Burkina Faso - Post-Primary Education Project

Document of the International Development Association acting as Administrator of the Interim Trust Fund Report No. 16025-BUR PROJECT APPRAISAL DOCUMENT ONA PROPOSED INTERIM TRUST FUND CREDIT IN AN AMOUNT OF SDR 18 MILLION TO BURKINA FASO FOR A POST-PRIMARY EDUCATION PROJECT November 11, 1996 Human Development III Africa Region  CURRENCY EQUIVALENTS Currency Unit = CFA franc (CFAF) US$1.00 = CFA franc 490 (April 1996) Fiscal Year School Year January I - December I September - June APE Parents' Association BAC Baccalaureate Diploma BEPC Lower Secondary School Diploma (Brevet dW'etudes du premier cycle) CAP Teachers' pedagogic training groups (Cellule d 'animation pedagogique) CAS Country Assistance Strategy CEG General Education School (College d'enseignement general) CENOU Centre national des oeuvres universitaires CP Pedagogic Advisor (Conseiller pidagogique) CUPB Polytechnic University of Bobo Dioulasso (Centre universitaire polytechnique de Bobo Dioulasso) DAAF Directorate of Administrative and Financial Affairs (Direction des affaires administratives etfinancieres) DBES Directorate of Scholarships (Direction des bourses d 'itudes et des stages) DEP Directorate of Studies and Planning (Direction des etudes et de la planification) DGES Directorate of Secondary Education (Direction generale de 1 'enseignement secondaire) DIFPE Directorate of Inspection and Education Personnel Training (Direction des inspections et de laformation des personnels de I 'iducation) EGE National Consultation on Education (Etats generaux de l 'education) ENSK Teacher Training College (Ecole normale superieure de Koudougou) FEMS Secondary Textbook Fund (Fonds de l 'edition des manuels du secondaire) FJA Rural youth Training (Formation desjeunes agriculteurs) GBF Government of Burkina Faso (Gouvernement du Burkina Faso) IDA International Development Agency ITF Interim Trust Fund administered by IDA (Administrator) MEBA Ministry of Basic Education and Literacy (Ministere de 1 'enseignement de base et de V 'alphabetisation) MESSRS Ministry of Secondary and Higher Education and Scientific Research (Ministere des enseignements secondaire et superieur et de la recherche scientifique) NGO nongovernmental organization OCECS Central Directorate of Secondary Exams and Contests (Office central des examens et concours du secondaire) OFB Directorate of the Baccalaureat (Office du Baccalaureat) PC Project Coordinator PER Public Expenditure Review PPES Post-Primary Education Strategy SA special account SOE statement of expenditure SSRP subsectoral reform program Vice President Jean-Louis Sarbib Country Director Serge Michailof Technical Manager Helena Ribe Staff Member Makha Ndao  Burkina Faso Post-Primary Education Project TABLE OF CONTENTS Project Financing Data .................................................................I Block 1: Project Description .................................................................2 1. Project development objectives ........................ .........................................2 2. Proiect components .................................................................2 3. Beneiits and target population .................................................................2 4. Institutional and implementation arrangements ............................................................ 3 Block 2: Project Rationale .................................................................4 5. CAS objective(s) supported by the project ................................................................. 4 6. Main sector issues and Government strategy ................................................................4 7. Sector issues to be addressed by the project and strategic choices .............. ..................4 8. Project alternatives considered and reasons for rejection ........................ ......................5 9. Major related projects financed by the Bank and/or other development agencies .........6 10. Lessons learned and reflected in the project design .................................... .................7 11. Indications of borrower commitment and ownership ...................................................7 12. Value added of Bank support ..................... ............................................7 Block 3: Summary Project Assessments ........................ .........................................8 13. Economic Assessment ................................................................8 14. Financial Assessment ................................................................8 15. Technical Assessment .................................................................8 16. Institutional Assessment .................................................................9 17. Social Assessment .................................................................9 18. Environmental Assessment .................................................................9 19. Participatory Approach ................................................................9 20. Sustainability .................................................................9 21. Critical Risks ................................. 10 22. Possible Controversial Aspects ................................. 11 Block 4: Main Credit Conditions ................................. 1 23. Board and Effectiveness Conditions ................................. 11 24. Other ..................................11 Block 5: Compliance with Bank Policies ................................. 11 List of Annexes Annex IA: Project Design Summary Annex I B: Letter of Education Sector Development Policy Annex 2: Detailed Project Description Annex 3: Estimated Project Costs Annex 4: Cost Benefit Analysis Summary Annex 5: Financial Summary / Fiscal Impact Annex 6: Procurement and Disbursement Annex 7: Project Processing Budget and Schedule Annex 8: Documents in Project File Annex 9: Burkina Faso at a Glance Annex 10: Status of Bank Group Operations in Burkina Faso   INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION Africa Region Human Development III Project Appraisal Document Burkina Faso Post-Primary Education Project Date: November 11, 1996 [ ] Draft [X] Final Task Team Leader: Makha Ndao Country Director: Serge Michailof Project ID: BF-PA-304 Sector: Education Lending Instrument: SIL PTI: [ ] Yes [X] No Project Financing Data I I Loan IX] Credit(ITF) I I Guarantee I I OtherlSpecify] For Loans/Credits/Others: Amount (US$m/SDRm): 26.0/18.0 Proposed Terms: J Multicurrency I I Single currency Grace period (years): 10 I1 Standard Variable I I Fixed I I LIBOR-based Years to maturity: 40 years Commitment fee: NA Service charge: .75% Financing plan (US$m): Source Local Foreign Total Government 7.0 0 7.0 Communities 0.9 0 0.9 Private Sector 2.7 0 2.7 ITF 8.4 17.6 26.0 Total 19.0 17.6 36.6 Borrower: Republic of Burkina Faso Guarantor: NA Responsible agency(ies): Ministry of Secondary and Higher Education and of Scientific Research (MESSRS) Estimated disbursements (Bank FY/US$M): 1997 1998 1999 2000 2001 2002 Annual .9 2.3 4.8 7.4 5.4 5.2 Cumulative .9 3.2 8.0 15.4 20.8 26.0 For Guarantees: [] Partial Credit [ ] Partial risk Proposed coverage: NA Project sponsor: NA Nature of underlying financing: NA Terms of financing: Principal amount (USS) NA Final maturity NA Amortization profile NA Financing available without guarantee?: NA [ Yes [ ] No If yes, estimated cost or maturity: Estimated financing cost or maturity with guarantee: NA Expected effectiveness date: June 1, 1997 Closing date: June 30, 2002  2 Project Appraisal Document Country: Burkina Faso Project Title: Post-Primary Education Project Block 1: Project Description 1. Project development objectives (see Annex 1A for key performance indicators): The project supports the implementation of the Government's Post-Primary Education Strategy (PPES). It aims to have more and better-trained students graduated from secondary schools at reduced subsidy costs, with increased equality between genders and income levels. Progress in achieving this development objective by 2001 will be evaluated on the basis of the following indicators: (a) the proportion of primary school graduates who continue on to lower-secondary education rises from 27% to 30%; (b) grade repetition decreases from 25% to 20%; (c) total student social subsidies in higher and secondary education are reduced from CFAF 4.8 billion to CFAF 2.2 billion; (d) the proportion of girls enrolled in secondary school rises from 35% to 40% of total enrollment; and (e) 8,000 additional students are enrolled in secondary schools in the 10 provinces with the highest incidence of poverty and lowest school coverage. 2. Project components (see Annex 2 for a detailed description and Annex 3 for a detailed cost breakdown): The project supports expansion of both public and private provision of services to increase access to secondary education and promotes greater participation by girls and by low-income young people. In addition, various measures are designed to improve the quality of education offered and enhance the capacity of the Ministry of Secondary and Higher Education and Scientific Research (MESSRS) to carry out its functions in the education sector. Cost Incl. Contingencies % of Component Category (US$M) Total Access to Lower-Secondary Education Physical 19.5 53 Supports construction of new public schools, operation of schools by nonprofit organizations, and expansion of private schools. Quality of Post-Primary Education Institution- 13.8 38 Supports reforming and improving preservice and inservice training for building; teachers, increasing the availability of textbooks, and reforming curricula Policy and improving testing. Institutional Strengthening of MESSRS Institution- 3.3 9 Supports improving the sectoral planning and managerial capacities of building; MESSRS at the regional and central levels. Project mgmt. Total 36.6 100 3. Benefits and target population Economic benefits * More skilled and productive labor force through increased numbers of students educated: 45,000 additional places in lower-secondary schools, plus increased flows through less grade repetition. (In the Economic Assessment, section 13, the value of this benefit is measured as higher earnings for secondary-school graduates. Higher earnings, in tuni, benefit the country through higher tax payments and increased remittances from expatriate workers). * Reduced fiscal burden: cost recovery through increase in student fees, increased tax revenues on higher earnings of secondary school graduates, shift to private provision of education, reduction in subsidies (see section 13). * Higher quality of education: better trained teachers, improved curricula. Higher quality improves both the skills of the graduates and the efficiency of the system. Social benefits * Increased numbers of girls educated: dormitory rooms and scholarships reserved for girls. * Greater equality of educational opportunity: government education resources concentrated on most underserved populations, with 86% of the school construction program targeted to provinces where the proportion of poor people is the highest.  3 Other benefits * Institution-building: improved ability of MESSRS to manage the education sector; enhanced partnership among government and the private sector, municipalities, NGOs, and communities. Targetpopulations: (a) primary school graduates who pass the national entrance exam for secondary school; (b) boys and girls in the 10 provinces with the lowest access to secondary education and in the zones with the highest percentage of population living below the poverty line; (c) boys and girls from households in the two highest income groups and living in urban areas, who will have increased access to nonpublic schools; and (d) girls in tertiary education. 4. Institutional and implementation arrangements (details are included in the Project Implementation Manual): The project team has appraised the draft Implementation Manual and found it substantially satisfactory. Implementation period: Five years Executing agency: MESSRS Project coordination: A project coordinator (PC), to be assisted by a small administrative staff, will be posted in the Minister's Cabinet and will report directly to the Minister. The PC will be responsible for planning and coordinating project activities within the MESSRS, with other Government agencies/units, and with other groups. Under the PC's guidance, MESSRS line units will be responsible for day-to-day coordination and implementation of activities for which they have prime responsibility. Project coordination will be ensured at all operational levels (central, regional, and community/school) through committees with representatives from relevant Government agencies/units, beneficiaries, private sector groups, and NGOs. Project oversight and policy guidance will be the responsibility of MESSRS' Steering Committee, which is chaired by the Minister; the Committee will be supported by the Interministerial Committee, comprising MESSRS, Ministry of Finance, Ministry of Public Service, and the Ministry of Basic Education (MEBA). Accounting, financial reporting, and auditing arrangements: Directorate of Administrative and Financial Affairs (DAAF)/MESSRS will be responsible for project financial management, reporting, and auditing following systems and procedures acceptable to IDA. Accounting records will be kept for all project-related expenditures and financing following generally accepted accounting principles. Project accounts will be audited annually, following international auditing standards, by independent auditors acceptable to IDA. Disbursements under SOEs will be audited semiannually. The annual audit report will be submitted to IDA within six months of the end of each fiscal year, and the semiannual audit report within three months of the end of each period. The project special account will be managed by DAAF, with the PC as a co-signator. MESSRS' decentralized administration will be complemented with decentralized financial management controls. Monitoring and evaluation (M/E) arrangements: The project supports the development of M/E systems and processes. Under the PC's guidance, project M/E will be the shared responsibility of the MESSRS directorates (DBES, DEP, DGES, and DIFPE). Relevant data collection, validation, analysis, and dissemination will be the responsibility of the DEP. M/E will be guided by (a) the Letter of Education Sector Development Policy (see Annex IB); (b) the Project Design Summary (see Annex IA); and (c) the Implementation Plan in the Project Implementation Manual. M/E will be conducted through (a) monthly meetings of the MESSRS committee of concerned directorates, chaired by the MESSRS Minister (the meetings will be open to staff of IDA and other donors); (b) IDA supervision missions; (c) annual progress review during IDA supervision missions before the end of the first quarter of each fiscal year; (d) midterm review (MTR) of project implementation jointly with IDA and other donors no later than 30 months after effectiveness; and (e) beneficiary surveys and assessments at MTR and at other implementation milestones as shown in the implementation plan. Twice each year (by July 30 and January 31), the PC will transmit to IDA progress reports on project implementation and outcomes, using the format agreed at negotiations. An Implementation Completion Report (ICR) will be prepared within six months after the Credit closing; MESSRS will contribute to the ICR its own evaluation of the project and an operational plan.  4 Block 2: Project Rationale 5. CAS objective(s) supported by the project (CAS: Report No. 15740-BUR, Board Date July 11, 1996) The Burkina Faso CAS recognizes that the country's low level of human capital adversely affects the economic returns to investments in all sectors, and that its long-term growth prospects are seriously limited by the population's low educational attainment and skill levels. Therefore, the CAS is designed to address long-term human capital development by providing Bank support for accelerating the provision of social services over the medium term and building the basis for faster improvement in social indicators. The proposed operation serves this strategy by helping to ensure that increasing numbers of students continue to secondary schools (laying the foundation for meeting the CAS objective of a 35% transition rate by 2005) and that the education they receive is of higher quality. 6. Main sector issues and Government strategy: Sector issues Enrollments at all levels of education remain low in Burkina Faso compared to international standards. Gross primary school enrollment, which was about 5% at the time of independence in 1960, has increased to 38%. At the secondary level, enrollments have increased fourfold over the last decade to about 9% of the relevant age group. The demand for places in public secondary schools is far greater than the availability of places, especially in the Ouagadougou and Bobo Dioulasso urban areas. About 8,800 students are enrolled in technical schools (73% in private schools, most in Ouagadougou and Bobo Dioulasso). A National University, created in 1974 with 533 students, now has over 9,400 students, or about I % of the relevant age group. The quality of education is low, as is evidenced by high dropout and repeater rates and low examination pass rates at all levels. It takes 9.5 years, on average, to produce a lower secondary school graduate (2.4 times longer than necessary'l, and an additional 5.8 years to produce an upper secondary graduate (1.9 times longer). In secondary schools the instructional year is very short; it extends only from the second week of October to the end of May. MESSRS' capacity to use its resources cost-effectively is hampered by its weak capacity for management. It has had limited experience with the implementation of foreign-financed projects. Government strategy In the late 1980s, the Government developed a five-year plan to expand and improve primary education. This plan became a National Basic Education Program, designed to raise the gross enrollment ratio to 46% of the school-aged population by the year 2000, improve the quality of education, increase the enrollment of girls, and promote more cost- effective use of public education resources. Following several studies and technical discussion on the education system, in 1994 the Government organized a national consultation (Etats Generaux de l'Education-EGE) that recognized that resources for education will remain constrained; the EGE proposed a number of measures to increase cost-effectiveness and recommended giving priority to primary education. In response, the Government developed a subsectoral reform program (SSRP) to improve education within severe economic and budgetary constraints. In the context of the SSRI1, the Government developed a Post-Primary Education Strategy (PPES) to: (a) restructure the sector to use resources more efficiently; (b) increase the participation of the private sector in secondary education to free up resources for the expansion of public primary education; and (c) improve quality and efficiency. The PPES was accompanied by an Investment Plan (IP) for 1996-2005. 7. Sector issues to be addressed by the project and strategic choices: The project is designed to support the implementation of the PPES: to increase secondary school enrollments and to improve the quality of secondary education; and to build the Government's capacity to plan and manage resource use in the education sector. Strategic choices The principal strategic choice for this project was between public and private provision of services. Analysis showecl that, although measures to improve efficiency and access could increase intakes to some extent, the public sector would not be financially able to support the initial planned growth in public enrollment of about 13% p.a., or to meet the recurrent costs obligations of any significant expansion in enrollment. However, all-private provision raised serious questions of equity of access to education by all economic classes; private school fees are well beyond the ability of most Burkinabe households to pay. The solution was combined provision of services: expanding private provision (through  5 increased nonpublic first-grade intakes by up to 15% p.a.) where demand is high, and concentrating public resources on lower-income and underserved groups. A second strategic choice, which flowed from the first, involved the geographic locations of the proposed schools to best achieve project goals. The following decisions were made: (a) building on the high demand for private education in the larger cities of Ouagadougou and Bobo Dioulasso, the project will encourage expansion of private schooling there; (b) to keep fees lower, it will target nonpublic schools in secondary cities and less affluent areas for management by municipalities, NGOs, and other nonprofit organizations; and (c) it will support public sector provision of expanded educational opportunities in the poorest and more rural areas. 8. Project alternatives considered and reasons for rejection: School construction. Alternatives rejected: * Continue existing practice whereby the community constructs school facilities, with materials supplied by the Government when necessary. Rejected because (a) experience shows that community construction is slow, so the project would be unlikely to achieve its targets for increased access and enrollment; and (b) the generally poor quality of community construction presents a maintenance issue. * Engage private contractors for the construction of all school facilities. Rejected because replacing community participation (a long-standing tradition in the country) would undermine ownership and sustainability. Alternative selected: Engage private contractors to build the minimum package of facilities; maintain the traditional community/government approach to construct teachers' houses; and assign responsibility for maintenance to the community. Project management and implementation. Alternatives rejected: * Create a project management unit. Rejected because the possibility of disconnect from the mainstream sector management would make the unit ineffective. * Assign project management to the project coordinating unit of Education IV under MEBAM. Rejected because institutional links with MESSRS would be too weak. Alternative selected: Mainstream project management and implementation arrangements within the MESSRS organizational structure, with support for institutional capacity building and sustainability. Incentives to private schools. Alternatives rejected: * Construct matching classrooms by the Government, through credit support, at no cost to the schools. Rejected because it would be inconsistent with cost recovery objectives and would give the appearance of favoring private schools (and higher-income families) at the expense of public schools (and lower-income families). * Reimburse the operators of schools built through credit in the form of student places. Rejected because of the heavy administrative requirements for record keeping and monitoring the cost, value, and distribution of student places. Alternative selected: Provide interest-free reimbursements into an account with MESSRS, with reasonable grace and pay-off periods, and use these funds to further advance project objectives (for details, see the Project Implementation Manual).  6 9. Major related projects financed by the Bank and/or other development agencies: Sectorissue Project Latest Form 590 Ratings (Bank-financed projects only) IP DO Bank- Rural education program ill-suited to the First Education Project Cr. financed environment of Burkina Faso, and theoretical science 430-UV, US$2.85 million; teaching and lack of science facilities. signed in 1973 and closed in 1980 Low coverage of the rural education system; Second Education Project: shortage of qualified staff, and inequality of Cr. 956-UV, US$14.0 opportunity between the rural and the formal million; signed in 1979 and education systems. closed in 1986 Very low access to primary education, high primary Primary Education education unit costs, and inefficient allocation of Development Project: Cr. resources between educational levels. 1598-BUR; US$21.6 million (OED rating: satisfactory). signed in 1985 and closed in 1994 Low and inequitable access to primary education, Fourth Education Project: Cr. S S and poor quality at primary and secondary education 2244-BUR, US$24 million, levels. signed in 1991, expected closing date in 1998 Slow increase in primary education enrollment ratio, Basic Education Project: inequity between boys/girls, rural/urban areas, and planned for FY1998 slow improvement in the quality of education. Other Development Agencies France Poor quality of training of school teachers and General Secondary Education school directors; weak organizational capacity of Support Project: (1996-98, parents' association; and lack of libraries. CFAF 750 million) Insufficient number of: (a) well trained university University of Ouagadougou professors; (b) books for university libraries; and (c) Development Project: 1996- equipment for the science and medical faculties. 98, CFAF 686 million Netherlands Weak management capacity at the University and at Support Program for the the faculty of economics and management. University of Ouagadougou: US$3.0 million African Inefficient scientific education teaching at secondary Under preparation: appraisal Development general education and lack of scientific equipment; expected in 1997/98 Bank inadequate technical and vocational training programs. Overall, donors' support to the education sector in Burkina Faso is complementary.  7 10. Lessons learned and reflected in the project design: * Lesson I (see PCR, Second Education Project): the Government should, at an early stage, develop a comprehensive policy framework that forms the basis for the intervention of all donors in the subsector. Reflecting this lesson, the project is based on the Government's Post-Primary Education Strategy and Investment Plan developed following a national consultation on education. * Lesson 2 (see ICR, Primary Education Development Project): to guide implementation and build momentum, reasonably detailed implementation arrangements covering especially the first two years should be developed before the project becomes effective. Reflecting this lesson, MESSRS has prepared a satisfactory draft implementation manual focusing on detailed programs for the first two years of the project. * Lesson 3 (see ICR, Primary Education Development Project): implementing sensitive reform measures affecting, in particular, secondary and higher education students (e.g., reduction of scholarships) is politically risky; such reforms are not likely to succeed unless they are preceded by extensive consensus-building efforts among the various affected groups. Reflecting this lesson, national and regional workshops were held during project preparation; and extensive discussions on the project's objectives, policy measures, and investment program were conducted with the Burkinabe authorities at the national and local levels (including mayors), the teachers' union, parents' associations, NGOs, and private sector representatives. 11. Indications of borrower commitment and ownership: A Burkinabe delegation of five technical staff, led by the minister of Secondary and Higher Education, visited Washington in June 1995 to present and discuss both the PPES and the IP. The Government has confirmed its commitment to the education sector reforms set out in the SSRP in its Letter of Education Sector Development Policy (see Annex I B). In addition, to build wide understanding and ownership, it has sponsored discussion of most of the SSRP measures at the national and regional levels and with teachers, donors, NGOs, and the unions (see section 10). Draft implementation plans and schedules have been prepared for each element of the investment program; sites for the first two-year school construction program are being identified; and requirements for furniture, pedagogical materials, and equipment have been submitted to IDA and found acceptable. SSRP measures already taken by the Government * Support for female students: as of SY 1995/96, 60% of the 679 students' rooms in the dormitories at the university are reserved for female students. * Reduction in scholarships: between SY 1991/92 and SY 1995/96, the total number of scholarships awarded annually has decreased from 6,123 to 3,407 for higher education, and from 22,750 to 11,345 for secondary education. * Academic improvements: the school year has been lengthened to include 36 weeks of effective teaching, and secondary schools are now required to include two hours per week of supervised homework. . Cost recovery: public secondary school students must now pay registration fees (CFAF 20,000 for the first year and CFAF 5,000 the following years), of which the schools themselves keep 75%; and, starting in 1997, university fees will be increased to at least CFAF 15,000. * Administrative changes: the "Office du Baccalaureat" (OF) and the "Centre National des Oeuvres Universitaires" (CENOU), formerly managed by the university, have been transferred to MESSRS, leaving the university free to focus on academic matters. Similarly, the management of a restaurant at CUPB has been transferred to a private operator. * Support for gender equality: only female students will be eligible for new secondary education scholarships. 12. Value added of Bank support: CAS The preparation of the proposed project was complemented by three other Bank instruments: the CAS, a Public Expenditure Review (PER), and a Poverty Survey. During the preparation of the CAS, both the Ministry of Secondary and Higher Education and the Ministry of Basic Education participated in consultations about the broader aspects of the Bank's assistance strategy and the government's own development strategy. As a result, the proposed project has benefited from the best possible integration into the sectoral and overall strategies.  8 PER The preparation of the PER, which was carried out by a Burkinabe team with the assistance of Bank staff, helped further to ensure that the education strategy is consistent with the overall fiscal framework. The Burkinabe team will continue to carry out PER work each year, thus guaranteeing close monitoring of overall expenditures to accommodate an increased allocation to social sectors, including education. Poverty Survey The Poverty Survey, conducted in 1995 by a Burkinabe team with the Bank's support and discussed at the national level in 1996, helped to define the geographic location of the proposed investment and to better target provinces whose populations are below the poverty threshold and cities whose populations have significantly lower indicators of poverty. Block 3: Summary Project Assessments (Detailed assessments are in the project file. See Annex 8) 13. Economic Assessment (see Annex 4): Cost-Benefit Analysis: NPV=US$ 6.1 million; ERR=17%. * The economic benefits in the cost-benefit analysis are measured by the incremental earnings of secondary school graduates produced by the project. Other benefits identified in section 3 above cannot be quantified in monetary terms and were excluded from the analysis. * The economic costs include the project investment and incremental recurrent costs as well as private direct costs (school fees and other school-related costs incurred by households in sending children to school) and opportunity costs (the income that students forgo by attending school). * The project is economically feasible, as indicated by its NPV of more than US$6.0 million equivalent (using a discount rate of 10%) and ERR of 17%. Risk analysis using Monte Carlo simulations shows that project feasibility is robust with respect to a deterioration in key assumptions, i.e., the probability that NPV would become negative (or that the ERR would fall below 10%) is negligible. * The project impact on Government finances is positive. The present value of net benefits accruing to the Government is estimated at US$3.4 million. This would come from (i) the lower cost to the Government of providing secondary education because of a reduction in its social subsidies to students, increased student fees, and more efficient use of teachers, and (ii) additional tax revenues on the higher earnings of secondary school graduates. 14. Financial Assessment (see Annex Sa): * Incremental recurrent costs of the project to be financed by the Government would average US$1.3 million equivalent (see Annex Table SB) per year from 1997-2001, and would be more than offset by the larger recurrent cost savings expected under the project, averaging US$2.7 million equivalent per year. These can be easily absorbed within the MESSRS budget. Government financing of project recurrent costs beyond the investment phase of the project would also not be problematic as a large share of recurrent costs would be financed either through cost-recovery mechanisms or by the private sector. * Financial incentives in the form of subsidized, long-term credit would be sufficient to induce private school operators to participate in the project. Assuming a fee level in line with prevailing practice (about US$107 equivalent per student year), the financial rate of return (FRR) to a typical private school operator would be about 17%. The FRR is highly sensitive to changes in fee level. An increase in fees by about 5% (to US$112 equivalent per student year) would increase the FRR to 31% (see Annex Table SC). * The NPV in financial terms that would accrue to secondary school graduates and their families as a group is estimated at US$2.8 million equivalent or 45% of total net benefits (see Annex 4). The poorer students and girls whose education costs would be subsidized under the project, would account for a more than proportionate share of total net benefits. 15. Technical Assessment: The project is technically sound. Within the context of the poverty agenda, it addresses the issues of access and equity systematically on the basis of needs, opportunities, and comparative advantages. Project components (construction program, teacher training, textbooks, curriculum reforms, etc.) were prepared on the basis of international as well as regional norms and practices, and will be implemented in accordance with acceptable standards. Innovations, such as school management by NGOs and support to private schools, are based on sound technical and economic feasibility studies (see project file). Investments and recurrent cost estimates for the project are based on estimates of prevailing market unit cost, with appropriate allowance for inflation. A reasonable level of physical contingencies has also been included in the cost estimates.  9 16. Institutional Assessment: Executing agencies: The 1996-97 policy reforms and the formulation of the Letter of Education Sector Development Policy, demonstrate MESSRS' ability to formulate a policy agenda and carry it out through its decentralized organization. The project includes measures to strengthen MESSRS' capacity at all operational levels, particularly in the areas of planning, coordination, supervision, and monitoring and evaluation. Project management: MESSRS has limited experience in implementing donor-financed projects. Therefore, the project includes measures to strengthen project management and reduce the procurement and accounting burden on the Ministry: (a) appointment of a Project Coordinator in the Minister's cabinet (see Section 4); (b) recruitment of a procurement specialist and an accountant, and the installation of an accounting system acceptable to IDA at DAAF; and (c) delegation of about half of the construction management to Faso Baara, an experienced contract management agency. 17. Social Assessment: Several social factors may affect the project's abilities to achieve its goals. A positive effect is likely to come from the identified high demand for educational services in the population centers of Ouagadougou and Bobo Dioulasso. Nationwide, however, at least three factors may make people unwilling or unable to take advantage of education opportunities: (a) economic costs; (b) opportunity costs, particularly for girls; and (c) a high level of mobility. People in Burkina Faso relocate in search of employment or education and for purposes of marriage: 28% of the population of 10 years or older (of whom more than half are females) have migrated at least once. The project includes measures to reduce the economic costs of education (scholarships for girls, broadened public provision of education, reduced cost of textbooks). The problem of high mobility challenges the design and financing of education services; but by standardizing education throughout the country, and providing schools in more locations, the project improves the chances that people who move will be able to continue their education. 18. Environmental Assessment: This is a Category C project. No environmental risks are foreseen. Construction would comply with national environmental laws. Schools would be built following acceptable standards. Many classrooms would be associated with existing schools. Provision of latrines and promoted hygiene will have positive environmental impact. There would be no displacement of people. 19. Participatory Approach: Identification/Preparation Implementation Operation Beneficiaries/community groups CONS and COL COL COL Intermediary NGOs IS and COL COL COL Academic institutions COL COL COL Local government CONS and COL COL COL Other donors IS and CONS IS and CONS Is and COL Other (specify) Note: IS = information sharing, CON = consultation, and COL = collaboration. 20. Sustainability: The project is designed to promote long-term sustainability by (a) developing a capacity in MESSRS to constantly evaluate the quality and effectiveness of secondary and tertiary education, and to take immediate remedial actions as necessary; (b) reducing expenditures on scholarships, and other social expenditures, freeing resources for improvement in quality; (c) ensuring that all public secondary schools have sufficient resources to finance nonteaching expenditures; and (d) ensuring quality education in nonpublic secondary schools to encourage increased enrollment without placing an additional burden on the Government's budget. The savings associated with the planned policy measures are summarized in Annex 5. These include (a) direct revenue and savings from increasing university and registration fees, reduction of grants and scholarships, and a cost-recovery scheme for textbooks; and (b) indirect savings associated with such measures as the privatization of the management of the university restaurant canteens and of the student health insurance scheme, and the redeployment of some of the teaching staff. These savings (13% of recurrent budget) actually outweigh the incremental recurrent costs (7% of recurrent budget) associated with the investments proposed in the project.  10 21. Critical Risks (see fourth column of Annex 1A): Risk Risk Rating Risk Minimization Measure Project outputs Private sector may not be Moderate Extensive discussions (including feasibility to development responsive to incentives studies) with private operators, NGOs, and objectives offered. municipalities conducted during project's preparation have shown a great interest by the private sector. Relevant project components are being designed and will be implemented in collaboration with the private school operators. Students and teachers may High Extensive consultations with teachers derail the reforms which affect conducted during preparation. The parents them directly (reduction of support the pedagogic measures. Progressive student's social subsidies and reduction of scholarships has been longer working hours for implemented under the ongoing education teachers). project. The project provides for more pedagogical material and support to teachers. Proposed cost recovery may Low The demand is far greater than the availability have a negative impact on of places and there is a tradition of cost enrollment. recovery in Burkina. The project stabilizes the fees at a equitable level. Future budget allocations may Low Most of the additional costs implied by the not be adequate project can be financed through the direct savings generated by the SSRP. PERs will be an integral part of the budget making progress. Project MESSRS' capacity to monitor Low Private architectural firms and Faso Baara (a components to and implement the construction contract management agency) will assist outputs program may not improve. MESSRS. MESSRS staff will also benefit from a training program. Quality of private schools may Moderate The project provides support for inservice not attract more students. teacher training. The student assessment system will help to disseminate the results of different schools. The matching classes will constitute an incentive for quality improvement in private schools Overall project The overall risk Risks are further mitigated by IDA's and risk rating that the project other donors' well-developed policy dialogue could fail to with Burkina Faso in the education sector; by achieve its the close integration of the education sector development dialogue in the overall macro dialogue; and outcome is rated by special supervision efforts planned during moderate. the early stages of project implementation  11 22. Possible Controversial Aspects: Two aspects of the project may be controversial. First, MESSRS may be criticized for providing support in the form of physical facilities to private operators and NGOs, thus helping them make additional profits. The constructive dialogue with key stakeholders conducted by the Government during project preparation will continue during project implementation, and benefits realized from the project's support to the private sector will be in turn directed to support the less privileged segments of the population. It is unlikely that this policy will not be acceptable to the public. Second, higher education students and teachers may oppose the efficiency measures that will affect them directly (reduction of social subsidies and longer working hours for teachers). Improved quality of education will help the concerned groups better understand the ultimate goal of the efficiency measures. Block 4: Main Credit Conditions 23. Board and Effectiveness Conditions: As a condition of Board presentation, the Government has furnished IDA a signed version of the Letter of Education Sector Development Policy (see section 4 and 11). As conditions of credit effectiveness, the Government would: * Furnish the Project Implementation Manual, in form and substance acceptable to IDA (see section 4); * Publish in the Legal Gazette the Arrete No. 96-096/MESSRS/SG dated September 10, 1996, pertaining to university fees (see section I1);