Rwanda - Second Education Project

Document of The World Bank FOR OFFICIAL USE ONLY Repor No. P-3335-RW REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE RWANDESE REPUBLIC FOR A SECOND EDUCATION PROJECT May 26, 1982 This docunent 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.  CURRENCY EQUIVALENTS US$1.00 5 Rwandese Franc (Rf) 92.84 Rf 100 5 US$1.08 FISCAL YEAR January 1 - December 31 GLOSSARY OF ABBREVIATIONS BPES - Bureau Pedagogique de lVEnseignement Secondaire: Curriculum Development Unit of MINEPRISEC CERAI - Centre d'Enseignement Rural et Artisanal Integre: 1W Post-primary Rural Centers of MINEPRISEC CERAR - Centres Ruraux et Art-isanaux du Rwanda (Pre-reform Post-Primary Rural Centers) CTC - Commerce Training College ESSI - Higher Education for Medical Technicians GDP - Gross Domestic Product ILO - International Labor Organization MINEPRISEC - Ministry of Primary and Secondary Education MINESUP - Ministry of Higher Education MINISANTE - Ministry of Health MPW - Ministry of Public Works NTS - Nursing Training School NUR - National University of Rwanda PIU - Project Implementation Unit in SFCS for the Second Education Project SDP - Second Development Plan, 1977-81 SF - Sections Familiales (Post-primary Centers (Girls)) SFCS - Service de Financement et des Constructions Scolaires: Building and Project Unit of MINEPRISEC TDP - Third Development Plan, 1982-86 TTC - Teacher Training College WHO - World Health Organization MEASURES 1 meter (m) 3.3 feet 1 kilometer (km) 0.62 miles 1 square kilometer (km2) = 0.39 square mile 1 hectare (ha) 2.47 acre 1 are (100 m2) 0.02 acres  FOR OFFICIAL USE ONLY RWANDA SECOND EDUCATION PROJECT Credit and Project Summary Borrower: Rwandese Republic Amount: SDRs 9.0 million (US$10.0 million equivalent) Terms: Standard Project Description: ti) Objectives: To assist the Government in meeting increasingly acute shortages of qualified personnel through expansion of secondary school facilities for training in commerce, nursing and primary teaching. (ii) Components: The project would consist of: (a) increasing student capacity and output at the following Ministry of Primary and Secondary Education (MINEPRISEC) schools: (i) 1 commerce training college and (ii) 2 teacher training colleges and attached demonstration schools; (b) creating a new nursing training school; and (c) providing technical assistance for project implementation, teacher training and studies on teacher training needs, paramedical training texts and evaluation/preinvestment. (iii) Benefits: The project would (a) assist in providing qualified personnel urgently needed in commerce, nursing and primary teaching; (b) strengthen project administration; (c) increase opportunities for girls to participate in secondary education; and (d) provide guidelines for improved standards in both pedagogical methods and physical facilities. 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) (iv) Risks: For a variety of political, managerial and technical reasons, implementation of the first education project proved difficult. Two misprocurements occurred, resulting in two cancellations, and project implementation has been slow. The situation has markedly improved under new leadership at MINEPRISEC, but close monitoring will nonetheless be necessary to facilitate implementation of the second project. It is expected that the proposed project will not encounter the difficulties of the first, not only because of a new managerial climate at MINEPRISEC, but also given the familiarity with Bank Group procedures gained by the Rwandese; further, the project is less complex and preparation will have been more advanced through the use of the PPF. Estimated project costs Local Foreign Total (US$ millions equivalent) Civil works, furniture equipment & vehicles 2.0 3.5 5.5 Technical assistance, professional services 0.2 0.9 1.1 Pedagogical training, fellowships, studies 0.4 0.8 1.2 Project administration 0.2 0.2 0.4 Contingencies Physical 0.2 0.4 0.6 Price 1.0 1.8 2.8 Total 4.0 7.6 11.6 of which taxes (0.4) - (0.4) Financing Plan Local Foreign Total (US$ millions equivalent) IDA 2.4 7.6 10.0 Government 1.6 - 1.6 TOTAL 4.0 7.6 11.6  (iii) Estimated disbursements: IDA Fiscal Year (US$ thousands equivalent) 1983 1984 1985 1986 1987 1988 Annual: 50 490 3,750 4,350 1,250 110 Cumulative: 50 540 4,290 8,640 9,890 10,000 Appraisal Report: No. 3770-RW of May 12, 1982. Rate of Return: N.A. Map: IBRD No. 16060   INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE RWANDESE REPUBLIC FOR A SECOND EDUCATION PROJECT 1. I submit the following report and recommendation on a proposed credit to the Rwandese Republic for the equivalent of SDRs 9.0 million (US$10.0 million equivalent) on standard IDA terms, to finance a Second Education Project. PART I - THE ECONOMY 2. A report, "Memorandum on the Economy of Rwanda" (No. 1108-RW), was distributed to the Executive Directors on July 27, 1976. Rwanda was visited by an economic mission in February 1979 and again in November/December 1981. The major findings of this recent mission are reflected below. Country data are provided in Annex I. 3. Rwanda is a small landlocked country in sub-Saharan Africa, surrounded by Uganda, Tanzania, Burundi and Zaire. It has the third highest population density of low income countries, at 188 persons/km2 (following Bangladesh and Sri Lanka), and its GNP per capita is among the lowest in the world, at US$200 in 1980. Rwanda's population of nearly 5.2 million in 1980 is predominantly rural (with only 4.5 percent in urban areas), and lives in small individual farms scattered over hilly terrain. The balance between food production and population is precarious, as potentially arable land is scarce, foodcrop yields are declining, and population is expanding at an estimated 3.6 percent annually. Twice recently (1974 and 1980), Rwanda had to resort to emergency food imports. Agriculture (coffee, tea, pyrethrum, cinchona) provides most of the country's foreign exchange earnings. Coffee is, by far, the most important source (62 percent) followed by mining products (20 percent), mainly cassiterite and wolfram. Rwanda's manufacturing base is narrow, and its growth is limited * by the small size of the market, and the lack of raw materials, marketing facilities, entrepreneurial skills and skilled manpower. The country, consequently, imports petroleum products, capital goods, cement, steel, construction materials, and virtually every other modern manufactured product. Its merchandise trade is hampered by high transportation costs and dependence on neighboring countries for access to the sea ports at Mombasa and Dar es Salaam. 4. A quantitative assessment of Rwanda's economic performance can only be tentative because of deficiencies in the statistical data base. Available estimates indicate that during the period 1977-79 the rate of growth of real GDP averaged 5 percent, but declined to about 4 percent in 1980. The average  - 2 - contribution of the agricultural sector to GDP, from 1977 to 1980, was 45 percent, and the sector's performance reflected mainly variations in foodcrop production, which during this period accounted for 79 percent of the value added by the sector. Foodcrop production oscillated with weather conditions, but is estimated to have been, on average, slightly above the rate of population growth. The remaining 21 percent of the value added by the agricultural sector is shared by livestock, fishing, and export crops. As a consequence of the pressure of population on land, the cattle herd has been reduced, and thus the contribution of livestock to the growth of the primary sector; fish production remains very low, as there is no tradition of fish consumption. Export crops, involving only 6 percent of Rwanda's arable land and contributing an average of 11 percent to the value added by the agricultural sector, are of crucial importance to the economy. Coffee is not only the principal source of foreign exchange but also a major source of cash income to a large proportion of the population and has accounted for a significant proportion of the Government's budgetary revenue. 5. The contribution of mining production to GDP averaged only 2 percent in 1977-80, and has declined in recent years. Output of cassiterite and wolfram has stagnated, owing to low international prices aggravated recently by the appreciation of the Rwandese franc, which is linked to the United States dollar. Furthermore, supply of necessary fuels has at times been irregular (as in 1979, with the closing of the Uganda border), and access to additional deeper seams by small-scale independent miners has become increasingly difficult. 6. The contribution of the manufacturing sector to GDP averaged 15 percent from 1977 to 1980. There are indications that manufacturing has experienced some significant real growth in recent years, principally in traditional production (mainly of banana and sorghum beer), which is estimated at nearly three-quarters of the value added in industry. Important also are the agro-industries (coffee, tea, pyrethrum), sugar refining, and beer and fruit juice production (lemon, passion-fruit etc.). Rwanda's modern manufacturing base has grown slowly, often in response to foreign aid. Examples include a cement plant under construction in the south, financed by China and a match factory financed by Japan. The construction sector contributed, on average, 4 percent to GDP in the period 1977-80. Its recent growth has been limited to the construction of dwellings, mainly in Kigali (Rwanda's capital), and public buildings. 7. The assessment of performance of the tertiary sector is particularly tentative, partly because of the difficulties associated with evaluating commercial activities in the rural areas (traditional trade in coffee and foodcrops), but also because of probable tax evasion. The data available indicate that commerce and transportation contributed nearly 18 percent to GDP, on average, during 1977-80. Other tertiary activities seem to have expanded in real terms, especially public administration, whose contribution to GDP averaged 8 percent in that period. 8. Traditionally, Rwanda's fiscal policies have been prudent, and have taken into account the variations of revenue from export taxes, notably on  -3- coffee. As a result, current budgetary surpluses averaged 3 percent of GDP in 1977-80. The budget structure reflects the narrow revenue base, high recurrent expenditures, and development expenditures which are contingent upon external assistance. In 1977-80, more than 50 percent of central government revenues came from import and export taxes, with coffee exports alone contributing 25 percent; taxes on beverages (17 percent), and on income and profits (18 percent), accounted for most of the remainder. Recurrent expenditures were distributed mainly among Government's administrative services (25 percent), education (24 percent) and defense (20 percent), but expenditures on agriculture and public works have expanded faster in recent years. Budgeted development expenditures have been particularly important in agriculture (18 percent in 1977-80), transport and communications (13 percent), education (13 percent) and other social services (16 percent). 9. The fiscal situation, however, is being affected by a number of unfavorable trends. Preliminary estimates indicate that in 1981, contrary to the preceding years, increases in revenue fell short of increases in expenditures. Coffee prices declined, and in spite of higher export volume, budgetary receipts from this source fell. At the same time, there was a sharp expansion in government expenditures reflecting, inter alia, the impact of the general wage awards granted in September 1980 and the costs associated with the addition of a new Ministry of Higher Education and the establishment of a new legislative assembly. In an effort to expand the revenue base and increase revenue, the Government introduced a new business tax which, however, has not yet yielded sufficient resources to compensate for the fall in revenue from coffee. The overall treasury position thus shifted from a surplus of RwF 1.4 billion (US$15.1 million equivalent) in 1980 (equivalent to 1.3 percent of GDP) to an estimated deficit of Rwf 2.1 billion (US$23.1 million equivalent) in 1981 (equivalent to about 2 percent of GDP). Even if growth in government expenditures is slowed, continued deficits are likely in the medium-term, as revenue from coffee is expected to remain depressed, and the possibility of recourse to other taxes (or to increase tax rates) is limited. 10. Conservative monetary and credit policies were followed during the 1977-80 period. Inflationary pressures have arisen mainly from supply shortages caused by frequent disruptions of supply routes through neighboring countries, increased international transport costs, and increased prices of imports and domestic foodstuffs. Inflation averaged 12.5 percent per annum during 1977-80; it peaked at 16 percent in 1979, primarily as a result of the closing of the Uganda border, but also reflecting higher transport costs following the 1979-80 oil price rises. The inflation rate declined to 7.2 percent in 1980 and remained at this level in 1981 as trade through Uganda was back to normal, the prices of domestic foodstuffs did not increase, and there was a significant slowdown in the rate of increase of import prices. 11. Rwanda's balance of payments generally reflects coffee market conditions, and has benefitted in recent years from significant net capital inflows. During the period 1977 to 1980, the current account deficit averaged U$105 million. Nevertheless, it was substantially lower in 1977 and 1979, and higher in 1978 and 1980, in line with fluctuations in coffee export receipts. Sustained net capital inflows led to overall balance of payments surpluses each year, and Rwanda's gross official foreign reserves, at end-1980, were equivalent  -4- to seven months of projected 1981 imports of goods and non-factor services. The decline in coffee export receipts observed in 1980 continued in 1981. Preliminary estimates indicate that in spite of a significant net inflow of capital, Rwanda suffered its first reserve loss in many years, bringing gross official foreign reserves down to the equivalent of five months of projected 1982 imports of goods and non-factor services. Medium-term prospects are not encouraging, as the terms of trade are expected to deteriorate. Because there are no viable alternatives, in the medium-term, to the products currently exported, export receipts are likely to increase only slightly (on the strength of increased volumes of coffee and tea), while import payments will probably remain at a high level, as Rwanda's import needs will increase if growth is to be sustained. 12. Rwanda's development plan for the period 1977-81 included as its main priorities to increase food production, improve living standards through more widespread access to better health care and basic social services, increase employment and improve utilization of human resources, and strengthen the country's external position (through reducing its dependence on coffee as the principal source of foreign exchange earnings and its vulnerability to external factors, such as transportation). The Government has made serious efforts to pursue these objectives, but structural, financial, and institutional constraints have limited the success of its policies. Particularly, institutional weaknesses stemming from lack of skilled personnel, fragmentation of institutional responsibilities, and poor coordination among concerned agencies have hindered project preparation and implementation and public sector management, and have thus contributed to the sluggishness of plan implementation. The Government's efforts to increase agricultural production, especially of foodcrops, have had modest results, and food supply remains inadequate. This situation is likely to be aggravated in the medium-term, as population is increasing rapidly. The work of the National Population Office, recently created and still being organized, will take time to produce results. While there has 'been a gradual increase in the number of health/nutrition centers and hospital beds, health services in rural areas are still sparse and water supply has tended to deteriorate in some rural areas. The implementation of the 1979 education reform has been hampered by financial and administrative constraints and by the limited number of teachers. The only significant increases in employment have occurred in the public administration and construction sectors. While Rwanda succeeded in diversifying somewhat its export crops by increasing the production of tea, this did not reduce significantly its vulnerability to volatile world market conditions. 13. One of the 1977-81 Plan's main objectives was to reduce the country's vulnerability to bottlenecks affecting transportation through neighboring countries; however, improvement of internal transportation is also needed to stimulate agricultural productivity. Rwanda's rudimentary road network has hampered agricultural specialization and monetization, and thus the modernization of the agricultural sector. External donors finance most of Rwanda's infrastructure projects, and investment in roads and road maintenance has increased in recent years. However, a large proportion of the road network is still not passable during the rainy seasons, which sometimes seriously  - 5 - disrupts trade. The northern transportation corridor through Uganda and Kenya to the port of Mombasa carries most of Rwanda's external trade. Interruptions of this trade have had negative impacts on the economy, as during the Uganda/Tanzania war in 1978/79. when the Government was forced to resort to expensive air transport. Air Rwanda, the state-owned airline, purchased a used Boeing 707 cargo plane which has been used since July 1979 to transport all kinds of merchandise. Kigali's airport has been equipped for all-weather operation and, since its recent expansion, can accommodate wide body jets. It appears likely that air transport will continue to grow in importance, given the risks of political disruptions in the region and the prohibitively high cost of shipment over alternative routes. 14. External agencies have financed the largest proportion of development expenditures in Rwanda. The principal sources of foreign assistance and their average share during 1977-80 were Belgium (26 percent), the European Development Fund (13 percent), the Federal Republic of Germany (9 percent), the United Nations System (14 percent), and France (8 percent). IDA contributed over half of the United Nations System share. Japan, Switzerland, non-governmental organizations, Canada, and the United States account for the remainder. External aid has been mainly in the form of technical assistance and financing infrastructure development. Most technical assistance (58 percent) has benefitted agriculture, education, and health care. Investment in transport and communications accounted for about two-thirds of infrastructure financing in - 1980. Together, these four sectors received nearly 62 percent of the aid extended to Rwanda in 1980, an emphasis in line with the country's avowed objectives and priorities. 15. Rwanda's need for external assistance will increase in the next few years, as its fiscal and balance of payments prospects are less favorable than in the past, principally as a result of depressed world prices for its major exports (coffee, tea, cassiterite and wolfram). Agricultural production, particularly of.foodcrops, is not expected to increase significantly in the short run, as it will take time to raise yields. Significant increases in mining production will only be possible if the financing for currently planned investments materializes. The performance of the other sectors, which depend heavily on imported goods, can only be maintained with further reserve losses and/or increased net inflow of capital, and these sectors will probably compete with food items for scarce foreign exchange. Thus, the medium-term outlook for Rwanda is not encouraging, especially at a time when the external agencies also have financial constraints. The country's external debt is still low. At end-1980, the public- and publicly-guaranteed external debt amounted to US$170 million, or 14 percent of GDP, and the debt service ratio was equivalent to only 3.2 percent of exports of goods and non-factor services. Hence, there remains considerable scope for further borrowing. Nevertheless, given the poverty of the country, the vulnerability of its economy and its poor medium-term prospects, external funds should continue to be provided mostly in the form of grants or loans at highly concessionary terms.  PART II - BANK GROUP OPERATIONS IN RWANDA 16. Bank Group assistance started in 1970 and initially focused on the improvement of the road network and the strengthening of agriculture production. Rwanda has received sixteen IDA credits totalling US$161.4 million, of which five (totalling US$69.0 million) were for roads, six (US$64.3 million) for agriculture, two (US$9.2 million) for DFC projects, one (US$8.0 million reduced to US$6.4 millior) for education, one (US$7.5 million) for telecommunications and one (US$5.0 mtllion) for technical assistance. There have been no Bank loans. An IFC loana of US$535,000 for a tea factory was signed in 1976; a second IFC loan of US$226,000 and contingent equity commitment of up to US$60,000 to expand the tea factory were signed in September 1980. Annex II contains a summary statement of IDA credits, IFC investments and notes on the execution of ongoing projects. 17. The first three highway projects are completed and totally disbursed. A fourth credit for a highway maintenance project (Credit 769-RW), which became effective in August 1978, is three-quarters completed and is progressing satisfactorily. 18. The first agricultural development (Mutara) pro ect was completed in July 1979 and funds have now been completely disbursed._/ A second credit of US$8.8 million, which supports the second phase of a long-term development for the Mutara region, was declared effective on May 30, 1980, but has experienced start-up problems due to difficulties in recruiting technical assistance. The cinchona project (US$1.8 million) is nearing completion and has progressed satisfactorily; the Bugesera/GisakalMingongo mixed farming and rural development project (BGM I) is expected to be completed by December 31, 1982. Construction, procurement and budgeting are proceeding satisfactorily under the BGM project, though the results of foodcrop and plant improvement components are below appraisal estimates due to a lack of appropriate technical packages for the relatively dry project area. A project to support reforestation programs in Kigali, Butare and Gisenyi Prefectures (IDA Credit 1039-RW for US$21.0 million) was signed July 2, 1980; the project, which is proceeding satisfactorily, also includes a study of renewable energy sources for Rwanda. A US$15.0 million credit for a coffee improvement/foodcrops project in the Lake Kivu region was 1/ A Project Completion Report (August 1980) concluded that even though the increases in agricultural production were less than originally expected, substantial achievements had been realized under the project in the areas of infrastructure development and in experience acquired by Rwandese staff in project management. In addition, the project had served as a positive instrument for IDA and the Government in developing a sectoral dialogue for the Mutara area.  - 7 - signed April 29, 1981; all staff have been recruited, the first year extension program has been completed successfully, and research activities have commenced. A credit for an education project (US$8.0 million) became effective in 1975; physical implementation has been complicated by procurement problems (paras. 19 and 26 below). The first credit of US$4.0 million to the Rwandese Development Bank (BRD) has now been fully committed. BRD's performance under the credit has been highly satisfactory. A second credit of US$5.2 million to BRD was signed on July 13, 1979, and became effective on January 4, 1980. A credit for a telecommunications project (US$7.5 million) which aims at reducing Rwanda's geographic isolation from other countries and at improving internal telecommunications facilities, became effective July 7, 1981, and is proceeding satisfactorily. 19. In fiscal years 1979-81, disbursements for Rwanda totalled US$28.9 million compared to new commitments of US$42.4 million. In the same period, the average annual disbursement rate (ratio of change in disbursements to undisbursed balance) was 20 percent; this is about average for countries of the East Africa Region. While disbursement performance in general is satisfactory, notable difficulties have arisen in the case of the first education project (para. 26 below). The lack of acceptable record keeping has impeded the processing of disbursement requests. However, following a UNESCO assisted final inspection and evaluation mission for the workshops financed under the project, disbursements have resumed. Implementation of a second education project should be less affected by similar weaknesses given the familiarity with Bank Group procedures now acquired in the Ministry of Primary and Secondary Education (MINEPRISEC), where in addition, a new and more positive managerial climate now prevails since MINEPRISEC's reorganization about a year ago. 20. One of the major constraints on Rwanda's development is the shortage of technical/managerial capacity. This affects all sectors and inhibits project preparation and implementation. Intensive technical assistance and on-the-job training of Rwandese staff are therefore a salient feature of the Bank Group's program for Rwanda, either under individual projects in the various sectors or through the recently approved Technical Assistance Project. 21. For the future, the primary emphasis of Bank operations will remain on rural development, the main objective being to increase food production as well as export crops, while maintaining soil fertility. A major emphasis will also be placed on the development of human resources, focusing on population control and support to basic education and skills training to improve agricultural productivity, provide skilled manpower, and influence attitudes on the population issue. Further investment is also justified for infrastructure and, in particular, transportation to reduce the country's isolation and provide incentives to further intensification of agriculture as well as increased specialization and diversification through better marketing. Another area requiring special attention is renewable energy to lessen the demand for fuel imports and mitigate their impact on the balance of payments. A study of  -8- renewable energy sources is being financed under IDA credit 1039-RW (para. 18). Processing of a second Bugesera rural development project is underway and includes a population/nutrition component, the Association's first operational effort in the critical area of population education and control. In highways, the Bank Group recently approved a credit to participate in the financing of the Butare-Cyangugu road. This project is designed to open up the southern region of Rwanda towards Zaire and Burundi and support both the forestry (Ff80) and the coffee improvement/foodcrops (FY81) projects. It is expected that the Bank Group will continue to support industrial development through the BRD. PART III - THE EDUCATION SECTOR Background: Primary and Secondary Education 22. Primary education in Rwanda is provided to about 64 percent of the total school-age population and is of eight years duration, starting from age seven. It is followed by either three year post-primary vocational training or six years of secondary education for a very small number of students (about 2 percent of the school-age population). A larger portion of primary school leavers go to post-primary rural centers (CERAR for boys and Sections Familiales for girls) which provide courses to prepare students for rural living. Government's objective is to combine the courses for boys and girls into single post-primary rural centers (CERAI). The general level of participation for the primary age-group varies fairly widely among Rwanda's ten prefectures (Kibuye leading with 70 percent and Butare trailing with 47 percent), though not significantly between boys and girls (the latter comprising 48 percent of total enrollments). Inter- and intra-regional variations in participation levels (and those for boys and girls) are more significant at the post-primary and secondary levels (which have been developed through and depend more upon private external resources). While primary education generally takes place in inadequate facilities where basic materials, such as textbooks and furniture, are also inadequate, facilities for secondary schools (largely because of the interest shown by missionaries and external aid agencies) are of a reasonable standard. Because of double shift operation for grades 1-3, there is a high utilization of teachers and accommodations at the primary level, but quality of education is rather poor as about one-third of primary teachers are not qualified. The student/teacher ratio in secondary schools at 13 is too generous and therefore unnecessarily expensive, and the lack of specialized teachers makes it difficult to reform curricula to make them more vocationally oriented and comprehensive. This situation in turn exacerbates the problem of shortages of qualified personnel, especially in commerce, health and teacher training. 23. In 1980, over 500 students (282 girls and 222 boys) followed commerce courses in six schools to train for employment in secretarial, administrative and middle-management jobs as well as for entry to humanities programs, including economics in higher education. The yearly output of these schools (70), even if doubled by 1985 as expected, falls short of the estimated annual demand of about 300. The MINEPRISEC also provides health training at the secondary level for medical assistants and "senior" nurses with emphasis on  -9- diagnosis and midwifery, respectively, and for junior nurses (lower secondary level). The two centers training medical assistants have an output of about 40 yearly, while another two centers training senior nurses graduate about 30 yearly and two other centers train about 25 junior nurses yearly. Output of junior nurses is particularly low as requirements are conservatively estimated at 100 per annum. Furthermore, the standard of teaching is weakened by the lack of pedagogical training among staff. Similarly, quantity and quality of output are increasingly problematic in teacher training. Thirty-one secondary schools, having teacher-training streams with 2,880 enrollments in 1980 and a combined output of about 500 yearly, train primary teachers. About a three-fold increase in outputs will be required to meet estimated needs in 1990 and increase the proportion of qualified teachers (3,600 unqualified out of 10,000 in 1980). Post-primary teachers are trained in four secondary/technical schools. About three-quarters of the 560 teachers in 1980 were considered qualified. Of 900 secondary teachers in 1980, about one-quarter were women, three-quarters nationals and two-thirds were qualified. Educational Reforms 24. At independence, the education and training system in Rwanda was a traditional elitist type and was generally ill-adapted to meet the needs for the economic and social development of the masses. Various efforts were therefore made over the years to remedy this situation, culminating in a major reform proposed for implementation under the Second Development Plan, 1977-81. The major objectives of this reform, introduced in 1979, are threefold: (i) to reform primary and post-primary curricula to improve their relevance for rural/agricultural needs; (ii) to make secondary education more vocational and comprehensive and supply much needed middle-level technicians; and (iii) to orient higher education towards major develomental priorities, especially agriculture and applied research. While these objectives are basically sound, the reform has three major shortcomings: (i) inappropriate structure of primary education; (ii) financial unfeasibility given limited budgetary resources; and (iii) an unrealistic time-frame proposed for achieving student enrollment and teacher training targets. With Rwanda's rapidly growing population and limited financial capabilities, prolongation of compulsory primary education from 6 to 8 years, as introduced with the reform, is bound to slow down or decrease participation rates, thereby exacerbating inequities and postponing achievement of universal primary education. In addition, the reform would require a steady increase of the proportion of the national budget allocated to education from about 22 percent in 1980 to over 40 percent in 1986--even assuming that there were no real increases in teachers' salaries. A doubling of primary classrooms by 1986, as implied by the reform proposals, is likewise unfeasible with regard to both financing and construction capacity. Finally, given the shortage of teacher trainers and the time required to develop reformed syllabi and train the teachers, it is virtually impossible to meet the enrollment targets for 1986. 25. The shortcomings of the educational reform have been a major theme of the Bank Groupts dialogue with Rwandese officials. An outcome of this  - 10 - dialogue has been Government's acknowledgement of the need to recast portions of the reform considered inappropriate (especially those relating to the timing, targets and educational structure) given limited financial and administrative resources. Government's intent to make these modifications is reflected in the analyses of the education sector undertaken for the Third Development Plan, 1982-1987. Among other departures from the reform, it is expected that the double shift system would be continued for at least the medium-term for primary grades 1-3; expansion of grades 7-8 would be phased in accordance with financial constraints and the time horizon for achieving the objectives of the reform would be extended. This flexibility suggests Government's responsiveness and preparedness to approach critical issues in the education sector more realistically. We intend to continue to impress upon the Government the need to shorten the eight-year primary cycle. Bank Group Experience in the Education Sector 26. The Bank Group's First Education Project (Credit 567-RW), approved in June 1975 in the amount of US$8.0 million, was designed to support the Government's 1974 education reform (which laid emphasis on introducing practical subjects in primary schools) through providing: (i) 150 workshops (increased later to 250 with a simpler design) at selected primary schools; (ii) a printshop for textbook production; (iii) office accommodations for a Project Implementatios Unit (PIU) and School Construction Services (SFCS); (iv) furniture and equipment for the Gitarama center for training primary teachers in practical subjects; and (v) related technical assistance. For a variety of political, managerial and technical reasons, implementation has proved difficult. First, important aspects of the 1974 reform met strong public opposition and were abandoned. Secondly, there were serious managerial shortcomings in the SFCS project unit, including poor accounting and two misprocurements, which lead to cancellations and a reduction in the Credit proceeds from US$8.0 to 6.4 million. Third, monitoring of school construction was very difficult as a large number of schools were widely scattered throughout the remote and difficult terrain of rural areas. Moreover, this was the country's first experience in the education sector with the Bank Group's procedures. Despite problems, the project is now about 80 percent physically completed. The SFCS and printshop are in full operation and a considerable community effort was mustered to construct the workshops which are about 88 percent completed. A schedule of actions to overcome outstanding implementation problems has been agreed with the Government and improvements are being made. The Bank Group has recently agreed to a government request to postpone the original Closing Date of June 30, 1982 by six months. 27. The proposed Second Education Project would focus on development of skills training badly needed in the areas of commerce, health and basic education. It would also continue the assistance provided for institution building in the First Education Project and in ongoing programs of UNDP/UNESCO and various bilateral agencies.  - 11 - IV - THE PROJECT 28. The proposed project was appraised in June 1981. Negotiations were held in Washington during April 19-22, 1982. The Government delegation was led by Mr. Romuald Mugema, Secretary General, Ministry of Primary and Secondary Education. A detailed description of the project components can be found in the Staff Appraisal Report No. 3770-RW, dated May 12, 1982, which has been distributed separately to the Executive Directors. The main features of the project are highlighted in the Credit and Project Summary at the beginning of this report. Special conditions of the Credit are summarized in Annex III. Objectives and Description of the Project 29. The project's main objective is to assist the Government in meeting acute shortages of qualified personnel through expansion of secondary schools for training in commerce, nursing and primary teaching; shortages in the latter two are moving toward crisis proportions and in commerce are causing disruptive bottlenecks. More specific objectives include: (i) improvement of training standards in these disciplines, (ii) implementation of curricula reform to render them more relevant to the country's needs, (iii) support for the development of basic education through teacher training, (iv) increased educational opportunities for girls, (v) improvement of the quality of entrants to higher education, and (vi) development of local pedagogical and / administrative expertise. 30. The project would consist of: (i) increasing student capacity and output at the following MINEPRISEC secondary schools: (a) a commerce training college and (b) two teacher training colleges; (ii) creating (a) a new nursing training school and (b) two demonstration schools; (iii) providing technical assistance for project implementation, teacher training and studies on teacher training needs, paramedical training texts and evaluation/preinvestment; constructing additional student hostels to provide boarding for trainees and six staff houses at each institute in (i) and (ii)(a) above. Detailed features 31. Commerce Training College (CTC). The existing CTC at Mhramba, about 100 km. northwest of Rigali, provides an economics stream for selected primary leavers and has a yearly output of 20. Following extension under this project, it would offer two streams, adding a new five-year commerce training program for 200 students, in addition to the present economics program for 240 students, which qualifies successful graduates for access to higher education. The CTC would increase its yearly output to about 70 (35 commerce, 35 economics) of which 40, including all from the commerce stream and about 5 from the economics stream, would be absorbed in the labor force. The remaining 30 would proceed to higher education to undertake humanities courses (including advanced commerce) for which there is a shortage of suitable candidates. The yearly national output of 70 from the six existing commerce schools is expected to double by  - 12 - 1985, and would then be increased to about 170 with the Muramba extension. This output, of which 120 would enter the labor force, would help alleviate acute manpower shortages (but nonetheless fall short of estimated annual needs: 300). 32. When in full operation, the expanded CTC would require 20 full-time teachers. This implies a faculty increase of seven and a more efficient use of staff by raising the student/teacher ratio from 12 to 22. Of the seven additional teachers to be recruited from National University of Rwanda (NUR) graduates, five would be specialized in economics and commercial subjects. Fellowship training (six staff years) is included in the proposed project for (i) the five economic and commercial subject teachers and (ii) the one specialist-teacher from the existing staff; this would provide for a one-year pedagogical training course abroad for each prior to opening CTC's extension. Syllabi for the first- and second-year CTC programs were reviewed by Bank group staff and found satisfactory. The Government provided assurances during negotiations that the remaining syllabi would be available for Bank Group review not later than June 30, 1983 (Section 3.04 of the Development Credit Agreement). 33. Nursing Training School (NTS). A new NTS of 100 student places to train junior nurses would be established adjacent to a government hospital in Gisenyi which has over 150 beds. The hospital is in good physical condition and is well administered with Belgian technical assistance. A four-year course would be provided in the NTS for selected primary school leavers; yearly output would be about 20. The existing stock of 300 junior nurses in 1980 (of which 180 are qualified) can only meet half of the country's estimated needs. With a yearly population increase of 3.6 percent, shortages would almost double to about 600 in 1990 unless additional training facilities are provided. Increased output to over 100 yearly will.be required to meet the existing deficit and increasing needs. Effective planning of nurse training is hampered by inadequate consultation between the user (MINISANTE) and the supplier (MINEPRISEC). During negotiations, the Government gave assurances that from school year 1982/83, a yearly analysis of needs and supply of health training personnel facilities would be made in consultation between these ministries and transmitted for Bank Group review by the end of each year for five school years (Section 3.05 of the Development Credit Agreement). 34. The training course in Gisenyi would have two semesters yearly with 38 weekly hours in accordance with reformed curricula prepared by the Curriculum Development Unit of the MINEPRISEC (BPES). Satisfactory syllabi for the first- and second-year programs were reviewed by Bank Group staff. The Government gave assurances during negotiations that the remaining syllabi would be available for Bank Group review by not later than June 30, 1983 (Section 3.04 of the Development Credit Agreement). Upon successful completion of training, graduates would be awarded a MINEPRISEC diploma and be employed in hospitals and health centers. When in full operation, the new NTS would require six full-time teachers. To improve teaching methods in nursing schools, a technical assistant specialist (one staff year) would be recruited to conduct a one-year course during 1984/85 for about 20 nursing trainers (para. 37).  - 13 - 35. Teacher Training Colleges (TTCs). Two extensions of 330 student places each would be provided under the proposed project to increase TTCs enrollment to 540 at Save and Zaza, about 130 and 100 km. south and southeast of Kigali, respectively. A five-year course would be offered to selected primary school leavers to train as teachers of grades 1-6. Teacher shortage problems, already very critical, are exacerbated by increasing demand due to a rapidly increasing population and by the high proportion of unqualified staff (36 percent or 3,600). Total existing output capacity of 500 would need to be tripled by 1990 to supply the teachers required for a modest enrollment growth of 5.5 percent yearly. By increasing output from the two project TTCs from 60 to 190, this component would play a small but significant role in assisting the Government's efforts in meeting these shortages. For lack of sufficient qualified secondary students, a five-year course--including general secondary and teacher training subjects--is necessary, but it is envisaged that eventually junior secondary trainees may be selected to undertake a two-year program, thus increasing the output capacity of the TTCs and enabling some of them to revert to their initial role of secondary schools. 36. The training course, shortened in 1981 from six to five years, would have two semesters yearly with 38 hours weekly. Reformed curricula were prepared by the BPES and were adopted by the Government in May 1981. Syllabi for first- and second-year programs were reviewed by Bank Group staff and found satisfactory. The Government gave assurances during negotiations that the remaining syllabi would be available for Bank Group review by not later than June 30, 1983 (Section 3.04 of the Development Credit Agreement). From the first to the fifth school-year, time allocation for general subjects would be reduced from 76 percent to 45 percent, for science and practical subjects from 21 to 16 percent, while pedagogy and teaching practice would be increased from 2 to 39 percent. Instruction would be in Kinyarwanda, the national language. Adjacent demonstration schools would be available for teaching practice which would start with two hours weekly in the third year, increasing to four hours in the fifth year. 37. The existing Save and Zaza TTCs are well administered by the Order of Christian Brothers and have 18 full-time equivalent staff each (who are almost exclusively nationals having good qualifications). When in full operation (following extension and with improved utilization), 20 additional teacher trainers would be required for the two TTCs - 10 for pedagogy, 6 for natural science and 2 each for arts and home economics. Because of the importance of natural science for rural development, a technical assistance specialist (two staff-years) would be recruited to first undertake curriculum development and course preparation and subsequently to conduct an ad hoc one-year course during 1984/85 for about 20 selected Rwandese in the National University of Rwanda (NUR). The graduates.from this course would be appointed to the two project TTCs and other training colleges to upgrade training expertise in this subject. Provision for four staff-years of fellowships is included in the project for selected arts and home economics trainers for one-year training abroad while NUR-trained pedagogy specialists would be recruited locally. During negotiations, the Government provided assurances that the Bank Group would  - 14 - be informed, by not later than December 31, 1983, that suitable NUR accommodation would be made available to the MINEPRISEC for school year 1984/85 to conduct this ad hoc course as well as that for trainers mentioned in para. 34 (Section 3.06 of the Development Credit Agreement). 38. The demonstration schools attached to the two project TTCs are in poor physical condition. Teaching quality is also inadequate and they have no organizational link with the TTCs. Extension of 240 student places each would be provided under the project at the demonstration schools and a strong effort would be made to improve quality as required to fulfill their important role in training new teachers. During negotiations, the Government gave assurances that by not later than September 30, 1984: (i) these two demonstration schools would be brought under the control of the TTC Directors, (ii) their teaching staff would be at full strength and qualified, and (iii) required maintenance at the schools would be completed (Section 3.07 of the Development Credit Agreement). Bank Group staff have discussed in detail with the Government the implications of Rwanda's financial constraints on the development of primary education (and on training of the required teachers) and the inappropriateness in this regard of the education reform introduced in 1979. The Government has provided information that more realistic planning is now being undertaken in drafts for the education section of the Third Development Plan. During negotiations, the Government agreed to undertake a yearly review of and update reform targets, with a view to modifying programmed activities for the Third Development Plan and would provide information thereon each July for Bank Group comment (para. 4.03 of the Development Credit Agreement. 39. Studies. The project includes six staff years of technical assistance for the following studies: (i) assessment of teacher training needs to the year 2000 and efficient means to meet them (ii) paramedical teaching methods and adaptation of paramedical training texts to Rwandese requirements and (iii) evaluation/pre-investment studies related to project components and development of the eduational sector. During negotiations, the Government gave assurances that terms of references for these studies would be received for Bank Group review and comment by not later than April 30, 1983 and that the studies would be completed by not later than June 30, 1986 (Section 3.08 of the Development Credit Agreement). 40. Technical Assistance. The technical assistance program includes 23 staff/years of specialists and 11 staff/years of fellowhips. The program includes one staff-year (under the Project Preparation Facility) for preliminary architectural planning and preparation of equipment lists and 13 staff/years for an architect, accountant and equipment specialist in the PIU. It also includes three staff/years of specialists' services for teacher training for NTS and TTC staff together with 11 staff/years of fellowship training fo-r Directors and some specialist teachers for the project institutes, and six staff-years for studies. Technical assistants would be selected in accordance with the Bank Group "Guidelines for Use of Consultants" of August 1981. Fellowship candidates, courses of study and institutions would be selected in consultation with the Bank Group (Section 3.03 of the Development Credit Agreement).  - 15 - Project Cost 41. The total cost of the project is estimated at US$11.6 million equivalent, including customs duties and taxes estimated at US$0.4 million equivalent. Cost estimates for civil works, furniture, equipment and vehicles were derived by staff from a review of data provided by: (i) the Ministry of Public Works on its activities in the building sector, (ii) religious organizations, (iii) the private sector including mainly contracting firms and architectural-engineering firms connected with them, and (iv) the SFCS project unit based on its experience in implementing the First Education Project and on different school construction activities financed from other sources. The schedules of accommodations on which the cost estimates are based are austere and functional. Furniture and equipment are of a type adequate to the country for achieving the proposed educational objectives of the project. 42. The average unit base cost of construction for the secondary education and teacher training institutes in the project is US$404/m2 equivalent at March 1982 prices. This cost reflects the transport difficulties faced by a landlocked country highly dependent on the external supply of construction materials. Although a direct comparison of unit cost of construction is difficult, the unit cost in this project compares with other Eastern Africa countries as follows: Malawi US$390 (1981), Comoros US$350 (1981) and Lesotho US$331 (1981). The designs of the facilities financed under the project are simple and would make maximum use of local materials and building techniques. The project unit's specialists' services, which comprise about 156 staff-months of the total technical assistance program, are estimated at an average cost of US$7,500 per staff-month including salary, housing and travel. 43. For physical contingencies, 10 percent has been added to the base costs of civil works, and 5 percent to the base costs of all other components. Price increases, from the base cost date (March 1982), have been applied in accordance with the implementation schedule at the following projected yearly inflation rates, foreign and local, respectively: 1982 1983 1984 1985 1986-87 (percent) Foreign 8.5 7.5 7.5 7.5 6.0 Local 10.5 10.0 9.5 9.0 8.0 Including contingencies, the foreign exchange component is estimated at US$7.6 million equivalent or 68 percent of the total project cost net of taxes.  - 16 - Financing Plan 44. The total project cost is estimated at US$11.6 million equivalent. IDA financing of SDR 9.0 million (US$10.0 million equivalent) would represent about 86 percent of total cost. The Credit would cover all foreign exchange costs (US$7.6 million) and 66 percent of local currency cost, excluding customs duties and taxes. The maximum Government capital contribution to the project in any single year is not expected to exceed US$0.6 million equivalent and this would occur in FY 1985. Based on a conservative projection of the funds likely to be available to the MINEPRISEC for capital expenditures in that year, the expenditure on the proposed project would represent about 1.8 percent of the MINEPRISEC capital budget. The recurrrent expenditures generated by the project are estimated to amount to about US$0.2 million equivalent by FY 1990 when the project would be in full operation; this amount represents about 0.4 percent of the MINEPRISEC projected recurrent budget in that year. Implementation 45. The project would be implemented over a period of about five years, including six months for completion of payments and withdrawals. The project is expected to be completed by March 31, 1987, with a Closing Date of September 30, 1987. The implementation schedule is based, inter alia, on experience derived from the first IDA-assisted education project in Rwanda. 46. A Building and Project Unit (SFCS) was established under the First Education Project to provide for improved planning and construction of school buildings. Because of implementation difficulties experienced under the first project and the greatly increased volume of work required of the SFCS by the MINEPRISEC, a Project Implementation Unit (PIU), to be established within the SFCS, would have sole responsibility for implementation of the proposed Second Education Project. The PIU would be staffed, on a full-time basis, by an architect (five staff-years), an accountant (five staff-years) and an equipment procurement specialist (3 staff-years), all financed under the technical assistance component of the project. A new Rwandese Director of the SFCS was appointed in August 1981. This Director would have responsibility for coordinating the work of the unit's experts and that of the required support staff; a Deputy Director in the PIU would be appointed to assist him. Support staff, including architectural technicians, specialist counterparts and secretarial personnel, would be provided by the Government. Conditions of Credit effectiveness would be the establishment of the PIU and the employment of the architect and the accountant in the PIU (Section 6.01 of the Development Credit Agreement). The equipment specialist would be appointed for a 3-year period (intermittent) by not later than December 31, 1982 (Section 3.02 of the Development Credit Agreement). Incremental operational expenses, excluding government-financed salaries, would be financed under the project. 47. PPF Fund and Professional Services. Architectural and engineering services, including the supervision of construction, would be carried out by the existing UNDP/UNESCO architectural team located in the SFCS. To supplement the team, the project includes an advance (US$215,000) under the Project Preparation  - 17 - Facility (PPF) to finance preliminary architectural planning and preparation of preliminary equipment lists. Funds under the PPF are also provided for specialized professional services--civil and mechanical engineering and land surveying (about one staff-year of specialist services). It is expected that preliminary architectural plans and preliminary equipment lists will be ready by October 1, 1982. The proposed PPF would be refinanced by proceeds of the Credit. 48. Sites. Extension of project institutes would be built on satisfactory sites adjacent to the existing facilities. During negotiations, the Government submitted for Bank Group review, an acceptable legal opinion of the Chief Legal Counsel in the Presidency defining the ownership of these sites and the buildings to be built thereon. 49. Reporting and Evaluation. The Director of the PIU would be responsible for implementation of all components financed under the proposed project as well as for disbursements in accordance with schedules agreed with the Bank Group. Biannual progress reports (highlighting any implementation problems and proposals for their resolution) would be transmitted for Bank Group review each December and June following Credit effectiveness, and a Project Completion Report (PCR) would be prepared by the project unit staff (in cooperation with other relevant agencies) and transmitted to the Bank Group for review within five months following the Credit Closing Date (Section 3.10 of the Development Credit Agreement). Procurement 50. Contracts for civil works, furniture, equipment and vehicles would be awarded on the basis of international competitive bidding in accordance with the Bank Group's guidelines for procurement, except: (i) civil works contracts costing less than US$250,000 equivalent each (estimated at US$1.4 million including contingencies); and (ii) furniture, equipment and vehicles contracts, costing less than US$50,000 equivalent each (estimated at US$0.7 million including contingencies). These contracts would be awarded on the basis of competitive bidding advertised locally and in accordance with local procedures satisfactory to the Bank Group. The aggregate value of contracts to be awarded by ICB is estimated at US$5.6 million equivalent including contingencies. 51. Architectural sketch designs, draft tender documents, and master lists of furniture, equipment and vehicles indicating proposed grouping would be reviewed by the Bank Group. Items would be grouped to the extent practicable to permit bulk procurement. Review of tender evaluation documents by the Bank Group prior to award would not be required for individual civil works contracts amounting to less than US$250,000, and for individual contracts for furniture, equipment and vehicles amounting to less than US$50,000 equivalent. Where ICB procedures are used: (i) domestic manufacturers would be allocated a preference of 15 percent or the existing applicable rate of import duties, whichever is lower, over the c.i.f. price of competing foreign supplies; and (ii) qualified domestic civil works contractors would be allowed a preferential margin of 7-1/2 percent over the bid prices of competing foreign contractors.  - 18 - Disbursements 52. Disbursements would be on the basis of: (i) 80 percent of expenditures for civil works; (ii) 80 percent of local expenditures for locally procured furniture, teaching equipment and vehicles for project administration; (iii) 100 percent of foreign expenditures for directly imported construction materials, furniture, equipment, vehicles, technical assistance and fellowships, professional services, evaluation and preinvestment studies; and (iv) 70 percent of local expenditures for technical assistance and fellowships, professional services and preinvestment studies and project administration. Disbursements for project administration would be made against certificates of expenditure, documentation for which would not be submitted for review but which would be retained by the borrower and would be available for inspection by the Bank Group during project supervision. Auditing 53. Annual auditing would be required for all expenditures financed under the proposed project, with particular attention to those expenditure reimbursed under certificates of expenditure. Auditing would be performed by independent auditors acceptable to the Bank Group. Audit reports would be submitted yearly to the Bank Group within six months following the end of the Borrower's fiscal year (Section 4.01 of the draft Development Credit Agreement). To strengthen the accounting capacity of the SFCS and the PIU, five staff-years of technical assistance for an accounting specialist is included in the project. This specialist would assist in improving the accounting methods and would train local counterparts. Benefits and Risks 54. By providing additional student places in one commerce training college and two teacher training colleges with demonstration schools, and creating a new nursing training school, the project would assist the Government in alleviating acute shortages of qualified personnel in the areas of commerce, nursing and primary teacher training. Simultaneously, the project would provide a model to improve pedagogical methods and physical facilities. Experience gained by Rwandese personnel in implementing the project would serve to improve local administrative and pedagogical skills. Increased opportunity for girls' participation in secondary education (especially in the commerce and nursing schools) would represent an additional important benefit. In supporting teacher training, the project would also support the development of basic education which has important potential for affecting behavior and attitudes in such areas as population growth and family health. Finally, Bank Group support of education in Rwanda would ensure continuity in the dialogue with Government and the ability of the Bank Group to influence decisions affecting development of the education system. 55. For a variety of political, managerial and technical reasons, implementation of the First Education Project proved difficult. Two misprocurements and cancellations occurred. Although the situation is now  - 19 - improving under new leadership, close mDnitoring will nonetheless be necessary to facilitate implementation of the second project. However, it is expected that the proposed project will not encounter the difficulties of the first, not only because of the familiarity gained by the Rwandese with Bank Group procedures but also because the proposed project is less complex and its preparation will have been more advanced through the use of the PPY. PART V - LEGAL INSTRUMENTS AND AUTHORITY 56. The draft Development Credit Agreement between the Rwandese Republic and the Association, and the Recommendations of the Committee provided for in Article V, Section 1 (d) of the Articles of Agreement of the Association are being distributed to the Executive Directors separately. 57. Special Conditions of the Project are listed in Section IV of Annex III of the Report. 58. 1 am satisfied that the proposed Credit would comply with the Articles of Agreement of the Association. PART VI - RECOMMENDATIONS 59. 1 recommend that the Executive Directors approve the proposed Credit. A.W. Clausen President Attachments By Washington, D.C. Moeen A. Qureshi Miy 26, 1982  ANEX I - 20 - Page 1 of 5 TABLE 3A RWANDT-I