Malawi - Third Education Project

Document of FLE gCp The World Bank FOR OFFICIAL USE ONLY Report No. P-2475-MAI REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON PROPOSED CREDITS TO THE REPUBLIC OF MALAWI FOR A THIRD EDUCATION PROJECT May 2, 1979 This document has a restricted disrbution and may be used by recipients only in the performance of their official duties. Its contents my not Otherwise be disclosed without World Banlk authorization.  CURRENCY EQUIVALENTS USED IN THIS REPORT Currency Unit - Malawi Kwacha (MI) US$1.00 = MK .83 MK1.00 = US$1.20 MEASURES 1 meter (m) 2 3.28 feet 1 square meter (m ) = 10.76 square feet 1 kilometer (km) = 0.62 mile 1 hectare (ha) = 2.74 acres ABBREVIATIONS CIDA - Canadian International Development Agency EEC - European Economic Community MBS - Malawi Book Service MCC - Malawi Correspondence College MOE - Ministry of Education ODM - United Kingdom Overseas Development Ministry PIU - Project Implementation Unit UNDP - United Nations Development Programme USAID - United States Agency for International Development FISCAL YEAR April 1 - March 31  FOR OFFICIAL USE ONLY MALAWI THIRD EDUCATION PROJECT CREDIT AND PROJECT SUMMARY Borrower: Republic of Malawi Amount: US$14.5 million (IDA); and US$7.5 million (EEC Special Action Credit) Terms: Standard IDA (for both Credits) Project The proposed project would help to improve and expand Description: primary and secondary education, and would provide assistance for curriculum development, in-service training and management of education. Major components include (i) provision of primary schools and textbooks to all primary school students and expansion of primary teacher training facilities; (ii) improvement and expansion of secondary education by enlarging the Malawi Correspondence College, improving facilities at five secondary schools, expanding teacher training facilities, and assisting three technical schools and the agri- cultural college; (iii) establishment of an Institute of Education responsible for curriculum development, in-service training, and materials preparation; and (iv) assistance for the school inspectorates, architec- tural and engineering services, educational studies and project administration. An important project benefit would be the improved quality of primary and secondary education through the provision of primary school textbooks to all students, and the improvement in primary and secondary school teacher training facilities. The project faces no special risks, although the effectiveness of the self-help community construction of the project primary schools would require close coordination between several agencies at the national and local levels. Several of the programs sponsored under the project (the Institute of Education and the commercial education component) are innovative and would require adequate staffing to be successful. LThis document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  - ii - Estimated Cost: US$ Millions Local Foreign Total 1. Primary Schools 3.4 2.2 5.6 2. Secondary Schools 2.1 1.4 3.5 3. Teacher Training 2.7 1.8 4.5 4. Institute of Education 1.1 0.7 1.8 5. Vehicles 0.1 0.7 0.8 6. Textbook Program 1.3 2.0 3.3 7. Studies, Services, Project Administration 1.1 0.6 1.7 8. Contingencies 3.3 2.1 5.4 Total 15.1 11.5 26.6 (taxes and duties) (0.9) (0.9) Total net of taxes and duties 14.2 25.7 Financing Plan: IDA 7.5 7.0 14.5 (57%) EEC (Special Action Account) 3.0 4.5 7.5 (29%) Government 3.7 - 3.7 (14%) Total net of taxes and duties 14.2(55%) 11.5(45%) 25.7 (100%) Estimated Disbursements: IDA Fiscal Year 1980 1981 1982 1983 1984 IDA Annual 0.2 1.7 4.2 5.5 2.9 Cumulative 0.2 1,9 6.1 11.6 14.5 EEC Annual 0.3 3.3 3.9 Cumulative 0.3 3.6 7.5 Staff Appraisal Report: No. 2277-MAI, dated April 26, 1979  INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON PROPOSED CREDITS TO THE REPUBLIC OF MALAWI FOR A THIRD EDUCATION PROJECT 1. I submit the following report and recommendation on two proposed credits to the Republic of Malawi for the equivalent of US$22.0 million on standard IDA terms to help finance a Third Education Project. One credit of US$14.5 million would be made from IDA resources; a second credit of about US$7.5 million equivalent would be made from the EEC Special Action Account administered by the Association in accordance with the terms of the agreement of May 2, 1978, between the Association and the European Economic Community. PART I - THE ECONOMY i' 2. A report entitled "Memorandum on the Economy of Malawi" (Report No. 1677a-MAI) dated September 30, 1977 was circulated to the Executive Directors on October 10, 1977. A Basic Economic Mission will visit Malawi from May 11 to June 15, 1979. Country data sheets are provided in Annex I. 3. With a population of 5.6 million and a land area of about 46,000 square miles, Malawi is relatively densely populated. Its main assets are moderately fertile soils, good water resources and a climate favorable to crop production. Unlike its neighbors, Malawi has no known substantial mineral resources. Forests constitute the main, essentially untapped, resource which could be exploited on a significant scale in the future. 4. Although Malawi has a GNP per capita of only US$140 and is listed by the United Nations among the world's poorest countries, its progress since 1964, measured against its natural endowments, has been remarkable. Between 1964 and 1976, GDP at constant prices grew at an average annual rate of 6.5 percent, domestic investment and savings increased rapidly, and government finances improved sufficiently to eliminate the need for budgetary aid. Agriculture, which dominates the economy (47 percent of GDP and 48 percent of paid employment in 1977), has been directed towards export markets by encouraging cash crop estates production and integrated rural development schemes. In addition, rapid industrial development (the share of industry rose from 9 percent of GDP in 1964 to 17 percent in 1977) has significantly broadened the economic base. 1/ The section on the economy is substantially the same as in the President's Report for the National Rural Development Programme (NRDP) - Phase I (P-2377-MAI, November 6, 1978).  5. The continuing success of Malawi's development efforts has been due in large part to realistic and purposeful planning by the Government. A Statement of Development Policies (DEVPOL), which pro- vides a general framework for three-year rolling plans, was published in 1971. DEVPOL contains major economic targets up to 1980 and states as main socioeconomic objectives: (a) raising living standards and pro- ductivity in rural areas; (b) achieving an eight percent average annual real growth of GDP through the parallel development of smallholder out- put, estate agriculture and industry; (c) promoting a more balanced regional development; and (d) developing local initiatives by gradually increasing local participation in the economy. 6. Of total public sector investments during 1971-80, agriculture will receive 19 percent, public utilities 11 percent, and social services 15 percent. The transportation sector will receive about 29 percent, although between now and 1980 the proportion is expected to be tempo- rarily higher (46 percent) because of the concentration of several large investments in those years. Malawi has an effective administration which has been quite successful in preparing and implementing development projects. 7. DEVPOL recognizes the important role of private investment in development which, it is anticipated, would account for about one-half of total fixed capital formation over the 1971-80 period. The Govern- ment also recognizes the role of a healthy private sector in generating foreign exchange and savings needed to sustain other elements of the development strategy, and has adopted policies which are intended to attract foreign investors and to ensure continued rapid growth of the private sector. Trade and payments policies are liberal; profits are moderately taxed and wages are held down to favor labor-intensive estates and industries. The modern private sector has been the leader in economic growth. The output of estate agriculture increased by 10 percent a year in real terms over the past decade, and industrial pro- duction rose by 13 percent annually. 8. In 1969, the poorest 40 percent of Malawi's households received 15 percent of the total income; the highest 20 percent received 53 per- cent and the top 5 percent received 30 percent. Since then, the Govern- ment has not conducted a national household income survey, not only because it is a costly undertaking but also because income distribution has not been a critical issue in this country with a large subsistence population and a small modern sector. 9. In keeping with its efforts to develop the rural areas, the Government has directed some of its agricultural investment programs toward smallholders. Although, for some years, the Government kept producer prices low, it now recognizes the importance of sufficiently remunerative commodity producer prices and has recently authorized increases. Over the past seven years, real wages have fallen somewhat, and wage employment has increased by eight percent a year on the average.  10. In 1977, a population census revealed that the country's population grew at 2.9 percent per annum during the past decade. Projecting the same growth rate for the remainder of the century, Malawi's population will almost double by the year 2000. This high population growth rate has important implications for the 1-bor-land ratio. Malawi's population density is about 136 per sq. km of agri- cultural land, among the highest in Africa. By the year 2000, Malawi will have 267 people per sq. km. While the Government argues that the country has substantial unused agricultural land, it has not had much success in settling farmers on new land; settlement schemes have had high investment cost and have run into difficulties, social as well as economic. We are discussing these implications with the Government which, at this time, opposes adoption of an official policy of active population control, reportedly for religious reasons. As a result, sales of contraceptives are prohibited in Malawi, though clinics are permitted to give family planning advice to those who seek it. The Basic Economic Report will provide further in-depth analysis (par- ticularly of the cost of social services for a rapidly growing population and of the Government's land-use policy) for continuous follow-up. Only about eight percent of the total population live in urban areas. How- ever, because of the diversification of the economy, urban population is increasing by more than seven percent per annum, in line with the ex- pansion of wage employment opportunities in the non-agricultural sectors. 11. As about 90 percent of the population live in rural areas, rural development is a primary social and economic objective. At pre- sent, the majority of farmers are smallholders on the fringe of the market economy. Their staple crop is almost exclusively maize, and their principal cash crops are cotton, tobacco and groundnuts. Until now, the principal instrument for increasing smallholder productivity has been relatively intensive, integrated development projects in specific areas which, when completed, will reach about 25 percent of the rural population. 12. In spite of the Government's efforts, however, production from traditional agriculture has lagged behind that of the estates. Although firm figures are lacking, indications are that between 1971 and 1976, production from the traditional sector grew at about 4.5 percent a year compared to about 11 percent in the estate sector. The Government is concerned about this relatively slow growth and has prepared a new country- wide approach to rural development. It constitutes a departure from the previous approach in that it primarily concentrates on providing farm inputs and extension services, with less emphasis on infrastructure. The new approach - the National Rural Development Programme - is to become the Government's chief vehicle for smallholder development.  - 4 - 13. The country's progress in generating and using domestic re- sources has, on the whole, been impressive. Both domestic savings and fixed investment have risen steadily since independence. Savings, virtually nil in 1964, were 19.2 percent of GDP in 1977, and fixed in- vestment rose during the same period from 8.5 to 22.5 percent of GDP. In general, the Government's fiscal management has been skillful. By holding recurrent expenditures down while expanding revenues, the Government has managed to achieve small budget surpluses to raise the domestic contribution to financing capital development expenditures, which was negative in 1964, to 13 percent in 1977. Nevertheless, the expanding level of development activities would lead to additional demands for recurrent expenditures, possibly limiting future govern- ment contributions to the capital budget. Consequently, there is need for stepping up domestic resource mobilization, particularly through taxation. In response, the Government has increased the company tax, personal income tax and import duties and excise taxes on some com- modities. Further increases, however, will be needed, both for re- current expenditures as well as to help finance future development. The Government is concerned about the problem and, with Bank assist- ance, has initiated a study of the fiscal implications of its develop- ment program. 14. After serious deterioration in 1975 and 1976, Malawi's balance of payments recovered sharply in 1977. The deterioration was due principally to international inflation (and consequent deterioration in the terms of trade), exacerbated by the suspension in 1974 of the flow of Malawian migrant workers to South Africa, which drastically reduced remittances, and substantial capital outflows in 1975 and 1976. As a result, Malawi's foreign reserves declined from US$82 million in 1974 to US$26 million - equivalent to about 1-1/2 months of imports - in 1976. The Government took fiscal and monetary measures to deal with the problem, and in 1977, the IMF made available a first tranche standby credit, equivalent to US$6.3 million. Demand for Malawi's main agri- cultural exports, however, continued strong, and foreign exchange reserves rose to a record level of US$88 million (equivalent to about four months of imports) by the end of 1977. 15. The expansion of the Government's investment programs has been assisted by increased public capital inflows on very concessionary terms. The net contribution from foreign official sources to the fi- nancing of public investment increased from US$17 million in 1967 to about US$66 million in 1977, of which US$9 million was in grant form. The sources have also been gradually diversified. At independence, Britain was virtually the only source; by 1977, the British contribution had declined to about 40 percent. Multilateral sources, especially IDA, provided about 40 percent, and a variety of bilateral sources, notably Canada and the USA, accounted for the remainder.  16. At the end of 1977, Malawi's external public debt totalled US$421 million, of which US$283 million had been disbursed. Debt service in 1977 amounted to US$14.2 million, equivalent to about 7 percent of foreign exchange earnings. At the end of 1977, the Bank's and the co'bined IDA/Bank shares in Malawi's disbursed debt were 0.8 percent and 23.4 percent, respectively, and service on the Bank Group debt accounted for 6.3 percent of total debt service. In 1985, the IDA/Bank share in total disbursed debt is projected to be 45.3 per- cent and the service on the Bank Group debt to be 24.5 percent of the total debt service. With the continuing increase in public investment, external capital inflow is estimated to increase to about US$117 million by 1985. In the future, some hardening of the average terms of lending can be expected. However, even if the average grant element of official assistance were to fall from the 80 percent level of 1971-75 to, say, about 60 percent by 1985, Malawi's public debt service obligations still would remain below 5 percent of export earnings in 1985. Because of the Government's limited ability to mobilize domestic resources for the pipe- line of projects it is able to prepare and implement (para. 13), external financing usually covers a substantial part of the project cost, including local costs when the foreign exchange component is relatively small. Despite the Government's success in steadily raising the domestic share of development expenditures (13 percent in 1977), new investment is ex- panding more quickly than the domestic resource base. Moreover, much of the Government's development outlays are necessarily cancentrated in activities not suitable for external assistance, so that the proportion of external financing in specific projects reached the overall level of 87 percent in 1977. In consideration of the Government's good performance in economic management and project preparation and implementation, Malawi became eligible for some borrowing on Bank and Third Window terms in 1976. PART II - BANK GROUP OPERATIONS IN MALAWI 17. Malawi has received 18 IDA credits totalling US$154.9 million and four Bank loans totalling US$29.2 million, of which two were on Third Window terms. Of the total Bank Group assistance, US$85 million (46 percent) was for agriculture, about US$38 million (20 percent) for power development, about US$18 million (10 percent) for education, US$32 million (17 percent) for roads, US$3 million (2 percent) for a development finance company (INDEBANK) and the balance of US$9 million (5 percent) for water supply and to finance feasibility studies for a planned pulp mill at Viphya. The first Bank loan to Malawi was made on Third Window terms in June 1976 and the first standard Bank loan in April 1977. IFC's investments in Malawi consist of a loan of US$6 million made in February 1976 for a textile mill, another of US$9 million for sugar development in April 1977, and a US$562,000 equity investment  - 6 - in INDEBANK in July 1978. A summary statement of Bank Group operations and notes on the execution of ongoing projects are provided in Annex II. Project implementation is generally satisfactory. 18. Bank Group operations in Malawi will continue to emphasize rural development and agriculture through further investments in the National Rural Development Programme (NRDP). A second phase NRDP project, recently appraised, will improve the supply of wood-based energy and forest products in rural areas through the establishment of 43,000 ha of fast growing plantations. Other major areas of con- centration include education, water supply, and transportation. In water supply, project preparation based on a sector study recently undertaken by the IBRD/WHO Cooperative Program has begun. A fourth highway project is being prepared which will include extension of the main north-south spine road as well as assistance for feeder road development. Finally, we are examining possible investments in power, industry and urban sites and services. PART III - THE EDUCATION AND TRAINING SECTOR Overview 19. After independence in 1964, the Government placed high priority on economic growth and the development of directly productive sectors rather than social services. Consequently, in education emphasis was given to improving those institutions which would provide the middle and higher level manpower required for the productive sectors of the economy. As a first priority, secondary education was improved and the University of Malawi established. In the early 1970s, the "Education Plan of Malawi, 1973-79" was prepared, which set broad goals for the education sector and stressed the need to improve internal efficiency, achieve a more equitable distribution of educational opportunities and con- tinue the efforts to meet manpower requirements. Despite these efforts, shortages of adequately trained skilled, technical and managerial manpower re- main throughout the economy, and only 25 percent of the population is literate. Education System 20. The formal education system consists of eight years of primary education, four years of secondary education and post secondary and university courses of various durations. Currently, primary education is the weakest element in the system: enrollment in grades 1-5 amounts to 68 percent of the 6-10 age group; only 37 percent of children enter- ing primary school complete the first five years of primary education and only 21 percent complete the full eight year course. Girls make up  37 percent of enrollaent and are more likely than boys to drop out after one year of schooling. Repeater and drop out rates are high due to a lack of adequate school facilities, educational materials, textbooks and qualified teachers. Moreover, as Malawians tend to favor living in isolated family clusters rather than in villages, walking distances to schools offering the full eight grades are often great. The Ministry of Education recognizes the need to im- prove primary education and with IDA assistance has recently initiated a school mapping survey to help determine specific construction needs and rationalize school planning. The Government has also started a program to provide primary school prototypes with the intention that they should be replicated by the communities, and has begun to provide technical and material support to self-help school building. 21. Local authorities are responsible for providing educational materials to primary schools. They buy all expendable school materials and equipment through utilization of school fees, which are now K 2.00 per student in rural areas and K 3.50 in urban areas in grades 1 to 5 and, K 4.00 and K 6.50 respectively in grades 6 to 8. At present these fees are sufficient to cover only one-half to one-third of the overall textbook requirements, depending on how long books last. School fees have not changed since 1975 and the Govern- ment does not plan to raise them in the foreseeable future due to hardships this would cause poorer families. Consequently, the number of textbooks available to students is likely to continue to decline as costs rise. Such a decline would worsen an already difficult situation and would adversely affect pass and retention rates. The Government has recognized the importance of textbooks and has pro- posed to initiate a program under which the Central Government would gradually take responsibility for financing a large portion of the costs of textbooks, beginning with basic English, Chichewa and arithmetic textbooks. Locally collected fees would be used for ad- ditional textbooks, teaching materials, furniture and equipment. 22. In secondary education, school places currently are available to only nine percent of students who pass the primary school leaving certificate. The internal efficiency of secondary education is re- latively high but could be improved. Pass rates in day secondary schools are about 20 percent lower than in boarding schools, due in part to the long distances that many children have to walk to school and the fact that children must often seek lodging in nearby towns or make-shift dormitories. The availability of boarding places would increase access to secondary education for a large number of poor students, particularly from the rural areas, and for girls. About 32 percent of all secondary school teachers are expatriates and 100 staff positions are available but unfilled.  - 8 - 23. In the field of technical education, the needs for skilled industrial workers are being met by the Polytechnic and several secondary technical and training schools which offer training pro- grams in bricklaying, carpentry, joinery, electrical working, plumbing, etc. At present there are no cormercial education programs in public schools and there continues to be a shortfall in output of trained agricultural technicians. 24. In non-formal education, several ministries and private agencies sponsor adult education programs. While the lack of co- ordination has often led to duplication of efforts, the programs have reached a significant number of adults. The Ministry of Health offers several programs which provide training in the basic techniques of preventive medicine. Numerous other programs in child care, homecraft and literacy are provided by the Ministry of Community Development and Social Welfare. 25. Total education expenditures currently absorb about 2.5 per- cent of GDP. In 1977/78, recurrent education expenditures were 12 percent of the Central Government's recurrent budget and are estimated to increase to 14 percent in 1978/79, due mainly to a recent salary increase. These proportions are low by African standards and reflect the greater emphasis placed by the Government on directly productive sectors, especially agriculture,and on general administration. Assuming moderate growth in enrollment, improved student/teacher ratios and con- tinued upgrading of educational facilities, educational expenditures as a percentage of the recurrent budget should increase to about 15 percent in 1985/86 and 17 percent in 1990/91. This level of expenditure would not greatly tax Malawi's resources and would still be lower than that prevailing in most African countries. Government Policy and Programs in the Sector 26. The Government has adopted a strategy for formal education which includes: (a) expanding and improving primary schools through programs to provide textbooks and assistance to villages for constructing schools on a self-help basis; (b) improving the quality of secondary education, limiting its rate of expansion, and providing a low-cost alter- native to formal secondary education by expanding the Malawi Correspondence College; (c) expanding primary and secondary school teacher training facilities;  - 9 - (d) increasing the output of the technical schools, agricultural colleges, the apprenticeship program and the University of Malawi to meet the increasing demands for professional and technical manpower; and (e) establishing the Institute of Education to strengthen curriculum development and in-service training for teachers. In quantitative terms, the Government's programs for the gradual expan- sion and improvement of the formal education sector would lead to substantially increased enrollments at the primary level. By 1990, enrollment in grades 1-5 would be equivalent to about 85 percent of the 6-10 age group and enrollment in the full eight year primary course would be equivalent to nearly 70 percent of the 6-13 age group. In the short term, the expansions in enrollments in secondary schools would be limited to about three percent per year due to a shortage of qualified teachers and concern over the possibility of unemployed secondary school graduates in the future. In post-secondary education, enrollments are projected to double over the next 12 years. At the same time, major efforts would be made to expand on-the-job and non- formal training programs to meet specific manpower needs. To provide more precise information on the economy's manpower requirements, the Government is undertaking a series of studies on manpower needs and on secondary school leavers. These studies will provide a basis for planning the rate of expansion of the sector, particularly at the secondary level. 27. Specific programs to expand and improve primary education focus on increasing the supply of qualified teachers and teaching aids and providing physical facilities that would meet basic educa- tion, health and safety standards. The Government's recent decision to take responsibility for financing a large portion of the costs of textbooks will improve efficiency and equity at this important level of education. Also important is the Government's program to support community self-help initiatives for primary school building with building materials and technical advice provided by work teams organized under the Development Division of the Office of the President. In parallel with these improvements in the resources at the disposal of the primary school system, the Government is planning to improve the curriculum and to strengthen the primary school inspectorates. In particular, curriculum development, textbook preparation, materials production and in-service teacher training for teachers and headmasters would be centralized at a new Institute of Education to be located on the site of the present in-service training center at Domasi. With the planned expansion of the inspectorate and the supply of vehicles to the inspectors, primary schools would be visited more frequently and on a regular basis rather than every two to three years as at present.  - 10 - 28. In secondary education, the first priority is to expand teacher training. Enrollment growth at the present rate of three percent per annum requires an average of 90 new teachers per annum, while the present output of Chancellor College is only 30 students per annum. Present secondary programs focus on improving access for female students and students from rural areas by con- structing dormitories and specialized training facilities in existing day-schools, expanding agricultural and commercial education, and promoting a lower cost alternative to secondary education through the expansion of the Malawi Correspondence College. Previous Bank Group Assistance to the Education Sector 29. To date Bank Group assistance to the education sector con- sists of two IDA credits. The first project, approved in 1967 (Cr. 102-MAI), provided US$6.3 million to help finance: (i) extensions to 12 secondary schools to enable them to teach technical subjects; (ii) a primary teacher training college; and (iii) ten fellowships. The project was implemented on schedule. Savings realized under the project were utilized in financing an institute to train Post and Telecommunications personnel in Malawi, Botswana, Lesotho and Swaziland. The Project Completion Report observed that it achieved its objectives though the equipment procured for technical training in the secondary schools may have been too sophisticated. 30. In 1975, the Association approved a US$11.6 million credit (No. 590-MAI) to help finance the Second Education Project which con- tinues the emphasis that the first project placed on secondary education and primary teacher training. It also includes provision of facilities designed to increase women's participation in secondary education, assistance to institutionalize and expand rural training and the development of prototype primary schools and rural education centers. The project is progressing well and should be completed on schedule. 31. The Bank has carried out an active program of sector studies in collaboration with the Government culminating in an in-depth "Education Sector Survey" (Report No. 1781-MAI, February 1978). The Government has accepted most of the findings of the Survey and is currently negotiating financial assistance to implement its recommenda- tions with several donor agencies. CIDA is expected to help finance the establishment of a Natural Resources College which will train middle to high level manpower for the agricultural sector, while USAID, ODM and the UNDP are considering proposals to help finance facilities for higher level commercial and technical education as well as secondary education.  - 11 Future Strate&y 32. The Bank Group's strategy in the sector has focused on improving the quality of, and expanding the access to, primary and secondary education as well as strengthening the overall management and organization of the sector. These are the areas where the Bank, through its project lending, has developed considerable knowledge and expertise. Building on past experience, the Bank will endeavor to help Malawi strengthen and streamline primary and secondary education. In primary education, the Bank will support programs based on improving quality and equity by assisting local self-help school construction activities and improving textbook production and distribution. In secondary education, the Bank will support measures to improve quality through the expansion of the output of secondary school teachers. The Bank would also support measures to improve general efficiency and increase access for females and for students in rural areas. In addition to assistance for primary and secondary education, the Bank will complement the activities of other assistance agencies in the fields of higher level manpower development, improved curriculum development, educational research and school supervision. PART IV - THE PROJECT 33. The proposed project was formally identified in September/ October 1977 and prepared by the Government with assistance from the Association. The project was appraised in Malawi in July/August 1978, and negotiations were held in Washington in April 1979. Mr. C.L. Mphande, Under-Secretary in the Ministry of Finance, led the govern- ment delegation. A Staff Appraisal Report on the project is being circulated separately. Annex III provides supplementary project data. Project Objectives and Description 34. The proposed project would: (i) help to improve efficiency in, and access to, primary and secondary education; (ii) assist in the provision of manpower needed for development; and (iii) improve curriculum development, in-service training, and management of education. The project would carry out these objectives by: - constructing, furnishing and equipping educational facilities; - providing textbooks to primary school students; - providing vehicles for school inspectorates and educational institutions; and financing studies, services, and project administration costs.  - 12 - Overall, the project would construct, furnish and equip buildings and related facilities for about 50,000 primary students, 2,900 secondary students, 180 commercial and agricultural school students, and 345 teacher trainees. The project would also help to provide courses for over 800 primary and secondary teachers and supervisors per year, and would provide dormitories for 855 students, and houses for 614 primary, secondary and university staff. Project Details (a) Primary Schools 35. The project would support a community development program for the self-help construction, furnishing and equipping of (i) 250 four-classroom blocks for primary schools serving about 50,000 children, and (ii) 500 staff houses. About half the classrooms would be distributed equally among administrative districts and would be located on the basis of the Government's present criteria which in- clude self-help initiatives, population density, expected growth and location of neighboring schools. The remainder would be located after completion of a school mapping program; here the distribution by district would take into account school age population and en- rollment rates by district (see Section 3.04 of the draft IDA Credit Agreement). Local authorities would prepare applications for school facilities which would be processed by the District Development Committee, sent to the Development Division in the Office of the President, and approved by the Ministry of Education. In order to ensure proper coordination at all levels, the Government would prepare, by December 31, 1979, an implementation program and pro- cedures, acceptable to the Association, which would establish the respective responsibilities of participating ministries (see Section 3.03 (a) of the draft IDA Credit Agreement). The Government also would ensure that the Development Division increased its staff sufficiently to supervise construction of the primary schools (see Section 3.03 (b) of the draft IDA Credit Agreement). (b) Primary School Textbooks 36. Supplying educational materials currently is the responsibility of local authorities who collect school fees for materials and equipment (see para. 21). Because this system is inadequate, the Government is undertaking a program to finance the costs of primary school textbooks for mathematics, English and Chichewa; school fees will cover the rest.  - 13 - The project would support the program in its initial phase, and for one year of replacement. Overall a total of some 2.2 million textbooks would be provided during this period to about 740,000 primary school children. The Government would prepare and submit to the Association for comments by July 31, 1981, a plan for supplying primary school textbooks beyond the project period (see Section 4.03 of the draft IDA Credit Agreement). (c) Correspondence Centers and Secondary Schools 37. Due to the strong social demand for secondary education, the Government has encouraged growth of an alternative lower cost secondary school system based on a regular junior secondary curri- culum taught by radio and correspondence courses. The system is operated by the Malawi Correspondence College (MCC), through a net- work of 58 secondary school equivalency centers. These centers now provide full-time classroom accommodations up to six hours a day for nearly 3,000 students, the equivalent of one-third of the enrollment in regular secondary schools. The pass rates in these centers are substantially below those in regular junior secondary schools; how- ever, regular secondary school students are selected by examination while there are no specific entrance requirements for these centers. Pass rates could be increased through improvements in local physical facilities and in central facilities at MCC headquarters. Under the proposed project, 30 centers would be constructed or reconstructed, furnished and equipped and facilities at headquarters would be improved. In order to strengthen the management and program delivery of these centers, an evaluation unit would be established at MCC by July 1, 1980, and a specialist would be recruited for the unit (see Section 3.06 of the draft IDA Credit Agreement). 38. The Government, with assistance from the United Kingdom, is currently building boarding facilities in some schools whose students live too far away to commute. The project would complement this effort by providing for the construction and furnishing of boarding and other facilities for 280 students at an additional five secondary schools. (d) Commercial and Agricultural Education 39. The Government plans to establish a new program for training secretaries, typists and bookkeepers. The project would support this training by providing classroom blocks, staff houses, administrative space and related furniture and equipment for three existing technical schools. Dormitories also would be provided for two of the schools;  - 14 " the third school has adequate capacity. Since the commercial training program would be new, a specialist would be recruited to assist in the preparation of curriculum and teacher training programs (see Section 3.08 of the draft IDA Credit Agreement). A tracer program would be established by December 31, 1981 to follow the activities of the graduates (see Section 3.05 (b) of the draft IDA Credit Agreement). 40. The Government has announced its intention to establish a Natural Resources College to meet the growing manpower requirements of the agricultural sector. Several financing agencies have expressed interest in assisting the College, which is targeted to open in 1983/84. Meanwhile the project would assist Colby College of Agriculture to improve the ratio of students to qualified teachers and to increase output per year by 1981 from 160 to 190. Specifically, the project would provide for six new faculty houses, dormitory furniture for an additional 60 students and one vehicle. (e) Primary and Secondary School Teacherst Training 41. The project would help expand the enrollment at Mzuzu Primary Teacher Training College from 420 to 540 and would provide for the additional staff housing required for the expansion. The proposed additions would increase the number of qualified school teachers enter- ing into the primary system. 42. The project would also help Chancellor College expand its physical facilities in order to increase the enrollment of its secondary school teacher training program. On completion, enrollment of teacher trainees would increase from 105 to 330, and the College's annual output of teachers would triple from 30 to 90. A tracer program would be established by July 1, 1980 to monitor the activities of graduates from the secondary school teacher training program (see Section 3.05 (a) of the draft IDA Credit Agreement). (f) Institute of Education 43. The project would assist the Government to establish an Institute of Education for curriculum development, materials prepara- tion and in-service training for both the primary and secondary educa- tional system. An education materials resource center, science center, administrative center, library and staff houses would be built and equipped. At full development, the Institute would have a staff of about 30 and residential accommodation for 150 students and would upgrade annually about 600 primary school teachers and provide short courses to 100 district education officers, 100 primary school head- masters and 40 secondary school teachers, The Government has agreed to legally establish the Institute with an autonomous Board of Governors, to appoint its Director and to take steps to provide ap- propriate technical assistance to it, by July 1. 1980 (see Section 3.07 of the draft IDA Credit Agreement).  - 15 - (g) Vehicles for School Supervisory System and Educational Institutions 44. In order to ensure a satisfactory standard of teaching in the schools, the Government has established a school inspectorate responsible for teacher evaluation, school maintenance, and introduction of new curricula and textbooks. Its existing staff of 29 inspectors, with only limited transportation facilities, however, is unable adequately to cover over 2,000 primary schools in Malawi. The project would support the inspectorate by financing the purchase of 29 vehicles, which would enable the inspectorate to visit each primary school in Malawi about twice a year. The project also would provide 21 vehicles to regional and central MOE offices, Mzuzu Teacher Training College, the MCC, Colby College of Agriculture, and the Project Implementation Unit. (h) Studies, Services and Project Administration 45. The project would support a number of studies on key educational issues, including monitoring and evaluation of the Second and Third Education Projects,to be carried out by the Institute of Education, Chancellor College, the Malawi Certificate Examination and Test Board and other relevant institutions. It also would provide funds for archi- tectural and engineering services, and for project administration. Project Implementation 46. The Project Implementation Unit (PIU), established under the Second Education Project, has functioned well and would supervise the implementation of the proposed project. The PIU would prepare designs for primary schools based on the prototype schools built under the Second Education Project, and would arrange for the supply of building materials to local communities which would construct the schools on a self-help basis. The project would be implemented over a five-year period. Project Cost and Financing 47. The total project costs are estimated at US$25.7 million equivalent (net of taxes), of which about US$11.5 million, or 45 percent, represent foreign expenditures. The value of locally provided labor for self-help construction and some materials expected to be provided by the communities have not been included in project costs. The proposed US$14.5 million IDA credit would finance 57 percent of costs, and a credit of about US$7.5 million from the EEC Special Action Account, about 29 percent. IDA and EEC Special Action Account financing would be provided on a parallel basis. The IDA credit would finance project expenditures related to  - 16 - primary, secondary and technical schools, secondary teacher training facilities, Colby College of Agriculture, and the Institute of Education, as well as studies, consultant services and project administration. The EEC Special Action Credit would finance project expenditures related to primary teacher training, MCC and its centers, primary school textbooks and vehicles. Procurement 48. Contracts to be financed by IDA total about US$16.1 million equivalent, including contingencies, of which about US$10.9 million equivalent (68 percent) would be awarded on the basis of international competitive bidding in accordance with Bank Group guidelines. Exceptions to these guidelines amounting to US$5.2 million equivalent (32 percent) would be for: (a) Labor and materials, costing about US$4.5 million, for constructing rural primary school facilities with community self-help, would be financed following local procedures. The Development Division would provide skilled labor and technical assistance, financed by the project. The PIU would procure construction materials locally, in bulk and as needed over a four-year period (to avoid deterioration in prolonged storage) following competitive bidding pro- cedures acceptable to the Association. As maximum annual expenditures on materials would be only about US$750,000, the amounts would be unlikely to attract foreign bidders; (b) Other construction contracts costing less than US$250,000 each and furniture, equipment and vehicle contracts costing less than US$50,000 equivalent each. The aggregate total of these contracts is not expected to exceed US$0.7 million equivalent. 49. Contracts to be financed by the EEC Special Action Credit total about US$8.4 million, including contingencies, and would be awarded in accordance with Schedule III of the draft EEC Special Action Credit Agree- ment which limits bidding to EEC member countries and IDA member countries which are eligible to receive Special Action Credits. Specifically the EEC Special Action Credit would finance the following: (a) Construction contracts for Malawi Correspondence College and its 30 centers, costing US$1.9 million. As the work on the MCC and its centers would be phased and spread over a wide geographical area, these contracts would not be of interest to international firms and would be awarded on the basis of local procedures;  - 17 - (b) Textbooks for primary schools, costing an estimated US$3.8 million. Procurement of textbooks, most of which are published in Malawi, would be through the Malawi Book Service (MBS), a parastatal body. MBS currently procures and distributes all textbooks for government schools, mainly by direct purchases from local suppliers. Its procurement is efficient and economical and procedures for procuring project textbooks would be acceptable to the Association. (c) The construction contract for the expansion of the Mzuzu Teachers College, estimated to cost US$1.1 million equivalent. The contract would be negotiated on the basis of presently agreed unit costs with the contractor employed to construct the first phase under the Second Education Project (Credit 590-MAI). This is regarded as the most efficient and economical contractural method in view of the contractor's satisfactory performance on the existing contract and the previous difficulties in attracting bidders to the Mzuzu area. (d) Equipment and furniture for (a) and (c): and vehicles for the project, costing an estimated US$1.6 million. Pro- curement for these items would follow international com- petiive bidding procedures set out in Schedule III of the draft EEC Special Action Credit Agreement. 50. Contracts to be awarded following international competitive bidding total US$12.5 million equivalent; contracts to be awarded following negotiation and competitive bidding advertised locally,and in accordance with procedures acceptable to the Association,are estimated at US$12.0 million equivalent,including contingencies. Architectural sketch designs, draft tender documents and master lists of furniture, equipment and vehicles, including proposed grouping, would be reviewed by the Association. Items would be grouped to the extent practicable to encourage competitive bidding and bulk procurement. Review of tender evaluation documents by the Association prior to award would not be required for construction contracts costing less than US$250,000 equivalent each and for construction materials, furniture, equipment and vehicle contracts each costing less than US$50,000 equivalent. Where international competitive bidding procedures are used (i) domestic manufacturers of furniture and equipment would be allowed a prefer- ence of 15 percent or the existing applicable rate of import duties,whichever is lower, over the c.i.f. price of competing foreign suppliers and (ii) for IDA financed components qualified domestic contractors would be allowed a preferential margin of 7-1/2 percent over the bid prices of competing foreign contractors.  - 18 - Disbursements 51. Proceeds of the proposed IDA credit would be disbursed on the following basis: (i) 80 percent of the total costs of civil works and project administration; (ii) 80 percent of local expenditures for locally procured construction materials for primary school facilities, furniture, equipment, consultants services and studies; (iii) 100 percent of foreign expenditures for directly imported construction materials, furniture,equipment, consultants services and studies; and (iv) 100 percent of the ex-factory cost of furniture and equipment manufactured locally. Disbursement against components financed from the EEC Special Action Credit would be: (a) 87 percent of total expenditures for civil works; (b) 90 percent of total expenditures for textbooks and furniture; and (c) 90 percent of local and 100 percent of foreign expenditures for equipment and vehicles. Retroactive financing up to US$100,000 equivalent is recommended to help finance the cost of architectural consultancy services and project administration expenditures incurred after April 1, 1979. Benefits and Risks 52. The proposed project would improve the quality of and the access to primary and secondary education. The provision of textbooks to all primary school children and the increased availability of primary and secondary school teachers are among the project's major qualitative benefits. Assistance for the Institute of Education, and the school inspectors would improve the educational system's operations and effi- ciency. On equity grounds, the project would improve the access of students in the disadvantaged areas, largely rural, to educational opportunities at the primary and secondary level. The provision of boarding facilities in secondary schools for both boys and girls would help to improve student performance as well as strengthen female par- ticipation in economic activities. The project also would address Malawi's manpower needs by assisting commercial education and helping to improve the supply of secondary school teachers and agricultural tech- nicians. Finally, investment in the Malawi Correspondence College would offer much needed opportunities for secondary education to students who for various reasons are unable to enroll or continue enrollment in the regular secondary school system. There are no major risks associated with the project. However, construction of the primary school program by communities on a self-help basis would require close coordination among several agencies. In addition, several of the programs sup- ported by the project, particularly the Institute of Education and the com- mercial education component, are innovative and would require adequate staffing to be successful. To minimize risks it has been agreed that: (i) the Government would, by December 31, 1979, prepare a program, satisfactory to the Association, which would show how it intends to coordinate the responsibilities and activities of all agencies involved in the construction  - 19 - of the primary schools (see Section 3.03 of the draft IDA Credit Agreement); and (ii) the Institute of Education as well as the other agencies concerned with project implementation would be suitably staffed (see Sections 3.07(b) and 3.08 of the draft IDA Credit Agreement). PART V - LEGAL INSTRUMENTS AND AUTHORITY 53. The draft Development Credit Agreement between the Republic of Malawi and the Association, the draft EEC Special Action Credit Agreement between the Republic of Malawi and the International Development Association, as administrator of the EEC Special Action Account established with funds contributed by the member states of the EEC, and the Recommendation of the Committee provided for in Article V, Section l(d) of the Articles of Agreement of the Association are being distributed to the Executive Directors separately. 54. Special conditions of the project are listed in Section III of Annex III of this report. 55. A special condition for effectiveness of the IDA Credit Agreement would be that all conditions precedent to the effectiveness of the EEC Special Action Credit Agreement have been met other than the effectiveness of the IDA Credit Agreement. A special condition of effectiveness of the EEC Special Action Credit Agreement would be that all conditions precedent to the effectiveness of the IDA Credit Agreement have been met other than the effectiveness of the EEC Special Action Credit Agreement. 56. I am satisfied that the proposed credit would comply with the Articles of Agreement of the Association, and that the EEC Special Action Credit would comply with the criteria established by the Agreement of May 2, 1978 between the Association and the European Economic Community. PART VI - RECOMMENDATION 57. I recommend that the Executive Directors approve the proposed credit. Robert S. McNamara President May 2, 1979  - 20 - ANEX 1 TABLE 3A MALAWI - SOCIAL INDICATORS DATA SHEET REFERENCE GROUPS (ADJUSTED AVERAGES MALAWI La LAND AREA (THOUSAND SQ. KM.) - MOST RECENT ESTIMATE) TOTAL 118.5 SAME SAME NEXT HIGHER AGRICULTURAL 41.2 MOST RECENT GEOGRAPHIC INCOME INCOME 1960 Lb 1970 A ESTIMATE Lb REGION Le GROUP /d GROUP Le GNP PER CAPITA (US$) 50.0 70.0 140.0 223.6 182.9 432.3 ENERGY CONSUMPTION PER CAPITA (KILOGRAMS OF COAL EQUIVALENT) .. 46.0 56.0 86.7 88.9 251.7 POPULATION AND VITAL STATISTICS TOTAL POPULATION, MID-YEAR (MILLIONS) 3.5 4.6 5.6 URBAN POPULATION (PERCENT OF TOTAL) 4.4 5.6 7.9 13.6 15.0 24.2 POPULATION DENSITY PER SQ. KM. 29.0 38.0 47.2 18.4 46.8 42.7 PER SQ. KM. AGRICULTURAL LAND 92.0 114.0 135.9 53.6 254.1 95.0 POPULATION AGE STRUCTURE (PERCENT) 0-14 YRS. 42.9 43.9 45.4 44.4 43.6 44.9 15-64 YRS. 53.2 52.1 51.3 52.7 53.3 52.8 65 YRS. AND ABOVE 3.9 4.0 3.3 2.8 2.9 3.0 POPULATION GROWTH RATE (PERCENT) TOTAL 2.2 2.6 2.9 2.6 2.4 2.7 URBAN 5.5 5.0 7.6 5.8 4.0 8.8 CRUDE BIRTH RATE (PER THOUSAND) 49.0 49.3 47.7 46.9 44.3 42.2 CRUDE DEATH RATE (PER THOUSAND) 30.6 28.1 23.7 20.6 19.7 12.4 GROSS REPRODUCTION RATE 3.2 3.2 3.2 3.1 2.9 3.2 FAMILY PLANNING ACCEPTORS, ANNUAL (THOUSANDS) .. .. .. USERS (PERCENT OF MALRRIED WOMEN) .. .. .. 2.5 14.6 14.2 FOOD AND NUTRITION INDEX OF FOOD PRODUCTION PER CAPITA (1970-100) 89.0 100.0 113.2 94.2 96.4 104.3 PER CAPITA SUPPLY OF CALORIES (PERCENT OF REQUIREMENTS) 86.0 103.0 103.0 90.1 92.3 99.5 PROTEINS (GRAMS PER DAY) 50.0 54.0 68.4 55.2 50.0 56.8 OF WHICH ANIMAL AND PULSE 6.0 If 9.0 9.9 17.1 13.9 17.5 CHILD (AGES 1-4) MORTALITY RATE .. .. .. .. .. 7.5 HEALTH LIFE EXPECTANCY AT BIRTH (YEARS) 35.0 38.5 41.0 43.7 45.8 53.3 INFANT MORTALITY RATE (PER THOUSAND) .- 142.0 138.4 102.7 82.5 ACCESS TO SAFE WATER (PERCENT OF POPULATION) TOTAL .. .. .. 22.4 26.4 31.1 URBAN .. .. .. 66.3 63.5 68.5 RURAL .. .. .. 10.4 14.1 18.2 ACCESS TO EXCRETA DISPOSAL (PERCENT OF POPULATION) TOTAL .. .. .. 23.9 16.1 37.5 URBAN .. .. .. 70.3 65.9 69.5 RURAL .. .. .. 14.2 3.4 25.4 POPULATION PER PHYSICIAN 35000.0 /f 38250.0 .. 21757.5 13432.7 9359.2 POPULATION PER NURSING PERSON .. 16090.0 .. 3473.8 6983.3 2762.5 POPULATION PER HOSPITAL BED TOTAL 940.0 f 760.0 .. 645.4 1157.6 786.5 URBAN .. 190.0 .. 172.9 183.3 278.4 RURAL *- 1520.0 .. 1292.6 1348.8 1358.4 ADMISSIONS PER HOSPITAL BED .. 36.3 /h 19.2 19.5 19.2 HOUSING AVERAGE SIZE OF HOUSEHOLD TOTAL .. .. .. 4.9 5.2 URBAN .. 3.4 Lt .. 5.0 4.8 RURAL .. .. .. 4.7 5.3 AVERAGE NUMBER OF PERSONS PER ROOM TOTAL .. .. .. URBAN .. 1.9 ft 1.7 .. 1.8 2.3 RURAL .. .. .. ACCESS TO ELECTRICITY (PERCENT OF DWELLINGS) TOTAL .. .. .. .. 25.9 28.3 URBAN .. 16.0 Li .. RURAL *- *- ** 8.7 10.3  - 21 - ANNEX I TAULE 3A MALAW! - SOCIAL IhDICATORS DATA SHEET REFERENCE GROUPS (ADJUSTED AVERAGES MALAY!W La - HOST RECENT ESTIMATE) SAhE SAMlE NEXT IGHER MOST RECENiT GEOGRAPHIC INCOME INCOME 1960 lb 1970 /b ESTIIATE Lb REGION LI GROUP /d GROUP Ie EDUCATION ADJUSTED ENROLLMENT RATIOS PRIMARY: TOTAL 63.0 40.0 61.0* 52.1 62.9 75.8 tEKALE 45.0 29.0 48.0 37.6 45.9 67.9 SECONDARY: TOTAL 1.0 2.0 3.0* 8.0 14.4 17.7 FEMALE 0.3 1.0 2.0 5.0 8.8 12.9 VOCATIONAL (PERCENT OF SECONDARY) 24.0 3.0 8.5 7.2 6.6 7.4 PUPIL-TEACHER RATIO PRIMARY 41.0 43.0 58.0 * 43.2 38.5 34.3 SECONDARY 14.0 16.0 19.0 * 22.8 19.8 23.5 ADULT LITERACY RATE (PERCENT) 22.0 1I 25.0 20.3 36.7 63.7 CONSUMPTION PASSENGER CARS PER THOUSAND POPULATION 1.8 2.0 2.3 3.9 3.1 7 RADIO RECEIVERS PER THDUSAND POPULATION 9.0 k 20.0 26.0 40.1 31.1 71 TV RECEIVERS PER THOUSAND 1 POPULATION 0.7 2.2 2.8 14.; NEWSPAPER ("DAILY GENERAL INTEREST") CIRCULATION PER THOUSAND POPULATION 2.0 3.9 6.0 16.3 CINEMA ANNUAL ATTENDANCE PER CAPITA 0.3 0.4 1.2 1.4 1.6 EMPLOYMENT TOTAL LABOR FORCE (THOUSANDS) 1700.0 2000 0 p300 0 FEMALE (PERCENT) 38.3 37.8 37.5 32.6 24.2 28.0 AGRICULTURE (PERCENT) 93.0 89.1 86.0 73.3 60.7 54.1 INDUSTRY (PERCENT) 2.7 3.7 PARTICIPATION RATE (PERCENT) TOTAL 48.2 46.9 45.8 42.0 39.8 37.8 MALE 60.3 59.2 58.1 54.8 53.3 50.3 FEMALE 36.4 35.0 33.9 27.3 19.6 20.9 ECONOMIC DEPENDENCY RATIO 1.0 1.1 1.1 1.2 1.3 1.3 INCOME DISTRIBUTION PERCENT OF PRIVATE INCOME RECEIVED BY HIGHEST 5 PERCENT OF HOUSEHOLDS 29. 5 25.7 20.3 19.5 HIGHEST 20 PERCENT OF HOUSEHOLDS 52.9 55.1 45.1 48.9 LOWEST 20 PERCENT OF HOUSEHOLDS 5.7 5.8 5.7 5.9 LOWEST 40 PERCENT OF HOUSEHOLDS 15.0 14.5 16.8 15.7 POVERTY TARGET GROUPS ESTIMATED ABSOLUlTE POVERTY INCOME LEVEL (US$ PER CAPITA) URBAN 60.0 108.8 88.5 155.9 RURAL 60.0 74.1 71.9 97.9 ESTIMATED RELATIVE POVERTY INCOME LEVEL (US$ PER CAPITA) URBAN 124.4 100.8 143.7 RURAL 40.0 59.6 42.0 87.3 ESTIMATED POPULATION BELOW POVERTY INCOME LEVEL (PERCENT) URBAN 25.0 26.8 46.0 22.9 RURAL 85.0 47.6 48.0 36.7 Not available Not applicable. NOTES /a The adjusted group averages for each indicator are population-veighted geometric means. excluding the extreme values of the indicator and the most populated country in each group. Coverage of countries among the indicators depends on availability of data and is not uniform. /b Unless otherwise noted, data for 1960 refer to any year between 1959 and 1961; for 1970, between 1969 and 1971; and for Most Recent Estimate, between 1973 and 1977. /c Africa South of Sahara; /d Low Income ($280 or less per capita, 1976); /e Lower Middle Income ($281-550 per capita, 1976); /f 1962; Ia 1963; /h 1965; fL 1967; LI 1966; /k Including data for Southern Rhodesia and Zambia. * 1978 Primary, Secondary education enrollment and pupil/teacher ratios are 56, 5, 61 and 21, respectively. April 26, 1979  - 22 - ANNEX I DEFINITIONS OF COCIAL INDICATORS Notes: Although the data are drawn fr-o sources generally Jadged the soot authoritative and reliable, it uhoald alsc be noted thlt they nay uoc be inter- satisallv unsparabte beconue of the lank of standardized definitions and .o.epts pt ed by different cocutrion in collecting the data. The date are. nnetheless useful to deocribe orders of magnitude, indinote trends, and ohar-atenria certais najor differences between countries. The adjusted grouP average for eanh indinotor are population-weightad ge.etn,in means, excludieg the e.treme values of the indicator aed the most populated country in esch group Coverage of countries among the indinatore depends on availability of data and in nut uniform Dce to lack of data, group averages lot CapItal Surplus Oil Efportere and indicetors of a-ces. to sense and e-creta dispoaal, houoing. i-cu-e distribhtios and poverty are simple popolation-weighted g-retric -neess cithont the enclusion of etrene values. LAND AREA (thonsand sq. in Popluation per hospital bed - total, urban, and rural - Population (total, Total - Total surface area -caprisleg land area and inland waters. urban, and rural) dinided by their respective number of hospital beds Aeniculiural - Most recent estimate of agrinultural area used tempocrnily v-ilabise in public and priatet general and opecialloed hospital and re- or -ormaoently for crops, pa-tures, market and kitchen gardens or to habilitation centers. lfuspitalu are establishments permanently ataffed by lie fallow at least one phynician. Eutablishmentu providing principally castodiol cere are net included, Rlana hospituls, however, include health and medi- GNP PER CAPITA (1S1) - GNP peo capita estimates at current market prides, cal centers not permanently rtaffed by a physician (bht by a medical as calculated by .asa convension method ao World Bank Atlas (1971-77 basis); niatest, n-r-e, nidwife, etc-) which offer in-patient accommodati-u and 1960, 1970, and 1977 cita, provide a limited range of sedical facilities. Admissions per hospital bed - Total number of admissions to or discharges ENERGY CONSLMPTIION PER CAPITA - Ancual consumption Of commercial energy feom hospitals divided by the nubmhr cf beds. (coal and lignite, petroleua, natucrl gas and hydro-, nuclear and gee- thearmal electicity) in kilogr.ss of coal equivalent per capits. HOUSING Average siae of household (persona per household) - total, urban, and rural- POPULATION AND VITAL STATISTICS A household consists of a group of individuals whu shore living qearters Tontl population, =id-year (millions) - As of July 1; if not available, and their main eals. A boarder or lodger say or maY not be included in aoerage of two end-year estimaten; 1960, 1970, and 1977 data, the household for statistical purposes. Statistical definitions of house- Urban population (procent of totel) - Ratio of urban to trtal popula- hold vaey. tion; different definitions of urban areas may affect comparability Average number of persons per room - total, urban, and rural - Average sum- of data among countries, ber of pers.ns per r..a in all, urban, and rural occupied conventional PopslaLiun density dwellings, respectively. Dvellings enclude nom-permanent structares and Pe n. Ia. - Mid-year population per square kilometer (100 hectarms) usoccupied parts. of trual area. Ancess to electricity (percent of dwellings) - rotal, urban, and rural - Per sq. kbe. griclturo loud - Computed s above for agricultural land Conventi oal I dwellings with e1eoricity in living quarters as percentage only. of total, urban, uan rural dwellings respectively. Population aao structure (percest) - Children (0-14 years), working-age (15-64 years), and retired (65 years and over) an parcentages of mid- EDUCATION year popul7- ion AdJusted enrollment ratios Pepulstion growth rati (percent) - total, And urban - Compound annual Primary school - total, and female - Total and fetale enrollment of all ages growth rates of total and urban aid-year populations for 1950-60, at the primary level au percentages of respectively primary school-age i960-70, and 1911-15, popalaio.ns; normally includes childron aged 6-11 years but adjusted for Crado birth rate (oer thousand) - Annual live births per thousand of different lengths of primary education; fun countries with universal edu- oid-year populatione ten-year arithmetic averages ending in 1960 and nation enrollment may emceed 100 percent Since Snoe pupils are below or 1910 and five-yrur average ending in 1975 for .s.t recent estitate. above the official sobhol age. Crude death rate (per thousand) - Annual deaths per thousand of mid- Secondary school - tatal. and female - Compated as above; seco- dary educa- year population; tnn-yest -.h.r.tin avecages ending in 1960 and 1970 tin requires ot _leat four yern of cpproved prinary instrcctiec; pro- and fine-yost average ending in 1975 for most recent estimate. vide general vocational, or teacher training instructions for pupils Groa reproduction rate - Average number of daughters a woman will bear usually of 12 to 17 yearn of ago; conrrepondence courses are generally is her normal -eprodactise period if ohs experiences present Age- ecluded. specific fertility rates; usually five-year averages ending in 1960, Vocational enrollment (Percent of aecundunol - Vocational institutions in- 1970, ad 1975. clude technical, indnutrial, or other programs vhih operant iodapendently Family planeing - acceptors, annual (thousands) - Annual number of o AS departmets f secondary institutions. acceptors of birth-control devices under auspicss of national family Pupil-teacher ratio - prisary. and seco-dary - Total studosta enrolled in planting program. primary And y levels divided by numbers of teachern in the corns- Family planning - uers (percent of Torried women) - Percentage of spending levels. married won of child-beating age (15-44 years) who use birth--corntl Adult literacy rate (nprtent) - Literate adults (able to read and write) as devices to oil married woren in ame age group, a percentage of total adult population aged 15 yeers and over. FO1OD AND NUTRITION CONSUMPTION Index of food prodaction per capita (i97f10.0) - Index number of per Passenger cars (per thousand population) - Passenger corn comprise mater cars rapitresoual production of all food commodities, seating lees than eight per.osi; excludes a=bulancer, hearses and military Pee casino supply of calories (percen ofrnle t)- tonputed from vehicle.. energy equivlent f net loud supplies available in country per .apita Radio reoeivers (per thousand population) - All types of receivers for radio per day. Avalable supplies comprise domestic production, imports les broad..st tno general public per thouxn. d of population; emnlude- unlicensed exports, ond changes in stock. Net supplies exclde animal feed, seeds, receivers in countries and in years when registration of radio sets was in quantities used in food processing, and losses in distribution Re- effect; data for recent years may not be comparable since moat countries qaire=ento were esti=ated by FAO bhsed on physiological reeds for por- abolished licensing. _al activity and hoIth considering enviromaental temperature, body TV receivers (per thouaand popularion) - TV receivens for broadcast to genera weighni, age and -so fiottlbutions of populatio., and allowing 10 per- public per thousand populatios; exciodie unli mnsed TV receivers in nose- cent for nwaste at household leel. trie and in years when registration of TV sets was in effect. Per ocpita upply_ofprti s per dy), - Protein content of per Newspaper circulation (per thousand Population) - Shows the average circula- capita noe nupply of food per day. Net supply of food is defined aS ties of "daily general interest newspaper", defined as a periodical publi- bove. Requiremennt for all countries established by USDA provide for cutie devoted pri=grily to recording gneral news. It is considered to a ni.uim allowance of 6h sram of tat.l protein per day and 20 grams be "daily" if it appears at leant four times au ek. of animal and paloe protein, of which 10 grams should be animal protein. Cinema ancual attendance per capitu per sear - BRed on the number of tickets These standards arc lower than those of 75 grass of total protein and sold during the year, including admissions to drive-in cine=as and sobile 3 grams of animal protein an an average fur the world, proposed by units FAO in the Third World Fond Survey. Per ca-ira protein aupply from animal and pulse - Protein onpply of food EbPLOYMENT derived from amlsend pul.es in grams per dey. Total labor furoc (thousa.nds) - Economically octive person, including armed Chld (ges 1-4) mrtality rute (per thbuxapd) - Annual deaths per thous- forces and unemployed but e-cluding huYSewive, tudeonts, tcd. Defini- and in age group 1-4 years, to children in this age groap. ti.sa in vurious countrIes ate -ot conparable Female (percent) - F..ale labor force as perconcage of trtal labor force. HEALTH Agricutre (perce_ t) - Labor force in farming, forestry, hunting And fishing Life expectancy at birth (years) - Averago number of years of life as percentage of total labot force. remaining at birth; usually fico-yost averages ending in 1960, 1970, Industry (percent) - Labor force in rising, construction, -anufactu-ing and cod 1975 elontrinity, water and gaf as percontage of mtii labor corcos Infant mortality tu (per thouand) - Annual deaths of infants under Participation nate (percent) - t_tal, sale, and female - Total, male, and use yeor of age per thousand line birht. femule labor force an porcentages of their respective populations. Accesg to safe water (parcent of population) - total, urban, and rural - These are ILOs adjusted participation rates eCflecting age-set Number of people (tonal, urban, and rural) with reasonable access to structure of tho population, and long tine trend. safe sutrr supply (inclueso treated surfacewars or untreated hut Etno=sic dependency rttic - Ratic of population under 15 and 65 and over to oncouruolsated saner ouch as that from protected boreholes, springs, the labur force in age group of 15-h4 year. and sanitary wells' on porcentuges of their respective populations. In an urban ac.a a publiC fountoin or snandpost located sot more INCOME DISTRIBLTION tban l2i met2rs iron a bouse nay be on.sidered as being within rea- Percentage of pr'iate income (both in cash and kind) received by richest 5 conublo accost of char l_ousr In rural areas reas.oabla access would percens, richest 70 pccnt, poorest 2C percent, and peore. s 40 percent imply that the bo,so..fo or membern of the household do not haye to of houehIoldn spend a disproportioate part of the day in fetching the fa=ily's autec t..d. POVERTY TARGET 1001ff Accsa to eEcreta ocual (percent of eupulatiun) -otal, urban, and Itimated absolut- pover e lovol s pertcnyotal - uch an coral- rura - Nuehec of co-plo -toa. -rba- and rur al)ervd by -octeta Abouep-recy to-o- lovel In thut Inon -1o boloso ubfoth niniml disposal as percentages of their respective papulatioun. Excreta nutritionally adequato dite plus essential non-focd requirements in not disposal maY include the collection and disposal, with or without affordable. cecatron:, of fu-at yEcresa and wanna-water tywetee-borne systems Estimated relativesy income lewe (.01 per capita) - urban and canal - or the ue cf pit prities end uimilar installation. Relative poverty inourn lenel is that inoose I-el lens than one-third Poularion onc obcsicicc - Population divided by number of practicing per capita personal irco-e of the coantry. phypiclan- qualified fros a nedinal uchnel at university level. fEninated population below poverty incoe level (percent) - urban end rural - PoPulantice rc c m on - Population divided by number of Percent of populotion (urban and rural) who ato either "absolute poor" or pruntc icyx ultl and fe-alo goudus nurues, peunninal nurses, and "cel=ice puocor licbscr is ssisantrse Economic and Sociai lata Division Ecscs.io An-lysis and Projections Deprtn-ent  - 23 - ANNEX I ECONOMIC INDICATORS GROSS NATIONAL PRODUCT IN 1977 ANNUAL RATE OF GROWTH (%, constant prices) US$ Mln. X 1967-76 1977 GNP at Market Prices 826.5 100.0 5.1 6.7 Gross Domestic Investment 179.0 21.7 7.1 39.5 Gross National Savings 116.5 14.1 35.0 246.0 Current Account Balance -37.2 -4.5 Exports of Goods, NFS 241.9 29.3 7.2 26.8 Imports of Goods, NFS 279.1 33.8 2.1 14.9 OUTPUT, EMPLOYMENT AND PRODUCTIVITY IN 1977 Value Added Labor Force/ V.A. Per Worker US$ Mln. % Thousand Z US$ Mln. X Agriculture 357.5 44.7 1334 85.2 267.6 52.1 Industry 144.0 17.9 83 5.3 1734.9 337.6 Services 302.7 37.4 148 9.5 2040.5 397.1 Total/Average 804.2 100.0 1565 100.0 513.9 100.0 GOVERNMENT FINANCE Central Government K Mln. % of GDP 1977/78 1977/78 1974/75 - 1976/77 Current Receipts 115.7 15.0 15.4 Current Expenditures 108.3 14.0 10.0 Current Surplus 7.4 1.0 0.7 Capital Expenditures 76.5 9.9 6.3 NOTE: All conversions to dollars in this Annex are at the average exchange rate prevailing during the period covered. 1/ Total labor force defined as male population between 15 and 60 years of age plus women actually employed. not available not applicable April 15, 1979  - 24 - ANNEX I COUNTRY DATA - MALAWI MONEY, CREDIT and PRICES ' 1972 1973 1974 1975 1976 1977 (Million K outstanding end period) Money and Quasi Money 62.9 84.6 115.7 122.4 121.0 122.7 Bank Credit to Public Sector 11.1 12.1 20.0 67.4 88.1 44.2 Bank Credit to Private Sector 35.6 33.0 49.4 56.1 76.5 87.7 (Percentages or Index Numbers) Money and Quasi Money as % of GDP 16.9 21.1 23.8 21.4 18.7 23.5 General Price Index (1970-100) 108.9 119.0 136.1 148.6 165.4 178.7 Annual percentage changes in: General Price Index 0.9 8.5 14.3 13.5 11.1 11.2 Bank Credit to Public Sector 136.2 9.0 65.3 237.0 30.7 -49.9 Bank Credit to Private Sector 1.4 -7.3 49.7 13.6 36.4 14.6 BALANCE OF PAYMENTS MERCHANDISE EXPORTS (AVERAGE 1975-1977) 1973 1974 1975 1976 1977 US$ Mln. X (Millions US$) Tobacco 75.4 44.2 Tea 33.4 19.6 Exports of Goods, NFS 122.1 151.7 179.4 202.6 241.9 Groundnuts 9.9 5.8 Imports of Goods, NFS 167.6 214.1 284.0 246.4 279.1 Sugar 18.7 11.0 Resource Balance -45.5 -63.4 -104.6 -43.8 -37.2 All Other Commodities 38.1 19.4 Total 170.5 100.0 Interest Payments (net) -3.0 -4.0 -5.4 -5.5 -5.5 Other Factor Payments (net) 4.6 18.8 17.3 -14.2 -20.0 EXTERNAL DEBT, DECEMBER 31, 1977 Net Current Transfers 7.1 5.7 6.1 5.5 23.5 Balance of Current Account -37.4 -41.9 -86.6 -58.0 -37.2 US$Mln. Direct Private Foreign Investment 11.4 14.9 9.9 8.2 11.1 Public Debt, incl. guaranteed 432.5 Net MLT Borrowing Non-guaranteed Private Debt .. Disbursements 25.8 37.4 42.3 34.0 56.8 Total Outstanding & Disbursed Amortizations 2.4 2.6 2.9 3.3 8.4 Subtotal 23.4 34.8 39.4 30.7 48.4 NET DEBT SERVICE RATIO for 1977 Other Capital (net) 25.3 1.6 -17.9 -30.1 35.6 X Increase in Reserves (+) 33.3 16.4 -47.1 -38.3 57.9 Public Debt, incl. guaranteed 5.2 Gross Reserves (end year) 66.7 81.8 65.5 26.2 88.0 Non-Guaranteed Private Debt Total Outstanding & Disbursed Petroleum Imports 11.2 17.9 22.9 26.1 21.5 Petroleum Re-exports 2.1 1.0 - - - RATE OF EXCHANGE IBRD/IDA Lending, (March 31, 1979) (Mln. US$) IBRD IDA 1975 1976 1977 1978 (Inc. Third US$ - K .8861 .9130 .9029 .8438 Window) K 1 - US$ 1.1545 1.0953 1.1075 1.1851 Outstanding & Disbursed 8.3 102.1 Undisbursed 20.9 52.8 Outstanding incl. Undisbursed 29.2 154.9 1/ IMP, International Financial Statistics, June 1977 April 15, 1979  - 25 - ANNEX II STATUS OF BANK GROUP OPERATIONS IN MALAWI A. STATEMENT OF BANK LOANS AND IDA CREDITS (March 31, 1979) Amount (less cancellations) US$ Million Bank incl. Loan or Third Credit No. Year Borrower Purpose Window IDA Undisbursed Nine Credits have been fully disbursed - 66.0 - 282-MAI 1972 Republic of Agriculture - 6.6 0.1 Malawi Karonga s-17-MAI 1974 Transport engineer- - 2.0 0.3 ing and Services 523-MAI 1975 Second Highway - 10.0 3.3 550-MAI 1975 Agriculture- - 8.5 0.3 Lilongwe III 590-MAI 1975 Education II - 11.6 4.8 1286-T-MAI 1976 Agriculture- 9.2 - 2.9 Karonga II 1388-MAI 1977 "/ESCOM Third Power 9.0 - 8.0 1387-T-MAI 1977 " " " 8.0 - 7.0 711-MAI 1977 Republic of Water Supply - 7.0 7.0 Malawi 758-MAI 1977 it Third Highway - 10.5 5.8 823-MAI 1978 " Shire Valley - 10.7 9.2 Consolidation 1610-MAI 1978 INDEBANK Investment and Dev. 3.0 - 3.0 Bank of Malawi 857-MAI 1979 Republic of Agriculture - 22.0 22.0 Malawi NRDP I TOTAL 29.2 154.9 73.7 of which has been repaid - 0.4 Amount sold - - of which repaid 1/ TOTAL now held by Bank and IDA- 29.2 154.5 TOTAL Undisbursed 20.9 52.8 =73.7 1/ Prior to exchange adjustments.  - 26 - ANNEX II B. STATEMENT OF IFC INVESTMENTS IN MALAWI (March 31, 1979)