PROGRAM INFORMATION DOCUMENT (PID) APPRAISAL STAGE Report No.: AB2883 Operation Name. Education and Training Sector Improvement Program - ETSIP Region

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1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized PROGRAM INFORMATION DOCUMENT (PID) APPRAISAL STAGE Report No.: AB2883 Operation Name Education and Training Sector Improvement Program - ETSIP Region AFRICA Sector General education sector (60%); Vocational training (40%) Project ID P Borrower(s) Implementing Agency Date PID Prepared February 12, 2007 Date of Appraisal February 28, 2007 Authorization Date of Negotiations March 7, 2007 Authorization Date of Board Approval April 26, Country and Sector Background GOVT OF THE REPUBLIC OF NAMIBIA MINISTRY OF EDUCATION Ministry of Education Private Bag Namibia Tel: Fax: Justin Ellis <jellis@mec.gov.na> Ministry of Education Private Bag Windhoek Namibia Tel: Ministry of Education Private Bag Namibia Tel: svanzyl@mhevtst.gov Namibia is one of Africa s few middle income countries with a per-capita income of US$ 3157 (2006 est.). Since its independence on March 21, 1990, Namibia has maintained a multiparty parliamentary democracy, with good governance, basic civil freedoms, respect for human rights, and a fairly contained level of corruption. Key social indicators have also registered substantial progress. For example, 83 percent of adults (15+ years) are literate while 90 percent of 15 to 24 year olds are literate. Net enrolment ratios for primary, basic, and senior secondary education are 96 percent, 95 percent and 53 percent respectively. Access to tertiary education and training is estimated at 11 percent. In terms of access, gender parity is attained at all levels of the sector. Population growth rate and the fertility rate are declining. Most (87%) communities have access to safe water, and to primary health care facilities. Namibia also has good prospects for accelerating growth. Despite these achievements, Namibia faces formidable development challenges. Since independence, growth rates have consistently fallen below government s own projections, and short of the 5½ percent annual per capita growth which the United Nations estimates as necessary to cut poverty in half by Income inequalities are among the highest in the world (Gini coefficient 0.6). Poverty is pervasive. Unemployment is estimated at 34 percent and even higher for youth and for the unskilled. The incidence of HIV/AIDS is among the highest worldwide. 1

2 With these challenges persisting throughout the first independence decade 1990 to 2000 the government articulated a broad national development reform framework in the form of Vision A core objective of this reform is to accelerate shared growth and to transform the economy into a knowledge-based economy. A core pillar of the growth strategy is to improve productivity. This will be attained through intensive application of knowledge and technology to increase the range and value of products that Namibia derives from its natural resources. Higher value-added productivity is expected to increase product exports, improve profitability and local investment returns, reduce domestic capital flight and attract foreign direct investments. The success of this growth strategy rests on Namibia s capacity to apply knowledge and technology in production and its capacity to transform its natural resource based industries into knowledge-intensive natural resource based industries. Though Namibia, today, has the technology and infrastructure, it does not have the skills to apply this technology in the extension of value chains. In 2003, the government invited the World Bank to undertake a thorough analysis of its education, training and skills development system and recommend how it may be transformed into a more effective tool for supporting the national development agenda. The analysis identified key sector weaknesses as pertaining to: poor quality, evident in low student learning outcomes. Performance on regional sixth grade mathematics and reading tests is the worst among the 14 participating countries. Very high proportions of adults who have had primary and even secondary education are functionally illiterate. Opportunities for post-secondary education and training are limited. So the system cannot supply the skills required to meet current labor market demands and to support the future development strategy. Another major weakness is the inequality in the distribution of education outcomes and attainment. That makes the system a weak tool for redressing poverty, social inequalities and income inequalities. Other weaknesses are inefficient use of available resources, the weak capacity to deliver education services, and the weak response to HIV/AIDS. The government adopted recommendations of the ESW and transformed them into a 15 year sector strategic plan and a 5 year medium term sector program (ETSIP1) 2. Operation Objectives The overall objective of this operation is to support the implementation of the first 2 years of Namibia s Education and Training Sector Improvement Program (ETSIP1). Specific objectives of DPL1 are to support: (i) the development of specific policies and policy instruments to guide and give effect to planned sector reforms; (ii) legal instruments to enforce policy implementation; and (iii) institutional capacities required for effective implementation of planned sector reforms. 3. Rationale for Bank Involvement The Bank s involvement is justified first and foremost by the government s recognition of its technical expertise as essential for the success of the sector reform program. A key rational for Bank involvement is its textured sector knowledge developed through a Bank-led ESW, technical support for the development of a 15 year sector strategy, and 5 year sector program. The Bank is therefore is best placed to support the government with the implementation of its sector reform agenda. The financial support provided by the Bank is essential to close the financing gap within the first two years of the program. The sustained involvement of the Bank during the 5 years of the program strengthens development partners confidence on the technical and substantive integrity of the government s program. This confidence has translated into a rare success in the Bank s support in raising grants and soft loans for the government program. The Bank s technical and financial support provide the government an incentive to effectively implement 2

3 touch policy, legal and institutional reforms required to give effect to planned sector reforms. Specifically, the use of the DPL has provided a strong incentive for the government to strengthen its sector delivery system as well as its fiduciary systems. Bank involvement also catalyzes and sustains substantive collaboration, coordination and harmonization of the 13 development partners that support the sector. This has culminated in a MoU that expresses the framework for collaboration. 4. Financing The total cost of the project is estimated to be about US$ 54 million and is expected to be financed as follows: Borrower: million IBRD: 5.25 million National Development Partners 0.8 International Development Partners million 5. Institutional and Implementation Arrangements ETSIP1 will be implemented through improved GRN structures under the overall control of the Ministry of Education (MoE). The MoE will take overall responsibility for the implementation of DPL1 and final accountability for the attainment of policy outcomes supported by DPL1. The MoE will be supported by the Ministry of Gender Equality and Child Welfare, responsible for early childhood development aspects of the operation; the Ministry of Information and Broadcasting, which supports the ICT aspects of the operation; the National Training Authority, responsible for the development of VET aspects; the National Council for Higher Education; the Ministry of Finance, accountable for adequate financing of the overall program; and the National Planning Commission, responsible for retaining the alignment of program objectives to the overall strategic outlook of Vision 2030 and specific development objectives of the National Development Plan. Key improvements, informed by the results of a capacity assessment, include clear definition of roles and responsibilities and enhanced lines of accountability from the Cabinet to teachers. New institutions will be established and old ones elaborated to improve the delivery of early childhood development (ECD) programs; technical education and training (VET); tertiary education and training (TVET), HIV/AIDS programs (HAMU and RACE), ICTs programs, and procurement activities. 6. Benefits and Risks The rationale and benefits of this operation have already been discussed above. The potential risks are: Vulnerability to external shocks: Namibia s critical sectors of the economy mining, fisheries, tourism, and agriculture are vulnerable to external shocks. Fluctuations in the contributions of these sectors may undermine macroeconomic stability and the GRN s ability to sustain its currently high budget allocations to the sector. To reduce this risk, the GRN has put a lot of effort toward raising grant financing required for up-front capital investment in the sector. In addition, efficiency measures instituted under ETSIP1 should contribute to the sustainability of recurrent cost implications of externally funded capital investment. Further, the MoE has developed base, medium, and high case scenarios for scaling ETSIP1 activities up or down over the years, if compelling reasons arise. Fiduciary risk: Initial assessments of the GRN s procurement system identified the following key risks: (i) inadequate MoE capacity to manage procurement processes, which may lead to delayed implementation; (ii) the low threshold for prior review by the tender board, which may delay program 3

4 implementation; and (iii) the application of price preferences within national competitive bedding in favor of historically disadvantaged local companies, which can lead to inefficient use of resources allocated for ETSIP1. These risks have been addressed through ongoing GRN procurement reforms and, through reforms agreed with the DPL1 team. The MoE has agreed to and is carrying out a number of steps to address these risks. Financial management: Financial management risks are (i) the weak budgeting capacity of the MoE and (ii) the MoF weak support and quality control of the audit function of the MoE and other ministries. The first is being addressed through substantial technical support to the MoE to ensure the level of accuracy in budgeting required under the GRN s integrated financial management information system (IFMIS). The second will be addressed in detail under the country integrated fiduciary assessment (CIFA). Recent system assessments however, concluded that GRN procurement and FM systems are adequate for the delivery of direct budget support. Interest-based resistance to proposed policy reforms: Some of the policy measures supported by DPL1 might encounter resistance from powerful interest groups, such as the teachers unions, wealthy parents, and civil servants. This is particularly so for policies to improve the efficiency of resource use and educators accountability for student learning. Examples include policies to de-link teacher salary increases from irrelevant and un-required qualifications, the phasing out of subsidies to profit-making private schools, and the placing of all managers on time-bound performance contracts. To mitigate this risk, the GRN has maintained an inclusive consultative process with all key stakeholders. This has engendered better appreciation of proposed policy reforms, as well as broader support and ownership. The GRN and the MoE have recently shown determination and strong will to overcome pressures from interest groups with the recent reversal of the decision to hike teacher entry salaries to unsustainable levels and the MoE s signing of performance contracts with headquarters-based sector managers. Implementation delays due to consultations and consensus building: A key cost of inclusive consultations is delay in making critical decisions and the resultant delay in program implementation. But the advantages of inclusive consultation ownership and broad-based support for the reforms far outweigh the disadvantages. In addition, the GRN has substantially reduced this risk by giving adequate lead time for consultations, starting in August It has also sustained the advocacy campaign for the broader program ETSIP1 since 2004, helping to build consensus around strategic policy reforms that could have been controversial. Inadequate implementation capacity: Mitigation measures pertain to: (i) creating a policy, legal, and institutional environment that will facilitate program implementation; (ii) assessing program implementation capacity and articulating a capacity development sub-program; (iii) frontloading capacity development actions; (iv) carefully sequencing activities to start with activities that are readily implementable and those that prepare for easier implementation downstream; (v) detailed articulation of implementation arrangements and implementation plans; and (v) clear system performance monitoring and evaluation. Potential discontinuity of financial support by one of the 13 development partners: The large numbers of development partners that will finance ETSIP1 pose a risk of discontinuing pledged support during the five years of program implementation. To reduce this risk, the GRN has committed an additional annual US$ 16 million to close the financing gap for ETSIP1, if it should become necessary. Adverse effects of HIV/AIDS on sector performance: Mitigation measures include (i) introducing substitute teachers using the national youth service and volunteers; (ii) more curricula mainstreaming of 4

5 HIV/AIDS; (iii) introducing conditional cash grants for OVCs; and (iv) strengthening of the HIV/AIDS management unit (HAMU) of the Ministry and regional AIDS committees (RACE). 7. Poverty and Social Impacts and Environment Aspects: In general, DPL1 supports policy, legal, and institutional reforms that are meant to increase the sector s contribution to accelerated and equitable growth. The operation capitalizes on the redistributive effects of education and training, which should lead to a significant impact on the reduction of poverty and broad social inequalities. Specific policies supported by DPL1 are pro-poor, and policy actions follow a propoor sequence. The first key policy focuses on equity in the distribution of education resource inputs and outcomes. Related pro-poor actions include the: (i) adoption of a policy on per-capita financing; (ii) development of standards to be met by all schools; (iii) institution of conditional grants for schools that will not meet set standards based only on per capita funding; (iv) establishment of magnet schools in disadvantaged regions and the creation of admission criteria that are pro-poor; and (v) establishment of conditional grants for OVCs. The second policy measure is pro-poor expansion of opportunities for good quality post-basic education and training. Expanding access to good quality education and training will broaden the base of Namibians who realize the benefits of education and training. Those benefits include broader employment opportunities, better income, reduced fertility, enhanced social participation, enhanced absorptive capacity for social services including education itself, gender parity, and overall poverty reduction and social equity. The expansion of sustained access to quality education is therefore one of the critical redistributive policies that Namibia will use to facilitate the sharing of growth. In addition, the enhanced system capacity to respond to HIV/AIDS will add to efforts to curb the spread of HIV/AIDS and stem the expansion of AIDS-related orphans. During implementation, close attention will be paid to monitoring DPL1 benefits for the poor and the marginalized. DPL1 will benefit indigenous communities as well. DPL1 supports the setting of performance standards that all schools should keep, and the establishment of conditional grants to enable under-resourced schools to meet set standards. Following a pro-poor sequencing, the currently under-resourced schools that cater to indigenous people will be prime beneficiaries. These schools include satellite schools that respond to seasonal movements of indigenous people, multi-grade schools that respond to children of farm workers who are mainly indigenous people s children, and mobile schools that respond to cattle herders, again mainly the children of indigenous people. An environmental impact assessment (EIA) was undertaken and it concluded that DPL1 and the parent program ETSIP1 are not likely to have significant negative environmental and social impacts. Potential impacts may arise from the construction of new schools, VTCs, and the extension of existing physical facilities and associated sanitary facilities. Given the availability of land, the location of new schools should easily avoid ecologically and socially sensitive sites. Where this may not be possible, frameworks for introducing EIA and for articulating an environmental management plan have been articulated. Students and communities will be involved in the implementation of these plans, using the advocacy services for ETSIP1. School curricula already include environmental education. Namibia also has solid policy, legal, and institutional frameworks that guide involuntary resettlements. There is also solid experience in applying these instruments in the Ministries of Agriculture, Water, and Forestry, and in the Road Authority. In the rare event that it may be necessary, the MoE will tap these experiences. Contact point Contact: Mmantsetsa Marope Title: Senior Education Specialist Tel:

6 Fax: mmarope@worldbank.org For more information contact: The InfoShop The World Bank 1818 H Street, NW Washington, D.C Telephone: (202) Fax: (202) pic@worldbank.org Web: 6

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