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1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Document of The World Bank FOR OFFICIAL USE ONLY PROJECT APPRAISAL DOCUMENT ON A Report No: MZ 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.

2 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 CPS CPs COPA CUT DAF DIPE DIPLAC-CEE DNT DPC DPEC DPPF DRH EA ECD EFA-FTI CF EMIS ESMF E- PAF EP1 FASE FM FMS FMR GA GCC GER GoM GDP HDI Direct Support to School program (Balance of) Social and Economic Plan Commission for the Evaluation of School Books Catalytic Fund 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 Construction and Equipment Unit under the Directorate for Planning and Cooperation 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 Education Performance Assessment Framework First Cycle of Primary Education Education Sector Support Fund (ESSF) Financial Management Financial Management Specialist Financial Management Report Grant Agreement Joint Consultative Committee Gross Enrolment Rate Government of Mozambique Gross Domestic Product Human Development Index i

3 IAP ICT IDA IEDA IFP IMF INDE IPM MDGs MTEF/CFMP MOE MoU NER OE/REO PARPA PEE PdA PDO PES PIM PQG PRSP RAR RPF SDEJT SISTAFE SPEC TA TORs WB Teacher Training College (in-service training) Information Communication Technologies International Development Association 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 Project Development Objectives Social and Economic Plan Project Implementation Manual The Government Five Year Plan Poverty Reduction Strategy Paper Annual Review Meeting Poverty Reduction Strategic Plan Resettlement Policy Framework State Administrative and Financial System Strategic Plan for Education and Culture Tribunal Adminstrativo Terms of Reference The World Bank Regional Vice President: Acting Country Director: Sector Director: Acting Sector Manager: Task Team Leader: Obiageli Katryn Ezekwesili Olivier Godron Ritva Reinikka Peter Materu Sophie Naudeau ii

4 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 Project Beneficiaries PDO Level Results Indicators... 7 III. Project Description... 8 A. Project components... 8 B. Project Financing Lending Instrument Project Financing Table C. Lessons Learned and Reflected in the Project Design IV. Implementation V. Key Risks Implementing Agency Risks Overall Risk Ratings VI. Appraisal Summary A. Economic and Financial Analysis B. Technical C. Financial Management D. Procurement E. Social F. Environment Annex 1: Results Framework and Monitoring Annex 2: Detailed Project Description Annex 3: Implementation Arrangements Environment Annex 4 Operational Risk Assessment Framework (ORAF) Annex 5: Implementation Support Plan Annex 6: Team Composition iii

5 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: P Lending Instrument: Specific Investment Loan (SIL) Sector(s): Primary Education 75%; Secondary Education 25%, Education for All 100% EA Category: B - Partial Assessment Proposed terms: Project Financing Data: [ ] Loan [X] Credit [X] Grant [ ] Guarantee [ ] Other: Cofinancing: Source Borrower: Republic of Mozambique IBRD: IDA: Others EFA-FTI CF Grant US$71.0 million US$90.0 million Total Amount: US$161 million Borrower: Republic of Mozambique Responsible Agency: Ministry of Education Contact Person: His Excellency Zeferino Martins Telephone No.: Fax No.: N/A Estimated Disbursements (Bank FY/US$ m) FY Annual Cumulative iv

6 Project Implementation Period: April 28, July 31 st, 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? 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? If yes, please explain: Does the project meet the Regional criteria for readiness for implementation? If no, please explain: Yes X No Yes X No Yes No Yes X No X Yes No 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 v

7 Conditions and Legal Covenants of the Financing Agreement: 1. The Additional Conditions of Effectiveness consist of the following: Financing Description of Condition/Covenant Agreement Reference Article V (a) the Grant Agreement has been executed and Effectiveness; delivered and all conditions precedent to its Termination 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 Date Due Effectiveness Condition Schedule 2. Section IV. B. Withdrawal Conditions; Withdrawal Period 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. 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. Retroactive Financing Each Fiscal Year Article IV The Co-financing Deadline for the effectiveness of the Cofinancing Agreement is December 31, Conditions and Legal Covenants of the Grant Agreement: 1. The Additional Conditions of Effectiveness consist of the following: Grant Agreement Description of Condition/Covenant Reference Remedies of the Association Date Due vi

8 Article V Effectiveness; Termination Schedule 2. Section IV. B. Withdrawal Conditions; Withdrawal Period Schedule 2. Section IV. B. Withdrawal Conditions; Withdrawal Period Article IV 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 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. 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. The Co-financing Deadline for the effectiveness of the Cofinancing Agreement is December 31, Effectiveness Condition Retroactive Financing Each Fiscal Year Remedies of the World Bank vii

9 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 and 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 165 th 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 Nevertheless, Mozambique is very unlikely to meet this MDG goal by Good progress has been made in improving maternal health (Goal 5); nevertheless, Mozambique is unlikely to meet this MDG goal by 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 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 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 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 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 1

10 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 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 22.4 mln (2010) % 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) 5.3 mln Total enrollments % 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) Govt. primary school service delivery indicators Years in cycle 67% 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%. 2

11 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 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 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 costeffective. 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 percent up to 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). 3

12 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 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) /11, operationalizes the PQG 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 4

13 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 ( ), and will operationalize the Government s new Five Year Plan ( ). The Government s Five Year Plan for 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 /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 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 5

14 only the case for one district in Net enrollment of 6 year old children has increased from 62 percent in 2007 to 70 percent in Retention of children in school has improved from 30 percent in 2006 to 41 percent in 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 , 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 As a consequence, completion rate has improved considerably from 34 percent in 2004 (26 percent for girls) to 50.8 percent in 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 ( /11) (SPEC) by reducing its financing gap in 2008, 2009, and 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 , 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 Program 2 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 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. 6

15 addition to EFA-FTI CF during the period : 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 While the overall education budget currently represents approximately US$ million in Mozambique, FASE contributed about US$ million per year over the period (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 , 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 ( ) 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 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 7

16 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$161 million (i.e. 31 percent of the FASE budget). Component 1: Improving Access to Education (US$ million, of which US$29.31 million financed by EFA-FTI CF and US$23.12 million financed by IDA) 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. 8

17 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 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 9

18 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 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 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 10

19 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 11

20 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 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 are infected with HIV. The highest prevalence rates are found among girls aged In 2009, the 12

21 prevalence rate in pregnant women aged was 8 percent; and 16 percent for women between the ages of The gender difference is serious. Women aged are 3 times more prone to contamination than men the same age and 4 times more prone between the ages of 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 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) 13