted to maintain the share of the education sector in the total budget at about 15 percent or 3 percent of GDP, which is not a very high percentage but nevertheless compares favorably with a number of other African countries. Government Strategy 27. The Government of Chad faces a dilemma. On the one hand, restricted access to education and training, particularly in rural areas, is a serious constraint to long-term development. On the other hand, because of extreme financial difficulties the Government cannot purchase sufficient materials for, or adequately manage, the existing educational system, much less finance its expansion. Under these circumstances, plans for education development are linked to the Government's economic policy which is chiefly geared towards rural development; in 1976/77, 53 percent of all public investment was for projects in the agricultural and livestock sectors. Thus, new initiatives in education and training are to concentrate on activities which will directly contribute to the Government's rural development strategy.  - 9 - 28. These initiatives will consequently be focused largely on improving literacy. Since secondary and higher education are less relevant in this respect, they are assigned a lower priority than primary education within the education sector as a whole. The reform of secondary education will therefore be implemented only as resources became available and after steps have been taken to improve primary education. 29. In 1973, the Government created a special agency, the National Institute of Educational Sciences (INSE), to coordinate the overall effort to improve primary education. After a period of experimentation and evalua- tion in pilot primary schools, the Government, with the cooperation of a number of donors, has formulated a package of interrelated projects costing about US$20 million to improve primary education. The package contains projects to develop a new curriculum, to train teachers and to begin to replace dilapidated or otherwise inadequate school buildings. 30. Curriculum Development. The Government has acquired technical assistance for the period 1977-1982 under a UNDP-financed and UNESCO executed project to assist INSE in implementing a reform of the primary school cur- riculum, particularly with respect to developing education materials and planning teacher retraining. This project follows up on a prior UNDP-financed project which, starting in 1974, designated 20 pilot primary schools in which new pedagogical programs prepared by INSE were tested. The pilot school program, now well-established, is intended to supply a continuous flow of information to INSE on all aspects of primary education. 31. Planning, Research and Supervision. INSE is receiving technical assistance from a wide variety of sources for planning primary school programs, for pedagogical research, and for improving primary school supervision. While the French Government is the largest supporter of these activities, the Swiss, US, and the Canadian Governments are also contributing significant amounts of technical assistance. Furthermore UNDP will, under the project mentioned in the previous paragraph, finance 85 man-years of technical assistance for teacher training, materials production, and distribution aspects of the primary school curriculum reform. UNESCO is also assisting the Government in replacing all primary school supervisors with better trained personnel. 32. School Construction. Since replacement of the primary school facilities is essential for improving the quality of primary education, the Government, with the assistance of UNDP and the UN Capital Development Fund, started a pilot primary school construction project in 1975. The objective of the project is to provide school designs which may be executed economically in rural areas using local materials and labor as much as possible, and which will accommodate a reformed teaching program. The project has funds to construct 17 schools. The initial results of this pilot project have been evaluated by the UN Capital Development Fund and by the Association. Satis- factory designs have been formulated and three schools have been built. The proposed Third Education Project would follow up on this pilot project.  - 10 - IDA's Role First and Second Education Projeccts 33. The two previous education projects in Chad aimed at (a) improving primary education through the training of primary school teachers, and (b) increasing the number of skilled industrial workers and middle-level industrial and agricultural technicians. 34. The First Education Project (Credit 126-CD), signed in 1968 and amended in 1973, provided US$2.2 million to establish a Primary Teacher Training College in Moundou and an Agricultural Technician Training Centre in N'Djamena. In 1971, prior to construction, the Government and IDA agreed the Agricultural School would be better located at Sahr than in N'Djamena. 35. The Second Education Project (Credit 251-CD), signed in 1971 and amended in 1973, provided US$2.7 million to (a) establish a Technical Secondary School in N'Djamena, (b) finance costs associated with changing the site of the Agricultural Technician Training Centre to be constructed under the First Education Project (c) provide equipment for a Vocational Training Centre in N'Djamena, and (d) finance a study of farmer training. 36. Achievements and Experience. Arn OED Audit Report is under prepara- tion. Construction of the three project institutions has been completed. The delays experienced in implementation were eight months for the Primary Teacher Training College, two years for the Agricultural Technician Training Centre and six months for the Technical Secondary School. The two-year delay in the construction of the Agricultural Technician Training Centre is attributable to the time taken by the Government and IDA to reach agreement on a site for the institution. Two institutions, the Primary Teacher Training College and the Technical Secondary School are in operation but the opening of the Agri- cultural Technician Training Centre is scheduled at the end of 1979. Staff- ing, financing and appropriate curricula have been serious constraints to the opening and effective operation of a:Ll the institutions. While these problems have been solved for the Primary Teacher Training Centre and the Technical Secondary School they have caused more serious delays in opening the Train- ing Centre at Sahr. However, the opening of the centre at end-1979 will be achieved following the provision of some staff by FAC, the introduction of a new curriculum and the provision of adequate funding by the Government. Funds would also be provided under the proposed Third Education Project to finance some teaching staff at the centre. The submission of a detailed plan, including bugetary provisions, leading to the opening of the Centre by September 1979 would be a condition of credit effectiveness (see Section 6.01(b) of the draft Development Credit Agreement). 37. The Government was unable to finance the local costs of the projects and, in 1973, the Credit Agreements for the projects were amended to provide 100 percent financing. In the first project, it was originally intended that IDA would finance 82 percent of the project cost of US$2.2 million, and in the second project 71 percent of the project cost of US$3.1 million. Since 1973 the situation in Chad has, if anything, deteriorated and it is therefore not anticipated that the Government will be able to make any direct contribution to financing the proposed Third Education Project from its regular budget.  - 11 - 38. At appraisal of the First and Second Education Projects it was envisaged that project institutions would be staffed initially by technical assistance personnel financed by France. Chadians were to be provided with fellowships to enable them to eventually replace expatriate teachers and trainers. The Government has, however, experienced difficulty in securing finance for the technical assistance required for the Agricultural Technician Training Center and the replacement of expatriates by national staff at all institutions will take longer than originally anticipated. 39. Experience since the appraisal of the Second Education Project has shown that the curriculum for the new Technical Secondary School in N'Djamena should be revised to meet the country's needs for middle-level industrial technicians. At project appraisal this curriculum had been in use for only three years at a secondary technical school in Sahr and there was insufficient evidence to assess results. Eight years of experience with the curriculum now show that nearly all graduates go abroad for engineering studies. Once abroad, these students invariably abandon their engineering studies because they are poorly prepared for them and undertake training for non-technical occupations. The proposed Third Education Project would provide technical assistance to develop and introduce technical curricula at the new Technical Secondary School thus ensuring better training for a small number of students who would go abroad, and a separate curriculum for technicians who would go directly into industry. Future Role 40. The proposed Third Education Project would, through the financing of studies, establish a basis for future development in the education and training sectors. The objectives of future investments should be: to improve the staffing in the public sector through training, particularly in the education sector; to achieve greater efficiency in the educational system through better financial planning; and to support the Government's long-term efforts to improve rural primary education. PART IV - THE PROJECT Introduction 41. The Government has requested IDA assistance to finance a Third Education Project that would primarily upgrade or reconstruct 15 percent of the country's existing primary school buildings in rural areas within the framework of an overall effort to improve primary education. As part of this overall effort, UNESCO is executing projects to reform the curriculum and to train teachers and supervisors. USAID is financing specialists in teacher training and planning; the African Development Bank, new facilities for INSE; the French Government, substantial recurrent costs mostly for staff; UNDP, a pilot school construction project; and the Swiss Government, teacher training for pilot schools. Assistance is also being received from Canada, Germany and Saudi Arabia. The proposed project would also finance studies  - 12 - that would pave the way for reforms in education financing and administration. In view of the country's difficult financial situation, the project and related activities supported by the donors have been designed to minimize increases in recurrent cost expenditures. The project was prepared by the Government and Bank Group Staff. It was appraised in February 1977 and a post-appraisal mission visited Chad in November 1977. A report entitled "Appraisal of a Third Education Project in Chad", No. 1712a-CD dated May 4, 1978 is being distributed separately and a Credit and Project Summary is presented at the beginning of this report. Negotiations for the proposed credit were held in Washington from April 10 to April 14, 1978. The Chadian Delegation was led by Mr. Allangambaye, the Director of Elementary Education. Project Objectives and Description 42. The main objectives of the proposed Third Education Project would be to assist the Government's efforts to (a) upgrade the quality of rural primary education; (b) meet the country's needs for industrial technicians and engineers; (c) improve education management and administration; and (d) ensure the opening of the Agricultural Technician Training Centre in Sahr. 43. The project would be implemented over the period 1978-1983 and would comprise: (i) constructing and equipping about 200 buildings for up to 60 rural primary school complexes, to be used as school classrooms, practical studies areas, storage spaces and teachers' lesson preparation areas; (ii) 176 man-months of expatriate technical assistance, and provision of eight Chadian senior staff and 33 junior staff for four years to: (a) help establish a permanent School Building Unit within the Ministry of Civil Engineering; (b) train Chadian site supervisors and technicians; and (c) supervise school construction; (iii) 48 man-months of technical assistance to develop new cur- ricula for the Secondary Technical School in N'Djamena that was financed under the Second Education Project (Credit 251-CD); (iv) 36 man-months of technical assistance to study educa- tion financing and administration and to review primary education; this would serve as a basis for future edu- cational development;  - 13 - (v) 72 man-months of technical assistance to help staff the Agricultural Technician Training Centre in Sahr; and (vi) provision of staff, equipment and operating expenses for the project office. Project Implementation and Monitoring 44. All schools constructed initially would be located in the southeast for reasons of security .and accessibility. Sites would be selected by an interministerial committee with representatives from the Ministries of Edu- cation, Civil Engineering (School Building Unit), Plan, Agriculture and Livestock, and Health. The criteria for site selection would be: (i) schools would either replace or consolidate existing schools; (ii) sites would be easily accessible by road; (iii) sites would be in areas where there are current or planned development activities; and (iv) schools would have access to wells. An acceptable list of school sites for the first year of construction has been received. The Government would by April 1 of each year, submit to the Asso- ciation for approval, proposals for the construction to be undertaken the following year (Section 3.07 (b) of the draft Development Credit Agreement). 45. The design and construction of schools and training of site super- visors and small-scale contractors would be the responsibility of the School Building Unit in the Ministry of Civil Engineering. The appointment of a Chadian Technical Director of the Unit with qualifications acceptable to IDA would be a condition of effectiveness (Section 6.01(a) of the draft Development Credit Agreement). A suitable candidate for this position has been identified. The legislation to formally incorporate this already established unit in the Ministry would be finalized by January 1, 1979 (Section 3.02(b) of the draft Development Credit Agreement). 46. The Unit would require technical assistance for an initial period of at least two years. Provision has thus been made for financing the em- ployment of six specialists. The recruitment of three of them: a Senior Technical Advisor, an Accountant and a Training Specialist, with qualifica- tions and under terms acceptable to IDA would be a condition of effective- ness (Section 6.01(a) of the draft Development Credit Agreement). The other specialists, an Operations Manager, a Chief of the Design Section, and a second Training Specialist with qualifications and under terms acceptable to IDA, would be appointed by end-December 1978. The School Building Unit is already being supported by technical assistance. UNDP has agreed to continue to finance the foreign exchange component of four of the six posi- tions. Signature of an agreement between the Government and UNDP would be a condition of effectiveness (see Section 6.01(c) of the draft Development Credit Agreement).  - 14 -- 47. A training program would be established within the School Building Unit to train sufficient site supervisors to supervise construction on 12 sites at the same time. Most of the site-supervisor training would be done on building sites. 48. Under the project simple furniture would be provided for up to 60 students per classroom. Furniture would be designed by INSE in cooperation with the School Building Unit. Handtools would be provided for (a) school- gardening, (b) metal and wood crafts, and (c) repair of agricultural imple- ments and furniture for each school itself. UNICEF would provide tools available from their standard supply for primary school workshops. 49. The new curriculum referred to in paragraph 30 will be adapted to the needs of the country and will be the basic feature of the education reform. 50. To draw maximum benefit from the school construction program and to ensure that its facilities are used for teaching the new curriculum, the teachers in project schools would receive additional training. Government has confirmed that these teachers would be given priority in existing teacher upgrading programs. 51. A comprehensive program for monitoring and evaluating the project will be introduced to assure that the objectives are achieved or to adjust the project to more realistic objectives, should this prove necessary. As part of the evaluation the Government would review with IDA, 18 months after credit effectiveness, the need for continued technical assistance. A second review will be made 30 months after credit effectiveness to examine the project's educational objectives i.e. the introduction of a reformed curriculum and the retraining of teachers (Section 3.03 (c) of the draft Development Credit Agreement). 52. Studies would be carried out under the project to pave the way for improvements in the present systems of education financing and of public administration and also prepare for a follow-up project. The terms of refer- ence, qualifications and contract terms for the consultants would have to be acceptable to IDA (Section 3.03(a) of the draft Development Credit Agreement). Project Cost and Financing 53. The cost of the project, excluding taxes, is estimated at US$9.2 million, with a foreign exchange component of US$6.5 million or 71 percent of total project costs. The base cost estimates are for February 1978 and take account of recent material and labor costs in Chad. The estimated average cost of construction is about US$153 per square meter or about US$260 per student place. This compares favorably with similar construction in neighbouring countries. The cost of technical assistance is estimated to average US$60,000 per man-year and is based on recent bilateral and UNDP experience. The project cost includes an allowance for physical contingencies  - 15 - that averages 5 percent of the total base costs for civil works, furniture, equipment and for the costs of local and technical assistance staff. Physical contingencies take account of the fact that sites have not yet been identified. The allowance for price increases is about 20 percent of base costs plus physical contingencies, and is estimated on the basis of expected price increases for civil works of 9 percent per year through 1980 and 8 percent per year through 1982, and for equipment and personnel (including technical assistance) of 7.5 percent per year through 1980 and 7 percent per year through 1981 and 1982. The proposed IDA credit of US$8.3 million would finance 90 percent of the total cost of the project. The remaining project costs would be financed by UNDP, and by the UN Capital Development Fund; because of severe budgetary constraints, the Government is unable to make a financial contribution to the project from its regular budget. The project would not cause any significant increase of recurrent cost expenditures. Procurement and Disbursement 54. Civil works are estimated to cost US$4.4 million. Small buildings widely dispersed on 60 sites would be built, using small-scale local contrac- tors under local bidding procedures wherever possible and force account whenever necessary. Furniture worth an estimated US$0.4 million would be procured under contracts awarded in accordance with local competitive bidding procedures or produced by force account by the School Building Unit or other qualified governmental services. Orders for equipment and building materials, including materials provided to small contractors, estimated to cost about US$2.5 million, would be grouped wherever possible in lots of not less than US$50,000 and the contracts would be awarded in accordance with IDA's guide- lines for international competitive bidding. Small equipment contracts, amounting to less than US$50,000, would be awarded on the basis of quotations or through local competitive bidding. The local competitive bidding proce- dures are acceptable to IDA. 55. Funds from the credit account would be disbursed as follows: (a) expenditures for civil works - US$4.4 million after the UNCDF contribution has been fully disbursed (see Schedule 1, paragraph 3b of the draft Develop- ment Credit Agreement); (b) expenditures for furniture - US$0.4 million; (c) expenditure for equipment, tools and vehicles - US$0.4 million; (d) ex- penditures for technical assistance US$1.0 million 1/; expenditure for local personnel - US$0.7 million. US$1.4 million of the credit would be unallocated. Withdrawal applications would be fully documented, except 1/ UNDP would finance four of the six expatriates in the School Building Unit on an OPAS-basis (Operational Assistance). This means that the Government will employ these experts and pay them the same salaries as national civil servants of corresponding rank. These salaries would be charged to the Credit. UNDP will cover the difference between inter- national levels of remuneration and the national salaries.  - 16 - with respect to expenditures for force account and local personnel. These would be supported by certificates of expenditure, for which the documenta- tion would not be submitted but would be retained by the Project Unit. Because the Government would have difficulty in prefinancing expenditures to be reimbursed under the credit, a revolving fund of US$0.6 million would be established with the Chad Development Bank and would be used to prefinance all project costs. IDA would make a first disbursement to this fund and would replenish it upon receipt of evidence of disbursements from the fund for allowable expenditures. Should any disbursements be made from the re- volving fund which prove not to be eligible for financing from the proceeds of the credit, the Government would be under the obligation to deposit the corresponding amount in the fund account (Section 2.02(e) of the draft Development Credit Agreement). Benefits and Risks 56. The proposed project would finance the school building component of a larger primary education development program which also includes curriculum development, teacher retraining and better school supervision. The program should lead to a marked improvement in the quality and efficiency of primary education. The project studies would pave the way for much needed improve- ments in the quality of public administration and, through better financial planning, in the efficiency of the education and training systems. The new secondary technical school curricula should help satisfy the country's needs for industrial technicians and engineers. Technical assistance for the Agri- cultural Technician Training Center, the construction of which was financed under the two prior credits, would enable that institution to open and to operate effectively. 57. The project involves some risks. Constructing a large number of small buildings at scattered rural sites by force account or by inexperienced contractors in a country with poor communications, requires management and technical manpower that is in short supply. The training and technical assistance components of the project have been designed to help reduce these risks. Also, the project would be organized to allow Government flexibility in procurement for civil works: it would permit the Government to use build- ing contractors, undertake force account works or employ other methods of building schools, such as community participation in construction through local Parents' Associations. Finally, two joint Government/IDA evaluations would be built into the project's implementation timetable to identify prob- lems that might jeopardize the achievement of the projects' physical and educational objectives and to formulate proposals for resolving them. 58. Given these safeguards, and given the priority assigned to primary education by the Government and the resources being invested by donors, the risks of not achieving the objective of improving the quality of primary education are small. There is little risk associated with the studies or with the curriculum development components of the proposed project.  - 17 - PART V - LEGAL INSTRUMENTS AND AUTHORITY 59. The draft Development Credit Agreement between the Republic of Chad and the Association and the Report of the Committee provided for in Article V, Section I (d) of the Articles of Agreement of the Association are being distributed to the Executive Directors separately. 60. In addition to the features of the Credit Agreement which are referred to in the text and listed in Section III of Annex III, the following features are of special interest: (a) A remedy permitting suspension of relevant disbursements has been provided for should any construction sites included in the project be inaccessible to IDA representatives as required for the efficient supervision of the execution of the project (Section 5.01(a) of the draft Development Credit Agreement); (b) Conditions of effectiveness include: (i) the appointment of a Technical Director of the School Building Unit and recruitment of technical assistance staff (Section 6.01(a) of the draft Development Credit Agreement); (ii) the appointment of three technical assistance specialists with terms and conditions acceptable to IDA (Section 6.01(a) of the draft Development Credit Agreement); (iii) the submission of a detailed plan leading to the opening of the Agricultural Technician Training Centre in Sahr by September 1979 (Section 6.01(b) of the draft Develop- ment Credit Agreement); (iv) the signing of the co-financing agreement and the fulfillment of all conditions of its effectiveness, if any, save the condition that the IDA credit has become effective (Section 6.01(c) of the draft Development Credit Agreement). (c) A condition for disbursement for civil works would be the depletion of grant funds provided by UNCDF for this purpose (para. 3(b) of Schedule 1 of the draft Development Credit Agreement). 61. I am satisfied that the proposed credit would comply with the Articles of Agreement of the Association.  - 18 - PART VI - RECOMMENDATION 62. I recommend that the Executive Directors approve the proposed credit. Robert S. McNamara President Attachments May 10, 1978  , ~~~- 19 - *lf* pages ?ABLE 3A fCKb .* OC/tCL tINDCATORI DATA SH14T LAND iltA (THOU KNO ;[EC EUT16(90 .TO 1...... 0 CD MOST RECEOT *SL, tIA4.0 1970 ESTIMATE I BOLI CENTRAL AFRICAR EMPtUi"' * . .5.0 ... ...... .. ....... *GN PE* t * cuss) ...6 . ;o,e.. 130.0 70.0 to0. 170.0 .................... POPULA!IIN A0 VITAL STATISTICS ,.4... ......................... , , bOPUL;hIS4 OIM3.YR, .ILLION) 5*9 1. *OPULAYInf OE4SITY 0 0 e PER 10. HKM. AQICULTIIRAL LANO 21.0 3 o . 01. 27.0 VITAL STATIS T*IC S6*4 65. CAL,Dr WYIN Atil (ITWOU. AY) 65,6 4A6* R4.6 19.7 34.6 CALIoC FAYTM RAtE (/T40UA,vl 23.1 RO. AD 2s 0 11,7 0, INFA'T MORlTALITY RATE (Jt,OuH ) I0.I /4 . . LIFE EvPICtaNCY IA S1RtHl (YRS) 33*5 36.0 36.5 37,2 61.3 39* 6n'S. QFSPOPUCTET!4 RATE 2.6 3,0 ,. 3. 2.6 . 01PULATInN GRMWTb RATE (I) 2, 22 @|*9^"~ ~ ~~~~1. 1.7 3.3 3.2 ,, .2 2. IRAN POPULATION (It rf TOT&LI 4,7 113 13.I . 2.3 30. *sr %JcyruE (PR 4ERCCENT 0 1 1a YE*RS 44.0C R1.4 6.0/a 69.1 61.9 42.1 15 Vt VEA6S 3t.0W 56.0 5.I 0S *9,5 54.a 56 *5 YFAlS *4n, !vEU * c 2.4 6.0 at S,5 3.1 *sr nftEIE.EtCv 6AT1D 6.91C 0. 0,l5 to 0.8 0.1 tCt'NnMIC hFPrFnE-CY RAPlT 3.7. .. 1.3 e,j I.ol 0. 9'"3Lt ' P161JNIj G ItEcETfos (CU'IILATT THOU) .j ,. ,, 6 ... ltSfR% Ct nr "ARRIED wn%EUI l l2TA; ,;A6.R Fr)RCE CTH31SAWn) 1100.0 *- 1300.0ft 2600.0 2300.0