Malawi - Primary Education Project

Document of The World Bank Report No. 15127-MAI STAFF APPRAISAL REPORT MALAWI PRIMARY EDUCATION PROJECT DECEMBER 21, 1995 Human Resources Division Southern Africa Department Africa Region  CURRENCY EQUIVALENT (as of October, 1995) Currency Unit = Malawi Kwacha (MK) U.S. $1.00 = MK15.7 FISCAL YEAR (FY) April 1 to March 31 WEIGHTS AND MEASURES 1 meter (m) = 3.281 feet (ft) 1 kilometer (km) = 0.621 miles (mi) 1 square kilometer (sq km) = 0.386 square miles (sq mi) 1 cubic meter (m3) = 264.2 U.S. gallons GLOSSARY OF ABBREVIATIONS CAS Country Assistance Strategy CIDA = Canadian International Development Agency CIF = Cost Insurance and Freight at Port of Destination CIP = Cost Insurance Paid (for landlocked countries) DEO District Education Officer GDP = Gross Domestic Product GOM Government of Malawi GTZ = German Corporation for Technical Cooperation HESSEA 1990/91 Household Expenditure and Small Scale Economic Activities Survey HYDRAFORM Hydraulic Forming (Machines) IBRD = International Bank for Reconstruction and Development ICB = International Competitive Bidding ICR = Implementation Completion Report IDA International Development Association ISA Integrated Sector Approach IEC Information, Education and Communication JCE Junior Certificate Examination KfW German Bank for Reconstruction MASAF Malawi Social Action Fund MEP&D = Ministry of Economic Planning and Development MIE = Malawi Institute of Education MIITEP = Malawi Integrated In-service Teacher Education Program MOE = Ministry of Education MOIWD = Ministry of Irrigation and Water Development MOWS = Ministry of Works and Supplies  NCB = National Competitive Bidding NGO = Non-Governmental Organization O&M Operation and Maintenance ODA = Overseas Development Administration PEP = Primary Education Project PICMO = Private and Independent Construction Management Organization PIU = Project Implementation Unit PPF = Project Preparation Facility PSIP = Public Sector Investment Program PTTC = Primary Teacher Training College PU = Planning Unit SCC = Systematic Client Consultation SOE = Statement of Expenditures SPFP = Sector Policy Framework Paper SU = Supplies Unit TA = Technical Assistance TDP = Teacher Development Program TESC = Third Education Sector Credit TOR = Terms of Reference UNDP = United Nations Development Program UNESCO = United Nations Educational, Scientific and Cultural Organization UNICEF = United Nations Children's Fund UNIPAC = United Nations Children's Fund Procurement and Assembly Center USAID = United States Agency for International Development   MALAWI PRIMARY EDUCATION PROJECT CREDIT AND PROJECT SUMMARY Borrower: Government of Malawi Implementing Agency: Ministry of Education Beneficiaries: Ministry of Education, Local Communities, and Primary School Students Poverty: Program of Targeted Interventions (PTI). The project would contribute to poverty reduction by improving access to and the quality of primary education. Amount: SDR15.1 million (US$22.5million equivalent). Terms: Standard IDA terms with a maturity of 40 years including a 10-year grace period. Commitment Fee: 0.50% on undisbursed credit balances, beginning 60 days after signing, less any waiver. Financing Plan: IDA - US$22.5 Million; GOM - US$1.2 Million; Communities - US$1.6. Net Present Value: Not applicable. However, least-cost, cost-effectiveness, and fiscal impact analyses have been undertaken (see Annex 3). Staff Appraisal Report: Report No. 15127 - MAI Map: IBRD - 27693 Project Identification Number: 42305  Estimated Project Costs: (MK Million) (US$ Million) % Total Foreign Base Local Foreign Total Local Foreign Total Exchange Costs 1. Primary School Construction 96.65 88.70 185.35 6.16 5.65 11.81 48 59 Program 2. Teacher Development Program 36.90 37.42 74.32 2.35 2.38 4.73 50 24 3. Teaching and Learning Materials 6.36 41.78 48.13 0.40 2.66 3.07 87 15 4. Project Management / EDMU/ PU 5.27 2.65 7.92 0.34 0.17 0.50 33 3 Total Baseline Costs 145.18 170.54 315.72 9.25 10.86 20.11 54 100 Physical Contingencies 7.16 8.53 15.69 0.46 0.54 1.00 54 5 Price Contingencies 76.20 41.45 117.65 3.10 1.03 4.13 25 21 Total Project Costs 228.54 220.52 449.06 12.80 12.44 25.24 49 126 Estimated IDA Disbursements: Fiscal Year Ending June 30 (US$ million) Years FY96 FY97 FY98 FY99 Annual disbursement 1.4 7.4 11.3 2.3 Cumulative disbursement 1.4 8.8 20.1 22.5  TABLE OF CONTENTS 1. INTRODUCTION ................................................................1 2. SECTORAL CONTEXT ................................................................2 A. BACKGROUND: SoCiO ECONOMIC ENVIRONMENT AND MACRO FRAMEWORK ......... ................2 B. SECTOR BACKGROUND AND THE MALAWI EDUCATION CRISIS .................................................3 C. MAIN SECTOR ISSUES ...............................................................................4 D. GOVERNMENT EDUCATION SECTOR STRATEGY ...........................................................................6 E. THE BANK GROUP'S ROLE AND STRATEGY ............................................................................... 7 3. THE PROJECT ............................................................... 10 A. PROJECT OBJECTIVES AND SCOPE ............................................................................... 10 B. PROJECT DESCRIPTION ................................................................................ 0 C. PROJECT COSTS AND FINANCING PLAN .............................................................................. 15 4. PROJECT IMPLEMENTATION ............................................................... 18 A. STATUS OF PROJECT PREPARATION AND READINESS .............................. ................................. 18 B. PROJECT MANAGEMENT AND COORDINATION ......................................................................... 18 C. PROJECT MONITORING AND EVALUATION .............................................................................. 20 D. PROCUREMENT .............................................................................. 21 E. DISBURSEMENT ............................................................................... 24 F. ACCOUNTING, AUDITING AND REPORTING .............................................................................. 25 5. PROJECT BENEFITS AND RISKS ............................................................... 27 A. PROJECT BENEFITS .............................................................................. 27 B. PROJECT RISKS .............................................................................. 28 C. ENVIRONMENTAL IMPACT .............................................................................. 29 6. AGREEMENTS TO BE REACHED AND RECOMMENDATION .................................. 30 LIST OF TEXT TABLES Table 1: Central Government Expenditures, Revenues and Fiscal Deficits, 1993-1998 .................2 Table 2: Components Project Cost Summary .............................................................................. 15 Table 3: Parallel Financing ............................................................................... 16 Table 4: Summary of Proposed Procurement Arrangements ......................................................... 23 Table 5: Proposed Procurement Plan by Year .............................................................................. 24 Table 6: Allocation and Disbursement of the IDA Credit .............................................................. 25 Table 7: Estimated IDA Disbursement Schedule ........................................................................... 25 This report is based on the findings of a Bank appraisal/negotiations mission which visited Malawi in September/October 1995, comprising Mr. Peter Ngomba (Senior Education Economist and Mission Leader), Mr. Dzingai Mutumbuka (Senior Education Specialist), Mr. David Bruns (Economist), Mr. Noel Kulemeka (Economist), Ms. Yisgedullish Amde (Economist), Mr. Diop Sakhevar (Textbook Specialist), Mr. Steve Gaginis (Disbursement Officer), Mr. Jaime Roman (Departmental Procurement Advisor), Mr. Aberra Zerabruk (Senior Legal Counsel), Mr. Arthur Fields (Procurement Specialist), Messrs. Thorkil Schou, Harry Wiebe, Alex Warrender and Dr. Bizaliele (Consultants). Mr. Leandros Alves and Florencia Castro-Leal made contributions to the economic analyses. Mss. Ada Rivera and Guadalupe Prado (Staff Assistants) provided administrative support in the preparation of the project. This report was edited by Mr. Leo Demesmaker. Messrs. Nat Colletta, Nick Bennett, Vincent Greaney and Abdelwahed Zhiri were the peer reviewers. Mr. Mulugeta Wodajo is the overall supervisor of the sector-wide education operation in Malawi and was the main contact point in Washington during negotiations in the field. Ms. Jacomina de Regt provided guidance on systematic client consultation. Ms. Barbara Kafka and Ms. Judith Edstrom are the Country Operations Manager and Operations Adviser respectively. Mr. Roger Grawe and Ms. Katherine Marshall are the Managing Division Chief and Department Director respectively.  -2 - ANNEXES Annex 1: Basic Indicators Annex 2.a: Structure of the Education System Annex 2.b: Primary School Enrollment Pyramid for Malawi (1994/95) Annex 3: Dimensions of Economic Analyses Performed Under the Primary Education Project Annex 3.a: Rates of Return to Investment in Education in Malawi Annex 3.b: Poverty Analysis and the Incidence of Public Expenditures on Education Annex 3.c: Site Selection and Targeting the Poor under PEP Annex 3.d: Sustainability Analysis and Recurrent Cost Implications Annex 3.e: Efficiency Gains through Reductions in Primary Repetition Rates Annex 3.f: Comparison of Alternative Teacher Training Programs Annex 3.g: Cost-Effectiveness and Least Cost Analysis of Alternatives During Project Design Annex 3.h: Uncertainty, Risk and Sensitivity Analyses Annex 3.i: Education Sector Institutional Planning and Management Annex 4: Roles, Responsibilities and Relations among Main Implementing Units Annex 5: Terms of Reference for a Private and Independent Construction Management Organization (PICMO) Annex 6: Implementation Charts Annex 7: Cost Tables Annex 8: Training on the Use of Hydraform Machines Annex 9: Key Project Performance Indicators Annex 10: Supervision Plan Annex I1: Procurement Packaging and Phasing of Civil Works Annex 12: Further Details on Past Education Projects Annex 13: Structure of Tuition, other Fees and Associated Costs of Primary Education before the Abolition of these Fees. Annex 14: Estimated Credit Disbursement Schedule Annex 15.a: Summary of Technical Assistance Services Annex 15.b: Summary of Local and Foreign Training Annex 16: Documents in Project Files Map: IBRD 27693  1. INTRODUCTION 1.1 The Government of Malawi has requested IDA's assistance in financing a primary education project (PEP). This project is in response to a crisis caused by the surge in enrollment resulting from the new Government's policy of eliminating all fees and associated costs of primary education. Total primary school enrollments increased from about 1.9 million in 1993 to about 3.2 million in 1994, putting enormous strain on an already weak system. The quality of primary education is particularly threatened, as up to 200 pupils fill each classroom and most of the twenty thousand newly-recruited primary teachers have not been trained. In addition, despite an increase of budgetary allocations to the sector, the current difficult macro-economic situation threatens to erode gains associated with increased allocation of resources to the sector. However, the widespread and strong political commitment to education from the current Government is expected to ease these serious difficulties. 1.2 This project is being developed as a fast-track supplement to an overall integrated sector credit aimed at financing a time-slice of the Government's long-term program for educational development. The proposed PEP will focus on the following urgently needed activities: (i) construction of about 1,600 primary classrooms and associated infrastructures; (ii) pedagogical support and in-service teacher training particularly focused on the recently recruited teachers; and (iii) provision of teaching and learning materials. 1.3 Total project costs are estimated at US$25.2 million, with a foreign exchange component of about US$12.4 million. IDA would finance US$22.5 million (including a PPF of US$1.4 million). The Government of Malawi would contribute about US$1.2 million equivalent including taxes and duties; and communities would contribute the equivalent of US$1.6 million to the school construction component of the project through contributions in cash or in kind.  - 2 - 2. SECTORAL CONTEXT A. BACKGROUND: SOCIO ECONOMIC ENVIRONMENT AND MACRO FRAMEWORK 2.1 Malawi is currently facing tough economic times, with the Government struggling with macro imbalances caused by factors including expenditure overruns, the recent drought and civil service wage increases. In 1994, real output growth shrank by 12.4% and the annual rate of inflation was 34.7% (compared to 22.8% in 1993). The fiscal deficit including grants rose from about 5% in 1994 to about 15 % in 1995. Table I shows the evolution and projections of central government expenditures, revenues and deficits between 1993 and 1998. Table 1 Central Government Expenditures and Revenues, 1993 - 19981 (in % of GDP, unless indicated otherwise) 1993 1994 1995 1996 1997 1998 l__ ___ ___ _est. proj. proj. proj. Revenue (excl. grants) 18.3 17.1 16.2 18.7 18.6 19.0 Expenditure 32.8 25.5 42.3 34.7 30.9 29.0 Deficit (excl. grants) -14.4 -8.4 -26.1 -16.0 -12.3 -10.0 Deficit (incl. grants) -12.1 -5.4 -15.1 -4.1 -3.9 -3.3 Education Recurrent Expenditure as: % of GDP 4.9 4.6 7.5 7.8 8.1 8.1 % of Total Gov. Expend. 14.8 17.2 23.4 24.6 26.8 27.7 2.2 Notwithstanding the economic difficulties, the new democratically-elected Government of Malawi has indicated its commitment to improve the quantity and quality of social sector expenditures as a means to reaching its overall objective of reducing poverty. In expenditure allocations on the recurrent account of this year's budget (1995/96), the Government's top priority has been the social sectors, with 40.1% budgetary allocation compared to 31.1% in 1994/95. The share of recurrent expenditure allocations for education rose from about 17% in 1994 to about 23.4% in 1995 and is projected to increase to about 25% in 1996. Much of the increase in education expenditures between 1994 and 1995 was aimed at accommodating and training the new teachers hired to carry out the free primary education policy. To permit these increased social sector expenditures and still meet deficit reduction targets, measures are underway to control overall expenditures and improve revenue collection. These include: the restriction (or prohibition) on filling new vacancies; a freeze on the hiring of temporary workers and the purchase of new vehicles; and a reduction in external travel. There has also been a stricter application of the cash budgeting system introduced in November, 1994. Measures were taken to enhance revenue by increasing the efficiency of tax and tariff collection. These measures have been effective in easing the macroeconomic situation; halfway through FY96, the projected deficit is expected to stand at 4% of GDP, including grants and excluding drought relief expenditures. Fiscal restraint will be reinforced under the ongoing Medium Term Expenditure Framework (MTEF). Under this, expenditure I Fiscal year ending March 31 of the year indicated.  - 3 - frameworks have been established that prioritize sectoral programs and spending to ensure that priority areas, such as the social sectors, are protected despite aggregate expenditure cuts. This overall effort is receiving Bank assistance including the structural adjustment program now being prepared. 2.3 It is urgent that economic stability be restored through reducing the current account deficit on the balance of payments, increasing the level of external reserves, adopting monetary policies that will ensure a stable exchange rate and reducing the government budget deficit and consequently the level of inflation (to below 20%). Notwithstanding the need for such stabilization policies, some priority expenditures in the social sectors (such as expenditures on primary education) need to be protected and the Government is committed to providing that protection. B. SECTOR BACKGROUND AND THE MALAWI EDUCATION CRISIS 2.4 Since Malawi gained its independence in 1964, significant progress has been made in the development of its education system. The World Bank has long been active in assisting Malawi's education sector; the first project was approved in 1967. Five additional education projects have been completed since and currently there is an ongoing project (the Second Education Sector Project). Although Malawi's education system has benefited considerably from the assistance of the Bank and other donors, this support has not produced the desired benefits. This limited success is due in part to lack of commitment by the former Government to education as well as the lack of a well-conceived and comprehensive policy framework. In 1994 the Bank began to prepare a new operation, the Third Education Sector Credit (TESC), which will pursue an integrated sector approach (ISA) to support a Government-designed program for the development and improvement of the sector as a whole. Through this approach, IDA will share in the financing of a time-slice of the Government's overall program as specified in the Ministry of Education's draft Sector Policy Framework Paper (SPFP). Donor coordination is an important aspect of the integrated sector approach. Most donors active in the sector support the approach; some have already committed resources to financing parts of the Government's program. 2.5 During the preparation of the TESC, the democratically-elected Government of Malawi announced (in June 1994) that all primary school fees would be abolished as of the beginning of the new school year in October, 1994. While this decision was consistent with the Government's overall goal of poverty reduction through economic growth and investment in human capital, it created a flood of over one million additional students into the primary system2, and necessitated the hiring of about 20,000 new teachers. This was in effect a 75% increase over the existing primary teaching force. The new teachers were mainly from among secondary school leavers, who were given only three weeks of induction training before being dispatched to schools. Retired teachers were also called back to help with the crisis. Government estimates that about 38,000 additional classrooms will be required to accommodate this influx of children. At present classrooms are severely overcrowded; thousands of children take their lessons in temporary facilities such as churches and mosques. Thousands more assemble in the open air, under trees or are crammed into rooms; it is common to see classes of two or three hundred children in a small shed. While "nominal" access to schools has increased, "effective" access to education has not improved. The quality of education has fallen -- many young children do not have enough teaching and learning materials and have only a few young untrained teachers to guide them. Unless these pressing needs are quickly addressed, 2 There were approximately 1.9 million primary school children in the system before the recent influx.  - 4 - the public's enthusiastic support for primary education could quickly evaporate and be succeeded by cynicism and apathy. 2.6 The current education crisis is the result of extreme pressures on an already weak system. Notwithstanding the Government's effort to improve access to education, starting from a very low base has meant that despite the very rapid rate of growth of primary enrollments (about 9.2% per annum from 1985 to 1993), the primary gross enrollment ratio was only about 67% on average between 1987-92, and adult literacy rate (aged 18 and over) was estimated to be around 40%. However, the real problem in the education system has been that of quality, which has declined over the years as indicated by high repetition and dropout rates. The repetition rate on average was over 20%, with only 19% of the (1980/81) intake completing primary school within the normal period. At present, it normally takes a primary pupil about 15 years to complete the 8-year primary cycle. The primary pupil-teacher ratio has progressively increased to 70 in 1992/93 with 13% unqualified teachers; the primary pupil-classroom ratio was about 100 during the same year. These indicators show that the primary education system was already extremely weak even before the recent crisis, because of lack of qualified teachers, textbooks, classrooms, and other essential inputs. C. MAIN SECTOR ISSUES 2.7 The Government's draft SPFP identifies the main issues confronting primary education in Malawi as: (i) severe financial constraints and the problem of financing the recurrent costs of GOM's educational development program; (ii) shortage of classrooms and acute overcrowding in schools and classrooms; (iii) poor quality and low efficiency due in large part to the large number of untrained teachers, especially the 20,000 recruited hurriedly after the introduction of free primary education; (iv) ineffective sector management and support, especially the weaknesses in inspection and supervisory functions; and (v) gender disparities, particularly at post-primary levels. 2.8 Severe Financial Constraints: Public resources within the education sector in Malawi are utterly insufficient to cover the rapid surge in primary school enrollments observed in 1994. Although public education recurrent spending in 1994/95 increased to about 7.5% of GDP, and increased as a share of the Government's recurrent expenditures allocated to the education sector from about 8.7% in 1988/89 to about 24% in 1994/953, there are still severe constraints for improving the quantity and quality of education. Initial results from a simulation model for educational development indicate that over the next five years, the education sector will need on average nearly 30% of public resources to meet the recurrent costs of the Government's education development program. The already low public spending dedicated to quality enhancement items is declining. In 1990/91, non-salary recurrent expenditure per primary school student was 11.5% of public recurrent spending on education; in 1994/95, this share declined to 3%. This decline was influenced by the rise in enrollments and in corresponding teacher requirements unsupported by a proportional increase in budgetary allocations for non-wage items. 2.9 The severe financial constraints confronting the education sector require bold measures, many of which are envisaged in the SPFP. These include: increased cost recovery at post-primary education levels; increased community involvement which will be a significant part of this project; cost-saving measures such as more secondary day schooling and double-shifting; encouragement of the private sector in the construction, maintenance and operation of schools; and the choice of least- cost alternatives in project design (such as the shell classroom construction design and the teacher 3 The priority accorded to primary education is also evident from the increase in the share of public recurrent education spending from 45% in 1990/91 to 71% in 1994/95.  - 5 - training approach developed in this project). In fact, providing more resources to the sector will be important but lifting monetary resource constraints will not suffice; the efficiency of expenditures and of delivery systems must be improved. Some donor financing of recurrent expenditures on an increasing or constant basis over the next five years (for example under the proposed TESC operation) will provide short-term relief, help set up these measures and ensure long-term sustainability so that such recurrent costs could be financed on a declining basis in subsequent IDA / other donor operations. 2.10 Shortage of Classrooms and Acute Over-crowding of Schools and Classrooms: The limited facilities that existed before 1994 are now over-stretched and acute overcrowding is the norm, especially in the larger urban centers. In many schools, classes are organized under trees and in mosques and churches. The Government estimates a need of about 38,000 new classrooms to attain a ratio of about 60 pupils per classroom. Meanwhile, although access to primary schooling has increased (the net enrollment rate for primary education in Malawi has risen to around 70% while the gross enrollment rate is over 100%), equity issues still need to be addressed. The results obtained from the 1990/91 household survey (HESSEA) indicate that disparities in net and gross rates across income levels are considerable. For example the poorest group has only 30% net and 60% gross enrollment rates in contrast with the richest group with its 75% net and 110% gross rate. The survey also shows that enrollment ratios are lower in rural than in urban areas, especially in the central and southern regions of the country. The location of the new schools and expansion of existing schools under this project will take these disparities and the problem of overcrowding into consideration. 2.11 Poor Quality and Low Efficiency: Because of the surge in enrollment, about 20,000 new teachers were recruited, most of them untrained school leavers (25% with full secondary education and 75% with only JCE). About 4,000 retired teachers were recalled from retirement. Most new recruits were given three weeks of crash training before being dispatched to schools. Consequently, teacher upgrading, in the most cost-effective manner possible, is an urgent priority. The weaknesses in inspection and supervisory functions have also limited the support provided to teachers. These functions should be strengthened and school-based supervision and support should be provided. 2.12 Gender Disparities: Historically, girls in Malawi have not gone to school in as great numbers as boys; drop out rates are higher for girls at both primary and secondary levels, and achievement rates are low for girls, especially in mathematics and science. Over half of enrolled girls leave school during early primary grades before they attain full literacy. Of those who stayed, it took an average of 16 years for girls to complete the 8-year primary education cycle, as opposed to 13 years for boys. Low enrollment is particularly apparent in secondary schools, where less than 39% of the places at secondary schools (in 1994/95) are held by girls. The reasons for these low rates include: retention problems; school and associated fees4; parents' perception of low return to girls' education; poor performance on Standard 8 exams; limited places at boarding schools; early marriage; and pregnancy, after which until very recently girls were not permitted to return to school. 2.13 Girls' participation and performance in primary education has recently improved. This overall improvement has been reinforced by USAID's Girls' Attainment in Basic Literacy and Education (GABLE) Project, launched in 1991. Under the project, school fee waivers were introduced for non-repeating girls (before the abolition of all fees); Government launched a social mobilization campaign to encourage girls to complete their schooling, and to change attitudes and elicit support from parents and communities. Substantial progress was also made in revising the 4 These include fees for uniforms, textbooks and learning materials.  -6 - curriculum to be more gender appropriate5. The success of the GABLE project resulted in increased female enrollment6 and a reduction in female dropout and repetition rates. Thus, the general enrollment increase in primary education has been accompanied by a fall in the gap in Gross Enrollment Ratios (GER) between girls and boys, from a 15% gap in 1986/87 (GER of 47% for girls and 62% for boys) to an 11% gap in 1992/93 (GER of 70% for girls and 81% for boys); the gap was only 4% in 1993/94 (91% for girls and 95% for boys). In a few years, this gap will be closed. 2.14 Notwithstanding the overall progress made at the primary level, significant gender disparities still exist at the upper-primary, post-primary and regional levels. The results obtained from the 1990/91 household survey (HESSEA) confirm that although gender disparities are not severe nationally in primary education, the rural South region shows boys with an enrollment rate 25% higher than girls, (probably due to the later development of education in the region) and a gross enrollment ratio about 20% higher for boys than girls in the urban North. There are enrollment disparities in class levels, where the share of girls in upper primary grades has remained in the mid 20% for the past several years. Under this project, gender disparities will figure prominently among the criteria in classroom site selection for districts. The project will also monitor the development of the SPFP to ensure that gender issues at post-primary levels are adequately addressed under the upcoming Third Education Sector Credit, especially the redefinition of the Gender Appropriate Curriculum Unit's roles and responsibilities to include the revision of the secondary curriculum to incorporate gender issues. Scholarship programs and school fee waivers are also being considered. D. GOVERNMENT EDUCATION SECTOR STRATEGY 2.15 Government has recently undertaken an intensive review of its policies and priorities in the education sector. The results of Government's efforts are set out in the Sector Policy Framework Paper (SPFP) that will be used to guide the overall development of the sector in the next decade and coordinate the efforts of donors under the ISA. The Framework Paper emphasizes primary education and sets ambitious targets for improving school quality and girls' participation. For example, primary school net enrollment is to increase to 90 percent for each district, with girls making up one half of those enrolled; pupil-teacher ratios are to drop from an average of about 70:1 now to 45:1 by 2005, and one textbook for each pupil in each of the three main subjects is to be required. The principal measures for achieving these targets are higher budgetary allocations to education in general and to the primary subsector in particular, greater community and private sector participation in both the construction and operation of primary and secondary schools, and increased construction and focus on community schools (Grades 1-4) combined with a social mobilization campaign aimed at girls and their parents. For post-primary education, more day schooling (rather than the currently predominant policy of boarding) and increased cost recovery are envisaged. The priorities outlined in the SPFP will parallel those spelled out in the Medium Term Expenditure Framework (MTEF) and agreed with MOF, thus facilitating adequate funding of the program in future years. 2.16 In June 1995, a draft of the SPFP was distributed to donors, NGOs, and other key stakeholders to solicit comments and reactions. While reactions have generally been favorable, several revisions were requested to ensure sustainability of the policies. The Bank's input included a 5 The Gender Appropriate Curriculum (GAC) Unit located at the Malawi Institute of Education has completed the primary curriculum up to Standard 5. 6 The overall percentage of girls in school has risen from 45% to 47% since the GABLE waivers began. Note that 52% of the Malawi population is female. In 1992/93, for the first time, the number of girls enrolling in standard I exceeded the number of boys (51% up from 49% the previous year).  - 7 - request for more realistic estimation of recurrent and investment expenditures and more explicit description of cost recovery measures at the secondary and tertiary levels. During appraisal, Government agreed to take these comments into consideration and set the following benchmarks towards "finalization" of the SPFP7: * In early October 1995, the Cabinet Committee on Education reviewed the initial draft of the SPFP and discussed the task of the PEP within this framework. An action plan and timetable was proposed for completion of the document. * Towards the end of November 1995, the Ministry of Education presented a revised SPFP to key stakeholders in the sector (donors, NGOs, and other members of civil society) that responded to their comments concerning prioritization and affordability. A strategy for ensuring an ongoing and broad policy dialogue for the forthcoming year has been agreed. Recognizing the fact that the SPFP is in fact a "living" document, some allocation has been made within PEP to finance some of the actions aimed at broadening the dialogue further on the policy framework and refining the document. * By end-December 1995, the Ministry will present the revised SPFP with its executive summary to the Cabinet Committee on Education for approval and endorsement. So before Board presentation, the Government will submit to IDA a prioritized summary of its policies and programs in the sector as a whole in a manner that clearly demonstrates that a critical assessment of trade-offs and policy options has been applied to arrive at programs and targets that are affordable and sustainable. E. THE BANK GROUP'S ROLE AND STRATEGY 2.17 Past and Ongoing Involvement: The Bank has long been active in assisting Malawi's education sector. The first project was approved in 1967. Five additional education projects have been completed since then. Further details on these completed projects are given in Annex 12. Currently, there is one ongoing project (the Second Education Sector Project), bringing the number of education projects to seven, for a total of about US$175 million. 2.18 The on-going project, the Second Education Sector Credit (Cr. 2083-MAI, scheduled to close on 30 June, 1996) began in 1990. The project objectives are: providing roofs for primary school buildings and teachers' houses; providing classroom furniture; providing science kits for secondary schools; improving library services to secondary schools; expanding Malawi Centres for Distance Education (MCDEs) and in-service teachers' training; developing curricula and textbooks; strengthening administration of the PIU; and providing technical assistance to MIE as well as to the Faculty of Commerce of the Malawi Polytechnic (including scholarships). In 1994 the Bank began to prepare a new operation, the Third Education Sector Credit (TESC), which will pursue an integrated sector approach to support a Government-designed program to develop and improve the sector as a whole. However, given the severity of the current crisis facing primary education in Malawi, the Bank has agreed to the Government's request of 'fast-tracking' urgently needed primary school activities of the TESC under a separate project, the PEP. 7 The SPFP is intended to serve as an operational document that Govemment regularly uses as a forum to debate and reach consensus with stakeholders on priorities in the sector and to identify the costs associated with meeting these priorities. "Completion" of the document does not exclude further consultation, revision and change.  - 8 - 2.19 Lessons from Previous IDA Involvement: Unlike previous projects which provided loosely-structured interventions, and thus resulted in limited impact, this project, and the TESC will share in the financing of a time-slice of the Government's overall program. By working within this framework, the projects should be more effective in improving the sector. Specific lessons learnt from implementing past projects have been incorporated in designing this operation. The design of classroom construction has been modified to reduce construction time and cost and maximize community participation. The school designs will consist of a shell which communities will complete with in-fills. This approach is expected to build a strong sense of ownership of schools by the local communities. Communities did not participate as fully as expected under the First Education Sector Credit as reported in the Implementation Completion Report (ICR) for that project (see Annex 12, para. 2 for further details); thus the communities' participation under PEP will not be taken for granted. A vigorous IEC campaign and community mobilization exercise (in collaboration with MASAF) as well as training for district and community leaders, are planned. An incentive mechanism for communities has been built into the project by making the provision and delivery of furniture and learning materials to the new classrooms conditional on the completion of the infills. Project implementation will be expedited by modifying the contracting arrangements so that contracts are awarded through a private and independent construction management organization (PICMO). Similarly, textbook distribution will be privatized. 2.20 Bank Strategy: The Bank's education sector strategy is aimed at supporting the implementation of a time-slice of the Government's educational development program in collaboration with other donors through the TESC. However, to respond immediately to the crisis facing primary education in Malawi, activities that are focused, ready, simple, and capable of being implemented quickly have been selected from the TESC for fast-track processing under a separate Primary Education Project (PEP). Both the PEP and TESC are consistent with the Bank's Country Assistance Strategy (CAS) in Malawi, presented to the Board on June 9, 1994 (Report No. P6236- MAI). The major objective of the CAS is sustainable poverty reduction through economic growth with equity. To attain this objective the strategy focuses on: (i) expanding access to human capital through improved education, health and other social services; (ii) expanding employment opportunities through a liberal environment for private sector entrepreneurship and initiative, expanded access to financial capital, and policies and programs that encourage labor-intensive activities and participation of women; (iii) enhancing agricultural productivity for poor, small farmers and ensuring sustainable use of land resources; and (iv) introduction of an integrated family- planning strategy to curb population growth and reduce fertility rates. 2.21 Education is central to all four dimensions of the strategy and the focus on primary education is crucial. In developing and implementing the Bank's education strategy, an iterative process has been used with feedback from systematic client consultation (SCC). As the findings of a 1995 SCC exercise carried out in the country show,8 communities ranked the need for schools as one of the two top priorities (the other was credit). Many communities have been participating in the implementation of school construction, through labor and monetary contribution; some have even generated, managed and implemented their projects without assistance from outside. Communities consistently ranked school committees as valued for their ability to deliver relevant services. This seems to validate the contention that communities have the provision of schools as their top priority and that with some facilitation, communities will be enthusiastic participants to this end. The SCC confirms that: (i) there is a high demand for education and communities give top priority to it; (ii) communities are willing to contribute to school construction and maintenance; and (iii) communities 8The SCC was done for the Malawi Social Action Fund project preparation. Nineteen representative communities in all three regions were surveyed .  -9- are interested in participating as early as possible in development projects affecting them. These factors were all taken into consideration when designing this project. The project combines a supply orientation (to provide a quick response to this high demand for education by the communities and to facilitate their involvement) with a demand-driven approach (through the active involvement of the communities). An IEC campaign and community mobilization are underway; some training for community members and leaders as well as district officials has already been undertaken (like the training in the use of hydraform machines and in the techniques of cladding - see Annex 8) and more training is envisaged under the project. Regular feedback will also be sollicited from participating communities and this information will be used to improve the training programs and project implementation. 2.22 Rationale for IDA Involvement: Poverty alleviation and human resource development are at the centre of IDA's strategy in Malawi (articulated in the Country Assistance Strategy Paper that was presented to the Board on June 9, 1994 - see details in para. 2.20) because these are essential elements of the country's development approach. IDA has been active in Malawi's education system for the last thirty years. It has incorporated the lessons learned in project preparation and implementation over those years and is now well positioned to assist the sector to implement the Government's sector development plan. PEP will provide timely assistance to at least partially alleviate the extreme pressure the primary education system now faces.  - 10- 3. THE PROJECT A. PROJECT OBJECTIVES AND SCOPE 3.1 Development Objectives: The main objective of this project is to assist the Government of Malawi in its efforts at poverty reduction and capacity building. The project is being developed as a fast-track forerunner to an overall integrated sector operation aimed at assisting the Government of Malawi implement a time-slice of its long term education sector development program. The main objectives of the program are to provide access to primary education to 90% of school-age children by the year 2005, expand access to lower secondary education, improve quality and resource use at all levels of education, and strengthen planning and management in the sector. Within that framework, this project aims at putting on fast-track selected activities of the program to provide a rapid response to the Malawian educational crisis which followed the elimination of all school fees and associated costs of primary education in 1994. These activities have been identified as among the most critical for poverty reduction and for providing the foundation for capacity building. 3.2 Specific Project Objectives: The specific objectives of this fast-track operation are to: (i) ensur-e that the quantitative gains in enrollments obtained with the introduction of free primary education are maintained through the retention of newly-enrolled children in the system; and (ii) improve the quality of primary education through providing teaching and learning materials, and pedagogical support to, and in-service training for untrained teachers. B. PROJECT DESCRIPTION 3.3 The three main project components, all focused on primary education, are: (i) classroom construction; (ii) pedagogical support and in-service teacher training; and (iii) teaching and learning materials. Component 1: Primary Classroom Construction Program (US$11.8 million) 3.4 Objectives and Scope of Component: The Ministry of Education estimates that 38,000 classrooms will be required over the next ten years to reduce serious overcrowding and to move towards a student: classroom ratio of 60:1. This ambitious construction program will require an improvement in current designs and implementation practices. In response to the high demand for classrooms, over 50% of project funds will be allocated to primary school infrastructure. The overall goal for civil works is to provide as many well-built classrooms as quickly and as cost-effectively as possible, and to provide teachers' housing and administration blocks in appropriate proportion. Health and hygiene needs will require the construction of pit latrines and boreholes at most primary school sites. Sapling shade trees will be planted at all new sites to provide a shade canopy for the many hot months of school attendance. 3.5 Activities to be Supported: The project would finance the construction and provision of furniture for about 1600 primary classrooms. Of this total, 600 will be in 75 new sites (new primary schools) mainly in rural areas; the other 1000 will expand existing schools with overcrowded classrooms especially in peri-urban and some rural areas. The project would finance the construction of an administration block, two teacher houses, two pit latrines and a borehole in each of the new schools and the planting of sapling shade trees at all new sites. Before appraisal, Government undertook a school location exercise to determine the communities in which the new schools will be  located as well as those in which schools will be expanded. To ensure that the exercise was carried out in a transparent manner, the Bank assisted MOE in identifying objective criteria and developing a formula to rank districts, zones or communities on the basis of these criteria (see annex 3c for details). The criteria include: poverty level, average number of pupils per classroom, population density, gender disparity and average enrollment ratios. Once identified, the communities are required to select the sites for the new schools and prepare them for construction (mainly by clearing the sites). Before negotiations the Government submitted the list of districts in which classrooms will be constructed. As a condition of Board Presentation the Government will submit the list of the sites selected in consultation with the communities where new schools will be constructed as well as the names of the existing schools to be expanded, ensuring that this list contains at least 80% of the total number of classrooms to be constructed under this primary school construction component of the project. 3.6 Classroom Construction Using Shell Concept: Because of the serious and immediate need for classrooms (as well as the need for cost-effectiveness), a shell design has been selected for fast track classroom construction. The Ministry of Works and Supplies (MOWS) completed designs for shell-type structures in July 1995. The Bank's Project Preparation Facility (PPF), which is a pilot for this fast-track project, is financing the construction of 96 classroom steel shells, along with teacher houses, administration blocks, and site services. The steel shell design has already been tested in Malawi by UNICEF, on a smaller scale. The results from all these pilot operations have been positive. Communities have shown a lot of enthusiasm for the project and the role they will play in its implementation. They have already moulded large amounts of blocks using the hydraform machines. Annex 3g provides further analyses of alternative construction designs considered before selecting the shell design. Alternative shell types will be used only if these prove to be as cost- effective, as quick to construct and as durable as the steel shell design selected. Although the shell design is new to Malawi, it has a track record in Africa, notably with the Bank's ongoing primary school construction project in Ghana. The shell model is a low-cost high-quality classroom design with construction across two stages: