2

I. BACKGROUND

3. The objective o f the IDA operation i s to provide support to the Government o f Tanzania in reforming the delivery o f secondary education through the SEDP as part o f the implementation o f the Education Sector Development Program (ESDP). The long term aim o f the SEDP i s to build a productive and adoptable labor force as well as supplying better quality students for higher levels o f the post-secondary education and training system. This would help increase and sustain growth o f the national economy, and allow Tanzania to participate more effectively in the global economy. SEDP also aims at reducing poverty by increasing the proportion o f students from poor households and communities complete secondary education that would enable them to enter the labor market. The specific objectives of the SEDP are to: (i) expand access by increasing the proportion o f the relevant age group completing secondary education (ii) improve quality through raising the learning achievements o f students, especially girls; and (iii) strengthen management by enabling the public administration system to manage secondary education more effectively. Policy measures adopted by the Government aimed at achieving these objectives include interventions to: (a) make more efficient use o f resources, (b) provide capitation and development grants to schools and communities (c) expand teacher supply, (d) lower household costs for secondary education, by reducing tuition fees in day schools and expanding the scholarship program for students from very poor households, and (e) enhance partnership with the non-government sector.

4. Substantial progress i s being made towards achieving the objectives through implementation o f the policy measures. Gross Enrolment (GER) in secondary education increased from 7.4 percent in 2003 to 9.4 and 1 1.7 in 2004 and 2005 respectively (Basic Education Statistics in Tanzania 1995-2005). Enrolment o f Form I students in Ordinary Level secondary education has increased from 98,738 in 2004 to 134,963 in 2005. The expansion has been supported by increases in Government recurrent budget, and investments through the SEDP program. This has greatly helped to (i) expand enrolment capacity o f some o f the existing schools through construction o f additional classrooms and establishment o f new schools; (ii) recruitment and deployment o f additional teachers; (iii) provisional o f scholarships to pupils from very poor households who cannot afford secondary education, as well as reduced school fees in public day secondary schools most o f which were initiated by communities; and (iv) provision o f capitation grants to school to enable financing o f teaching materials and textbooks. Nevertheless, the demand for inore infrastructure, teachers and learning materials in secondary education enroIment i s expected to increase further given the planned enrolment targets and the increased number o f primary education completers resulting from free universal primary education. The Gross Enrolment ratio (NER) in primary education was 106.4 percent in 2005 compared to only 11.7 percent in secondary education. The Government’s target i s to ensure 50 percent o f the age group complete lower secondary education by 2010 compared to 5-6 percent in 2003. In general, communities are pleased that more children are now getting access to secondary education. Schools have also been able to purchase more textbooks and teaching materials given the increased financial resources directed to school levels through capitation grants. Private publishers and booksellers have also become inore active given the launching o f private publishing o f school materials and textbooks.

Macro-Economic Developments

5. Since 1995, the government has shown constant commitment to macroeconomic structural reforms which have helped to enhance stabilization o f the economy. Over the last five years the GDP growth rate has averaged more than five percent. Tanzania economy grew by 6.7 percent in 2004 and estimated to have grown by 6.9 percent in 2005. Mining and construction grew by 15.6 and 11 percent in 2004 respectively. The agricultural sector which i s important in the poverty reduction efforts in Tanzania, grew by 6 percent in 2004.while it i s estimated to have declined to 5.3 percent in 2005 due to lack o f enough rain. Agriculture contributes about 46 percent o f Tanzania’s GDP and about 86 percent o f households

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3 depend on agriculture for their livelihood. There i s also an increased growth in the manufacturing sector to 7 percent in 2004. Investment has been growing more than the GDP to a ratio o f 17 percent in 2001 to 21 percent in 2004. Both public and private investments increased at the level o f 7.7 and 13.2 percent respectively in 2004. Foreign direct investment continues to be key in the Tanzanian investment with increased external financial flows. Export trade has more than doubled between 2000 and 2004 particularly in the aspects o f gold and tourism industries. Sustainability of these growth rates i s expected to help reduce poverty by hal f in 20 15.

6. Total Central Government Expenditures increased from 22 percent o f GDP in 2003/04 to 25 percent o f the GDP in 2004/05. The increase was a result o f (i) improved performance o f domestic revenue which rose from 13.0 to 13.6 percent o f the GDP; (ii) domestic and foreign borrowing. Importantly, domestic borrowing scaled up in 2004/05 amounting 1.1 percent after several years o f negative borrowing. The Public Expenditure (PER) and Financial Accountability Reviews involving a broad spectrum o f stakeholders i s the key forum through which fiscal management and performance are assessed. The process i s particularly essential for General Budget Support. Currently, the government i s reviewing the PER process to ensure it i s more aligned to the National Strategy for Growth and Reduction for Poverty (NSGRP) and the budget process with review process o f different sectors. This would also help to strengthen the quality and efficiency in public expenditure. Monetary supply has in general grown to 25.5 percent in 2004/05. This i s consistent with the inflation rate which fe l l to 4.1 percent in the same year. Aid f low has increased causing high interest rates which could cause negative consequences to private sector growth. The situation i s however manageable given the declining rate o f inflation over the recent years.

Growth and Poverty Reduction

7. The National Strategy for Growth and Reduction o f Poverty (NSGRP) i s a second national organizing framework focusing on poverty reduction within the national vision 2025. The framework was approved by the Cabinet in February 2005 spelling out three key clusters o f poverty reduction outcomes aimed at (i) reducing income poverty particularly in rural areas where 87 percent o f the poor live; (ii) improving quality o f l i f e and social wellbeing; and (iij) strengthening governance and accountability. Implementation o f the NGSRP i s underway and would require an estimated GDP growth rate o f 6-8 percent per annum up to 2015. In order to achieve this, the focus i s to increase investments towards modernizing small, medium and large scale agricultural enterprises including agro-processing to benefit poor communities. Attention i s also provided to ensure improved trade, services and markets, infrastructure and creation o f a conducive environment for private investment. Specifically, t h i s would also entail rising o f the number o f post-primary and post-secondary completers for improved technologies and knowledge required for growth o f the economy. A household budget survey carried out in 2000/01 showed a rather modest decline in poverty from 42.8 percent in 1992 to 38.6 in 2001. Projections show that poverty declined further to 33.8 percent in 2004. The projected growth rates to be achieved through implementatioii o f the NGSRP are expected to reduce poverty further by 2015.

Recent Developments in Non-income Dimensions of Poverty and Public Service Delivery

8. HIV/AIDS i s s t i l l a challenge to Tanzania with a prevalence rate o f 7 percent (7.7 and 6.3 percent for females and males respectively). Recent developments in Tanzania’s fight against HIV/AIDS include the establishment o f the Tanzania Commission for AIDS (TACAIDS) which has a fully staffed secretariat since January 2003, and the appointment o f members o f the coinmission including representatives from c iv i l society. The Government has increased i t s allocation o f financial resources for implementing HIV/AIDS interventions guided by the multi-sectoral strategic framework which was launched in 2003 under implementation by government and non-government actors. A recent HIV/AIDS report indicates that the Government has increased spending on HIV/AIDS by 79 percent since 2002/2003. External support for HIV/AIDS has also increased representing 90 percent o f the overall expenditure. The Wor ld Bank i s among the agencies supporting the Government o f Tanzania in implementing i t s HIV/AIDS strategy through the Tanzania Multisectoral Aids Project (TMAP). This includes the Clinton Foundation

4 expected to support care and treatment to about 400,000 people l iving with HIV/AIDS with an estimated cost o f about US$ 535 mil l ion over five years.

9. Education. Government i s committed to increase access, quality and equity at a l l levels o f the education system. Key measures in the achievement o f these objectives are being implemented through the Primary Education Development Program (PEDP) supported joint ly by the government and development partners. The measures have included abolition o f primary school fees in 200 1 and increased budgetary allocations to include among other things, provision o f development and capitation grants to schools. Other measures have included increased pre-service training o f teachers and supporting them through continuous professional development. There i s positive impact being achieved from the PEDP implementation towards universal completion o f quality primary education. As a result o f the PEDP implementation, the NER has increased from 65.8 percent in 2001 to 94.8 percent in 2005.

10. The Secondary Education Development Program (SEDP) i s being implemented in most communities in the country. The measures have included reduction o f fees and provision o f scholarships to qualified students from very poor households to ensure equitable access to secondary education. There have been also increases in budgetary allocations which has enabled disbursement o f development and capitation grants to schools; increased pre-service training o f teachers at diploma and degree levels as well as recruitment o f licensed teachers; teacher deployment to needy schools i s also being implemented. The number o f government secondary schools increased from 528 in 2001, 828 in 2004 and to 1202 in 2005. However, teacher supply and quality enhancement remains a big challenge to the expanding secondary education system. Measures to address the issue are underway through enrolment expansion for degree and diploma level teachers. Intake at degree level increased from 300 students in 2004 to 700 in 2005. Diploma level training also increased from an enrolment o f 2,400 students to 3,573 in 2005, and about 4000 students are planned to be enrolled in 2006. The Government i s also in the process o f developing a comprehensive strategy for teacher development, and management.

1 1. The Government i s also committed to improve higher and technical education to ensure increased access and equity, efficiency and quality. Interventions aimed at expanding the system have started including provision o f student loans to both public and private higher education institutions to ensure increased enrolment and equitable access.

11. PROGRESS AGAINST TRANCHE RELEASE CRITERIA

12. The government has made good progress in implementing the Secondary Education Program. In particular, the Agreed Actions for the second tranche release as stipulated in Part A o f Schedule 2 to the Development Financing Agreement (DFA) have been implemented as summarized below. Evidence o f the implementation i s provided through the respective annexes.

Condition 1: The Borrower has allocated appropriate budgetary resources for FY 2004-2005 on the basis o f criteria and norms referred to in paragraph - of the LDP as required to ensure adequate staffing levels and delivery o f capitation, development and scholarship grants for Government Schools. (i) Allocation o f appropriate budgetary resources for 2004-2005; (ii) Adequate staffing; and (iii) Delivery of capitation grants, development grants, and scholarships grants. The condition is met.

The key indicators include:

13. Allocation of appropriate budaetarv resources: Recurrent budget allocation for the full education sector increased by 28 percent in FY 2004/05 and by 11 percent in 2005/06. Recurrent allocations to the secondary education sub-sector increased with 20 percent between 2003/04 and 2004/05, and with further 23 percent by 2005/06. The increases in recurrent budget are sufficient to finance the increases in teaching staff. Recurrent expenditures financed over the development budget increased significantly in

5 the period as the program funds became available. Thus, total increase in recurrent expenditures was about 80 percent from 2003/04 to 2004/05. There are coiicerns about sustainability o f the expansion given the high share o f recurrent expenditures financed over the development budget from program funds. These funds are utilized to finance capitation grants for learning materials, school based seminars for professional development o f teachers and related quality enhancement initiatives at school levels. Development expenditure increased from Tshs. 5 billion to 39.9 billions.

14. Adequate staffing: An objective o f the program i s that pupil-teacher ratio wi l l be o f 30:l by 2009. Evidence provided by tlie Borrower shows that the situation i s improving to ensure every teacher has enough workload in accordance with t l ie established guidelines and norms stipulated in the “ Mechanisms for Posting Teachers to Government Secondary Schools for the Secondary Education Development Plan 2004-2009”. The pupil teacher ratio was 20: 1 in 2003 and has improved to 26.1 by June 2005 (Basic Education Statistics 2005). However, teacher demand keeps on increasing given the ongoing expansion of secondary education. I n t h i s regard more teachers were recruited and deployed between 2004 and 2005. The f i rs t batch o f the new teachers employed consisted of 305 licensed teachers who had completed Advanced Level secondary education. These teachers were recruited and trained for one month to familiarize themselves with the teacliing profession. Upon completion o f t l ie training, they were awarded each, a teaching license. The second batch consisted of 1467 diploma and degree level teachers who had completed training from different institutions. Altogether a total o f 1772 licensed, diploma and degree level teachers were employed and deployed to different needy schools including underserved areas. Delivery o f degree level teachers has remained low for many years with a ratio o f 20: 80 degree and diploma level respectively. In order to increase the number o f degree level teachers, the government converted the Chang’ombe Teacher Training College, and Mkwawa High School to Constituent Education Colleges under the University o f Dar es Salaam in August 2005. As a result, degree level enrolment in the public institutions has increased from 300 students in 2004/05 to 700 in 2005/06. Enrolment o f candidates for teacher training at diploma level increased from 2,689 in 2004 to 3,593 in 2005. Enrolment in 2006 for diploma level i s expected to increase to 4000 students.

15. I n order to have a long term strategy on teacher supply and development, the Government plans to strengthen the teacher development system further. Terms o f Reference (TOR) for this activity were developed and approved by different stakeholders involving the Government, Development Partners and the Civil Society Organisations participating in the Basic Education Development Committee (BEDC). Based on tlie TOR an invitation for expression o f interest for the “Teacher Development and Management Strategy (TDMV has been implemented. An inception report for the strategy will be finalised in M i d April 2006.

16. Capitation Grants: According to the program, capitation grants for learning materials and textbooks would be disbursed to secondary schools at a rate o f Tshs.25,000 per pupil per year. Government allocated about 3 billion shillings for these as recurrent expenditures under the development budget against projected 7.8 billion shillings. An amount o f Tshs. 4, 280,220,000 was disbursed to 803 schools (with 214,011 students) out o f t l ie 828 Government schools which were registered by 2004 with a total enrolment o f 264,888 students. The amount disbursed to these schools was approximately Tshs 20, 000 per student which was a bit less than t l ie planned grant o f Tshs. 25,000. Nevertheless 97 percent o f the schools registered by 2004 and 87 percent o f the student body during t l ie same period got capitation grants.

17. More fbnds wi l l be required for the grants in the 2006 academic year given the increased number o f government secondary schools, students’ enrolments, as well as the need to provide the full capitation grants up to Tshs. 25,000 per student. The number of schools registered increased to 1202 with a total enrolment o f 355,188 students by June 2005. Importantly, the capitation grants disbursed already to the 803 government schools have enabled the schools to purchase text books and teaching materials, thus contributing to quality improvement in teaching and learning

6 18. Development Grants; The program stipulates that Development Grants would be allocated based on the extent the area i s underserved. About 34 bil l ion shillings are allocated for development expenditures i n the budget for 04/05. As it turns out, about 930 government schools in different districts and communities have benefited froin the grants. A total o f Tshs 19,587,000,000 were disbursed to bank accounts o f these schools to (i) expand the capacities o f existing schools through construction o f more new classroom and furnishing (ii) rehabilitation and maintenance o f school facilities (iii) construction o f new schools and (iv) construction o f teacher houses, assembly halls, hostels, toilets and girls private rooins, and other necessary facilities. About 1569 new classrooms were constructed to expand school enrolment out o f a target o f 1914. About 425 new schools were constructed with a few classroom in underserved areas that had a considerable population o f primary education completers. Construction o f more classrooins in these new schools i s planned in 2006 to ensure the schools get enough classroom to operate in full capacity. Enrolment into Advanced Level secondary education also increased from 15,925 students to 18,154 in the same period.

19. Scholarship Grants; About 23,587 students froin very poor households studying in Form 1, 2, and 3 are benefiting froin the scholarship program that started i n 2003. Management o f the program i s guided by the “Guidelines for Provision of scholarship Grants to Secondary School PupilsJi.om Low Income Households” to support the identified eligible pupils. The total amount o f funds disbursed to schools with scholarship students in the 2005 academic year was Tshs.4,235 inillions at an average o f Tshs. 180,000 per student . The ainount covered expenses for fees, uniforms, medical, pocket money and transport. Out o f the scholarship students, 12,020 (5,101 girls and 6,919 boys) o f them were in Form I in the 2005 school year.

Condition 2: The Borrower has adopted a package of incentives designed to attract and keep teachers in underserved areas. The condition is met.

20. The Government has adopted a policy o f constructing teacher houses, particular in undeserved areas. Availability o f teacher houses within school compounds, especially in communities where teachers cannot find any houses to rent, has been one o f the key incentives i n deploying teachers. The Borrower has indicated that, out o f the total amounts o f the Development Grants disbursed to schools, Tshs. 8,172 ini l l ion was used for construction o f teacher houses especially in the remote areas. Government circular number 12 o f November 2004, provides guidelines for construction o f teacher houses particularly in underserved areas with the aim o f motivating teachers to teach in remote areas. As a result, 903 teacher’s houses were constructed in 888 different schools within local coininunities under the supervision o f district council engineers. Teacher support system are being strengthened to reach teachers in remote areas through school based continuous teacher development using accreditation and non-accreditation programs. This has been mostly through programs organized by the Open University o f Tanzania using distance education approaches and through the school inspectorate system.

Condition 3: The Borrower has amended, in substance satisfactory to the Association, its Circular No., dated August 15, 1998 government mechanisms for approval o f educational books. condition is met.

21. The Government has issued Education Circular Number 7 o f 2005, replacing Circular number 2 o f 1998 on the approval system o f Educational Books and Materials. The current Circular, aims at strengthening the approval system making it more transparent and efficient involving private, public and c iv i l society stakeholders. Further, the Circular re-enforces private book production and publishing which was not the case in the previous years.

Condition 4: The Borrower has adopted and implemented a program of actions designed to foster continuous development of professional skills for teachers and school administrators for secondary education across Borrower’s territory (mainland). Indicators: (i) Continuous Development of Teachers; and (ii) Development o f school administrators: The condition is met.

7 22. Continuous development of teachers: School-based training i s ongoing at schools and within teacher training colleges delivered through distance education combined with short sessions o f face to face interactions. The training program i s organised by the Open University o f Tanzania. About 505 science and mathematics teachers from various schools participated i n short training for a period o f three weeks in 2005 aimed at improving the teaching o f maths and sciences. About 71 diploma level teachers of maths and sciences are being supported by the government to attend degree level upgrading training at Tuinaini private university. L o w performance o f students in maths and sciences was one o f the identified issues that would be addressed in the SEDP implementation. Upgrading o f secondary education teachers i s also ongoing using teacher colleges and the University o f Dar es Salaam.

23. The school inspectorate system has been strengthened with increased transportation to enable zonal based inspectors to visit scliools more often to inspect schools and at the same t ime conduct school based seminars aimed at improving teaching levels and school management. A Training Manual for School Inspectors was developed in 2005 to provide guidance on among other things, school based training o f teachers.

24. In order to equip college tutors with adequate ski l ls for training primary and secondary education teachers, a total o f 296 tutors from different Teacher Training Colleges are being trained by the Open University o f Tanzania using distance learning approaches, upgrading the tutors to degree levels. About 14 tutors are also being trained for upgrading to post graduate Advanced Diploma level.

25. Continous develo-pment of school administrators: About 3,800 actors responsible for management and administration at schools and other levels were trained for a period of 10 days throughout the country. The training was conducted in eight different zones and was attended by heads o f schools, members o f school construction committees, regional and district engineers, and education officers at various levels. The aim o f the training was to inform people about the SEDP reforms in relation to roles o f the various stakeholders at these different levels. A strategy to strengthen school management involving heads o f schools and school boards i s also underway. This includes strengthening o f the teacher support and quality assurance systems through capacity building of School Inspectors at al l levels. The school inspectors in turn train school heads and school boards as well as other key players in management and administration guided by the “Training Manual for School Inspectors ” designed by the respective education mitiistry in 2005.

Condition 5: The Borrower has reduced the level o f tuition fees due by students attending Government Schools (day schools) from Tshs. 40, 000 to 20,000 starting in 2005 school year. Indicators: Government, Circular, Fees Compensation to schools. The condition is met.

26. Government Circular Number 11 dated September 2004 issued by the Chief Education Officer reduced school fees o f al l government day secondary schools from Tshs. 40,000 to 20,000 (by 50 percent) effective January 2005. The Circular was issued to Regional Administrative Secretaries, Zonal School Inspectors, and all Heads of Secondary schools. Reports and other information sources indicate that the policy i s being implemented in al l government day schools since January 2005. This has greatly contributed to increased access to secondary educatioii at community levels.

27. Given the implementation o f the policy, a total o f Tshs. 3, 461 millions was disbursed to 732 day government schools as compensation o f the reduced fees per pupil. About 173,05 1 students in government day schools benefited from the fee reduction policy in 2005. This i s approximately 49% o f students enrolled in government schools by 2005.

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111. CONCLUSION

28. In view o f the overall performance and progress with the iinpleineiitation o f the program supported by the Credit and the Grant and in compliance with the specific conditions o f release as described in paragraphs (1 2-27) above the International Development Association has informed the Borrower o f the availability o f the second tranche in the amount o f SDR33.5 mill ion.