Document of The World Bank FOR OFFICIAL USE ONLY Report No: PAD984 INTERNATIONAL DEVELOPMENT ASSOCIATION PROJECT PAPER ON A PROPOSED ADDITIONAL CREDIT IN THE AMOUNT OF SDR 9.8 MILLION (US$15 MILLION EQUIVALENT) TO THE UNITED REPUBLIC OF TANZANIA FOR A SCIENCE AND TECHNOLOGY HIGHER EDUCATION PROJECT June 16, 2014 Human Development Sector Education Unit East & Southern Africa Africa Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective May 31, 2014) Currency Unit = Tanzanian Shilling (TZS) TZS1 = US$ 0.00060060 US$1 = SDR 0.64915253 TANZANIA GOVERNMENT FISCAL YEAR July 1 – June 30 ABBREVIATIONS AND ACRONYMS AF Additional Financing AfriQAN African Quality Assurance Network ANPC Assistant National Program Coordinator APSP African Primary Science Program ARU Ardhi University ATE Association of Tanzania Employers BRN Big Results Now CAS Country Assistance Strategy CASPR Country Assistance Strategy Progress Report CAG Controller and Auditor General CEM Country Economic Memorandum CoICT University of Dar es Salaam College of ICT COSTECH Tanzania Commission for Science and Technology CQS Consultants’ Qualification Selection CSEE Certificate of Secondary Education Examination DEO District Education Office DHE Directorate of Higher Education DUCE Dar es Salaam University College of Education EMP Environmental Management Plan ESDP Education Sector Development Program ESMF Environmental and Social Management Framework ESMP Environmental and Social Mitigation Plan FFF Flexible Financing Facility FM Financial Management FYDP Five Year Development Plan GoT Government of Tanzania HEDP Higher Education Development Program HEI Higher Education Institution HET-MIS Higher Education Management Information System HESLB Higher Education Student Loans Board Hi Head of Institution ICT Information and Communications Technology ii ICB International Competitive Bidding IDA/IBRD International Development Association/International Bank for Reconstruction and Development IFR Interim Financial Report INQAAHE International Network of Quality Assurance Agencies in Higher Education INSET In-Service Education and Training IPC Institutional Program Coordinator IRR Internal Rate of Return JICA Japan International Cooperation Agency LCS Least Cost Selection LTC Local Training Center LTPP Long-Term Perspective Plan MCST Ministry of Communication, Science and Technology MoEVT Ministry of Education and Vocational Training M&E Monitoring and Evaluation MKUKUTA Second National Strategy for Growth and Reduction of Poverty (Mpango wa II Pili wa Kukuza Uchumi na Kuondoa Umaskini Tanzania) MKUZA II Zanzibar Strategy for Growth and Reduction of Poverty (Mkakati wa Kukuza Uchumi na Kupunguza Umasikini Zanzibar) MUCE Mkwawa University College of Education NACTE National Council for Technical Education NAO National Audit Office NCB National Competitive Bidding NICTBB National ICT Broadband Backbone NPC National Program Coordinator OC Operating Costs OM Operational Manual OUT Open University of Tanzania PAD Project Appraisal Document PDB President’s Delivery Bureau PDO Project Development Objective PEMANDU Performance Management Delivery Unit (Malaysia) PMT Project Management Team PPA Public Procurement Act PPP Public-Private Partnership PSLE Primary School Leaving Examination PWPB Project Work Plan and Budget QBS Quality Based Selection SDR Special Drawing Rights SEDP Secondary Education Development Program SMS Short Message Service STEM Science, Technology, Engineering and Mathematics STHEP-1 Science and Technology Higher Education Project-1 STIP Science Teacher Improvement Project SUA Sokoine University of Agriculture SUZA State University of Zanzibar TCU Tanzania Commission for Universities iii TDV Tanzania Development Vision TEA Tanzania Education Authority TEAMS Teacher Education in Mathematics and Science THEDC Tertiary and Higher Education Development Committee TNBC Tanzania National Business Council TOR Terms of Reference TPSF Tanzania Private Sector Foundation TVET Technical and Vocational Education and Training UDSM University of Dar es Salaam VETA Vocational Education and Training Authority Vice President: Makhtar Diop Country Director: Philippe Dongier Sector Director: Tawhid Nawaz Sector Manager: Sajitha Bashir Task Team Leader: Xiaonan Cao iv UNITED REPUBLIC OF TANZANIA ADDITIONAL FINANCING FOR SCIENCE AND TECHNOLOGY HIGHER EDUCATION PROJECT CONTENTS Project Paper Data Sheet ................................................................................................................ vi Project Paper ................................................................................................................................... 1 I. Introduction .......................................................................................................................... 1 II. Background and Rationale for Additional Financing ...................................................... 1 III. Proposed Changes ............................................................................................................ 3 IV. Appraisal Summary .......................................................................................................... 8 Annexes......................................................................................................................................... 12 Annex 1. Results Framework and Monitoring......................................................................... 12 Annex 2. Operational Risk Assessment Framework (ORAF) ................................................. 17 Annex 3. Detailed Project Description .................................................................................... 20 Annex 4. Economic and Financial Analyses ........................................................................... 40 Annex 5. Institutional and Implementation Arrangements ...................................................... 55 Annex 6. Budget Allocations and Work Plan .......................................................................... 65 Annex 7. Environmental and Social Safeguards Compliance ................................................. 66 Country Map ................................................................................................................................. 68 v Project Paper Data Sheet United Republic of Tanzania Additional Financing for Science & Technology Higher Education Project ( P149464 ) AFRICA AFTEE . Basic Information – Parent Parent Project ID: P098496 Original EA Category: B - Partial Assessment Current Closing Date: 31-Jul-2014 Basic Information – Additional Financing (AF) Project ID: P149464 Additional Financing Type: Restructuring Regional Vice President: Makhtar Diop Proposed EA Category: B - Partial Assessment Country Director: Philippe Dongier Expected Effectiveness Date: 01-Aug-2014 Sector Director: Tawhid Nawaz Expected Closing Date: 31-Jan-2016 Sector Manager: Sajitha Bashir Report No: PAD984 Team Leader: Xiaonan Cao Borrower Teleph Organization Name Contact Title Email one Ministry of Finance Dr. Servacius B. Likwelile Permanent Secretary Project Financing Data–Parent ( Science & Technology Higher Education-P098496 ) Key Dates Effectiveness Original Closing Revised Project Ln/Cr/TF Status Approval Date Signing Date Date Date Closing Date P098496 IDA-44540 Effective 27-May-2008 10-Jul-2008 02-Oct-2008 30-Jun-2013 31-Jul-2014 Disbursements % Project Ln/Cr/TF Status Currency Original Revised Cancelled Disbursed Undisbursed Disbursed IDA- P098496 44540 Effective XDR 60.80 60.80 0.00 60.80 0.00 100.00 vi Project Financing Data –Additional Financing for Science & Technology Higher Education Project ( P149464 ) [ ] Loan [ ] Grant [ ] IDA Grant [ X] Credit [ ] Guarantee [ ] Other Total Project Cost: 15.00 Total Bank Financing: 15.00 Financing Gap: 0.00 Financing Source – Additional Financing (AF) Amount BORROWER/RECIPIENT 0.00 International Development Association (IDA) 15.00 Total 15.00 Policy Waivers Does the project depart from the CAS in content or in other significant respects? No Does the project require any policy waiver(s)? No Team Composition Name Title Specialization Unit Javier Botero Alvarez Senior Education Specialist Higher Education LCSHE Xiaonan Cao Senior Education Specialist Higher Education & TVET AFTEE Arun R. Joshi Lead Education Specialist Education AFTEE Nkahiga Mathus Kaboko Education Specialist Education AFTEE Francisco Marmolejo Lead Education Specialist Higher Education & Work Force HDNED Development Agnes Nderakindo Mganga Team Assistant Administration AFCE1 Donald Paul Mneney Senior Procurement Specialist Procurement AFTPE Michael Okuny Financial Management Specialist Financial Management AFTME Bee P. Pang Senior Program Assistant Administration AFTEE Danielle Malek Roosa Senior Counsel Legal LEGES Luis M. Schwarz Senior Finance Officer Finance CTRLA Helen Z. Shahriari Senior Social Scientist Social Safeguards AFTCS Nobuyuki Tanaka Education Economist Education Economics AFTEE Ruma Tavorath Senior Environmental Specialist Environmental Safeguards SASDI Michael Trucano Senior Education Specialist ICT in Education HDNED Juliana C. Victor-Ahuchogu Senior Monitoring & Evaluation Monitoring & Evaluation AFTDE Specialist Mei Wang Senior Counsel Legal LEGAM vii Locations Country First Administrative Location Planned Actual Comments Division Tanzania Zanzibar Urban/West Region Zanzibar X Tanzania United Republic of Tanzania X Tanzania Morogoro Region Morogoro X Tanzania Dar es Salaam Region Kinondoni District X Tanzania Iringa Region Iringa Rural District X Tanzania Arusha Region Arusha X Parent ( Science & Technology Higher Education - P098496 ) Sector Board Education Sectors / Climate Change Major Sector Sector % Adaptation Mitigation Co-benefits % Co-benefits % Education Tertiary Education 88 Public Administration, Law, and Justice Central Government 12 Administration Total 100 Themes Theme (Maximum 5 and total % must equal 100) Major theme Theme % Human Development Education for the Knowledge Economy 100 Additional Financing ( Science & Technology Higher Education – P149464 ) Sector Board Education Sectors / Climate Change Major Sector Sector % Adaptation Mitigation Co-benefits % Co-benefits % Education Tertiary education 100 Total 100 I certify that there is no Adaptation and Mitigation Climate Change Co-benefits information applicable to this project. Themes Major theme Theme % Human Development Education for the Knowledge Economy 100 Total 100 viii Project Paper I. Introduction 1. This Project Paper seeks the approval of the Board of Executive Directors to provide an additional Credit in the amount of SDR 9.8 million (US$15 million equivalent) to the United Republic of Tanzania for the Science and Technology Higher Education Project (STHEP-1) (Credit Number 4454-TA). The proposed additional Credit would provide a 18-month financing to support the Government of Tanzania (GoT) to: (i) implement remaining activities under STHEP-1 which could not be fully completed due to a Credit loss of US$6.6 million arising from exchange rate fluctuations over the implementation period; (ii) pilot two programs to sustain the momentum of key reforms in science teacher training and performance-based financing in higher education that were initiated under STHEP-1; and (iii) develop a strategy and operational plan for human capital and skills development at the tertiary level 1 in priority growth areas. The content and coverage of the proposed additional Credit largely covers the activities and objectives of the original Credit. However, since the development of the strategy and operational plan for skills development in priority growth sectors covers tertiary education, which goes beyond the higher education subsector originally covered by STHEP-1 and includes technical and vocational education and training (TVET), the original Project Development Objective (PDO) is being re-worded slightly to reflect this expanded coverage. II. Background and Rationale for Additional Financing 2. The original IDA Credit in the amount of SDR 60.8 million (US$100 million equivalent) for STHEP-1 was approved by the Board on May 27, 2008, signed on July 10, 2008 and became effective on October 2, 2008. Its Closing Date is July 31, 2014. So far, SDR 60.79 million ($93.6 million equivalent) of the signed Credit SDR 60.80 million has been disbursed and most activities have been completed or are being implemented as planned. 3. The original PDO of STHEP-1 is “to increase the quantity and quality of higher education graduates, with special emphasis on science, technology and education, through an improved learning environment.” To achieve this PDO, STHEP-1 has invested in two broad areas: (a) increasing capacity to deliver specific degree programs of higher priority; and (b) building institutions and systems to support higher education overall. The Project is currently rated Satisfactory on PDO achievement and Moderately Satisfactory on Implementation Progress for the past 12 months. Results recorded in the most recent Implementation Status and Results Report (May 7, 2014) indicate that project impact is consistent with the expectations set out in the Project Appraisal Document. 1 “Tertiary level” here means the level of post-basic education which includes certificate, diploma or degree training programs, producing middle to higher levels of artisans, technicians and professionals. 1 4. Despite the substantial contribution made by STHEP-1 to the creation of a high-level skilled workforce in Tanzania, the country has an even greater demand for skills at all levels: • Each year, approximately 800,000 Tanzanians enter the labor market, most of them youth. Addressing their skill needs can help break the poverty cycle, reduce potential extreme poverty and spread prosperity among the younger generations. • Only 3 percent of the current working population is considered high-skilled. As the economy diversifies, there will be a greater demand for both high-level and medium-level skills, which roughly correspond to higher education and TVET, respectively. Projections show that the skills composition has to improve by 33 percent for medium- skilled and 12 percent for high-skilled in order to achieve Tanzania’s Vision 2025 2. • Further, the successful implementation of the GoT’s Big Results Now (BRN) 3 initiative launched in 2013 depends on the availability of sufficient and qualified personnel in the country. 5. In this context, the GoT requested additional financing (AF) for STHEP-1 to help address its urgent need in three areas: a) Financial Shortfall. The Credit loss of US$6.6 million due to exchange rate fluctuations over the implementation period, affected the full completion of certain critical activities under STHEP-1. As a result, some of the key activities such as PhD-level staff training could not be completed, a few consultancy contracts were put on hold, and some newly constructed buildings supported by the Project are awaiting furniture and equipment. In order to address this financial, shortfall, the Ministry of Education and Vocational Training (MoEVT) conducted a prioritization exercise with the implementing institutions responsible for all STHEP-1 activities 4 . Full completion of the prioritized activities would contribute to achieving the original PDO, as these activities are across all the STHEP-1 components. In spite of these efforts, due to financial constraints, the GOT is unable to finance these activities, which are critical to achieving the original PDO. The proposed AF would provide financial support to enable the full completion of those prioritized activities. b) Education Reforms. Reforms successfully initiated under STHEP-1 include increasing capacity for secondary school teacher preparation and improving relevance of higher education institutions. STHEP-1 has equipped some universities with modern teaching/learning facilities and trained faculty with advanced degrees in Education and Information and Communications Technology (ICT). The Project also supported the development of a performance-based financing instrument called Flexible Finance Facility (FFF) to improve accountability, relevance and efficiency in higher education institutions, enabling them to produce the high quality graduates demanded by the labor market. The GoT would like to build on these reform initiatives and push the reforms further to address two urgent needs facing the country. One is the severe shortage of 2 “Tanzania: Growth and Structural Transformation Required to Reach Middle Income Status by 2025”, International Growth Center, UK and the President’s Office Planning Commission, Tanzania, 2010. 3 The Big Results Now (BRN) initiative launched by the GoT in the summer of 2013 pursues a more results- oriented development approach with initial focus on seven priority sectors – agriculture, energy, education, resource mobilization, transport, water and business environment. 4 Activities that have been originally planned, but are of minor relevance for the achievement of PDO indicators, have been left out. 2 qualified secondary school science teachers 5 including those who are already in the workforce but lack sufficient subject content knowledge to adequately instruct students. The other is the weak linkages between higher education institutions and the private sector, making higher education less responsive to the needs of economic growth in the country. The proposed AF would support GoT’s continuing reform in these areas by piloting a new ICT-enhanced approach for in-service science teacher training and establishing necessary institutional mechanisms for strengthening linkages between higher education and the private sector. c) Strategy Development. With a relatively low-skilled population and pressure from a new generation of job seekers for employment, and, at the same time, a high demand for skills in growth sectors, Tanzania needs to develop a broad range of skills and competencies. The GoT is urgently seeking technical assistance to assess the current system capacity and mechanisms for skills development in the country, specifically in certain growth sectors. A strategy and operational plan to develop human capital and skills for priority growth sectors, from the technical/vocational level to higher education, needs to be developed to support the realization of economic growth while helping to address youth employment in the country. The proposed AF would provide the required analyses to inform and facilitate the development of the strategy envisaged by the GoT. 6. The proposed AF is aligned with the Tanzania Country Assistance Strategy (CAS) 2012 - 2015. The CAS supports the GoT’s Vision 2025 and its 5-year national strategy for growth and poverty reduction (MKUKUTA II and MKUZA II) which puts great emphasis on investment in human capital. It directly supports the strategic objectives in the CAS – strengthening human capital and promoting accountability and governance. The recent Country Economic Memorandum (CEM) recommends the creation of productive jobs for Tanzania’s economic growth and calls for greater effort in skills development in sectors with growth potential. The CAS Progress Report (CASPR) puts further emphasis on job creation and public service delivery to support the GoT’s on-going effort in ending poverty and promoting shared prosperity. All the activities under the proposed AF will contribute to the achievement of the objectives and needed actions outlined in the original CAS, the CEM, and the CASPR. III. Proposed Changes Summary of Proposed Changes: The proposed AF will maintain the original STHEP-1 components with two sets of activities. One is for the existing activities that are affected by the credit loss and need financial support for their completion. The other is for new activities that help to pilot the reforms introduced by STHEP-1 and make the tertiary education system more responsive to the labor market demand. 5 Currently, the country needs about 27,000 science teachers. However, only 2,300 student teachers graduate each year with a science degree. 3 Change in Implementing Agency Yes [ ] No [ X ] Change in Project's Development Objectives Yes [ X ] No [ ] Change in Results Framework Yes [ X ] No [ ] Change in Safeguard Policies Triggered Yes [ ] No [ X ] Change of EA category Yes [ ] No [ X ] Other Changes to Safeguards Yes [ ] No [ X ] Change in Legal Covenants Yes [ ] No [ X ] Change in Loan Closing Date(s) Yes [ ] No [ X ] Cancellations Proposed Yes [ ] No [ X ] Change in Disbursement Arrangements Yes [ ] No [ X ] Reallocation between Disbursement Categories Yes [ ] No [ X ] Change in Disbursement Estimates Yes [ X ] No [ ] Change to Components and Cost Yes [ X ] No [ ] Change in Institutional Arrangements Yes [ ] No [ X ] Change in Financial Management Yes [ ] No [ X ] Change in Procurement Yes [ ] No [ X ] Change in Implementation Schedule Yes [ X ] No [ ] Other Change(s) Yes [ ] No [ X ] Development Objective/Results PHHHDO Project’s Development Objectives Original PDO: The Project Development Objective is to increase the quantity and quality of higher education graduates, with special emphasis on science, technology, and education, through an improved learning environment. Change in Project's Development Objectives PHHCPDO Explanation: The proposed additional Credit would provide a 18-month financing to support the Government of Tanzania (GoT) to: (i) implement remaining activities under STHEP-1 which could not be fully completed due to a Credit loss of US$6.6 million arising from exchange rate fluctuations over the implementation period; (ii) pilot two programs to sustain the momentum of key reforms in science teacher training and performance-based financing in higher education that were initiated under STHEP-1; and (iii) develop a strategy and operational plan for human capital and skills development at the tertiary level in priority growth areas. The content and coverage of the proposed additional Credit largely covers the activities and objectives of the original Credit. However, since the development of the strategy and operational plan for skills development in priority growth sectors covers tertiary education, which goes beyond the higher education 4 subsector originally covered by STHEP-1 and includes technical and vocational education and training (TVET), the original Project Development Objective (PDO) is being re-worded slightly to reflect this expanded coverage. Proposed New PDO - Additional Financing (AF): The objectives of the Project are: (i) to increase the quantity and quality of higher education graduates, with special emphasis on science, technology and education; and (ii) to lay the foundations for improved responsiveness of tertiary education to the labor market. Change in Results Framework PHHCRF Explanation: Four new Project Outcome Indicators and four Intermediate Results Indicators are added to the existing results framework in order to capture the results of the additional new activities that will be financed under the proposed additional Credit. Compliance PHHHCompl Covenants - Additional Financing for Science & Technology Higher Education Project Source of Finance Description of Funds Agreement Date Due Recurrent Frequency Action Covenants Reference For the purpose of carrying out the Project, the Recipient shall, where required by the ESMF: (i) prepare and disclose, prior to the commencement of any works under the Project, Site-specific ESMPs, satisfactory to the SCHEDULE 2, IDA Association in accordance Continuous New Section I, E. 4 with the ESMF; (ii) carry out the Site-specific ESMPs in accordance with the ESMF; (iii) not amend, suspend or abrogate any of the provisions of the site- specific ESMPs without the prior approval of the Association Finance PHHHFin Loan Closing Date - Additional Financing for Science & Technology Higher Education Project Source of Funds Proposed Additional Financing Loan Closing Date 5 International Development Association (IDA) 31-Jan-2016 Change in Disbursement Estimates (including all sources of financing)PHHCDE Explanation: The original Credit has been fully disbursed. The proposed additional Credit of SDR 9.8 million (US$15 million equivalent) would provide a 18-month financing to support the Government of Tanzania (GoT) to: (i) implement remaining activities under STHEP-1 which could not be fully completed due to a Credit loss of US$6.6 million arising from exchange rate fluctuations over the implementation period; (ii) pilot two programs to sustain the momentum of key reforms in science teacher training and performance-based financing in higher education that were initiated under STHEP-1; and (iii) develop a strategy and operational plan for human capital and skills development at the tertiary level in priority growth areas. Expected Disbursements (in USD Million) (including all sources of financing) Fiscal Year 2015 2016 Annual 14.50 0.50 Cumulative 14.50 15.00 Allocations - Additional Financing for Science & Technology Higher Education Project Disbursement %(Type Source of Category of Allocation Currency Total) Fund Expenditure Proposed Proposed Grants for Subprojects under Parts A.1(a), A.2(a) IDA XDR 4,900,000.00 100.00 and (b) and B.1(a) of the Project Consultants’ Services under IDA XDR Part A.1(b) and Goods, 4,100,000.00 100.00 (SEE FA PG. 17) Works, Goods, Consultants’ IDA XDR Services and Training under 650,000.00 100.00 Part B.2 of the Project Operating Costs 150,000.00 100.00 IDA XDR Total: 9,800,000.00 Components PHHHCompo Change to Components and Cost PHHCCC Explanation: The proposed AF will maintain the original STHEP-1 components with two sets of activities. One is for the existing activities that are affected by the credit loss and need financial support for their completion (“existing activities” hereafter). A total of US$6.37 million is allocated for the existing activities. The 6 other is for new activities that help to pilot the reforms introduced by STHEP-1 and make the tertiary education system more responsive to the labor market demand (“new activities” hereafter). A total of US$8.63 million is allocated for the new activities. STHEP-1 has two broad components ("More and Better Qualified Graduates in Specific Priority Areas" and "Strengthening Institutions and Systems to Support Higher Education Generally") and each has two sub-components. The new activities are concentrated in Component 1B and Component 2A. Proposed Current Component Proposed Component Current Cost Additional Action Name Name (US$M) Cost (US$M) Investments in Priority Investments in Priority Disciplines for Economic Disciplines for Economic 47.30 3.71 Revised Growth Growth Expanded Capacity for Expanded Capacity for Teacher Preparation and for Teacher Preparation and for 35.00 5.66 Revised Graduate Studies in Graduate Studies in Education Education Strengthening Key Higher Strengthening Key Tertiary Education Agencies and Education Agencies and 8.50 4.63 Revised Institutions Institutions Investments in System-wide Investments in System-wide 7.00 1.00 Revised ICT and Libraries ICT and Libraries 6 Total: 97.80 15.00 Other Change(s) PHHHOthC Change in Implementation Schedule PHHCISch Explanation: The proposed additional Credit would provide a 18-month financing to support the Government of Tanzania (GoT) to: (i) implement remaining activities under STHEP-1 which could not be fully completed due to a Credit loss of US$6.6 million arising from exchange rate fluctuations over the implementation period; (ii) pilot two programs to sustain the momentum of key reforms in science teacher training and performance-based financing in higher education that were initiated under STHEP-1; and (iii) develop a strategy and operational plan for human capital and skills development at the tertiary level in priority growth areas. 6 In addition to the costs of the four project components under STHEP-1, there is an implementation cost of US$2.2 million. Thus, the total cost of STHEP-1 is US$100.00 million as indicated in the STHEP-1 Project Appraisal Document (p. 55). 7 IV. Appraisal Summary Appraisal Summary PHHHAppS Economic and Financial Analysis PHHASEFA Explanation: Skills development is key for national development in Tanzania. As one of its fundamental pillars, the MKUKUTA aims at “improving quality of education, knowledge and skills development and ensuring that education and training systems produce skills demanded by the labor market.” To sustain its rapid economic growth, Tanzania needs a substantial number of skilled workers. In the current working population, 84 percent of them are classified as low-skilled, 13 percent as medium-skilled and only 3 percent as high-skilled workers. According to the study commissioned by the government, attaining middle-income status – which is Tanzania’s vision by 2025 – will require a different skill composition among its working population. The study indicated that around 55 percent of the country’s population could be low-skilled, 33 percent medium-skilled and 12 percent high-skilled. This means that the proportion of high-skilled working population will need to quadruple and the proportion of the medium- skilled labor will need to be more than doubled. Increasing skill levels is not just critical for the country’s economic development, but is also important for improving the living standards of individuals and families. The positive relationship between workers’ skill profile and earnings is well documented. Individual income levels increase with the level of education. In Tanzania, completing primary education generates a higher average income of 52 percent in comparison to those with no education. Similarly, average income increases by 62.2 percent when workers’ educational attainment moves from lower secondary to upper secondary education. Completing university education yields an average annual income 3.5 times higher than those who completed only upper-secondary education. Thus, at the individual level, there are strong economic gains in pursuing higher levels of education. Moreover, the Project estimates that the private return to higher education is 21 percent. With more and more people attaining basic education, the demand for technical/vocational and higher education will increase. The proposed AF has two sets of activities – existing activities and new activities as described above. The AF operation expects to produce increased numbers of quality higher education graduates by completing existing activities. The project estimates about US$1.1 million (TZS 1.868 billion equivalent) of net present value with the discount rate of 7.6 percent, and an internal rate of return of 31.8 percent (see Annex 4 for detailed cost-benefit analysis results). It also expects positive results with respect to efficiency and effectiveness from the pilot program using ICTs to upgrade the subject content knowledge of in-service secondary school science teachers. This activity is expected to be scaled up in future (see Annex 4 for detailed unit cost). There is a strong case for public provision and evidence of high returns from the proposed activities. Quality education and training produces important positive externalities. Economic studies have shown that education provision can provide economic benefits to society greater than the sum of its benefits to individuals. By providing a rich environment for innovation, technology transfer, and scientific discovery, for example, education can help accelerate overall economic growth, leading to poverty reduction and shared prosperity. In addition, through its technical assistance, the World Bank will bring global knowledge and expertise to relevant studies and activities proposed under this AF. 8 Technical Analysis PHHASTA Explanation: The proposed activities under this AF are appropriate for assisting the GoT address urgent needs summarized before and described here: (a) Supporting productive job creation: Creating productive jobs is critical for sustaining economic growth, but the relatively low-skilled population is a major obstacle for business growth and job creation in Tanzania. Linking education and skill development with labor market needs that support national development priorities is essential. The Country Economic Memorandum (CEM) for Tanzania recommends a focused approach to sectors with the potential for growing the economy, creating productive jobs and expanding the labor market. Besides continuing STHEP-1’s effort in producing high- skilled workers in priority areas through the existing activities, the new activities under the proposed AF will support the job creation agenda in four ways: (i) increasing the potential for the younger generation to develop a critical knowledge base in science by enhancing the subject content knowledge of secondary school science teachers; (ii) strengthening linkages between higher education institutions and the private sector by operationalizing a performance-based funding mechanism; (iii) understanding the real gaps and skill requirements in the sectors with growth potential as identified in the CEM – agribusiness (including leather), tourism and transport (including logistics); and (iv) developing a strategy and operational plan for skills development to help realize the growth potentials in these priority sectors. (b) Addressing the shortage of qualified science teachers: The severe shortage of qualified secondary school science teachers has created a negative cycle for producing technicians, engineers and scientists that the country needs for its economic transformation. The GoT and development partners have been working in this area through various programs (more information can be found in Annex 3). However, few training programs have tackled the issue of insufficient subject content knowledge of teachers directly. The proposed AF will build on these experiences and complement the on-going effort by piloting a new technology-enhanced approach to speed up the content training process – using ICT for upgrading content knowledge of secondary school science teachers on difficult subject topics. The GoT is interested in ICT-enhanced approaches which could be scaled up in order to benefit all teachers in all subjects in the future. To sustain such effort, the GoT would like to establish institutional mechanisms and capacity which will enable the country to effectively use ICT and other technologies for teacher training going forward (e.g. a new unit affiliated with the MoEVT which is specifically for e-learning). The proposed AF will conduct a pilot program to address these needs. (c) Strengthening linkages with the private sector: The GoT would like to find ways to address the disconnect between what higher education produces and what the society and market actually require by changing the way of allocating public funding to higher education. In particular, the GoT would like to see stronger linkages between higher education institutions and the private sector in meeting the demands of the labor market and technology transfer to support the country’s economic growth. STHEP-1 responded to this desire and developed the Flexible Financing Facility (FFF) instrument which helps the government mobilize resources and achieve specific results through a performance-based competitive grant mechanism. The proposed AF will support GoT’s continuing effort in improving the relevance of higher education by helping to operationalize the FFF instrument. The proposed activities under this AF can be carried out properly within the time frame given the following: (a) The emphasis of the pilot, using ICT for upgrading the subject content knowledge of secondary 9 school science teachers, is on building necessary institutional mechanisms and the capacity for future applications of new technologies in teacher training. This effort will be led by a joint task force that includes the Directorate of Secondary Education and the Directorate of Higher Education under the leadership of the Permanent Secretary with technical support from the Commissioner for Education at the MoEVT. Instead of a general coverage of the curriculum, the focus of upgrading is on difficult-to-teach topics in O-Level science subjects. These topics were identified as challenging in the national examination results and in consultation with key stakeholders. The use of ICT in this pilot is not about using the latest technologies, it is about converting existing relevant materials, including exemplary teaching on difficult topics, to multimedia and digital formats (starting with simple technologies such as DVD, VCD, audio CD and mobile phone) and making them available to teachers. Teachers will be trained to use these materials for mastery of subject content knowledge in local training centers, followed by additional support. This method has been used in other countries to address similar content mastery and pedagogy issues for teachers in rural and remote areas. A blended approach of face-to-face training, self-paced study and on- going support with mobile technology and peer gathering will be included in the pilot (see Annex 3 for detailed design and description). This will be carried out by institutions with the necessary technical capability developed through STHEP-1. In STHEP-1, these institutions were provided with modern teaching/learning facilities and trained-faculty with advanced degrees in Education and ICT. Some preparatory work such as the identification of difficult topics, potential materials for digitizing, design of pre- and post-training tests, etc. will be carried out by these institutions in advance to prevent delays in implementation. (b) The core of the FFF instrument developed under STHEP-1 is a performance-based financing approach through competitive grant schemes. This model has been applied in many countries, e.g. Chile has been using this approach to improve the quality of higher education for over a decade. Examples and lessons learned from these countries can guide the implementation of establishing institutional mechanisms and procedures for the FFF operations, which will be carried out by the MoEVT. The GoT expects that the implementation of FFF in the near future can change institutional behavior in areas that are critical to the country’s economic transformation, e.g. strengthening linkages between higher education and industry, or, improving both quality and quantity of graduates and research in applied sciences, engineering, and technology, or, incentivizing innovation and knowledge transfer, or, making curricula and academic programs more relevant to market needs. The operation of the FFF will also encourage partnerships with the private sector and development partners, especially those from emerging economies. The MoEVT is highly motivated to making the FFF fully operational soon. Under STHEP-1, a study visit to Chile was organized for developing the FFF instrument. The MoEVT intends to start the preparatory work in advance for establishing the institutional mechanisms and procedures for FFF operations by, e.g. drafting terms of reference and identifying candidates, to improve implementation readiness. Social Analysis PHHASSA Explanation: Not applicable Environmental Analysis PHHASEnvA Explanation: The GoT has confirmed that there will be no additional new civil works under the proposed AF and any up-gradations/rehabilitations or minor civil works will be done within existing properties supported under STHEP-1. Thus, no new land acquisition is expected for construction and no involuntary resettlement is 10 expected under the proposed AF. The proposed AF will therefore continue to be classified as Category B and will continue to utilize the existing ESMF, which has been deemed satisfactory by the World Bank. No new safeguards will be triggered. However, the deficiencies noticed during STHEP-1 implementation will need to be improved by the GoT. This includes (i) enhancing systems for ensuring that site-specific ESMPs are prepared and disclosed appropriately and (ii) improving institutional mechanisms at the MoEVT for better monitoring of ESMF implementation. The Additional Financing Agreement and the amended Financing Agreement will contain appropriate covenants for the preparation, consultation and disclosure of such site-specific ESMPs. Risk PHHASRisk Explanation: The overall risk rating is Substantial for two reasons. There is a legitimate concern about whether all the activities proposed for the AF funding can be fully implemented on time. Also, although the proposed AF will be able to establish the institutional mechanisms and procedures and make the FFF instrument ready for operations, it will not be able to assure funding needed for its first call for proposals which would go beyond the AF closing. However, these risks could be mitigated through the following measures: (i) the GoT has demonstrated a strong commitment and leadership during the AF preparation and is expected to maintain such a position during project implementation, especially given its track record of relatively satisfactory implementation of STHEP-1; (ii) as the implementing agency of STHEP-1, the MoEVT has the Directorate of Higher Education and its Director responsible for overseeing the Project. This arrangement will remain the same for the proposed AF. The Directorate has the experience and is familiar with the World Bank’s operations and requirements; (iii) the MoEVT plans to raise and secure funds in parallel with the implementation of establishing the institutional mechanism and procedures for FFF operations; (iv) further efforts will be made in training and strengthening the institutional capacity; and (v) implementation support from the World Bank will provide continuing support to the implementing institutions. Although the risk for the proposed AF is substantial, the GoT is confident that all these measures will help to mitigate the risk and implement the AF effectively. 11 Annexes Annex 1. Results Framework and Monitoring United Republic of Tanzania: Additional Financing for Science and Technology Higher Education Project Project Project Additional Financing for Science & Technology Higher Education Project Additional Financing Status: FINAL Name: Stage: Team Requesting Xiaonan Cao AFCE1 Leader: Unit: Product Responsible IBRD/IDA AFTEE Line: Unit: Country: Tanzania Approval FY: 2015 Lending Region: AFRICA Investment Project Financing Instrument: Parent Project Parent Project P098496 Science & Technology Higher Education Project ID: Name: Project Development Objectives Original Project Development Objective - Parent: The Project Development Objective is to increase the quantity and quality of higher education graduates, with special emphasis on science, technology, and education, through an improved learning environment. Proposed Project Development Objective - Additional Financing (AF): The objectives of the Project are: (i) to increase the quantity and quality of higher education graduates, with special emphasis on science, technology and education; and (ii) to lay the foundations for improved responsiveness of tertiary education to the labor market. 12 Results Core sector indicators are considered: Yes Results reporting level: Project Level Project Development Objective Indicators Status Indicator Name Core Unit of Measure Baseline Actual(Current) End Target Revised Percent of students who are Percentage Value 41.80 40.80 60.00 satisfied with quality in science Date 30-Nov-2012 30-Apr-2014 31-Jan-2016 and technology degree programs Comment This baseline was This is the actual New End Target established after the from 2012/13. for AF restructuring which introduced this new quality indicator. Revised Number of new degree-holding Text Value 181 4118 4150 teachers hired in secondary Date 01-Dec-2007 30-Apr-2014 31-Jan-2016 schools each school year, qualified to teach: (a) mathematics; (b) Comment End Target under New End Target sciences; and (c) English. Original Credit has for AF been met Revised Number of PhD and MSc holding Number Value 564 1599 1650 lecturers in priority disciplines Date 30-Nov-2012 30-Apr-2014 31-Jan-2016 Comment This baseline was End Target under New End Target established after the Original Credit has for AF restructuring which been met. The gov. was retrospectively revised 2012/13 obtained. data from 1501 to 1599. Revised Number of scientific publications Number Value 784 957 980 by these PhD and MSc holding Date 30-Nov-2012 30-Apr-2014 31-Jan-2016 lecturers in priority disciplines each year Comment This baseline was End Target under New End Target established after the Original Credit has for AF restructuring which been met. was retrospectively 13 obtained. Revised Direct project beneficiaries Number Value 40150 41680 45000 Date 20-Dec-2012 30-Apr-2014 31-Jan-2016 Comment This indicator was introduced in 2011/2012. Proportion of female beneficiaries is being established by December 20, 2012. Revised Female beneficiaries Percentage Value 33.70 35.85 37.00 Sub Type Supplemental Revised Quantity: Number of graduates Text Value 1312 3579 3700 from science and technology Date 01-Dec-2007 30-Apr-2014 31-Jan-2016 degree programs. Comment New Customized FFF Operations Text Value No Project Closing Manual endorsed by MoEVT for Date 30-Apr-2014 31-Jan-2016 implementation Comment New Institutional mechanisms for using Text Value No Project Closing ICT in teacher training in place Date 30-Apr-2014 31-Jan-2016 Comment New Appropriate ICT-enhanced Text Value No Project Closing method(s) for teacher training Date 30-Apr-2014 31-Jan-2016 identified from pilot experiments Comment New A strategy and operational plan for Text Value No Project Closing skills development in priority Date 30-Apr-2014 31-Jan-2016 growth sectors developed and endorsed by key stakeholders Comment 14 Intermediate Results Indicators Status Indicator Name Core Unit of Measure Baseline Actual(Current) End Target Revised Number of students enrolled in Text Value 3353 8294 8742 programs supported by Date 01-Dec-2007 30-Apr-2014 31-Jan-2016 Component 1A of the Program (Science and Technology students Comment enrolled (number)) Revised Number of student workstations in Text Value 1025 1701 1,878 teaching workshops and Date 01-Dec-2007 30-Apr-2014 31-Jan-2016 laboratories for science and technology. Comment Revised Number of new courses (not Text Value zero 182 224 previously offered) in science and Date 01-Dec-2007 30-Apr-2014 31-Jan-2016 technology disciplines. Comment Revised Number of new degree-holding Text Value 172 4118 4150 secondary school teachers Date 31-Jan-2007 30-Apr-2014 31-Jan-2016 graduated each year qualified to teach (a) mathematics (b) sciences Comment (c) English. Revised Enrollment in degree-level Text Value 1130 5103 5150 secondary school teacher Date 01-Dec-2007 30-Apr-2014 31-Jan-2016 preparation to teach mathematics, sciences and English. Comment Revised Percentage of student borrowers Text Value 5.6 40 80.7 with mature student loans who are Date 01-Dec-2007 30-Apr-2014 31-Jan-2016 repaying on schedule, as of Dec. 31 of each year. Comment New Degrees of score increase between Percentage Value 0.00 0.00 pre- and post-training assessments Date 30-Apr-2014 31-Jan-2016 of science teachers participated in the pilot Comment 15 New Number of O-Level science Number Value 0.00 2000.00 teachers trained through the pilot Date 30-Apr-2014 31-Jan-2016 Comment New Number of assessments & studies Number Value 0.00 5.00 completed Date 30-Apr-2014 31-Jan-2016 Comment New A Lab completed for developing a Yes/No Value No strategy and operational plan for Date 31-Jan-2016 skills development in priority growth areas. Comment . 16 Annex 2. Operational Risk Assessment Framework (ORAF) United Republic of Tanzania: Additional Financing for Science & Technology Higher Education Project . . Project Stakeholder Risks Stakeholder Risk Rating Low Risk Description: Risk Management: Main stakeholders of this AF are government agencies, Continuing consultations and communications with relevant stakeholders. national agencies, tertiary education institutions, and Resp: Status: Stage: Recurrent: Due Date: Frequency: industries targeted by the national development priorities. They are in agreement with the importance and urgency of Both In Progress Implementation Continuous the activities proposed under this AF. Implementing Agency (IA) Risks (including Fiduciary Risks) Capacity Rating Substantial Risk Description: Risk Management: MoEVT has implemented STHEP-1 and built certain Capacity development effort in fiduciary and M&E will be continued under the AF. capacity during the implementation. The project so far is Resp: Status: Stage: Recurrent: Due Date: Frequency: rated satisfactory. However, 1. MoEVT’s capacity is still relatively weak in fiduciary Both In Progress Implementation Continuous and M&E. 2. The FM assessment at this stage shows a moderate risk rating based on the past experience. 3. The procurement risk assessment at this stage is considered high due to relatively weak procurement capacity. Governance Rating Low Risk Description: Risk Management: The MoEVT has relatively clear management Good practices and lessons learned from other countries in relevant areas desired by the 17 responsibility with tertiary education institutions, other MoEVT will be provided under the AF. ministries and national agencies and tries to improve Resp: Status: Stage: Recurrent: Due Date: Frequency: coordination and communication and to be more transparent. Client In Progress Implementation Continuous Project Risks Design Rating Substantial Risk Description: Risk Management: Due to its limited implementation period, the proposed AF International experts on performance-based financing will be brought to Tanzania to will only be able to help establish the institutional set-up help appropriate customization of the FFF. Good practices and lessons learned from of the Flexible Financing Facility, but will not be able to other countries will be introduced. With a robust institutional framework established, it assure and secure funding needed for issuing first call for will help fundraising for the FFF operations. The MoEVT plans to start working on proposals to test out the instrument. Hence, there is a risk fundraising in parallel with the AF implementation. related to the follow-up on this work. Resp: Status: Stage: Recurrent: Due Date: Frequency: Both In Progress Implementation 31-Jan-2016 Social and Environmental Rating Low Risk Description: Risk Management: There are environmental risks associated with minor civil The MoEVT has satisfactorily developed an Environment and Social Management works and constructions which will be funded under the Framework (ESMF), which has been implemented during STHEP-1. The World Bank is AF. However since no land is to be acquired for new mostly satisfied with the quality of ESMF implementation. Although some issues related constructions, the environmental footprint is limited to to completion of site-specific ESMPs, disclosure and monitoring need improvement. construction related activities and no land acquisition or These aspects will be strengthened during the AF. resettlement issues are foreseen. Resp: Status: Stage: Recurrent: Due Date: Frequency: Both In Progress Implementation Continuous Program and Donor Rating Moderate Risk Description: Risk Management: 1. Coordination failure or delay hinders implementation 1. The MoEVT and the MCST have agreed to work closely to ensure the last eight of system-wide ICT-related efficiency reforms. institutions will be connected to the Internet under the AF. More frequent 2. Increased enrollments lead to decline in higher communications between the two ministries will smooth the implementation. education quality 2. With a large number of trained staff with PhD and MSc degrees, newly equipped 18 labs, new teaching and learning facilities under the Project, the quality of teaching and learning in priority disciplines is expected to improve even with the enrollment increase. Resp: Status: Stage: Recurrent: Due Date: Frequency: Both In Progress Implementation Continuous Delivery Monitoring and Sustainability Rating Moderate Risk Description: Risk Management: M&E has been weak in STHEP-1 implementation. M&E capacity development for both the MoEVT and the implementing institutions will be continued under the AF. Resp: Status: Stage: Recurrent: Due Date: Frequency: Both In Progress Implementation Continuous Overall Risk Overall Implementation Risk: Rating Substantial Risk Description: There are concerns over whether all the AF activities can be fully implemented on time and whether funding will be available for making the first call for proposals after the FFF becomes operational. These risks could be mitigated through the following measures: (i) the GoT shows strong commitment and leadership; (ii) the implementing agency – MoEVT has the experience and is familiar with the World Bank’s operations and requirements; (iii) the MoEVT plans to raise and secure funds in parallel with the AF implementation for FFF future operations; (iv) further strengthening the institutional capacity; and (v) continued implementation support from the World Bank with global know-how knowledge and good practices. Although the risk for the proposed AF is substantial, the GoT is confident that all these measures will help to mitigate the risk and implement the AF effectively. 19 Annex 3. Detailed Project Description United Republic of Tanzania: Additional Financing for Science and Technology Higher Education Project 1. The proposed Additional Financing (AF) for Science and Technology Higher Education Project (STHEP-1) will support the Government of Tanzania (GoT) to: (i) implement remaining activities under STHEP-1, which could not be fully completed due to a Credit loss of US$6.6 million arising from exchange rate fluctuations over the implementation period; (ii) pilot two programs – using ICT in science teacher training and operationalizing the Flexible Financing Facility (FFF) developed in the existing Credit – to sustain the momentum of key reforms in higher education in these areas that were initiated under STHEP-1; and (iii) develop a strategy and operational plan for human capital and skills development at the tertiary level 7 in priority growth areas. The content and coverage of the proposed additional Credit largely covers the activities and objectives of the original Credit. However, since the development of the strategy and operational plan for skills development in priority growth sectors covers tertiary education, which goes beyond the higher education subsector originally covered by STHEP-1 and includes technical and vocational education and training (TVET), the original Project Development Objective (PDO) is being re-worded to improve clarity and refer to tertiary education. Thus, the PDO for the proposed AF are: (i) to increase the quantity and quality of higher education graduates, with special emphasis on science, technology and education; and (ii) to lay the foundations for improved responsiveness of tertiary education to the labor market. 2. The proposed AF operation will maintain the component structure of STHEP-1. It will include two sets of activities: (i) existing activities affected by the Credit loss and in need of resources for full completion (“existing activities” hereafter, listed in Appendix 1) and (ii) new activities that address the GoT’s urgent need to upgrade the content knowledge of science teachers, strengthen linkages between higher education institutions and the private sector, through two pilots, and develop a strategy and operational plan for skills development in priority growth sectors (“new activities” hereafter). The new activities are reflected in Component 1B and Component 2A. A total of US$6.37 million is allocated for the existing activities 8 and a total of US$8.63 million is allocated for the new activities. Below is a detailed description of the proposed activities to be financed by the AF, including key features of design and implementation. 3. Component 1A – Investments in Priority Disciplines for Economic Growth (US$3.71 million). The additional Credit will finance the completion of existing activities in the areas of staff training, remaining external works and civil works, lab equipment, and other goods. No new activities are planned under this sub-component. 7 “Tertiary level” here means the level of post-basic education which involves certificate, diploma or degree training programs, producing middle to higher levels of artisans, technicians and professionals. 8 The total Credit loss is about US$6.6 million. The GoT prioritized the affected activities and would like to support those which are more critical to the achievement of the PDO. These prioritized activities are listed in Appendix 1 of Annex 3 of this document and they need financial support of US$6.37 million in total. 20 4. Component 1B – Expanded Capacity for Teacher Preparation and for Graduate Studies in Education (US$5.658 million). About US$0.978 million of the additional Credit will finance the completion of existing activities under this sub-component in the areas of staff training, remaining external works and civil works, lab equipment, and furniture. About US$4.68 million of the additional Credit will finance a new activity – to build institutional mechanisms and capacity for applying information and communications technology (ICT) in teacher training with the introduction of a pilot training program that upgrades the content knowledge of science teachers in difficult subject areas. No civil works will be financed under this new activity. The details of this new activity are as follows: Building institutional mechanisms and capacity for applying ICT in teacher training with the introduction of a pilot training program that upgrades the content knowledge of science teachers in difficult subject areas 5. There is a severe shortage of qualified school science teachers in Tanzania. The country needs 26,998 secondary school science teachers immediately but the tertiary education institutions in the country can only produce 2,300 graduates annually who are science teacher candidates 9. Of the current 10,400 in-service secondary school science teachers, many do not have sufficient subject content knowledge 10. While Mathematics and Science account for 46 percent of the curriculum, only 28 percent of teachers are qualified to teach these subjects 11. Inadequate instruction in science in secondary schools has also led to a decline in the quality of applicants to the STEM (Science, Technology, Engineering and Mathematics) areas for tertiary education in recent years. For example, since 2004, the number of students admitted to the engineering program at the University of Dar-es-Salaam has dropped about 30%. This has a serious effect on the country’s economic development and aspirations to transform itself into a knowledge-based economy. 6. The GoT and development partners have introduced several initiatives to raise the quality of science teaching and learning in schools such as the earlier APSP, TEAMS, STIP programs, the ongoing SEDP II Project 12 and the forthcoming BRN in Education Program. STHEP-1 itself has also contributed to these efforts by producing new degree-holding teachers hired by secondary schools to teach Mathematics and Science. Main lessons learned from these attempts are the importance of working closely with schools especially school inspectors, commitment at all levels, support of the Ministry, and that quality improvement has to be continuous and consistent. 9 UNESCO: “Quality Teachers for Education for All in Tanzania.” (new report) The cited figures include both the mainland and Zanzibar. 10 Though there is no teacher competency assessment in Tanzania, it is broadly acknowledged by the education authorities in the country that lack of sufficient subject content knowledge among science teachers is a key factor in the low learning outcomes of students in mathematics and sciences. 11 Project Appraisal Document, SEDP II Project. 12 Secondary Education Development Program (SEDP) Phase 2 Project, 2010-2015. 21 7. The on-going effort from the INSET 13 component of SEDP II focuses on improving equity in the distribution of teachers, enhancing the quality of instruction, and improving teaching delivery. Through fifty Regional Training Centers, it provides content development of the teacher training curriculum, practical guides and face-to-face training. While the cascade training model of INSET could yield some promising results, it cannot address the overall deficiency in subject content knowledge facing the entire teaching force. In addition, the materials used currently by schools for teaching science subjects are very diverse, with varying quality on the one hand and instructional materials unavailable to teachers on the other. This situation has had a negative impact on the teachers’ grasp and knowledge of the subject area, especially those topics that are difficult in the science curriculum. 8. Based on lessons learned from other countries such as China, Indonesia, Pakistan, Papua New Guinea, and Kenya, where ICT has been used effectively to improve education quality and standards especially in rural and remote areas, the GoT would like to explore the possibility of using ICT to speed up and scale up the training of in-service science teachers. Under STHEP-1, some higher education institutions are equipped with modern teaching/learning facilities and have trained their faculty with advanced degrees in Education and ICT (e.g., 20 staff received PhD training in these areas) such as Dar es Salaam University College of Education (DUCE), Mkwawa University College of Education (MUCE), the State University of Zanzibar (SUZA), University of Dar es Salaam College of ICT (CoICT), and the Open University of Tanzania (OUT). The GoT would like to take advantage of these newly available resources for speeding up science teacher training, not overlapping but complementing the INSET of SEDP II Project, strengthening collaboration between higher education and secondary education, and standardizing materials for science teaching in the country. At present, there are no existing effective mechanisms for applying ICT in teacher training in the country. 9. The proposed new activity under the AF therefore is an attempt to help the GoT to find effective ways of using ICT to raise the quality of science teaching in secondary schools across the country. It will focus on building necessary institutional mechanisms and capacity for applying ICT in teacher training with the introduction of a pilot training program that upgrades the content knowledge of science teachers in difficult subject areas 14. 10. The building of institutional mechanisms and capacity for ICT application in teacher training will be based initially on the organizational structure and process outlined for the pilot (see below) with periodical evaluations and adjustments to enhance its effectiveness. It is expected that at the end of the Project proper mechanisms for applying new technologies in teacher training will be institutionalized for the future. The upgrading of subject content knowledge of science teachers on difficult topics in the pilot will take a blended approach of face-to-face training at local training centers and self-paced learning with multimedia and digital materials on the identified difficult topics in science subjects at O-Level, accompanied by follow-up support. Under the pilot, the existing efforts including available materials will be 13 The INSET (in-service training of secondary school science and mathematics teachers) component has an investment of US$27.1 million and is implemented by the MoEVT in cooperation with JICA (Japanese International Cooperation Agency). 14 Such “difficult topics” are identified by the National Examinations Council of Tanzania based on the historical results of O-Level and A-Level tests and in consultation with key stakeholders. 22 leveraged and content materials related to these topics will be selected, developed and converted to multimedia and digital formats 15 to make them available for training. The pilot will test out this approach with 2,000 science teachers in the workforce in 12 regions and provide them with training in the ICT skills required to use these multimedia and digital materials. As a follow-up to face-to-face training, continuing support in the form of SMS 16 reminders/quizzes for consolidating content knowledge mastery, and video-taping classroom teaching for feedback on improving practice with peers will be provided. Effectiveness of the pilot will be evaluated for future scaling-up at the end of the Project. 11. Building institutional mechanisms and capacity for applying ICT in teacher training. With the joint effort of the Directorate of Higher Education and the Directorate of Secondary Education under the leadership of the Permanent Secretary with technical support from the Commissioner for Education at the MoEVT, an initial organizational structure and processes for carrying out the pilot for upgrading subject content knowledge of science teachers have been designed (Figure 1). Terms of reference for key roles and players will be defined and developed. This mechanism will be monitored, evaluated and adjusted throughout the pilot for its effectiveness. It will be used as a base for building the institutional mechanisms necessary for applying ICT and new technologies in teacher training for the country in the future, accompanied by capacity development in areas such as design, procurement, management, implementation and evaluation of teacher training programs using ICT and new technologies. Where the pilot may suggest some scalable ICT tools and ICT-enabled support for enhancing teacher training going forward, it will be critical that there is sufficient core local institutional and human resource capacity, which future initiatives can leverage and build upon. The MoEVT intends to establish a new unit within the Ministry for e-learning going forward, built on the pilot experience. To smooth the pilot implementation, the MoEVT plans to have the basic structure and some terms of reference in place prior to the AF becoming effective. 15 The converted materials in multimedia and digital forms will be made ready first for producing DVDs, VCDs, audio CD and putting online, later for TV broadcasting, web and mobile devices. The Tanzania Commission for Science and Technology (COSTECH) is about to launch a TV channel in June 2014 specializing local content for education, science, technology and innovation to the general public in the country, which could be used for delivering teacher training in future. 16 Short Message Service (SMS) is a text messaging service component of mobile phone. 23 Figure 1. Organizational Structure and Process for the Pilot Source: The STHEP-1 AF preparation teams of the GoT and the World Bank 12. Upgrading the content knowledge of secondary school science teachers on difficult subject topics. Under the MoEVT’s leadership, five institutions – CoICT, DUCE, SUZA, MUCE, and OUT which have implemented STHEP-1 – will carry out this pilot. The pilot focus will be given to science teachers’ content knowledge mastery on difficult topics in Mathematics, Physics, Biology, and Chemistry at O-Level secondary education. 13. Content Selection and Validation. Under the MoEVT’s coordination, stakeholder consultation and expert evaluation will be employed to select and validate the content for the pilot. In particular, it will include seasoned, experienced school science teachers and subject experts on the National Expert Panel who have at least seven years’ teaching and training experience in a particular science subject. For the four subjects covered under the pilot, four experts will be identified for each subject. Technologists, trainers and implementing institutions will be actively involved in the process. Difficult topics under each subject are identified from the national examination results both historical and present on the subject. Consultations will review and agree on the content materials 17 that are appropriate to be converted to multimedia 17 It will start from the materials previously developed by the SEDP Project, followed by the contribution of each implementing institution. Existing materials will be leveraged as much as possible. As these materials are all local content, no copy rights issue is involved. 24 and digital formats for the content mastery purpose. Collaboration between the implementing institutions and experienced school teachers on customization of content and materials to meet local teachers’ needs is a key feature of the pilot. For the pilot, one module for each subject will be developed and it will contain fifteen lessons. Each lesson will have supporting multimedia and digital materials to facilitate teachers’ mastery of content knowledge on a given difficult topic. The MoEVT intends to complete the content selection and validation work prior to the AF becoming effective. 14. Media/Technology Selection and Content Conversion. Starting from the content selection and validation, the CoICT which has over ten years’ experience in e-learning, will work with some key stakeholders and experts to identify appropriate technologies which could enhance teachers’ learning experience. The CoICT will be responsible to convert and develop (if needed) the approved materials (e.g. curriculum, teaching guides, lesson plans and exemplary teaching practices, etc.) into integrated multimedia and digital formats. It will then conduct test- runs of the prototype materials with experienced secondary school teachers and pedagogical experts to determine their relevance, revising the content where necessary for improvement. With this validation, the CoICT will produce copies needed for training. 15. Trainers Selection and Orientation. The other four implementing institutions – DUCE, MUCE, SUZA, and OUT who have long experience in both pre- and in-service teacher training will be responsible for delivering the training. Each institution has been designated to cover a set of identified regions for the pilot (see Table 1 below). It will select 15 of its faculty members who have the subject knowledge and training experience as training facilitators for the pilot. To maintain the quality of training with uniformity and consistency, the CoICT will train these 60 facilitators and 4-5 seasoned experienced secondary school science teachers in how to effectively use the newly available multimedia and digital materials for content learning. 16. Selection of Teachers for Training. Teachers to be trained under the pilot will be selected through District Education Offices (DEOs) which are responsible for secondary schools, following the established procedure for teacher training. The four implementing institutions are expected to work with the DEOs in their respective regions and are responsible for the selection. Teachers targeted for this training are those who have poor mastery and teaching skills of the science subjects they teach. A total of 2,000 science teachers in 12 regions will be selected for the pilot. Each of the four implementing institutions will be responsible for roughly 500 selected teachers. 17. Selection of Local Training Centers. The selection of local training centers is based on the following criteria: (i) these centers are ordinary public secondary schools; (ii) relative central location for easy access by road; (iii) no building rehabilitation needs; and (iv) its teaching staff profile is aligned with the teachers targeted for training. To ensure a reasonable geographic coverage of the country, 22 such centers from 12 regions have been selected for the pilot. Each of them will be under the supervision of a corresponding implementing institution and managed jointly with the school management under the pilot (see Table 1 below). It is envisaged that these training centers will become local resource centers for science teachers from nearby schools for their continuing effort in mastering and upgrading content knowledge of the subjects they teach after the completion of the pilot. 25 Table 1. Institutional Arrangements and Training Targets by Region and Institution TRAINING ARRANGEMENT FOR RETOOLING PILOT Local Training No. of Responsible Country Geographical Zone Region Center Trainees Institution SOUTHERN ZONE Iringa MUCE 116 MUCE Mbeya Iyunga Sec 268 MUCE Njombe Sec 116 MUCE EASTERN ZONE Dar es Salaam TPDC DUCE 100 DUCE Azania Sec 100 DUCE Morogoro Kilakala Sec 100 DUCE Tanga Tanga Tech 100 DUCE Covering both Mtwara and Lindi Mtwara Mtwara Tech 100 DUCE NORTHERN TANZANIA Arusha OUT Centre 100 OUT CENTRAL ZONE Dodoma OUT Centre 100 OUT LAKE ZONE Mwanza OUT Centre 100 OUT WESTERN TANZANIA ZONE Kigoma OUT Centre 100 OUT Shinyanga OUT Centre 100 OUT ZANZIBAR ISLAND ZONE 9 Training Centres Covering Pemba and Unguja Islands Zanzibar/Pemba9 Centres 500 SUZA COUNTRY TOTAL 2000 Source: The STHEP-1 AF preparation team of the GoT 18. Training Delivery. The training facilitators will prepare and organize training activities and go to their respective local training centers to deliver the training. The four implementing institutions are responsible for all training-related matters and will equip their respective local training centers with necessary devices and consumables for carrying out training. It is expected that each of them will train 500 teachers during the AF period (total 2,000 direct beneficiary teachers) with the newly available multimedia and digital materials. The face-to-face training at local training center will be 10 days, of 8 hours per day, during school breaks or weekends to minimize possible disruption of classroom teaching for students. It will be accompanied by teachers’ self-paced learning with the multimedia materials provided. 19. Follow-up Support. Based on global best practices in teacher training, to consolidate the content mastery and apply it in classroom teaching, teachers who participated in the face-to-face training will receive follow-up support for their continuing professional development under this pilot. These teachers will be provided with support in two ways: (i) receiving periodic text- messages (at least two SMS messages for each lesson ) via mobile phone to remind them of or quiz them on key content covered in each of the 15 lessons they received training on, and to prompt them to apply it in their classroom teaching, ; and (ii) using low-cost video camera, through either the local training center or themselves, to tape own actual classroom teaching on one selected difficult topic on which they received training and do self-reflection, analyze the results with peers, or compare with the exemplary teaching in the video material received to 26 improve teaching. Participating teachers will gather together periodically at the local training center for exchange and peer learning, which is a practice established already in some regions. 20. Monitoring and Evaluation. To evaluate the effectiveness of the blended approach employed by this pilot as an intervention for in-service training of science teachers, a 3-level evaluation scheme is planned: (i) for participating teachers, a pre- and post-training assessment, developed by the subject experts, will be conducted to measure the degree of their content knowledge increase from the training (if the capacity allows, it would be good to conduct another post-assessment after these teachers have had chance to apply what they have learned in their classroom teaching); (ii) at schools where participating teachers come from, school headmasters or inspectors, in collaboration with their respective responsible implementing institution, will conduct pre- and post-training classroom observations with 200 selected teachers to evaluate possible behavior change in teaching of these teachers; (iii) for technologies, surveys via SMS to participating teachers will be conducted to understand the effectiveness of a particular technology employed in the pilot; and (iv) at the project level, the MoEVT will work with all five implementing institutions to monitor and evaluate the progress and effectiveness of the pilot. The implementing institutions are expected to guide school-level evaluation and collect data for the MoEVT. Each of them will have a designated person responsible for M&E. In addition, the MoEVT will conduct an independent evaluation of the effectiveness of the institutional mechanisms used in the pilot. 21. Under this pilot, capacity development will be offered to the implementing institutions, involved school headmasters and inspectors, and local training center staff who will conduct and support the pilot implementation. Table 2 below provides a tentative timetable for the pilot implementation. 27 Table 2. Activities and Their Implementation Schedule of the Pilot 0M M1 M2 M3 M4 M5 M6 M7 M8 M9 M10 M11 M12 M13 M14 M15 M16 M17 M18 2014 2015 2016 Activity Prior Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Institutional Mechanisms for ICT Application: initial set-up & TORs development periodic review & adjustment evaluation & recommendation for future MoEVT & key stakeholders validation Content: content selection content validation Multimedia/Digital Materials: selecting appropriate technologies to enhance the content mastery converting/developing trial/test-run production Local Training Centers (LTCs) : selection criteria selection equipping Trainers: selection criteria selection training Science Teachers: selection criteria selection pre-training test training (F2F, 10 days, during school breaks or weekends) post-training test Follow-up Support (SMS) : provider selection SMS content development mobile app development & testing delivery (to all teachers, 2 messages per lesson, over 8 weeks) Follow-up Support (low-cost video) : training of LTCs staff LTCs (2 low-cost video cameras per LTC) assisted classroom taping self-reflection/peer learning (periodic) M&E: TORs for all M&E roles in the pilot M&E persons designated (1 per institution) M&E person monitoring, data collection & reporting MoEVT monitoring & evaluation Headmasters/Inspectors: selection (20 headmasters, 28 inspectors) development of tools & training (52 incl 4 from implementing inst.) pre-training classroom observation (200 teachers) & reporting post-training classroom observation (200 teachers) & reporting Source: The STHEP-1 AF preparation team of the GoT 22. This pilot has six innovative features: (i) pursuing long-term development of the country’s capacity in applying ICT and new technologies in teacher training by building appropriate institutional mechanisms; (ii) focusing only on the topics which pose the greatest challenge to science teachers in terms of content and pedagogy; (iii) strengthening the linkage of universities and secondary schools for quality improvement; (iv) situating local training centers in secondary schools to mimic real teaching environment and to provide teachers easy access to materials after training; (v) employing a blended training approach with integrated multimedia and digital materials; and (vi) providing follow-up support using existing technologies to enhance training effectiveness. 23. Component 2A – Strengthening Key Tertiary Education Agencies and Institutions (US$4.632 million). About US$0.682 million of the additional Credit will finance the completion of existing activities under this sub-component in the areas of consultancy services 28 and STHEP-1 operational costs. About US$3.95 million of the additional Credit will finance two new activities: (i) establish institutional mechanisms and procedures for the Flexible Financing Facility (FFF) developed under the original Credit, which is a performance-based financing instrument for fostering greater linkages between higher education institutions and the private sector (US$2.32 million); and (ii) develop a strategy and operational plan for skills development from the technical/vocational level to higher education in the priority growth sectors of agribusiness, tourism, and transport/logistics, in close collaboration with the private sector (US$ 1.63 million). The details of the new activity are as follows: Establishing institutional mechanisms and procedures for FFF operations 24. Under STHEP-1, a performance-based financing instrument – FFF was developed. This innovative instrument employs a competitive grant mechanism with clearly defined performance requirements to help mobilize resources and achieve results in specific areas desired by reforms in higher education in the country. Such a performance-based financing approach has been applied in many other countries, e.g. Chile has been using this approach to improve the quality assurance of higher education institutions over the past decade. Given the many challenges facing the Tanzanian higher education, e.g. increased magnitude and complexity of unmet skills demand; weak market relevance; low efficiency; unsatisfactory quality; lack of equitable access; and constrained public funding, the GoT would like to implement a competitive instrument like FFF to: (i) improve both accountability and efficiency of the public funding allocation to higher education; (ii) strengthen linkages between higher education institutions (HEIs) and the private sector; and (iii) change institutional behavior and make HEIs more responsive to the country’s development needs. 25. In principle, FFF is expected to demonstrate the characteristics of a competitive funding arrangement to achieve the development objectives of the GoT and that of HEIs, by adopting internationally acceptable best practices in areas such as: interventions aligned with priorities; competition with clear purpose; objectivity and transparency in selection; results-based funding; public-private partnerships; and sustainability. Funding through the FFF will be largely complementing the general budget support of the Government to HEIs, and will progressively supplement government support through attracting multi-stakeholder resources towards specific, targeted interventions focused on institutional and sector-level development targets (e.g. research and innovation, quality teaching and learning, responsiveness to market demand, better management, public-private partnerships, etc.), directly contributing to the economy and the society at large. 26. Though FFF as an instrument was fully developed including an already-appraised Operations Manual (OM), an application website and a training module, the necessary institutional mechanisms and procedures for its normal operation are not in place yet. Without an appropriate institutional set-up that can manage all aspects of its operation, FFF has no practical use and its promised benefits will not materialize. The proposed pilot 18 will therefore help to establish the required institutional mechanisms and procedures based on the OM and 18 “Pilot” here is in the sense that performance-based financing is completely new to higher education institutions in Tanzania and setting up an institution for its operation is pioneering work in the country. 29 have them in place, ready for FFF operations at the end of the proposed AF. In particular, the pilot will focus on the following five activities: 27. Customization of the OM and establishment of institutional mechanisms and procedures. The FFF was developed with reference to international best practices (e.g. a study visit to Chile) and giving consideration to a range of possible scenarios. As a result, its OM is very comprehensive and elaborate. Given that Tanzania has no history or experience with performance-based financing in higher education, international experience suggests that it should begin by introducing something relatively simple, in order to enable the behavior change process to commence, and to allow TEIs to accept the process and become familiar with it gradually. Thus, the existing OM which reflects the FFF comprehensiveness needs to be further customized. The customization will focus on the FFF institutional arrangements outlined on page 5 in the OM. Consultations will be carried out with other national agencies such as the Tanzania Commission for Science and Technology (COSTECH), the Tanzania Education Authority (TEA), the National Council for Technical Education (NACTE), and the private sector as well as development partners. Efforts will focus on the establishment of a simplified institutional set-up which still maintains the FFF-defined key principles such as independence, transparency, objectiveness, sustainability, and partnership with the private sector, and can actually govern and manage FFF operations going forward. It will start with hiring an experienced independent full-time staff to take the lead in the OM customization and be responsible for the establishment of the necessary institutional mechanisms and procedures. The expected outcome of this activity is a customized OM which will be acceptable by international standards and which will be endorsed by the Government as a policy guideline for future FFF reforms in the development of Tanzanian higher education. 28. Capacity Building. The OM customization and the establishment of institutional mechanisms and procedures will need a cohort of people who can drive the process and focus efforts in the right direction across different areas such as planning, activity coordination, communication, financial management, working with peer review panels, administering grants, handling legal issues, etc. Thus, the capacity of FFF secretariat staff in key function areas such as fiduciary, M&E, communication, and fundraising is very important to the success of full FFF implementation. Training will be provided to key personnel to ensure that the established FFF institution will have capable people to run it. At the same time, because many HEIs are unfamiliar with performance-based funding and administration of competitive grant schemes, for FFF’s successful implementation it is necessary to educate these institutions in some key areas such as proposal writing, peer-review process, managing grants, etc. Although such training was provided to a few universities as a test-run at the end of the FFF development under STHEP-1, it was far from sufficient. The pilot will continue the capacity building effort for HEIs. The fundamental challenge to FFF implementation is the required behavior change of HEIs. The buy-in and support of the leadership of these institutions are critical. Thus, the additional financing will provide critical exposure training to university leadership on the change process and the importance of institutional performance in relation to FFF. The expected outcome of the capacity building activity is that there will be capable people with required competencies working in key function areas under FFF in both the FFF secretariat and HEIs. 30 29. Communication and Promotion. FFF embodies a new concept of pushing for reforms in HEIs in specific areas through a performance/results-based financing mechanism, i.e. payment based on the achievement of agreed results. This is very different from the established tradition in Tanzania where HEIs receive funding from the Government with little accountability attached, resulting in increased disconnection between teaching/research and the current needs of society. Behavior change at both institutional and individual levels is certainly required. To make FFF successful, communication is crucial. This must go beyond informing the public and HEIs about FFF and how it works. It needs to communicate what expectations and needs society and industry have for HEIs, which reforms and changes are needed, what improvement results should be expected, and how FFF can help both the Government and HEIs to meet societal expectations and achieve these results. Communications between HEIs and the private sector are also needed for mutual understanding and partnership building. A communication plan needs to be developed and appropriate communication channels need to be identified. The development of FFF under STHEP-1 included a website which was designed to make the application, evaluation and selection process more transparent. Although this function is still needed for the FFF operation, it is insufficient to serve the overall communication needs for FFF. The pilot will support the revision of the FFF website, identification of FFF communication channels, and development of communication and promotion materials for dissemination. 30. Definition of Grant Windows and Associated Performance Criteria. FFF was developed as a general instrument of performance-based financing. It does not specify any particular area in which the instrument should be used. Such specification is left to the GoT to define based on its reform agenda. In other words, the areas on which FFF will focus will be determined by the areas which Government has identified as key to improving performance and generating positive results from HEIs. To make FFF fully operational, it is necessary to define the priority areas in which the reform is needed the most, in close collaboration with the private sector. Higher education in Tanzania faces many challenges as mentioned earlier. Taking the issue of relevance as an example, the GoT could address it by strengthening linkages between higher education and the industry in two ways: (i) establishing a basic structure that facilitates knowledge transfer between universities and industries, such as the creation of a knowledge transfer unit to liaise with industries and the changes required in institutional regulations to provide faculty appropriate incentives to make knowledge transfer happen; and (ii) to establish market feedback mechanisms for improving the relevance and quality of academic programs, which could include the inclusion of industry representatives on the Academic Committee to reflect industry needs in curriculum updates and new program development, and the establishment of a tracer study mechanism to regularly collect employment information and feedback from graduates on the courses and programs they took. Similarly, the GoT could try to improve Science, Engineering and Technology education by, e.g. encouraging HEIs to establish partnerships with their counterparts in emerging economies. For each of these, performance and results criteria could be clearly defined and measured. Calls for proposals could then be issued in these areas under the FFF. During the pilot, at least two grant windows will be identified and their associated performance/results criteria will be defined through consultations with key stakeholders including the private sector. At the end of the AF, these windows will be well defined and ready for issuing a call for proposals to support the FFF rollout. 31 31. Partnership Development and Resource Mobilization for FFF Implementation. FFF is just an instrument. To apply it in real situations, even if the above mentioned preparations are all in place, will not be enough. Sufficient funding is necessary, not just for covering FFF’s own operational costs but more importantly for being able to make calls for proposals to bring about the changes and achieve the results that are desired by higher education reforms in the country. There are potential resources for financing FFF implementation. Possibilities include the annual incremental budget support from the Government, development partners, the private sector, foreign investment, and society at large. Funds from these sources will not come naturally, however, and deliberate fundraising efforts need to be made by, for example, developing partnerships with emerging economies (e.g. China, Brazil, South Korea), development partners, and Tanzania’s own private sector which could mean consultations with organizations such as the Association of Tanzania Employers (ATE), the Tanzania Private Sector Foundation (TPSF), the Tanzania National Business Council (TNBC) etc. Factors such as political will, impact of the intended reform, clarity of performance/result criteria are all important. To ensure FFF’s full operation and sustainability during the pilot, a fundraising strategy will be developed and major potential funding sources will be identified. Funding channels will be secured at the end of the AF in preparation for issuing the first call for proposals in an identified priority reform area. 32. MoEVT will oversee and administer the FFF pilot. It will monitor the process, evaluate the results, and refine the instrument for its future applications. Table 3. Implementation Timetable for Operationalizing FFF M1 M2 M3 M4 M5 M6 M7 M8 M9 M10 M11 M12 M13 M14 M15 M16 M17 M18 2014 2015 2016 Activity Prior Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan customization of the OM TOR lead consultant hiring customization of the OM consultations finalized OM for FFF operation capacity building TORs key positions hiring training HEI leadership training: preparation workshop delivery evaluation communication & promotion communication/promotion plan channel identification website update materials development & production promotion evaluation grant windows & performance criteria stakeholder consultation window definition criteria definition validation preparating call for proposals first call for proposals issued resource mobilization fundraising strategy partners identification fundraising activity design activities execution evaluation endorsement MoEVT & stakeholders endorsed FFF ready for operations Source: The STHEP-1 AF preparation team of the GoT 32 Developing a strategy and operational plan for skills development at the tertiary level in priority growth areas 33. As a result of recent changes in Tanzania – for example, the discovery of natural resources, a new development approach (BRN), a demographic shift, and youth unemployment, etc., job creation and skills development are on the national agenda. Linking education and skills development with labor market needs and job creation to support national development priorities is a concern of the GoT. The GoT would like to know what kind of mechanisms the country should employ to improve and sustain such linkages and what a strategy for human capital and skills development should look like for the country. To meet this requirement, a set of activities have been designed under the proposed AF to fill the knowledge gaps, and to provide inputs for the development of the strategy and operational plan envisaged by GoT. 34. Study Visit. Emerging economies have successfully aligned strategies for human capital development and national development with supporting mechanisms. Such alignment has been weak in Tanzania where a human capital development strategy does not exist and skills development is very fragmented. To help the country move forward in this area, the GoT would like to learn from the experiences of emerging economies. The main objectives of the proposed study visit are to learn: 1) how to set up mechanisms that link human capital development with industry needs; 2) what financing and management models are used for skills development; 3) how to employ public-private partnership (PPP) for human capital development; and 4) how to effectively apply ICT in skills development. The proposed study visit will focus on Asian emerging economies 19 such as Malaysia, Thailand, South Korea and China where experiences in these areas are highly relevant to Tanzania’s needs. MoEVT will lead the preparation and execution of the proposed study visit. 35. Sector-Specific Studies on Human Recourse Needs and Skills Gaps. The GoT has produced a number of strategies such as the Tanzania Vision 2025, the BRN and the 5-Year Plans in which several priority areas have been identified for national development in the short and longer terms. However, whether the development targets set out for these priority areas can be achieved with the existing levels of human resource skill is unclear, both quantitatively and qualitatively. The additional Credit will finance sector-specific studies to help understand human resource needs and skills gaps in three priority growth areas – agribusiness (including leather), tourism, and transport (including logistics). The selection of these three priority areas is based on recent studies on growth and productive jobs in Tanzania 20. It tries not to repeat or overlap with studies that already exist or are underway 21. 36. The proposed sector-specific studies will be managed by MoEVT. A basic economic analysis model of supply and demand will be used to examine human resource needs and skills gaps along both upstream and downstream value chains in the three priority growth areas. The informal sector under each of these areas will also be looked at. The current provision of skills 19 South Africa can also offer lessons to Tanzania in the area of a functioning mechanism for linking skills development with industry needs, if the funding permits. 20 “Country Economic Memorandum: Tanzania: Productive Jobs Wanted”, forthcoming, 2014. 21 For example, the Nordic Consulting Group has done study on petroleum. The EU, World Bank and DFID are about to launch a study on jobs in the oil and gas industry. 33 training by tertiary education institutions, including both technical and vocational education and training (TVET) and higher education, will be examined. The main instruments which will be used for the studies are an employers’ survey, interviews, focus groups, and stakeholder consultations. The expected outputs of the studies are reports that clearly indicate the forecasted demand for human resources and skills, the current provision and shortage of skills supply, and recommendations for possible solutions in each of the three selected priority growth areas. MoEVT has started the preparation of the terms of reference for these studies based on consultations with the respective industries in the public and private sectors. 37. Assessment of the Capacity of the Current TVET System. Tanzania has a large but fragmented TVET system that produces mid- and low-level skilled-labor for the country’s economy. The GoT recently issued the TVET Development Program 2013/2014 – 2017/2018 as a strategy for its development. Given the need for the more focused development strategy newly adopted by the Government, whether the current TVET system has the required capacity and means to produce the skilled workers required to support these strategies becomes questionable. The proposed assessment will employ the analytic framework developed by the World Bank’s SABER Work Force Development instrument 22 to assess policies and institutions for skills development from three dimensions – strategy, oversight, and delivery. It will rely on a questionnaire and system protocols for data collection. Consultations with various stakeholder groups, particularly the private sector, in different locations will be conducted as part of the data validation and policy dialogue process. Diagnostic results from this exercise will provide evidence for exploring and identifying solutions for improvement. MoEVT will manage this assessment study with technical support from the World Bank. Over 30 countries have done such diagnostic assessment. The templates for its execution including survey questionnaire, terms of reference, and consultation workshop design are ready for use. 38. Study on Financing Mechanisms and Institutional Arrangements for Skills Development. Tanzania does not have a dedicated funding system for mid-level skills development. This has led to private colleges for skills training mushrooming, with self-financing and no loan systems. Some sectors such as health, water, agriculture, etc. provide grants to their affiliated institutions for diploma-level skills training programs. This model is not sustainable. The provision of skills development is also fragmented in the country. There are government agencies such as the National Council for Technical Education (NACTE) and the Vocational Education and Training Authority (VETA) which govern registered technical and vocational training institutions separately. In addition to MoEVT, other ministries are also involved in provision of skills development in their respective sectors. Development partners provide their own certificate training programs for either general or specific skills as well. In addition, there is no communication channel between skills development providers and industry. With such fragmentation, the GoT lacks a clear picture of this sub-sector of education and training and is unable to manage it appropriately. Both training quality and meeting labor market needs have suffered. The proposed study is urgently needed to improve this situation. The study will examine the current funding mechanisms, institutional arrangements and regulations through policy reviews, interviews, focus groups, and stakeholder consultations. The results of the analysis are expected to lead to recommendations for a feasible financing model, a more 22 Please see the SABER site for further reference: http://saber.worldbank.org/index.cfm?indx=5 34 coherent and accountable institutional arrangement, a set of sound regulations providing appropriate incentives, and a workable mechanism for communicating market needs with training providers. All of these are meant for sustainable skills development in the country. The study will be managed by MoEVT in collaboration with other relevant government ministries (e.g. the Ministry of Finance, the Ministry of Labor etc.) and national agencies (e.g. Tanzania National Business Council (TNBC), Loans Board, NACTE, VETA etc.) as well as with the private sector representative agencies (e.g. Tanzania Private Sector Foundation, Association of Tanzania Employers etc.). 39. A Lab on Human Capital and Skills Development for Supporting National Priorities. With the inputs from the study visit, the sector-specific studies, the assessment on TVET capacity, and the study on financing and institutional mechanisms, a “Lab” will be conducted specifically for the subject of human capital and skills development. The envisaged Lab is a series of close-door, facilitated workshops with key stakeholders including the private sector over a period of 2-3 weeks and uses the inputs from those assessments and studies funded under the proposed AF, other available research and data, international experiences, and Tanzania own good practices to discuss, debate and identify possible solutions for addressing human capital and skills development in the country in both formal and informal sectors. The final product of this Lab process is a strategy and operational plan for skills development in Tanzania, focusing on areas with great growth potential. MoEVT will collaborate with the Tanzania President Delivery Bureau (PDB), the Malaysia PEMANDU Team, and TNBC to design and run this Lab. The strategy and operational plan will include required policy interventions; sound mechanisms for governance, financing and market responsiveness; partnerships with the private sector and development partners; specific targets for the selected growth areas – agribusiness, tourism, and transport/logistics; detailed plans to achieve the targets; monitoring and evaluation of the progress etc. It is expected that the strategy and operational plan will be acceptable to development partners and will be endorsed by the GoT. 35 Table 4. Implementation Timetable for the Proposed Assessments/Studies M1 M2 M3 M4 M5 M6 M7 M8 M9 M10 M11 M12 M13 M14 M15 M16 M17 M18 2014 2015 2016 Assessment/Study Prior Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan study visit TOR preparation actual visit reporting & knowledge-sharing sector-specific studies (for each of 3 sectors): TOR consultants hiring inception report conduct study & reporting report consultation final report TVET system capacity TOR consultants hiring inception report conduct study & reporting report consultation final report financing mechanism & institutional arrangements TOR consultants hiring inception report conduct study & reporting report consultation final report lab on human capital & skills development TOR design preparation running the lab draft strategy & operational plan further consultation finalizing the strategy & the plan endorsed by key stakeholders Source: The STHEP-1 AF preparation team of the GoT 40. Component 2B – Investments in System-wide ICT and Libraries (US$1.0 million). The additional Credit will finance the completion of the existing activity – Last Mile Connectivity – to connect the remaining eight higher education institutions with the National ICT Broadband Backbone. No new activities are planned under this sub-component. 36 Appendix 1. List of Credit-Loss Affected Activities (Prioritized by the Ministry of Education and Vocational Training) Institution Activity Prioritized by MoEVT Estimated Cost (US$) Ardhi University (ARU) Training of 9 Staff 180,352.75 Civil works 118,923.45 Laboratory and Teaching Equipment 99,338.80 Total 398,615.00 Dar-es-Salaam University Consultancy 15,652.00 College of Education (DUCE) Civil works 541,209.00 Strengthening of building security by 7,599.77 providing grills to windows located at ground floor and corridor Total 564,460.77 University of Dar-Es-Salaam External Works (including renovation of car 28,125.00 (UDSM) park, circulation ways, and sewer network) and renovation of power substation for Kijitonyama Campus External Works (including On site sewer and 61,250.00 landscaping), permanent power connection with a 125kV substation for Mwanza LAN ODel center building External works (including on site sewer, site protection landscaping) necessary variation due to site condition (including foundation 91,250.00 protection and additional ramp) for Mbeya LAN ODel center building External works (including on site sewer, site protection and landscaping), necessary variation due to site topography and 446,875.00 permanent power connection with a 500kV substation for Aquatic Sciences and Fisheries building External Works (including connection to existing sewer, car park, access road, and 82,500.00 protection landscaping) and permanent power connection for Heritage building External works (including connection to existing sewer, and protection landscaping), necessary variation due to site topography and 195,000.00 connection to permanent power connection with 800kV substation for Mining and Mineral Processing building External works (including site protection 15,625.00 landscaping) for Transportation building Furniture and fixtures for three renovated 187,500.00 buildings at Kijitonyama Campus Furniture for Mwanza LAN ODel Center in 20,000.00 Mwanza 37 Furniture for Mbeya LAN ODel Center in 20,000.00 Mbeya Furniture and fixtures for Aquatic Sciences 106,500.00 and Fisheries building Furniture and fixtures for Heritage building 62,500.00 Furniture and fixtures for Mining and Mineral 62,500.00 Processing building Furniture and fixtures for Transportation 32,500.00 building Stipend, stationery allowances, research costs, 45,000.00 travel and tuition fee for 6 PhD scheduled to graduate beyond February 2014 External Works (including on site sewer, car park, access roads and protection landscaping) 232,500.00 and permanent power connection with 500 kV substation for Multi Sciences Complex building External works (including connection to existing sewer, car park, access roads and protection landscaping), necessary variation due to inadequacy in design and site 531,300.00 topography and connection to permanent power 500kV substation for Education building Furniture and fixtures for Multi Science 228,125.00 Complex building 196,875.00 Furniture and fixtures for Education building Stipend, stationery allowances, research costs, 110,000.00 travel and tuition fee for 11 PhD candidates scheduled to graduate beyond February 2014 Total 2,755,925.00 Mkwawa University College of Staff Training (9 staff members) 95,924.33 Education (MUCE) Consultancy 29,822.96 Civil works / contractor 287,420.94 Total 413,168.23 Ministry of Education and Nelson Mandela Tertiary Education Market 350,000.00 Vocational Training (MoEVT) Study Operating costs 200,000.00 STHEP Employee(consultants) provision of 132,000.00 Salaries Total 682,000.00 Sokoine University of Supply of ICT equipment for Tourism with 60,000.00 Agriculture (SUA) focus on Eco Tourism subcomponent Supply of Safari Beds for Tourism with focus 40,000.00 on Eco Tourism subcomponent Supply of Furniture and Fixtures for new 95,000.00 buildings at SUA Supply of Textbooks and Journals for 15,000.00 38 Tourism with focus on Eco Tourism subcomponent External Works for the new building 95,000.00 Department of Food Science and Technology Internet and Telephone connectivity for the 195,000.00 new buildings Operating costs 55,831.00 Total 555,831.00 Ministry of Communication, Science and Technology Last Mile Connectivity 1,000,000.00 (MCST) Total 1,000,000.00 Grand Total 6,370,000.00 39 Annex 4. Economic and Financial Analyses United Republic of Tanzania: Additional Financing for Science and Technology Higher Education Project 1. This annex provides relevant analyses for the proposed Additional Financing (AF) of Tanzania’s Science and Technology Higher Education Project (STHEP-1) on: 1) the impact of the Project; 2) rationale for public investment; and 3) the World Bank added value. It will first provide a brief description of the country context and the government’s vision and priorities. Based on the available data, this will be followed by analyses on the education sector as a whole and in particular its sub-sectors of technical and vocational education and training (TVET) and higher education in Tanzania, with a focus on areas such as access, relevance, finance, alignment with national development goals, and science and technology. After that, the annex will provide the results from the cost-benefit analysis, unit cost analysis for in-service teacher training, and fiscal analysis of the Project. A. Country Context 2. The Population of Tanzania is estimated at 47.8 million in 2012, which has significantly increased from 34.9 million in 2001. Population growth rate remains high and has been growing from 2.5 percent in 2001 to 3.0 percent in 2012. The GNI per capita was only US$570 in 2012 (WDI, 2012). Despite its 7 percent annual growth in the past decade, Tanzania remains one of the world’s poorest economies in terms of per capita income. Its economy depends heavily on agriculture which accounts for 28 percent of the GDP, provides 85 percent of the exports and employs over 70 percent of the work force. However, growth is slow and productivity is only about 4 percent. Tanzania is ranked the 120th out of 144 countries on business competitiveness and the 152nd out of 186 countries on the United Nations Human Development Index in 2012. B. Government Vision and Priority 3. Tanzania has a medium-term national growth and poverty reduction strategy – MKUKUTA II, which covers the period from 2010/11 to 2014/15. The focus of this strategy is to achieve the goals outlined in the Tanzania Development Vision (TDV) 2025 and the Millennium Development Goals (MDGs). The TDV 2025 envisions that, by 2025, Tanzania will become a middle-income country characterized by high quality livelihoods; peace, stability, and unity; good governance; a well-educated and learning society; and a strong and competitive economy. MKUKUTA II is organized into the following three clusters: 1) growth and reduction of income poverty; 2) improvement of quality of life and social well-being; and 3) good governance and accountability. Education is a key priority within the second cluster. Guided by the TDV 2025, the Education Sector Development Program (ESDP) provides a comprehensive strategic plan for the sector. Under the ESDP framework, each sub-sector has developed its own plan (e.g. the Secondary Education Development Program for secondary education, the TVET Development Program for TVET, the Higher Education Development Program for higher education etc.). 4. As a planning tool to operationalize the TDV 2025 and MKUKUTA II, the Five Year Development Plan (FYDP) I (2011/12–2015/16) presents the Government’s high-level policy 40 priorities. The FYDP I complement MKUKUTA II by prioritizing key interventions in an orderly sequence to enable more efficient and effective resource utilization. The overarching goal of FYDP I is to unleash the country's growth potential in order to fast-track the provision of basic conditions for broader, pro-poor growth. The FYDP I is the first in a series of three five- year plans under the recently launched Long-Term Perspective Plan (LTPP) 2011/12–2025/26 – “The Roadmap to a Middle Income Country.” Under the umbrella of LTPP, three strategic FYDPs are expected to be developed: the first FYDP (2011/12–2015/16) “Unleashing the Growth Potential” (currently under implementation); the second FYDP (2016/17–2020/21) “Nurturing an Industrial Economy”; and the third FYDP (2021/22–2025/26) “Realizing Competitiveness-Led Export Growth.” GoT’s emphasis on infrastructure to support industries leads to the following five core groups of interventions in FYDP I: 1) hard infrastructure (energy, ports, railways, roads, airports, and air transport) and soft infrastructure (mainly ICT); 2) agriculture; 3) industries (manufacturing, mining); 4) water and sanitation; and 5) human capital development 23. 5. The MKUKUTA also aims at “improving quality of education, knowledge and skills development and ensuring that education and training systems produce skills demanded by the labor market” as one of its fundamental pillars. The transformation of the Tanzanian economy requires an increasing pool of better qualified university graduates. By 2015 Tanzania aims to produce: 26,000 physical scientists; 88,000 architects and engineers; 22,000 life scientists; 64,000 medical, dental and veterinary scientists; 30,000 economics related professionals; 320,000 teachers; and 130,000 managerial workers. In order to achieve these targets, at least 80,000 well-trained students must graduate from universities each year. That means student intake in higher education must double from the current number of 40,000. 6. The Government of Tanzania (GoT) launched the Big Results Now (BRN) initiative, which sets specific goals and assures government and stakeholders’ strong commitment in seven priority areas (agriculture, education, energy, transportation, water, resource mobilization, and business environment). The human resource requirement for realizing the BRN has not received sufficient attention. When human resource needs are discussed (e.g. water), only short-term training (offered by external experts, maximum 2-3 months) is mentioned. Although the BRN has specific targets for each of the six priority areas, without a skilled labor force, the BRN results will unlikely be sustainable even they can be achieved. The Ministry of Education and Vocational Training (MoEVT) sees this clearly and feels the urgent need to develop the tertiary education sub-sector further in order to support the realization of the BRN and the TDV 2025. C. Education in Tanzania. 7. Thanks to GoT’s efforts to increase access to basic education for all, Tanzania has achieved almost universal primary education, with a 90% completion rate. This has led to a huge expansion in secondary education enrollment, which almost quadrupled between 2005 and 2010, with an annual growth rate of 30%. The rapid expansion, however, has rendered the system unable to maintain the standards of education service delivery. As a result, the quality of education at both primary and secondary levels has dropped significantly and student learning 23 PRSC 10 Program Document 41 outcomes have declined. The O-Level pass rate for secondary education was approximately 40 percent in 2012. GoT is determined to focus on quality improvement and to increase the O- Level pass rate to 80 percent by 2015. This target has been made a priority in the BRN initiative. 8. The expansion of secondary education has led to a rapid growth in higher education in Tanzania. Both the number of institutions and the enrollment have more than doubled in the last 5 years or so. At the end of the 2011/12 academic year, there were 50 higher education institutions, 14 public and 36 private, with a total 166,274 students enrolled in 576 degree programs. Private higher education has experienced the fastest growth and its enrollment now reaches a quarter of the total enrollment of higher education in the country. However, only about a quarter of university students study sciences and engineering 24 . Less than 20 percent of university faculty holds a PhD. Though there is no specific data available, it is reported that an increasing number of graduates have difficulties finding jobs due to a mismatch between their skills and labor market needs. Even with impressive enrollment growth in higher education, Tanzania is still very behind in comparison with other developing countries. At present, only 3.7 percent of the college-age population in Tanzania is enrolled in higher education – one of the lowest among all low-income countries (9 percent on average) and even below the Sub-Saharan Africa’s average (5 percent). Linkages between university research and industry are very limited and there is no single patent registered under a Tanzanian in the country. 9. The human resources needed to achieve the country’s development agenda has been a matter of significant concern for GoT. Increasing enrollment and graduation rates from secondary education as a result of the BRN initiative will double the number of qualified candidates for universities in a few years and quadruple it before 2020 (see Figure 1). The growing need for medium to high levels of skilled workers to sustain economic growth and support emerging sectors such as extractive industries is enormous. No doubt, the tertiary education sector in Tanzania will face huge pressure for expansion and for improvement in quality and relevance. Without anticipating and managing the tertiary education expansion strategically, Tanzania will not be able to make the required socioeconomic transformation for achieving the TDV 2025 and for fulfilling its dream of becoming a middle income country. The GoT is fully aware of this challenge. Under the ESDP framework, the Higher Education Development Program (HEDP) was developed to address challenges facing the higher education sector in three broader areas: institutional reforms, service delivery, and sustainability. The GoT has recently developed the Technical Vocational and Education Training Development Program (TVET DP) to demonstrate its effort in addressing skills development for supporting economic growth. D. Tertiary Education and TVET in Tanzania 1. Access and Equity 10. At the tertiary education level, most students are enrolled in universities and fewer in technical colleges. 24 See “University and University Colleges – Facts and Figures, 2013”, Tanzania Commission for Universities. 42 Table 1. Admission in University versus Non-university Institutions in Tanzania in 2010/2011 Total Admissions in Percentage 2010/2011 Non University 4,629 8.7 University 48,690 91.3 Total 53,319 100 Source: MoEVT TELMO Source of Data: TCU 11. Student’s admission is skewed towards some programs. Proportionally, more students are enrolled in social sciences, business and education, and fewer in science and technology related programs. In the 2012/13 academic year, for instance, the total admission in agriculture was only 2.1 percent and only 1.4 percent in natural sciences, while 19.1 percent in business and 12.4 percent in law and social science. Moreover, the table below shows the tendency of more male than female students to be enrolled in science and technology fields, e.g., 189 out of total 921 students admitted in agriculture were female in that year. Table 2. Admission by Major Categories of Academic Discipline in 2012/2013 Grand Total Major Category of Academic Discipline Female Male Total Percentage Agriculture 189 732 921 2.1 Business Management & Administration 3493 5046 8539 19.1 Engineering Sciences 391 2158 2549 5.7 Law & Social Sciences 2301 3236 5537 12.4 Medical Sciences 737 1404 2141 4.8 Natural Sciences 178 447 625 1.4 Science & ICT 1054 2806 3860 8.6 Education 7045 13498 20543 45.9 Grand Total 15388 29327 44715 100 Source: MoEVT TELMO Source of Data: TCU and NACTE 12. Table 3 shows graduates in salaried employment by sector and gender from vocational training institutions in Tanzania in 2011. Almost half of male students were employed in manufacturing, followed by electricity, gas and water sectors, while almost half of female students were employed in public administration and other services. 43 Table 3. Distribution of VETA 25 Graduates in Salaried Employment by Sector and Gender in 2011 (%) Company/ Sector Male Female Total Agriculture 2.3 1.7 2.1 Manufacturing 47.2 14.6 36.4 Electricity, Gas, Water 16.4 6.6 13.2 Construction 4.6 2.3 3.8 Wholesale and Retail Trade 1.0 2.3 1.4 Hotel and Restaurant 3.4 19.3 8.7 Transport, Storage and Communication 3.1 1.7 2.6 Finance 0.2 2.0 0.8 Public Admin and Other Services 21.8 49.5 31.0 Total 100.0 100.0 100.0 Source: VETA tracer study, 2011, Table 3.27 13. Higher education enrollment in Tanzania is skewed towards the rich. According to the data from the National Panel Survey 2011, about 87 percent of students enrolled in higher education came from rich families (Figure 1). Figure 1. Education Level by Quintile of Wealth, Age group 15-29 in 2011 (%) 100% 13.4 15.0 90% 20.8 25.9 32.7 80% 15.6 16.0 46.9 70% Wealthiest 21.8 65.5 20.5 60% 19.8 Quintile 4 24.1 24.7 86.6 50% 18.6 18.6 Quintile 3 40% 21.0 22.5 22.5 19.0 Quintile 2 30% 20.8 13.7 19.4 18.4 20% Poorest 30.3 15.5 10% 22.5 7.7 11.2 8.1 18.0 16.6 8.2 5.7 4.9 5.4 0% 2.5 No Incomplete Complete Incomplete Complete Upper University Total Primary Primary Primary Lower Lower Secondary Education Secondary Secondary Source: Calculation from 2011 National Panel Survey. 14. Projection of candidates for secondary and tertiary education. Figure 2 shows the projection for Form 4 and Form 6 leavers. The number of Form 6 leavers has been relatively 25 Vocational Education and Training Authority 44 stable (32,418 in 2009, actual). However, after 2013, it is projected that the number of Form 6 leavers will significantly increase (154,784 in 2020, estimation), even though the number will decline in 2014 (impact of the CSEE pass rate drop in 2012) and in 2018 (impact of the PSLE pass rate drop in 2018). Figure 2 also shows the projection of Form 4 leavers, which will significantly increase in the coming five years, from 150,000 to 352,000 (more than doubled). Figure 2. Projections of Form 4 and Form 6 Leavers by 2020 400000 Form 4 (lower secondary) leaver 352,400 350000 Form 6 (upper secondary) leaver 300000 250000 200000 154,782 150000 135,840 100000 50000 32,418 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Source: World Bank team’s projection based on BEST 2012 and BRN Education Lab Executive Summary. 2. Quality and Relevance to Labor Market 15. As mentioned above, to be a middle income country and to be competitive in the world, the demand for human resource and skills development is huge in Tanzania. In order to meet this demand, the Tanzanian tertiary education system needs to develop its capacity for accommodating more students and to provide skilled personnel with the competencies required by the labor market. 16. Graduate Skills. Table 4 shows the results of an employer assessment conducted in 2013 on the skills of new graduates from tertiary education. The assessment finds that employers’ satisfaction with new graduates varies across major academic disciplines. For instance, the skills of many graduates from agriculture, environment and natural sciences, health sciences, education and extractive industries were considered low or not adequate, while the majority of graduates from business management, human resources and administration, engineering, technology, law and social sciences, humanities and others were considered to be average or adequate. 45 Table 4. Employer Assessment of Skills of New Graduates from Tertiary Education (%) Low/Not Major Academic Discipline Average Adequate Adequate Agriculture, Environment and Natural Sciences 68 21 11 Business Management, Human Resources and Administration 18 53 30 Engineering, Technology and Other 4 50 46 Law and Social Sciences, Humanities and Art 3 61 36 Health Sciences 70 14 16 Education 74 13 13 Information and Communication Technology 49 30 21 Extractive Industry 93 7 0 Source: MoEVT TELMO survey Field Survey Data 17. Relevance of Tertiary Education in Tanzania. Several tracer studies conducted in Tanzania have pointed to the mismatch between labor market demand and graduates’ skills. These studies have also identified the mismatch between the training curriculum and the skills that employers look for in graduates (Table 5). Table 5. Findings of Selected Labour Market Tracer Studies in Tanzania Type of Study Methodology Key Findings • Interview with 55 • There is a mismatch between training curriculum and the skills employers in hospitality which employers hunt for. and 31 employers in • Poor quality in graduates especially in areas of customer care, tourism. sales, innovativeness, ability to apply skills. Labor Market Demand • Interview with 149 Survey for Occupations employees in hospitality under Hospitality and and 71 In tourism. Tourism industry (2006) • Interview with 5 professional bodies • Interview with 2 training institutions in hospitality and tourism • Interviews and technical Labor Market Demand • There are significant gaps between the training curriculum in the workshops for survey for occupations technical institutions and the skills that employers expect from consultations with under Journalism (2006) graduates. stakeholders • University education appeared to exert a statistically significant Education, Employment and impact on self-employment earnings. Earnings of Secondary Interviews with employees • Further education and training undertaken by graduates after School and University in selected samples formal education, appears to increase wage employment earnings. Leavers in Tanzania (2006) • The point estimates for the private returns to a university education are higher compared to senior secondary. • The skills delivery does not adequately provide the skills business requires. Association of Tanzania Interviews with selected • Vocational and technical education providers lack effective Employers (ATE) Skills skill providers coordination of their programs. Development Assessment complemented by desk (unknown) research • The private sector and private skills providers lack incentives to invest in human capital development, relying mainly on training institutions. 46 Type of Study Methodology Key Findings Knowledge and Skills of B. • There is an alarmingly poor and declined level of communication Com Graduates of the • Interviews with selected skills and English language proficiency among graduates. Faculty of Commerce and graduates • Some of the knowledge acquired by University graduates is Management, University of • Interview with sampled relatively less applicable on the job market. Dar-es-salaam in the Job employers • Generally, the actual knowledge possessed by the graduates falls Market (2007) short of expectations of the employers. • Interviews with junior secondary school leavers • Few school graduates are able to find wage employment. A • Interviews with senior sizeable proportion opts for self-employment. Employment Outcomes secondary school • A higher proportion of school leavers are unemployed compared among Secondary School leavers to graduates. and University Leavers • Interview with • The school curriculum generally does not adequate impart critical (2003) University Leavers competencies to students (such as analytical and problem solving • Interviews with skills, ICT skills and entrepreneurship mind-set skills) employers • Desk research Source: Adapted from MoEVT TELMO survey 18. Relevance of TVET. Table 6 shows the employment rate of graduates from vocational training institutions by gender and by transition duration from school to work in 2011. Approximately 70 percent of the graduates were employed within twelve months of completing their studies. Table 6. Employment Rate of Vocational Training Graduates by Gender and by Transition Duration (%) Transition in months 0-12 13-24 25+ Total Male 71.2 4.5 2.6 78.3 Female 67.5 4.7 1.3 73.5 Total 69.9 4.6 2.2 76.7 Source: VETA Tracer study in 2011 19. Table 7 shows the average monthly earning by level of education in 2010. In general, when a person acquires a higher level of education qualification, his/her earning tends to be higher. In Tanzania, for instance, the average monthly income for a person with a primary education certificate or a lower secondary education certificate is TZS 1,34,000 or TZS 3,342,000 respectively, while the income for a person with a university degree is TZS 15,700,000. The average monthly income for university-degree holders is higher than those with only primary, lower secondary or upper secondary education certificates. 47 Table 7. Average Annual Salary of Wage Workers by Education Attainment in 2010 (TZS .000) Education Level N Mean P50 SD Min Max No primary education 366 1,014 72 6,242 2 55,100 Primary education 1245 1,034 233 4,193 0 125,000 Lower secondary 342 3,332 1,720 9,712 1 157,000 Upper secondary 95 5,404 3,560 8,829 55 80,800 University 76 15,700 4,808 33,900 92 215,000 Total 2723 1,652 232 7,723 0 215,000 Source: The WB Team’s calculation based on NPS 2010/11. 20. The project estimates that the private return to higher education is 21 percent, by using data from NPS 2010/11 and applying Mincerian regressions. 4. Education Finance 21. Over the last 10 years, Tanzania has increased its investment in education steadily. The public expenditure on education is around 6 percent of GDP and 18 percent of the total government expenditure. The GoT has also made the effort in balancing budget allocation among the sub-sectors within the education system in the past two years, resulting in 46 percent for primary, 21 percent for secondary, 24 percent for higher education in 2011. With this supporting environment, some significant improvements in education have been achieved. Table 8. Education Budget by Current and Capital Component, 2011-2014 2011/12 2012/13 2013/14 (Actual) (Actual) (Budget) TZS billions % TZS billions % TZS billions % Capital 216 9 46 2 55 2 Current 2,069 91 2,405 98 2,627 98 Total 2,285 100 2,451 100 2,683 100 Source: Created by WB team based on CfBT 2013 22. Figure 3 shows the education expenditure and budget by its sub-sector. The largest share of the education expenditure and budget for the past 5 years is primary education, followed by higher education. However, the budget share of higher education has declined from 27 percent in 2010/11 to 19 percent in 2013/14, and the share of secondary education has increased from 15 percent in 2010/11 to 18 percent in 2013/14. The share of TVET is very small, and has declined over the years from 5.0 percent in 2010/11 to only 0.5 percent in 2013/14. 48 Figure 3. Education Budget by Sub-sector as Percent of the Total Sector Expenditure 100% 1.40% 0.60% 0.50% 4.50% 5.00% Adult/Non- 90% formal/Community/Folk 22% 19% 26% 80% 24% 27% Technical and Vocational Training 70% 18% 17% 18% Teacher Education 60% 13% 15% 50% Higher Education 40% 30% 52% 54% Secondary Education 50% 47% 51% 20% Basic Education 10% 4% 3% 2% 6% 5% 0% Administration Actual Actual Actual Actual Budget 2009/10 2010/11 2011/12 2012/13 2013/14 Source: crated based on CfBT rapid analysis E. Economic Analysis 23. The proposed AF includes two sets of activities: 1) existing activities affected by the Credit-loss due to exchange rate fluctuations during the implementation period of STHEP-1 (e.g., external works, staff development and consultancy services); and 2) new activities such as a pilot of using ICT to upgrade subject content knowledge of in-service secondary school science teachers – establishing institutional mechanisms and procedures for a performance-based financing instrument – and studies for skills development in growth areas (see Annex 3). The proposed AF expects to continue the effort in increasing number of graduates in science, technology, and education with better quality; in upgrading secondary school science teachers, in fostering greater linkages with industries; and in responding to labor market needs. Cost Benefit Analysis for the Project 24. Although an ex-ante economic and financial analysis was carried out at the appraisal of STHEP-1, no cost benefit analysis was conducted at that point. Therefore, the Project estimates costs and benefits of activities under Component 1A (Investment in Priority disciplines), 1B (Strengthening Key Higher Education Agencies and Institutions) and 2B (Selective Investments in Systems-wide ICT development and Libraries.). Component 2A is for capacity development to strengthen higher education institutions, and, it is difficult for standard cost-benefit analysis which includes calculation of a net present value and internal rate of return. 49 25. Originally, out of its US$100 million investment of STHEP-1, about US$53.6 million and US$27.3 million were planned to be allocated to Component 1A and Component 1B respectively, including civil works to support the construction of new buildings and the rehabilitation of existing buildings and procurement of goods to improve teaching, learning environment, staff development and relevant consultancy services, including design and supervision of civil works. Moreover, about US$5.6 million were planned to be allocated to Component 2B, including civil works and procurement of goods for Last Mile Connectivity (fiber optic cable to institutions). The proposed AF will finance some critical activities affected by the Credit loss in order to achieve the original development objective of the Project. 26. The cost-benefit analysis of the Project focuses on economic costs and benefits. Economic costs include total component cost of Component 1A, 1B, and 2B and private costs (school registration fees, uniforms and sport clothes, books and school supplies, costs to and from school, boarding fees and other expenses). Benefits of the Project are measured in terms of the economic value of the wage premium of graduates from higher education institutions. The main source of data used in the analysis is the NPS 2010/11. . 27. Cost stream. Costs include project costs and private costs (school registration fees, uniforms and sport clothes, books and school supplies, costs to and from school, boarding fees and other expenses). Data from NPS 2010/11 is used for estimation of private costs. Annual average private household cost per student for a 3-year program of higher education is estimated at TZS 1,528,429. Opportunity cost of foregone income per year during schooling is estimated at TZS 5,404,000 on average. 28. Benefit stream. Benefits of the Project are estimated by the increase in the number of graduates from higher education institutions and by higher productivity and life-time earnings. Data from NPS 2010/11 is used for estimating prospective wages of graduates. In 2010, average annual wages for those who completed higher education is TZS 15,700,000. 29. Limitation. Data on higher education required for cost-benefit analysis of the proposed AF (and STHEP-1) is very limited in Tanzania. Current data does not permit the analysis of economic returns to specific disciplines such as science, technology and engineering at the higher education level. Therefore, although the Project focuses on science and technology, the cost-benefit analysis also includes data on programs that are outside of the Project scope, because it is difficult to differentiate between science and technology-related programs and others. 30. Assumption. The cost-benefit analysis of the Project is conducted under the following assumptions. Note that the analysis takes into account only quantifiable benefits 26. As a result, the team assumes that the internal rate of return (IRR) that the Project computes is a lower bound for the impact of the Project. 26 Benefit of higher education is beyond individual and to society (WB 2000), e.g., poverty reduction, infant mortality and life expectancy (Tilak 2007). 50 • Project cost and allocation over the project period: A total of US$86 million (for Component 1A, 1B and 2B) is used as a cost to expand physical capacity for increasing access with quality to institutions. Annual allocation across the project period is as follows. FY2011: US$10 million, FY2012: US$15 million, FY2013: US$25 million, FY2014: US$30 million, and FY2015: US$6 million. Although STHEP-1 became effective in 2008, due to the initial delay of the implementation, the actual disbursement started only in FY 2011. The Project estimates the disbursement from FY2011 to FY2014 based on the actual disbursement, and for FY15, the Project assumes that funds will be disbursed as planned. • Exchange rate: US$1 = TZS 1,600. • Direct costs: Direct costs cover school registration fees, uniforms and sport clothes, books and school supplies, costs to and from school, boarding fees and other expenses. The costs are estimated with the NPS 2010/11 data. • Opportunity costs: Opportunity costs represent a loss of productive capacity measured as a loss of earning for the individual who is enrolled in higher education institutions. It assumes that a student would otherwise not be idle or unemployed. The opportunity costs are estimated with the NPS 2010/11 data. • Duration of program: The Project assumes that an individual who attends a Project- supported institution takes 3 years to complete the enrolled program. • Increase of access and graduates to institutions: The Project expects to increase student graduates in science and technology field from 1,995 to 3,492 by the end of FY 2015. • Civil works at tertiary education institutions: The Project expects that civil works at Project-supported institutions will be completed and all supported buildings will be functional within one year of the proposed AF. • Discount rate: The Project uses 7.6 percent as discount rate to calculate present value 27. • Inflation rate: The assumed inflation rate is 5.6 percent. • Annual increase of salary. The Project assumes that salary of graduates increase by 2.0 percent annually. • Employment of graduates. The Project assumes that 80 percent of graduates are employed after graduation. • Retirement Age: The Project assumes that retirement age is 60. No unemployment period between graduation and retirement. 31. Net Present Value (NPV) of Benefits, Costs and Internal Rate of Return. Based on the discount rate of 7.6 percent for the benefits and costs stream mentioned above, net present value of base scenario is TZS 1.868 billion, and the IRR associated with this NPV is 31.8 percent. Sensitivity Analysis for the Project 32. Table 9 shows the IRRs based on different scenarios. For instance, if employment ratio of graduates drops to 60 percent from 80 percent of base scenario), IRR decreases to 26.1 percent 27 Bank of Tanzania, Discount Rate 2010 average. 51 from 31.8 percent (base scenario). If employment ratio of graduates drops 60 percent from 80 percent and graduates are only 80 percent of targeted number of the project, IRR decreases to 22.4 percent. Table 9. Results of Sensitivity Analysis Net Present Value IRR Scenario Changes (TZS, million) (%) Graduates employment is 80%, number of Base 1,868,055.9 31.8 graduates is 100% of target Decrease of graduates’ Graduates employment from 80% to 60% 1,337,630.7 26.1 employment Decrease of graduates from Number of graduates only 80% of targets 1,443,715.7 27.2 higher education Decrease of graduates’ Graduates employment from 80% to 60%, employment and graduates 1,019,375.5 22.4 Number of graduates only 80% of targets from higher education Source: World Bank team’s computation Unit Cost Analysis for In-service Teacher Training 33. Among the new activities under AF, US$4.68 million (31.2 percent of total AF project amount) is budgeted to pilot activities for in-service teacher training for science teachers at secondary level. 34. The pilot could help reduce the cost of in-service teacher training in the long run, enhance teachers’ matery of subject content, and therefore improve the teaching quality, leading to better learning outcome of students. Importance of teachers’ quality are examined by empirical studies such as Hanushek (2011), which shows that higher performing teachers contribute to raise the present value of student life time earnings, compared to average performing teachers 28. 35. This pilot takes blended approach (conventional teacher training plus ICT-used teacher training such as digitized materials and multi-media), and teachers are able to access training materials and study at home by bring them back to home. This means this pilot would also include features of distance learning partially. Also benefits of initial investment to improve teacher training facilities last beyond AF project time, and will be utilized during scaling up stage. 36. The table below shows the number of beneficiaries and the unit cost for the comparison of four implementing institutions from the perspective of cost-effectiveness. Due to the data limitation on relevant in-service teacher training conducted through the INSET of the SEDP II Project and the Zanzibar Basic Education Improvement Project, it would be difficult to compare the unit costs between these projects and the pilot under the proposed AF. However, in general 28 For instance, Hanushek (2011, p.42) estimates “A good, but not great, teacher increases each student’s lifetime earnings by $10,600. Given a class of 20 students, she will raise their aggregate earnings by $212,000” in USA. 52 several studies show that costs for distance learnings are lower than those for conventional learning in schools 29. Table 10. Unit Cost Analysis for Each Implementing Institutions (in US$) Institutions DUCE SUZA MUCE OUT Total # of Beneficiaries 500 500 500 500 2,000 Unit cost / day: All (material development + facility improvement + 212 236 218 223 222 facilitator training + teacher training) Unit cost / day: (material development + facilitator training + teacher 135 136 147 137 139 training) Unit cost / day: 104 105 116 106 108 (facilitator training + teacher training) Unit cost / day: teacher training only 64 68 60 68 65 Source: World Bank calculation based on government proposal. Benefits from Technical Assistance 37. The proposed AF will support the establishment of institutional mechanisms and procedures for the Flexible Financing Facility operation and conduct several assessments and studies for skills development in priority growth sectors. It would be difficult to quantify their benefits in monetary value because financial benefits of such work depend on how findings are incorporated into policies and programs. The Project will bring to Tanzania not only the IDA funding but also the World Bank’s global knowledge (best practice, international experts and lessons learned from other projects) and expertise, particularly on the topics of quality, market relevance, financing, and governance in tertiary education. All of these will help the GoT prepare and implement the project better. F. Fiscal Analysis of the Project 38. The cost of the Project is US$15 million (equivalent to TZS 24 billion at exchange rate of US$1 = TZS 1,600), which is 0.98 percent of total education expenditure (TZS 2,451 billion) in 2012/13, and 4.36 percent of total higher education expenditure (TZS 550 billion) in 2012/13. 39. The Project will support to establish the institutional mechanisms and procedures for FFF operations to foster greater linkages between higher education institutions and the private sector. The project expects that FFF will be operational and start call-for-proposals after AF. Considering financial sustainability of the activity, a fundraising strategy will be developed and major potential funding sources will be identified. 29 For instance, Rumble and Koul (2007) 53 40. Based on pre- and post-assessment of effectiveness of pilot for in-service teacher training for secondary science teachers by ICT usage, the Project expects that this pilot will be scaled-up after the project. The government is planning to conduct scale-up activities in existing teacher training programs in the country. References: o Tanzania Rapid Budget Analysis, CfBT, 2014 o Valuing Teacher, Erik A. Hanushek, 2011 o BEST 2012, Ministry of Education and Vocational Training (MoEVT), 2012 o Draft Report of the Study on Establishment of Tertiary Education Labor Market Observatory (TELMO) in Tanzania, MoEVT, 2013 o Open Schooling for Secondary and Higher Secondary Education: Costs and Effectiveness in India and Namibia, Greville Rumble & Badri N Koul, Commonwealth of Learning, 2007 o “Higher Education, Poverty and Development,” by Jandhyala B. G. Tilak, Higher Education and Development IIEP News Letter, Vol. XXV, No.1, January – March 2007 (p.5) o Human Development Index, UNDP o Tracer Study Report for Graduates of Vocational Education and Training Tanzania Mainland, Vocational Education and Training Authority (VETA), 2011 o VET Data Handbook, VETA, 2011, 2013 o Science and Technology Higher Education Project Appraisal Document, World Bank, 2008 o Secondary Education Development Program II Project Appraisal Document, World Bank, 2010 o Big Results Now in Education Program Project Appraisal Document, World Bank, 2014 o Zanzibar’s Basic Education Improvement Project Appraisal Document, World Bank, 2007 o World Development Indicators, World Bank o Higher Education in Developing Countries: Peril and Promise, World Bank, 2000 54 Annex 5. Institutional and Implementation Arrangements United Republic of Tanzania: Additional Financing for Science and Technology Higher Education Project 1. The institutional and implementation arrangements that were used for the implementation of the Science Technology and Higher Education Project (STHEP-1) will be employed for the implementation of its Additional Financing (AF) operation. 2. These arrangements involve the Ministry of Education and Vocational Training (MoEVT) overseeing the program on behalf of the Government of Tanzania. At the start of the Program, each implementing institution will enter into an administrative agreement with the Permanent Secretary responsible for higher education detailing the specific activities to be undertaken and the budget to be allocated. The MoEVT in turn will supervise all stages of the activities and disburse the agreed budget stepwise upon satisfactory implementation and reporting. The system of No Objection approval by the MoEVT will continue for Post Review items and likewise No Objection approvals by the World Bank for Prior Review items. The IDA/IBRD guidelines for procurement and financial management will be used as in STHEP-1. 3. Within the above institutional and implementation arrangements, four main activities will be carried out within 18 months in the AF program. These are: ACTIVITY 1 – completion of constructions and procurements that were affected by the currency exchange loss and could not be completed and used under STHEP-1, including civil works, procurement of furniture, and connecting institutions to the National ICT Broadband Backbone, namely the Last Mile Connectivity; ACTIVITY 2 – implementation of a pilot on using ICT for upgrading content knowledge of secondary school science teachers; ACTIVITY 3 – implementation of a pilot on establishing institutional mechanisms and procedures for the Flexible Finance Facility operation; and ACTIVITY 4 – undertaking assessments and studies in human resource needs and skills gaps for developing a strategy and operational plan for skills development in priority growth sectors. Implementation Components and Budget Distribution 4. About 69% of the funds provided by the additional Credit will be passed on by the MoEVT to implementing institutions as extra budgetary allocations to be devoted to the agreed purposes as follows: o ACTIVITY 1 (42%): Completing key activities in STHEP-1 that were affected by the currency exchange loss. Institutions involved in this activity include those under STHEP-1’s Component 1A – Ardhi University (ARU), Sokoine University of Agriculture (SUA), University of Dar es Salaam (UDSM); Component 1B – Dar es Salaam University College of Education (DUCE), Mkwawa University College of Education (MUCE), UDSM; and Component 2B – the Ministry of Communications Science and Technology (MCST). o ACTIVITY (27%): Undertaking the implementation of a pilot on using ICT for upgrading content knowledge of secondary school science teachers. Institutions involved in this activity are those under STHEP-1’s Component 1B – DUCE, MUCE, the State 55 University of Zanzibar (SUZA), the Open University of Tanzania (OUT) and the College of Information and Communication Technologies – UDSM (CoICT-UDSM). [The remaining 31% will be processed at the MoEVT to carry out the following activities.] o ACTIVITY 3 (20%): Undertaking the implementation of a pilot on establishing institutional mechanisms and procedures for the Flexible Finance Facility operation to improve linkages between higher education and industry. o ACTIVITY 4 (11%): Developing a strategy and operational plan for skills development in priority growth sectors with various consultancy assessments and studies and also used as overheads and operating costs to monitor and manage the projects. Implementation of Decentralized Components (1 and 2) by Implementing Institutions 5. All six institutions implementing Component 1 were participants in STHEP-1 and all of them are procurement entities as defined in the Public Procurement Act, and will procure themselves the goods, services and civil works needed for their sub-projects as they did before under STHEP-1 and will be guided by the IDA/IBRD guidelines. 6. All four institutions implementing Component 2 were also participants in STHEP-1 and all of them are procurement entities as defined in the Public Procurement Act, and will procure themselves the goods, services and civil works needed for their sub-projects as they did under STHEP-1, and will be guided by the IDA/IBRD guidelines. 7. Before receiving funds from the MoEVT, each Head of Institution (HI) will sign an administrative agreement with the MoEVT. There will be an administrative agreement for each sub-project. Each administrative agreement describes the scope of work and purpose, the participating end-users, the implementation arrangements, the project to be implemented by each institution, its costs, cost categories eligible for financing, the internal flow of funds, procurement responsibilities, and reporting requirements. Common features of all administrative agreements are set out in the Program Operations Manual previously used for STHEP-1 30. 8. Each HI will appoint a senior officer as Institutional Program Coordinator (IPC). The IPC will chair an institutional implementation team, on which end-user representatives, and the procurement, financial management, and accounting functions are represented. For institutions implementing the pilot of using ICT for upgrading content knowledge of secondary school science teachers, HI will appoint a senior academic with experience and competence in relevant science education, teacher education or ICT education to serve as IPC. The Terms of Reference (TOR) for IPCs are to: i. Ensure that monthly implementation and procurement plans are prepared by the end- users within the institution; ii. Ensure that Project Work Plan and Budget (PWPB) for the project is adhered to as guided by the MoEVT; iii. Monitor the various implementation activities to be carried out by the end-users, in accordance with their respective plans; 30 In STHEP-1’s Program Operations Manual, the name “Grant Agreement” was used for the same purpose. 56 iv. Ensure that procurement is carried out on time, in accordance with: the procurement plans; the Public Procurement Act; the Procurement Manual contained in the Program Operations Manual; and the IDA procedures for International Competitive Bidding (ICB) tenders, as applicable; v. Ensure timely preparation and submission of financial, procurement and technical progress reports to the National Program Coordinator (NPC) at the MoEVT; and vi. Monitor progress toward attainment of objectives and timely reports problems so that solutions are found in good time. 9. Each institution implementing this pilot will also designate a STHEP-1 Project Accountant and a STHEP-1 Procurement Expert to guide the new IPC in conforming to the IDA Financial and Procurement Guidelines. Furthermore, the HI implementing this pilot shall appoint one staff member (academic or administrative) to serve as a Monitoring and Evaluation Officer for the project. Coordination of Implementation of the AF by the MoEVT 10. The MoEVT, in particular its Directorate for Higher Education, is responsible for the overall coordination of the AF implementation. With respect to the Program, the responsibilities of the Director of Higher Education are to: i. Serve as Program Director with overall mandate of the Project; ii. Regular reporting of project activities to the Permanent Secretary at the MoEVT; iii. Chair the MoEVT Implementation Committee; and iv. Chair the Project Management Team (PMT, at the Ministry). 11. The MoEVT Implementation Committee, chaired by the Director of Higher Education and consisting of the IPCs, will meet once every two months to discuss and help resolve planning and implementation issues. These meetings will provide a forum allowing participants to: (a) be kept informed of the progress on the overall implementation; (b) discuss common implementation problems/issues and suggest remedial actions; (c) exchange relevant experiences and lessons learned; and (d) provide support to each other, when and if necessary, in carrying out certain activities. Specialized technical staff within or outside the institutions might be called to participate in meetings, on an ad hoc basis, when required. 12. From time to time, the Director of Higher Education may delegate responsibilities including the chairing of the MoEVT Implementation Committee to one of the two Assistant Directors in the Directorate of Higher Education. 13. In relation to the day-to-day administration of the Program, the Director of Higher Education will be assisted by a National Program Coordinator (NPC) who heads a small group of support staff. 14. The TOR for the NPC are to: i. Monitor program execution, based on the detailed implementation plans prepared by the participating institutions, and the overall consolidated plan; 57 ii. Oversee the coordination of day-to-day finance, procurement and monitoring and evaluation (M&E) aspects of the project with the assistance of technical staff; iii. Liaise with the IPCs on day-to-day implementation progress and challenges; iv. Review and consolidate the progress reports submitted by the participating institutions; v. Advise the Project Director on key implementation steps including disbursements to institutions; and vi. Act as Secretariat for the MoEVT Implementation Committee and the Ministry’s Project Management Team. 15. To carry out the above duties, the NPC will be assisted by an Assistant National Program Coordinator (ANPC) – responsible for the secondary school science teachers training in the pilot. The TOR for the ANPC are as follows: i. Monitor technical aspects of the pilot program based on the detailed implementation plans prepared by the participating institutions and the overall consolidated plan; ii. Assist the NPC in day-to-day coordination of the technical and M&E aspects of the project with the assistance of the M&E Officers; iii. Review and consolidate the technical progress reports submitted by the participating institutions; iv. Advise the NPC on key implementation steps to assure successful completion of the pilot; and v. Carry out any other tasks that are assigned by the NPC or the Director of Higher Education. Figure 1. Reporting and Responsibility Structure Source: The Government Task Team for STHEP-1 AF preparation 16. Due to their functional change in relation to the Project, the obligations of the Tertiary and Higher Education Development Committee (THEDC) and the Directorate of ICT at the 58 Ministry of Communication, Science and Technology (MCST) 31 to the project implementation which were established under STHEP-1 are no longer applicable in the AF implementation. Financial Management Arrangements 17. The objectives of the project financial management arrangements are to: i. Ensure that funds are used only for their intended purposes in an efficient and economical way; ii. Ensure that funds are properly managed and disbursements are smooth and predictable to meet the objectives of the project; iii. Enable the preparation of accurate and timely financial reports; and iv. Enable the program management to monitor the efficient implementation of the project and safeguard project assets and resources. 18. The technical officer responsible for the financial management will be the Finance Manager who will be guided by the following TOR: i. Serve as a chief advisor on financial management and reporting; ii. Prepare budget estimates for the program; iii. Prepare timely withdrawal applications; iv. Prepare program progress reports including Interim Financial Reports (IFRs) to be submitted to the World Bank; v. Guide Institutional Project Accountants in abiding by the IDA/IBRD Financial Guidelines; and vi. Liaise with the Chief Accountant of the Ministry in all financial management matters. 19. Planning and Budgeting: Implementing institutions prepare Annual Work Plans and Budgets which are mainstreamed by the Ministry. The MoEVT has the responsibility of ensuring that the requirements of project funds are fully reflected in the Ministry’s budget and annual national budget. Budgeting for the project is coordinated and consolidated by the MoEVT via the project coordination, in consultation with extensive detailed inputs by the respective implementing entities. 20. Annual Financial Statements: In addition to the preparation of quarterly IFRs, the MoEVT is in charge of preparing the Project Annual Financial Statements to be submitted to the National Audit Office (NAO) within three months after the end of the financial year for auditing purposes, based on the format for annual financial statements agreed with IDA. Program financial statements are to be prepared in accordance with International Public Sector Accounting Standards (which inter alia include the application of the cash basis of recognition of transactions). 21. Project Financial Statements: These statements include: (i) Statement of sources and uses of funds/cash receipts and payments for each funded period which recognizes all cash receipts, cash payments and cash balances controlled by the entity, and separately identifies payments by third parties on behalf of the entity; (ii) Accounting policies adopted with 31 The Directorate of Policy and Planning at MCST has taken the responsibility of implementing the Last Mile Connectivity activity under STHEP-1. 59 explanatory notes which should be presented in a systematic manner with items on the Statement of Cash Receipts and Payments being cross referenced to any related information in the notes for each funded period. Examples of this information include a summary of fixed assets by category of assets, and listing individual withdrawal applications; and (iii) Management assertion that program funds have been expended in accordance with the intended purposes as specified in the relevant funding agreements for each funded period. 22. Periodic Reporting for Project Monitoring: Within 20 days of the end of each two months, an IFR will need to be submitted to the MoEVT where a compilation will be done. After three months a report will be submitted to the World Bank by the program coordinating unit. Other reports, apart from the IFR which will also be submitted, include the following: (i) a procurement progress report; and (ii) an M&E report which describes progress in implementation. Both reports are cumulative and for the period covered by the said report and explain variances between the actual and planned project implementation. These reports are prepared by the IPCs. Thereafter, a compilation will be done by the NPC with inputs from the Department of Policy and Planning (DPP) for the M&E inputs, from the Finance Manager and the Procurement Manager before submission. 23. Bank Account and Flow of Funds Arrangements: (a) Designated Account: the MoEVT has a US Dollar Designated Account at the coordinating unit which is acceptable to IDA under STHEP-1. The same will be used in the AF. (b) Disbursement of funds from the Designated Account to meet project expenditures. Funds from the Designated Account will be transferred to the respective implementing entities’ project accounts on a quarterly basis, based on the financial performance in the previous quarter as reflected in the available quarterly progress report. Figure 2. Project Fund Flow Arrangements IDA Credit Account (AF) MoEVT Designated US Dollar Account Implementing institutions under the AF Project Accounts Source: The Government Task Team for STHEP-1 AF preparation 24. Disbursement Method: The disbursement method which will be used mostly under the AF is the reimbursement method but subject to what is outlined in the AF legal document. Other methods such as direct payment and special commitment may only be used as when it will be necessary. Disbursements from the IDA Credit are based on quarterly IFRs. At the start of the Program, disbursement cover cash forecast of the first two quarters (six months) of the Program. 60 Disbursements to meet eligible expenditures will follow agreed disbursement categories as stipulated in the Financial Agreement (FA) and the Disbursement Letter of the AF. Funds from IDA Credit will be disbursed to the Designated Account established at the commercial bank approved by the World Bank. 25. The documentation required for report-based disbursement is the following: i. Un-audited Interim Financial Reports (IFRs); ii. Designated USD Account Activity Statement; iii. Designated USD Account Bank Statements; iv. Summary Statement of Designated USD Account Expenditures for Contracts subject to Prior Review; v. Summary Statement of Designated USD Account Expenditures not subject to Prior Review; and vi. Projected cash requirements for the next two reporting periods. 26. DOCUMENTATION: All documents supporting the reported expenditures, such as invoices, statements, and bills of lading, should be maintained by the implementing entities and made available for review by auditors as set out in the FA. 27. AUDITING ARRANGEMENTS: a. The Internal Auditors will develop an audit strategy and plan for the Program based on the risk assessment. The internal auditor’s work would be monitored and reviewed by the Ministry’s & respective entities audit committee on quarterly basis to ensure that the internal control systems are functioning adequately and that the issues raised in the internal auditor’s report are addressed by the ministry. b. The Audit Committees are in place and functioning well. The committee should meet every three months to review the internal audit reports, internal control issues and also follow up on the audit queries raised in the agencies annual audit reports. Audit Committees will provide an oversight role on Program funds and follow up on implementation of internal and external audit findings. c. External Audit: The external audit will be carried out annually by the National Audit Office (NAO) as stipulated in the Public Finance Law. Controller and Auditor General (CAG) are mandated to subcontract such services in the event of capacity or other constrains. The Auditors will express an opinion on the annual Program financial statements based on International Standards on Auditing and submit the audit report within six months of the end of the financial year. In addition, the Auditors will provide: (i) an opinion on the operation of the Designated Account; and (ii) detailed management letters containing the auditor’s assessment of the internal controls, accounting system and compliance with financial covenants in the Financing Agreement. The terms of reference for the audits will be agreed by negotiations. 28. OPERATING COSTS: Each implementing institution shall have been allocated operating costs (OC) for this Program. This funding is meant to facilitate timely implementation of activities as previously done in STHEP-1 and eligible expenditures for this category include: costs of venues for workshops, services of office machines and equipment, purchase of materials for workshops, operation and maintenance costs for vehicles, office supplies, and communication 61 charges. The OC funds may also be used for technical training (IDA procurement and finance guidelines, M&E) necessary for implementation. The OC funds may also be used for per diem and travel costs for all projects implementing staff including those from the Public Procurement Regulatory Authority and National Auditor’s Office when traveling on duty during carrying out annual procurement and financial audit respectively among others. These costs will be financed by the Program and procured in accordance with the Public Procurement Act (PPA) of 2004. However, the OC funds may not be used for payment of salaries or any form of allowances. Procurement Arrangements 29. General Conditions: Procurement for the AF will be carried out in accordance with the World Bank’s "Guidelines: Procurement under IBRD Loans and IDA Credits" dated January 2011 and "Guidelines: Selection and Employment of Consultants by World Bank Borrowers" dated January 2011 and the provisions stipulated in the Financial Agreement. For each contract to be financed by the Credit, the different procurement methods or consultant selection methods, the need for pre-qualification, estimated costs, prior review requirements, and time frame have been agreed between the Government and IDA in the Procurement Plan. If necessary, the Procurement Plan will be updated at most twice in the first nine months of implementation by mutual agreement between the MoEVT and the World Bank. Details on procurement will be given in the Procurement Manual. Procurement at implementing institutions 30. Each implementing institution will be regarded as a procurement entity as defined by the Public Procurement Act of Tanzania (PPA) and having signed an administrative agreement with the MoEVT. It will carry out its own procurement of goods, services and works. The central procurement unit of the institution shall consolidate all the procurement needs for the end-users of the institution, and packages the goods, services and works so as to achieve the maximum economy of scale possible. 31. In particular, the responsibilities of the institutional procurement units under the AF are to: i. Establish an effective procurement service so as to be able to address the additional requirements generated by the project; ii. Manage the procurement program for its component/sub-component in accordance with the procedures indicated in the PPA and IDA’s regulations; iii. Ensure that any Procurement Agent that may be contracted and other consultants execute their obligations in accordance with the contract; iv. Prepare and update their procurement plans in accordance with the timing indicated by the Project Coordination; v. Package the goods, services and works to be procured so as to achieve the best economy of scale; vi. Attend to all audit queries on procurement; vii. Ensure proper maintenance of records of program contracts for the provision of goods, services and works; viii. Initiate the settlement of disputes with contractors/suppliers and follow up on defective supplies/services/works that are in breach of contract provisions; 62 ix. Attend to procurement enquiries and complaints by prospective bidders; and x. Provide to the Procurement Unit of the MoEVT the information required by including regular procurement progress reports. Procurement of Works: 32. Works under the project include construction and rehabilitation of facilities such as laboratories, offices and teaching blocks. Procurement for all International Competitive Bidding (ICB) contracts is to be carried out using the World Bank’s Standard Bidding Documents (SBD) and Standard Bid Evaluation Forms. The Government has already prepared Standard Bidding Documents for National Competitive Bidding (NCB) procedures for procurement of works, which have to be used by the Implementing Institutions. Civil works estimated to cost more than US$5,000,000 equivalent per contract have to be procured through ICB. Civil works estimated to cost less than US$5,000,000 equivalent per contract are procured through NCB. Minor works contracts estimated to cost less than US$100,000 per contract are procured using Shopping Method. Direct contracting may be used when it can be justified that a competitive method is not advantageous and meets the requirements under paragraph 3.6 of the Procurement Guidelines, and after consultation with IDA. The prior review threshold for works contracts is US$500,000 equivalent per contract. Pre-qualification of contractors is to be used only for large contracts over US$10,000,000 or in cases where special expertise is required. Procurement of Goods: 33. Goods procured under the project include such items as laboratory equipment, office equipment, office furniture, motor vehicles, chemicals, textbooks, library books. Procurement for all ICB contracts is done using the Worlds Bank’s SBD and Standard Bid Evaluation Forms. The Government has prepared SBDs for NCB procedures for procurement of goods and have to be used by the Implementing Institutions. Goods estimated to cost more than US$500,000 equivalent per contract have to be procured through ICB procedures. Goods estimated to cost less than US$500,000 equivalent per contract are to be procured through NCB procedures. Goods contracts estimated to cost less than US$100,000 equivalent per contract are procured using Shopping method. Direct contracting may be used when it can be justified that a competitive method is not advantageous and meets the requirements under paragraph 3.6 of the Procurement Guidelines and after consultation with IDA. The prior review threshold for goods contracts is US$500,000 equivalent per contract. Procurement of non-consulting services 34. Non-consulting services to be procured under the project include, inter alia: venues for workshops, training, selecting vendors for maintenance office equipment and vehicles, etc., which are to be selected on the basis of at least three quotations or through NCB procedures. Procurement and Selection of Consultants 35. Main consulting services to be financed by the project include design and minor constructions, supervision of civil works, development of document management systems, development of various strategies, studies, and technical assistance by both national and 63 international experts. The appropriate method of consultant selection is to be determined for each assignment or package of assignment in the course of preparing the procurement plan on the basis of the nature of the assignment and the provisions of the Consultant Guidelines. Consulting firms for services estimated to cost less than US$200,000 equivalent per contract are selected using Consultants’ Qualification Selection (CQS). Consulting firms for carrying out standard or routine nature assignments such as audits are selected through Least Cost Selection (LCS). Consulting firms for services which meet the requirements under paragraph 3.2 of the Consultant Guidelines (such as selection of higher learning institutions) are selected on the basis of quality and therefore, the Quality Based Selection (QBS) method has to be used. Individual consultants are selected on the basis of their qualifications in accordance with Section V of the Consultant Guidelines. Single source may be used where it can be justified and after consultation with IDA. Short lists of consultants for services estimated to cost less than US$200,000 equivalent per contract may be composed entirely of national consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines. Consultancy services estimated to cost above US$200,000 equivalent per contract for firms and above US$100,000 equivalent per contract for individual consultants and single source selection of consultants are subject to prior review by IDA. Monitoring and Evaluation 36. The monitoring and evaluation of outcomes and results will be a principal activity of the MoEVT. Responsibility for collecting data for this will rest with the Ministry’s DPP. In carrying out M&E, the Coordinating Unit at the MoEVT will work intensively with the implementing higher education institutions. The Program envisions a core set of Program indicators that measure incremental changes to quantity and quality of graduates produced in priority disciplines, both science and technology and education/teacher development, and efficiency gains that improve the function of the main higher education financing and regulatory agencies. Capacity for data collection does require further strengthening within the MoEVT, and this will start with the appointment of an experienced full time M&E officer. 37. The position of the M&E Officer will be guided by the following TOR; i. Develop M&E tools, templates and methods based on the AF results matrix; ii. Develop indicators for Components 2A and 2B; iii. Develop standardized project monitoring tools and formats; iv. Develop structured data registers or databases at the level of implementing institutions for regular collection, maintenance of quality and reliable data; v. Collect, review and consolidate M&E indicators to be submitted by the MoEVT to the World Bank; vi. Develop and implement a risk monitoring and mitigation strategy for the Program; and vii. Provide timely advice to the NPC about any potential setbacks and threats to the implementation progress. 64 Annex 6. Budget Allocations and Work Plan United Republic of Tanzania: Additional Financing for Science and Technology Higher Education Project Planned Quarterly Expenditure Implementing Institution Amount Planned (US$) QI Q II Q III Q IV QV Q VI Exchange Loss: Sokoine University of Agriculture (SUA) 555,831.00 555,831.00 -- -- -- -- -- Ardhi University (ARU) 398,615.00 308,439.00 90,176.00 -- -- -- -- University of Dar es Salaam (UDSM) 2,755,925.00 2,755,925.00 -- -- -- -- -- Dar es Salaam University College of Education (DUCE) 564,460.77 564,460.77 -- -- -- -- -- Mkwawa University College of Education (MUCE) 413,168.23 413,168.23 -- -- -- -- -- Ministry of Education and Vocational Training (MoEVT) 682,000.00 83,000.00 433,000.00 83,000.00 83,000.00 -- -- Ministry of Communications Science and Technology (MCST) 1,000,000.00 -- 1,000,000.00 -- -- -- -- Sub-Total 6,370,000.00 Pilot - ICT for Teacher Training: DUCE 782,664.00 706,039.00 26,875.00 24,875.00 24,875.00 -- -- UDSM College of ICT 926,465.80 349,164.80 519,967.67 28,666.67 28,666.66 -- -- State University of Zanzibar (SUZA) 925,550.00 872,325.00 19,075.00 17,075.00 17,075.00 -- -- MUCE 782,856.20 313,281.00 424,525.20 22,525.00 22,525.00 -- -- Open University of Tanzania (OUT) 768,000.00 698,875.00 24,375.00 22,375.00 22,375.00 -- -- MoEVT 494,464.00 152,783.00 62,783.00 162,783.00 62,783.00 26,666.00 26,666.00 Sub-Total 4,680,000.00 Pilot - FFF: MoEVT 2,320,000.00 1,520,000.00 800,000.00 -- -- -- -- Strategy for Skills Development: MoEVT 1,630,000.00 -- 1,630,000.00 -- -- -- -- TOTAL 15,000,000.00 9,293,291.80 5,030,776.87 361,299.67 261,299.66 26,666.00 26,666.00 65 Annex 7. Environmental and Social Safeguards Compliance United Republic of Tanzania: Additional Financing for Science and Technology Higher Education Project 1. The Additional Financing (AF) for Science and Technology Higher Education Project (STHEP-1) Program will fall into the Environmental Category B just like STHEP-1 because no adverse long term impacts are anticipated. 2. The AF will also be compliant with the same framework that was used in STHEP-1, i.e., the Environmental and Social Management Framework (ESMF). This Program will not fund activities that would cause adverse effect on the environment or any form of land acquisition or restriction of access to sources of livelihoods. 3. The purpose of ESMF for AF will be to: • Assess the potential environmental and social impacts of the planned civil works in higher education institutions, whether positive or negative, and propose mitigation measures; • Inform the Program preparation team and the Tanzanian government of the potential impacts of different anticipated sub-projects and propose relevant mitigation measures and strategies; • Establish clear directives and methodologies for the environmental and social screening of sub-projects to be financed by the Program; and • Identify potential environmental policies, legal and institutional framework pertaining to the Program. 4. Program Location and Salient Physical Characteristics Relevant to the Safeguards Analysis. The proposed Program is expected to take place within the confines of existing higher education institutions in different parts of Tanzania and some training will be delivered at their affiliated local training centres. 5. Measures Taken by the Borrower to Address Safeguards Issues include: the proposed Program triggered the Environmental Assessment (OP/BP4.01) policy and has been assigned an Environmental Screening Category of ‘B’. This rating is based on the scope of the Program, which indicates some limited adverse environmental and social impacts. The only activities that may result in some environmental impacts are from the possibility of unfinished civil works and external works that were affected by the Credit loss due to exchange rate fluctuation during the implementation of STHEP-1. Potential negative impacts, restricted in scope and severity, are summarized below: • Dust and noise due to construction and demolition • Dumping of construction waste and accidental spillage of machine oil and lubricants 6. The ESMF being used in the AF will be consistent with Tanzanian national laws as well as the World Bank’s safeguards policy – Environmental Assessment OP/BP 4.01. The ESMF provides general policies, screening mechanism, guidelines, codes of practice and procedures, 66 and implementation and monitoring and evaluation arrangements. Based on this framework, Environmental Management Plans (EMP) or site-specific Environmental Impact Assessment (EIA) will be prepared for each site where construction or rehabilitation will take place. 7. Responsibility for Environmental Safeguard: The MoEVT will have the overall responsibility for overseeing the implementation of the ESMF recommendations. The MoEVT has designated an officer to serve on a part-time basis as the Environmental and Safeguards Officer for the Program. Consultants will be engaged to prepare EIAs/EMPs as and when necessary. 8. Safeguard policies Safeguard Policies Triggered by the Program 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 ] 67 IBRD 33494R1 TA N Z A N I A SELECTED CITIES AND TOWNS MAIN ROADS PROVINCE CAPITALS RAILROADS NATIONAL CAPITAL PROVINCE BOUNDARIES RIVERS INTERNATIONAL BOUNDARIES 30°E 32°E 34°E 36°E This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of The World Bank Group, any judgment on the legal status of any territory, or any To endorsement or acceptance of such boundaries. 0° Tororo 0° To GAN DA U GAND A Kampala To Kampala Lake To Ka ge r a Victoria Nakuru K E N YA Bukoba Musoma Mara To Nakuru Buoen 2°S RWANDA KAGERA MARA 2°S MWANZA Lake Mwanza Natron Geita Bariadi To u Simiy K Kilimanjaro am GEI TA GEITA ARUSHA (5895 m) a SIMIYU Moshi BURUNDI Arusha To NGO CONGO Lake Malindi Mo Eyasi Lake SHINYANGA yow Kibondo Pa Shinyanga e Manyara KILIMANJARO n ga p o si Kahama 4°S ni ep Nzega Same F CO Babati St Mas ai sa KIGOMA PEMBA e St S teppe er NORTH Kasulu mb MANYARA OF Kigoma Tabora Singida Kondoa Kaliua DEM. REP. O PEMBA Iwe Tanga Wete SOUTH TA N G A Mkoani ZANZIBAR TA B O R A Manyoni NORTH Lake Ugalla Tanganyika DODOMA ts. Mkokotoni ZANZIBAR SINGIDA M Zanzibar Koani SOUTH & u CENTRAL ur i am Mpanda g DOD OM A DODOMA ZANZIBAR W N WEST K ATAV I Morogoro Kibaha Dar es Salaam wa DAR ES SALAAM Rung Grea t MO ROGORO MOROGORO IRINGA Rua ha PWANI Lake Iringa Sumbawanga Rukwa M B E YA 8°S n ge Utete 8°S RUKWA Mpui Ra ro ya IN DI AN ji e ufi be Mb R Kilom Kilwa Mbeya Kivinje du t an NJOMBE Ma Tunduma Ki Njombe O CE AN To pe L I N D I Kasama n ur u mk ge be re 10°S M Lindi 10°S Mtwara Ra To ng Kasama A MB Z AM IA B IA e Masasi To Songea TANZANIA Kasungu MTWARA Lake RUVUMA Tunduru vum a Ru Malawi To Chiúre 12°S To To Lichinga Marrupa MO ZA MBIQ MOZAM UE BI QUE 0 50 100 150 200 Kilometers 32°E 34°E 36°E 0 50 100 150 Miles 40°E JUNE 2013