Malawi - Education Sector Credit II

Document of The World Bank FOR OFFICIAL USE ONLY Report No: 18755 IMPLEMENTATION COMPLETION REPORT REPUBLIC OF MALAWI EDUCATION SECTOR CREDIT II (CREDIT No. 2083-MAD) December 29, 1998 Human Development 1 Eastern and Southern Africa Africa Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS At the time of Project Appraisal Malawi Kwacha 2.65= US$1 At the time of project completion mission Malawi Kwacha 25 = US$1 WEIGHTS AND MEASURES Metric System FISCAL YEAR OF BORROWER April 1- March 31 ABBREVIATIONS AND ACRONYMS AfDB Africa Development Bank CERT Center for Educational Research and Training DflD Department of International Development (U.K.) ICR Implementation Completion Report IDA International Development Association MANEB Malawi National Examination Board MASTEP Malawi Special Teacher Education Program MCDE Malawi College of Distance Education MIE Malawi Institute of Education MIITEP Malawi Integrated In-Service Teacher Education Program MOE Ministry of Education PIU Project Implementation Unit PSBU Primary School Broadcasting Unit USAID United States Agency for International Development Vice President Callisto E. Madavo (AFRVP) Director Barbara Kafka (AFC03) Sector Manager Ruth Kagia (AFTH1) Task Manager Peter Ngomba (AFTH4)  FOR OFFICIAL USE ONLY Table of Contents PREFACE i EVALUATION SUMMARY ii PART 1: PROJECT IMPLEMENTATION ASSESSMENT 1 A. INTRODUCTION AND BACKGROUND 1 B. ACHIEVEMENT OF OBJECTIVES I C. IMPLEMENTATION RECORD AND MAJOR FACTORS AFFECTING THE PROJECT 2 D. PROJECT SUSTAINABILrry 6 E. BORROWER PERFORMANCE 6 F. BANK PERFORMANCE 7 G. ASSESSMENT OF OUTCOME 8 H. FUTURE OPERATIONS 8 1. KEY LESSONS LEARNED 9 PART II: STATISTICAL ANNEXES 10 Table 1: Summary of Assessments 10 Table 2: Related Bank Loans/Credits 11 Table 3: Project Timetable 12 Table 4: Cumulative Estimated and Actual Loan Credit Disbursements (US$ Millions) 13 Table 5: Key Indicators for Project Implementation 14 Table 6: Key Indicators for Project Operation 21 Table 7: Studies Included in Project 22 Table 8A: Project Costs (US$ Million) 23 Table 8B: Project Financing (US$ millions) 24 T;ible 9: Economic Costs and Benefits 25 Table 10: Status of Legal Covenants 26 Table 11: Compliance with Operational Manual Statements 28 Table 12: Bank Resources: Staff Inputs 1/ 29 Table 13: Bank Resources: Missions 30 APPENDIXES A. Completion Mission's aide-memoire B. Borrower contribution to the ICR C. Miscellaneous appendixes: I - List of Persons Met 2 - List of Sites Visited 3 - Sites for Primary School Classroom Rehabilitation D. Map This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  IMPLEMENTATION COMPLETION REPORT MALAWI EDUCATION SECTOR CREDIT II (CREDIT No. 2083-MAI) PREFACE 1. This is the Implementation Completion Report (ICR) for the Second Education Sector Credit in Malawi (Cr. 2083-MAI), for which a credit in the amount of SDR 29.5 million (US$ 36.9 million equivalent) was approved on December 12, 1989 and made effective on April 4, 1990. 2. The Credit was closed on June 30, 1998, after having been extended twice, for one year on each occasion. Over 99.5% of the Credit was disbursed. Final disbursement took place on November 10, 1998, at which time a balance of about $192,000 was cancelled. 3. The ICR was prepared by Mr. Peter Ngomba, Human Development Group of the Africa Region with assistance from Mr. Mulugeta Wodajo (Consultant) and Ms. Anne Anglio (Team Assistant). It was reviewed by Mrs. Ruth Kagia (Sector Manager) and Ms. Barbara Kafka (Country Director). The Borrower had no comments on the ICR. 4. Preparation of this ICR was started in April 1998 during the Bank's final supervision mission. An ICR mission comprising Mr. M. Woda.jo and Ms. Y. Amde, consultants, was undertaken between May 16-30. The Borrower contributed to the preparation of this ICR by preparing its own evaluation of the project's execution and initial preparation which is included in the report as Annex. 5. This report is based on material in the project files, discussions with Bank staff and officials of the Govemment who were involved in the preparation and implementation of the project, data collected by the ICR mission in the field and site visits to institutions assisted under the pro.ject. A list of officials in the Ministry of Education and project institutions as well as the sites visited by the ICR mission are included as Appendices.  IMPLEMENTATION COMPLETION REPORT MALAWI EDUCATION SECTOR CREDIT II (CREDIT No. 2083-MAI) EVALUATION SUMMARY Introduction 1. IDA has been active in the education sector in Malawi since 1967. This is the seventh education project to be completed. Two more are under implementation. In spite of considerable assistance from IDA and other Donors, the sector still faces major constraints, particularly with regard to improving the quality of education at all levels, expanding access to secondary education, and generally in strengthening institutional capacity for planning, management and implementation. Project Objectives 2. Statement of Project Objectives. The projects development objective was to assist the govermment in financing the second phase (1990-95) of its ten-year Education Plan. Specifically the project was intended to: (a) improve the quality of education at all levels; (b) expand access to primary and secondary education; (c) strengthen sector management, budgeting and planning; and (d) improve resource mobilization to the sector. To achieve these objectives the project financed a number of interventions in primary, secondary and post-secondary education. It also sought to address deficiencies in planning and management of the sector as well as to introduce policy measures that would increase resources available to the sector. Assessment of Project Objective. 3. While the impact and outcome of the various objectives and components were uneven, on the whole the project was satisfactory. Many targets were reached and some even exceeded. In particular three components aimed at improving educational quality at the primary level -- rehabilitation of primary school classrooms, preparation and distribution of textbooks and teachers' guides, and upgrading primary school teachers through an innovative special teacher education program (MASTEP) -- achieved or even exceeded their objectives. Following is a summary of attainment of project objectives, grouped by component as in the appraisal documents. .i.  Implementation Completion Report Evaluation Summary Malawi - Education Sector Credit JI 4. Textbook Preparation and Distribution. The project achieved highly satisfactory results in the preparation and distribution of primary school textbooks and teachers' guides. At appraisal, the plan was to provide textbooks in four subjects for Standards I to 4 only. Coverage was extended to Standard 8 in the course of implementation. Over 7 million copies of pupils' books and teachers' guides were prepared, printed through ICB and distributed. This helped alleviate textbook shortage in the country; it also resulted in strengthening significantly the technical capacity and expertise of the Malawi Institute of Education (MIE). 5. Teacher Training and Upgrading. Project achievement was satisfactory in upgrading teachling skills and academic level of over 4,000 primary school teachers through a new and innovative program that combined short residential training with supervised teaching and field seminars. A revised version of this model is now adopted by the Ministry of Education as the main vehicle for upgrading primarv school teachers and is replicated by the Bank and other donors in follow-up projects. 6. Rehabilitation of Primary School Classrooms. The project achieved highly satisfactory results in rehabilitating over 2,000 classrooms, almost ten times the number planned at appraisal. In tlhe wake of a massive expansion of primary school enrollment following the abolition of school fees by a government that came to power under a new multi-party election, the IDA's prompt response to Government's urgent request to assist with school rehabilitation is commendable. 7. Improving Educational Meaxurements. The project achieved satisfactory results in strengtlhening the Malawi National Examinations Board (MANEB) in diversifying primary schools examinations and in increasing its computer capacity. 8. The project's achievement was unsatisfactory with regard to the provision of equipment and fi4rniture for primary schools and instructional materials and science kits for secondary schools. Also, the project was not successful in strengthening school supervision. Curriculum reform at the secondary level was not undertaken. The project was partially successful in expanding access to secondary education by creating about 3000 student places in ten new Distance Education Centers (DEC). But the DECs (now converted to day secondary schools) do not have appropriately qualified teachers nor essential science equipment and instructional materials, as a result of which the quality of instruction is not at par with the other secondary schools in the country. 9. Institutional Development. The project was partially successful in initiating the inherently difficult and complex task of devolving educational management to districts and regions. Project in-puts (e.g. provision of houses for district inspectors, local training and seminars for teachers and supervisors) have been implemented. Government has began to partially devolve certain functions (notably personnel and to a lesser extent, accounting) but additional resources and concerted effort by government and others is required. Follow-up projects by the Bank and other donors (notably DflD and GTZ) are providing additional assistance in pursuit of this ob.jective. 10. Resource Mobilization. The project was successful in mobilizing additional resources to the sector. Education's share of total government expenditure exceeded targets sought at appraisal by almost two-fold, from 11% at appraisal to 23.8% in 1994-95. School fees were increased at iii  Implementation Completion Report Evaluation Summary Malawi - Education Sector Credit II secondary schools and at the University. Boarding fees were also increased, and later government introduced day secondary education as official policy. While these and other related policy changes may not be directly attributable to the project, at the very least the project did serve as the main vehicle for the IDA and the govemment to pursue policy dialogues for mobilizing additional resources to the sector. Implementation Record and Factors Affecting the Project 11. Success in implementing the individual project activities was uneven for several reasons: first the project's scope was too broad and extensive in relation to implementation capacity in the sector. As a result certain components (e.g. provision of science kits and leaming materials for secondarv schools) did not perform as well as others (e.g. primary school textbook preparation). Second. the Project Implementation Unit (PIU) was over stretched as it was completing implcmentation of the preceding project when this project was launched, thereby delaying project start-up. Third, at the beginning the PIU also lacked the requisite technical staff (architects, quantity surveyors) as these positions were previously held by expatriate staff and were being localizcd at the time. These problems were further compounded by factors largely beyond the control of the govemment such as serious economic and financial problems in the country, succcssive years of drought, and disruption in extemal assistance. These factors severely constrained government's ability to release counterpart funds in a timely manner. Project Sustainability 12. The project is likely to be sustained for the foreseeable future. Government has demonstrated its strong commitment to the sector by doubling its share of allocation. Also, govement is pursuing cost saving and efficiency measures in the sector, including introduction of day secondary schools, affordable school designs and construction, and more cost-effective approaches in teacher education. Borrower Performance 13. On the whole borrower performance was satisfactory. Borrower's performance during preparation is rated satisfactory as the borrower was actively involved in the preparation of various studies that provided valuable in-put for preparation of the project. Though uneven, borrower performance during implementation was generally satisfactory. After initial delays, the PIU was able to implement the project largely as planned, although as noted earlier implementation success was not even across components. Bank Performance 14. Bank performance during preparation is rated satisfactory. Appraisal results were mixed: potential risks were appropriately identified but implementation constraints were underestimated. Bank performance during implementation was on the whole satisfactory. Assessment of Outcome 15. Overall, the project's outcome was satisfactory. Three components in particular were particularly successful: the preparation and distribution of over 7 million textbooks and iv  Implementation Completion Report Evalutation Summary Malawvi - Education Sector Credit II thousands of teachers' handbooks has alleviated critical shortage of learning materials and created in-country publishing capacity at MIE for textbooks and related leaming materials: rehabilitation of thousands of otherwise unusable classrooms has eased overcrowding; and finallv the Malawi Special Teacher Education Program (MASTEP) has introduced a new and less costly model for teacher upgrading. A modified version of the model has been adopted by the Ministry and replicated by the Bank and other donors. Future Operation 16. To enhance and sustain the effectiveness of this project, Govemment should pursue introduction of efficiency and other cost saving measures which are an integral part of the Sector Investment Plan (SIP) currently under discussion. In fact, MOE is in the final stages of finalizing a detailed Sector Investment Plan (SIP) which is intended to serve as the framework for investment in human resources by the govemment and all donor agencies in the future. Donor agencies active in the sector (which includes DflD, USAID, GTZ, AfDB, DANIDA, JICA, in addition to the Bank) meet regularly with MOE officials. This has served as a useful forum for the Gov emment to present successive drafts of the SIP for the their review and comments. In the meantime, pending the finalization of the SIP, the Bank has approved two projects that finance discrete investments in primary and secondary education that are manifestly within the SIP's overall objectives and resource confines. ODA, AfDB and GTZ are doing likewise. Govemment continues to demonstrate a strong commitment to human resource development. About 25% of the Govemment's total recurrent budget is allocated to education, a clear testimony to that commitment. There is virtually no scope for Govemment to increase its allocations beyond present levels. Thus future Bank operations in the sector are taking this resource constraint into account in designing projects that promote such measures as increased cost recovery especially at post-secondary level, community involvement in school construction and maintenance, affordable school designs, non-boarding secondary schools, and more cost-effective approaches in teacher training ( such as MIITEP). 17. Govemment should also pursue vigorously measures for retaining publishing and reprinting rights for the textbooks that were prepared by MIE. Ownership of copyright and publishing rights by non-govemment agencies may otherwise adversely affect Bank participation in the financing of textbook printing through intemational bidding (ICB). Key Lessons Learned 18. The following are some of the lessons learned from this operation: * Flexibility during implementation is critical in responding to new and pressing developments in the sector; * Great weight should be given to assessment of implementation capacity during preparation and appraisal; * Successful institutional development initiatives require sustained assistance over a period of time and in the course of successive projects; * Implementation staff (technical, managerial, financial) should be put in place before a project is initiated. v  IMPLEMENTATION COMPLETION REPORT REPUBLIC OF MALAWI EDUCATION SECTOR CREDIT n (CREDIT No. 2083-MAI) PART I: PROJECT IMPLEMENTATION ASSESSMENT A. INTRODUCTION AND BACKGROUND I. Since independence in 1964, Malawi has had to contend with a series of economic difficulties caused in large measure by falling world prices for its exports and rapid escalation in import prices, particularly fuel and capital goods. Also, regional political instability and civil strife in Mozambique and elsewhere in the region closed its access to ports thereby escalating transport costs and causing a large influx of refugees. While some of these pressures, particularly regional instability and influx of refugees have largely abated, Malawi continues to face major economic difficulties and remains one of the poorest countries in the continent. Notwithstanding the above, the country has made a remarkable transition to a multi-party democracy, beginning with the first multi-party elections held in 1994. In education too the country has made major strides in spite of severe economic and resource constraints. The World Bank has for a long time supported the education sector in Malawi. The first Bank-assisted project was approved in 1967. Six additional projects have been completed since and two more are under implementation. In spite of considerable assistance from the Bank and other Donors, the sector faces major constraints, particularly with regards to upgrading the quality of instruction at all levels, expanding access at the post primary level, and generally in strengthening institutional capacity for planning, management and implementation. B. ACHIEVEMENT OF OBJECTIVES 2. The Project's development objective was to assist the Government in the financing of the second phase (1990-1995) of its ten-year Educational Plan. Specifically, the project' s objectives were to: (i) improve the quality of education at all levels; (ii) expand access to primary and secondary education; (iii) strengthen sector management, budgeting and planning; and (iv) improve resource mobilization to the sector. To achieve these objectives, the project contained the following components: (a) Primary Education: curriculum reform and development, textbook preparation and distribution, upgrading the quality and expanding the output of primary school teachers. strengthening the inspectorate and examination reforms; (b) Secondary Education: curriculum reform, improving access, provision of textbooks, library books and science kits; (c) Post-Secondary Education: staff development at the Faculty of Commerce, and modest expansion of output of accountants; (d) Institutional Development: devolution of key educational services to the districts and regions; (e) Resource Mobilization: increasing education's share of the govemment budget and reforms in fee structure in schools and at the University. 1  Implementation Completion Report Part 1: Project Implementation Assessment Malawi - Education Sector Credit II 3. The Development Credit Agreement was amended on July 29, 1993 to reflect the reallocation of the proceeds of the Credit, following the Government's decision to drop the component on Primary School Broadcasting Unit (PSBU). This decision was based on the findings from pilot phase of the program which demonstrated that PSBU was unsustainable. The funds released were reallocated mostly to finance textbook preparation and distribution for additional grades (standards 5 to 8). Achievement of Project Objectives 4. The project objectives were responsive to the country's needs, and in as much as the project financed specific investment costs of the second phase of the country's educational plan, they were consistent and fully integrated with the country's development plan. The project' s components were too broad and extensive as they covered virtually the entire sector, from expanding access to primary and secondary schools, teacher training/upgrading, curriculum development, production/distribution of textbooks, to mention the main areas assisted under the project. In retrospect a simpler and more focused project design would have been more in line with the implementation capacity in the country. The project was designed as a sector investment operation aimed at implementing certain policy reforms, and proceeds of the credit were to be disbursed as the reforms were implemented. The policy reforms sought (such as increasing education's share of total govemment budget, increasing tuition, boarding and other school fees), were achieved ahead of schedule, thereby preempting the need to tie disbursement to those changes. C. IMPLEMENTATION RECORD AND MAJOR FACTORS AFFECTING THE PROJECT Implementation Experience 5. On the whole the project's implementation record was satisfactory, though uneven with some components doing better than others. On account of the devaluation of the Malawi Kwacha against the SDR, over US $41 million was available to the project (the total sum of the credit was $36.9 million) and 99.5% of that (or US $ 41.2 million) was disbursed. The remaining amount (about US$193,000) was canceled. The closing date was extended twice (for one year each time) to allow for delays in the start up of the project and in order to complete components that were at advaniced stages of implementation. The PIU took its experience with previous projects into account to ensure that the classrooms, staff houses and other civil works were simple and functional in their design and their construction was of acceptable quality. With the exception of two or three small contractors whose contracts had to be canceled and retendered for their persistent delays and poor performance, the contractors on the whole performed well and were supervised on a regular basis by technical staff from the PIU. Achievement of Project Objectives 6. As a whole the project was satisfactory in achieving its development objectives. Three components, rehabilitation of primary school classrooms, preparation and distribution of textbooks and teachers' guides, and upgrading of primary school teachers through an innovative special teacher education program (MASTEP) achieved or even exceeded their objectives. Details of achievements of the various components, grouped by sub-sector, are discussed below. 2  Implementation Completion Report Part 1: Project Inpletnentation Assessment Malawi - Education Sector Credit II Primary Education 7. Curriculum Review, Textbook Preparation and Distribution. Following an intensive review of primary school curriculum, the project assisted the preparation of instructional material based on the new curricula. Project achievement with regards to the preparation, production and distribution of primary school textbooks and teachers' aids was highly satisfactory. At appraisal, the project envisaged the provision of textbooks and teachers' guides in the four principal primary school subjects (namely, Chichewa, English, Arithmetic and General Studies) for only Standards I to 4. In the course of project implementation, coverage was extended to include standards 5 through 8, utilizing funds reallocated from the component for school broadcasting which was dropped. The technical capacity and expertise of the staff at the Materials Production Unit of MIE was strengthened substantially, enabling MIE to successfully complete the preparation and trial testing of over 63 titles of manuscripts for Standard I to 8 pupils' books and teachers' guides until Camera Ready Copy (CRS). Over 7 million copies of pupils' books and 208,000 copies of teachers' guides were printed through ICB and distributed to schools through the PIU and the District Education Offices. 8. Teacher Training and Upgrading. Project achievement in upgrading primary school teachers was satisfactory. A total of 4,300 primary school teachers (compared to the appraisal target of 4,500) were provided in-service courses to upgrade their teaching skills and academic level through a special teacher training program, known as the Malawi Special Teacher Education Program (MASTEP) developed under a previous project (Cr. 1767). The program consisted of a three-year program that combined short residential courses at teacher training colleges with supervised teaching in primary schools and seminars in the field. Learning modulcs prepared specifically for the program covering both content and teaching methods were utilized, supplemented by handouts and taped lectures. The program received positive ratings by an DflD mid-term evaluation team in 1994 as well as by CERT at the conclusion of the program. The projcct was also successful in expanding the output of pre-service teachers training by expanding the capacity of Montfort Teacher Training College from 160 to 540 places. 9. Primary School Radio Program. At appraisal, the project contained a provision for improving primary school radio programns. Technical assistance (12 staff years) wore provided for establishing a Primary School Broadcasting Unit (PSBU) and for training Malawian counterparts. The project envisaged a pilot test to measure the cost-effectiveness of the program as well as annual evaluations. Following the result of the pilot test, the Government concluded that the recurrent cost implications of the program would be unsustainable if the scheme were to be replicated at a national level and decided, with the Bank's concurrence, to drop the component altogether. 10. Improvement in Measurement vfAchievement. The project's achievement was satisfactory in assisting the Malawi National Examinations Board (MANEB) in developing and incorporating standardized multiple-choice items as an integral part of the primary school leaving examinations. The project expanded MANEB's computer capacity and provided Malawian senior as well as junior technical staff with expertise in the field of tests and measurements. Expatriate technical assistance staff planned under the project was instead provided by DflD. 11. Primary School Supervision. The project's achievement to strengthen primary school supervision was unsatisfactory. The Government provided 30 inspectors (through redeployment of staff) as planned, and 60 motorcycles were procured from the proceeds of the credit, but the 3  Implementation Completion Report Part I: Project Implementation Assessment Malawi - Education Sector Credit II inspectors were unable to undertake frequent inspection visits because of shortage of recurrent budget. The Govemment and the Bank are pursuing a more intensive strategy to strengthen the inspectorate in a follow-up project. 12. Primary School Rehabilitation. The project's achievement in rehabilitating primary school classrooms was highly satisfactory. At appraisal, the project intended to provide roofing sheets to 228 unroofed and unusable primary schools. With the sudden and massive expansion of primary school enrollment in 1994 (over I million additional children were admitted to primary school in just one year when school fees were abolished). The Bank responded by expanding the scope of this particular component to include not just re-roofing but a complete rehabilitation of unusable classrooms almost ten times the original number. Over 2,000 classrooms were provided with newv roofs, their floors were resurfaced in most cases, and their overall structure strengthened by providing them with concrete (or in some cases steel) beams. As a result the classrooms improved not only qualitatively, but were able to accommodate an estimated 100,000 additional pupils. The devaluation of the Malawi Kwacha against the SDR enabled the Government and the Bank to successfully complete this undertaking. 13. Furniture and Equipment. The project's achievement in the provision of firniture and equipment was unsatisfactory. Only a negligible amount (about 4%) of the furniture planned at appraisal was provided (3,000 out of a planned 75,000). As a result of the massive expansion of primarn school enrollment, the Government's highest priority was provision of classrooms. Funds allocated for this component was used for classroom rehabilitation. Secondary Education 14. The project's achievement in expanding access to secondary education was partially satisfactory. Ten new two-stream Distance Education Centers were completed, thereby creating 3,200 new student places. MOE has converted the Centers into day secondary schools, consistent with new policy changes in secondary education. The quality of instruction, however, is not at par even with other Malawi secondary schools, as the institutions lack laboratories and secondary school textbooks. The project's achievement was unsatisfactory regarding curriculum reform, provision of instructional materials and strengthening school inspection at the secondary level as very little was done in these areas beyond preliminary seminars, procurement of few science kits and a limited number of library books. Vehicles procured under the project for school inspection are facing the same problems encountered by the district officers at the primary school level; namely. a lack of adequate funds for fuel and maintenance. Post-Secondary Education 15. The project's achievement in its assistance to the Faculty of Commerce at the Polytechnic (University of Malawi) was partially satisfactory. Under the twinning arrangement with the City University of Dublin (CUB), and the University of Saskatchewan, staff taught various courses in the areas of finance, management, marketing and small business enterprises at the Faculty of Commerce for a total of 12.5 staff-years. Lecturers from the Faculty of Commerce undertook post-graduate studies in management and finance-related fields at CUB. Only the fellowship (staff training) component of the twinning arrangement with the University of Saskatchewan was implemented. These staff exchange anld training schemes together with the local teaching materials developed by the visiting staff and teaching equipment (mostly computers) procured 4  Implementation Completion Report Part I: Project Irnplementation Assessment Malawi - Education Sector Credit II under the project have helped to improve the quality of the Faculty of Commerce. There was also a modest expansion of output of accountants, from 50 to 65 per year. Due to a high staff turnover as well as inadequate funding for research, the Faculty of Commerce has yet to develop into a mature academic community of students and scholars. Institutional Development. 16. The project's objective to strengthen educational management at the regional and district level was partially attained. With the help of project in-puts, particularly local training, seminars, of operating costs and staff houses for district inspectors, MOE was able to initiate the first phase of its decentralization plan. Accounting and personnel functions are being devolved to regions and districts and some fifteen zones have been established to facilitate the work of school inspectors and supervisors. Sustained assistance over a longer period of time, as well as concerted effort and commitment on the part of govemment is required to attain full scale decentralization. Follow-up projects by IDA and other donors (notably DflD and GTZ) are pursuing these objectives with additional assistance to help strengthen district and regional education offices. Resource Mobilization. 17. The project sought to implement policy changes which would increase the resources available to the sector. The main policy objective in this regard was to increase education's share of total govemment recurrent budget from about 11% at appraisal to 15% by 1994-95. This objective was attained, and even exceeded as education's share stood at 23.8% of total Govemment recurrent expenditure bv 1994-95 and about 25.2% in 1997-98. The other policy chaniges aimed at increasing tuition fees in secondary schools and at the University. increasing boarding fees and discontinuing provision of free exercise books and writing materials in secondarv schools. These policy changes have been partially attained. Tuition and boarding fees were increased in secondary schools and at the University. With regard to boarding, the Govcmment went farther to adopt day secondary education as official policy. Free provision of exercise books was discontinued in 1991 but reinstated in 1995 when primary schools fees were abolished by the new govemment under a multi-party system. Some of those policy changes may not be directly attributable to the project, but the project did serve as the main vehicle for the Bank and the Govemment to pursue policy dialogues for mobilizing additional resources to the sector. 18. Factors not generally subject to government control. Malawi continued to face serious economic and financial constraints during the period the project was under implementation (1990- 1998). These included two major droughts (1992 and 1994) and falling tobacco prices. These setbacks cumulatively resulted in a loss of more than 25% in annual GDP, according to Bank estimatcs. These constraints were further compounded by disruption in extemal assistance that lasted I 8 months (1992-1994) as donors reacted to poor govemance and the need for political democratization. 19. Factors generally subject to government control. In 1994 a major macroeconomic crisis developed in the months preceding the first multi-party elections in the country resulting in deep depreciation in the exchange rate and falling public revenues. Remedial actions were instituted by the Govemment with the help of the IMF and the situation improved, though it continued to remain fragile. As the govemment's financial constraints worsened, it was forced to introduce "cash budgeting" which meant that Govemment could release funds on a monthly basis equal to 5  Implementation Completion Report Part : Project Implementation Assessment Malawi - Education Sector Credit II the amount of revenue collected the previous month. This exacerbated the local funding situation for the project as the Project Implementation Unit (PIU) found it difficult to pay civil works contractors the local share (20%) of their contracts. Further, the abolition of school fees in 1994 and the resulting massive increase in school enrollment (total primary school enrollment grew by over I million pupils in just one year) added an excessive burden to an already over-stretched MOE. Various organs of MOE, including the PIU, were asked to provide assistance (e.g. construction material, technical services), thereby adding additional burden to their regular project implementation duties. 20. Factors subject to the control of the project implementation unit. At the beginning, the PIU did not have the requisite technical staff with the appropriate qualifications (architects, accountants, quantity surveys, etc.) Also, the Unit was still involved in the implementation of the final phases of the First Education Sector Credit (Cr. 1767). Inevitably, implementation of this project was delayed by these factors. Starting in 1992, a full contingent of technical staff (includinig an experienced project manager) were appointed and, with the completion of Cr. 1767, the pace of implementation picked up significantly. D. PROJECT SUSTAINABILITY 21. The project assisted institutions were an integral part of MOE and of the sector as a whole. Hence, their sustainability is closely linked to that of the sector as a whole. Taking several factors into consideration, the project is likely to be sustained for the foreseeable future. The main factor that enhances the project's sustainability is the Govemment's strong commitment, exemplified by the large and rapid increase of its allocations to education and the social sectors generally. Allocations for education have increased by more than two-fold over the last decade, from about 11% of total recurrent budget in 1988/89 to about 23.8% in 1994/95 and 25.2% in 1997. While these increases will enhance the system's sustainability in physical and quantitative temnis Govemment recognizes the need to introduce additional measures to upgrade the quality of education to an acceptable level, and is pursuing those policies. These include: increased cost recovery at post-primary (and especially post-secondary) level, community involvement in school constniction and maintenance, more day secondary schools, more affordable school designs and construction, and more cost-effective approaches in teacher training. These policy objectives have been incorporated in the Govemment's Policy Investment Framework for the sector which is at an advance stage of preparation by Govemment in collaboration with the Bank and other donors, including USAID, DfID, and GTZ. Follow-up Bank projects (Primary Education, Cr. 2810-MAI and Secondary Education, Cr. 305 1-MAI) have also incorporated various features of those policy measures. E. BoRROWER PERFORMANCE 22. On the whole, the Borrower's performance during project preparation and implementation was satisfactory. As part of project preparation, the Borrower updated its public expenditure plan for the second phase of its ten-year development plan, and articulated its policy reform strategies and action plan. These were attached as annexes to the staff appraisal report. It also prepared the first phase of its plan to decentralize education services to regions and districts. The Borrower's perfomlance during implementation was on the whole satisfactory. During the early stages of implementation, the PIU did not have the full complement of qualified technical staff, including an architect, accountant or procurement officer familiar with the Bank's procurement guidelines. 6  Implementation Completion Report Part 1: Project Implementation Assessment Malawi - Education Sector Credit II The situation was greatly improved during the second and third years of implementation when Govenmment hired with project funds Malawian technical staff with the requisite qualifications (two architects, a quantity surveyor, an accountant/financial analyst as well as an experienced project manager). 23. The PIU regularly sent semi-annual progress reports that proved valuable for Bank staff to monitor implementation status. On the whole, the PIU prepared annual project accounts on a timely manner but auditing of the accounts by the Government and hence annual audit reports faced persistent delays. Counterpart funds were often delayed and slightly below planned amounts: total govemment contribution amounted 8% of project costs (instead of 10% as originally planned). In view of the major devaluation of the Kwacha during the period the project was implemented (from MK4 to the US$ at appraisal compared to MK25 to the dollar at project completion), the Government made a serious effort to meet its counterpart obligations. 24. Beginning in 1996, in an effort to standardize the terms and conditions of staff hired in Bank-financed projects in Malawi, the Govemment, with the Bank's concurrence, introduced revised salary scales which in some instances were lower than what some PIU technical staff were paid from project funds at the time. This led to the resignation of two key PIU staff (project accountant and an architect). In addition, as part of the Bank's efforts to strengthen project implenmentation capacities of line ministries, the Govemment and the Bank agreed on new implementation arrangements (that included subcontracting certain activities such as civil works to private contractors). Accordingly, the two follow-up projects which were approved in 1996 and early 1998 (before the closing date of this project) are being implemented by a small unit directly under MOE instead of the PIU. The PIU however will continue to implement other donor-funded projects (including those of AfDB). F. BANK PERFORMANCE 25. Bank performance during preparation was satisfactory. A detailed analysis of the sector including costs and financing was prepared and served as the basis for discussion with the government regarding funding levels for the sector. At appraisal several potential risks were identified including: budgetary constraints, and relatively weak implementation capacity, especially at the district and regional levels. Measures that were expected to mitigate those risks were identified, but in retrospect the Bank was too optimistic especially about implementation capacity in the sector. 26. The Bank's performance during supervision was satisfactory. Supervision missions were mounted regularly. Judging from the aide memoires and other documentation those missions left in the field, the Bank has provided timely assistance and guidance to the borrower in the course of project implementation. The Government's decision to drop a major component (PSBU) was arrived during supervision in 1993, following a detailed costing of the project and evaluation of the pilot phase of that component. As a result, the government was able to reallocate the funds released to higher priority areas in time to prepare and distribute textbooks for Standards 5 to 8, which were not provided for originally. 7  Implementation Completion Report Part 1: Project Implementation Assessment Malawi - Education Sector Credit II G. ASSESSMENT OF OUTCOME 27. Overall, the project's outcome was satisfactory. This is especially the case as regards meeting the quantitative targets. The project had impact particularly in the following three areas: a) developing institutional capacity at MIE for the development of primary school textbooks and teachers' guides, b) rehabilitation of primary schools, and c) implementing a new and innovative mode for training primary school teachers (MASTEP). 28. Primary school textbooks. The project has assisted MIE in acquiring institutional capabilitv for: (i) designing new curricula and syllabi on which the new textbooks were based; (ii) writing/developing new instructional materials; (iii) designing and illustrating textbooks using some of the latest desk-top publishing skills; and (vi) providing in-service training for teachers in the use of the new books. This was achieved through internal training, study tours/attachments, procurement of desk-top publishing facilities and provision other facilities such as staff houses, vehiclcs and some operating funds. Rehabilitation of Primary Schools. At the time the project was appraised, this was a relatively small component intended to re-roof 228 classrooms and about 400 teachers' houses. However, when school fees were abolished in 1994 resulting in a massive increase in primary school enrollment, construction and rehabilitation of classrooms became MOE's most pressing concern. Accordingly, the project provided a timely assistance in this regard with the rehabilitation of over 2,000 classrooms in all parts of the country. The Government's contribution to this ICR specifically identifies this component as having made "a vers big difference in the lives of the pupils". Teacher Training. The MASTEP program had a major impact in the sector not only in terms of providing in-service training for over 4,000 primarv school teachers, but especially in inaugurating a new approach for upgrading teachers. Hitherto, teacher training was done mostly through residential courses that sometimes lasted two years or more. MASTEP's strategy of upgrading teachers through a combination short residential courses supplemented by in- school supervised teaching and seminars in the field is now well accepted in the country and was replicated, with some modifications, in the new Malawi Integrated In-service Teacher Education Program (MIITEP) currently under implementation under a follow-up project Bank-financed project (Primary Education) as well as by projects funded by others donors, DfID and GTZ in particular. H. FUTURE OPERATIONS 29. MOE is in the final stages of finalizing a detailed Sector Investment Plan (SIP) which is intended to serve as the framework for investment in human resources by the govemment and all donor agencies in the future. Donor agencies active in the sector (which includes DflD, USAID, GTZ. AfDB, DANIDA, JICA, in addition to the Bank) meet regularly with MOE officials. This has served as a useful forum for the Govemment to present successive drafts of the SIP for the their review and comments. In the meantime, pending the finalization of the SIP, the Bank has approved two projects that finance discrete investments in primary and secondary education that are manifestly within the SIP's overall objectives and resource confines. ODA, AfDB and GTZ are doing likewise. Govemment continues to demonstrate a strong commitment to human resource development. About 25% of the Govemment's total recurrent budget is allocated to education, a clear testimony to that commitment. There is virtually no scope for Govermnent to increase its allocations beyond present levels. Thus future Bank operations in the sector are taking this resource constraint into account in designing projects that promote such measures as 8  Implementation Completion Report Part 1: Project Implementation Assessment Malawi - Education Sector Credit I! increased cost recovery especially at post-secondary level, community involvement in school construction and maintenance, affordable school designs, non-boarding secondary schools, and more cost-effective approaches in teacher training ( such as MIITEP). 30. Toward the end of project implementation, the Bank learned that publishing and re- printing rights for some of the textbooks developed under the project had been transferred to private publishers. While in principle the Bank has no objection to private sector participation in textbook publishing and printing, it has expressed its concern to MOE that this was done without clear and open competition, and may therefore adversely affect the Bank's future participation in financing procurement of textbooks following ICB procedures. 1. KEY LESSONS LEARNED 31. A number of lessons can be drawn from the experience of implementing the project, of which the principal ones are as follows: