Malawi - Second Education Sector Credit Project

Document of The World Bank FOR OFFICIAL USE ONLY C,~ R H4J D 3Repot No.P-5105-MAI MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED SECOND EDUCATION SECTOR CREDIT IN THE AMOUNT OF OF SDR 29.5 MILLION TO THE REPUBLIC OF MALAWI NOVEMBER 13, 1989 T document bas a restricted dlstribution aod may be used by *ecipients only in the performane of ther offcial dudies. Its contents may not otherwvise be disclosed writhout World Baolc authoorzatioo.  CURRENCY W9IVALENTS (September 1989) Currency Unit - Rwach (IMK) MK 1.00 = US$0.38 US$1.00 - MK 2.65 SDR 1.00 - US$1.25 FISCAL YEAR April 1 - March 31 MEASURES 1 meter (m) - 3.28 feet 1 square meter (sq m) = 10.76 square feet ABBREVIATIONS AND ACRONYMS CER - Center for Education Research CIDA - Canadian International Development Agency EP&D - Economic Planning and Development ESR - Economic Services Review (Price Waterhouse Report) IBRD - International Bank for Reconstruction and Development ICB - International Competitive Bidding IDA - International Development Association LCB - Local Competitive Bidding MCDE - Malawi College of Distance Education MIE - Malawi Institute of Education MK - Malawian Kwacha MOEC - Ministry of Education and Culture ODA - Overseas Development Agency (UK) PCR - Project Completion Report PIU - Project Implementation Unit PPAR - Project Performance Audit Report REO - Regional Education Office SAR - Staff Appraisal Report SDR - Special Drawing Rights UNDP - United Nations Development Program UNESCO - United Nations Educational and Scientific Organization USAID - United States Agency for International Development  FOR oMCIAL USE ONLY SECOND EMUC&TIO SECTOR gREDIT CREDIT AU1D ET S Borrower: Government of alawai Beneficiary: Ministry of Education and Culture Amount: SDR 29.5 million (US$36.9 million) Terms Standard, 'ith 40 years maturity Financins Plan: _/ Government US$ 4.1 million IDA USS 36.9 million TOTAL USS 41.0 million Economic Rate of Return: Not Applicable Staff Amraisal Retort: Report No. 7734-HAI maps IBRD No. 21607 Note: al Excludes taxes and duties of US$1.35 million. This document has a restricted distribution and may be used by recipients only in the perfo.nancz of their official duties. Its contents may not otherwise be disclsed without World Bank authirizatk...  MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED SECOND EDUCATION SECTOR CREDIT TO THE REPUBLIC OF MALAWI 1. The following memorandum and recommendation on a proposed development credit to Malawi for SDR 29.5 million (US$ 36.9 million equivalent) 1i submitted for approval. The credit would be on standard IDA terms with 40 years maturity. It would help finance a second education sector project. 2. Background. Confronted with severe economic problems and debilitating external shocks, Malawi has been undertaking a comprehensive program of structural adjustment since 1981. Within this context, the Government is strongly committed to improving education, as indicated in its "Statement of Development Policies" for the 1987 - 1996 period. 3. The principal issues in the sector at this stage in its development reflect the constraints and problems facing the country as a whole and African education generally. The aualitv of instruction is still very poor, due to inalequacies in textbook supplies, curricula, facilities and teacher quality and numbers (the primary pupil:meacher ratio is 63:1 on average and over 100sl in many urban schools, which ar, high figures even among African countries). Access, as reflected by the number of school places in relation to the school age population, is low: net primary enrolment is only 432, and the transition rate to secondary schools is only 112. Management. budgetin% and ilanning continue to need major additional upgradlsg. Also, further steps are needed in resource mobilization and allocation policies, especially (a) restructuring of fees for secondary schools and the university to increase cost recovery, and (b) implementing Government's stated policy of reversing the erosion of education's share of the budget, which has fallen from 132 in the early 80's to 112, well below the median of 15S for Africa. Government's priorities in the sector are appropriate and well articulated. 4. Recognizing the extent and urgency of the challenges it faces, Government launched in 1985 an education sector reform program, with assistance from IDA through a First Education Sector Credit. The reform program addresses the issues indicated above through a broad set of measures in curriculum reform, instructional materials (textbooks, teachers' guides, and teaching aids), improved and expanded use of distance education (radio) to enhance classroom instruction, expansion of the number of primary school teachers, strengthening of teacher training, improvement in the examinations system, construction and rehabilitation of schools utilizing community self- help for primary schools, changes in pol'cies on promotion and repetition, more efficient use of facilities (e.g., double shifting), and upgrading of the management and planning capabilities in the Ministry of Education and other institutions with leadership roles in the sector. In addition, the reform program has a major emphasis on resource issues, including adjustment in fee structures, introduction of multi-year investment plans (to limit spending to only the highest priority needs), ane increases in budget allocations to education. 5. Progress thus far under the reform program has been encouraging. A comprehensive assessment of performance undertaken in October 1989 found that implementation was generally proceeding in accordance with expectations. In areas where faster or more effective action was found to be needed, Government  accepted without reservation the recommendations for corrective steps, and committed ltself to ecting upon them tauediately. 6. Despite the achievements to date, much more remains to be done. The reforms were, from the outset, anticipated to require ten years or more to complete, given the depth and breadth of the needs and deficiencies. Also, there is the further fact that the gains achieved since the reform program was initiated have been partly offset by (i) the very high rate of population growth, and attendant large Increases in the school age population, and (ii) the worse-than-expected development of the economy in the last few years, the budgetary implications of which have resulted in very severe limitations in the resources available to the sector. 7. The currently proposed project is needed to assist Government in (i) reinforcing and completing the measures already begun, (ii) extending and intensifying the reforms In areas not thus far affected, in accordance with the original plan and the conclusions of the recent assossment, and (iii) coping with the pressures from the difficult resource situation and from high population growth, which otherwise would undermine or slow down the reform process before it can attain its full potential. 8. Six Bank education projects in Malawi (including the ongoing sector credit) have provided valuable experience and lessons. Increases in primary and secondary enrollments and teacher training capacity have been effectively implemented, and have resulted in substantial achievements despite the impact of rapid population growth and constrained resources. Implementation of the self-help construction was hampered initially by expecting local communities to contribute more than they were capable of, but better schemes have since been devised. Text-book components have been well implemented and have had a positive impact on learning. The introduction of technical subjects into secondary schools has not been satisfactory because of high costs, lack of specialist teachers and lack of interest. Weaknesses In managerial and planning capacity have pointed to the need for strengthening, and for decentralization of routine administrative and other decisions. These lessons from past project experience have been incorporated into the design of the currently proposed project. 9. Project Oblectives. The proposed project has four main objectives: (1) to improve the quality of education at all levels; (2) to expand access, focussing on the primary and secondary levels; (3) to strengthen sector management, budgeting, and planning; and (4) to improve resource mobilization and allocation policies, through increasing cost recovery at post-primary levels and reversing the decline in the sector's budget share in accordance with the recommendations of the recent public expenditure review and with Government's stated policy. 10. Proiect Description. The project will support: (1) qualitv improvement through (a) curricula reform and development, (b) improvements in the preparation, production, and distribution of textbooks and other instructional materials, (c) development and introductior of new methods for more effective use of radio in primary schools, (d) improvement of the distance education system used at the secondary level; (e) development and introduction of low cost approaches for improving science instruction and the library system at the secondary level; (f) improvement of teacher training; (g) expansion of the number of qualified primary teachers, (h) reforms in the examination system, and (i) strengthening the school inspection system; (2)  -3- access improvements through (a) facilitating community self-help upgrading of school facilities by providing roofing sheets and limited amounts of school furnitiare, and (b) planning and implementing reforms in promotion criteria and facilities utilization and (c) expansion of the university's capacity to produce accountants - a skill in axtremely short supply; (3) management. budRetinR, and planninz strengthening through (a) various institutional and capacity building measures in the Ministry of Education and the Malawi Institute of Education, and (b) a decentralization program for the Ministry; and (4) improved resource mobilization and allocation through (a) reforms in fee structures at all levels, (b) changes in reporting requirements for recurrent and investment expenditure plans, and (c) increases in the sector's budget share. 11. A breakdown of costs and the financing plan are shown in Schedule A. Amounts and methods of procurement and of disbursements and the disbursement schedule are shown in Schedule B. A timetable of key project processing events and the status of Bank Group Operations in Malawi are given in Schedules C and D, respectively. A map is attached. The Staff Appraisal Report No. 7734-MAI, dated November 10, 1989 is also attached. 12. Rationale for IDA Involvements IDA involvement is needed because (i) the new initiatives to be launched under this project involve complex issues on which the Government has limited experience and capacity, and thus requires technical and other assistance; (ii) six loans for education in Malawi have given IDA considerable experience in the sector; (iii) IDA has a comparative advantage in these areas including considerable experience from other countries; (iv) other development assistance agencies are not able to fill this role for various reasons (e.g., they are giving priority to other sectors or other countries; or they are already committed); and (v) the government and international agencies are relying on IDA to take the principal role in the sector. 13. The proposed project would complemelt the other development assistance activities ongoing in the sector, which include the following. USAID is assisting the Government in graduate level training through the Human Resources Institutional Development project and has also assisted in the development of the Polytechnic. ODA has provided (a) fellowships for specialized training in the United Kingdom, (b) a limited number of English, Math, and Science teachers at the secondary level; (c) assistance with the development of technical schools and (d) managerial assistance for the MCDE. UNICEF has assisted with upgrading of untrained primary school teachers. UNDP as well as CIDA have financed equipment and technical assistance for curriculum development. UNDP has recently reached an understanding with the Ministry of Education to provide technical assistance and fellowships to improve planning skills. The African Development Bank has funded two education projects which support construction of (a) primary schools in urban areas, (b) secondary schools, and (c) offices for regional education administrators. NGOs, especially churches, play an important role in the secondary education and manage many grant-aided schools. 14. Agreed Actions. Government has agreed to implement the actions outlined in its Letter of Education Development Policy of August 28 1989, which includes specific measures in each of the areas described above (paras 4 and 10). In line with that commitment, Government has agreed to the following as conditions of disbursement. By Credit effectiveness (and for  - 4 - release of funds for the items listed as sub-project A In Schedule attached)i agreement with IDA on projected education expenditures for the remaining years of the education plan, and on an acceptable plan for evaluating progress of teachers in the new in-service training program, and criteria and procedures for dismissing poor performers. By July 1991 (for release of funds for sub- project 3): implementation of the first phase of the restructuring of the Ministry and of new rules for repetition and for admission of pupP to standard one; and agreentnt with 1DA on (i) a reduced number of sat aects in the secondary school curriculum, and (ii) level of the Development Budget; and increases in secondary school tuition fees to MK45 per year and university fees to NK280 per year. (3) By Januarv 1993 (for release of funds for sub- project C)s Implementation of the agreed second phase of the Education Services Review including the staff development program; inrease In secondary tuition fees to MK60, and boarding fees to MK200, and university fees to WK360; discontinuation of free provision of exercise books to secondary school students; and agreement with IDA on the level of the Development kdget. 15. Benefits and Risks. The credit would continue and further IDA's support for policy reform in education, and would finance innovative programs to Improve quality, cost-effectiveness, internal and external efficiency, equity and access at all levels. It will strengthen the planning, budgeting and management capabilities of the Ministry. These improvements in access vould be especially beneficial for women, r.al areas, and poor families. The main risk is that Government would allocate Insufficient funds to the education sector over the next five years, leading to delays In Implementation of the reform program, the investment plan, and the project. This risk has been minimized by requiring that a commtment to adequate funding, supported by approval by Treasury and EP&D of budget projections, Is in place before the project begins and Is reaffirmed at regular prescribed intervals during the life of the project. A second risk is that the limited managerial and administrative capability of the MOEC to Implement and effectively monitor the policy changes might be overstretched by the project. The credit is addressing this risk by strengthening the planning function with technical assistance, more local staff positions, and fellowships. A third risk is that the large number of trainee teachers to be recruited into the new three year in-service training program will not all perform eatisfactorily. This risk is being addressed through conditionality that requires MOEC to develop criteria against which to evaliate their academic and practical performance and to release from service those who are unsatisfactory. 16. Recommendation. I am satisfied that the proposed credit would comply with the Articles of Agreement of the Association and recommend that the Executive Directors approve the proposed credit. Barber B. Conable President By Ernest Stern Attachments Washington D.C. November 13, 1989  -3- access improvements through (a) facilitating community self-help upgrading of school facilities by provid;'ng roofing sheets and limited amounts of school furniture, and (b) planning and implementing reforms in promotion criteria and facilities utilization and (c) expansion of the university's capacity to produce accountants - a skill in extremely short supply; (3) management. budgeting. and planning strengthening through (a) various institutional and capacity building measur4s in the Ministry of Education and the Malawi Institute of Education, and (b) a decentralization program for the Ministry; and (4) improved resource mobilization and allocation through (a) reforms in fee structures at all levels, (b) changes in reporting requirements for recurrent and investment expenditure plans, and (c) increases in the sector's budget share. 11. A breakdown of costs and tue financing plan are shown in Schedule A. AMounts and methods of procurement and of disbursements and the disbursement schedule are shown in Schedule B. A timetable of key project processing events and the status of Bank Group Operations in Malawi are given in Schedules C and D, respectively. A map is attached. The Staff Appraisal Report No. 7734-MAI, dated November 10, 1989 is also attached. 12. Rationale for IDA Involvement: IDA involvement is needed because (i) the new initiatives to be launched under this project involve complex issues on which the Government has limited experience and capacity, and thus requires technical and other assistanca; (ii) six loans for education in Malawi have given IDA considerable experience in the sector; (iii) IDA has a comparative advantage in these areas including ccisiderable experience from other countries; (iv) other development assistance agencies are not able to fill this role for various reasons (e.g., they are giving priority to other sectors or other count-ies; or they are already committed); and (v) the government and international agencies are relying on IDA to take the principal role in the sector. 13. The proposed project would complement the other development assistance activities ongoing in the sector, which include the following. USAID is assisting the Government in graduate level training through the Human Resources Institutional Development project and has also assisted in the development of the Polytechnic. ODA has provided (a) fellowships for specialized training in the Unired Kingdom, (b) a limited number of English, Math, and Science teachers at the secondary level; (c) assistance with the development of technical schools and (d) managerial assistance for the MCDE. UNICEF has assisted with upgrading of untrained primary school teachers. UNDP as well as CIDA have finsnced equipment and technical assistance for curriculum development. UNDP has recently reached an understanding with the Ministry of Education to provide technical assistance and fellov7ships to improve planning skills. The African Development Bank has funded two education projects which support construction of (a) primary schools in urban areas, (b) secondary schools, and (c) offices for regional education administrators. NGOs, especially churches, play an important role in the secondary education and manage many grant-aided schools. 14. Agreed Actions. Government has agreed to implement the actions outlined in its Letter of Education Development Policy of August 28 1989, which includes specific measures in each of the areas described above (paras 4 and 10). In line with that commitment, Government has agreed to the following as conditions of disbursement. BY Credit effectiveness (and for  release of funds for the items liated as sub-project A In Schedule attached): agreement with IDA on projected education expenditures for the remaining years of the education plan, and on an acceptable plan for evaluating progress of teachers in the new in-service training program, and criteria and procedures for dismissing poor performers. By JAlv 1991 (for release of funds for sub- project 5): implementation of the fitst phase of the restructuring of the Ministry and of new rules for repetition and for admission of pupils te standard onel and agreement with IDA on (i) a reduced number of subjects An the secondary school curriculum, and (itI) level of the Development Budget; and Increases In secondary school tuition fees to MK45 per year and university fees to MK280 per year. (3) Iv January 1993 (for release of funds for oub- project C)s implementation of the agreed second phase of the Bducation Services Review including the staff development program; increase In secondary tuition fees to MK60, and boarding fees to MX200, and university fees to MK3601 discontinuation of free provision of exercise books to secondary sehool students; and agreement with IDA on the level of the Development Budget. 15. Benefits and Risks. The credit would continue and further IDA's support for policy reform in education, and would finance innovative programs to improve qualt-y, cost-effectiveness, internal and external efficiency, equity and access at all levels. It will strengthen the planning, budgeting and management capabilities of the Ministry. These improvements in access would be especially beneficial for women, rural areas, and poor families. the main risk is that Government v-uld allocate insufficiont funds to the education sector over the next five years, leading to delays in implementation of the reform program, the investment pli'n, and the project. This risk has been minimized by requiring that a comml_mont to adequato funding, supported by approval by Treasury and EP&D of budget projections, is in place before the project begins and is reaffirmed at regular prescribed intervals during the life of the project. A second risk is that the limited managerial and administrative capability of the MOEC to implement and effectively monitor the policy changes might be overstretched by the project. The credit is addressing this risk by strengthening the planning function with technical assistance, more local staff positions, and fellowships. A third risk is that the large number of trainee teachers to be recruited into the new three year in-service training program will not all perform satisfactorily. This risk is being addressed through conditionality that requires HOEC to develop criteria against which to evaluate their academic and practical performance and to release from service those who are unsatisfactory. 16. Recommendation. I am satisfied that the proposed credit would comply with the Articles of Agreement of t'e Association and recammend that the Executive Directors approve the propose credit. Barber B. Conable President By Ernest Stern Attachments Washington D.C. November 13, 1989  - 3 - access improvements through (a) facilitating community self-help upgrading of school facilities by providing roofing sheots and limited amounts of school furniture, and (b) planning and implementing reforms in promotion criteria and facilities utilizatio.. and (c) expansion of the university's capacity to produce accountants - a skill in extremely short supply; (3) management. budgeting, and planning strengthening through (a) various institutional and capacity building measures in the Ministry of Education and the Malawi Institute of Education, and (b) a decentralization program for the Ministry; and (4) improved resource mobilization and allocation through (a) reforms in fee structures at all levels, (b) changes in reporting requirements for recurrent and investment expenditure plans, and (c) increases in the sector's budget share. 11. A breakdown of costs and the financing plan are shown in Schedule A. Amounts and methods of procurement and of disbursements and the disbursement schedule are shown in Schedule B. A timetable of key project processing events and the status of Bank Group Operations in Malawi are given in Schedules C and D, respectively. A map is attached. The Staff Appraisal Report No. 7734-MAI, dated November 10, 1989 is also attached. 12. Rationale for IDA Involvement: IDA involvement is needed because (i) the new initiatives to be launched under this project involve complex issues on which the Government has limited experience and capacity, and thus requires technical and other assistance; (ii) six loans for education in Malawi have given IDA considerable experience in the sector; (iII) IDA has a comparative advantage in these areas including considerable experience from other countries; (iv) other development assistance agencies are not able to fill this role for various reasons (e.g., they are giving priority to other sectors or other countries; or they are already committed); and (v) the government and international agencies are relying on IDA to take the principal role in the sector. 13. The proposed project would complement the other development assistance activities ongoing in the sector, which include the following. *USAID is assisting the Government in graduate level training through the Human Resources Institutional Development project and has also assisted in the development of the Polytechnic. ODA has provided (a) fellowships for specialized training in the United Kingdom, (b) a limited number of English, Math, and Science teachers at the secondary level; (c) assistance with the development of technical schools and (d) managerial assistance for the MCDE. UNICEF has assisted with upgrading of untrained primary school teachers. UNDP as well as CIDA have financed equipment and technical assistance for curriculum development. UNDP has recently reached an understanding with the Ministry of Education to provide technical assistance and fellowships to improve planning skills. The African Development Bank has funded two education projects which support construction of (a) primary schools in urban areas, (b) secondary schools, and (c) offices for regional education administrators. NGOs, especially churches, play an important role in the secondary education and manage many grant-aided schools. 14. Agreed Actions. Government has agreed to implement the actions outlined in its Letter of Education Development Policy of August 28 1989, which includes specific measures in each of the areas described above (paras 4 and 10). Ir. line with that commitment, Government has agreed to the following as conditions of disbursement. By Credit effectiveness (and for  - 4 - release of funds for the Items listed as sub-project A ln Schadule attached)t agreement with IDA on projected education xpenditures for the remaining years of the education plan, and on an acceptable plan for evaluating progres of teachers in the new in-service training program, and criteria and procedures for dismissing poor performers. Bv Julyv 1991 (for releae of funds for sub- project O)i implementation of the first phase of the restructuring of the Ministry and of new rules for repetition and for admission of pupils to standard one; and agreement with IDA on (1) a reduced number of subjects in the secondary school curriculum, and (Ui) level of the Development Budget; and Increases in secondary school tuition fees to NK4S per year and university fees to MK280 per year. (3) BY January 1993 (for release of funds for sub- project C)s implementation of the agreed second phase of the Education Services Review including the staff development program; increae in secondary tuition fees to 1K60, and boarding fees to M1200, and university fees to M13601 discontinuation of free provision of exercise books to secondary school students; and agreement with IDA on the level of the Development Budget. 15. Benefits and Risks. The credit would continue and furthor IDA's support for policy reform in education, and would finance Innovative programs to improve quality, cost-effectiveness, internal and external efficiency, equity and access at all levels. It will strengthen the plannlng, budgeting and management capabilities of the Ministry. These Improvements in access would be especially beneficial for women, rural areas, and poor families. The main risk is that Government would allocate Insufficient funds to the education sector over the next five years, leading to delays in implementation of the reform program, the investment plan, and the project. This risk has been minimized by requiring that a commitment to adequate funding, supported by approval by Treasury and EP&D of budget projections, is In place before the project begins and is reaffirmed at regular proscribed intervals during the life of the project. A second risk is that the limited managerial and administrative capability of the M4OEC to Implement and effectively monitor the policy changes might be overstretched by the project. The credit Is addressing this risk by strengthening the planning function with technical assistance, more local staff positions, and fellowships. A third risk is that the large number of trainee teachers to be recruited into the new three year in-service training program will not all perform satisfactorily. This risk is being addressed through conditionality that requires MOEC to develop criteria against which to evaluate their academic and practical performance and to release from service those who are unsatisfactory. 16. Recommendation. I am satisfied that the proposed credit would comply with the Articles of Agreement of the Association and recommend that the Executive Directors approve the proposed credit. Barber B. Conable President By Ernest Stern Attachments Washington D. C. November 13, 1989  Ochedule A SECOND TI C CDIT EIMATED COSTS AND IMN 1 Estimated Costs Local Forei Total --------(US$ million)------- Sub-Proiect A 10.2 8.9 19.1 1. Curriculum and Textbook Development 0.1 1.0 1.1 2. Strengthening Schools Radio 1.3 2.4 3.7 3. Special Teacher Training 6.1 1.2 7. 4. Strengthening Exams 0.1 0.6 0.7 5. Strengthening Inspectorate 1.0 0.0 1.0 6. Strengthening Planning and Management 0.2 0.2 0.4 7. Strengthening the PIU 1.4 1.0 2.4 8. Faculty of Commerce 0.0 2.5 2.5 Sub-Pro1ect B L3.7 4.8 8.4 1. Primary School Facilities 2.9 4.1 7.0 2. Secondary Level 0.4 0.6 1.0 3. Management Study Implementation 0.4 0.0 0.4 Sub-Proiect C 2.4 5.1 7.6 1. MCDE Centers 0.6 1.1 1.7 2. Institutional Development - MIZ 0.1 0.2 0.3 3. Teacher Training Expansion 1.4 2.8 4.2 4. Implementing ESR 0.2 0.7 0.9 5. Support for CER 0.1 0.3 0.4 TOTAL BASE COSTS 16.3 ,18.8 35.1 Physical Contingencies 0.5 0.8 1.3 Price Contingencies 3.5 1.1 4.6 GRAND TOTAL PROJECT COSTS 20.3 20.7 41.0 Financinz Plan Local Poreian Total