Document of The World Bank

FOR OFFICIAL USE ONLY

Report No: 60595-MZ

PROJECT APPRAISAL DOCUMENT

ON A

PROPOSED INTERNATIONAL DEVELOPMENT ASSOCIATION CREDIT

IN THE AMOUNT OF

SDR 45.2 MILLION

(US$71 MILLION EQUIVALENT)

AND A

PROPOSED EDUCATION FOR ALL – FAST TRACK INITIATIVE CATALYTIC FUND (EFA-FTI CF) GRANT

IN THE AMOUNT OF

US$90 MILLION

TO THE

REPUBLIC OF MOZAMBIQUE

FOR THE

MOZAMBIQUE EDUCATION SECTOR SUPPORT PROJECT

April 4, 2011

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.

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CURRENCY EQUIVALENTS

(Exchange Rate Effective February 28, 2011)

Currency Unit = Metical (pl. Meticais) MZM 31,000 = US$1

US$1 = SDR 0.64

FISCAL YEAR January 1 – December 31

ABBREVIATIONS AND ACRONYMS

ADE BdP CALE CF

Direct Support to School program (Balance of) Social and Economic Plan Commission for the Evaluation of School Books Catalytic Fund

CPS CPs COPA CUT DAF DIPE

Country Partnership Strategy Cooperating Partners Joint Committee for Supervision ( Comité paritário de acompanhamento) Unique Treasury Account Directorate of Administration and Finance Directorate of Special Programs

DIPLAC-CEE Construction and Equipment Unit under the Directorate for Planning and Cooperation

DNT DPC DPEC DPPF DRH EA ECD EFA-FTI CF EMIS ESMF

National Directorate of Treasury Development of Professional Competences Provincial Directorate of Education and Culture Provincial Directorates of Planning and Finance Directorate of Human Resources Environmental Assessment Early Childhood Development Education for All Fast Track Initiative Catalytic Fund Education Management Information System Environmental and Social Management Framework

E- PAF EP1 FASE

Education Performance Assessment Framework First Cycle of Primary Education Education Sector Support Fund (ESSF)

FM Financial Management FMS FMR GA GCC GER

Financial Management Specialist Financial Management Report Grant Agreement Joint Consultative Committee Gross Enrolment Rate

GoM Government of Mozambique GDP HDI

Gross Domestic Product Human Development Index

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IAP ICT

Teacher Training College (in-service training) Information Communication Technologies

IDA International Development Association IEDA IFP IMF INDE IPM MDGs MTEF/CFMP MOE MoU NER OE/REO PARPA PEE PdA

Distance Education Institute Teacher Training Institute International Monetary Fund Institute of the Development of Education Integrated Pest Management Millennium Development Goals Mid-Term Expenditure Framework Ministry of Education Memorandum of Understanding Net Enrollment Rate (Execution Report) State Budget Secretary for Education, Youth and Technology at District Level The first Strategic Plan for Education and Culture Annual Activity Plan

PDO Project Development Objectives PES PIM

Social and Economic Plan Project Implementation Manual

PQG PRSP RAR RPF SDEJT

The Government Five Year Plan Poverty Reduction Strategy Paper Annual Review Meeting Poverty Reduction Strategic Plan Resettlement Policy Framework

SISTAFE SPEC

State Administrative and Financial System Strategic Plan for Education and Culture

TA TORs WB

Tribunal Adminstrativo Terms of Reference The World Bank

Regional Vice President: Obiageli Katryn Ezekwesili Acting Country Director: Olivier Godron

Sector Director: Acting Sector Manager:

Ritva Reinikka Peter Materu

Task Team Leader: Sophie Naudeau

iii

Table of Contents I. Strategic Context ............................................................................................................................................. 1

A. Country Context ....................................................................................................................................... 1 B. Sectoral and Institutional Context ............................................................................................................ 3 C. Higher Level Objectives to which the Project Contributes ...................................................................... 6

II. Project Development Objectives..................................................................................................................... 7 A. PDO .......................................................................................................................................................... 7

1. Project Beneficiaries ............................................................................................................................. 7 2. PDO Level Results Indicators .............................................................................................................. 7

III. Project Description....................................................................................................................................... 8 A. Project components............................................................................................................................... 8 B. Project Financing ................................................................................................................................ 14 1. Lending Instrument............................................................................................................................. 14 2. Project Financing Table ...................................................................................................................... 15 C. Lessons Learned and Reflected in the Project Design ....................................................................... 18

IV. Implementation .......................................................................................................................................... 18 V. Key Risks ...................................................................................................................................................... 20

Implementing Agency Risks ............................................................................................................................. 20 Overall Risk Ratings ............................................................................................................................................. 21 VI. Appraisal Summary ................................................................................................................................... 21

A. Economic and Financial Analysis ...................................................................................................... 21 B. Technical ............................................................................................................................................ 23 C. Financial Management ....................................................................................................................... 23 D. Procurement ........................................................................................................................................ 24 E. Social .................................................................................................................................................. 25 F. Environment ....................................................................................................................................... 26

Annex 1: Results Framework and Monitoring...................................................................................................... 28 Annex 2: Detailed Project Description ................................................................................................................ 33 Annex 3: Implementation Arrangements ............................................................................................................. 43

Environment .................................................................................................................................................. 54 Annex 4 Operational Risk Assessment Framework (ORAF) ............................................................................... 60 Annex 5: Implementation Support Plan ................................................................................................................ 63 Annex 6: Team Composition ................................................................................................................................ 66

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PAD DATA SHEET

Republic of Mozambique

Mozambique Education Sector Support Project

PROJECT APPRAISAL DOCUMENT

Africa Region Education

Date: April 4th, 2011 Acting Country Director: Olivier Godron Sector Director: Ritva Reinikka Acting Sector Manager: Peter Materu Team Leader(s): Sophie Naudeau Project ID: P125127 Lending Instrument: Specific Investment Loan (SIL)

Sector(s): Primary Education 75%; Secondary Education 25%, Education for All 100% EA Category: B - Partial Assessment

Project Financing Data: Proposed terms:

[ ] Loan [X] Credit [X] Grant [ ] Guarantee [ ] Other:

Source Cofinancing: Borrower: Republic of Mozambique IBRD: IDA: Others EFA-FTI CF Grant

US$71.0 million US$90.0 million Total Amount: US$161 million

Borrower: Republic of Mozambique

Responsible Agency: Ministry of Education

Contact Person: His Excellency Zeferino Martins Telephone No.: +258 21 480700 Fax No.: +258 21 490979 Email: N/A

Estimated Disbursements (Bank FY/US$ m)

FY 2011 2012 2013 2014 2015 Annual 10 37 47 47 20 Cumulative 10 47 94 141 161

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Project Implementation Period: April 28, 2011- July 31st, 2015 Expected effectiveness date: July 2011 Expected closing date: 31 July, 2015

Does the project depart from the CAS in content or other significant respects?

○ Yes X No

If yes, please explain:

Does the project require any exceptions from Bank policies? Have these been approved/endorsed (as appropriate by Bank management? Is approval for any policy exception sought from the Board?

○ Yes X No ○ Yes ○ No ○ Yes X No

If yes, please explain:

Does the project meet the Regional criteria for readiness for implementation?

X Yes ○ No

If no, please explain:

Project Development objective: The proposed Development Objective is to improve access to and, quality and equity of education.

Project description Component 1: Improving Access to Education Component 2: Improving the Quality of Education

• Subcomponent 2.1: Teacher training for primary education • Subcomponent 2.2: Production and distribution of free primary school books • Subcomponent 2.3: Curriculum Reform for Primary and Secondary Education • Subcomponent 2.4: Direct support to school program (ADE) • Subcomponent 2.5: Subsidies for literacy workers

Component 3: HIV/AIDS Prevention and Mitigation Component 4: Strengthening the Management of the Education Sector Administrative System

• Subcomponent 4.1: Continuing the consolidation of the reforms in the area of financial management and procurement as well as planning budgeting and monitoring

Safeguard policies triggered? Environmental Assessment (OP/BP 4.01) Natural Habitats (OP/BP 4.04) Forests (OP/BP 4.36) Pest Management (OP 4.09) Physical Cultural Resources (OP/BP 4.11) Indigenous Peoples (OP/BP 4.10) Involuntary Resettlement (OP/BP 4.12) Safety of Dams (OP/BP 4.37) Projects on International Waters (OP/BP 7.50) Projects in Disputed Areas (OP/BP 7.60)

X Yes ○ No ○ Yes X No ○ Yes X No X Yes ○ No ○ Yes X No ○ Yes X No X Yes ○ No ○ Yes X No ○ Yes X No ○ Yes X No

vi

Conditions and Legal Covenants of the Financing Agreement: 1. The Additional Conditions of Effectiveness consist of the following: Financing Agreement Reference

Description of Condition/Covenant Date Due

Article V — Effectiveness; Termination

(a) the Grant Agreement has been executed and delivered and all conditions precedent to its effectiveness or to the right of the Recipient to make withdrawals under it (other than the effectiveness of this Agreement) have been fulfilled; and

(b) the Recipient has furnished to the Association, in form and substance satisfactory to the Association, an Annual Action Plan for Fiscal Year 2011.

Effectiveness Condition

Schedule 2. Section IV. B. Withdrawal Conditions; Withdrawal Period

No withdrawal shall be made: (a) for payments made prior to the date of this

Agreement, except that withdrawals up to an aggregate amount not to exceed twenty (20) percent of the Financing may be made for payments made prior to this date but on or after January 1, 2011, for Eligible Expenditures under the Category.

Retroactive Financing

Schedule 2. Section IV. B. Withdrawal Conditions; Withdrawal Period

No withdrawal shall be made: (b) in any Fiscal Year commencing in Fiscal Year 2012,

until: (i) the Recipient has furnished to the Association, in form and substance satisfactory to the Association, a proposed Annual Action Plan along with details of the proposed Annual Action Plan Expenditures including the percentage of said Annual Action Plan Expenditures which may be financed out of the proceeds of the Financing; and (ii) both Annual Action Plan and Annual Action Plan Expenditures have been approved.

Each Fiscal Year

Article IV The Co-financing Deadline for the effectiveness of the Co-financing Agreement is December 31, 2014.

Remedies of the Association

Conditions and Legal Covenants of the Grant Agreement: 1. The Additional Conditions of Effectiveness consist of the following: Grant Agreement Reference

Description of Condition/Covenant Date Due

vii

Article V Effectiveness; Termination

The Grant Agreement shall not become effective until evidence satisfactory to the World Bank has been furnished to the World Bank that the conditions specified below have been satisfied:

(a) the Financing Agreement dated the same date as this Agreement, between the Recipient and the Association, providing a credit in support of the Project (“Financing Agreement”), has been executed and delivered and all conditions precedent to its effectiveness or to the right of the Recipient to make withdrawals under it (other than the effectiveness of this Agreement) have been fulfilled;

(b) the execution and delivery of this Agreement on behalf of the Recipient has been duly authorized or ratified by all necessary governmental action; and

(c) the Recipient has furnished to the World Bank, in form and substance satisfactory to the World Bank, an Annual Work Program for Fiscal Year 2011.

Effectiveness Condition

Schedule 2. Section IV. B. Withdrawal Conditions; Withdrawal Period

No withdrawal shall be made for: (a) payments made prior to the date of this Agreement

except that withdrawals up to an aggregate amount not to exceed twenty (20) percent of the Grant may be made for payments made prior to this date but on or after January 1, 2011, for Eligible Expenditures under the Category.

Retroactive Financing

Schedule 2. Section IV. B. Withdrawal Conditions; Withdrawal Period

No withdrawal shall be made for: (b) in any Fiscal Year commencing in Fiscal Year 2012,

until: (i) the Recipient has furnished to the World Bank, in form and substance satisfactory to the World Bank, a proposed Annual Action Plan along with details of the proposed Annual Action Plan Expenditures including the percentage of said Annual Action Plan Expenditures which may be financed out of the proceeds of the Financing; and (ii) both Annual Action Plan and Annual Action Plan Expenditures have been approved.

Each Fiscal Year

Article IV

The Co-financing Deadline for the effectiveness of the Co-financing Agreement is December 31, 2013.

Remedies of the World Bank

1

I. Strategic Context

A. Country Context 1. Mozambique has emerged from a set of complex emergencies, brought about by war and natural disasters, to become a country with impressive annual economic growth. Between 1996 and 2006, following the devastating civil war that ended in 1992, the economy has grown at a rate of about 6-7 percent annually. The poverty headcount index fell by 15 percentage points between 1996-97 and 2002-03. Economic expansion has been underpinned by overall macroeconomic stability, sound policy reforms, growth in agriculture, post-war reconstruction, mega-projects, and strong support from development partners. 2. Mozambique remains one of the poorest countries in the world. It ranks 165th of 169 countries on the 2010 Human Development Index (HDI). It is a country vulnerable to exogenous shocks (such as recurrent natural disasters). The per capita income was US$454 in 2009 (compared to the Sub-Saharan Africa average of US$500), 55 percent of the population lives below the poverty line, and 63 percent of rural children live in absolute poverty. Despite progress made in achieving the Millennium Development Goals (MDGs), more progress needs to be made in increasing access to and the quality of basic public services such as education, health, and water and sanitation, particularly in rural areas.

3. Substantial progress has been made towards reducing child mortality, and good progress has been made in increasing immunization rates (Goal 4). Under-5 mortality rate has decreased from 178 per thousand in 2000 to 138 per thousand in 2008. Nevertheless, Mozambique is very unlikely to meet this MDG goal by 2015. Good progress has been made in improving maternal health (Goal 5); nevertheless, Mozambique is unlikely to meet this MDG goal by 2015. Maternal mortality has decreased from an estimated 1,000 per 100,000 live births in the early 1990s to 408 per 100,000 live births in 2003 and further to 340 in 2007. The number of attended births has increased slightly; however, Mozambique continues to have one of the worst performances in the region for these targets.

4. There has been little progress in combating HIV/AIDS, malaria and other diseases (Goal 6). A 2010 report suggests that the HIV/AIDS prevalence rates remain still very high, even though there was a reduction in the prevalence rate from 16 percent in 2007 to 11.5 percent in 2009. The prevalence rate among women is particularly high at 13.1 percent.

5. In spite of the challenges the country faces, Mozambique is making steady progress towards the achievement of universal primary education by 2015 (MDG 2). Net enrollment in primary education more than doubled from 45 to 95 percent between 1998 and 2010, and the completion rate (grade 7) increased from 34 percent in 2004 to 50.8 percent in 2010. A major achievement is the increase in the net enrollment rate at 6-7 years of age from 19 percent in 1998 to 70 percent in 2010. Nevertheless, efforts have to continue particularly to improve retention and reduce dropout rates in order to increase completion rates, as well as to continue removing gender disparities, and to increase the quality of primary education

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6. Mozambique remains stable with respect to gender equality and empowering women (MDG 3). Gender indicators at all levels of education have improved, particularly in the lower level of primary education (grades 1 to 5, also called EP1) and the gender difference in net enrollment ratio was greatly reduced. While in 2003 only 44.7 percent of the students in primary schools were girls, in 2010 this was 47.3 percent. In secondary education the proportion of girls improved from 40 percent in 2004 to 44 percent in 2010. Nevertheless, significant gender gaps remain at the upper level of primary education (grades 6 and 7, also called EP2) and in secondary education, and great regional differences remain.

Table 1: Mozambique Population and Education Indicators Domain/Indicator Total

Selected population characteristics Total size of population based on last census (2010)

22.4 mln

% of population below the poverty line (2008) 54.7% HIV prevalence among prime-age adults (2009) 11.5% Enrollment rates 2010 (%) Primary (Net) 95.5 Secondary (Gross) 45.5 Primary education enrollments and student flow (2010)

Total enrollments 5.3 mln

% in privately financed and managed schools 2% Net enrollment rate Grade 1 (%) – 6 year olds 69.9% Primary education completion rate (%.)-(total) 50.8% Repetition rate over primary cycle (2009) 7 Dropout rate over the primary cycle (2010) Primary Transition rate to Secondary education

6.5% 79%1

% of girls in primary education (Grade1- Grade7)

47.3% % of girls intake first grade 49% Primary student learning outcomes Pass rate in national primary school leaving exam (2009)

67%

Govt. primary school service delivery indicators

Years in cycle 7 classes Pupil-teacher ratio (overall -2010) 66:1 Pupil-textbook ratio (GRADE 1 &2) 1:1

Source: 2010 Mozambique Education Sector Information System Report.

1 This rate takes only day school into consideration. If night school is included then the transition rate is approximately 93%.

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7. Mozambique’s gross domestic product (GDP) growth decreased only slightly from 6.7 percent in 2008 to 6.3 percent in 2009, as a result of the financial crisis. In early 2009, the Government prudently took steps to mitigate the impact of the crisis. In line with the advice of the International Monetary Fund (IMF) and the Bank, the Government decided to loosen the fiscal and monetary stance during 2009. The Government also eased monetary policy in order to limit the contractionary impact of the higher public debt on credit to the private sector. The Government requested access to 100 percent of its quota at the IMF (approximately US$170 million equivalent) in additional foreign exchange reserves under the IMF’s Exogenous Shock Facility (ESF), which was approved by the IMF Board in June 2009. Overall economic performance was satisfactory. 8. The financial crisis impacted negatively the education sector. Inflation rate increased in 2010 due to the exchange rate fluctuation between the Euros-Dollar- metical. In addition, the Government reduced fuel subsidies which increased transportation costs. As a result, there have been increased costs in construction, supervision, equipment, and textbook delivery. This, combined with the expected reduction in external funding in the coming years, will have a significant impact on the education budget despite cost savings associated with the implementation of new procurement models that have helped the sector to become more cost-effective. 9. Around 50 percent of the overall Government’s budget is funded through external sources (loans and grants). In the case of the education sector, this percentage has been between 35-40 percent up to 2009. FASE is currently financing 18 percent of the overall education budget. In 2010, the sector experienced reduced external funding (36 percent reduction in commitments through bilateral projects and 8 percent through FASE, the Education Sector Support Fund). These cuts have put pressure on the sector, with serious implications for the implementation plan.

B. Sectoral and Institutional Context 10. The Mozambican constitution establishes education as a right, as well as a duty, of all citizens. The Government acknowledges the key role of education in improving living conditions and reducing poverty. The Government’s focus is to ensure that by 2015 all children have access to, and can complete, a seven-year primary education. At the same time, it is acknowledged that primary education is not enough to support and sustain the national processes of the country in a global economy and society. The Government promotes a holistic vision of the education system which implies simultaneously developing quality post-primary (secondary, technical and higher) education, in order to address the human capital needs required for Mozambique’s human and economic development. There are different political and strategic instruments that guide planning; budgeting and monitoring processes in the country (see Table 2).

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Table 2. The Government’s political and strategic instruments for planning; budgeting and monitoring. Agenda 2025 reflects the long-term vision for the development of the Country. Government’s 5 Year Plan (PQG): The Government’s key objectives and priorities in a five year mandate. (Absolute) Poverty Reduction Strategic Plan (PRSP/PARPA): The Government’s medium-term strategy to reduce the poverty, based on the PQG. Mid-Term Expenditure Framework (MTEF/CFMP): Instrument that defines the limits for the implementation of PARPA in the medium term (three year roll-out). Sectoral and Provincial Strategic Plans: Medium term strategic plans for the ministries or provinces that translate the Government’s main objectives (of the PQG) into specific strategies to achieve them. (Balance of) Social and Economic Plan (BdP/PES): The annual plan that operationalizes the general lines of the PQG and PARPA, translating the sectoral or provincial strategies into specific actions for implementation in the relevant year. Its implementation is assessed twice a year through the Balance of the PES. (Execution Report) State Budget (OE/REO): The budget that defines the funds made available for the implementation of the actions specified in the PES. Its execution is monitored on a quarterly basis through the Budget Execution Report (BER/REO). The Annual Activity Plan (PdA): Specific instrument of the education sector that translates the actions of the PES into specific activities and links them to the budget made available for implementation (through the State Budget or other known contributions that are not included in the budget). The education sector strategic plans 11. The strategic plans of the sector follow and execute the National Education Policy (1995) that highlights education as a key human right and instrument for poverty reduction. 12. The first Strategic Plan for Education and Culture (PEE) was implemented from 1998 to 2005. The focus was on primary education with the specific objectives of increasing access, improving quality and strengthening institutional capacity. 13. The second, and current, Strategic Plan for Education and Culture (PEEC/SPEC) 2006-2010/11, operationalizes the PQG 2005-2009 and re-emphasizes the objectives of the previous plan, which continue to be valid. However, in line with the MDGs for education, there is more emphasis on improving the quality of education and on increasing student retention up to grade 7. At the same time, the PEEC anticipated an increase in the efforts to develop post-primary education and reduce the level of illiteracy in order to create the necessary human capacity to

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sustain an economy in continuous growth. Resulting from the merger of different ministries, the PEEC also incorporates the subsystems of higher education and culture. 14. The next strategic plan is currently being drafted (2012–2016), and will operationalize the Government’s new Five Year Plan (2010-2014). The Government’s Five Year Plan for 2010-2014 continues to prioritize a seven-year system for primary education, as well as the development of the post-primary system. Reducing illiteracy as a means to increasing individual capacity to improve one’s quality of life and that of one’s family remains one of the Government’s main concerns. Thus, the new strategic plan will reflect the continuation and consolidation of the sector’s main existing strategies. The education sector results 15. Over the past years, the sector has focused on three main goals, namely to: (i) increase access, by reducing geographical and gender disparities; (ii) improve the quality of education; and (iii) strengthen the institutional capacity of the system at all levels. 16. The Strategic Plan for Education and Culture 2006-2010/11, operationalized this focus through the following main actions:

• The actions to increase access concentrated, on the one hand, on expanding the school network through the construction of educational infrastructure and, at the same time, on the implementation of specific measures to prevent exclusion for financial, cultural or gender reasons;

• To improve the quality of education, the focus of the interventions was on: curriculum reform; provision of textbooks and other teaching and learning materials in sufficient quantities and in a timely manner; the development of an integrated system for teacher training and capacity building; and increasing the annual recruitment of newly trained teachers;

• To improve performance in the provision of education services through an increase in

institutional capacity, the Ministry of Education is working towards making the education system, from the central level to the school level, increasingly less bureaucratic, more creative, more dynamic, closer to students, parents, tutors and the community. The Ministry of Education is also willing to be accountable for its performance.

17. Special attention was given to improving the planning systems, financial management and monitoring of the implementation of the sector’s programs, through the decentralization of responsibilities and financial resources up till school level. 18. The Government’s efforts have resulted in an expanded system at all levels. Between 2003 and 2010, the number of children in primary schools increased from 3.3 million to 5.3 million at an average growth rate of 8 percent per year, bringing the net enrolment rate up to 95.5 percent in 2010. As previously mentioned, the gender gap is steadily closing. In 2004, 22 districts had pupil populations where less than 40 percent of the children were girls, while this is

6

only the case for one district in 2010. Net enrollment of 6 year old children has increased from 62 percent in 2007 to 70 percent in 2010. Retention of children in school has improved from 30 percent in 2006 to 41 percent in 2010. While repetition rates have decreased considerably (from 20 percent in 2004 to 7 percent in 2009) with the introduction of the new curriculum that promotes semi-automatic promotion, the dropout rate has remained stable over the last few years at around 7-8 percent. The number of children attending secondary education has almost quadrupled in the period 2003–2010, from around 270,000 to 900,000 students.

19. The number of children annually graduating from primary school (grade 7) has increased substantially from around 166,000 in 2004 to 265,000 in 2009. As a consequence, completion rate has improved considerably from 34 percent in 2004 (26 percent for girls) to 50.8 percent in 2010. These positive results have been supported by priority actions such as the hiring of more teachers in order to bring down the pupil teacher ratio; the reform of the teacher training program that ensures that all newly hired teachers have pedagogical training; and the provision of books and basic learning materials to all schools. 20. The first EFA-FTI CF grant of US$79 million contributed to the implementation of the Mozambique Strategic Plan for Education and Culture (2006-2010/11) (SPEC) by reducing its financing gap in 2008, 2009, and 2010. The CF was channeled through the Mozambique education sector donor funding pool FASE just like this proposed project, and implemented by the MOE. The first EFA-FTI CF support supported seven components: (i) improvement of access and quality in primary education; (ii) supporting implementation of literacy programs for adult learners; (iii) supporting the development of a secondary and technical and vocational education strategy; (iv) supporting in-service teacher training programs at all levels of education; (v) supporting strategy development and finances in higher education; (vi) supporting the construction of special education and ICT; and (vii) strengthen the MOE’s institutional and fiduciary capacity.

C. Higher Level Objectives to which the Project Contributes

21. The latest Country Partnership Strategy (CPS), which spans the period 2008-2011, aims to support the Government of Mozambique in the implementation of its second Poverty Reduction Strategy (PARPA II). PARPA II identifies human capital as one of its three main pillars and identifies the following priorities in education: increasing the net schooling rate and the completion rate of primary education for girls, and improving the quality of teaching by reducing the student-teacher ratio. The CPS also acknowledges that both access to and quality of education continues to be high priorities in Mozambique. This project contributes directly to these higher level objectives. 22. It is also important to note that this project contributes to the overall FASE pool of Donor contributions for the Mozambique Education Sector Support Program2

2 Throughout this PAD, “Program” is used when referring to the overall FASE pool while “Project” is used when referring only to the portion of the FASE pool that is supported by IDA and EFA-FTI CF. The Financing and Grant Agreements will refer to this as a “Project” and not as a “Program.”

over the period of this project (i.e., 3 years for the EFA-FTI-CF allocation of US$90 million and 4 years for the IDA credit of US$71 million). The following ten donors contributed to the FASE pool of funds in

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addition to EFA-FTI CF during the period 2008-2010: Ireland, Finland, Germany, DFID, Portugal, Spain, UNICEF, CIDA-Canada, the Netherlands and DANIDA. An additional two donors (Italy and Flanders Cooperation) are expected to join the FASE pool of funds in 2011, while the Netherlands will stop disbursing in 2011 and DANIDA in 2012. 23. While the overall education budget currently represents approximately US$650 – 7003

million in Mozambique, FASE contributed about US$120- 135 million per year over the period 2008-2010 (or roughly 18 percent of the overall annual education budget of the Government). The EFA-FTI CF contribution represented about 20 percent of the FASE pool of funds during this period (i.e., approximately US$26 million per year). With this new project over the period 2011-2015, the joint EFA-FTI CF and IDA contributions represent a larger share of the FASE pool of funds, thus compensating for the negative trend of reduced external funding previously mentioned.

II. Project Development Objectives

A. PDO

24. In 2008, following the 2007 approved first EFA-FTI CF for a period of 3 years (2008-2010) in the amount of US$79 million, the Government of Mozambique and the Development Partners agreed to the World Bank being the supervising entity. In November 2010, a second EFA-FTI CF was approved in the amount of US$90 million for the period 2011-2014. 25. The proposed project is a direct continuation of the first EFA-FTI CF for the Mozambique Education Sector Support Program, with the same development objective. The proposed Development Objective is to improve access to and, quality and equity of education.

1. Project Beneficiaries 26. Since the project is channeled through FASE, it is expected to contribute to the overall education system. In 2010, this included approximately 5.3 million children in primary education, 900,000 children in secondary education, and 680,000 adults in literacy classes. Although the primary education system is stabilizing in the south of the country, the system is expected to continue to grow in other regions, thus absorbing more children every year. In addition, it is expected that the completion rate will increase and that more children will complete primary education annually.

2. PDO Level Results Indicators 27. The PDO level results indicators include: (i) increased primary completion rate, (ii) net enrolment of 6-year-old children in Grade 1, (iii) transition rate EP2/next level post primary, (iv) gender parity index (GPI), and (v) direct project beneficiaries (number), of which female (%). Annex 1 provides a complete results and monitoring framework. 3 Depending on the exchange rate

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28. It is important to highlight that all the PDO level results indicators as well as the intermediate results indictors reflect the overall implementation of the Government’s sector program and does not just depend on the overall FASE contribution or the IDA and EFA-FTI CF portions of it. The indicators are part of the overall monitoring and evaluation framework agreed between the MOE and its external partners in the context of monitoring the implementation of its PRSP through its sector program (education-PAF).

III. Project Description

A. Project components 29. As previously mentioned, the project will continue to channel resources through the common fund (FASE). Funds will continue to be allocated based on an agreed annual activity plan which is designed to implement the Ministry of Education’s strategic plan for education and culture. Each year the ministry presents an annual activity plan with the proposed budget and financing plan. The annual plans are agreed with the Bank and the other CPs. The annual plans include all activities of the sector funded by both internal and external sources. 30. The specific activities funded by the common fund (FASE) will differ from year to year based on the particular needs and gaps of the year which will be discussed and agreed upon by the MOE, the Bank, and the other CPs. In practice the project, through FASE, will continue support for the implementation of the Government program in support of, but not limited to: construction, direct support to schools; the provision of school books; subsidies of literacy workers; pre-service and in-service teacher training; curriculum reform; HIV/AIDS prevention and mitigation; decentralized management, supervision and monitoring; and institutional development. It is expected that the project will continue programs that ensure continuity of existing strategies that have proven to be effective, and that it will implement the necessary adjustments to address major challenges in order to enhance the overall sector performance toward meeting its strategic objectives. The activities and components are representative of the minimal number of activities the Government will continue to support in light of the expected shortfall in resources for the education sector. 31. The expected FASE budget for the coming four years is estimated at US$512 million (or annually US$128 million) of which EFA-FTI CF and IDA will provide US$161 million (i.e. 31 percent of the FASE budget). Component 1: Improving Access to Education (US$166.72 million, of which US$29.31 million financed by EFA-FTI CF and US$23.12 million financed by IDA)4

32. In 2005, the Government accelerated classroom construction through the decentralization of the competencies for classroom construction to the provinces. This was part of the overall strategy to expand access to primary education for all school aged children and improve teaching conditions. This accelerated classroom construction program is based on strong community

4 The cost of each component is based on estimates and subject to changes. All expenses that fall within the agreed upon Annual Activity Plan (PdA) are eligible for financing by FTI and IDA. The Government will decide what specific expenditures to allocate to FTI and IDA.

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involvement through local construction. The program also includes the provision of furniture and housing for teachers. The current program contributed to a 12 percent increase in the number of classrooms from 44,747 in 2007 to 50,354 in 2009, as well as an increase of around 50 percent of concrete or brick classrooms. In 2008, the program was expanded to include secondary schools in rural areas. 33. The proposed project, through FASE, will continue to support this activity aimed at building approximately 800 new primary education classrooms and 200 rural secondary classrooms annually, and to provide the required furniture. Over the four year period of the project, through FASE, it is anticipated that approximately 3,200 new classrooms will be built in existing primary schools on the government owned land, and 800 new secondary school classrooms will be built on the government owned land. The construction will involve large national or international suppliers, benefiting from economies of scale alongside the use and continued development of local capacity. 34. To maintain the level of access to education in basic and secondary education the education sector will have to continue to recruit and deploy annually in the upcoming 5 years about 10,000 teachers and education officials. However, due to the recent economic crisis the sector budget has been reduced permitting only the recruitment of 8,500 teachers. In order to ensure sufficient teachers for post primary education and to minimize the constraints on access to basic education, FASE will contribute to the salaries of new contracted teachers in 2011. The FASE donors and the Bank will continue to work with the government to ensure that in 2012 at least 75 percent of these newly recruited teachers can be absorbed by the Government budget. 35. To ensure a better start for all children and improve their performance in school, the ministry also recognizes the need for a robust pre-primary education program. Currently, the coverage of early childhood education services is only 4 percent, and mainly provided by the Ministry of Women and Social Services, the private sector, and local community organizations. FASE will support the development of an integrated framework that considers the development of the child as a whole. The ministry recognizes the importance of early childhood education and will progressively support increased access to pre-primary education in the coming years. Component 2: Improving the Quality of Education (US$283.1 million, of which US$49.8 million financed by EFA-FTI CF and US$39.3 million financed by IDA) 36. This component will continue to support the Government plans to improve the quality of education through: (i) the continued implementation of the reform in teacher training which is aimed at providing intense and quality pre-service and in-service training and increasing the number of teachers; (ii) the provision of free primary school books; (iii) direct support to schools; and (iv) subsidies for literacy workers. Subcomponent 2.1: Teacher Training for Primary Education (US$20.2 million, of which US$3.5 million financed by EFA-FTI CF and US$2.8 million financed by IDA) 37. In 2006, the pupil:teacher ratio was 75:1 due to the rapid expansion in the number of students attending primary and secondary schools. At the same time, 35 percent of the teachers

10

did not have any pre-service teacher training. This had a detrimental impact on the quality and efficiency in the system. The MOE’s reform aimed at, among others, providing intense quality pre-service training without losing sight of the need to ensure the long-term sustainability of an increasing number of teachers in the system. This led to: (i) reforms in pre-service teacher training by adjusting the teacher training curriculum, improving quality of teacher training; and providing basic training in a shorter period of time (one year); (ii) promotion of a system that fully integrated pre-service training and continuous professional development; and (iii) rationalizing the existing system for in-service teacher training by transferring this responsibility to teacher training institutes (IFPs), which are part of the Ministry of Education. 38. Since 2006, the IFPs have increased the number of pre-service graduates from 5,228 in 2006 to 10,033 in 2009. In addition, 5,563 primary school teacher graduates have improved their qualification level through the IAP/IEDA distance education learning courses. Since 2008, the IFPs have conducted continuous training activities for primary school teachers and managers, led by the IFPs trainers, and this program benefited greatly from an increase in FASE funding in 2008. 39. Pre- and in-service teacher training will remain a priority in the next strategic sector plan and continue to benefit from funding through FASE. The current number of newly graduated teachers should be sufficient to ensure a continued decrease in the pupil: teacher ratio, which is still high. At the same time, the project will continue to focus on increasing the capacity of the IFPs to implement the integrated teacher training system: pre-service training and on the job training, distance training and support to new teachers in the workplace. Subcomponent 2.2: Production and Distribution of Free Primary School Books (US$103.5 million, of which US$18.3 million financed by EFA-FTI CF and US$14.3 million financed by IDA) 40. The Government of Mozambique has declared free primary school. This means that all children shall have access to a full primary education cycle of seven years, regardless of financial means. In order to implement this strategy, the Government agreed to distribute free textbooks to all children. Every year, approximately 12 to 14 million books (82 titles) are produced and distributed to primary schools from grades 1-7. The planning is based on an annual school survey conducted each March as well as a ratio of one textbook per subject per student – most books having a life-span of three years (with the exception of workbooks from grade 1 and 2 which have a one year life span). This program has contributed to increased enrollment in primary schools. However, it also represents a large portion of the sector’s budget (in 2009 the production and distribution of textbooks for primary education represented about 15 percent of the FASE expenditures). 41. In spite of the success of this program, there are still students without books. This subcomponent will, through FASE, continue to support the distribution of free textbooks as well as assist in ongoing Government efforts to find ways to reduce the cost of production and ensure better coverage. The Government’s plan to achieve this is to: (i) continue savings by acquiring property rights for more book titles; (ii) rationalize the number of titles particularly in grades 3 to 7; (iii) improve book conservation by improving the quality of the books and improving storage

11

conditions at schools; (iv) increase replacement rates, particularly for key subjects; and (v) implement actions to make textbook distribution more competitive. 42. Linked to the objective of improving quality of education, the challenge is to continuously improve the capacity of teachers in the use of textbooks in the classroom to achieve better student learning outcomes. This challenge is directly linked to the need for greater focus on this within teacher training and as a part of regular supervision, which is discussed in the teacher training component. Subcomponent 2.3: Curriculum Reform for Primary and Secondary Education (US$4.7 million, of which US$0.8 million financed by EFA-FTI CF and US$0.7 million financed by IDA) 43. In 2004, the ministry introduced the new curriculum for primary education with the objective of contributing to improving the quality and relevance of education. The curriculum transformation aims to support efforts to reduce dropout and failure rates, and gender and regional disparities. The transformation was based on the need to adjust the structure and content of the curriculum to the changing reality of the country and today’s world. A curriculum plan for primary education was developed and programs and school manuals were validated and approved. The results achieved with the introduction of the primary education curriculum are demonstrated through the: (i) increase in completion rates for primary education, equity and reduction of’ repetition and drop-out rates; (ii) perception that the curriculum is innovative, as demonstrated through the introduction of Mozambican languages, local curriculum and new subjects; and (iii) provision of textbooks and teacher manuals that are consistent with the primary education curriculum plan and with the teaching programs, and more attractive and adapted to the Mozambican reality. 44. In 2006/07, the MOE initiated the reform of secondary education. The main objective of this reform is to align with the basic education curriculum and improve its responsiveness to changing societal needs in terms of ensuring that secondary school leavers have the necessary competencies to become productive adults.

45. The project, through FASE, will continue to support ongoing curriculum reform activities in both primary and secondary education with continued focus on the development of basic skills in speaking, reading, writing and numeracy among all students in the first years of school and the consolidation of these skills throughout the next cycles of learning. This goal, which is taken as an indicator of the quality of teaching, should be achieved in parallel to and support of the reduction of school failure levels, the subsequent increase of completion rates at the appropriate age and with the skills defined in the curriculum, and the increase in the number of students pursuing their education at the next level. Subcomponent 2.4: Direct support to school program (ADE) (US$139.3 million, of which US$24.3 million financed by EFA-FTI CF and US$19.6 million financed by IDA)

46. The direct support to school program (ADE) is a program that transfers funds directly from the central level to schools for the purchase of basic materials to support teaching and

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learning processes. An evaluation of the program has shown that the program has a positive impact in terms of ensuring funding for the purchase of basic materials (i.e., pens, pencils, notebooks, complementary reading materials etc.) and strengthening the functioning of school councils who are responsible for the management of funds. Currently the program is based on number of students only and places around US$2.5 per student per year in all primary schools. In 2006, a pilot project was introduced to provide additional support for orphans and other vulnerable children affected by the HIV/AIDs pandemic in the amount of US$1.5 per child through the ADE structure. In 2009 this pilot operated in 13 districts. This has been considered unsustainable and was discontinued. However, with the expected increase in ADE funding, a social protection component will be introduced to support the most vulnerable children throughout the country. The Government is also planning to introduce an element of performance-based financing in future ADE allocations. 47. In 2008, the ADE program was expanded to include secondary schools and institutions for technical-vocational training. 48. The project, through FASE, will continue to support the ADE through the direct transfer of funds from the central level to the school level. The integration of the social protection aspect of the program that targets orphans and vulnerable children will also continue to be supported. The ADE should be regarded as the main fund available to primary schools for the purpose of: (i) funding the school’s recurrent expenses (i.e., maintenance, electricity and water); (ii) funding basic learning materials aimed at improving the quality of education; and (iii) ensuring the increased participation and retention of vulnerable children. Subcomponent 2.5: Subsidies for literacy workers (US$3.7 million, of which US$0.9 million financed by EFA-FTI CF and US$0.5 million financed by IDA) 49. The Government Five Year Plan (PQG) expects a reduction of the adult illiteracy rate (measured through household surveys) from 48.1 percent in 2009 to 30 percent by 2014. In order to reach this target, one million people will need to develop literacy skills every year. This subcomponent will continue to provide subsidy payments for literacy workers involved in different literacy programs provided by government and non-governmental organizations. In 2003, the payment of trainer subsidies was introduced (550 MT per month). Beginning 2011, an increase in the monthly amount of the subsidy is anticipated from 550 MT to 650 MT (approximately US$20/month). This program is traditionally co-financed by the internal source of funding. The payment of subsidies has been a consistent element of the programs financed by FASE, reflecting the Government’s commitment to reducing the high illiteracy rate in the country, particularly among rural women. Despite a clear commitment and emphasis on adult literacy, progress has been slow, as external factors such as lack of a literate environment play an important role in sustaining literacy. Component 3: HIV/AIDS Prevention and Mitigation (US$11.8 million, of which US$2.1 million financed by EFA-FTI CF and US$1.6 million financed by IDA) 50. Data from 2009 indicate that 11.5 percent of Mozambicans between the ages of 15-49 are infected with HIV. The highest prevalence rates are found among girls aged 15-24. In 2009, the

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prevalence rate in pregnant women aged 15-19 was 8 percent; and 16 percent for women between the ages of 20-24. The gender difference is serious. Women aged 15-19 are 3 times more prone to contamination than men the same age and 4 times more prone between the ages of 20-24. 51. In spite of efforts made, the prevalence of HIV/AIDS remains very high in Mozambique. There is some evidence that the situation has stabilized in the north and that the infection rate in the central part of the country has decreased, excluding Zambézia. In the south, the epidemic is still growing.

52. However, over the past five years there has been significant progress in: (i) the mainstreaming of HIV/AIDS as a cross-cutting issue into the sector, through budgeted plans; (ii) the expansion of funding for prevention, care and mitigation at provincial and district levels; (iii) the expansion of antiretroviral treatment to all districts, and (iv) the launch of the community counseling and testing initiative. 53. The education sector has been hit particularly hard as the high prevalence rate of HIV/AIDS among teachers and administrative staff in Mozambique strongly impacts both access to and quality of education, in part because of the challenge of having to constantly replace teachers who become sick and can no longer teach and in part because of illness-related absenteeism. This component will therefore contribute to achieving the project outcomes in components 1 and 2. 54. The sector has formulated its interventions on the basis of its four functions in the combat of the HIV/AIDS pandemic:

• as employer

•

: aiming to develop HIV/AIDS prevention and impact mitigation actions for teachers, school directors and other staff; as educator:

•

aiming to develop HIV/AIDS prevention and impact mitigation actions for students, including support to orphans and vulnerable children; as system

•

: aiming to develop an effective institutional framework that will allow the sector to provide an adequate response to HIV/AIDS in order to carry out its central education mission in spite of the epidemic’s impact; as part of the national response

: aiming to develop effective relationships with other governmental and non-governmental partners to respond to the epidemic.

55. The project, through FASE, will focus on mainstreaming HIV/AIDS prevention and mitigation activities into existing key sector programs (i.e., school curriculum; textbooks, ADE, teacher training, etc.), as well as on-going planning, budgeting and monitoring processes. It will also provide support to the implementation of the HIV/AIDs work place policy that aims to support education officials (teachers and administrators alike). Component 4: Strengthening Management of the Education Sector Administrative System (US$50.3 million, of which US$8.8 million financed by EFA-FTI CF and US$7.0 million financed by IDA)

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56. The objective of this component is to strengthen institutional capacity at all levels to ensure adequate management of the education sector administrative system. This is particularly important in the current context of rapid expansion of the sector and of increased decentralization of responsibilities and financial resources. Strengthening institutional capacity requires, but is not limited to, investments in the provision of means (such as transportation, communication, supplies), clear orientation in terms of the role of education sector staff in the implementation and monitoring of activities, clear procedures and regulations, strong incentives, and supervision and capacity building. Subcomponent 4.1: Continuing the consolidation of the reforms in the areas of financial management and procurement as well as planning budgeting and monitoring 57. This subcomponent will support an integrated planning and monitoring system that builds on the principle that decentralization requires greater accountability systems to avoid inequities in the service delivery of educational services. In this context the project will continue to support the following activities: • Capacity building activities aimed at increasing the knowledge of provincial and district-

level officials in strategic planning and budgeting of education; • Initiation of the process of design of procurement plans at provincial level and in selected

districts where capacity has been strengthened; • The upgrading of the existing Education Management Information System (EMIS), which is

also supported by additional resources from other partners. This sub-component will aim at strengthening integrated monitoring and evaluation by assisting the directorate of planning through: (1) provision of technical assistance to review and upgrade the existing EMIS system; (2) provision of technical support for the design of an integrated planning and monitoring system; and (3) provision of technical assistance to conduct the impact evaluation of selected interventions which will serve to support policy and timely decision making.

• Impact evaluation studies of selected interventions to inform policy decision-making. • Provision of financial support to Provincial Directorates of Education and Culture (DPECs)

and district-level Secretaries for Education, Youth and Technology (SDEJTs) to facilitate their functioning and responsiveness to manage the implementation of the system at decentralized levels.

• Provision of technical assistance in the areas of financial management, procurement, and construction.

B. Project Financing

1. Lending Instrument

58. The proposed Project is a Sector Investment Loan (SIL) intended to cover the financing gap to fully implement the education strategic plan with special focus on improving school

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readiness in children, basic education and secondary education5

. Proposed resources from IDA (US$71 million) will be pooled with resources from the Fast Track Initiative Catalytic Fund (US$90 million) and with contributions from other CPs through FASE (see Table 4 below for indicative commitments from each CP). FASE has been identified by the Ministry as the preferred mechanism for channeling external support to the sector and is in operation since 2003. In 2010, around 75% of all external support was being channeled through FASE. FASE has contributed to increased planning, budgeting and implementation capacity of the Ministry by reducing the transaction costs involved when managing a variety of parallel bilateral projects.

59. Alternatives considered included Additional Financing to the previous EFA-FTI CF project. However, because this is the first IDA credit in support of the Mozambique Education Sector Support Program, and because the previous project was not approved by the board as it was financed by EFA-FTI CF, this alternative was rejected. In addition, it would have been difficult to complete all activities within the limit of a three year extension.

2. Project Financing Table 60. The overall FASE budget for the coming four years is estimated at US$511.9 million, of which US$90 million financed by EFA-FTI CF (2011-2013) and US$71 million financed by IDA (2011-2014). The rest will be financed by other CPs. Detailed information on specific activities to be financed with FASE funds, including the estimated IDA/EFA-FTI CF contribution by component and subcomponent, is provided in Table 3 below. Table 3 includes retroactive financing for eligible expenditures incurred after January 1, 2011 up to 20 percent of the IDA credit and EFA-FTI CF respectively. It is important to note that all expenses that fall within the agreed upon Annual Activity Plan (PdA) are eligible for financing by EFA-FTI CF and IDA. The Government will decide what specific expenditures to allocate to EFA-FTI CF and IDA, respectively.

5 In addition to pooling their funds in FASE, some FASE partners including the World Bank will continue to provide parallel project support in the subsectors beyond general education such as higher education, science, and technology and technical education. These programs nevertheless are aligned with the Ministry’s SPEC.

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Table 3: FASE funding by Component and Sub-Component, US$ million

FY 2011 (including

retroactive financing) and FY 2012

FY 2013 FY 2014 FY 2015 2011-2015

Project Cost by Component and Sub-Component FASE (Total)

of which EFA-FTI CF

of which IDA

FASE (Total)

of which EFA-FTI CF

of which IDA

FASE (Total)

of which EFA-FTI CF

of which IDA

FASE (Total)

of which IDA

FASE (Total)

1. Rehabilitation of MOE buildings 0.4 0.1 0.1 0.6 0.2 0.1 0.6 0.2 0.1 0.6 0.1 2.3 1. Accelerated classroom construction 24.6 5.8 3.3 24.3 5.7 3.2 23.0 5.4 3.1 23.0 3.6 95.0 1. Rehabilitation of teacher training institutions 2.7 0.6 0.4 2.6 0.6 0.3 2.6 0.6 0.3 2.6 0.4 10.4 1. Rehabilitation and construction of secondary schools 5.9 1.4 0.8 6.4 1.5 0.9 9.0 2.1 1.2 9.0 1.4 30.3

1. Rehabilitation and construction of technical schools 9.6 2.2 1.3 6.4 1.5 0.9 6.4 1.5 0.9 6.4 1.0 28.8 2.1 Teacher training for primary education + supervision 4.9 1.1 0.6 5.1 1.2 0.7 5.1 1.2 0.7 5.1 0.8 20.2

2.2 Primary school books 24.3 5.7 3.2 23.0 5.4 3.1 23.0 5.4 3.1 23.0 3.6 93.4 2.2 Teaching materials for adults and youth (non-formal) 2.4 0.6 0.3 2.6 0.6 0.3 2.6 0.6 0.3 2.6 0.4 10.1

2.3 Monitoring and curriculum development - primary education 0.8 0.2 0.1 1.3 0.3 0.2 1.3 0.3 0.2 1.3 0.2 4.7

2.4 Direct Support to Schools (ADE) and school supplies 17.5 4.1 2.3 19.2 4.5 2.6 19.2 4.5 2.6 19.2 3.0 75.1

2.4 Activities to improve school quality for secondary education 10.9 2.6 1.4 10.2 2.4 1.4 10.2 2.4 1.4 10.2 1.6 41.6

2.4 Direct support for technical schools and other materials 3.50 0.8 0.5 6.4 1.5 0.9 6.4 1.5 0.9 6.4 1.0 22.7

2.5 Subsidy for literacy workers 3.70 0.9 0.5 3.8 0.9 0.5 3.8 0.9 0.5 3.8 0.6 15.2

3. HIV /AIDS, school health and nutrition 3.50 0.8 0.5 3.2 0.8 0.4 2.6 0.6 0.3 2.6 0.4 11.8

4. Support fund for district direct supervision 4.10 1.0 0.5 3.8 0.9 0.5 3.8 0.9 0.5 3.8 0.6 15.6 4. Support fund for provincial supervision 2.60 0.6 0.3 2.6 0.6 0.3 2.6 0.6 0.3 2.6 0.4 10.3 4. Technical assistance, evaluation and institutional development 6.40 1.5 0.9 6.4 1.5 0.9 5.8 1.4 0.8 5.8 0.9 24.4

Total Financing 127.9 30.0 17.0 128.0 30.0 17.0 128.0 30.0 17.0 128.0 20.0 511.9

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Table 4: Indicative partner commitments towards FASE for the period 2011-2014 (Amounts in 10^3)6

Agency 2011 2012 2013 2014

Netherlands Commitment 0 0 0 Negotiation

CIDA – Canada

Commitment 26,324 24,888 24,888 Negotiation

Ireland Commitment 5,816 Negotiation 6,610 6,610

DFID Commitment 11,489 7,181 7,181 Negotiation

Germany Commitment 21,150 21,150 3,966 Negotiation

Finland Commitment 9,253 9,253 11,897 Negotiation

Denmark Commitment 10,228 0 0 Negotiation

Spain Commitment 2,644 2,644 Negotiation 3,966

Portugal Commitment 330 330 330 Negotiation

UNICEF Commitment 1,000 Negotiation 1,000 1,000

Italy Commitment 1,322 1,322 1,322 Negotiation

Flanders Cooperation

Commitment 1,322 1,322 1,322 Negotiation

EFA-FTI CF

Commitment 15,000 35,000 40,000 Negotiation

IDA Commitment 2,964 18,000 26,000 24,036 Negotiation

TOTAL

Commitment 128,000 121,091 116,906

Negotiation 0 7,610 11,575 TOTAL 128,000 128,000 128,000

6 All amounts are based on current exchange rates and indicative of partners’ commitments at this time rather than final. Data are not yet available for 2014, except for IDA.

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C. Lessons Learned and Reflected in the Project Design 61. The implementation of the ESSP and of the recently closed EFA-FTI CF project provided the Government, the World Bank, and all development partners with important lessons to improve the design of the current program. Among them the following are to be highlighted:

(i) Government should continue its efforts to ensure donor harmonization and to bring together key stakeholders to support reforms. While a secretariat for the coordination and implementation of the strategic plan was established within the Directorate of Planning in 2007, the deployment of qualified personnel and additional capacity development are required to consolidate its effectiveness;

(ii) Reforms should be implemented to include information and communication sharing regarding bottlenecks in the system and presentation of pragmatic options at a high level of Government. Continuous dialogue is needed among all partners to identify key constraints in the system and to prioritize and agree on planned interventions; and (iii) Implementation capacity at the local level needs to be strengthened. Whilst at central level, capacity for policy dialogue, development and reform has improved, implementation at the local level is often weak due to limited capacity in planning and to different levels of understanding of the key issues and approaches with regard to the reforms proposed in the sector strategy. The Government’s commitment to the fiduciary reform has been key to yield improvements in the quality of planning and reporting at the central level, but the size and nature of this operation requires greater level of supervision and implementation support at provincial and district levels.

IV. Implementation

A. Institutional and Implementation Arrangements

62. The Ministry of Education is fully responsible for project implementation. The table below summarizes which unit or department within the Ministry of Education will be responsible for each activity.

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Table 5: Implementaiton Arrangement

B. Results Monitoring and Evaluation

63. The project will be monitored as part of the overall monitoring of the FASE funds, as defined in the FASE MoU. The FASE MoU stipulates joint monitoring of sector performance to implement an agreed Education Performance Assessment Framework (E-PAF) linked to sector priorities and key interventions. More detailed information is included in Annex 3.

C. Sustainability 64. The sustainability of the activities described in this project beyond 2015 is not fully known, although their continuation is very likely as they are central to the implementation of sector programs that are key to the functioning and improvement of the existing education system and are inscribed in the overall state budget, funded by both external and internal funds.

Implementing Unit/Department Support Unit Activity Component/ Subcomponent

Central and provincial construction unit

Construction of classrooms and teachers housing

Component 1

Teacher Training Institutes (IFPs) and Provincial Directorate of Education and Culture (DPECs)

Directorate for Teacher Training at central level

Teacher training for primary education

Subcomponent 2.1

Commissão para a Avaliação do Livro Escolar/Commission for the Evaluation of School Books (CALE) and a central procurement unit within the MOE

Education Directorates Production and

distribution of free primary school books

Subcomponent 2.2

Institute of the Development of Education (INDE)

Education Directorates

Curriculum reform for primary and secondary education

Subcomponent 2.3

Directorate of Administration and Finance (DAF) (central) and districts

Education Directorates

Direct Support to School Program

Subcomponent 2.4

Provincial level DINAEA Subsidies for Literacy Workers

Subcomponent 2.5

Directorate of Special Programs (DIPE), Directorate of Human Resources (DRH) (central), and a focal point and schools

HIV/AIDS Prevention and Mitigation

Component 3

Directorate for Planning and Cooperation (DIPLAC), DPECs, and Secretary for Education, Youth and Technology at District Level (SDEJTs)

Management of Education Administrative System

Component 4

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Most of the donors contributing to FASE can only commit to the short term period covered within this project. In the medium term, however, the fact that only two (the Netherlands and DANIDA) will stop disbursing and that two additional donors (Italy and Flanders) will join the FASE pool appears promising.

I. Key Risks 65. All risks are rated Low in the attached ORAF (see Annex 4), except for implementing agency risks, which are rated as Medium-I and are further discussed below.

Implementing Agency Risks 66. The Ministry of Education (MOE) will continue to be the implementing agency for this project. The MOE has demonstrated a great level of commitment to reform its fiduciary system and to improve the quality of preparation of fiduciary planning, documentation and related internal audit. As an example, in 2007 a procurement capacity assessment found that the sector’s overall capacity and the experience of its staff required strengthening by means of more training and additional resources to ensure that duties were properly carried out. To mitigate the problem, and with the support of the World Bank team, the provision of jointly organized training took place at the central level. This resulted in better quality of the procurement processes prepared at the central level and in increased level of coordination among the two main procurement units located in the DAF and DIPLAC-CEE, respectively. However, with the expansion of the sector and resource allocation, the sector suffers from insufficient staffing, especially at provincial and district levels. To mitigate the risk, training will be provided to staff at all levels. 67. Procurement:7

An update of the MOE Procurement Capacity Assessment was carried out in August 2010 and the outcome was satisfactory as the MOE possesses adequate capacity and resources to meet minimum Bank fiduciary requirements and the risk rating for Procurement is Moderate. To mitigate the risk a significant portion of the procurement will be made using country procurement regulation and the major procurement will be procured by the central level which has the capacity and the knowledge to plan and make timely procurement. Additional training will also be provided in Bank procurement procedures to continue the capacity building effort.

68. Financial management: Financial reporting and audits are sometimes delayed because of capacity issues. Again, training will be provided to continue to build the capacity of the project financial management team. A recent review of FM arrangements indicates that FASE-EFA-FTI CF continues to maintain adequate and acceptable financial management and disbursement arrangements. No major changes are expected in the financial management and disbursement arrangements of the Education Sector Support Fund. The audited financial statements for the program for the fiscal year that ended on December 31, 2009 were submitted 7 Procurement for the proposed Project would be carried out in accordance with the World Bank’s “Guidelines: Procurement under IBRD Loans and IDA Credits” dated May 2004, revised in October 2006 and May 2010, and “Guidelines: Selection and Employment of Consultants by World Bank Borrowers” dated May 2004, revised in October 2006 and May 2010; and the provisions stipulated in the Legal Agreement. The revised Anti-Corruption Guidelines dated January 2011 shall apply to this project.

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to the Bank within six months after the end of fiscal year, in accordance with the legal agreements, and the auditors expressed unqualified opinion on the program financial statements. IFRs have also been received in order. The risk rating for financial management is Moderate.

Overall Risk Ratings 69. The overall implementation risk rating for this operation is Medium-L based on the fact that the risks described in the attached ORAF are likely to have a low impact on the achievement of the PDO.

II. Appraisal Summary

A. Economic and Financial Analysis 70. The Strategic Plan for Education and Culture (SPEC) 2006/2010-11 was developed not only through broad based national consultation, but also based on sound technical analysis and deliberate adoption of good policies and practices. Through a sector wide program, SPEC in particular emphasizes the development of basic education including primary and lower secondary education. The SPEC implementation period runs up to 2011. The ongoing joint sector reviews have registered the successful implementation of the strategy in particular in the areas of access, equity, and increased implementation capacity. The sector strategy prioritizes issues of quality, in particular in primary and secondary education, though progress has been less visible. 71. Mozambique’s Five Year Government Plan and the major documents that underpin the country development strategy clearly place education at the center of development. The government’s focus in the education sector is to ensure that by 2015 all children have access to, and can complete, a seven grade Primary Education. In particular basic education is a priority area for government involvement because externalities are large. Further, there are broad benefits to society as a whole from widespread functional literacy and numeracy. At the same time, it is acknowledged that primary education is not enough to support and sustain the national development processes of the country in a global economy and society. The government promotes a holistic vision of the system which entails developing, in parallel, quality pre-primary, post-primary, secondary, technical and higher education, in order to address the needs of lifelong learning to contribute to the development of the country’s human capital and economy.

72. Private and social Rates of Return (ROR) to education in Mozambique are high. Both the social and private ROR to education in Mozambique show that investing in education is an urgent necessity in order to yield benefits in health, productivity and consumption. Investment in education would also be a basis for further social and economic development. Mozambique’s high ROR in post-basic education may reflect the scarce supply of educated labor and the fact that post-primary education qualifications is still a rare privilege in Mozambique for which the labor market is prepared to pay a high premium, compared to its costs.

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73. Studies in Mozambique show a positive correlation between the level of education of the household head and both income and expenditure, and a negative correlation with poverty. Among household heads, education is strongly correlated with higher per adult equivalent consumption. Reflecting the relative scarcity of secondary and post-secondary education, the returns to education rises with each additional educational level completed. But the impact of education in urban areas is higher than in rural areas for all levels of education (and especially for post-lower-secondary education). Column 2 of Table 6 shows the results from regressing household log per capita expenditure on education. The coefficient estimates confirm literature findings of a positive impact of education on well-being. For instance, having some lower primary education is associated with a 18 percent increase in per capita consumption, increasing to 35 percent for household heads who have completed upper primary education, and to 99 percent and steadily upward, when secondary education and beyond has been acquired. This analysis supports the Government´s focus on a holistic and sustained development of the overall sector while continuing to prioritize primary education since the largest share of the population is active at sustenance level.

Table 6: Regression analysis of real consumption per capita (log.) Human Capital National Level Urban Rural Lower primary 0.18*** 0.23** 0.18*** Upper primary 0.35*** 0.33*** 0.36*** Secondary education 0.99*** 0.95*** 1.26** Higher education 1.83*** 2.24*** 0.63 Source: IAF 2002/03

74. Education can also serve to reallocate some of the working population towards economically more productive sectors. Table 7 displays the distribution of workforce across four sectors in relation to their educational achievement. The figures indicate two patterns; firstly there is a higher chance that a person participates in the non agricultural labor market if he or she is more highly educated; and secondly, more educated people tend to work in the tertiary sector either private or public. For instance 93.3 percent of workers with upper secondary education are employed in the public or private sectors compared to 20 percent of people without schooling. In agriculture, the workforce is mostly non-educated (80 percent). These data confirm that education can induce participation in higher value added and more productive economic activities, which in turn are expected to positively impact earnings and growth.

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Table 7: Education level per sector Agriculture Manufacturing

Mining Private services sector

Public services sector

Total

No schooling 79.9 1.6 17.6 0.9 100 Lower primary 50.8 3.4 41.8 4 100 Upper primary 27 3.5 55.3 14.2 100 Lower secondary 11.1 2.4 45.4 41.1 100 Upper secondary 2.2 4.3 47.2 46.3 100 Technical/vocational 6.8 6 54.9 32.3 100 University 6.9 3.4 34.5 55.2 100 Source: IAF 2002/03

B. Technical 75. At a technical level the components of this program are based on the implementation of the two successful strategic plans of education (1999-2005 and 2006-2010/11). The interventions supported by the program have been tested on the ground and revisited on an ongoing basis with the aim to make improvements based on lessons learned. The capacity of implementation has improved significantly over the years from central to district level, and there is clear indication of progressive improvements in planning, budgeting, implementation and monitoring of education policy and strategies. The government and the sector have shown consistency in their approach to tackle educational issues throughout the years. With these new funds the program will continue to support the Government in its efforts to recruit and retain the required qualified staff in the education sector and in particular in the teaching force.

C. Financial Management

76. A financial management assessment of Ministry of Education (ME) implementing the project was conducted. Details on the Financial Management arrangements for this project are included under Annex 3. 77. The assessment of the financial management arrangements of the FASE was carried out in accordance with the Financial Management Manual for World Bank-Financed Investment Operations that became effective on March 1, 2010, AFTFM Financial Management Assessment and Risk Rating Principles. The objective of the assessment was to determine whether the financial management arrangements for the FASE are adequate to ensure that: (1) sector funds are used only in accordance with the Sector strategy and plan in an efficient and economical way, (2) periodic financial reports are prepared in an accurate, reliable and timely manner; and that (3) the Education sector’s assets are safeguarded.

78. The assessment was favorably impacted by the fact that the project, through FASE, uses the same financial management procedures as those applied to the normal day-to-day operations.

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79. The proposed FM arrangements as summarized in Annex 3 meet the minimum requirements for financial management under OP/BP 10.02.

D. Procurement 80. Procurement will be carried out in accordance with the World Bank’s "Guidelines: Procurement under IBRD Loans and IDA Credits" dated May 2004, revised October 2006 and May 2010; and "Guidelines: Selection and Employment of Consultants by World Bank Borrowers" dated May 2004, revised October 2006 and May 2010. 81. The Ministry of Education maintains two separate procurement units, with the main unit within the Directorate of Administration and Finance (DAF) and a specialized procurement unit under the Directorate for Planning and Cooperation (DIPLAC). The former is mainly responsible for the procurement of goods and textbooks and consulting services (such as auditors and institutional assessments), while the latter specializes in the procurement of works for school construction and rehabilitation and teacher’s training institutes including associated consulting services and goods.

82. An update of the Ministry of Education procurement capacity assessment at both units was carried out in August 2010 and the outcome was satisfactory as the Ministry of Education possesses adequate capacity and resources to meet minimum Bank fiduciary requirements and the risk rating for procurement is Moderate.

83. The existing implementation arrangements for the FASE - EFA-FTI CF grant, procedures and staff currently employed by the Ministry of Education will be maintained and will be used to carry out procurement under the proposed Project. It is important to note that the overall FASE (pooled fund) has been following Bank procedures since 2008 and will continue to follow the latest Procurement and Consultants Guidelines and the 2011 Anti-Corruption Guidelines in the context of this second EFA-FTI CF and new IDA (i.e., until 2015). The ministry will also anticipate the implementation of further actions to strengthen its capacity to carry out procurement through formal and on-the-job activities. A brief summary of the procurement capacity assessment and project procurement arrangements are provided in Annex 3. More details are available in the project files.

84. Procurement planning is mainstreamed within the Ministry planning cycle and the procurement plan is shared and discussed with the Partners supporting the FASE prior to approval on an annual basis. All activities to be financed out of the FASE will be included in the procurement plan before the procurement is carried out and following the annual planning cycle or through updates. The Procurement Plan for the project was received by the Bank and found to be acceptable on March 15, 2011. The Plan will be updated at least annually (or as required) to reflect project implementation needs.

85. As agreed with all the Partners contributing to the FASE program, the Bank will exercise the Prior Review of all procurement under the Program as agreed in the Procurement Plan.

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E. Social 86. A commitment to education for all children is reflected in all Government documents that underpin the current application and present in the strategy designed by MOE over the years have improved substantially their administrative and managerial capacity but are faced with increased unpredictability of access to increased level of resources needed to consolidate the existing programs and initiated new interventions. The Government is fully committed to achieving the MDGs for education. 87. Mozambique confronts critical education issues related to access, quality, equity and governance of the system. The country faces a dramatic shortage of school infrastructure in both urban and rural settings, in addition to the ongoing need to rehabilitate existing schools and provide basic furniture and equipment as well as pedagogic and didactic materials.

88. Therefore significant resources will be devoted to improve and rehabilitate the school/classrooms infrastructure, and where needed, to build new schools to meet the increasing demand for education. The construction and/or rehabilitation of school facilities will have an overall positive impact, particularly in the area of gender equity, due to the fact that the Project will contribute to improving conditions for girls participation through the continued provision of appropriate sanitary conditions, known to be particularly important for retaining girls in school and in rural setting of teachers housing to attract and retain female teachers. Particular attention will also be paid vis-à-vis vulnerable groups such as handicapped students and/or teachers, both physical and visual, during design and rehabilitation/construction of infrastructures (i.e. access ramps, classroom lightening, blackboard emplacement, etc.).

89. In the medium term, the expansion of coverage and the improvements in quality will have a very significant social impact. The construction of added classrooms in the primary schools will allow for the increase of complete schools (with all primary grades) which will result in a larger basis of students having access to key knowledge on literacy and numeracy, basic general science concepts and of life skills. Communities at large will benefit from better practices implemented by those school managers, teachers and students who have been able to learn basic concepts taught in primary schools.

90. The positive impact outweighs limited negative social impacts. To mitigate any possible social impacts caused by project activities, the MOE, based on their environmental and social management framework (ESMF) and Resettlement Policy Framework (RPF), has recently developed a leaflet on environmental and social issues that the MOE distributed to the schools, district authorities as well as to construction companies as annex of their contracts. This leaflet will contribute for the increases of key knowledge of the school and district managers on issues related to environment and social issues.

91. At the time of project preparation, the Government considered that OP/BP 4.12 might be triggered. The Ministry therefore prepared a Resettlement Policy Framework (RPF) in May 2008 for the original EFA-FTI CF Project, which was revised to include the components of this project and re-disclosed both in-country and at the World Bank’s InfoShop on December 29, 2010. However, no major resettlement issues are anticipated as a result of the SPEC implementation.

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The framework provides a process to protect against community land donation which can be the result of coercion from the community upon select individuals. The RPF also allows for tangible monitoring mechanisms to be in place to ensure no person is worse off as a result of the project activities.

92. As sub-projects will not be known during project preparation, the RPF outlines guidance and standards by which to: (i) prepare a resettlement action plan, (ii) consult with impacted persons, (iii) conduct assets valuation, (iv) address grievances, and (v) establish monitoring mechanisms to ensure no person is worse off as a result of project activities.

93. During project implementation, all sub-projects will undergo a screening process to determine whether or not there is land acquisition, impact on assets, or restricted access to assets. If it is determined that the subprojects will require land, impact assets, or restrict access to assets, then a Resettlement Action Plan (RAP) will need to be prepared prior to sub-project approval.

F. Environment 94. The project will finance construction and rehabilitation of additional classrooms, schools and teaching facilities in Mozambique. Physical, environmental, and social impacts will result mainly from the rehabilitation and construction activities. The environmental impacts are expected to be limited to (i) the management of wastes at the rehabilitation /construction sites (waste water, solid waste, rejection and elimination of wastes such as oils and paints, unsafe disposal of asbestos), soil erosion, loss of vegetation, rehabilitation of borrow pits, as well as dust and noise during the works; (ii) issues around the water supply and sanitation in the schools; (iii) high demand of wood for construction, e.g. furniture, windows; (iv) high demand for firewood for cooking; and (v) use of chemical for the control of termites during the construction phase. The project will not finance any additional activities with negative impacts different to those implemented under the parent project. 95. The project triggers three safeguards policies: (i) Environmental Assessment (OP/BP 4.01), (ii) Pest Management (OP 4.09), and (iii) Involuntary Resettlement (OP/BP 4.12). The ESMF addresses OP/BP 4.01 and OP 4.09, and the RPF addresses OP/BP 4.12. 96. The Pest Management OP 4.09 is triggered due to the fact that the Project may purchase, acquire, use and/or involve application as well as disposal of pesticides to control for termites in the wood procured and used for construction of schools as part of Component 1 activities. The specific considerations with respect to pest and pesticide management issues relevant to the Project are addressed in the Project’s ESMF. The Project aims to (i) promote the use of biological and/or environmental management for pest control, in this case termites; and (ii) strengthen capacity of the Project implementing entity to promote and implement safe, effective and environmentally sound pest management in accordance with the classification of pesticides and their specific formulations as per the World Health Organization's Recommended Classification of Pesticides by Hazard and Guidelines to Classification (Geneva: WHO 1994-95). Furthermore, any pesticide financed by the Project for the control of termites will be manufactured, packaged, labeled, handled, stored, disposed of, and applied according to

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standards acceptable to the Bank. The Project will not finance formulated products that fall in WHO classes IA and IB, or formulations of products in Class II. 97. The ESMF provides guidelines for preparation of required environmental and social management plans (ESMPs) to mitigate and manage any and all potential impacts anticipated from activities to be undertaken under the project. The ESMF provides an environmental and social checklist, environmental and social screening form, and environmental guidelines for contractors designed to ensure that adverse environmental and social impacts from project activities are identified and captured in the planning stages of each sub-project. Moreover, the ESMF describes the Pest Management approach to be adopted in this Project which addresses (a) Pesticide use and management for termite control; and (b) Monitoring and evaluation. The pest management approach is designed to minimize potential adverse impacts on human health and the environment and reflect the guiding principles of an Integrated Pest Management (IPM) approach. 98. The ESMF was initially prepared as part of the documentation required during project preparation for the first EFA-FTI CF grant and was reviewed by the Bank and disclosed both in-country and at the Bank's InfoShop in August 2008. The ESMF was designed to be an instrument that provides a framework that will apply to the parent project as well as future investments under the Education Sector Support Program to be financed by FASE. The ESMF was updated to include all the components of this new project and disclosed both in-country and at the World Bank’s InfoShop on December 29, 2010. The ESMF was further updated to include the Pest Management Approach and re-disclosed both in-country and at the World Bank’s Infoshop on April 4, 2011.

G. Safeguard policies 99. The project has been classified as Category B with respect to environmental and social consideration. The ESMF and RPF have been prepared for addressing the triggered policies, and the documents have been updated in March 2011.

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Annex 1: Results Framework and Monitoring

MOZAMBIQUE: Education Sector Support Project Results Framework

Note: The PDO level and intermediate results indicators in this results framework reflect the overall FASE Program and not just the

IDA and EFA-FTI CF portions of it.

Project Development Objective (PDO): The Project Development Objective (PDO) of the proposed project is to improve the access to, and quality and equity of education

PDO Level Results Indicators* C

ore Unit of

Measure Baseline (2010)

Cumulative Target Values** Frequency

Data Source/ Methodology

Responsibility for Data

Collection

Description (indicator

definition etc.) 2011 2012 2013 2014 2015

Indicator One: Primary completion rate

Percent 50.8%

51.1% 51.5% 53.3% 57% 60.8% Annually EMIS/INE through annual surveys and projections on population growth

MINED/DIPLAC through the school system

Primary completion rate is measured as the total number of students regardless of age that complete 7th grade of primary school divided by the number of children of official age for completing primary level

Indicator Two: Net enrolment of 6 year olds in grade 1

Percent 69.9%

73% 76% 79% 83% 86%

Annually EMIS/INE through annual surveys and projections on population growth

MINED/DIPLAC through the school system

Number of children (total) that are in first grade with 6 years (day, night, public and private) = numerator) with the population (total) of the same age

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Indicator Three: Transition rate EP2/next level post primary

Percent

79% 85% 85% 90% 90% 90%

Annually EMIS/INE through annual surveys and projections on population growth

MINED/DIPLAC through the school system

Number of children/youngsters (total) that participate in the first level of post-primary education (lower secondary or vocational) (numerator) with the total population estimated between 13-15 years (total denominator)

Indicator Four. Gender Parity Index (GPI)*

Ratio

0.90 0.90 0.91 0.92 0.93 0.94

Annually EMIS/INE through annual surveys

MINED/DIPLAC

GPI is the ratio of female enrollment to male enrollment. upon 1st grade entry

Indicator Five: Direct project Beneficiaries (number) of which female (%)

X

Number and percent

0

6.2 million (46 % female)

6.5 million (47% female)

7.0 million (47.5 female)

7.5 million (48% female)

8.0 million (48.5% female)

Annually EMIS/INE through annual surveys

MINED/DIPLAC

Beneficiaries refer to students in both primary and secondary education

INTERMEDIATE RESULTS

Intermediate Result (Component One): Improved school infrastructure

Intermediate Result indicator One: Number of additional classrooms built or rehabilitated at the primary level resulting from project interventions

X

Number 0 0 800 1,600 2,400 3,200 Annually Annual sector review report based on Education Performance Assessment Framework

MINED/CEE

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Intermediate Result indicator Two: Number of classrooms built or rehabilitated at secondary level through the accelerate classroom construction program

Number 0 0 200 400 600 800 Annually Annual sector review report based on Education Performance Assessment Framework

MINED/CEE

Intermediate Result (Component Two): Increased number of qualified teachers

Intermediate Result indicator One: Number of additional qualified primary teachers resulting from project interventions.

X

Number 0 0 10,000 15,000 20,000 25,000 Annually EMIS/INE through annual surveys

MINED/DIPLAC

Intermediate Result indicator two: Drop-out rate in Primary Education (medium)

Percent

6.5% 5.3% 4.0% 4.0% 4.0% 4.0%

Annually EMIS/INE through annual surveys

MINED/DIPLAC

The indicator measures the difference between the total number of children attending primary school at the beginning of the year and at the end of the same year.

Intermediate Result indicator three: Number of people who completed the alphabetization cycle

Number

680,455 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000

Annually EMIS through annual surveys

MINED/DIPLAC

This indicator captures the number of people receiving training from both Government and non-Government programs.

Intermediate Result indicator four: Percent of ADE funds disbursed according to plan

Percent

95% 96% 97% 98% 99%

Annually ADE audit reports

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Intermediate Result (Component Three): HIV/AIDS Prevention and Mitigation

Intermediate Result indicator One: Ratio between orphans and non-orphans attending school in relation to ratio between orphans and non orphans in the reference age population (i.e. primary school age children).

Ratio 0.8 0.8 0.8 0.9 0.9 1 Annually EMIS/INE through annual surveys

MINED/DIPLAC

Intermediate Result indicator Two: percentage of primary schools covered by programs using the concept of “skills for life”

Percent 60% 70% 80% 90% 100 Annually EMIS through annual surveys

MINED/DIPLE

This indicator measures the extent to which existing programs that address issues such as HIV/AIDS, STDs, reproductive health, empowerment, etc., reach out to include all schools.

Intermediate Result (Component Four): Strengthening the Management of the Education Sector Administrative System

Intermediate Result indicator One: Execution of the approved state budget (that includes FASE) for the sector (aggregated total of recurrent and investment)

percent >90% and <105%

>90% and <105%

>90% and <105%

>90% and <105%

>90% and <105%

>90% e <105%

Annually Budget Execution Report

MF in collaboration with MINED

The indicator measures the annual expenditures against the approved budget

Intermediate Result indicator Two: Development and implementation of institutional development plan for SDEJTs

qualitative n.a Development of plan

Implementation year 1

Implementation year 2

Implementation year 3

Implementation year 41

Annually Annual sector review report based on Education Performance Assessment Framework

MINED/DRH in collaboration with DIPLAC and DRH

In the coming years the sector will focus on capacity building at the district level. An action plan is currently being developed to include specific activities in the areas of: human resources

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management, planning, budgeting and monitoring, financial management, procurement, etc. Monitoring will be done against this plan.

Intermediate Result indicator Three: System for learning assessment at the primary level

X Yes/No Score 1-4

No/0 No/0 Yes/1 Yes/2 Yes/3 Yes/4 INDE

*Please indicate whether the indicator is a Core Sector Indicator (see further http://coreindicators)

**Target values should be entered f the years data will be available, not necessarily annually.

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Annex 2: Detailed Project Description

Component 1: Improving Access to Education

Overview 1. As part of Government´s overall strategy to expand the opportunities of access to primary education to all children of school age while at the same time improving teaching conditions, the ministry decided, as of 2005, to accelerate classroom construction through the decentralization of the competencies for classroom construction to the provinces. This program for accelerated classroom construction is based on a strong community involvement through local construction. The program includes the provision of furniture and housing for teachers. The current program contributed to a 12 percent increase in the number of classrooms from 44,747 in 2007 to 50,354 in 2009, as well as an increase of around 50 percent of concrete or brick classrooms. In 2008 the program was expanded to include secondary schools in rural areas. 2. The proposed project, through FASE, will continue to support this activity aimed at building approximately 800 new primary education classrooms and 200 rural secondary classrooms annually, and to provide the required furniture. Over the four year period of the project, through FASE, it is anticipated that approximately 3,200 new classrooms will be built in existing primary schools on the government owned land, and 800 new secondary school classrooms will be built on the government owned land. The construction will involve large national or international suppliers, benefiting from economies of scale alongside the use and continued development of local capacity. 3. To maintain the level of access to education in basic and secondary education the education sector will have to continue to recruit and deploy annually in the upcoming 5 years about 10,000 teachers and education officials. However, due to the recent economic crisis the sector budget has been reduced permitting only the recruitment of 8,500 teachers. In order to ensure sufficient teachers for post primary education and to minimize the constraints on access to basic education, FASE will contribute for the salaries of new contracted teachers in 2011. The FASE donors and the Bank will continue to work with the government to ensure that in 2012 at least 75 percent of these newly recruited teachers can be absorbed by the Government budget. 4. To ensure a better start for all children and improve their performance in school, the ministry also recognizes the need for a robust pre-primary education program. Currently, the coverage of early childhood education services is only 4 percent, and mainly provided by the Ministry of Women and Social Services, the private sector, and local community organizations. FASE will support the development of an integrated framework that considers the development of the child as a whole. The ministry recognizes the importance of early childhood education and will progressively support increased access to pre-primary education.

Construction Methodology 5. In the coming years, the accelerated construction program will be implemented according to a new methodology that organizes construction in two phases: the first phase is to supply the

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main structure of the buildings, roofing and molding, as the responsibility of large contractors and in large volumes, and the second phase is for assembling and completing those components, as the responsibility of local or national contractors, in volumes to be decided upon depending on the circumstances and needs for rationalization and cost control. The construction plans look at the design of an adequate construction project, modular, with normalized elements and a low level of local technical demands. This new methodology was introduced as pilot in 2010 with the construction of primary schools in the provinces of Cabo Delgado and Zambézia. In 2011, this new approach is being expanded to four more provinces (Tete, Manica, Sofala and Maputo Provinces) and will be expanded to all provinces from 2012 onwards. Until then the other provinces will continue to use the participatory construction approach but with the mandatory enforcement of national tender rules only for contractors who are formally registered. Some rationalization measures will also be introduced, namely the principle of construction zoning, availability of attractive plots of at least 15 classrooms and a minimum number of five classrooms per school. 6. With regard to secondary schools, as was already envisaged in the SPEC, and reaffirming the strategy for secondary education (approved by the Council of Ministers in December 2009), the construction of schools at the lower secondary level will be primarily done through the accelerated construction program, using the same principles applied to primary education. In 2010 it is envisioned that there will be construction of one school per province (and two for Zambézia), using the new approach in both pilot provinces and the former approach in the remaining provinces.

Independent supervision 7. External supervision of construction will be used and aims to increase the levels of control and execution of contracts. It will be carried out by independent consultants, one per province, who will be responsible for supervising the program’s construction works in each campaign, according to conventional methods of construction work supervision. Proposed Unit costs 8. The unit cost per classroom for the accelerated construction program is being adjusted to be in line with the market price. This will imply different costs for different provinces. On average the unit cost is estimated at US$16,000 per classroom (including supervision, furniture and some funds for teacher housing).

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Table 8: Proposed financing for the accelerated construction program Expense 2009 2011-2015 Primary Education Classrooms Unit cost (in 10^3 US$) Program costs (in 10^3 US$) 23,261 23,040 Secondary Education Classrooms Unit cost (in 10^3 US$) Program costs (in 10^3 US$) 1,922 3,840 Total 25,183 26,880

Component 2: Improving the Quality of Education Sub-component 2.1: Teacher training for primary education Overview 9. In 2006 the pupil:teacher ratio was 75:1 due to the rapid expansion in the students attending primary and secondary schools. At the same time, 35 percent of teachers did not have any pre-service psycho-pedagogical training. This had a detrimental impact on the quality and efficiency in the system. The ministry reform aimed at, among others, at providing intense and quality pre-service training without losing sight of the need to ensure the long-term sustainability of an increasing number of teachers in the system. This led to: (i) reforms in pre-service teacher training by adjusting the teacher training curriculum, improving quality of teacher training; and providing basic training in a shorter period of time (one year); (ii) promotion of a system that fully integrated per-service training and continuous professional development; and (iii) rationalizing the existing system for in-service teacher training by transferring this responsibility to teacher training institutes (IFPs). 10. Since 2006, the IFPs have increased the number of pre-service graduates from 5,228 in 2006 to 10,033 in 2009. In addition, 5,563 primary school teachers graduates have improved their qualification level through the IAP/IEDA distance education learning courses. Since 2008, the IFPs have conducted continuous training activities for primary school teachers and managers, led by the IFPs trainers and this program benefited greatly from an increase in FASE funding in 2008. 11. Pre- and in-service teacher training will remain a priority in the next strategic sector plan and continue to benefit from funding through FASE. The current number of newly graduated teachers should be sufficient to ensure a continued decrease in the pupil teacher ratio, which is still high. At the same time, the project will continue focus on increasing the capacity of the IFPs to implement the integrated teacher training system (pre-service training and on the job training, distance training and support to new and existing teachers in the workplace.

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Unit costs 12. The formula for the allocation of funds considers the number of students or trainees enrolled in the IFPs (pre-service training) as well as the number of primary school teachers of the area covered by the IFP (in-service training). In addition funds will be made available to support the five regional training centers for adult education and the three regional special education centers which will start operating in 2011.The overall annual contribution of FASE for the training of teachers is estimated at US$5.1 million with another US$500,000 for the training of literacy workers. This represents around 4 percent of the FASE budget. Sub-component 2.2: Production and distribution of free primary school books. Overview 13. The Government of Mozambique has declared free primary school. This means that no child shall be hindered in access to a full primary education cycle of seven years, due to lack of financial means. In order to implement this strategy, the Government agreed to the distribution of free textbooks to all children. Every year, approximately 12 to 14 million books (40 titles) are produced and distributed to primary schools from grades 1-7. The planning is based on a ratio of one textbook per subject per student - each book having a life-span of three years, using the information gathered at the school level during the annual survey conducted each March. This program has contributed to increased enrollment in primary schools however, it also represents a large portion of the of the sector’s budget (in 2009 the production and distribution of textbooks for primary education represented about 15 percent of the 2009 FASE expenditures). 14. In spite of the success of this program, there are still students without books. This subcomponent will, through FASE, continue to support the distribution of free textbooks as well as assist in the ongoing government efforts to find ways to reduce the cost of production and ensure better coverage. The government’s plan to achieve this is to: (i) continue savings by acquiring property rights for more book titles; (ii) rationalize the number of titles particularly in grades 6 and 7; (iii) improve book conservation by improving the quality of the books and improving storage conditions at schools; (iv) increase replacement rates, particularly for key subjects; and (v) implement actions to make textbook distribution more competitive. 15. The calculations for textbook procurement for the year n+1 are based on the following assumptions:

• A replacement rate, for replacement titles, of 35 percent on the textbooks estimated in stock for the year n;

• 100 percent procurement of the positive differential estimated between the numbers of students for year n and the year n+1;

• The total replacement titles correspond to the numbers of students estimated for the year n+1 in relevant classes (1, 2, 6 and 7 classes);

• An extra margin of 5 percent on the total of textbooks

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16. The assumptions: free textbooks for all children enrolled in primary school (in public education); and financing for the distribution of textbooks to schools will be through the internal source of funding (approximately US$2 million). 17. Although the budget for textbooks appears higher than that of 2009, in reality, the funding remains at the same level. Until 2009, textbook procurement was partly financed through a bilateral project amounting to approximately US$6 million. Unit costs 18. The average unit cost is established at US$1.75 per book (production and distribution). FASE is expected to cover US$1.5, while the internal component will take care of most costs related to the distribution of the books (estimated at US$0.25 per book). For the coming years, FASE’s contribution to the production and distribution of school books is estimated at US$23 million (or 18 percent of the annual FASE budget). This is slightly higher than in 2009, primarily due to the need to absorb the books of bilingual education, as well as for school libraries. Sub-component 2.3: Curriculum Reform for Primary and Secondary Education 19. In 2004, the ministry introduced the new curriculum for primary education with the objective of contributing to improving the quality and relevance of education. The curriculum transformation aims to support efforts to reduce dropout and failure rates, and gender and regional disparities. The curriculum transformation was based on the need to adjust the structure and content of the curriculum to the changing reality of the country and today’s world. A curriculum plan for primary education was developed and programs and school manuals were validated and approved. The results achieved with the introduction of the primary education curriculum are demonstrated through the: (i) increase in completion rates for primary education, equity and reduction of’ repetition and drop-out rates; (ii) perception that the curriculum is innovative, as demonstrated through the introduction of Mozambican languages, local curriculum and new subjects; and (iii) provision of textbooks and teacher manuals that are consistent with the primary education curriculum plan and with the teaching programs, and more attractive and adapted to the Mozambican reality. 20. In 2006/07 the ministry initiated the reform of secondary education. The main objective of this reform is to align with the basic education curriculum and improve its responsiveness to changing societal needs in terms of ensuring that secondary school leavers have the necessary competencies to become productive adults.

21. The project, through FASE, will continue to support ongoing curriculum reform activities in both primary and secondary education with continued focus on the development of basic skills in speaking, reading, writing and numeracy in the first years of school and the consolidation of these skills throughout the next cycles of learning. This goal, which is taken as an indicator of the quality of teaching, should be achieved in parallel to the reduction of school failure levels, the subsequent increase of completion rates at the appropriate age and with the skills defined in the curriculum, and the increase in the number of students pursuing their education at the next level.

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Costing 22. In the coming years, the focus of the sector is very much on the consolidation of existing curriculum (primary education) and the finalization of the reform for secondary education. The FASE budget primarily caters for development costs, varying between US$500,000 and US$1 million annually. The costs involved in the actual implementation are integrated in other components such as books, teacher training, etc. Sub-component 2.4: Direct Support to School program (ADE) Overview 23. The direct support to school program (ADE) is a program that transfers funds directly from the central level to schools for the purchase of basic materials to support teaching and learning processes. An evaluation of the program has shown that the program has a positive impact in terms of ensuring funding for the purchase of basic materials (i.e., pens, pencils, notebooks, complementary reading materials etc.) and strengthening the functioning of school councils who are responsible for the management of funds. Currently the program is based on number of students only and places around US$2.5 per student per year in all primary schools. In 2006, a pilot project was introduced to provide additional support for orphans and other vulnerable children affected by the HIV/AIDs pandemic in the amount of US$1.5 per child through the ADE structure. In 2009 this pilot operated in 13 districts. This has been considered unsustainable and was discontinued. However, with the expected increase in ADE funding, a social protection component will be introduced to support the most vulnerable children throughout the country. The Government is also planning to introduce an element of performance-based financing in future ADE allocations. 24. In 2008, the ADE program was expanded to include secondary schools and institutions for technical-vocational training.

25. The project, through FASE, will continue to support the ADE through the direct transfer of funds from the central level to the school level. The integration of the social protection aspect of the program that targets orphans and vulnerable children will also continue to be supported. The ADE should be regarded as the main fund available to primary schools for the purpose of: (i) funding the school’s recurrent expenses (i.e. maintenance, electricity and water); (ii) funding basic learning materials aimed at improving the quality of education; and (iii) ensuring the increased participation and retention of vulnerable children.

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Unit costs

Table 9: Average amount for the ADE program

ADE Unit Unit Cost No of units Total annual Costs (average)

Primary Education Student US$3.50 5.5 million US$19 million Secondary Education Student US$2.00 1 million US$2 million Technical-vocational education Institution US$14,000 45 institutions US$630,000

Sub-component 2.5: Subsidies for Literacy workers Overview 26. In 2003, the payment of the subsidies for literacy workers was introduced (550 Meticais per month). The Government Five Year Plan (PQG) expects a reduction of the illiteracy rate from 48.1 percent in 2009 to 30 percent by 2014. In order to reach this target, there will be a need to develop literacy skills in 1 million people every year, through State interventions, as well as through civil society. The continued payment of trainer subsidies in State programs, as well as in civil society programs is anticipated. Unit cost 27. In 2011, an increase of the monthly amount of the subsidy is anticipated from 550 MT to 650 MT (about US$18 a month). Payment is for ten months – period of implementation of the different program. This program is traditionally co-financed by the internal source of funding (up to 4 months). Calculations are based on a ratio of trainees to trainer of 30:1. FASE is estimated to fund 60% of the overall costs of this program. In the coming years, FASE is expected to contribute annually with US$3.5 – 4 million, representing 3 percent of the overall FASE budget. Component 3: HIV/AIDS Prevention and Mitigation Overview 28. Data from 2009 indicate that 11.5 percent of Mozambicans between the ages of 15-49 are infected with HIV. The highest prevalence rates are found among girls aged 15-24. In 2009, the prevalence rate in pregnant women aged 15-19 was 8 percent; and 16 percent for women between the ages of 20-24. The gender difference is serious. Women aged 15-19 are 3 times more prone to contamination than men the same age and 4 times more prone between the ages of 20-24. 29. In spite of efforts made, the prevalence of HIV/AIDS remains very high in Mozambique. There is some evidence that the situation has stabilized in the north and that the infection rate in the central part of the country has decreased, excluding Zambézia. In the south, the epidemic is still growing.

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30. However, there has been significant progress over the past five years, namely (i) the mainstreaming of HIV/AIDS as a cross-cutting issue into the sector, through budgeted plans; (ii) the expansion of funding for prevention, care and mitigation at provincial and district levels; (iii) the expansion of antiretroviral treatment to all districts and (iv) the launch of the community counseling and testing initiative.

31. The education sector has been hit particularly hard as the high prevalence rate of HIV/AIDS among teachers and administrative staff in Mozambique strongly impacts both access to and quality of education, in part because of the challenge of having to constantly replace teachers who become sick and can no longer teach and in part because of illness-related absenteeism. This component will therefore contribute to achieving the project outcomes in components 1 and 2. 32. The sector has formulated its interventions on the basis of its four functions in the combat of the HIV/AIDS pandemic:

• as employer

•

: aiming to develop HIV/AIDS prevention and impact mitigation actions for teachers, school directors and other staff; as educator:

•

aiming to develop HIV/AIDS prevention and impact mitigation actions for students, including support to orphans and vulnerable children; as system

•

: aiming to develop an effective institutional framework that will allow the sector to provide an adequate response to HIV/AIDS in order to carry out its central education mission in spite of the epidemic’s impact; and as part of the national response

: aiming to develop effective relationships with other governmental and non-governmental partners to respond to the epidemic.

The project, through FASE, will continue to support HIV/AIDS through: (i) increasing knowledge on HIV/AIDS with focus on the skills for life approach, and (ii) integrating prevention and mitigation activities in key sector program (i.e. school curriculum; textbooks, ADE, teacher training etc.) Unit costs 33. Financing for specific HIV/AIDS prevention and mitigation activities is estimated at approximately US$2 million until at least 2012. After that, the designated funds for HIV/AIDS are expected to reduce as the strategies of prevention and mitigations are to be integrated/mainstreamed in existing programs such as ADE, the textbook program, curriculum development, teacher training and human resource development.

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Component 4: Strengthening Management of the Education Sector Administrative System Overview 34. Since 2003, the Ministry of Education has taken important steps towards decentralization. An example of this process is the direct support to school program introduced by the World Bank in 2003 and taken over by the Ministry in 2006 with the support of all FASE donors. The proportion of resources allocated at provincial and district levels have gradually increased. In 2011, around 55 percent of the resources of Government´s internal budget will be directly executed at local level (i.e. district), and forty-five percent of FASE funds are currently channeled to the Provincial Directorates of Education and Culture (DPECs) and to the District Education Youth and Technology Services (SDEJTs). This poses a major challenge for the MOE since capacity development at local level did not keep up with the rapid pace of decentralization. 35. The objective of this component is to strengthen institutional capacity at all levels to ensure adequate management of the education sector administrative system. Strengthening institutional capacity requires, but is not limited to, investments in the provision of means (such as transportation, communication, supplies), clear orientation in terms of the role of education sector staff in the implementation and monitoring of activities, clear procedures and regulations, strong incentives, and supervision and capacity building. 36. The project will contribute to capacity building in planning, monitoring, financial management, and procurement at all levels to ensure that policy and programmatic interventions lead to improved education outcomes. Training in these areas will be based on the training modules developed by the Ministry of Education. Subcomponent 4.1: Continuing the consolidation of the reforms in the areas of financial management and procurement as well as planning budgeting and monitoring 100. This subcomponent will support an integrated planning and monitoring system that builds on the principle that decentralization requires greater accountability systems to avoid inequities in the service delivery of educational services. In this context the project will continue to support the following activities: • Capacity building activities aimed at increasing the knowledge of provincial and district-

level officials in strategic planning and budgeting of education; • Initiation of the process of design of procurement plans at provincial level and in selected

districts where capacity has been strengthened; • The upgrading of the existing Education Management Information System (EMIS), which is

also supported by additional resources from other partners. This sub-component will aim at strengthening integrated monitoring and evaluation by assisting the directorate of planning through: (1) provision of technical assistance to review and upgrade the existing EMIS system; (2) provision of technical support for the design of an integrated planning and monitoring system; and (3) provision of technical assistance to conduct the impact evaluation of selected interventions which will serve to support policy and timely decision making.

• Impact evaluation studies of selected interventions to inform policy decision-making.

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• Provision of financial support to Provincial Directorates of Education and Culture (DPECs) and District Education Youth and Technology Services (SDEJTs) to facilitate their functioning and responsiveness to manage the implementation of the system at decentralized levels.

• Provision of technical assistance in the areas of financial management, procurement, and construction.

Unit costs 37. The ministry spends, on annual basis, around 4-5 percent on institutional development activities, varying from the provision of technical assistance, equipping of DPECs and SDEJTs, communication and supervision. FASE finances on an annual basis approximately US$1.2 million (or 1 percent) of its budget on technical assistance mainly for the areas of financial management, procurement and constructions. Bilateral agencies (JICA, UNICEF, GTZ, CIDA, and DANIDA) provide additional technical expertise at both central and provincial level to support strategic development and implementation. 38. Allocations to province and districts use combined formula that take into account the area covered per province/district and density of school population. Provinces and districts plan the use of FASE funds within the context of their annual plan that is sent for submission to central level to be included as part of the sector’s annual activity plan (PdA). Total annual budget is estimated at 5 percent of the FASE budget or US$6.3 million.

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Annex 3: Implementation Arrangements

1. Project administration mechanisms 39. The table below summarizes which unit/department will be responsible for each activity. More detailed implementation arrangements for each component, including responsibilities and tasks of each implementing unit, are explained below. Table 10: Summary of Implementation arrangements

Implementing Unit/Department Support Unit Activity Component/ Subcomponent

Central and provincial construction unit

Construction of classrooms and teachers housing

Component 1

Teacher Training Institutes (IFPs) and Provincial Directorate of Education and Culture (DPECs)

Directorate for Teacher Training at central level

Teacher training for primary education

Subcomponent 2.1

Commissão para a Avaliação do Livro Escolar/Commission for the Evaluation of School Books (CALE) and a central procurement unit within the MOE

Education Directorates Production and

distribution of free primary school books

Subcomponent 2.2

Institute of the Development of Education (INDE)

Education Directorates

Curriculum reform for primary and secondary education

Subcomponent 2.3

Directorate of Administration and Finance (DAF) (central) and districts

Education Directorates

Direct Support to School Program Subcomponent 2.4

Provincial level DINAEA Subsidies for Literacy Workers Subcomponent 2.5

Directorate of Special Programs (DIPE), Directorate of Human Resources (DRH) (central),

HIV/AIDS Prevention and Mitigation

Component 3

Directorate for Planning and Cooperation (DIPLAC), DPECs, and Secretary for Education, Youth and Technology at District Level (SDEJTs)

Management of Education Administrative System

Component 4

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Component 1: Improving Access to Education 40. The central construction unit (DIPLAC-CEE, or Construction and Equipment unit within the Directorate of Planning and Cooperation), which is part of the Ministry of Education, will have overall responsibility for: (i) Setting of annual targets; (ii) Ensuring procurement at central level in the areas of construction, equipment as well as contracting of technical assistance and independent supervision; and (iii) Supervising implementation at provincial level. 41. The construction unit at provincial levels will be responsible for: (i) Defining annual priorities and location for construction in consultation with the districts; (ii) Contracting local companies to construct or complete construction of the works; and (iii) Supervising the overall implementation of the program. Standard documentation exists for construction as well as for procurement procedures. Component 2: Improving the Quality of Education Subcomponent 2.1: Teacher Training for Primary Education 42. The responsibility for the implementation of teacher training programs is with the Teacher Training Institutes (IFPs), both initial and in-service training. Based on set criteria, funds are allocated by central level to each individual teacher training college. Funds are channeled from central level to the provinces that have the responsibility to ensure transfer to the IFPs. 43. IFPs are required to present an annual training plan with regard to the use of FASE funds. Provincial Directorate of Education and Culture (DPECs) have the responsibility to ensure that in-service training plans of the IFPs cover sector priorities and all primary school teachers. Annual teacher training plans (particularly for in-service training) are expected to be reflected in provincial annual activity plans to be submitted to the central level for incorporation in the sector´s annual activity plan (PdA). DPECs are to monitor and supervise the functioning of IFPs. Central level is currently revising its instruments to facilitate a more effective and efficient monitoring and supervision by DPECs. Subcomponent 2.2: Production and Distribution of Free Primary School Books 44. A specific unit, Commissão para a Avaliação do Livro Escolar/Commission for the Evaluation of School Books (CALE) within the MOE, is responsible for ensuring the quality of the books that are being provided to primary education, in cooperation with the relevant education directorates and INDE, who is responsible for developing the curriculum and for monitoring its effective implementation. 45. The Ministry of Education has a central procurement unit, which has specialized sub-units all managed by the Directorate of Administration and Finance within the MOE. A specialized team of experts undertakes the procurement of textbooks and related distribution (for primary education and other levels of education). This unit receives external support from Canadian International Development Agency (CIDA) to reform this area. The ongoing reforms

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include the acquisition of author rights by the ministry, the expansion of the pilot of international competitive bidding and promoting public (national) bidding for book distribution from one province to cover all provinces. Subcomponent 2.3: Curriculum Reform for Primary Education and Secondary Education 46. The Institute of the Development of Education (INDE) is the designated body responsible (subordinate institution of the MOE) for the development, testing and evaluation of curriculum at different levels of the education system. Curriculum development involves a wide range of stakeholders and different modalities. In certain cases, the INDE works with focus groups and teachers from the system, in other cases the INDE contracts out the preparation of (parts of) the curriculum. Synergies are created through cross-departmental working groups that involve the directorates of education, teacher training and others that may be relevant. Subcomponent 2.4: Direct Support to School Program (ADE) 47. The implementation arrangements and responsibilities are as follows: (i) current disbursement is twice a year, directly from the central level to the schools, through the district offices; (ii) the allocation criteria are developed at central level and communicated to districts and schools with each disbursement; (iii) accountability is assured through the distribution of a manual, being produced with each disbursement that specifies the details of application and justification, and the direct involvement of school councils in the management of the allocations; and (iv) currently the criteria are being revised to include elements of social protection and performance based financing. Subcomponent 2.5: Subsidies for Literacy Workers 48. The establishment of targets in terms of numbers of literacy program students and literacy workers is done centrally, based on the information provided annually by the provinces. Guidelines are provided with regard to the contracting of literacy workers. Funds are inscribed in the provincial budget to ensure financing for the established targets. The responsibility for contracting literacy workers is at provincial level, which in turn, has the liberty to delegate this to the districts. Component 3: HIV/AIDS Prevention and Mitigation 49. The role of the central ministry in this context is to elaborate adequate policies, partnerships, management and monitoring systems and regulations that will ensure the execution of programs for HIV prevention and mitigate the impact on students and employees. The implementation of the HIV/AIDS program is organized and ensured through a Focal Point system, from the central body to the school (National Directorates, Provincial Directorates of Education and Culture, District Education Services, Youth and Technology, ZIPs and schools) and there is a link between the school and the community through community representation on school boards

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Component 4: Strengthening Management of the Education Sector Administrative System Subcomponent 4.1: Continuing the consolidation of the reforms in the area of financial management and procurement as well as planning budgeting and monitoring 50. Institutional development is coordinated jointly by the directorates for human resource development, planning and international cooperation, and administration and financial management within the MOE. 51. Funds in support of provincial directorates and district offices are directly channeled through the budget to the responsible units. Allocation is done centrally on the basis of established criteria. Operational manuals exist with regard to the application of the funds. 2. Financial Management, Disbursements and Procurement

a. Financial Management

52. The Education Sector Support Fund is implemented centrally at ME through its Direção de Administração e Finanças (DAF) and at the provincial, as well as district level and school level. The recent review of FM arrangements indicates that FASE continues to maintain adequate and acceptable financial management and disbursement arrangements and there are no major changes expected in the financial management and disbursement arrangements of the Education Sector Support Fund – additional financing operation. Despite the decentralized nature of the operation, it has continuously shown improvements in the execution of its activities. The DAF of ME is also familiarized with Bank procedures including for procurement and disbursement, through original FASE- EFA-FTI CF, and other financed Bank operations. The project will use the country financial management system for budgeting, accounting, internal controls, flow of funds, financial reporting and auditing, as outlined in the following sub-sections.

Budgeting 53. Budgeting, budgetary control, and budget revisions will follow the education sector and national procedures requiring that the budget is inserted as part ME budget as well as approved by the cooperating partners. Annual work plans that cover the whole sector will be prepared, which will incorporate activities to be financed by the state budget, by FASE, and by bilateral projects/contributions. FASE is already registered with the Ministry of Finance’s National Directorate of Budget (DNO) and National Directorate of Treasury (DNT). FASE funds are annually inscribed in the budget for the next year by July. The IDA and EFA-FTI CF yearly allocations will be included in this process. 54. Substantial budget variations will be followed up using national procedures as described by the Mozambican law, and discussed with the partners, including the Bank, to ensure that the Fund’s activities remain on track, using existing mechanisms of dialogue. The budget execution is monitored through the quarterly reports prepared and submitted to the Bank and other cooperating partners.

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Internal control and Accounting procedures

55. Internal controls and accounting at the central, provincial, and district levels will also be based on national procedures, which are based on SISTAFE. In addition to the internal procedures described on the manual of operations which has been reviewed and found to be still relevant for the current operation, FASE has an internal audit department, which is adequately staffed and experienced. The internal audit department has been responsible for ensuring that funds are being used according to procedures, in an efficient and economic way, as well as following up on any issues raised by auditors. FASE’s internal audit department also conducts quarterly internal audits to both provincial delegations and district activities. At the central level, the Inspecão Geral das Finanças (IGF) will play a key role in ensuring compliance with national procedures through their inspections, which take place at least on a yearly basis. ME also has an in-house Inspeção Geral da Educação (IGE) which is responsible for ensuring the adequacy of the ministry’s system of internal controls and accountability, and which has also benefited from training on risk-based internal audit facilitated by the Bank to consolidate and enhance the skills of its inspectors. At the provincial level, the Direções de Administração e Finanças of the DPEC and the Provincial Directorates of Planning and Finance (DPPF) will ensure compliance to internal control systems. In addition, the regional IGF offices will also perform inspections on the respective DPEs to ensure that the internal controls are working effectively.

Staffing 56. The accounting staff capacity remains adequate at the central and provincial levels. Each province has a financial management focal point, responsible for the day to day accounting activities, as well as oversight of the district activities. The Fund has an adequately experienced and qualified Financial Management Specialist (FMS) which has been responsible for adequacy of the financial management arrangements. The FMS responsibility also includes providing training and mentoring to other staff to ensure sustainability of the department, especially to the staff at the district level, which requires more attention.

Accounting system 57. The ME is connected to the government’s IFMIS, e-SISTAFE, as well as all provincial delegations of the ME. The IFMIS is still being rolled out to the districts, of which 50 out of the 128 are currently connected. The execution of the connected institutions will be able to be verified and checked at central level, through their read-only capabilities. For those districts and schools, which are not connected to the IFMIS, they will record their transactions mainly through manual processes whereby all accounting transactions are entered into spreadsheets and as described on the manual of procedures. Information from districts, schools and other institutions will be collected and recorded at the DAF for consolidation and reporting purposes. In addition to e-SISTAFE, the provincial accounting managers of the Fund also make use of Primavera for the reporting and summarizing accounting transactions as well as for control and reconciliation purposes. 58. The preparation of the accounting information will be on a cash basis in accordance with Mozambique requirements, which are also in alignment with the International Public Sector Accounting Standards.

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Flows of Funds

59. The Memorandum of Understanding records the agreement of Cooperating Partners to a framework for donor contributions to the program, including the timing, modalities, and related matters that govern how contributions from each donor are to be made during project implementation. 60. The Fund operates with one US$ FOREX account held at the Banco de Moçambique, and through which all the funds will be transferred to the government’s single treasury account, CUT, and subsequently onto the beneficiaries. The funds will be coded to ensure that they are only accessible to the Fund and its beneficiaries. Upon submission of annual contributions by the cooperating partners, withdrawal applications will be submitted to the Bank and the funds will be advanced to the FOREX. Based on the FASE’s needs for funds, the ME will request the Department of Treasury (DNT) to transfer funds into the government’s single treasury account, where payments will be effected directly to suppliers. For the institutions which are not connected to the government’s CUT, the advance modality will be used, whereby funds equivalent to the amount of the approved forecast of expenditures will be transferred to their respective bank accounts from the CUT for use on eligible expenditures. The reporting on the use of these funds will take place indirectly onto e-SISTAFE, and only after which, can the respective institutions receive additional advances.

The funds will flow as illustrated in Figure 1 follows:

World Bank

FOREX Account MOF (DNT)

(US$)

CUT (Mtn/US$/Euro/Rand) (FASE Project Acc)

Suppliers/Service Providers

Other Partners

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Reporting 61. For reporting purposes, quarterly reports in a similar format used to report to the cooperating partners will be prepared by the Fund and submitted to the partners and the Bank within 90 days of the end of each calendar quarter reported on. The report is sufficiently detailed covering all consolidated activities of the entire Fund. These quarterly reports are also sent to the Ministry of Finance as well as National Directorate of Public Accounting (DNCP). 62. The Fund will submit the audited annual financial statements together with the Management Letter to the partners and the Bank within six months of the end of the fiscal year. These audits will be conducted by in accordance with International Standards on Auditing (ISA), by an institution acceptable to IDA and the cooperating partners. The Annual Financial Statements for the project will incorporate all activities, and prepared in accordance with International Public Sector Accounting Standard for cash basis.

External Auditing 63. The Tribunal Administrativo (TA) is constitutionally mandated to audit all government funds, including projects financed by external sources. The TA has performed some audits on FASE activities, including a recent value of money audit on the school books. However, within the FASE framework, GoM and the donors agreed to subcontract the audit to a firm of private auditors. The ME has the duty and obligation to carry out the appointment of the auditors, but on the basis of Terms of Reference agreed with FASE partners. The auditor will meet standards acceptable to IDA and the partners in respect of qualifications, experience and independence, which are designed to provide to assurance on whether the annual financial statements are a fair representation of the financial transactions and balances associated with the project. 64. The audited financial statements, along with the auditor’s report and management letter (incorporating management’s comments) covering identified internal control and accounting system weaknesses, will be submitted to IDA and the partners within six months of the end of each fiscal year. A single audit opinion will be issued and will cover all FASE’s receipts and payments, and FOREX Account.

Table 11: Requirements for audit compliance and FM action plan

Audit compliance Submission Date By whom

Submit annual audited financial statements together with the Management Letter

Annually by June 30 ME

b. Disbursements

65. Similar to the original operation, FASE will disburse on a quarterly basis based on Interim Financial Reports. The Advance disbursement method will be used to operate effectively through the CUT. Upon effectiveness of the Financing Agreement, an initial advance, based on an estimate of six months forecast financing requirements will be disbursed into the FOREX to cover eligible expenditures.

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66. The project may also make use of other disbursement methods/procedures such as (i) Reimbursement disbursement method, whereby the Bank reimburses the Borrower for eligible expenditures that the Borrower has pre-financed from its own resources; (ii) Direct Payment method, by which at the Borrower’s request, the Bank makes direct payments to suppliers and contractors from the Credit account; (iii) the Special Commitment method, whereby the Bank will issue special commitment to commercial banks for payment of eligible expenditures. 67. The Bank will issue the “Disbursement Letter” which will specify the additional instructions for withdrawal of the proceeds of the Credit and the Grant.

c. Procurement Procurement provisions and review thresholds 68. Procurement for the proposed Project would be carried out in accordance with the World Bank’s “Guidelines: Procurement under IBRD Loans and IDA Credits” dated May 2004, revised in October 2006 and May 2010, and “Guidelines: Selection and Employment of Consultants by World Bank Borrowers” dated May 2004, revised in October 2006 and May 2010; and the provisions stipulated in the Legal Agreement. The revised Anti-Corruption Guidelines dated January 2011 shall apply to this project. 69. The Implementation of the procurement activities for the proposed project will be managed by Ministry of Education. The Ministry possesses two separate procurement units, with the main unit within the Directorate of Administration and Finance (DAF) and a specialized procurement unit under the Directorate for Planning and Cooperation (DIPLAC). The former is mainly responsible for the procurement of goods and textbooks and consulting services (such as auditors and institutional assessments), while the latter specializes in the procurement of works for school construction and rehabilitation, construction and rehabilitation of teacher’s training institutes. Furthermore, this unit carries out the procurement of associated consulting services and goods and equipment.

70. The overall performance of both Ministry units has been reviewed during the preparation of the project and found to be satisfactory and capable of meeting minimum Bank fiduciary requirements The Ministry is resourced with qualified and experienced procurement officers, engineers and architects, who are involved in procurement and contract management. Moreover, the procurement unit within DAF is supported by an external procurement consultant. The risk associated with carrying out project is rated as Moderate. 71. Prior-Review Thresholds. Prior-review and procurement method thresholds for the project are defined in the procurement plan and guided by the table below.

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Table 12: Procurement Thresholds

72. Procurement Plan and Procurement Arrangements. The Procurement Plan for the project has been prepared by the Ministry of Education during Appraisal and has been reviewed by the Bank and found acceptable on March 15, 2011. This plan will be updated annually or as required to reflect the project implementation. Works contracts are expected to finance school (primary and secondary) construction and rehabilitation as well as training institutes. Goods to be procured are mainly for the provision of necessary goods and equipment for the new and rehabilitated premises, such as IT equipment, school furniture, laboratory equipment, library literature, among others. Text books for primary education are expected to be procured on an annual basis. Consulting services will mainly be associated with the design and construction supervision of schools and training institutes. DAF and DIPLAC will manage all procurement related activities, in their respective areas of specialty, with DAF responsible with the overall reporting consolidation. 73. The World Bank Standard Bidding Document for Goods and Works will be used for ICB, the Standard Request for Proposals will be used for consulting service packages larger than US$200,000 as well as procurement documents in Portuguese satisfactory to the Bank will be used for contracts to be procured for NCB or selection of consulting services for short-lists comprised by local consultants. These documents may be based on Government own documents that have been prepared in the framework of the Mozambique new procurement legislation, incorporating the exceptions that will be determined by the Bank when relevant.

74. Use of Government own Procedures: Government own SBD and Regulation may be used under NCB and Selection of Consultants provided that departures from Bank procurement guidelines are adequately mitigated as follows:

Applicable provisions under national competitive bidding (NCB for Goods and Works):

(i) Eligibility

No restriction based on nationality of bidders or origin of goods shall apply; therefore, foreign bidders shall be allowed to participate in NCB without restriction and shall not be

Prior Review Thresholds

Proposed (US$ million)

Procurement Method Thresholds Proposed (US$ million)

ICB NCB Shopping QCBS CQS Least Cost SSS ICS

Works 5.0 DC: all

≥5.00 <5.00 <0.10

Goods 0.50 DC: all

≥0.50 <0.50 <0.075

Consulting Services

0.20: for firm SSS: all

≥0.20

0.10: for Individuals SSS: all

N/A ≥0.10

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subject to any unjustified requirement which will affect their ability to bid such as, but not limited to, the proof that they are not under bankruptcy proceedings in Mozambique, or have a local representative in the country. Prior registration, obtaining a license or agreement shall not be a requirement for any bidder to participate in bidding procedures. (ii) Qualification Normally, post-qualification shall be used unless explicitly provided for in the procurement plan. Irrespective of whether post qualification or prequalification is used, eligible bidders (both national and foreign) shall be allowed to participate. (iii) Bidding Documents Procuring entities should use standard bidding documents for the procurement of goods, works and services; acceptable to the World Bank. (iv) Preferences No domestic preference shall be given for domestic bidders and for domestically manufactured goods. (v) Bid evaluation

(a) Qualification criteria shall be clearly specified in the bidding documents,

and all criteria so specified, and only criteria so specified shall be used to determine whether a bidder is qualified; the evaluation of the bidder’s qualifications should be conducted separately from the technical and commercial evaluation of the bid.

(b) Evaluation of bids shall be made in strict adherence to the criteria declared in the bidding documents; criteria other than price should be quantified in monetary terms.

(c) A contract shall be awarded to the qualified bidder offering the lowest technically responsive evaluated bid.

(d) Bidders shall not be eliminated from detailed evaluation on the basis of minor, non-substantial deviations.

(vi) Rejection of All Bids and Re-bidding All bids shall not be rejected and new bids solicited without the World Bank’s prior concurrence. (vii) Complaints by Bidders and handling of complaints The Borrower shall establish an effective and independent protest mechanism allowing bidders to protest and to have their protest handled in a timely manner.

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(viii) Right to Inspect/Audit Each bidding document and contract financed from the proceeds of the Grant shall provide that the suppliers, contractors and subcontractors shall permit the World Bank, at its request, to inspect their accounts and records relating to the bid submission and performance of the contract, and to have said accounts and records audited by auditors appointed by the World Bank. The deliberate and material violation by the supplier, contractor or subcontractor of such provision may amount to obstructive practice. (ix) Fraud and corruption The World Bank shall declare a firm or individual ineligible, either indefinitely or for a stated period, to be awarded a contract financed by the World Bank, if it at any time determines that the firm or individual has, directly or through an agent, engaged in corrupt, fraudulent, collusive, coercive or obstructive practices in competing for, or in executing, a contract financed by the World Bank. (x) Payment of Sitting Allowances: The Payment of sitting allowance to civil servants when serving as members of an Evaluation Committee is not permitted and shall not be made out of the proceeds of the Credit and Grant. (xi) Applicable Procurement Methods: The only procurement methods to be used under the project are those provided for in the Legal Agreements and further elaborated in the agreed Procurement Plan. Methods such as Limited bidding, Small-scale bidding and reverse-auction bidding will not apply under World Bank financing. (xii) Bidding Period Duration: Whenever NCB is used the duration of bidding procedure shall not be less than 28 days (4 weeks);

Applicable provisions for the use of Government Standard Request for Proposals (RFP)

The Government Standard Request for Proposal may be used for the selection of Consultants if the Short-list is fully comprised by local firms, subject to the requirements below: (xiii) Expressions of Interest: The advertisement for the solicitation of expression of interest shall be for not less than 14 days from the date of advertise on a newspaper of major circulation to the deadline for the submission of expressions of interest;

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(xiv) The Short-list: The short-list shall be comprised by six (6) firms, unless not enough qualified firms did express interest or are not known (xv) Time for Preparation of Proposals: The time to be provided to the short-listed consultants, for the preparation and submission of proposals, shall be no less than 28 days (4 weeks), after the issuance of the Letter of Invitation to the short-listed firms;

3. Environmental and Social

Environment 75. The project will finance construction and rehabilitation of additional classrooms, schools and teaching facilities in Mozambique. Physical, environmental, and social impacts will result mainly from the rehabilitation and construction activities. The environmental impacts are expected to be limited to (i) the management of wastes at the rehabilitation /construction sites (waste water, solid waste, rejection and elimination of wastes such as oils and paints, unsafe disposal of asbestos), soil erosion, loss of vegetation, rehabilitation of borrow pits, as well as dust and noise during the works; (ii) issues around the water supply and sanitation in the schools; (iii) high demand of wood for construction, e.g. furniture, windows; (iv) high demand for firewood for cooking; and (v) use of chemical for the control of termites during the construction phase. The project will not finance any additional activities with negative impacts different to those implemented under the parent project. 76. The project triggers three Safeguard policies: (i) Environmental Assessment (OP/BP 4.01), (ii) Pest Management (OP 4.09), and (iii) Involuntary Resettlement (OP/BP 4.12). The ESMF addresses OP/BP 4.01 and OP 4.09, and the RPF addresses OP/BP 4.12. 77. The Pest Management OP 4.09 is triggered due to the fact that the Project may purchase, acquire, use and/or involve application as well as disposal of pesticides to control for termites in the wood procured and used for construction of schools as part of Component 1 activities. The specific considerations with respect to pest and pesticide management issues relevant to the Project are addressed in the Project’s ESMF. The Project aims to (i) promote the use of biological and/or environmental management for pest control, in this case termites; and (ii) strengthen capacity of the Project implementing entity to promote and implement safe, effective and environmentally sound pest management in accordance with the classification of pesticides and their specific formulations as per the World Health Organization's Recommended Classification of Pesticides by Hazard and Guidelines to Classification (Geneva: WHO 1994-95). Furthermore, any pesticide financed by the Project for the control of termites will be manufactured, packaged, labeled, handled, stored, disposed of, and applied according to standards acceptable to the Bank. The Project will not finance formulated products that fall in WHO classes IA and IB, or formulations of products in Class II. 78. The ESMF provides guidelines for preparation of required environmental and social management plans (ESMPs) to mitigate and manage any and all potential impacts anticipated from activities to be undertaken under the project. The ESMF provides an environmental and

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social checklist, environmental and social screening form, and environmental guidelines for contractors designed to ensure that adverse environmental and social impacts from project activities are identified and captured in the planning stages of each sub-project. Moreover, the ESMF describes the Pest Management approach to be adopted in this Project which addresses (a) Pesticide use and management for termite control; and (b) Monitoring and evaluation. The pest management approach is designed to minimize potential adverse impacts on human health and the environment and reflect the guiding principles of an Integrated Pest Management (IPM) approach. 79. The ESMF was initially prepared as part of the documentation required during project preparation for the first EFA-FTI CF grant and was reviewed by the Bank and disclosed both in-country and at the Bank's InfoShop in August 2008. The ESMF was designed to be an instrument that provides a framework that will apply to the parent project as well as future investments under the Education Sector Support Program to be financed by FASE. The ESMF was updated to include all the components of this new project and disclosed both in-country and at the World Bank’s InfoShop on December 29, 2010. The ESMF was further updated to include the Pest Management Approach and re-disclosed both in-country and at the World Bank’s Infoshop on April 4, 2011. Social 80. A commitment to education for all children is reflected in all Government documents that underpin the current application and present in the strategy designed by MOE over the years have improved substantially their administrative and managerial capacity but are faced with increased unpredictability of access to increased level of resources needed to consolidate the existing programs and initiated new interventions. The Government is fully committed to achieving the MDGs for education. 81. Mozambique confronts critical education issues related to access, quality, equity and governance of the system. The country faces a dramatic shortage of school infrastructure in both urban and rural settings, in addition to the ongoing need to rehabilitate existing schools and provide basic furniture and equipment as well as pedagogic and didactic materials. 82. Therefore significant resources will be devoted to improve and rehabilitate the school/classrooms infrastructure, and where needed, to build new schools to meet the increasing demand for education. The construction and/or rehabilitation of school facilities will have an overall positive impact, particularly in the area of gender equity, due to the fact that the Project will contribute to improving the conditions for girl’s participation through the continued provision of appropriate sanitary conditions, known to be particularly important for retaining girls in school and in rural setting of teachers housing to attract and retain female teachers. 83. In the medium term, the expansion of coverage and the improvements in quality will have a very significant social impact. The construction of added classrooms in the primary schools will allow for the increase of complete schools (with all primary grades) which will result in a larger basis of students having access to key knowledge on literacy and numeracy, basic general science concepts and of life skills. Communities at large will benefit from better

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practices implemented by those school managers, teachers and students who have been able to learn basic concepts taught in primary schools. 84. The positive impact outweighs limited negative social impacts. To mitigate any possible social impact caused by project activities, the Ministry of Education based on their environmental and social management framework (ESMF) has recently developed of a leaflet on environmental issues that MOE distributed to the schools will contribute for the increases of key knowledge on issues related to environment by the school and district managers. 85. The Ministry prepared a Resettlement Policy Framework (RPF) in May 2008 and it was revised and disclosed both in-country and at the World Bank’s InfoShop in December 29, 2010 because it was determined that OP/BP 4.12 may be triggered. However, no major resettlement issues are anticipated as a result of the SPEC implementation. The framework provides a process to protect against community land donation, which can be the result of coercion from the community upon select individuals. The RFP also allows for monitoring mechanisms to be in place to ensure no person is worse off as a result of the project activities. 86. As sub-projects will not be known during project preparation, the RPF outlines guidance and standards by which to: (i) prepare a resettlement action plan, (ii) consult with impacted persons, (iii) conduct assets valuation, (iv) address grievances, and (v) establish monitoring mechanisms to ensure no person is worse off as a result of project activities. 87. During project implementation, all sub-projects will undergo a screening process to determine whether or not there is land acquisition, impact on assets, or restricted access to assets. If it is determined that the subprojects will require land, impact assets, or restrict access to assets, then a Resettlement Action Plan (RAP) will need to be prepared prior to sub project approval. Safeguard policies 88. The project has been classified as Category B with respect to environmental and social consideration and triggers three safeguard policies, namely, OP/BP 4.01 for Environmental Assessment, OP 4.09 for Pest Management and OP/BP 4.12 for Involuntary Resettlement. An ESMF and RPF have been prepared for addressing the triggered policies.

Safeguard Policies Triggered by the Project Yes No Environmental Assessment (OP/BP 4.01) [X] [ ] Natural Habitats (OP/BP 4.04) [ ] [X] Pest Management (OP 4.09) [X] [ ] Physical Cultural Resources (OP/BP 4.11) [ ] [X] Involuntary Resettlement (OP/BP 4.12) [X] [ ] Indigenous Peoples (OP/BP 4.10) [ ] [ X] Forests (OP/BP 4.36) [ ] [ X] Safety of Dams (OP/BP 4.37) [ ] [ X] Projects in Disputed Areas (OP/BP 7.60) [ ] [ X] Projects on International Waterways (OP/BP 7.50) [ ] [ X]

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4. Monitoring & Evaluation Joint monitoring system (CPs and the Ministry) 89. The project will be monitored as part of the overall monitoring of the FASE funds, as defined in the FASE MoU. The FASE MoU stipulates joint monitoring of sector performance to implement an agreed Education Performance Assessment Framework (E-PAF) linked to sector priorities and key interventions. This Joint monitoring process is organized at three levels, through:

• 2-3 headline meetings that join senior ministry officials from both central and

provincial levels with representatives of donor agencies and representatives of civil society to evaluate annual progress based on the agreed indicators and targets set in the E-PAF.

• Technical working groups composed of education specialists from donor agencies, NGOs, (national) directors and technical staff responsible for a specific thematic area or subsector, to accompany the implementation and development of key strategies in these identified areas. The working groups meet regularly according to a schedule agreed upon at the working group level.

• Monthly meetings of the senior management led by the Permanent Secretary, with the donor coordination team to follow-up on agreements reached in headline meetings and ensure regular communication and flow of information between the donors and the ministry.

90. The working group on Planning and Financial Management has an additional responsibility to monitor the application of FASE funds in line with the procedures outlined in the FASE MoU. The existing E-PAF presents a mixture of impact, outcome, output and input indicators and targets. Within the context of the preparation of the next strategic plan, the current E-PAF will be revised and cleaned up to ensure a more result-based orientation on the basis of indicators that are measurable on an annual basis. Monitoring at the level of the education sector is an integrated part of the overall annual review process of the performance of both government and donors on the basis of an agreed Performance Assessment Frameworks (PAF) that includes key sector indicators8

.

91. The FASE MoU foresees one annual external audit report as part of one overall audit of all external sector funds. In addition, the E-PAF indicates annual money for value audits for specific programs. Finally, external (thematic) evaluations may take place as part of the annual review process, agreed upon between CPs and the Ministry. 92. To provide continuous feedback on the Project’s progress towards the achievement of the SPEC targets and a range of indicators will be monitored. Through its M&E subcomponents, the project will support existing data collection systems at school, district and central levels. The outputs and outcomes will be mainly captured by the EMIS and line Ministry reports, as

8 Education indicators in the overall PAF are: i) primary completion rate for girls, ii) net intake rate – 6 year olds (girls) and iii) pupil/teacher ratio.

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appropriate. The project will also support the analysis and dissemination of progress to stakeholders through subcomponent. 5. Role of Partners 93. The CPs have provided an important support to the development of education in Mozambique. External support is provided to Mozambique through a highly structured aid architecture that links macro and sector level government-led donor coordination. The current structure of dialogue between the Ministry and 23 external partners from bilateral and UN organizations in the education sector, started with the development of the first strategic sector plan in 1998. Since then, the partnership has matured and become an open and transparent dialogue around strategic issues. The key principle of the partnership is support to one plan, one budget and one monitoring process. 94. The dialogue is guided by four key instruments:

• The sector’s strategic plan that guides all internal and external interventions;

• A Performance Assessment Framework (PAF matrix) to facilitate the monitoring of progress in the sector;

• A Memorandum of Understanding that guides the implementation of the sector pooled funds (FASE);

• Terms of reference, defining the basic principles and mechanism of dialogue between the ministry and its partners.

95. As mentioned earlier, the EFA-FTI CF contribution of US$90 million and IDA credit of $ 71 million will be part of the pooled fund (FASE). Among a total of 23 external partners in the education sector, in 2011 the FASE will be comprised of 12 CPs, namely Canada, Denmark, Finland, Germany, Ireland, Italy, Netherland, Portugal, Spain, UK, UNICEF and the World Bank. 96. In order to facilitate the dialogue with the Ministry, the partners are coordinated through a coordination team, composed by two or three agencies that are the link between the Ministries and the partners. The composition of the coordination team is agreed upon annually between the Ministry and its partners. Currently the coordinating team is composed by Ireland (focal point), Germany (through the GTZ) and UNICEF. In addition, over the last five years the civil society represented by the national network Education for All Movement (MPET) is increasingly present at national education meetings and joint planning and review meetings which attest also to the increased capacity of inclusiveness and leadership by the sector in promoting the dialogue among the main stakeholders. 97. A lot of progress has been made over the last few years. The sector has benefited greatly from increased external funding to the sector, including the EFA-FTI CF contribution in 2008-2010. A strong focus on the aid effectiveness agenda has brought great results in terms of coordinated sector support and dialogue, as well as in terms of alignment: around 90 percent of

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the external funds are on budget and 75 percent is now channeled through the sector support fund FASE (in 2003 this was only 5 percent). 98. More recently, however, the implementation of the EU code of conduct on division of labor, is posing a challenge to the financing for education, as two of the major donors are withdrawing from the sector, this only partly being compensated by increased support of the remaining donors or the entry of new donors to the sector (through either FASE or bilateral projects). 99. Civil society organizations have always contributed to the provision of education in the country, particularly at local level. Their participation in the dialogue at different levels has increased considerably over the last years. In the coming years, Government will continue to search even more actively their support the implementation of the sector plan, particularly in the area of literacy and non-formal education, teacher and school management training, as well as in the area of early childhood development and the introduction of mother tongue language as language of instruction in primary education. 100. Partnerships have also been developed between private sector foundations/companies, and the Ministry, for example in the area of school construction as well as the provision of school equipment (computers, laboratories). In addition, active engagement of the private sector is promoted in the area of technical and vocational training to make sure that this level of education responds better to the emerging human capital requirements of the economic sector (formal and informal).

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Annex 4 Operational Risk Assessment Framework (ORAF)

Negotiations and Board Package Version9

Project Development Objective(s)

The Development Objective of the proposed Project is to improve access to and, quality and equity of education.

PDO Level Results Indicators:

1. Primary Completion Rate 2. Net enrolment of 6 year olds in Grade 1 3. Transition rate EP2/next level (post primary) 4. Gender parity index (GPI) 5. Direct project beneficiaries (number), of which female (%)

Risk Category

Risk Rating Risk Description Proposed Mitigation Measures

Project Stakeholder Risks

Low

Lack of resources to continue the implementation of key activities may frustrate teachers and key administration officers, which may affect the timely completion of planned activities. The commitment for the ongoing reforms in the sector has raised expectations among the main beneficiaries of the programs.

The Bank’s task team will work closely with the Government and CPs to ensure that the project objectives are achieved and that the Government continues (i) to gradually cover selected programs by the state budget to reduce external dependency and (ii) to involve the provincial and district managers in the decision making process. With the proposed request for this project, the Government will be able to continue the support to the education sector

Implementing Agency Risks

Medium-I The MOE still needs to improve its knowledge of Bank’s policies and procedures, particularly in the area of procurement of goods and services. While the MOE implemented large IDA funded

9 This is the version that should be used for Negotiations and submission for Board Approval.

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projects in the past, with the expansion of the sector and resource allocation, the sector suffers from insufficient staffing, particularly at the provincial and district level. Procurement: Staff turnover and the limited number of newly recruited staff with knowledge about procurement procedures may delay project implementation Financial Management: There is a risk that information reported from the districts and provinces may not be reported timely, accurately and reliably given the various layers of consolidation and reporting. The government’s IFMIS, e-SISTAFE, is not yet rolled out to all districts. This could increase the likelihood of inaccurate and/or incomplete accounts for the FASE

The Bank jointly with MOE worked and will continue to work with UFSA to deliver training in procurement. It has to be noted that in the past years the existing MOE team at central level benefited from capacity building programs and this showed concrete results in the quality of the procurement documents processed by the procurement unit. The Bank team will continue to provide this type of training also at provincial level. Also a significant portion of the procurement will be made using country procurement regulations and major procurements will be done at the central level which has the capacity and knowledge to plan and make timely procurement. Capacity building on-the-job takes place in a top down manner from central to provincial to districts levels, and subsequently to school level, to ensure that funds are used only for the intended purposes. FASE is working with the government’s IFMIS, spreadsheets, and a separate accounting software for control purposes.

Project Risks

• Design

Low The implementation period proposed through this project may not be enough to allow for the achievement of the project’s PDO.

The proposed project is a direct continuation of the first EFA FTI-CF, which was successfully implemented by the sector in the past three years. There are only four project components, and the

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project PDOs can be achieved within the scope of the agreed project outcomes. In addition, while the proposed implementation period for the second EFA-FTI CF grant is 3 years, the proposed implementation period for the IDA credit is 4 years.

• Social and Environmental

Low There are no significant adverse social or environmental impacts expected as a result of the proposed project. All impacts will be managed in ESMF and RPF; ESIAs, ESMPs, and/or RAPs will be prepared as and when necessary.

• Program and Donor

Low It is possible that delays may occur in the releasing of funds by some cooperating partners, which may affect the speed of implementation of the program. Inadequate donor coordination may lead to overlap of programs and inefficient use of resources and higher transaction costs by all stakeholders.

The annual commitments communicated through FASE will be monitored by all partners, and where necessary, some partners may release more funds than expected for a specific period to compensate the delay of others. The existing technical planning and financing management working groups meet regularly and help anticipate any financing gaps.

• Delivery Quality

Low The main risk is related to delays when conducting relatively complex procurement cases. The Financial Management risks identified above may affect delivery quality.

Staff at the central and district level will continue to receive training. Financial management risks are mitigated as indicated above

Overall Risk Rating at Preparation

Overall Risk Rating During Implementation

Comments

Low Medium-L

The risks described in this ORAF are likely to have a low impact on the achievement of the PDO

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Annex 5: Implementation Support Plan 101. The overall implementation of SPEC is under the responsibility of MOE. In monitoring progress, the MOE relies very much upon the joint MOE and CP monitoring system that has been put in place and is reflected in the agreed terms of reference. This system includes: (i) annual review meetings (RAR); (i) regular co-ordination meetings (GCC); and (iii) Joint Thematic Working Groups. 102. Three headline meetings take place per year between all CPs and the MOE, focusing on measuring progress against an agreed set of indicators (E-PAF) and discussing strategic issues for future action:

• Annual review meeting in March looking back at progress made in year n-1 (RAR) • Mid-term review meeting in August looking at in-year progress (Copinha) • End-of-year meeting in December looking at the annual plan for year n+1 (COPA)

103. Recommendations of the headline meetings are followed-up at two levels: (i) The Joint Consultative Committee (GCC), bringing together the CP co-ordination team (3 CP representatives) and (ii) the senior management of the MOE on monthly basis. During these meetings, follow-up is given to an agreed agenda of co-operation and dialogue. 104. Joint Working Groups, comprised of interested CPs and thematic Directors from MOE, provide thematic discussions, opportunities for sharing of knowledge, information and skills. In addition, the working group of Planning and Finance has been mandated to monitor the implementation of the FASE MoU. 105. Also in its capacity of supervising entity of the EFA-FTI CF funds and of financier of the project the Bank task team will provide regular implementation support to the MoE team and will use established mechanism of dialogue through the joint working groups to support/ advise and steer implementation of the programs and listed activities annually discussed and approved with the MoE. In case required the World Bank will provide specialized support in areas of its expertise and will mobilize additional support in areas that are not natural areas of the Bank expertise.

106. The FM implementation support plan will be risk based, and will include: review of quarterly reports; review of annual audited financial statements and management letter as well as timely follow up of issues arising; and participation in project supervision missions as appropriate.

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The main focus of implementation support is summarized below.

Time Focus Skills Needed Resource Estimate

Partner Role

First 12 months

Technical and Procurement review of the bidding documents Procurement training Procurement

Procurement specialist 4 weeks N/A

Review the continuing adequacy of the financial management arrangements

Financial management FM specialist 5 weeks

Land acquisition and Social Safeguard training and Supervision

Social science Social specialist 4 weeks

Environmental safeguard training and supervision Environment

Environmental specialist 2 weeks

Institutional arrangement and project supervision coordination Operations

Operations officer 8 weeks

Team leadership and technical supervision

Leadership and education

TTL: 4 weeks Education specialist: 6 weeks

12-48 months

Team leadership and technical supervision

Leadership and education

TTL: 4 weeks Education specialist: 2 weeks

Project construction Construction Procurement specialists 4 weeks

N/A

Environmental and social monitoring & reporting

Environment Environmental specialist 2 weeks

Social science Social specialist 2 weeks

Review the continuing adequacy of the financial management arrangements

Financial management 5 weeks

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Skills Mix required is summarized below.

Skills Needed Number of Staff Weeks Number of Trips Comments

Operations officer 8 SWs annually Field trips as required Country office based

Education specialist 6 SWs first year, then 2 SWs annually in the following years

Two

Procurement specialist 4 SWs annually Field trips as required Country office based

Social specialist 4 SWs annually Field trips as required Country office based

Environmental specialist 3 SWs annually

Field trips as required Country office based

FM specialist 5 SWs annually Field trips as required Country office based

Sector financial analyst 2 SWs annually Field trips as required

Task team leader 4 SWs annually Field trips as required Country office based

Note: SW- Staff Week

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Annex 6: Team Composition

World Bank staff and consultants who worked on the project:

Name Title Unit Sophie Naudeau Senior Education Specialist (Task Team Leader) AFTED Ana Ruth Menezes Education Specialist AFTED Sandra Beemer Senior Operations Officer AFTED Ryoko Tomita Wilcox Education Economist AFTED Joao Tinga Financial Management Analyst AFTFM Elvis Langa Financial Management Analyst AFTFM Antonio Chamuco Senior Procurement Specialist AFTPC Dirk Bronselaer Senior Procurement Specialist AFTPC Christine Makori Counsel LEGAF Jose Janeiro Senior Finance Officer CTRFC Cheikh Sagna Senior Social Scientist AFTCS Lungiswa Thandiwe Gxaba

Senior Environmental Specialist AFTEN

Adriana Costa Language Program Assistant AFTED