world bank documentdocuments.worldbank.org/curated/en/386971468280135500/pdf/mul… · materials...

Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No. P-6757-MAI

MEMORANDUM AND RECOMMENDATION

OF THE

PRESIDENT OF THE

INTERNATIONAL DEVELOPMENT ASSOCIATION

TO THE

EXECUTIVE DIRECTORS

ON A

PROPOSED CREDIT

IN THE AMOUNT EQUIVALENT TO SDR 15.1 MILLION

TO THE

REPUBLIC OF MALAWI

FOR A

PRIMARY EDUCATION PROJECT

DECEMBER 21, 1995

This document has a restricted distribution and may be used by recipients only in the performance oftheir official duties. Its contents may not otherwise be disclosed without World Bank authorization.

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

CURRENCY EQUIVALENTS(as of October, 1995)

Currency Unit = Malawi Kwacha (MK)US$1.00 = MK15.7

FISCAL YEAR (FY)

April I to March 31

WEIGHTS AND MEASURES

I 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 US gallons

GLOSSARY OF ABBREVIATIONS

CAS = Country Assistance StrategyCIDA = Canadian International Development AgencyDDEO = Deputy District Education OfficerDEO = District Education OfficerEDMU = Education Development Management Unit (integrated into

MOE structure)GABLE = Girls' Attaimnent in-Basic Literacy and EducationGAC = Gender-appropriate CurriculumGOM = Government of MalawiGTZ = Gesellschaft fuer Technische Zusammernarbeit

(German Technical Cooperation Agency)ICB = International Competitive BiddingICR = Implementation Completion ReportIEC = Information, Education and CommunicationIDA = International Development AssociationKfW = German Bank for ReconstructionMIE = Malawi Institute of EducationMIITEP = Malawi Integrated In-service Teacher Education ProgramMOE = Ministry of EducationMTEF = Medium Term Expenditure FrameworkNCB = National Competitive BiddingNGO = Non-governmental OrganizationODA = Overseas Development AdministrationPEA = Primary Education AdviserPEP = Primary Education ProjectPICMO = Private and Independent Construction Management

OrganizationPIU = Project Implementation UnitPPF = Project Preparation FacilitySCC = Systematic Client ConsultationSPFP = Sector Policy Framework PaperSSA = Sub-Saharan AfricaSU = Supplies UnitTA = Technical AssistanceTDP = Teacher Development ProgramTESC = Third Education Sector CreditUSAID = United States Agency for International Development

FOR OFFICLL USE ONLY

MALAWIPRIMARY EDUCATION PROJECT

CREDIT AND PROJECT SUMMARY

Borrower: Government of Malawi

Implementing Agency: Ministry of Education

Beneficiaries: Ministry of Education, Local Communities, and PrimarySchool Students

Poverty: Program of Targeted Interventions (PTI). The project wouldcontribute to poverty reduction by improving access to and thequality of primary education.

Amount: SDR 15.1 million (US$22.5million equivalent).

Terms: Standard IDA terms with a maturity of 40 years includinga 10-year grace period.

Commitment Fee: 0.50% on undisbursed credit balances, beginning 60 days aftersigning, less any waiver.

Financing Plan: See Schedule A.

Net Present Value: Not applicable. However, least-cost, cost-effectiveness, andfiscal impact analyses have been undertaken (see Annex 3 ofSAR). See also Schedule B showing the results of the overallprivate and social rates of return to investing in education inMalawi.

Staff Appraisal Report: Report No. 15127-MAI

Map: Map No. 27693

Project IdentificationNumber: 42305

This document has a restricted distribution and may be used by recipients only in the performance of theirofficial duties. Its contents may not otherwise be disclosed wiihout World Bank authorization.

MEMORANDUM AND RECOMMENDATION OF THE PRESIDENTOF THE INTERNATIONAL DEVELOPMENT ASSOCIATION

TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE REPUBLIC OFMALAWI

FOR A PRIMARY EDUCATION PROJECT

1. I submit for your approval the following memorandum and recommendation for a proposedDevelo pment Credit to the Republic of Malawi for SDR15.1 million, the equivalent of US$22.5million , on standard International Development Association (IDA) terms with a maturity of 40years. The Credit will help to finance urgently needed primary school activities under the overallumbrella of the Government's Education Sector Policy and Investment Framework Paper.Government and Beneficiaries will contribute US$1.2 million equivalent and US$1.6 millionequivalent respectively.

2. Background. The Government of Malawi has made significant progress in developing theeducation system since Malawi gained its independence in 1964. The World Bank has beenactively involved in assisting Malawi's education sector, with the first project approved in 1967.Six projects have been completed so far; one project (the Second Education Sector Project) isongoing. These projects primarily focused on expanding primary and secondary education,teacher tTaining, and strengthening management and planning. Although Malawi's educationsystem has benefited considerably from the assistance of the Bank and other donors in the past,that support has not produced the desired impact because a well-conceived and comprehensivepolicy framework and coordination has not been in place.

3. In 1994 the Bank began preparing a new operation, the Third Education Sector Credit (TESC),which will pursue an integrated sector approach to support the Government's program for thedevelopment and improvement of the sector as a whole. The approach is outlined in the SectorPolicy and Investment Framework Paper which emphasizes primary education and improvementin school quality and girls' participation. Its ambitious targets include achieving a 90% primaryschool net enrollment for every district; reduction of primary teacher:pupil ratio from 1:70 atpresent to 1:45 by 2005; and provision of one textbook per primary pupil for each of the threemain subjects (Mathematics, English and General Studies). The principal measures for achievingthese targets are higher budgetary allocations to education in general and to the primary sub-sectorin particular, greater community and private sector participation in construction and operation ofschools, and increased construction and focus on community schools (Grades 1-4) combined witha social mobilization campaign aimed at girls and their parents. For post-primary education, theGovernment envisages more day schooling and increased cost recovery.

4. Project Rationale. While the TESC was being prepared, the new democratically-electedGovernment announced that all primary school fees would be abolished in October, 1994. Whilethis action was consistent with the Government's overall goal of poverty reduction througheconomic growth and investment in human capital, it led to an education crisis caused by an influxof over one million additional students into the primary system and the hiring of nearly 20,000new teachers from among secondary school leavers. These hastily recruited young people weregiven only three weeks of "induction" training before being posted to schools. Retired teacherswere called back to help with the crisis. Government has estimated that about 38,000 additionalclassrooms will be required to accommodate this influx of children if they do not drop out from

'Total cost includes US$1.4 million allocated to Project Preparation Facility (PPF)

2

the system. At present classrooms are grossly overcrowded and thousands of children take theirlessons in various temporary facilities and in the open air. While access to schooling hasincreased, the quality of education has fallen: many young students have virtually no learningmaterials and only a few young untrained teachers to guide them. Unless these pressing needs arequickly addressed, there is a risk of losing the public's enthusiastic support for primary education.

5. At the request of the Government, the Bank agreed to 'fast-track' urgently needed primaryschool activities of the TESC under the overall umbrella of the Government's Education SectorPolicy and Investment Framework. The Malawi Primary Education Project (PEP), amounting toapproximately $US25.2 million, will have three major components: construction of classrooms,provision of teaching and learning materials, and implementation of selected activities forstrengthening teacher skills. These urgently needed components are well-focused, simple, ready,and capable of being delivered quickly. The Government is highly committed and enthusiastic asshown by its sector policy, and the increase in the share of education of its total budget (fromabout 8% in 1988 to about 24% in 1995 for the recurrent budget). The share of recurrenteducation expenditure allocated to primary education increased from 45% in 1990/91 to 71% in1994/95.

6. Project Objectives. The objectives of this fast-track operation are to: (i) ensure that thequantitative gains in enrollments are maintained through retaining newly-enrolled children in thesystem; and (ii) improve the quality of primary education through providing teaching and learningmaterials and pedagogical support to, and in-service training for, teachers so that the educationprovided will produce real learning gains.

7. Project Description. The three main project components, all focused on primary education,are: (i) primary classroom construction; (ii) pedagogical support and in-service teacher training;and (iii) provision of teaching and learning materials.

8. Primary Classroom Construction (US$11.8 million). The project would finance theconstruction and provision of furniture for 1,600 primary classrooms. Six hundred of these will bein 75 new sites (new primary schools) mainly in rural areas; the remainder will expand especiallyovercrowded schools. PEP will finance the construction of an administration block, two teacherhouses, two pit latrines and a borehole in each new school, as well as the planting of sapling shadetrees at all new sites to provide shade for the many hot months. Classroom construction willfollow the shell model, a low-cost high-quality construction design. Though new to Malawi, themodel has proved successful in other parts of Africa (e.g. Ghana). MOE, through a private andindependent construction management organization (PICMO), will put up shells (foundation, steelcolumns, and roof), which communities will complete with in-fills using blocks made withhydraform machines, or other local materials. This shell can be constructed very quickly,permitting school-children to move from their "classroom" in the open air, to the shade and shelterof a classroom shell, even before the in-fill is completed. District officials and NGOs will help tomobilize the community in completing the classroom shells. To ensure that this is attainable,orientation sessions of 2-3 days are being held for key officials from each district, and communityleaders to encourage a sense of ownership by the communities.

9. Pedagogical Support and In-service Teacher Training (US$4.7 million). The long-term goalof this component is to improve the learning in Malawi's primary schools by establishing a teachersupport system that provides regular, sustained assistance to every school and to every teacher.This component will provide support to: (a) the Malawi Integrated In-service Teacher Education

3

Program (MIITEP) for certification of untrained teachers, and (b) pedagogical support for allprimary teachers. MOE has involved ODA, GTZ/KfW and the Bank in planning this program.These other donors have agreed to provide parallel financing for activities to supplement thosebeing supported by the Bank. The activities being financed by these other donors include: trainingand support for Regional Education Office staff, District and Deputy-district Education Officers,Primary Education Advisers, head-teachers and deputy heads; construction of resource centers;strengthening of MIE; and the provision of technical assistance. PEP would finance:

* Preparatory activities for implementing the Teacher Development Program (TDP) including:(i) setting-up an apex coordinating body for the primary education TDP; (ii) designing acurriculum; (iii) developing training manuals, modules and handbooks; (iv) training trainers;and (v) staff development. A campaign to inform all key players about the program and theirresponsibilities has been launched with PPF financing.

* Planning and preparation of course materials and the implementation of the MIITEP aimed atabout 20,000 untrained teachers. MIITEP will start in January, 1997 with 3,000 students on athree-month residential course. Thereafter, the students will be deployed to schools andcontinue their training for 21 months through sub-zonal seminars and supervised teaching intheir schools. A formative evaluation will be conducted after three consecutive residentialcourses. To be certified, students will be required to write a final examination in addition towriting a specified number of projects and assignments.

* School and sub-zonal in-service training for all primary teachers. Each resource center andschool will be provided with packages of teaching and learning materials.

* Provision of motorcycles for all the 315 primary education advisers to increase their mobilityin visiting schools and providing assistance to teachers.

10. Learning Materials and Textbook-related Activities (US$3.1 million). The ongoing Bank-financed Second Education Sector Credit has a major component for the development, productionand distribution of textbooks to all primary school grades, with a planned target of one textbookfor two students and one guide per teacher in four subjects - Mathematics, Chichewa, English, andGeneral Studies. Additional needs for textbooks resulting from the massive influx of children intothe system in 1994 are being covered by parallel support from CIDA. PEP would concentrate on:a) acquiring and distributing basic learning materials, including exercise books, pencils, slates,chalk and boards; b) furnishing book storage rooms in new primary schools; c) strengthening theSupplies Unit of MOE including the computerization of book-distribution operations andprovision of associated training and technical assistance; d) training teachers and primaryeducation advisers on the effective use of textbooks; and e) evaluating the content and durabilityof textbooks developed under the IDA-financed Second Education Sector Credit for possiblerevision under TESC.

11. Project Cost and Financing. The total project cost is estimated at US$25.2 millionequivalent. The foreign exchange component of the project is estimated at 48% (US$12.4 million)of the total cost. The IDA Credit would finance 89.0% of the total project cost (US$22.5 million);Government and communities would finance about 4.8% and 6.2%, respectively (approximatelyUS$1.2 million and US$1.6 million equivalent, respectively). Parallel financing totaling aboutUS$27.0 million equivalent is being provided by KfW, ODA, CIDA and GTZ for the financing ofurgently needed supplementary activities under the three main components of PEP. A summary of

4

the project costs and financing plan is provided in Schedule A. Procurement arrangements andthe disbursement schedule are summarized in Schedule B. A timetable of key processing stepsand the status of Bank group operations in Malawi are provided in Schedule C and Schedule D,respectively. Staff Appraisal Report No. 15127-MAI and Map IBRD No. 27693 are attached.

12. Project Management and Implementation. Day-to-day management and implementation ofthe project will be carried out by the relevant units of the Ministry of Education. The EducationDevelopment Management Unit (EDMU), recently created under the direct responsibility of thePermanent Secretary, will coordinate project activities, administrative, procurement, and financialmatters, contacts with IDA and inter-agency coordination. Management of the civil worksprogram and related furniture and equipment needs will be delegated to PICMO, under contractto MOE, and following a procedural manual acceptable to IDA. The provision of teaching andlearning materials will be handled and coordinated by the Supplies Unit in the Ministry ofEducation; the implementation of the Pedagogical Support and In-service Teacher TrainingProgram will be undertaken by MOE's newly established Coordinating Unit for the PrimaryEducation Teacher Development Program.

13. Lessons from Previous IDA Involvement. Unlike previous projects which provided ad-hocinterventions, and thus resulted in a limited impact, this project, and the TESC will share in thefinancing of a time-slice of the Government's overall program as specified in MOE's draft SPFP.Given this framework, the projects should be more effective in improving the sector. Lessonslearnt from past projects have been incorporated in designing this operation. The design ofclassroom construction has been modified to reduce construction time and cost and maximizecommunity participation. The school designs will consist of a shell, which communities willcomplete with in-fills. This process is expected to generate a strong sense of school ownership bythe local communities. Given that communities did not participate as fully as expected under theFirst Education Sector Credit, as reported in the Implementation Completion Report (ICR),community participation under PEP will not be taken for granted. A vigorous public awarenesscampaign and community mobilization activities as well as training for district and communityleaders, are planned. An incentive mechanism for communities to participate fully has been builtinto the project by making the provision and delivery of furniture and learning materialsconditional on the completion of the in-fills. Project implementation will be expedited bymodifying the contracting arrangements so that contracts are awarded through a private andindependent construction management organization (PICMO) rather than via the existing ProjectImplementation Unit (PIU) which is being phased-out. Textbook distribution will also beprivatized rather than being undertaken expensively by the PIU.

14. Rationale for IDA Support. Poverty alleviation and human resource development are at thecore of IDA's strategy in Malawi because both are essential elements of the country'sdevelopment approach. This project is consistent with the Bank's Country Assistance Strategy(CAS) in Malawi, presented to the Board on June 9, 1994 (Report No. P6236-MAI). The majorobjective of the CAS is sustainable poverty reduction through economic growth with equity. Toattain this objective the strategy focuses on: (i) human capital development through improvededucation, health and other social services; (ii) expanding employment opportunities through aliberal environment for private sector entrepreneurship and initiative, expanded access to financialcapital, and policies and programs that encourage labor-intensive activities and participation ofwomen; (iii) enhancing agricultural productivity for poor, small farmers and ensuring sustainableuse of land resources; and (iv) introduction of an integrated family-planning strategy to curbpopulation growth and reduce fertility rates. Education is central to all four dimensions of the

5

strategy and primary education is among the factors most critical for poverty reduction. IDA hasbeen associated with Malawi's education system for the last thirty years. IDA has incorporatedlessons learned in project preparation and implementation during those years and is now wellpositioned to assist the implementation of the Government's sector development plan. PEP willprovide timely assistance to alleviate the extreme pressure the primary education system faces atpresent.

15. Agreed Actions. Key issues critical for project implementation and sustainability have beenidentified, and appropriate actions to deal with them have been agreed with GOM. These include:(i) Limited implementation capacity: To deal with implementation capacity constraints, acompletely new arrangement involving the private sector is envisaged, along with MOE's newlycreated EDMU to ensure quality control and oversight. GOM has selected a private andindependent construction management organization (PICMO) to manage and supervise the PEPconstruction program. PICMO's selection was a condition of Board presentation. In addition,during negotiations, GOM gave assurances that it will: maintain EDMU with adequateprofessional and support staff under terms of reference acceptable to IDA and consult with IDA onany changes in EDMU staffing or responsibilities; and submit semi-annual progress reports,annual audit reports, and an implementation completion report within four months of completingthe project. A mid-term review will be scheduled during the second year of implementation.Furthermore, MOE is preparing a Project Implementation Manual to assist the variousimplementing units in preparing their tasks. As a condition of Credit Effectiveness, GOM hasagreed to submit a copy of the completed Project Implementation Manual to IDA; (ii) Inadequateprocurement planning and processes: Implementation may slow down unless satisfactoryprocurement planning and processes are in place. During appraisal, EDMU prepared aprocurement plan which identifies each procurement package with its estimated value,procurement method, and time schedule. The plan will be used by PICMO in monitoring actualprocurement performance, and will be updated on a quarterly basis and included in a writtenprogress report to IDA. Standard IDA bidding documents will be used for ICB, while GOMprepared NCB bidding documents, which the appraisal mission reviewed and found satisfactory;(iii) Need to use transparent and poverty-focused criteria for classroom and school siteselection: During negotiations, MOE provided a list of districts in which new classrooms will beconstructed and the total number of classrooms to be constructed in each. These were selected onthe basis of a ranking of the districts using a formula that combined poverty level, enrollmentratios, gender disparities and pupil:classroom ratios across the districts. The Government hassubmitted to IDA, as a condition of Board presentation, the list of sites selected in consultationwith communities (within each district) where new schools will be constructed as well as thenames of the existing schools to be expanded, ensuring that these list contains at least 80% of thetotal number of classrooms to be constructed under PEP; and (iv) Severe financial constraintscoupled with the problem of financing the recurrent costs of GOM's educational developmentprogram: Some measures envisaged in the SPFP include increased cost recovery at post-primaryeducation levels, increased community involvement, cost-saving measures such as more secondaryday schooling and double-shifting, encouragement of the private sector, and the choice of least-cost alternatives in project design. It will also be necessary to improve the efficiency ofexpenditures and of delivery systems. The Government has submitted to IDA, as a condition ofBoard presentation, a prioritized summary of its policies in the sector as a whole in a manner thatdemonstrates that a critical assessment of trade-offs and policy options has been considered toarrive at programs and targets that are affordable and sustainable. Meanwhile, donor financing ofrecurrent expenditures (on an increasing or constant basis) in the short-run will provide somerespite until Malawi's growth is more sustainable.

6

16. Poverty Category. The project is part of the core poverty program for Malawi and isincluded in the program of targeted interventions. Poverty in Malawi is widespread and severe.Reducing poverty is a central policy objective of the new Government which in 1994 initiated thePoverty Alleviation Program. The Bank is assisting the Government's poverty alleviation efforts.The major objective of the Bank's Country Assistance Strategy (CAS) for Malawi is sustainablepoverty reduction through economic growth with equity. This project would contribute to povertyreduction by improving access to and quality of primary education. In the selection ofcommunities and districts where classrooms will be constructed under this project, the level ofpoverty was prominent among the five major criteria used. The main beneficiaries of this projectwill be primarily children in poor communities in mainly rural and peri-urban areas.

17. Environmental Impact. The project's environmental category is C. Minimal environmentalrisks are foreseen. The 75 new schools to be constructed will be small and will be dispersed inrural areas; most of the new classrooms will be provided by expanding existing schools, with littledetrimental environmental effect. The use of blocks made with hydraform machines (which applypressure on cement-soil mixtures) and not burnt bricks would reduce the need for firewood andwould also not be detrimental to the environment. The planting of sapling shade trees at all newschools will have positive effects on the environment.

18. Program Objective Category. PEP will expand access to and improve the quality of primaryeducation, a cornerstone of poverty reduction and the foundation for human resource development.Through its specific targeting of the poor, PEP constitutes a program of targeted interventions(PTI).

19. Participatory Approach. In developing and implementing the Bank's education strategy afeedback from systematic client consultation (SCC) has been playing an important role. As thefindings in a 1995 SCC exercise carried out in the country show,2 the need for schools was rankedby the communities as one of two top priorities (the other was credit). Many communities havebeen participating in the implementation of school construction, through labor and monetarycontribution, and some have generated, managed and implemented their projects withoutassistance from outside. Communities consistently ranked school committees as organizationsvalued for their ability to deliver the needed services. This seems to validate the contention thatcommunities have the provision of schools as their top priority and that with some facilitation,they will be enthusiastic participants. PEP is combining a supply orientation (to provide a quickresponse 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). Aninformation, education, and communication (IEC) campaign and community mobilization areplanned while some training for community members and leaders, and district officials hasalready begun.

20. NGO Involvement. Non-governmental organizations have increasingly become active inMalawi recently, due largely to the newly-instituted democratic environment which has openeddoors for NGO activities. Most NGOs have a comparative advantage in the social sectors, giventheir proximity to grassroots levels, and also have existing capacity (though not nationwide) todeal with community-based assignments. NGOs will be increasingly called upon to play a major

2The SCC was done for the Malawi Social Action Fund project preparation. Nineteen representativecommunities in all three regions were surveyed.

7

role in the implementation of PEP especially in the areas of community mobilization,sensitization, capacity building and training for leadership and transformation, selecting goodcaliber people, and putting into place monitoring and evaluation mechanisms. This project willfinance some of these activities through NGO technical assistance and the participation of NGOsas resource persons for training and capacity building efforts at the community level. NGOs willbe encouraged to bid for construction contracts, preferably on a joint venture basis with localcontractors, particularly in areas where they may have comparative advantage such as theconstruction of boreholes, pit latrines, landscaping and external works.

21. Project Benefits. The major benefits of the project would be increased coverage andimproved quality of primary education. Over a three-year period, the project would increaseeffective access to education (as distinct from simply access to a school) through the constructionof classrooms to provide shelter and adequate learning conditions for about 100,000 childrencurrently taking their lessons in the open air. Most of these classrooms will be built in rural andunderserved peri-urban areas. Qualitative improvements, through better-trained teachers andadequate supply of teaching and learning materials, would improve learning for all primary schoolchildren (around 3 million children) and reduce repetition and drop-out rates. Efficiency gainsattributable to reductions in repetition and drop-out rates should result in a reduction ofeducation's share of the GOM total recurrent budget. If average repetition rates drop from theirpresent level of over 15% to 5% over the next decade, then all other things being equal efficiencygains will reduce education's annual share of GOM's total recurrent budget by an average of 3 to 4percentage points. The project would support innovative measures such as school-basedsupervision and delegation of pedagogical support from the central ministry to regional anddepartmental levels to make the system more responsive to local needs. Local communities wouldbe required to participate financially and in-kind in primary school construction and maintenance,so reducing the burden on the Government budget and increasing ownership and sustainability.Furthermore, a cost-benefit study using the Malawi 1990/91 household survey data, illustrates thatthe private and social rates of return to primary education in Malawi are quite high, estimated atabout 23% and 20%, respectively3.

22. Project Sustainability. Donor support in the education sector is critical until a sustainablegrowth path has been established. In the long-run, sustainability of the sector needs to beenhanced. The sector program will develop a strategy - with quantifiable benchmarks - to lowerrecurrent expenditures to more sustainable levels. Government commitment and the involvementof communities and the private sector in financing and implementation of the project, will enhancethe project's sustainability in the long run. Efficiency gains as a result of quality improvements,and the expansion of day schooling (instead of government-subsidized boarding) as well asincreased cost-recovery at post-primary education levels will lead to substantial savings andmobilization of increased resources, and will make the system more affordable and sustainable.

23. Project Risks. The main risks the project faces are four-fold. First, the Government'scapacity to rapidly implement the fast track activities and the overall sector program is notassured. For the civil works components, this risk would be addressed by transferringresponsibility for implementing construction from the MOE to PICMO and communities, andlimiting the Government's role to overseeing and quality control. Second, the capacity of theconstruction industry in Malawi to build a relatively large number of classrooms quickly is notassured. To counter this risk, an analysis was undertaken to assist the Government to assess this

3See Schedule B and Annex 3 of the SAR for details on rate of return analysis.

8

capacity. It became clear that the traditional way of building (small contractors using bricks andmortar, and managed by PIU) put a serious cap on the number of classrooms that could be built ina year. This led to the shell classroom scheme, which has been discussed and analyzed withconstruction practitioners (architects and builders) and has been successfully piloted under PPFfinancing. Third, the innovative programs proposed under the project, in particular those toenhance decentralized school-based supervision, may not fully reach their objectives. These riskswould be addressed by careful monitoring and annual reviews of progress, expecting that theseprograms may need to be modified during implementation. Finally, there are macro-economic

4risks. The loss in revenues from the abolition of fees and the rapid increases in educationexpenditures (caused by the massive influx of students and the hiring of teachers) haveexacerbated an already difficult macro-economic situation. The Government is committed tohuman resource development as a means to achieve its objective of poverty reduction. The majorchallenge now is how to do more with less resources. GOM has put the emphasis on prudentfiscal management at the economy-wide level, better prioritization, and the need for efficiency andfinancial sustainability measures at the sector level. In the Bank's dialogue with GOM, thechallenge for fiscal sustainability is being discussed in the context of a Medium Term ExpenditureFramework (MTEF) which is coordinated by the Ministry of Finance. Under the MTEF, fiscalpolicies involving expenditure restraint, prioritization and revenue mobilization are beingexplored. At the sectoral level, a simulation model for education has been developed. This willassist MOE to assess the viability of alternative efficiency, cost-saving and resource mobilizationoptions. We expect that economic growth will increase in the next couple of years. There is somerisk, however, that if economic growth prospects are not achieved, poor economic performancemay make it difficult to achieve sustainability with regard to financing the necessary recurrentexpenditures. To mitigate this risk, donor financing of some recurrent costs on a constant orincreasing basis for about five years under TESC is being considered. After that period, we expectfinancing on a declining basis to be possible.

24. Recommendation. I am satisfied that the proposed Credit would comply with the Articles ofAgreement of the Association and recommend that the Executive Directors approve it.

James D. WolfensohnPresident

Washington, DCDecember 21, 1995

Attachments

4Just before their abolition, revenues from school fees amounted to about US$1.5 million per year.

9

Schedule APage 1 of I


Project Costs and Financing Plan(US$ million, including taxes and duties)

Local Foreign Total

Primary School Construction Program 6.2 5.6 11.8

Teacher Support & Training Program 2.4 2.4 4.7

Learning Materials & Textbook-related 0.4 2.7 3.1ActivitiesProject Management, and Strengthening of 0.3 0.2 0.5EDMU/PIUTotal Baseline Costs 9.2 10.9 20.1

Physical Contingencies 0.5 0.5 1.0

Price Contingencies 3.1 1.0 4.1

Total Project Costs 12.8 12.4 25.2

(Totals may not add up because of rounding)

Financing Plan Local Foreign Total

IDA 10.1 12.4 22.5Government of Malawi 1.2 1.2Communities 1.6 1.6Total Project Costs 12.8 12.4 25.2

10

Schedule BPage 1 of 4


Private and Social Rates of Return (ROR) to Investment in Education(%)'

Primary Education over Secondary Education overNo Education Primary Education

WagesPrivate ROR, including all private costs 22.76 15.27Private ROR, with private costs except 28.11 15.27fees and uniformsPrivate ROR: using forgone costs only 36.31 29.69Social ROR 19.88 14.13Income3

Private ROR, including fees and 21.95 8.65associated private costPrivate ROR, with private costs except 28.11 8.64fees and uniformsPrivate ROR: using forgone costs only 28.21 25.20Social ROR 20.02 7.66Sensitivity Analysis using WagesNo Secondary Fee Increase 15.27Secondary Fees Increase by 10% 14.74Secondary Fees Increase by 20% 14.25Bank staff estimate using 1990/91 Household Expenditure and Small-scale Economic Activities

(HESSEA) data.

' Calculations use wages and total income, and considering foregone costs only, then include fees andother associated private costs of education.

2Only urban areas.3Everybody between ages of 10 to 50. Expenditure was used as a proxy for Income in rural areas where

wage data are not available.

Main Beneficiaries and Nature of BenefitsThe main beneficiaries would be rural and urban households with primary students. There would be an

overall improvement in the quality of primary education through wider distribution of teaching and learningmaterials, better trained teachers, improved teacher support and supervision, and increased number ofclassrooms. In the selection of districts and communities to locate new schools and for expansion of existingschools, transparent criteria have been used, with a particular focus on the poor, and gender disparities inprimary school enrollment. These criteria include: poverty levels, enrollment ratios, girls' enrollment ratios,student:classroom ratios, and classroom construction activities already underway.

11



Financial Summary(Million MK)

FY 1996 FY1997 FY 1998 FY 1999Project Costs

Investment Costs 1,325.0 7,568.4 12,054.4 2,779.0Recurrent Costs 63.4 344.4 586.8 516.7Total 1,388.4 7,912.8 12,641.2 3,295.7

Financing Sources PercentagesIDA 100 93.7 89.7 69.7Government 2.5 6.3 6.1Communities 3.8 4.0 24.2Total 100 100 100 100

12

ScheduleMALAWI Page 3 of 4


Key Education Performance IndicatorsMost Recent Year Data

Indicators Estimate Source

Inputs _ ________

Finance% of expenditure from total GOM budget 21 1994/95 MOE% of GDP assigned to education 7.5 1994/95 Pov.Prof.% of ed. development expend. from total dev. budget 8 " " MOE% of ed. recurrent expend. from total recurrent budget 25 " "

% of education expenditure assigned to primary 73 __"_"____

% of education expenditure assigned to secondary 1 5% of education expenditure assigned to tertiary 1 2TeachersNumber of primary teachers 45,765 1994/95 MOENumber of secondary teachers 2,672 1993/94% of primary unqualified teachers 42 1994/95Primary pupil-teacher ratio 61 1994/95School buildings & facilitiesNumber of primary classrooms 20,036 1993/94 MOENumber of primary schools 3,118 1992/93Pupils per primary classrooms: permanent 154 1994/95Instructional materials & equipmentStudents per textbooks (Chichewa, Mt bh, English) 3 1994/95 MOEPrimary: proportion with access to desks 7 1994/95General AttendancePrimary enrollment: all 2,860,819 1994/95 MOE

% of girls in primary 47 1994/95% of girls in upper-primary (Std.6-8) 42 1994/95

Primary Gross Enrollment rate (GER)Female 127 1994/95 MOEAli 134 1994/95 "

Secondary schools: total enrollment (Formsi-4) 45,990 1993/94% of girls in secondary schools 39 1993/94MCDEs: Total Enrollment 56,319 1993/94 "% of girls in MCDEs 3 1993/94 "Secondary Gross Enrollment rate (GER): 1987-1992 4 1994 SID

Outputs/outcomes

% Literacy rates: all 45 BDDCAFemale 30 BDDCA

Percentage reaching Std.4 (1987-1992) 69 1994 SID% completing primary wlin normal period (1981/82 class) 19 USAID..Official PSLCE pass rate 79 1994 MOE% of transition rate (PSLCE) 12 1993 _ _

Official MCE pass rate 65 1993Dropout rate: all 17 1993/94

Males 16 1993/94Females 17 1993/94

Dropout rate: Std.6-7: All 14 1993/941Males 11 1993/94 _Females 18 1993/94 _

Primary repetition rate: all (1987-1992) 17 1993/94 _Average number of years taken to complete primary, males 13 1993/94 USAIDAverage number of years taken to complete primary, females 16.1 1993/94 USAID

13



Key Project Performance Indicators

Indicators 1995/96 1996/97 1997/98 1998/99 All(PPF)

A. Inputsl.Construction Program

Classrooms 96 452 848 204 1600Cladding of classrooms 96 452 848 204 1600Administration blocks 12 19 31 13 75Teacher houses 24 38 62 26 150Pit latrines 24 113 212 51 400Boreholes 12 19 31 13 75Furniture 2880 13560 25440 6120 48000

2. Learning materials and textbook-related activitiesProcurement of learning materials 50% 50%Distribution of learning materials 50% 50%Manual for materials management 100%Printing of training modules for teacher training 9% 46% 46%Materials for school-based in-service training 60% 20% 20%Teaching and learning material packages for teachers 60% 20% 20%

3. TrainingMobilization and orientation for DEOs and community leaders 50% 50%Two week workshop for MIE staff on effective use of textbooks 100%Orientation of 300 trainers to train teachers on effective use of textbooks 50% 25% 25%Staff development for trainers at TTCs, PEAs, and head-teachers 50% 50%School-based in-service training for PEAs, heads, and deputy-heads 60% 20% 20%Sub-zonal in-service training: PEAs, head-teachers & experienced teachers 60% 20% 20%

4. MiscellaneousHydraform machines 28Vehicles for SU and EDMU 100%Computers for SU, EDMU 100%Motorcycles for PEAs 315

B. ProcessPEAs- frequency of visitPrimary teachers qualified (%) 58% 58%Frequency of headmaster-teacher interactionComputerization of the Supply Unit 100%Textbook evaluation 50% 25% 25%Set-up of PICMO 80% 20%

C. Outputs/OutcomeNumber of primary student places : all 5760 27120 50880 12240 96000Primary student places: female (%) 47 47 48 49 48Pupil:permanent classroom ratio 153 150 143 142 147Repetition rate (%)* 17 15 13 11Dropout rate (%)* 1 7 15 13 11

* 1993/94 rates reported (MOE). Governments target is to reduce these rates to 5% by 2005. These andother indicators will be monitored to ensure improvement in internal efficiency.

14

Schedule CPage 1 of 2


Summary Procurement Arrangements(US$ million equivalent, including taxes and contingencies)

Procurement MethodProcurement Arrangements International National

- Non ICB/NCB Aggregated as Competitive Competitive Consulting Non-IDAOther Bidding Bidding Other Services Financing Total

1. Civil Works 4.89 4.19 0.0 0.0 0.93 10.00(4.65) (4.00) (8.65)

2. Goodsi) Equipment, Motorcycles, 0.70 0.0 0.30 0.0 0.45 1.45

Cars (0.67) (0.29) (0.96)ii) Furniture 0.0 1.16 0.17 0.0 0.0 1.33

(1.10) (0.16) (1.26)iii) Teaching and Learning 3.92 0.70 0.68 0.0 0.0 5.30

Materials (3.92) (0.70) (0.68) (5.30)

3. Consultancies and Trainingi) Technical Assistance 0.0 0.0 0.0 2.28 0.0 2.28

(2.28) (2.28)ii) Training

a) Teacher Training 0.0 0.0 2.7 0.0 0.0 2.70(2.7) (2.70)

b) Other Training 0.0 0.0 0.66 0.0 0.0 0.66(0.66) (0.66)

4. Miscellaneousi) Recurrent Expenditure 0.0 0.0 0.71 0.0 0.80 1.51

(0.64) (0.64)

Total 9.51 6.05 5.21 2.28 2.18 25.24(9.24) (5.80) (5.13) (2.28) (22.46)

Note: Figures in parenthesis are the amounts financed by International Development Association

15

Schedule CPage 2 of 2


Summary Disbursements Schedule

Amount of the Credit Percent of ExpendituresAllocated to be Financed by IDA

(US$ Million) AssociationCategory Amount %

I. Investment Costs1. Civil Works 7.43 100% For. & 95% Loc.2. Furniture 1.19 100% For. & 95% Loc.3. Equipment and Vehicles 0.74 100% For. & 95% Loc.4. Teaching and Learning Materials 4.90 100% For. & 95% Loc.5. Technical Assistance 2.08 100% Tot.6. Training / Workshops 3.12 100%Tot.

Total Investment Costs 19.46II. Recurrent Costs

7. Incremental Operating Costs 0.45 95% through March 31,1997, and 80%

thereafterIll. PPF 1.35IV. Unallocated 1.19TOTAL CREDIT AMOUNT 22.46

Tot. = Total Cost For. Foreign Cost Loc. Local Cost

Estimated IDA Disbursement Schedule(US$ million)

Program Years FY 1996 FY 1997 FY 1998 FY 1999

Annual disbursement 1.4 7.4 11.3 2.3

Cumulative disbursement 1.4 8.8 20.1 22.5

16

Schedule DPage I of I


Timetable of Key Project Processing Events

Identification May 1995

Preparation June 1995

Appraisal and Negotiations September 1995 - October 1995

Planned Board Date January 1996

Planned Date of Effectiveness March 1996

17

Schedule EPage 1 of 3


The Status of Bank Group Operations in MalawiSummary Statement of IDA Credits (as at December, 95)

Amount in $US millions(less cancellations)

Loan or Fiscal Undis- ClosingCredit No. Year Borrower Purpose Bank IDA bursed Date

Credits53 Credits Closed 910.70

C19660-MW 1989 Malawi Agri. Marketing & Est. 18.30 0.59 06/30/96(R)C19900-MW 1989 Malawi Energy I 46.70 3.99 02/28/96(R)C20360-MW 1989 Malawi Instit. Dev. 11.30 1.25 06/31/95(R)C20690-MW 1990 Malawi Infrastructure I 28.80 4.66 12/31/95(R)C20830-MW 1990 Malawi Educ. Sec. II 36.90 20.48 06/30/96(R)C22200-MW 1991 Malawi PHN Sector Credit 55.50 44.91 06/30/97(R)C22210-MW 1991 Malawi Financial & Enterprise 32.00 14.55 06/30/97(R)C22250-MW 1991 Malawi Fisheries Dev. 8.80 6.78 06/30/99(R)C23790-MW 1992 Malawi Local Dev. 24.00 18.95 12/31/99(R)C23860-MW 1992 Ma;awi Power V 55.00 51.27 06/30/98(R)C25130-MW 1993 Malawi Rural Fin. Services 25.00 23.60 12/31/96(R)C25140-MW 1993 Malawi Agric. Services 45.80 36.57 09/30/99(R)C26240-MW 1994 Malawi Instit. Dev. II 22.60 22.21 06/30/00(R)C23963-MW(S) 1995 Malawi Entrepreneur Dev. & D 40.00 3.29 03/31/96(R)C23964-MW(S) 1995 Malawi Entrepreneur Dev. & D 4.60 .49 03/31/96(R)C26960-MW 1995 Malawi Malawi Railway Rest. 16.16 16.69 12/31/98(R)*C27530-MW 1995 Malawi Nat. Water Dev. 79.20 74.96 06/30/03(R)

TOTAL Number of Credits = 17 Credits 550.66 345.24

Loans10 Loan(s) closed 104.52All closed for MALAWITOTAL number of loans = 0

TOTAL 104.52 1,461.36of which repaid 62.41 39.51

TOTAL held by Bank&IDA 42.11 1,421.85Amount sold .72which repaid .72

TOTAL Undisbursed 345.24

Notes:* Not yet effective* Notyet signed*** Total Approved, Repayments, & Outstanding balance represent both active and inactive Loans & Credits.(R) Indicates formally revised Closing Date.(S) Indicates SAL/SECAL Loans and Credits.The Net Approved and Bank Repayments are historical value, all others are market value.

The Signing, Effective and Closing dates are based upon the Loan Department official data and are not taken from the Task Budgetfile.

18



Statement of IFC Investmentsas of December 31, 1993

(US$ Million)

FY Type of Obligor Business Loan Equity Total1987 Viphya Plywood Plywood 3.9 0.5 4.41986 Leasing & Fin. Co. Money/Capital Markets 0.7 0.2 0.91982 Ethanol Co. Ltd. Chem/Petrochem 2.3 0.2 2.51980/84 Malawi Hotel Ltd. Tourism 2.1 - 2.11979 Indebank Development - 0.6 0.61977/81 Dwanga Sugar Corp. Sugar 11.3 - 11.31982 D. Whitehead & Son Textiles 10.8 - 10.8Total Gross Commitments 31.1 1.5 32.6LESS: Cancellations, Exchange, Adjustments, RepaymentsWrite-offs & Syndicate Sales 26.1 1.1 27.2TOTAL IFC COMMITMENTS 5.0 0.4 5.4

19



Disbursement Performance

The Bank's portfolio in Malawi includes 17 ongoing operations. While some improvement inproject implementation has been recorded, the Government's limited capacity to implement projects remainsa major constraint. One issue observed in project implementation is disbursement, slower than originallyanticipated in the SAR. The overall disbursements (as of November 28, 1995) were about 35% of theapproved credits. The major generic problems in disbursements are (a) procedures; (b) frequent turnover ofdisbursement staff in implementing agencies; (c) lack of counterpart funds; and (d) lack of staff incentives.On the Bank's side, disbursements are slowed by: (a) staff delays in procurement approval; and (b) projectbudget issues not being resolved at project negotiations. To remedy these problems, several disbursementworkshops have been held. In addition, the following actions were taken beginning in FY93: (i)disbursement workshops were conducted in Malawi (and will continue to be held yearly) for disbursementofficers working in Government and in parastatals; (ii) Bank disbursement officers have visited Malawiperiodically to assist ministries/agencies in resolving pending disbursement issues and clearing the backlog;and (iii) departmental procurement specialists have provided significant assistance to local procurementauthorities to speed the procurement process.

IBRD 27693

32 3° -'

o~~~~~

VCHTIT PAX (32)

KARONGA (22)

MALAWI, ( f38)t {NUMBER OF CLASSROOMS

TO BE BUILT UNDER RE.R

N / % (22) NUMBER OF CLASSROOMS/ ) \. Lake < ~~~~~~~~PER DISTRICTLake

KHATA ' DISTRICT BOUNDARIES(60) ~~BAY

(48) / - INTERNATIONAL BOUNDARIES

(MLAWI)_2 12

/- OWIKOTA- \ ' KILOMETERS 0 20 40 60 80 100

KA NG ~ OTAK~OT .______ ______KASUNGU () \ , MILES 0 20 40 60

2 0

MCIJ OA(60) T = VAIAls

> S G~~LONGWE / |

(KFW) LILON OWE

(78) N G O C H I KS

The boundaries, colors. TCHdenominations and anyother informtion shown(100)on this map do not MACHIN Aimply, on the pa ofThe World Bank Group.any judgment on the legalstatus of any territory,or any endorsementor acceptance of such zor >boundari sK.

BW^"seNYA te 9 DCLANTBR95

p , ; X ffi ~~~~~~~~~~~~~~20)

TANZANIA MLLANJI H LO ,f

t t > a <!u f ~~~~~~~CHIKWAWA ( 0 }

BOTSWAN /'= t

l ,Z ~~~AFRIC _ MDGAR,. 3

DECEMBER 1 995

IMAGING

Report No: 6757Type: MOP

world bank documentdocuments.worldbank.org/curated/en/386971468280135500/pdf/mul… · materials...

Documents