Document of The World Bank FOR OFFICIAL USE ONLY Report No: 85768-ML INTERNATIONAL DEVELOPMENT ASSOCIATION PROJECT APPRAISAL DOCUMENT ON A PROPOSED CREDIT IN THE AMOUNT OF SDR 23.3 MILLION (US$36.1 MILLION EQUIVALENT) AND A PROPOSED GRANT IN THE AMOUNT OF SDR 17.4 MILLION (USD$26.9 MILLION EQUIVALENT) TO THE REPUBLIC OF MALI FOR A SKILLS DEVELOPMENT AND YOUTH EMPLOYMENT PROJECT June 3, 2014 Education, Central and West Africa Department Country Department West Africa 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 April 30, 2014) Currency Unit = Franc CFA (FCFA) FCFA 472 = US$1 US$0.645290 = SDR 1 FISCAL YEAR January 1 – December 31 ABBREVIATIONS AND ACRONYMS ANPE Agence Nationale pour l’Emploi (National Employment Agency) APC Approche par Compétences (Competency Based Approach) APEJ Agence pour la Promotion de l’Emploi des Jeunes (Agency for the Promotion of Youth Employment) BT Brevet de Technicien (Technical Degree) BMS Banque Malienne de Solidarité (Malian Solidarity Bank) CAR Centres d’Animation Rurale (Rural Animation Centers) CAP Certificat d’Aptitude Professionnelle (Professional Competency Certificate) DNETP Direction Nationale de l’Enseignement Technique et Professionnel (National Directorate for Technical and Professional Education) DNES Direction Nationale de l’Enseignement Supérieur (National Directorate for Higher Education) DNFP Direction Nationale de la Formation professionnelle (National Directorate for Training) DUT Diplome Universitaire Technique (Technical University Degree) ECOWAS Economic Community of West African States ENETP Ecole Normale de l’Enseignement Technique et Professionnel (Teacher School for Technical and Vocational Training) FAFPA Fonds d’Appui à la Formation Professionnelle et à l’Apprentissage (Fund for the Support of Vocational Training and Apprenticeship) FARE Fond Auto-Renouvelable pour l’Emploi (Revolving Fund for Employment) Fond d’Appui aux Entrepreneurs en milieu Rural (Support Fund for Rural FIER Entrepreneurship) FM Financial Management FNAM Fédération des Artisans du Mali (Mali Artisans Organisation) GER Gross Primary Enrollment Rate GDP Gross Domestic Project GPRSF Government Growth and Poverty Reduction Strategy Framework ICT Information and Communications Technology IFAD International Fund for Agricultural Development IFP Institut de Formation Professionnelle ISN Interim Strategy Note MEAPLN Ministère de l’Education, de l’Alphabétisation et des Langues Nationales (Ministry of Education, Alfabetisation and National Languages) ii MEFP Ministère de l’Emploi et de la Formation Professionnelle (Ministry of Employment and Vocational Training) MSME Micro, Small and Medium enterprises NGOs Non-Governmental Organizations ODA Overseas Development Assistance PACEPEP Project for Economic Growth and the Promotion of Employment PAFIP Programme d’Appui à la Formation et à l’Insertion Professionnelle (Vocational Training and Professional Insertion support Program) PADDER Projet d’Appui à la Décentralisation et au Développement Economique Régional (Decentralization and Regional Economic Development Support Project) PAFP Programme d’Appui à la Formation Professionnelle (Vocational Training Support Program) PAPESPRIM Programme d’Appui à la Promotion de l’Emploi dans le Secteur Privé (Employment Promotion in the Private Sector Support Program) PAPAM Projet d’Accroissement de la Productivité Agricole (Agricultural Productivity Improvement Project) PCDA Programme de Compétitivité et de Diversification Agricole (Agricultural Diversification and Competitiveness Program) PEDASB Projet d’Electrification Domestique et Accès aux Services Sociaux de Base (Domestic Electrification and Access to Basic Social Services Project) PEJ Agence pour l’Emploi des Jeunes (Youth Employment Agency) PIM Project Implementation Manual PISE Programme d’Investissement pour le Secteur de l’Education (Education Sector Investment Program) PNE Politique Nationale de l’Emploi (National Employment Policy) PNEFTP Politique Nationale de l’Enseignement et la Formation Technique et Professionnelle (National Policy for Education and Technical and Vocational Training) PNFP Politique Nationale de la Formation Professionnelle (National Policy for Vocational Training) PRODEC Programme Décennal de Développement de l’Education (Ten-Year Education Development Program) PRODEFPE Projet pour le Développement Professionnel pour l’Emploi (Professional Development for Employment Project) PPP Public Private Partnerships SME Small and Medium Enterprises TFR Total Fertility Rate TVET Technical and Vocational Education and Training WAEMU West Africa Economic and Monetary Union Regional Vice President: Makhtar Diop Country Director: Paul Noumba Um Sector Director: Tawhid Nawaz Sector Manager: Peter Nicolas Materu Task Team Leader: Emanuela di Gropello (TTL) Lorenzo Bertolini (co-TTL) iii . PAD DATA SHEET Mali Skills Development and Youth Employment Project (P145861) PROJECT APPRAISAL DOCUMENT . AFRICA AFTEW Report No.: 85768-ML . Basic Information Project ID EA Category Team Leader P145861 B - Partial Assessment Emanuela Di Gropello Lending Instrument Fragile and/or Capacity Constraints [ X ] Investment Project Financing - Fragile States Financial Intermediaries [ ] Series of Projects [ ] Project Implementation Start Date Project Implementation End Date 27-Jun-2014 30-Jun-2020 Expected Effectiveness Date Expected Closing Date 30-Nov-2014 30-Jun-2020 Joint IFC No Sector Manager Sector Director Country Director Regional Vice President Peter Nicolas Materu Tawhid Nawaz Paul Noumba Um Makhtar Diop . Borrower: MINISTRY OF FINANCE Responsible Agency: Ministry of Vocational Training and Employment Contact: Mr. Hery Coulibaly Title: Technical Advisor Telephone No.: 233-207-942-85 Email: herycoulibaly55@yahoo.fr . Project Financing Data(in USD Million) [ ] Loan [X] IDA Grant [ ] Guarantee [X] Credit [ ] Grant [ ] Other Total Project Cost: 63.00 Total Bank Financing: 63.00 Financing Gap: 0.00 . iv Financing Source Amount BORROWER/RECIPIENT 0.0 International Development Association (IDA) 35.3 IDA Grant 26.9 IDA recommitted as a Credit 0.8 Total 63.0 . Expected Disbursements (in USD Million) Fiscal 2014 2015 2016 2017 2018 2019 2020 0000 0000 Year Annual 0.10 7.00 11.00 15.00 15.00 11.00 3.90 0.00 0.00 Cumulati 0.10 7.10 18.10 33.10 48.10 59.10 63.00 0.00 0.00 ve . Proposed Development Objective(s) The Project Development Objective (PDO) is to support education and training for employability and private-sector led job opportunities for youth in Mali. . Components Component Name Cost (USD Millions) 1. Education and Training for Employability 29.2 2. Private-Sector led Job Creation for Youth 25.1 3. Institutional Strengthening and Project Management 8.7 . Institutional Data Sector Board Education Sectors / Climate Change Sector (Maximum 5 and total % must equal 100) Major Sector Sector % Adaptation Mitigation Co-benefits % Co-benefits % Finance SME Finance 50 Education Adult literacy/non- 25 formal education Education Vocational training 25 Total 100 I certify that there is no Adaptation and Mitigation Climate Change Co-benefits information applicable to this project. . v Themes Theme (Maximum 5 and total % must equal 100) Major theme Theme % Financial and private sector development Micro, Small and Medium Enterprise 50 support Human development Education for the knowledge economy 50 Total 100 . Compliance Policy Does the project depart from the CAS in content or in other significant Yes [ ] No [ X ] respects? . Does the project require any waivers of Bank policies? Yes [ ] No [ X ] Have these been approved by Bank management? Yes [ ] No [ X ] Is approval for any policy waiver sought from the Board? Yes [ ] No [ X ] Does the project meet the Regional criteria for readiness for implementation? Yes [ X ] No [ ] . Safeguard Policies Triggered by the Project Yes No Environmental Assessment OP/BP 4.01 X Natural Habitats OP/BP 4.04 X Forests OP/BP 4.36 X Pest Management OP 4.09 X Physical Cultural Resources OP/BP 4.11 X Indigenous Peoples OP/BP 4.10 X Involuntary Resettlement OP/BP 4.12 X Safety of Dams OP/BP 4.37 X Projects on International Waterways OP/BP 7.50 X Projects in Disputed Areas OP/BP 7.60 X . Legal Covenants Name Recurrent Due Date Frequency Project Steering Committee 02-Mar-2015 Description of Covenant The Recipient, through MEFP, shall establish not later than three (3) months after Effective Date and thereafter maintain, throughout the implementation of the Project and in a manner satisfactory to the Association, a Project Steering Committee chaired by the minister of the MEFP or his representative. Name Recurrent Due Date Frequency vi Project Coordination Unit X CONTINUOUS Description of Covenant The Recipient, through MEFP, shall maintain, throughout the implementation of the Project, a Project Coordination Unit (PCU). Name Recurrent Due Date Frequency Financial Management 01-Jan-2015 Description of Covenant The Recipient shall recruit no later than one (1) month after effectiveness a financial management expert and an accountant on a competitive basis and pursuant to terms of reference satisfactory to the Association. Name Recurrent Due Date Frequency External Auditor 01-Jun-2015 Description of Covenant The Recipient shall recruit no later than six (6) months after the Effective Date, the external auditor pursuant to terms of reference satisfactory to the Association. Name Recurrent Due Date Frequency Internal Auditor 01-Apr-2015 Description of Covenant The Recipient shall recruit no later than four (4) months after the Effective Date, an internal auditor, whose qualifications and experience and terms of reference shall be acceptable to the Association. Name Recurrent Due Date Frequency Financial Management Software 01-Feb-2015 Description of Covenant The Recipient shall, no later than two (2) months after the Effective Date, acquire, install and thereafter maintain an accounting software acceptable to the Association, for the Project. Name Recurrent Due Date Frequency Procurement 01-Feb-2015 Description of Covenant The Recipient shall recruit no later than two (2) months after effectiveness a procurement expert on a competitive basis and pursuant to terms of reference satisfactory to the Association . . Conditions Source Of Fund Name Type IDA Project Implementation Manual Effectiveness Description of Condition The Project Implementation Manual has been adopted in form and substance satisfactory to the Association. Source Of Fund Name Type vii IDA Project Coordinator Effectiveness Description of Condition The Recipient has recruited the Project Coordinator on terms of reference acceptable to the Association. Source Of Fund Name Type IDA Subsidiary agreements with FAFPA Disbursement Description of Condition No withdrawal shall be made under Category (2) and (3) unless the Subsidiary Agreement has been signed between the MEFP and FAFPA, as Executing Agency, under terms and conditions satisfactory to the Association. Source Of Fund Name Type IDA Sub-grants Manual Disbursement Description of Condition No withdrawal shall be made under Category (3) unless the Recipient, through MEFP, has prepared and adopted the Manual for Sub-grants for TVET Institutions, in form and substance satisfactory to the Association. Source Of Fund Name Type IDA Subsidiary agreement with APEJ Disbursement Description of Condition No withdrawal shall be made under Category (4) unless a Subsidiary Agreement has been signed between MEFP and APEJ, as Executing Agency, under terms and conditions satisfactory to the Association. Source Of Fund Name Type IDA Subsidiary agreement with the relevant Executing Disbursement Agency Description of Condition No withdrawal shall be made under Category (5) and (6) unless a Subsidiary Agreement has been signed between MEFP and the respective Executing Agency, under terms and conditions satisfactory to the Association. Source Of Fund Name Type IDA Matching Grants Manual Disbursement Description of Condition No withdrawal shall be made under Category (6) unless the Recipient, through MEFP, has prepared and adopted the Manual for Matching Grants in form and substance satisfactory to the Association. Source Of Fund Name Type IDA Subsidiary agreement with FARE Disbursement Description of Condition No withdrawal shall be made under category (7) unless a Subsidiary Agreement has been signed between MEFP and FARE, as Executing Agency, under terms and conditions satisfactory to the Association. viii Team Composition Bank Staff Name Title Specialization Unit Janet Omobolanle Adebo Program Assistant Program Assistant AFTEW Lorenzo Bertolini Senior Private Sector Senior Private AFTFW Development Specialist Sector(Co-Team Lead) Development Specialist Wolfgang M. T. Chadab Senior Finance Officer Disbursement CTRLA Ruxandra Costache Counsel Legal Counsel LEGAM Emanuela Di Gropello Sector Leader Team Lead AFTHD Celine Gavach Senior Operations Implementation/Costing/ AFTEW Officer Operations Support Pierre Joseph Kamano Senior Education Education AFTEW Specialist Mahamoud Magassouba Operations Officer IFC-Private Sector GTCAF Celestin Adjalou Sr Financial Financial Management AFTMW Niamien Management Specialist Alice Diarra Sangare Team Assistant Team Assistant AFCW3 Mahaman Sani E T Consultant Private Sector AFTFW Development Mahamadou Bambo Senior Procurement Procurement AFTPW Sissoko Specialist Kalilou Sylla Consultant Operations Support AFTEW Non Bank Staff Name Title City Desire Bankole Private sector expert Ali Saana TVET expert . Locations Country First Location Planned Actual Comments Administrative Division ix REPUBLIC OF MALI Skills Development and Youth Employment Project TABLE OF CONTENTS Page I. STRATEGIC CONTEXT .................................................................................................1 A. Country Context ............................................................................................................ 1 B. Sectoral and Institutional Context................................................................................. 2 C. Higher Level Objectives to which the Project Contributes .......................................... 5 II. PROJECT DEVELOPMENT OBJECTIVES ................................................................6 A. PDO............................................................................................................................... 6 B. Project Beneficiaries ..................................................................................................... 7 C. PDO Level Results Indicators....................................................................................... 7 III. PROJECT DESCRIPTION ..............................................................................................8 A. Project Components ...................................................................................................... 8 B. Project Financing ........................................................................................................ 18 Project Cost and Financing ............................................................................................... 18 C. Lessons Learned and Reflected in the Project Design ................................................ 19 IV. IMPLEMENTATION .....................................................................................................21 A. Institutional and Implementation Arrangements ........................................................ 21 B. Results Monitoring and Evaluation ............................................................................ 22 C. Sustainability............................................................................................................... 23 V. KEY RISKS AD MITIGATION MEASURES .............................................................24 A. Risk Ratings Summary Table ..................................................................................... 24 B. Overall Risk Rating Explanation ................................................................................ 24 VI. APPRAISAL SUMMARY ..............................................................................................24 A. Economic and Financial Analysis............................................................................... 24 B. Technical ..................................................................................................................... 25 C. Financial Management ................................................................................................ 26 x D. Procurement ................................................................................................................ 28 E. Social (including Safeguards) ..................................................................................... 29 F. Environment (including Safeguards) .......................................................................... 30 Annex 1: Results Framework and Monitoring .........................................................................31 Annex 2: Detailed Project Description.......................................................................................35 Annex 3: Implementation Arrangements ..................................................................................53 Annex 4: Operational Risk Assessment Framework (ORAF) .................................................84 Annex 5: Implementation Support Plan ....................................................................................88 Annex 6: Economic and Financial Analysis ..............................................................................91 Annex 7: Sector Issues ...............................................................................................................107 Annex 8: Documents in project file ..........................................................................................117 MAP 33443R xi I. STRATEGIC CONTEXT A. Country Context 1. With a sparsely populated, predominantly dry land, high demographic growth and a highly undiversified economy Mali is exposed to several “structural” external shocks (climate change, commodity prices). At the heart of the Sahel, Mali is a vast, semi-arid, landlocked and sparsely populated country with the largest territory in the Economic Community of West African States (ECOWAS) community. With a high demographic growth rate (one of the highest of the world with a total fertility rate (TFR) of over 6 children per woman), but extremely low population density, and relatively limited natural resources and a rain-fed subsistence agriculture that provides income for a majority of the population, Mali is extremely vulnerable to external shocks. In addition, the economy is characterized by a narrow source of exports (gold, cotton, livestock represent about 90% of all exports) increasing its vulnerability to commodity price fluctuations. 2. In March 2012, a military coup ousted the democratically elected government triggering an unprecedented political, security and economic crisis which has added an internal dimension to the more traditional exposure to external shocks. Shortly after the military coup, the north was seized by extremist groups. A Transitional Government of National Unity was subsequently formed and recognized by the international community, with the mandate of restoring sovereignty over the entire territory of Mali and organizing fair and transparent national elections. Under the mandate of the UN Security Council, a coalition of Malian and international troops launched military operations in Northern Mali in January 2013. These events constitute the worst political and security crisis faced by Mali since its independence. Ethnic tensions, the limited state presence and institutional capacity, and the collapse of the security sector stand out as some of the key triggers of the crisis. 3. Significant efforts have been made towards the resolution of the crisis both with regard to re-establishing territorial integrity and to the return to democracy. Peace talks are also ongoing. Following the military intervention of the Malian and foreign troops, led by France first under Operation Serval, and by the UN as of July 2013 with the MINUSMA mission, control has been regained over the area between Gao and Timbuktu and access to main Northern cities has been reestablished. Additionally, considerable progress has been made in implementing the political roadmap presidential elections between July and August 2013, which led to the election of Ibrahim Boubakar Keita, and the National Assembly was elected in two rounds between November and December 2013. These positive developments, accompanied by a very substantial surge of Overseas development Assistance funding in 2013 following the Paris meeting on Mali, point to a gradual resolution of the political, security and economic crisis. Following security-related economic disruptions in 2012, in 2013, economic growth rebounded to 1.7%, up from 0.1% in 2012. The outlook for 2014 is positive, with a strong acceleration in GDP growth above 6 percent under the assumptions of continued donors support and average rainfall. 4. However many challenges remain. There still remains considerable uncertainty on the magnitude of the economic impact of the political crisis in 2012 and its subsequent recovery as 1 security conditions improved from 2013. While security has improved, the risk of renewed violence and guerrilla type conflict remains high deterring many displaced households from returning to the north. In May 2014, National Movement for the Liberation of Azawad (MNLA) and Al Qaida for the Islamic Maghreb (AQIM) forces have reaffirmed control over Kidal and violently attacked government representatives and military forces. The private sector has been significantly affected by the crisis and job creation has slowed further from an already significant decrease in the number of jobs created in both the public and private sector before the crisis (from about 30,000 new jobs per year in the period from 2008-2010 to less than 20,000 new jobs in 2011). Unemployment is also projected to have increased and poverty is likely to have worsened. After a decline from 55.6 to 43.6% from 2001 to 2010, the poverty rate is estimated to have increased from 43.6% in 2010 to 46% of the population by end 2012, or 7.2 million poor. As a further indication, first post-crisis household surveys suggest that per capita consumption decreased in Southern regions between springs 2011 and 2013, except in Bamako. B. Sectoral and Institutional Context 5. Mali’s youth are facing deeply rooted employability challenges, further aggravated by the crisis and with the potential to hamper full recovery. More than 70% of its huge youth group between 15 and 24 was out of school in 2010 and had very limited qualifications and skills for employability. The vast majority of these youth are employed in generally low productivity/quality jobs in the informal agriculture and service sector (over 90%). A significant percentage of them are also unemployed or inactive (about 20%). This is a structural longer-term issue for the undiversified Malian economy, but the situation further deteriorated during the crisis with the proportion of out of school, unemployed and disenfranchised youth likely to have further increased (pending updated employment data on the whole country), as a result of the disruption of education institutions and education system overall, the worsening economic context in 2012, and the fall of the terrorist groups in the north. If not addressed quickly, Mali’s youth’s challenges pose a major development and security challenge for the resolution of the crisis. 6. This situation points to two main types of challenges, related to job creation and skills development. The first type relates to jobs – there are too few and they have varying levels of productivity in the formal sector and low productivity and often precarious in the informal sector. The second type relates to skills – too few or simply irrelevant to what the formal and informal sector need to create, fill and/or improve jobs (skills mismatch). While opinions vary on whether demand or supply constraints are more acute, ultimately what is needed is an approach where efforts to create more and/or better jobs in the formal and informal sector and strengthen skills go hand in hand. This approach is even more relevant to the current post-crisis Mali context, where both education and job opportunities have decreased, requiring urgently a two- pronged strategy to promote jobs/employment creation and develop skills (for both the formal and informal sectors). This strategy needs to build on a clear understanding of the labor market and skills development situation and constraints in Mali, as illustrated below. 7. Labor market and job creation constraints: There are several potential sources of job creation in Mali. Employment statistics indicate that about 65% of adults are employed in the agriculture sector, 10% in the industry sector and 25% in the service sector. Recent reports confirm that over 80% of these jobs are in the informal sector. They also show that moving 2 forward sources of employment, growth and poverty reduction with high potential for growth will include the exploitation of agri-business potential, mining diversification, the construction industry, and fisheries. It is however not yet clear how many new jobs will really be created in those, or other, sectors in the future given the many constraints to the creation and growth of micro, small and medium enterprises (MSMEs). 8. Mali’s potential entrepreneurs and established firms face several constraints to fulfill their potential. While there is no overall reliable number on the total number of MSMEs in Mali, we know that about 20,000 new (formal) MSMEs were created from 2010 to 2013 with an average size of 3 workers per enterprise. Both formal and informal businesses face constraints to consolidation or growth. The three main cited constraints to business development are: (a) access to finance (over 50% of the firms); (b) access to land (about 30%); and (c) corruption (about 25%). A recent survey of a sample of 18 to 35 years youth located in four localities with different socio-economic levels highlights four key constraints to the creation and development of micro-enterprises: (i) the lack of technical and business management skills and expertise, in particular in rural areas; (ii) difficulties to put together sufficient initial capital to get started; (iii) very limited access to credit; and (iv) lack of longer-term mentoring and coaching. Overall, a key driver of job creation in Mali is likely to be the further development of the private sector, including the promotion of new, emerging and established MSMEs, which are shown to create comparatively more jobs than larger firms. Access to seed funds, finance and complementary training, support and coaching services, in particular for MSMEs, are therefore constraints, also confirmed from recent assessments of the business climate that will need to be addressed to support business and job creation in Mali. 9. Skills development constraints: Low schooling levels, and weak quality and relevance, are a key constraint to youth employability, firms and jobs in the short and longer run-in Mali. Job and employment prospects need to go hand in hand with skills development. Not only are existing jobs often constrained by lack of skills but lack of skills can hamper the creation of future jobs. 10. Education outcomes are still poor in Mali pointing to a skills miss-match with current and future labor market needs. Although the primary gross primary enrollment rate (GER) reached around 76% in 2010, according to household survey data, this rate is unlikely to allow Mali to achieve universal primary education (UPE) by 2015, and even decreased to about 69% in 2013 according to administrative data. And, at less than 60% in 2010 (and about 48% in 2013 according to administrative data), the primary completion rate is even more of an issue. While increasing from 2006 to 2010, only about one-third of the relevant school age population was enrolled in upper secondary education and a very small fraction would continue onto tertiary education, with a still important gender gap. Significant returns to primary and secondary education, as illustrated in the economic analysis section, suggest short-term shortages of skills at those levels. In fact, lack of education is cited as a major or very severe constraint to business by about 15% of the firms included in the recent enterprise surveys. Even more than schooling levels, quality and relevance of schooling are a short and longer-term constraint to Mali’s development, as illustrated by the poor national student assessment results, and the fact that employers in the formal and informal sector complain of difficulties in finding individuals with the right skills, including basic technical skills. Skills development is even more of an imperative 3 for the youth stock. Most recent household survey data show that about 70% of the 15 to 24 years old, and 80% of the 15 to 29 years old, are out of school, of which only about 30% have received formal schooling at primary or secondary level. And of those who are employed the vast majority is under-employed in the agriculture and services informal/low productivity sector, pointing to a mix of employment and skills constraints: current skills levels appear to be neither sufficient to migrate to the formal sector nor to increase productivity and employability in the informal one. 11. Mali’s quantity and quality related skills challenges are related to issues with the education and training sector that will need to be addressed. At the post-primary education level, the system suffers from a lack of diversification and options for post-primary education. Over 90% of secondary level students are enrolled in the general academic secondary stream (college and lycée), with less than 10% in the TVET stream. The general secondary and tertiary academic streams are often too theoretical and disconnected from the workplace, with low levels of internal efficiency. The lack of diversification of the formal education stream and related lack of labor market prospects is a key determinant of the decision to drop-out of school for Mali’s youth, in combination to some extent with demand side constraints such as poor family education, making it imperative to rebalance the system towards applied technical, science, engineering and technology skills starting from secondary education. Finally, there are limited options of informal education and training at basic and technical level. TVET, formal and non- formal, and tertiary technical tracks can be a potentially relevant option to address youth employability in Mali. However, they are in need of urgent improvement to fulfill their full potential. Key strengths and challenges faced by the Mali TVET system, largely managed by the Ministry of Education (Ministère de l’Education, de l’Alphabétisation et de la Promotion des Langues Nationales, MEAPLN) and Ministry of Tertiary Education (Ministère de l’Education Supérieure et de la Recherche Scientifique), for formal education and training leading to a degree, and by the Ministry of Employment and Vocational Training (Ministère de l’Emploi et de la Formation Professionelle, MEFP), for non-formal education and training, and which provide a strong rationale for key interventions of the project, are discussed in Annex 7. 12. Beyond the education and training sector, employability is also constrained by the lack of effective public employment promotion strategies. The country has set up agencies within its broader national employment policy to support school to work transition of students coming from the formal and informal education and training sector. The key agencies are the Agence pour la Promotion de l’Emploi des Jeunes (APEJ) and the Agence Nationale pour l’Emploi (ANPE) and both are not very effective and have had limited coverage and success in their interventions (from short term complementary training to internships, job counseling and entrepreneurship programs), in spite of renewed political commitment. 13. Along this line, underlying or aggravating skills and jobs constraints to employability are also some additional barriers related to location, family education and income, gender and more broadly information. Many of these barriers work through the education and job dimensions, contributing to explain the lower education levels and job opportunities. All these constraints, detailed in Annex 7, and which depict a more comprehensive picture of the challenges of in and out of school youth including significant differences between 4 urban and rural challenges, will need to be taken into account in the design of skills and jobs- related interventions. 14. To sum up, Mali will need a two-pronged strategy to develop skills and create jobs. Mali needs an effective strategy to improve youth employability. This will require a two-pronged approach to address skills constraints and job creation constraints. And this approach will need to be applied to both the formal and informal sector. The informal sector because this is where the largest potential for job creation is in the short run, the formal sector because this is where significant potential for job creation may exist in the longer-run. A two pronged strategy for the formal sector will require tackling quality and relevance issues in the formal education and training sector to improve graduate employability (and retention at school), while at the same time supporting the creation of more jobs in the modern sector to absorb those youth. On the other hand, in the informal sector, most of the actions will have to concentrate on how to improve the employability of the out of school youth stock with currently very limited education and skills, while developing more opportunities for productive and rewarding self-employment. Finally, whatever strategy is applied will also need to factor in the relevant location, family and gender constraints. C. Higher Level Objectives to which the Project Contributes 15. The overarching objective of the project is supporting youth employability in Mali to address the twin goals of promoting shared prosperity and reducing extreme poverty. 16. Interventions aimed at alleviating key binding constraints and assisting sectors which are able to potentially absorb large numbers of new labor market entrants, in the short to longer-run, will be essential if Mali is to fully recover from the crisis and support shared growth. At the same time, providing basic skills and job opportunities in the informal sector for highly vulnerable youth will also help address extreme poverty. By focusing on the two sides of the youth employability equation, the supply of skills and the availability of jobs in key economic sectors, and doing this in both the informal and formal sector, the project is fully aligned with the Bank’s and Government priorities. 17. The project is fully aligned with the country’s policy framework for skills and employment, including its national youth employment policy (Programme Emploi Jeunes, PEJ), the framework law for the promotion of the private sector (Loi d’Orientation du Secteur Privé), and the national policy on technical and vocational education and training (Politique Nationale de l’Enseignement et la Formation Technique et Professionnelle, PNEFTP), as more fully documented in Annex 7. It is also fully aligned with the Interim Strategy Note (ISN), Fiscal Year 2014-2015, in particular with the two pillars on (a) protecting human capital and building resilience, and (b) preparing the conditions for economic recovery. 18. At the core of the first pillar is a comprehensive and synergetic approach to human capital development focused on: (i) acting early through a combined action on improving the education, health and nutrition of infants and children, while also tackling fertility issues; (ii) providing key core skills to improve the productivity and employability of youth; and (iii) combining measures to improve health and education services with demand-side interventions to protect human capital, with an aim to setting in place systems which mitigate risks and build 5 resilience. The project is also central to the second pillar by supporting the creation of basic conditions for a private sector-led economic recovery that can help generate jobs. The development of new sources of growth in the medium term may include exploitation of agri- business potential, mining diversification, the construction sector, and the resumption of tourism and hospitality when the security conditions allow. 19. As fully documented in Annex 7, the project’s proposed interventions are complementary to existing or planned partners’ interventions, while also building as much as possible on lessons learned from interventions in Mali and elsewhere. All relevant projects were closely reviewed to ensure in depth understanding and be able to build complementarities in the proposed project. In general all existing projects are limited in scale, in terms of regions, sectors or beneficiaries, providing significant scope for complementarity and scaling-up. At the same time, some of them introduce or have introduced innovations or broader scale interventions worth building on (functional complementarity). 20. The proposed project will also complement other World Bank’s projects. It will notably complement the Reconstruction and Economic Recovery project (focused on reconstruction of basic infrastructure including schools in the whole country and improved livelihood in the north), and the Safety Net project (focused on providing cash transfers and possibly later on public works to vulnerable households), by supporting skills development and private sector led job creation and therefore income generation potential in the north and south. It will also complement the Basic Education GPE Project by supporting post-basic skills development and the Reproductive Health Project by supporting, to the extent possible, entrepreneurship in emerging health sub-sectors. The project will also complement: (i) the Programme de Compétitivité et de Diversification Agricole (PCDA) and the Projet d’Accroissement de la Productivité Agricole (PAPAM) projects by supporting the development of MSMEs in agribusiness sectors, and technical education and training in the agriculture and agro-industry sector (notably in Ségou); (ii) the Projet d’Electrification Domestique et Accès aux Services Sociaux de Base (PEDASB) by supporting skills development in construction and public works; and (iii) the Sahel Regional Telecommunication Project (WARSHIP) by supporting, to the extent possible, micro-entrepreneurship in emerging telecom sub-sectors, including the growing “mobile money” services/business. 21. Finally, in both project’s components the project will coordinate closely with some of the IFC initiatives in Mali. This is particularly the case of component 2 in the context of an improved business climate and access to credit, as will be further detailed in the project design section. II. PROJECT DEVELOPMENT OBJECTIVES A. PDO 22. The Project Development Objective (PDO) is to support education and training for employability and private-sector led job opportunities for youth in the Republic of Mali. 6 B. Project Beneficiaries 23. The overall primary target population is the 15 to 35 years old youth throughout the country. Specific target populations will differ by sub-component and intervention as follows: • the formal education sub-component will target the 15 to 24 years old in school youth. • the informal skills development sub-component will target the 15 to 29 years out of school youth with limited prior (primary or lower secondary education) or no education (specific age range will vary according to the program). • the entrepreneurship and established SMEs sub-components will target the 21 (with flexibility to start earlier if possible) to 35 years old finishing school/training or out of school with varying education and training levels (depending on the program). 24. This targeting should ensure broad representativeness of the youth in Mali, while ensuring continuity in support from initial education to employment. 25. Intermediary target groups are the schools and teachers benefiting from the education and training interventions, and the micro, small and medium enterprises which will benefit from the interventions supporting the private sector. C. PDO Level Results Indicators 26. The Project will use five key performance indicators (KPI) (plus one core one) to assess the progress toward the PDO, including those outlined below. More details are included in Annex 1. • Direct project beneficiaries (number), of which female project beneficiaries (%) (Core KPI) • Youth graduating from the CAP and BT programs in the public TVET institutions supported by the project in the 3 priority sectors (%). • Out of school youth who: o completed the dual apprenticeship program supported by the project (%, of which females, %); o are employed or self-employed within one year of completion of the program (%). • Out of school youth who: o completed the short-term skills training program supported by the project (%, of which females, %); o are employed or self-employed within one year of completion of the program (%). • Enterprises created or consolidated by graduate and non-graduate youth supported by the project’s entrepreneurship programs (number, of which by females, %). • Enterprises scaled-up as a result of the project (number). 7 III. PROJECT DESCRIPTION A. Project Components 27. The proposed project will support a two pronged strategy to promote jobs creation and develop skills for Malian youth. Jobs creation interventions, supported through Component 2, will target the private sector through support to would-be entrepreneurs and emerging or established SMEs with potential for job creation. Skills development interventions, supported through Component 1, will focus on both the formal and non-formal education and training sector, with emphasis on supporting more relevant and efficient technical tracks in secondary and tertiary education, revamping the apprenticeship program and creating new and more relevant opportunities of short term skills development for out of school youth. 28. Synergies will be created between the supply and demand components by ensuring continuity in support from education to employment for youth with different education levels, which will also help address the needs for “real” jobs in the vast informal sector (where over 80% of the jobs are) and more jobs in the emerging formal sector. On the one hand, the project will support more and better technicians at the secondary and tertiary level (CAP, BT, Baccalaureat Technique and even DUT) through targeted support to public and private schools, while also ensuring better transition to the labor market and opportunities of employment for these and other graduates through support to an entrepreneurship program for youth with secondary and tertiary education degrees and to established SMEs largely in the formal sector with prospects for employment growth. On the other hand, the project will support better qualified youth with no or limited formal education through innovative skills development options, while also creating better opportunities of employment for these and other youth through support to an entrepreneurship program for youth without formal secondary or higher level degrees, largely aimed at creating new stronger micro-enterprises in the informal sector, and to some extent through the strengthening of informal businesses. 29. To maximize impact while avoiding spreading too thinly, support will be focused on three economic sectors and value-chains, while leaving some flexibility for newly emerging sectors. These are the agro-industry sector with focus on fruits and vegetables and animal products (including meat, milk and skin derived products), following a value-chain approach from initial production to processing, quality control and commercialization; the building and public works sector, including both public construction sites and building and maintenance, through basic masonry to finishing works, maintenance and building design; and the mining and auxiliary services sector (upstream and downstream support services), through prospection, exploitation and truck driving. Recent sector diagnostics based on labor force survey data confirm that these are established, growing or emerging job provider sectors. To allow for emerging sectors which may not be immediately visible today or still need confirmation, the project will also have the flexibility, in particular under component 2, to support initiative in those sectors. The target population, priority sectors and interventions identified will help the project reach out to vulnerable youth everywhere in the country, including the north with its mass of unemployed disaffected youth with strong skills development, reconversion and employment needs. 8 30. The project will be divided into three components: (1) Education and Training for Employability; (2) Private-Sector led Jobs Creation for Youth; and (3) Institutional Strengthening and Project Management. Project’s sub-components under Component 1 are: (1.1). Strengthening Technical and Vocational Education and Training; and (1.2). Strengthening Skills Development for Out of School Youth. Project’s sub-components under Component 2 are: (2.1) Supporting Entrepreneurship for Youth; and (2.2) Supporting Established Small and Medium Enterprises for Job Creation. Component 1: Education and Training for Employability (Total costs US$29.2million) 31. The project will support under this first component more effective formal education and training for in school youth and non-formal training for out of school youth to improve their skills for employability by strengthening technical and vocational education and non-formal skills development programs for key value-chains. Sub-component 1.1: Strengthening Technical and Vocational Education and Training (Total costs US$14.1 million) 32. This sub-component will improve education and training for employability by supporting a higher quality and more demand-driven cost-effective technical and vocational education to improve youth employability. The target group will be the 15 to 24 years old in school youth enrolled in formal public and private technical and vocational institutions at secondary and tertiary level, with some room also for youth enrolled in non-formal vocational institutions. The project will target its resources to specific public institutions and competitively selected private institutions in the key priority sectors, with some measures like the development of curricula and programs, partnership and performance contract approaches and the training of trainers with a potential broader transversal impact. To the extent that rehabilitation will also create higher enrolment capacity, these supply-side measures will be complemented by an awareness/information campaign towards families and youth launched by the MEFP in combination with the private sector to show the benefits of enrolling into the improved TVET tracks for both boys and girls. Youth exiting from programs with BTs and more will also have the opportunity to participate in business plan competitions and receive coaching and easier access to implement their proposals through the entrepreneurship program for graduates in component 2. Youth exiting with CAP degrees and less will have the opportunity to go towards self-employment by participating in the entrepreneurship program for non-graduates. 33. Support to public sector TVET institutions (US$8.6million): The project will support four public sector formal education and training institutions and one non-formal vocational institution in the agro-industry, construction and mining sectors (all with potential to become national or regional poles in one of the key priority sectors): Ségou Agro-Industry Institute; Bankass Institute in the Mopti region (agriculture and livestock); IFSAB institute in Bamako (building and public works) and Kayes Industrial Institute of Mining (mining and auxiliary services) and Missabougou Professional Training Center (construction and agro-industry), with the potential for support to more institutions if pertinent. Support will entail either strengthening or introducing (if non existing) the key priority sectors, sub-sectors and fields (under a value- chain approach putting emphasis when relevant on the weakest links). Details on each institution, 9 with targeted sub-sectors and fields, are provided in Annex 2. In each institution the project will support a reform package which will prioritize curriculum, management and human resources upgrading, as well as physical rehabilitation. The packages will include the elaboration and application of competency based approach curricula, with related standards, in the priority fields and levels, a partnership framework with the productive sector and performance framework with public and private providers related to measurable outcomes, the design of entrepreneurship modules to be integrated within the formal curriculum, and the training of trainers (in coordination with the Ecole Normale de l’Enseignement Technique et Professionnel (ENETP)), and selected rehabilitation and upgrade of classrooms and equipment. Key aspects of the reform implementation process are included in Annex 2. 34. Support to private sector TVET institutions (US$5 million): While the private sector has strong potential, including being more efficient, more attuned to local labor market needs and accountable to parents than the public sector, the complementarity between the public and private sector has not worked well in Mali, with a private sector stifled of resources specializing in low cost low relevance service sector fields and used as a low quality “demand-absorbing” sector. To address this issue the project will provide grants to competitively selected private sector TVET institutions to expand and improve technical and vocational programs at various levels in the key identified sectors. Depending on the specific proposals, the private institutions will be able to benefit from some of the same interventions than the public institutions, with focus on curriculum, management and human resources upgrading, as well as new equipment. Under the assumption of an average amount per grant of US$400,000 and taking out the initial and on-going TA and M&E activities, it is expected that about 12 institutions should be able to benefit from a grant. Key elements accompanying the competitive grant scheme mechanism will be the support offered to pre-selected schools for the preparation of school development proposals; the competitive selection of the proposals according to pre-identified criteria; and the close monitoring and evaluation of the scheme by FAFPA in coordination with the involved technical departments. Details on school selection criteria are included in Annex 2. 35. Support to the Ecole Normale de l’Enseignement Technique et Professionnel (ENETP) (US$0.5 million): The ENETP will have a key responsibility in the quality assurance of the new curricula and in the development and implementation of the teacher training modules (for both public and private institutes), as requested by the DNETP and DNES, in alignment with the validated curricula. The ENETP will receive a support from the project in terms of limited equipment, development of teacher training modules and strategies, and training of teachers’ trainers, including training workshops and seminars in Mali. This support will also contribute to strengthen the School improving its capacity for teacher training across the board and help build a basis to address instructor quality in the long term. 36. Beneficiaries: the main beneficiaries of this sub-component will be the 2,360 students currently enrolled in the five identified supported public institutions in the priority sectors (at various levels) and about 1,000 students (assuming an average size of private institutions of about 300 students and about one-third of them benefitting from the new/improved programs) in private institutions for a total of over 3,000 students currently enrolled in the priority sectors. It is also expected that the institutes’ rehabilitation and improvement, including some of the new programs, will bring to an expanded enrollment in the priority sectors by mid to end of the 10 project implementation of about 800 students at CAP level, 400 at BT level and 150 at the certificate level per year in the public sector (which could increase if dual-training is applied), and about 400 students per year in the private sector. 37. Key activities: To sum up, the sub-component will finance a set of activities across public sector institution including: (a) TA for specific needs’ assessment, development and application of new curricula, entrepreneurship modules, partnership model and assessment, and feasibility studies for new investments; (b) delivery of teacher training; (c) equipment (for classrooms, workshops, labs); and (d) rehabilitation and upgrade of spaces/classrooms (for Bankass, IFSAB, Kayes and Missabougou). It will also support: (a) TA, including operational manual, guiding material and workshops for the operation of the private sector TVET institutions competitive fund (sub- grants) and preparation and implementation of school development proposals; and (b) the sub- grants themselves; as well as TA for the development of teacher training modules and strategies, training of teachers’ trainers, and limited equipment for the ENETP. An awareness campaign on TVET will also be supported under Component 3. 38. Implementation arrangements: This sub-component will be implemented by the PCU (anchored to the MEFP) and the FAFPA (selected as Executing Agency (EA) for the support to private sector institutions) under the leadership of the Direction Nationale de l’Enseignement Technique et Professionnel (DNETP), within the MEAPLN, and the Direction Nationale de la Formation Professionelle (DFP), within MEFP. The training of teachers activities will be carried out in coordination with the Direction Nationale de l’Enseignement Superieur (DNES), within the Ministry of Higher Education, and the Ecole Normale de l’Enseignement Technique et Professionnel (ENETP). More details on implementation arrangements are included in Annex 3. Sub-component 1.2: Strengthening Skills Development for Out of School Youth (Total costs US$15.1 million) 39. This sub-component will improve education and training for employability by supporting innovative skills development programs for out of school youth. The sub-component will help improve the employability of out of school youth through a combination of interventions which have the potential to reach out to a significant number of youth between the ages of 15 to 29 with no or limited education in urban, peri-urban and rural areas of the whole country, including areas with low density population and post-conflict where non-formal education can be, respectively, a powerful alternative to traditional education and a powerful tool to re-integrate disaffected youth. More specifically the project will support revamped dual-apprenticeship and short-term decentralized skills training programs tailored to the needs of two distinct categories of out of school youth: 15 to 24 age old with some primary up to lower secondary education living in urban areas, and 15 to 29 age old with less than lower secondary education (including no prior education) living in peri-urban and rural areas, while also ensuring broad participation of girls. Youth exiting from these programs will have the opportunity to receive additional entrepreneurship training, start-up funds and easier access to credit through the entrepreneurship program for non-graduates in component 2. 40. Dual apprenticeship program (US$7 million): Dual apprenticeship programs in urban localities combining formal training to confer cognitive and technical skills (1/3 of the time) and 11 apprenticeship (accounting for 2/3 of the time) spent in a formal or informal organization have been shown to be an effective and high impact form of apprenticeship. Building on the positive lessons of the first phase of the dual apprenticeship program supported by Swiss Contact, but also learning from some of this program’s weaknesses and striving to address the needs of the youth group it targets, the project will support an expansion and upgrade of the program (to double its coverage over the next five years) along several directions, including opening it to other sectors and unemployed youth, providing more flexibility in duration and schedules, and a stronger focus on strengthening technical, numeracy and literacy and pedagogical skills, as detailed in Annex 2. Apprenticeships would include, as in the first phase, 80% of time in the workplace and 20% of time in training at an accredited private training center (where emphasis is given to both technical and basic skills). These schools would also include some of the institutes supported under sub-component 1.1. 41. Decentralized skills training program (US$8.1 million): Building on international lessons and on the experience of MEFP, with its existing modular training program, and donor/NGO-funded initiatives, the project will support a decentralized non-formal vocational education and training program for out of school youth to help prepare them for successful integration in the local labor market in agriculture, livestock, construction, and other activities in the key priority sectors, with focus on youth with very limited or no education in peri- urban and rural areas, including post-conflict where this program can also help reintegrate youth at risk. The program will reach out to the rural and hard to reach areas and vulnerable youth by providing short-term training in a flexible way to reflect local conditions and needs in terms of length, content, delivery mode, and priority sub-sectors/occupations, while prioritizing workplace-based training (encouraged through stipends for local producers) which has been shown to be the most effective to learn a job and help address the shortage of schools. Flexibility in training schedule both on and off the workplace will also be factored in to ensure higher participation of girls by making it possible for them to address domestic and family commitments. Importantly, facilitators will be hired to accompany youth during the whole training process, from initial awareness and mobilization, to choice of the workplace, making the most of training opportunities and providing psychological support and job counseling, including some foundations of entrepreneurship. To take into account the local dimension, the program would rely on the close involvement of the MEFP’s deconcentrated regional offices working in close coordination with the regional assemblies (Conseils Regionaux) and other local actors, including local professional associations. Following a demand-driven approach, it is at this level that sector, sub-sector and occupational choices, as well the selection of beneficiary youth, will be made. Details on the functioning of the program are included in Annex 2. The most motivated youth will then be able to participate in the entrepreneurship program supported by component 2. 42. Beneficiaries: The dual apprenticeship program will benefit 4,500 (over 5 years) unemployed youth in the 15 to 24 age range with lower secondary education or less. The program will prioritize the three key priority sectors in specific occupations which will be confirmed during the first year of the project and extend to all the country’s regions in selected urban localities. The decentralized skills training program will benefit about 20,000 (over 5 years) unemployed youth in the 15 to 29 age range with lower secondary education or less in the key priority sectors in in selected peri-urban and rural localities of the whole country with high 12 levels of poverty and unemployment. Women will constitute about 30% of the dual- apprenticeship program and 40% of the decentralized training program. 43. Key activities: To sum-up the project will support under this sub-component the following activities related to the apprenticeship program: (a) TA for the identification of additional fields and locations, development of entrepreneurship and other training modules, certification and legal frameworks; (b) the delivery of the 20% training time in the institutes; (c) pre-apprenticeship training of youth; (d) additional training for master apprentices; (e) kits for apprentices and equipment for master apprentices; (f) testing, evaluation and certification of apprentices; and (g) operating costs of the program. The following activities will be supported to support the decentralized skills training program: (a) TA for the mapping of workplace, complementary training and locality options; (b) training and stipends for local practitioners/producers; (c) equipment for local practitioners/producers; (d) the delivery of complementary training off the workplace; (e) training and fees for facilitators; (f) basic post- training installation kits for youth; (g) awareness campaigns; (h) training of key stakeholders and operating costs of the program; and (i) impact evaluation of the program. 44. Implementation arrangements: The dual-apprenticeship program will be implemented by FAFPA (as EA) under the leadership of the DNFP, and in coordination with the Federation of Craftsmen (Fédération des Artisans du Mali, FNAM), other industrial associations, and training providers called upon to deliver complementary training modules. The decentralized non-formal skills training program will be implemented by the PCU under the leadership of the DNFP, in coordination with the MEFP’s deconcentrated offices and Regional Technical Commissions comprising of the Regional Assemblies, the deconcentrated offices of ANPE and APEJ and local community and professional associations. FAFPA, and the DNFP and its deconcentrated offices will receive significant institutional strengthening to deliver the programs, including through strengthening measures included in Component 3. Component 2: Private-Sector led Job Creation for Youth (Total costs US$25.1 million) 45. The project’s second component will support private sector led youth employment strategies in Mali to improve job opportunities for youth. While investing in skills development to start preparing future workers and addressing the short-term skills development needs of out of school youth, it is necessary to work on both sides of the employment equation by supporting parallel broader strategies to promote employment and job creation for youth. This is critical to ensure a successful transition from skills development to employment. The component’s design will reflect instruments that address critical constraints to job creation/employment generation faced by would-be entrepreneurs and existing MSMEs promoting a more robust private sector. It will target both the formal sector, still embryonic, to support its further growth, and the informal sector where there is an urgent need for more sustainable better jobs, to help absorb youth with different education and training levels, including some of the youth trained under Component 1. In this spirit, this component will support private sector led job creation strategies in Mali to improve job opportunities for youth through two key strategies: (A) entrepreneurship for the youth; and (B) development and strengthening of established micro, small and medium enterprises. The component will target the same sectors than Component 1, with window for supporting new emerging sectors (including for instance the Telecom and health and 13 pharmaceutical sector). It will also reflect synergies and collaboration with IFC activities with regard to business environment reform and private and financial sector development. Sub-component 2.1: Supporting Entrepreneurship for Youth (Total costs US$16.9 million) 46. This sub-component will support the employability of youth through entrepreneurship development. Self-employment is likely to be a key source of jobs in Mali, including for women who have high potential for success in particular in rural areas, making it imperative to address the key constraints to self-employment in a comprehensive way. While Component 1 supports the development of some entrepreneurship skills in youth formally and non-formally trained, this sub-component will bring the support further by accompanying would-be young entrepreneurs all the way to creating their own enterprise through two programs, adapted to 21-35 years youth with different education and training levels, addressing key constraints. 47. Entrepreneurship program for youth with limited education (CAP or non-formal training) (US$9.1 million): through this program youth with lower level formal technical education and non-formal education and training exiting education programs now or already on the market will receive support to create a micro-enterprise. The Mali and international experience show that some elements need to be in place to encourage micro-entrepreneurs, including in rural areas, these are creating awareness on entrepreneurship issues, providing coaching on developing simple business plans, and bringing in some start-up capital while facilitating access to micro-credit. Building on this approach, the proposed program will offer training, seed funds and easier access to initial finance and credit for youth as further described in Annex 2. Key highlights of the program are the application of pre-identified transparent criteria after an intensive local awareness campaign run jointly by the MEFP and the APEJ to attract a pool as large as possible; a two level training program focused on in-depth training and coaching on preparation of simplified business plans, micro-enterprise management, leadership and decision-making with the combined support of mentors and trainers for the most motivated youth; the provision of seed funds (capital endowment of about US$400) to about 60% of these would be entrepreneurs to motivate them to implement their simplified business plan over a 12 month period; easier access to microfinance through support to the FARE (Revolving Fund for Employment) which will intervene in guarantee of the loans granted to the entrepreneurs (for about US$2,000 on average); and markets and operational assistance and coaching for the whole 12 months, with the objective of leading to viable enterprises. More details on the entrepreneurship promotion and training program are included in Annex 2. It is expected that this entrepreneurship program would lead to the creation or consolidation of about 3,000 micro or small enterprises in the three key priority sectors of the project and emerging sectors, leading to the creation of about 6,000 new jobs by the end of the project. 48. Entrepreneurship program for youth with at least upper secondary education (technical or non-technical) (US$7.8 million): this program will provide opportunities for successful entrepreneurship for youth with at least upper secondary education who have potential for creating somewhat larger enterprises in the informal and formal sector. Building on best practices from international experiences and Mali, the program will support a Business Plan Competition (BPC) for 21 to 35 years old coming out of school (including from the institutes supported in Component 1) or already on the labor market. The BPC process will combine 14 training, mentoring, and technical and financial support to help youth translate their initial enterprise idea or development projects of young enterprises (of less than 5 years) into realistic and attractive business plans and ultimately viable and high performing companies. The BPC cycle will include three distinct phases: (i) calls for candidacy, selection, awareness to entrepreneurship issues; (ii) competition including capacity building in the development of business plans, preparation of business plans with mentors, selection of best plans and awards; and (iii) post-competition operational follow-up. Details on the BPC are provided in Annex 2. It is expected that the competition would take place in two cycles of two years leading to 500 plans/projects viable per cycle. Of these about 500 plans/projects would receive an award (for an average of US$5,300) to be used as seed funds for an enterprise, complemented, for a sub-set of them, by enhanced access to credit through the support of the FARE which would intervene in guarantee of the loans granted to the entrepreneurs (for about US$ 14,000 on average). It is expected that this program would lead to the creation or consolidation of about 500 small enterprises in the three key priority sectors of the project and emerging sectors, leading to the creation of about 2,000 new jobs by the end of the project. 49. Beneficiaries: The entrepreneurship program for non-graduates will provide level 1 training to about 10,000 youth, level 2 training to about 6,000 youth and the full package, including access to start-up funds and micro-finance, to about 2,500-3,000 youth in all the country’s regions in rural and urban areas. Women will be expected to represent about 50% of the beneficiaries. Youth joining from the decentralized skills training program will be able to move directly to level 2 training. Youth having launched one to three years old micro or small enterprises and who want to consolidate them will also be eligible to participate in the program. The entrepreneurship program for youth with at least secondary education will target about 2,000 youth from urban areas selected to present initial projects’ proposals, and from these about 1,000 youth receiving capacity-building on business plans to participate in the BPC, with about 50% (500 youth) receiving the awards and coaching. The program will target 50% of start-ups and 50% of less than 5 years old enterprises. 50. Key Activities: Key activities supported by entrepreneurship programs are: (a) the training of trainers for the entrepreneurship training; (b) entrepreneurship and business plans trainings of various levels; (c) seed funds for would be or new entrepreneurs; (d) guarantee funds to support access of youth to credit; and (e) coaching activities. 51. Implementation arrangements: The entrepreneurship program for non-graduates will be implemented by APEJ (as EA) in coordination with the FARE and under the co-leadership of the MEFP and Ministry in charge of Industry and Investments (relevant departments) and the overall coordination of the PCU. The entrepreneurship program for graduates will be implemented by a private institution selected competitively (indicated broadly as an EA) in coordination with the FARE and under the co-leadership of the MEFP and Ministry in charge of Industry and Investments (relevant departments) and the overall coordination of the PCU. This implementation arrangement strives to strike a balance between using existing structures and strengthening them (the APEJ) and involving private sector entities with higher levels of readiness and flexibility. About US$6.1 million allocated for the entrepreneurship programs, and corresponding to a significant share of the proposed credit envelope, will be transferred to the 15 FARE which will manage them through partner banks or institutes of micro-finance. More details on these arrangements are included in Annex 2 and 3. Sub-component 2.2: Supporting Established Small and Medium Enterprises for Job Creation (Total costs US$8.2 million) 52. This sub-component will support the employability of youth through the development and strengthening of established SMEs (with more than 5 years of life). The sub-component will provide business support to selected enterprises with plans to scale-up including facilitating access to markets and credit, and ad-hoc specialized managerial, business and technical expertise. In alignment with the overall sector focus of the project, the following sectors, with a value-chain approach, will be considered for priority support: agri-business sector, which includes agriculture and livestock sector products with emphasis on fruits and vegetables; construction; and mining sector (with the development of the activities of subcontractors), while leaving space for emerging sectors. Economic and geographical criteria will be taken into account in the identification of the sub-sectors. Increased job creation will contribute to create job opportunities for the over 3,000 youth trained in the technical institutes supported under component 1, while at the same time upgraded training under component 1 will help ease some of the skills constraints faced by firms closing the virtuous cycle. More specifically, the project will support enterprises in targeted sectors through two- mutually reinforcing - instruments aimed at improving their competitiveness and addressing credit constraints. 53. Matching grants (US$6.7 million): the objective of these grants is to help high potential local SMEs (e.g. rice importers in Office du Niger, small and medium size mango and papaya producers in Bamako, Sikasso and Ségou) improve their productivity, production processes, processing and/or marketing, by facilitating their access to finance, value chain development and just in time specific skills, while supporting sound business plans and developing partnerships with good practice investors. SMEs will be able to apply to two windows: (i) matching grants for TA (non-financial services); and (ii) matching grants to bring in financial contributions to scaling-up plans. The grants will finance non-financial and financial services within ceilings and shares determined by the sector and the size of the beneficiary SMEs (grant shares for financial services would be about 50/50 project/firm and for non-financial services about 70/30 for project/firm). More details on the matching grants, including the selection criteria for beneficiary SMEs are detailed in Annex 2. 54. Support to the FARE (US$1.5 million): In full alignment with sub-component 1 the FARE will receive additional resources to help it fulfill its role of guarantor of loans for SMEs (for about US$ 30,000 on average) and therefore support long term financing to SMEs (overall expected to be the same firms that receive the matching grants) in selected value-chains. The FARE works closely with several banks, including the BMS, and would also have the capacity to select partner banks competitively to get lower interest rates for SMEs. Overall, the FARE will receive about US$7.6 million under Component 2 which should significantly strengthen it and help alleviate credit constraints for new and established MSMEs in Mali. Mode details on the functioning of the FARE within the entrepreneurship and SME programs are provided in Annex 2 and will be further detailed in the operational manual. 16 55. Beneficiaries: Matching grants will benefit about 180 SMEs in key priority and emerging sectors/value-chains, with about 50% of them expected to get facilitated access to credit through the support of FARE. It is expected that the sub-component will contribute to create about 1,300 new jobs. 56. Key activities: the sub-component will support: (a) matching grants; (b) guarantee loans to support access of SMEs to credit; and (c) technical assistance activities, including the operational manual of the matching scheme. 57. Implementation arrangements: The matching grants will be managed by a private institution selected competitively under the leadership of the Ministry in charge of Industry and Investments (relevant departments) and the overall coordination of the PCU. The experience in Mali shows that this is the best arrangement to ensure the effectiveness and impact of the funds. The institution will be the same than the one managing the matching grants. The remaining funds will be transferred to the FARE for their management. 58. Complementary integrated support to MSMEs through the IFC: Finally, this project’s component will further leverage IFC’s strategic directions and operations so as to strengthen impact and delivery effectiveness, with a particular focus on value-chain financing instruments. In particular, the IFC will strengthen Mali’s new, emerging and established MSMEs through three key areas of intervention squarely targeting the reviewed constraints: (A) Improvement of access to credit for MSMEs notably through: (i) Supporting leasing development including a strengthening of the currently weak regulatory framework and further development of leasing products (Africa Leasing Facility II, focused on fragile countries); (ii) Increasing the use of Risk Sharing Facility, which provides partial guarantee to commercial bank in order to increase loans to SMEs, especially in underserved segments; (iii) Investing in viable micro-finance institutions; (iv) Developing the Global Index Insurance Program, which provides weather index insurance to smallholders and facilitates their access to credit; (B) Deployment of capacity building products to MSMEs notably through: (i) Strengthening Banks to improve their governance and capacity to manage loans through the Africa Micro, Small and Medium Enterprise Program (AMSME); and (v) Deploying capacity building providing an integrated package of advisory services (business training, mentoring/coaching, consulting, financial intermediation through Business Edge and SME toolkits program); and (C) Improvement of the investment/business climate at sector, country and regional levels through the third phase of its country specific Investment Climate program and regional initiatives (OHADA and ECOWAS), notably aimed at: (i) Improving Doing Business indicators; (ii) Supporting the government in implementing its strategy of investment promotion in key sectors including agriculture and mining to enhance potential for job creation; and (iii) Further assessing constraints and drivers to entrepreneurship in Mali including assessing the economic feasibility of a Government business incubator to offer financial and non-financial support to firms. Component 3: Institutional Strengthening and Project Management (Total costs US$8.7 million) 59. This component will support four main types of activities: (a) an effective employment information system, including capacity building for the labor market observatory, and support to 17 conduct employment and tracer surveys and SME inventories and surveys; (b) a more coherent skills certification and employment promotion framework, including updating of relevant legal frameworks, policy documents, and promoting multi-sector consultation frameworks; (c) the institutional strengthening of the relevant technical departments (within MEFP; MEAPLN; and the Ministry in charge of Industry and Investments) and Executing Agencies in charge of the implementation of Components 1 and 2, including capacity building also for monitoring and evaluation, additional human resources, selected equipment and operating costs; and (d) support to the project’s PCU, including project coordination, fiduciary processes, monitoring and evaluation (M&E), selected equipment and operating costs. B. Project Financing 60. The lending instrument will be an Investment Project Financing (IPF), financed under an IDA credit of US$36.1 million equivalent and IDA grant of US$26.9 million equivalent, with a five and a half year implementation period, with an expected effectiveness date of November 30, 2014. A Project Preparation Advance has become effective on April 1, 2014. The project’s closing date is June 30, 2020. Other lending instruments were considered, including a budget support modality (Development Policy Operation--DPO) and Program-for- Results (PforR), but they were not selected because they could not respond to the need for targeted short-term investments, as well as the need to carefully track individual activities and expenditures for a complex and highly innovative operation for Mali. Furthermore, in the absence of a strong country public fiduciary system, they were deemed not appropriate. 61. The Government has confirmed that it will contribute to the project for an amount equivalent to US$1.9 million, to finance the salary of the Project Coordinator (civil servant), and other supplemental operating costs related to the piloting of the project. It was confirmed that IDA procurement procedures would not apply in this case. Project Cost and Financing 62. Total project costs are the following: Project Components Project cost IDA Financing % Financing 1. Education and training for employability 27.4 27.4 100 2. Private-Sector led job creation for youth 24.4 24.4 100 3. Institutional strengthening and 7.7 7.7 100 project management Total Base Costs 59.6 59.6 100 Physical contingencies 1.6 1.6 Price contingencies 1.8 1.8 Total costs 63.0 63.0 100 Note: The credit amount includes recommitments of SDR 0.5 million (US$0.8 million equivalent) which was cancelled from the Mali Energy Support Project (IDA-46170). 18 C. Lessons Learned and Reflected in the Project Design 63. The Project design builds upon a large number of national and international experiences, from which a number of lessons have been drawn: a. Adopting an inclusive and participatory approach during project preparation is key to building ownership for the projet, all the more if multi-sectorial. A large number of stakeholders representing the government (ministries of education, ministry for investment and private sector, etc), the private sector (Conseil National du Patronat, Association Professionnelle des Banques et Etablissements Financiers, Assemblée Permanente des Chambres de Métiers du Mali, Assemblée Permanente des Chambres d’Agriculture du Mali, et Fédération Nationale des Artisans du Mali), youth organizations, educational institutions, and teachers associations have been included during project preparation, notably through the project Steering Committee and two working groups on education for employability and entrepreneurship and SMEs. The project proposed activities are the product of comprehensive consultations and discussions with all those actors. b. Indicators to measure project performance should be chosen carefully. In Mali, data are scarce and often difficult to collect. Therefore, project preparation must include due diligence to ensure accurate data. Indicators need to be realistic and useful. Complex indicators are often difficult to measure and they may be a source of controversy if they are used to inform change. Drawing on this lesson, the proposed project suggests the use of a limited number of relatively straightforward indicators for measuring outcomes and implementation progress. c. Involvement of employers, flexibility in delivery tailored to beneficiary needs and the right skills mix are some of the key determinants of success of education and training programs. TVET education is unlikely to be effective without the close involvement of employers. Building from successful reforms in Europe and Asia, the project puts potential employers in the driving seat through strong partnerships in curriculum design and implementation. 1 The project also builds on the key factors of success coming out from rigorous reviews and impact evaluations of non-formal education and training programs in Africa, Latin America and elsewhere 2 to design the non-formal skills training program with peri-urban and rural focus. These appear to be: flexibility in the delivery mode (using various 1 East Asia TVET systems come to mind, in particular Singapore, Korea and Malaysia. Mali for sure is very far from having a comparable productive sector, but some important features of these models, such as the active role of private sector representatives in program design, teaching and decision-making in general can be replicated with some adjustments (with smaller firms or employers’ associations, prior technical assistance, etc). 2 Examples of evaluated programs in Africa include: the Sierra Leone’s Support to Strengthen the Capacity of the Community Education Centers for Literacy and Vocational Skills for Women and Girls and Youth Reintegration Training and Education for Peace (YTREP) Program; Liberia’s Youth’s Alternative Education Project; Ethiopia’s Community Based Non formal Livelihood Skills Training for Youths and Adults (EXPRO) Program; Uganda’s Non- Formal Education and Livelihood Skills Training Program; in Latin America: the Jovenes programs implemented in many Latin American countries (although more geared towards the formal sector and therefore applicable to urban areas). These and other programs have been comprehensively reviewed in Yilmaz, di Gropello and Inoue (2103): “Out of school youth in Sub-Saharan Africa: a policy perspective” (mimeo) and The World Bank (2013): Youth unemployment in Sub-Saharan Africa (Flagship report). Another useful consulted source on Latin America is Cunningham and others: Youth at Risk in Latin America and the Caribbean: Understanding the Causes, Realizing the Potential, in Directions in Development, World Bank. 19 types of providers, including community centers and local practitioners, and flexible schedules) to reach out broadly while recognizing that work is a part of youth’s lives in many countries and regions and workplace-based training has an edge on traditional training in particular when combined with off-the-job training sessions; decentralized management of programs with strong community involvement combined with central support; use of local facilitators responsible for community mobilization, coordination, program monitoring, youth coaching; combination of technical with literacy, numeracy and life skills; and interventions to facilitate transition to work, with focus on entrepreneurship training and provision of seed money to start an activity, because non formal training programs must consider that most youth will be self-employed or work for a small, informal enterprise. d. A comprehensive strategy, tailored to youth characteristics, is needed to foster entrepreneurship for youth. Youth face multiple constraints in transitioning from training to creating their own enterprise. Lessons from Mali and elsewhere (including, among others, the “Technoserve” experience in Cote d’Ivoire and the “YouWin” experience in Nigeria, as well the experience with the PAJM in Mali) show that several complementary building blocks need to be in place to support entrepreneurship, including coaching, seed funds and easier access to credit. The experience also shows that the process needs to be tailored to different youth characteristics, with business plan competitions working well with more educated youth, and simpler selection methods required for youth with limited education. Building on those lessons, Component 2 supports the creation of new MSMEs through the organization of a business plan competition to identify and nurture young talent, when relevant according to youth characteristics, and by providing hands-on training and coaching, and start-up funds to launch projects in high potential sectors (agriculture, livestock, construction and public works, services such as ITC, health, etc.). The private sector will be closely involved in the management of the programs. e. Implementation choices need to achieve a balance between short-term results and longer term institutional strengthening objectives. Mainstreaming project implementation arrangements in government structures, with adequate technical assistance to support civil servants’ responsibilities, and strengthen the executing ministries capacities, builds stronger ownership of the reforms and is more likely to contribute to sustainable results. At the same time ensuring sufficient short-term capacity, continuity of effort and innovation is also critical to satisfactory project performance. The project strikes a balance by supporting, on the one hand, a light PCU and competitively selected private sector institutes to execute key project activities; and, on the other hand, anchoring the PCU squarely under the MEFP, strengthened at both central and decentralized level to coordinate project’s activities, and involving and strengthening existing strategic government agencies (FAFPA, APEJ, FARE) to execute key project activities. f. Implementation choices also need to strike a balance between centralization and decentralization. While a broader centralized coordination, quality control and reporting framework is necessary to maintain unity and overall sense of direction, decentralizing key activities to the best positioned actors is also very important to ensure higher rapidity, impact and relevance. The project strives to reach a balance between delegating activities to relevant 20 ministry’s departments and front-line executing agencies and maintaining oversight and reporting centralized through a central project coordination unit. IV. IMPLEMENTATION A. Institutional and Implementation Arrangements 64. The multi-sectorial nature of the project will require an implementation setting that takes this into account in terms of institutional set-up. The Project will be under the auspices of the MEFP. No later than three months after effectiveness, multi-sectoral Project implementation Steering Committee (SC) will be put in place through a government decree to include all the main project stakeholders, in order to reflect the multi-sectoral nature of the Project. This SC will confirm the Project implementation SC just put in place through a minister’s decision, which builds on the current well performing Project preparation SC. The SC will be chaired by the Minister of the MEFP or his representative. 65. The MEFP will have a global leadership and coordination role, through the SC and by hosting the Project Coordination Unit (PCU), as well as the leadership or co-leadership of all sub-components through its relevant departments. The MEAPLN through the DNETP will have the co-leadership of sub-component 1.1, with the DNES, part of the Ministry in charge of Higher Education, also involved on teacher training issues. The Ministry in charge of Industry and Investments through its relevant departments will have the co- leadership of sub-components 2.1 and 2.2. All these ministries will have an active role in decision-making, by also sitting in the SC, as well as technical activities (including the drafting, or co-drafting, of terms of reference and technical specifications, participation in technical evaluation committees, etc), and in contract and other project activities monitoring. 66. A PCU, housed within the MEFP for capacity building and greater ownership of the project and its sustainability, will be responsible for the overall coordination as well as monitoring and evaluation and reporting of the project. Beyond its broader implementation role, the PCU will directly handle procurement, financial management/accounting and contract management for some sub-components or part of sub-components (see below), while providing oversight, training, and quality control to the Executing Agencies (EA) directly handling these tasks in other sub-components. The recruitment of the project coordinator will be a condition of effectiveness. It was agreed during negotiations that if the project coordinator is a civil servant, with qualifications and experience acceptable to the Bank, his salary would not be financed under the credit and/or the grant. 67. Project’s specific implementation responsibilities are summarized below: Component 1: Education and Training for Employability • Leadership: MEFP, MEAPLN and to some extent Ministry in charge of Higher Education through relevant departments • FAFPA : Implementation of Apprenticeship and Grants to private TVET institutions • PCU: Direct implementation of component 1.1 except grants to private sector TVET institutions and component 1.2 except apprenticeships, and quality control to FAFPA 21 Component 2: Private-Sector led Job Creation for Youth • Leadership: MEFP and Ministry in charge of Industry and Investments through relevant departments • APEJ : Implementation of Entrepreneurship for non-graduates • Private consulting firm : Implementation of Entrepreneurship for graduates and Implementation of Matching grants • FARE : Guarantee Funds, working with APEJ and private firm • PCU: Quality control of EA Component 3: Institutional Strengthening and Project Management • Leadership: MEFP (in consultation with other concerned ministries) • PCU: Direct implementation 68. The signature of subsidiary agreements between MEFP and FAFPA, MEFP and APEJ, MEFP and FARE and MEFP and the competitively recruited private firm will be conditions of disbursement for the relevant activities. These agreements will define together with the PIM the specific roles and responsibilities of each actor. The capacities of the ministries and the EAs involved in project implementation will be strengthened through component 3. 69. Detailed Project implementation arrangements are provided in Annex 3 and will be further developed in the Project Implementation Manual (PIM). The PIM (including coordination mechanisms between all stakeholders involved in project implementation, detailed implementation mechanisms of each sub-component, administration, financial management, accounting and procurement procedures applicable to the project) will be a condition for the effectiveness of the credit. B. Results Monitoring and Evaluation 70. A comprehensive set of indicators will be utilized for monitoring progress towards achievement of the PDO. A robust M&E system will be developed to ensure adequate information flows among participating agencies, ministries, and other relevant institutions and to document progress and impact of project activities in a timely and effective manner. Indicators will be tracked through this comprehensive M&E system set up under the project and housed at MEFP/PCU. The MEFP/PCU will be responsible for implementing project monitoring (inputs, outputs, financial and technical audits). 71. Most of the data for monitoring project outcomes will come from regular project reports, key existing surveys and the Labor Market Observatory (LMO). When functional, the LMO will support collection of information regarding: (i) labor market trends; (ii) labor market insertion of graduates and trainees of the skills training programs (tracer surveys); and (iii) feedback from employers, and be able to support impact evaluations of employment promotion programs. These data will be supplemented by a beneficiary survey (baseline survey to be set up during the first year of project implementation) to be undertaken every three years in order to track: (i) employer satisfaction with the training received by newly hired; (ii) youth satisfaction with the training received; and (iii) resources received and employment status of program beneficiaries (through a tracer study component of the beneficiary assessment). They will also be 22 complemented by inventories/surveys of SMEs to document trends and key SME’s characteristics in Mali (in terms of size, age, location, sector and sub-sector, staff, etc). Finally, the monitoring and evaluation of the project will include an impact evaluation with an experimental design (randomized control trial) of the short-term large scale skills training program which if effective has the potential to be a game changer to address the skills needs of out of school disadvantaged youth in Mali. More impact evaluation’s details are provided in Annex 3 and the PIM. Data generated from the project will be disaggregated by gender to track the female participants of the programs, in order to ascertain whether the female enrolment targets are being fulfilled or not. M&E capacities of MEFP and other agencies will be further supported through Component 3, including through a TA to improve M&E systems of the different implementers. See Annex 1 for Results Indicators, including baseline and target values. C. Sustainability 72. A number of factors will contribute to the project’s sustainability: a. The project was developed following a highly participatory approach including all project stakeholders. These stakeholders will be involved in the project implementation Steering Committee. b. Youth issues are very high on the political agenda in Mali and by supporting the youth employability agenda this project is likely to have strong and enduring support. c. The project design includes some elements which should be instrumental to the sustainability of the reforms that it supports. Some of these elements are: the involvement of employers in the supply of and demand for skills to strengthen long-term demand for a stronger TVET; a focus on more efficient institutions, including through the use of performance contracts; and the strengthening of key public institutions involved in skills development and youth employment, such as the FAFPA, APEJ and FARE, which are three essential pillars of the skills and youth employment system in Mali and therefore well positioned to ensure sustainability to the reforms. d. More specifically, the project will also support strategies for sustained private sector engagement along key dimensions including the role of employers as: (i) providers of labor market information, (ii) providers of information on occupational standards, (iii) collaborators with faculty in creating new curricula, in validating or fine-tuning existing programs, and in defining program sequencing and learning pathways, (iii) hosts of internships for students and faculty, and (iv) sources of practitioner-experts to co-teach courses. Part of the strategy will be implicit in the application of the competency based approach to curriculum and program design. More broadly the project’s joint leadership between education and training and the private sector is expected to lead to much stronger synergies at all levels, further supported by a revision when needed of the legal frameworks. e. Many activities supported by the project have been designed in collaboration with the IFC and are likely to continue to be supported by the IFC after the credit closing date. 23 V. KEY RISKS AD MITIGATION MEASURES A. Risk Ratings Summary Table Risk Category Rating Stakeholder Risk S Implementing Agency Risk - Capacity S - Governance S Project Risk - Design S - Social and Environmental L - Program and Donor M - Delivery Monitoring and Sustainability M Overall Implementation Risk S B. Overall Risk Rating Explanation 73. Key risks likely to affect the PDO include still a volatile political and social environment, and weak implementation capacity of institutions in Mali. In particular, institutions in Mali experience weak implementation capacity due, among other factors, to a weak fiduciary environment and poor governance. Specifically in relation to the project, some risks may be associated with the multi-sector nature of the operation, entailing possible tensions between the many stakeholders involved at implementation stage, and the risk of conflict in some areas of project implementation. Risk mitigating measures have been identified and discussed in the ORAF. VI. APPRAISAL SUMMARY A. Economic and Financial Analysis 74. The project team conducted a comprehensive economic and financial analysis of the Project—the details of this analysis, together with sensitivity analyses, can be found in Annex 6. The analysis assesses the costs and benefits of the three main sub-components from a quantitative perspective generating a range of net present value (NPVs) and internal rate of return (IRRs) reported in the Table below. The Table also reports the results for the overall project since the effects of different interventions, such as technical assistance under Component 3 and support for SMSEs under Component 2, have cross-component effects that are captured in the wage and employment improvements under Component 1. 75. According to these outcomes, the project appears to be justified from an economic perspective. Costs include investment, recurrent costs to the government, and opportunity costs when applicable. Benefits are measured in terms of improvements in employability, increased 24 salaries, and lower turnover rates. Both base and alternative scenarios are driven by realistic, plausible and conservative assumptions about costs and benefits. 76. The interventions have many other expected benefits that could not be quantified and are reported in Annex 6. NPV and IRR by sub-component (million 2014 US$) (Base scenario, calculated over 25 years) NPV IRR Component 1 - TVET improvements and expansion and $702.0 37% non-formal skills development programs Component 2 – Entrepreneurship programs $11.0 15% Component 3 - Technical Assistance ($8.7) NA TOTAL $706.9 31% 77. In 2013, the Republic of Mali budgeted approximately US$522.5 million for its public education expenditures and an estimated US$27.9 million for public TVET education. The total investment by the World Bank (US$63 million) is about 12 percent of the total education budget. The fiscal impact from the Project (annual recurring costs that must be financed by the government) amounts to less than 2 percent of the total public expenditure starting 2015 of the public spending on TVET. Thus, the ongoing costs are a small share of the current expenditures on TVET. Both public and private TVET institutions will increase their recurring expenditures to fund the additional teaching staff and maintenance costs related to the enrollment expansion funded by the project. We estimate that the additional resources generated by expanded enrollment will be sufficient to cover these recurring costs. B. Technical 78. The project design is supported by strong technical and analytical underpinnings. First, it has emerged from the technical inputs of a truly multi-sectoral and multi-unit team on the World Bank side (being a joint effort of the HD and FPD departments, and the IFC) and country side (with the three Ministries in charge of Education and the Ministry in charge of Investments and Private Sector intimately involved in the design). 79. Second, the design of formal and non-formal skills development interventions, entrepreneurship and SME support programs builds on lessons from international experience as documented in several studies and impact evaluations cited in the PAD, while striving to adapt them to the case of Mali. The key lessons from these studies and evaluations are reported above under “lessons learned” and in Annex 6 (Economic Analysis). In terms of the adaptation to the Mali context, such adaptation has first of all required the development of an in-depth understanding of key sector issues and all government, donors and NGOs programs in these areas, with main lessons learned and key challenges, through multiple individual and group meetings, -including within the two working groups on “education for employability” and “entrepreneurship and MSMEs” set up for the preparation of the project, employers’ associations and private sector, and youth associations. Secondly, it has also entailed the analysis of multiple sector, program and project documents summarized elsewhere in the document and in the reference list. 25 C. Financial Management 80. A financial management assessment of MEFP who will have the overall coordination role under the project was conducted. The objective of the assessment was to determine: (a) whether the fiduciary department (DFM) of the MEFP has adequate FM arrangements in place to ensure that the funds will be used for the purposes intended in an efficient and economical manner and the entity is capable of correctly and completely recording all transactions and balances related to the Project; (b) the Project’s financial reports will be prepared in an accurate, reliable and timely manner; (c) the entity’s assets will be safely guarded; and (d) the Project will be subjected to auditing arrangements acceptable to the Bank. The assessment complied with the Financial Management Manual for World Bank-Financed Investment Operations that became effective on March 1, 2010 and AFTFM Financial Management Assessment and Risk Rating Principles. 81. Three other ministries will be involved in the project and will have technical responsibility: the Ministry in charge of Industry and Investments, under sub-components 2.1 and 2.2, and the Ministries in charge of Higher Education, and Secondary Education (MEAPLN) under the sub-component 1.1. 82. Due mainly to the multi sectorial nature of the project enhancing its complexity and the subsequent implementation challenges, a Project Coordination Unit (PCU) will be set up under the MEFP before the project become effective to ensure the day to day coordination of the project as well as monitoring and evaluation and financial management of the project. EAs will carry out activities under the technical supervision of the ministries and the financial oversight of the PCU to which they will report. 83. The Project Coordination Unit will not implement all project activities but identified executing entities will have the following assignment under the project: • Under component 1, FAFPA will be responsible of implementing apprenticeship and grants to private sector TVET institutions; • Under component 2, (i) APEJ will implement activities of entrepreneurship for non- graduates, (ii) another executing agency will be competitively selected under acceptable ToRs for the implementation of entrepreneurship for graduates and the Matching grants and (iii) FARE will be responsible for the management of the guarantee funds. 84. A Memorandum of Understanding will be signed between MEFP and each agency (FAFPA, APEJ and FARE and the private firm) early enough to ensure activities under their responsibility will be carried out in due course. 85. Financial management assessments were conducted at EAs level as well with the objective of ensuring mainly that (i) they have acceptable FM arrangements in place to ensure that the project funds will be used for the purposes intended in an efficient and economical manner and (ii) they are capable of correctly and completely recording all transactions and balances related to the Project and report appropriately. The following salient features came out: 26 -FAFPA is a national autonomous entity. It has prior experience with contracting with private sector institutes. It is then technically endowed to be able to conduct assigned activities under component 1 including the close monitoring of the competitive grant mechanism. It has previous experience with donors in general and in particular the World Bank financed projects amongst which the well-known Education sector project PISE. The entity has set up a dedicated unit to donor project management and is endowed with a procedures manual that describes among other things roles and responsibility of actors and missions as well as financial and reporting procedures. FAFPA will be capable of receiving funds, managing it and report on the use. -APEJ is a national autonomous entity. It is adequately staffed to carry out the project activities related to the management of the micro-scale entrepreneurship in the informal sector. However it does not have previous Bank experience and would need to be strengthened on reporting procedures. -FARE is an association created to support youth in the creation and development of MSMEs providing guarantee for loans. Through commercial banks, it will be responsible to manage guarantee funds allocated to the entrepreneurship programs in collaboration with FAFPA and APEJ. It has the required arrangements in place to carry out the assigned task. 86. To ensure that funds transferred to EAs will be used for the intended purposes and reported on adequately, a subsidiary agreement signed between the PIU and each executing agency will clarify roles and responsibilities, describe financial management and disbursements arrangements, and detail actions plans and budgets covering outputs and outcomes to be achieved during the contract implementation period. As such, the project may not transfer funds to the EAs unless the agreements are signed and the EAs have fulfilled any minimum requirements stated in their contract. 87. In regard to the setup of the PCU and its FM capacity, the assessment recommends: • Before the project become effective, the elaboration of a Project Implementation Manual (PIM) detailing roles and responsibilities of all involved stakeholders, and the project implementation mechanism. The PIM will describe the governance and oversight arrangements as well as the FM procedures required for the project including staffing, budgeting, accounting, reporting, funds flows and disbursement arrangements. The manual will detail in addition the subsidiary agreement requirement and mechanism. • The following actions have been set as dated covenants: (i) the recruitment of an FM officer and of an accountant, no later than one month after effectiveness; (ii) the acquisition and installation of a computerized accounting software capable of correctly record and consolidate financial information obtained from all EAs for automatic generation of financial statements (Interim and annual), no later than two months after effectiveness; (iii) the recruitment of an internal auditor to conduct ex-post reviews of the project transactions and provide training and guidance to the EAs on a regular basis, no later than four months after effectiveness; and (iv) the recruitment of an external auditor for the audit of annual financial statements, no later than six months after effectiveness. 88. Anti-corruption measures. Corruption and poor service delivery are acknowledged as issues in the public sector in Mali and more specifically with a project involving several entities 27 with relatively diverse interests and dealing with competitive and matching grant mechanisms. Then the lack of an appropriate oversight and of adequate operational tools might jeopardize the project implementation. The following additional measures are therefore incorporated to minimize the above risk: • Oversight : a multi-sectorial Project implementation Steering Committee (SC) will be put in place and include all the main project stakeholders • Internal control: operational manuals will be strengthened and complemented with the details of the operation of the competitive school grant mechanism and the matching grant mechanism detailing the selection process that will be transparent, and provide details on operation, control and reporting arrangements; • Operational review: the technical departments of the involved ministries will be strengthened to better carry out the technical oversight of the EAs activities including the competitive and matching grants subcomponents. 89. The overall risk for the project is rated Substantial. It is considered that the financial management will satisfy the Bank’s minimum requirements under OP/BP 10.00 once the mitigation measures have been implemented. An FM Action Plan to enhance the financial management arrangements for the Project is included in Annex 3. D. Procurement 90. Procurement for the proposed project will be carried out in accordance with the World Bank’s “Guidelines: Procurement of Goods, Works and Non Consulting Services under IBRD Loans and IDA Credits and Grants by World Bank Borrowers” dated January 2011, “Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits and Grants by World Bank Borrowers” dated January 2011 and the “Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants”, dated October 15, 2006 and revised in January 2011. National Competitive Bidding (NCB) shall be in accordance with procedures acceptable to the Bank. 91. The World Bank team undertook a procurement assessment of the three entities involved in the implementation of the procurement activities (DFM/MEFP, APEJ and FAFPA). The assessment was carried out by the Bank Procurement Specialist based in Bamako, in line with OP 11.00 and BP 11.00 updated on April 2013. Procurement under the project will be conducted with the support of a PCU housed within the DFM of the MEFP with technical and fiduciary skills necessary for managing project implementation. 92. World Bank procurement experience in Mali has shown that: (i) significant delays are experienced in procurement processing, with a significant part of the time spent on preparation of tender specifications, Terms of References (TORs); and (ii) procurement documents (BDs, RFPs, BERs and TERs of proposals) tend to be of poor quality. These experiences have been factored into the design of procurement arrangements. 93. The overall procurement risk for the proposed project is considered Substantial. In order to mitigate the risks identified in the fiduciary assessment, an action plan was prepared, in consultation with the client (see Annex 3). With the implementation of the proposed measures of 28 the action plan and the support of World Bank team, the overall procurement risk is rated Moderate. A Procurement Officer will be recruited no later than two months after effectiveness. E. Social (including Safeguards) 94. The proposed project is expected to have a positive social impact. It will benefit selected groups in direct and indirect ways: (i) individuals who are in or out of school will gain from skills upgrading and new job opportunities, leading to increased employability and greater worker productivity and earnings; (ii) selected/targeted secondary/TVET/ institutions will be able to raise the quality and relevance of their institutions, and establish direct value-added to their services and increase their capacity for generating revenue. Indirectly, the Project will contribute to sector diversification and economic growth, increasing the country’s welfare and avoiding the negative social impact of inequality. Beneficiaries of Components 1 and 2 will not only have an opportunity to earn an income and learn a skill that will improve their chances of gaining remunerative employment, but the Project will also help them better prepare, and create stronger opportunities in the private sector, for attaining and retaining employment. Increased youth employment and “re-enfranchising” youth will help the country recover from its recent economic and social turmoil. 95. The project will have a positive impact on gender in Mali. Rural entrepreneurship is for instance an excellent mechanism to involve women because of their potential in this area. It is expected that at least 60% of rural entrepreneurs supported by the project will be women. In addition, the project will include quotas of female beneficiaries in the informal skills training program, as well as to the extent possible in the business plans competition. Another expected positive social effect of the project will be to increase the share of female unskilled workers being trained and subsequently finding employment. 96. This project builds on continuing consultation and communication between the government, the private sector, youth organizations, educational institutions and teachers associations. Many different stakeholders are included in the SC, with different roles and responsibilities (as described in the project implementation arrangements). All these stakeholders were strongly involved during project preparation and their inclusion in the SC is an additional indication of their commitment to the project. The preparation of this project has already allowed the establishment of communication bridges between the Government, the private sector and civil society. While this dialogue is the most challenging part of the project, it is also the factor that could change skills development and youth employment in the long term in Mali. 97. An important consultation took place between the Bank pre-appraisal mission team and the Conseil National de la Jeunesse (National Youth Council) in January 2013 to gain a better understanding of the key characteristics and needs of the project target groups and how the Project’s activities can best benefit them. Over 80 youth of different education and training levels and employment status participated in the consultation. Overall, they strongly endorsed what the project is trying to achieve, asking for strong focus on entrepreneurship, better coaching for school to work transition, stronger accountability of institutions and the government for employability results, and a strong say in employment related policies – which has led to the decision of including them in the SC. Detailed results of the consultation are in Annex 3. 29 98. The potential negative social impacts of this project are likely to be site-specific and easily mitigated thus no direct or indirect long term impacts are anticipated from the implementation of the project. To prevent and manage the said potential impacts, OP 4.12 on Involuntary resettlement was triggered. Mali being a fragile state, the project is processed according to para 11 of OP.10.00, which allows the preparation and disclosure of safeguard documents to be deferred to implementation. A resettlement policy framework (RPF) will be prepared during the first year of implementation and disclosed in the country and Infoshop by February 2015. The PCU will recruit a part-time Social Safeguards Specialist to support the preparation of the RPF and screen for resettlement, as well as ensure the preparation and implementation of the RAPs if they would become necessary. The budget for this consultant and related training and other activities has been integrated in the project costing. F. Environment (including Safeguards) 99. The project has been assigned environmental category B (Partial Assessment). The project is classified category B with respect to activities under Component 1 which will finance the rehabilitation of classrooms in existing schools (within existing school premises), and Component 2 which will support the creation of micro, small and medium enterprises. The expected direct negative impacts of the project will not be large scale, significant or irreversible, instead they would be minor and manageable (temporary nuisances during civil works, safety at work, risk of inadvertent destruction of covered cultural artifacts, etc.); indirect adverse impacts would arise from the new created enterprises supported through the job creation mechanisms (component 2), and be related mainly to wastes and hygiene/sanitation issues. 100. To prevent and manage the said potential impacts, two Bank safeguard policies were triggered: (i) OP 4.01 on Environmental Assessment; and (ii) OP 4.11 on Physical Cultural Resources. The WBG environmental, health and safety guidelines (EHS) also apply to activities under component 2. Below are the main actions to be taken in relation to the application of the relevant environmental policies. 101. An ESMF has been prepared including guidelines and tools (screening checklists and specific ESMP template) and an exclusion list; it will be approved and disclosed in country and at the World Bank Infoshop by project effectiveness. The ESMPs will be prepared by March 2015 for the identified public sector institutions. The PCU will recruit a part-time Environmental Safeguards Specialist to ensure proper implementation, documentation, follow up and reporting of the mitigation measures (screening, execution of specific ESMPs, administering the exclusion list, etc.) recommended through the (ESMF). The budget for this consultant and related training and other activities has been integrated in the project costing. 102. Additionally, the Project Steering Committee made of the stakeholders will also be sensitized/trained on the Bank safeguard policies. Funding has been budgeted for about US$300,000 in the project for the execution of all the above-mentioned social and environmental measures. 30 Annex 1: Results Framework and Monitoring REPUBLIC OF MALI: Skills Development and Youth Employment Project Project Development Objective (PDO): The project development objective is to improve education and training for employability and private-sector led job opportunities for youth in the Republic of Mali PDO Level Results Core Unit of Baseli Cumulative target Values Data Responsibi Description Indicators* Measur ne 2014 2015 2016 2017 2018 2019 2020 Frequen Source/ lity for (indicator definition e cy Methodolo Data etc.) gy Collection 1. Direct project Number 0 21,222 37,000 Annually MEFP/PIU MEFP/PIU Total number of beneficiaries (number) M&E direct project of which female system beneficiaries, C project beneficiaries disaggregated by (%) Percent 0 36 36 Annually gender age 2. Youth graduating in Percent Annually MEFP/ MEPE/PIU Num: Total number the public TVET age PIU M&E and of youth graduating institutions supported system and MEAPLN with CAP/BT from by the project in the 3 MEAPLN public TVET priority sectors data institutions supported (graduation rate, %) 50 by the project 33 33 33 35 37 40 45 Den: Total number of -CAP level 75 youth enrolled in the -BT level 65 65 65 67 67 70 72 first year of CAP/BT in TVET institutions supported by the project 3. Out of school youth Percent 0 0 0 0 80 80 80 80 Annually MEFP/PIU MEFP/PIU Num (1): Number of who: age and and FAFPA out of school youth -completed dual FAFPA who completed the apprenticeship M&E apprenticeship programs supported by Percent 0 0 0 0 30 30 30 30 Annually system supported by the project (of which age project with a skills females) (%) certification Den (1): Number of out of school youth -who are employed or Percent 0 0 0 0 0 60 70 75 Annually who enrolled self-employed within age (assuming a 3 year one year of completion apprent.) 31 Num (2): Number of youth employed (within one year of completion) Den (2): Number of youth who completed the apprentices. program supported by the project 4. Out of school youth Percent 0 0 0 70 80 80 90 90 Annually MEFP/PIU MEFP/PIU Num (1): Number of who: age M&E and LMO youth completing - completed the short system; Den (1): Number of term skills training beneficiary youth enrolled program supported by survey and (assuming 1 year prg) the project (of which 0 0 0 40 40 40 40 40 Annually tracer females) (%) survey data Num (2): Number of youth employed (within one year of completion) Den (2): Number of -who are employed or Percent youth who completed self-employed within age 0 0 0 0 50 50 60 70 Annually the decentralized one year of completion skills training program supported by the project 5. Enterprises created Number 0 0 0 750 1,500 2,250 3,000 3,000 Annually MEFP/PIU MEFP/PIU, New or emerging or consolidated: and APEJ, (less than 5 years) Ministry in FARE and enterprises as - by non-graduate Percent charge of Ministry in measured by youth supported by age 0 0 0 40 40 50 50 50 Annually Private charge of existence one year the project’s Sector Private after business plan entrepreneurship M&E Sector and completion and program for non- system DCA in participation in the graduates (of which (SME charge of operational assistance females, %) survey), graduate and coaching APEJ and program program - by graduate youth Number 0 0 0 0 125 250 375 500 Annually FARE supported by the M&E project’s system entrepreneurship program for graduates 32 6. Enterprises scaled- Number 0 0 0 0 30 70 100 130 Annually MEFP/PIU MEFP/PIU, Established up as a result of the and Ministry in enterprises with at project Ministry in charge of least 3 new charge of Private employees for small Private Sector and firms and 5 new Sector DCA in employees for M&E charge of medium firms system program (SME survey) INTERMEDIATE RESULTS (Component One): Improving education and training for employability 1. Youth enrolled in Number 2,100 2,100 2,100 2,100 2,500 2,900 3,100 3,300 Annually MEFP/PIU MEFP/PIU new students CAP and BT degrees in M&E and enrolled in CAP and the identified public system and MEAPLN BT per year from TVET institutions MEAPLN 2017 supported by the data project in the 3 priority sectors 2. Private TVET Number 0 0 0 2 4 7 10 12 Annually MEFP/PIU MEFP/PIU institutions supported M&E and by the project system and MEAPLN MEAPLN data 3.Out of school youth Number 0 0 1,500 3,000 4,500 4,500 4,500 4,500 Annually MEFP/PIU MEFP/PIU 1,500 new enrolled in dual- and and FAFPA apprentices per year apprenticeship FAFPA up to a cumulated programs as a result of Percenta M&E amount of 4,500 project intervention (of ge 0 0 30 30 30 30 30 30 system which females (%)) 4. Out of school youth Number 0 1,000 4,000 8,000 13,000 17,000 20,000 Annually MEFP/PIU MEFP/PIU enrolled in the skills 0 and M&E training program system supported by the project (of which females (%)) Percent. 0 0 40 40 40 40 40 40 Intermediate Result (Component Two): Private sector-led job opportunities for youth 1. Youth with Number 0 0 1,500 3,000 4,500 6,500 6,500 6,500 Annually MEFP/PIU MEFP/PIU Youth with completed simplified and APEJ and APEJ completed simplified project plans under the M&E project plans entrepreneurship system program for non- graduates 33 2. Youth with Number 0 0 0 250 500 750 1,000 1,000 Annually MEFP/PIU MEFP/PIU, Youth with completed business M&E Ministry in completed business plans under the system charge of plan under the BPC entrepreneurship Private program for graduates Sector and DCA in charge of program 3. Firms benefitting Number 0 0 0 45 90 135 180 180 Annually MEFP/PIU MEFP/PIU, 45 new established from matching grants M&E Ministry in firms benefitting under the project system charge of from matching grants Private per year for a Sector and cumulative total of DCA in 180 over 4 years charge of program Intermediate Result (Component Three): Institutional Capacity Strengthening and Project Coordination 1. Beneficiary surveys Yes/No No Yes Yes Yes Every MEFP/PIU MEFP completed to support two/three M&E system on-going training years improvement 2. PME Yes/No No Yes Yes Yes Every MEFP/PIU MEFP and inventories/surveys two M&E system Ministry in years and Ministry in charge of charge of Private Sector Private Sector 3. LM Observatory Yes/No No Tracer Employ Tracer Every LMO system LMO data collection survey ment survey two survey years 34 Annex 2: Detailed Project Description REPUBLIC OF MALI: Skills Development and Youth Employment Project 1. The proposed project will support a two pronged strategy to promote jobs creation and develop skills for Malian youth. Jobs creation interventions, supported through Component 2, will target the private sector through support to would-be entrepreneurs and emerging or established SMEs with potential for job creation. Skills development interventions, supported through Component 1, will focus on both the formal and non-formal education and training sector, with emphasis on supporting more relevant and efficient technical tracks in secondary and tertiary education, revamping the apprenticeship program and creating new and more relevant opportunities of short term skills development for out of school youth. 2. Synergies will be created between the supply and demand components by ensuring continuity in support from education to employment for youth with different education levels, which will also help address the needs for “real” jobs in the vast informal sector (where over 80% of the jobs are) and more jobs in the emerging formal sector. On the one hand, the project will support more and better technicians at the secondary and tertiary level (CAP, BT, Baccalaureat Technique and even DUT) through targeted support to public and private schools, while also ensuring better transition to the labor market and opportunities of employment for these and other graduates through support to an entrepreneurship program for youth with secondary and tertiary education degrees and to established SMEs largely in the formal sector with prospects for employment growth. On the other hand, the project will support better qualified youth with no or limited formal education through innovative skills development options, while also creating better opportunities of employment for these and other youth through support to an entrepreneurship program for youth without formal secondary or higher level degrees, largely aimed at creating new stronger micro-enterprises in the informal sector, and to some extent through the strengthening of informal businesses. The figure below captures this logic (also accounting for a few cross formal-informal pathways, including from CAP students to the entrepreneurship program for non-graduates and, to be further explored, from apprentices to enterprises in the formal sector) Demand for Skills Supply of Skills (Jobs Creation) -Entrepreneurship for graduates (BT; other ForFormForm TVET (in school): formal education) CAP, BT, DUT -Established SMEs Non formal skills training (out of school): -Entrepreneurship for -Dual apprenticeship non-graduates (CAP; non- FoNonrNoFormFormNonN formal training) – New micro-enterprises -Short-term skills training -Informal businesses, -Established formal SM artisans’ associations 35 3. To maximize impact while avoiding spreading too thinly, support will be focused on three economic sectors and value-chains, while leaving some flexibility for newly emerging sectors. These are the agro-industry sector with focus on fruits and vegetables and animal products (including meat, milk and skin derived products), following a value-chain approach from initial production to processing, quality control and commercialization; the building and public works sector, including both public construction sites and building and maintenance, through basic masonry to finishing works, maintenance and building design; and the mining and auxiliary services sector (upstream and downstream support services), through prospection, exploitation and truck driving. Recent sector diagnostics based on labor force survey data confirm that these are established, growing or emerging job provider sectors. To allow for emerging sectors which may not be immediately visible today or still need confirmation, the project will also have the flexibility, in particular under component 2, to support initiative in those sectors. The target population, priority sectors and interventions identified will help the project reach out to vulnerable youth everywhere in the country, including the north with its mass of unemployed disaffected youth with strong skills development, reconversion and employment needs. 4. The project will be divided into three components: (1) Education and Training for Employability; (2) Private-Sector led Jobs Creation for Youth; and (3) Institutional Strengthening and Project Management. Project’s sub-components under Component 1 are: (1.1). Strengthening Technical and Vocational Education and Training; and (1.2). Strengthening Skills Development for Out of School Youth. Project’s sub-components under Component 2 are: (2.1) Supporting Entrepreneurship for Youth; and (2.2) Supporting Established Small and Medium Enterprises for Job Creation. Component 1: Education and Training for Employability (Total costs US$29.2million) 5. The project will support under this first component more effective formal education and training for in school youth and non-formal training for out of school youth to improve their skills for employability. About 18% of the 15 to 29 years old (and 23% of the 15 to 24 years old) are currently enrolled in lower and upper secondary schools with very limited quality and relevance and therefore extremely limited labor marker prospects. Most of the available tracks lead to either unemployment (rising with the education level) or employment in an already over- crowded public sector. Another 80% of the 15 to 29 years old (70% of the 15 to 24 years old) is out of school, with about 57% of them with no previous education and 23% with education levels varying from some primary (13%) to secondary (10%). These youth are either inactive or under-employed in low productivity sectors. At the same time, and this is relevant to all youth, the productive private sector, formal and informal, needs skilled workers. In this context, the project will help improve the employability of in and out of school 15 to 29 years old (or 24 years old for the in school) by supporting formal and non-formal education and training through strengthening technical and vocational education and non-formal skills development programs for key value-chains. 36 Sub-component 1.1: Strengthening Technical and Vocational Education and Training (Total costs US$14.1 million) 6. This sub-component will improve education and training for employability by supporting more effective and efficient technical and vocational education for in school youth. With less than 10% of students enrolled in technical and vocational streams, and the high potential for employability given the unfulfilled technical needs of the key priority sectors, but also important challenges of this education and training track, the sub-component will support a higher quality and more demand-driven cost-effective technical and vocational education to improve youth employability. The target group will be the 15 to 24 years old in school youth enrolled in formal public and private technical and vocational institutions at secondary and tertiary level, with some room also for youth enrolled in non-formal vocational institutions. Youth exiting from programs with BTs and more will also have the opportunity to participate in business plan competitions and receive coaching and easier access to implement their proposals through the entrepreneurship program for graduates in component 2. Youth exiting with CAP degrees and less will have the opportunity to go towards self-employment by participating in the entrepreneurship program for non-graduates. 7. While the ministry of training and employment has initiated the development and application of the competency based approach, this process has not yet been finalized. Partnerships with the productive sector to ensure higher relevance of TVET are also largely absent, while they should be central to the competency-based approach. There is also a crucial shortage of qualified teachers to teach relevant technical fields. To respond to these challenges, and in the spirit of laying out an overall framework for excellence of TVET in the priority sectors while not spreading too much scarce resources, the project will target its resources to specific public institutions and competitively selected private institutions in the key priority sectors, with some measures like the development of curricula and programs, partnership and performance contract approaches and the training of trainers with a potential broader transversal impact. It is expected that the improved TVET tracks will help retain students in school, as lack of relevance is a key factor of low completion. While quality is more of an objective than quantity, to the extent that rehabilitation will also create some higher enrolment capacity, these supply-side measures will be complemented by an awareness/information campaign towards families and youth launched by the MEFP in combination with the private sector to show the benefits of enrolling into the improved TVET tracks. 8. Support to public sector TVET institutions (US$8.6 million): More specifically, the project will support the following five public sector institutions (with the potential for more if pertinent) in the agro-industry, construction and mining sectors (all with potential to become national or regional poles in one of the key priority sectors), either by strengthening or by introducing (if non existing) sectors, sub-sectors and fields (under a value-chain approach putting emphasis when relevant on the weakest links): - Segou agro-industry institute, located in the agricultural heartland of Mali in the proximity of the Office du Niger with high agro-industry potential, and providing formal training at CAP and BT level on agricultural processing (fruit and vegetables, oleaginous, cereals, milk, honey and fisheries), packaging, quality control and management, marketing/selling, and foundations of 37 entrepreneurship. The project will help strengthen these existing fields to support a stronger value-chain in the fruit and vegetables and animal products sub-sectors (sous-filières). - Bankass institute in the Mopti region, which provides formal training on livestock, agriculture and agriculture equipment. While supporting the livestock related fields at CAP and BT level, the project will help develop and implement new trainings in skin derived products (all the value-chain from artisanal and industrial tanning, to leather-making and marketing/selling) knowing that the Mopti region is a livestock intensive area and the institution has free spaces to accommodate these new trainings. - IFSAB institute in the Bamako area specialized in the building and public works sector. The project will support the rehabilitation of a construction center with focus on trainings in masonry at CAP level with the implementation of sub-fields related to finishing works: covering (tile, flooring, earthenware), staff and sanitary plumbing. Higher in the value-chain it will also support trainings at BT level in building design. Location in Bamako is justified by the high construction needs combined with a critical lack of skills, in particular in the masonry field, in the area. - Kayes industrial institute of mining. Within this institute the project will support some training fields related to mining and auxiliary services with focus on driving and maintenance of construction equipment and trucks, welding (processes specific to mining) and in boiler (knowing that some other fields are covered by the building and public works and transport sectors and higher level occupations such as geologists, chemists and topographs are already provided in other institutes). - Missabougou professional training center in the Bamako area specialized in the agro-industry and construction sector. The project will strengthen existing trainings in the processing of fruits and cereals, as well as implement new sub-fields in masonry related to finishing works: covering (tile, flooring, earthenware), staff and sanitary plumbing. The support to this center will also help welcome students from the dual apprenticeship and short-term skills training programs. 9. In each institution the project will support a reform package which will largely be focused on upgrading curriculum, management and human resources, as well as physical rehabilitation. The packages will include the elaboration and application of competency based approach curricula, with related standards, in the priority fields and levels, a partnership framework with the productive sector and performance framework with public and private providers related to measurable outcomes, the design of entrepreneurship modules to be integrated within the formal curriculum, the training of trainers (in coordination with the Ecole Normale de l’Enseignement Technique et Professionnel (ENTP)), and selected limited rehabilitation of existing classrooms and equipment. The different elements will be implemented following a continuous process starting from TA (from 6 to 12 months depending on the center), to assess specific needs and develop the centers’ development, management and partnership strategy, and the elaboration of new curricula and training of trainers, moving to limited rehabilitation and equipment provision, and implementation of the curricula and management changes and evaluation of outcomes achieved. A key aim is to develop a partnership model with the productive sector which can lead to dual-training in several institutions, while involving the productive sector in key steps of TVET delivery including participation in curriculum design and 38 identification of standards, in the teaching process as source of practitioner-experts to co-teach courses or providers of industry training to TVET trainers, and in the management of the institution and skills certification process, following the example of successful TVET systems in the world. The Mali experience with the application of competency-based approaches in curriculum design and the intensive involvement of the private sector in the preparation of the project will be highly instrumental to sustained engagement of the private sector in the curriculum development process. Some of the support, including the development of a partnership framework with the productive sector and the training of trainers, will also have a transversal focus with the potential for benefitting more institutions than the ones immediately identified. 10. Support to private sector TVET institutions (US$5 million): While public institutions have been pre-selected, due to their large number, private institutions will be selected competitively. While the private sector has strong potential, including being more efficient, more attuned to local labor market needs and accountable to parents than the public sector, the complementarity between the public and private sector has not worked well in Mali, with a private sector stifled of resources specializing in low cost low relevance service sector fields and used as a low quality “demand-absorbing” sector. To address this issue the project will provide grants to competitively selected TVET private institutions (on the basis of specific school development proposals) to expand and improve technical and vocational programs at various levels (from certificate, to CAP, BT and even DUT) in the key identified sectors. It is expected that private institutions would be led to put more emphasis in the high demand fields provided by the public sector, becoming more relevant and diversified, while being spurred to become higher quality through performance contracts. Depending on the specific proposals, the private institutions will be able to benefit from some of the same interventions than the public institutions, with focus on curriculum, management and human resources upgrading, as well as new equipment (a menu of eligible expenditures will be prepared, excluding physical rehabilitation). They would also benefit from additional TA to ensure actual quality improvements. Under the assumption of an average amount per grant of US$400,000 and taking out the initial and on-going TA and M&E activities, it is expected that about 12 institutions should be able to benefit from a grant. 11. Key features of the competitive grant scheme mechanism will be the support offered to pre-selected schools to the preparation of school development proposals; the competitive selection of the proposals according to pre-identified criteria; and the close monitoring and evaluation of the scheme by FAFPA in coordination with the involved technical departments. Initial criteria for the pre-selection of the private schools include: age (functional for at least two years), provision of formal programs, existence of at least a functional workshop in the targeted priority sector and trainers, at least 20 enrolled students in that sector, and expression of interest for the program. School pre-selection and the selection of proposals will be operated by a committee led by the DNETP, DNES and DNFP with the participation of FAFPA and private sector representatives. 12. Support to the Ecole Normale de l’Enseignement Technique et Professionnel (ENETP) (US$0.5 million): The ENETP will have a key responsibility in the quality assurance of the new curricula and in the development and implementation of the teacher training modules 39 (for both public and private institutes), as requested by the DNETP and DNES, in alignment with the validated curricula. The ENETP will receive a support from the project in terms of limited equipment, development of teacher training modules and strategies, and training of teachers’ trainers, including training workshops and seminars in Mali. This support will also contribute to strengthen the School improving its capacity for teacher training across the board and help build a basis to address instructor quality in the long term. 13. Beneficiaries: the main beneficiaries of this sub-component will be the 2,360 students currently enrolled in the five identified supported public institutions in the priority sectors (at various levels) and about 1,000 students (assuming an average size of private institutions of about 300 students and about one-third of them benefitting from the new/improved programs) in private institutions for a total of over 3,000 students currently enrolled in the priority sectors. It is also expected that the institutes’ rehabilitation and improvement, including some of the new programs, will bring to an expanded enrollment in the priority sectors by mid to end of the project implementation of about 800 students at CAP level, 400 at BT level and 150 at the certificate level per year (which could increase if dual-training is applied) in the public sector, and about 400 students per year in the private sector. Finally, it is also envisaged that the institutes be open to welcome about 300 workers per year from the supported and other SMEs for in-service training in the key priority sectors. 14. Key activities: To sum up, the sub-component will finance a set of activities across public sector institution including: (a) TA for specific needs’ assessment, development and application of new curricula, entrepreneurship modules, partnership model and assessment, and feasibility studies for new investments; (b) delivery of teacher training; (c) equipment (for classrooms, workshops, labs); and (d) rehabilitation and upgrade of spaces/classrooms (for Bankass, IFSAB, Kayes and Missabougou). It will also support: (a) TA, including operational manual, guiding material and workshops for the operation of the private sector TVET institutions competitive fund (sub- grants) and preparation and implementation of school development proposals; and (b) the sub- grants themselves; as well as TA for the development of teacher training modules and strategies, training of teachers’ trainers, and limited equipment for the ENETP. An awareness campaign on TVET will also be supported under Component 3. 15. Implementation arrangements: This sub-component will be implemented by the PCU (anchored to the MEFP) and the FAFPA (selected as Executing Agency (EA) for the grants to private sector institutions) under the leadership of the Direction Nationale de l’Enseignement Technique et Professionnel (DNETP), within the MEAPLN, and the Direction Nationale de la Formation Professionelle (DFP), within MEFP. 16. FAFPA has been selected as Executing Agency (EA) for the operation of the competitive fund (sub-grants) for private sector TVET institutes because of its prior experience with contracting with private sector institutes (with a basis of over 500 accredited private institutes) within the context of the dual apprenticeship and other training programs. An operational manual will be completed with the details of the operation of the competitive grant mechanism. 17. The training of teachers activities will be carried out in coordination with the Direction Nationale de l’Enseignement Supérieur (DNES), within the Ministry in charge of Higher 40 Education, and the Ecole Normale de l’Enseignement Technique et Professionnel (ENETP) which will be strengthened through the project (see above). Sub-component 1.2: Strengthening Skills Development for Out of School Youth (Total costs US$15.1 million) 18. This sub-component will improve skills for employability by supporting innovative delivery strategies to provide skills development for out of school youth. With 80% of the 15 to 29 years old out of school and having generally little or no education and very limited real employment prospects it is imperative for Mali to revamp its offerings of skills development for this broad target group, both in terms of coverage, currently limited, and quality. This sub- component will help improve the employability of out of school youth through a combination of interventions which have the potential to reach out to a significant number of youth between the ages of 15 to 29 with no or limited education (lower secondary education and less) in urban, peri- urban and rural areas of the whole country, including areas with low density population and post- conflict where non-formal education can be, respectively, a powerful alternative to traditional education and a powerful tool to re-integrate disaffected youth. (Out of school youth with secondary and tertiary education will be targeted through the entrepreneurship program for graduates in component 2). 19. Limited options of skills development for out of school exist today in Mali. While the informal private sector offers traditional apprenticeships these are quite limited in scope and number and of generally low quality and efficacy, public sector apprenticeship initiatives, such as the dual apprenticeship program supported by SwissContact in coordination with the MEFP/FAFPA and the artisan association, or tutorial apprenticeships supported by the government through the APEJ, have limited scope and/or are closed. Beyond apprenticeships, the spontaneous supply of the private sector in terms of non-formal vocational education and training is completely insufficient to address needs and of low quality because of resource constraints, and the vocational programs financed by the government have been stopped for lack of resources and institutional capacity at the central and decentralized level, leaving the field to a few isolated initiatives financed by donors and NGOs, such as the LuxDev and CAEB training for employability initiatives. To address these gaps and respond to the challenges posed by out of school youth the project will support two programs tailored to the needs of two categories of out of school youth: 15 to 24 age old with some primary up to lower secondary education living in urban areas; and 15 to 29 age old with less than lower secondary education (including no prior education) living in peri-urban and rural areas. It will do so by supporting a revamped dual- apprenticeship and short-term decentralized skills training program. The dual-apprenticeship program is the right mechanism to improve the skills and employability prospects of youth with some education in urban areas, where there is notably higher supply of technical and vocational institutions and higher open unemployment allowing youth to commit for a longer time. A more flexible workplace-based shorter-term program is more adequate for somewhat older youth with no or little education in rural areas where institutions are scarce and youth have more competing options. These two programs will then need to be carefully tailored to the specific needs and characteristics of the two youth target groups. Youth exiting from these programs will then have the opportunity to receive additional entrepreneurship training, start-up funds and easier access to credit through the entrepreneurship program for non-graduates in component 2. 41 20. Dual apprenticeship program (US$7 million): Dual apprenticeship programs combining formal training to confer cognitive and technical skills (1/3 of the time) and apprenticeship (accounting for 2/3 of the time) spent in a formal or informal organization have been shown to be an effective and high impact form of apprenticeship. A recent evaluation of the SwissContact program, which closed in 2011 and which from 2005 to 2009 benefitted about 8,000 youth, showed a placement rate of 95% of the apprentices in the labor market (although at a somewhat high cost and with limited sector breadth). 21. Upon the closing of the SwissContact dual apprenticeship program, FAFPA in coordination with MEFP and the artisan association continued to run a down-sized program (for about 4,000 youth over 5 years). Building on the positive lessons of the first phase supported by SwissContact (such as the theoretical/practical mix approach, the strong ownership of artisan associations and the partnership with private sector institutions), but also learning from some of the weaknesses of the first phase and striving to address the needs of the youth group it targets, the project will support an expansion and upgrade of the current program (to double its coverage over the next 5 years) along several directions. First, it will be opened up to the non-craft industry sector, including when relevant enterprises from the formal sector, new sectors including the three project’s priority sectors not fully represented in the current 12 sectors, new localities (beyond the current 26), and to inactive, unemployed and under-employed youth (youth already fully employed will not be eligible anymore given the need to improve employability and the high unemployment/inactivity rate in urban areas). Second, the project will strive to introduce a bit more flexibility in the length of apprenticeships depending on the sector, occupation and employers’ skills needs (instead of a flat 3 years). Third, there will be a stronger focus on strengthening technical, numeracy and literacy and pedagogical skills of the master apprentices, as well as providing some pre-apprenticeship training for youth before the program and entrepreneurship training at the end of the program, while improving follow-up, skills certification and counselling and placement. Apprenticeships would include, as in the first phase, 80% of time in the workplace and 20% of time in training at a public or accredited private training center (where emphasis is given to both technical and basic skills). These schools would also include some of the institutes supported under sub-component 1.1. Like in the current model informal businesses and master apprentices are given incentives to participate through support to additional equipment. No further incentives are needed for informal businesses which already have strong ownership of the program as they see the value of cheap labor for three years. On the other hand attracting formal businesses to the scheme may require additional incentives still to be assessed. Some would simply be related to a better legal and fiscal framework for apprenticeship which the project will help develop in component 3. 22. Decentralized skills training program (US$8.1 million): The international evidence on the effectiveness of non-formal education and training is mixed. An in depth review of such programs, with related impact evaluations, helped flesh out some of the good practices – reported in Section C on Lessons Learned. Building on these international lessons and on the experience of MEFP, with its existing modular training program, and donor/NGO-funded initiatives like the ones of LuxDev, USAID and CAEB, the project will support a decentralized non formal vocational education and training program for out of school youth to help prepare them for successful integration in the local labor market in agriculture, livestock, construction, and other 42 activities in the key priority sectors, with focus on youth with very limited or no education in peri- urban and rural areas, including post-conflict where this program can also help reintegrating youth at risk. In alignment with international and national lessons, the program would reach out to the rural and hard to reach areas and vulnerable youth by providing training in a flexible way to reflect local conditions and needs (including more competing occupation options than in urban areas) in terms of length, content, delivery mode, and priority sub-sectors/occupations, while prioritizing workplace-based training which has been shown to be the most effective to learn a job and help address the shortage of schools. To take into account the local dimension, the program would rely on the close involvement of the MEFP’s deconcentrated regional offices working in close coordination with the regional assemblies (Conseils Regionaux) and other local actors, including local professional associations. Following a demand-driven approach, it is at this level that sector, sub-sector and occupational choices, as well the selection of beneficiary youth, will be made. 23. Youth participating in the program will be selected according to pre-identified transparent criteria after an intensive local awareness campaign (using a variety of media outlets and collective information sessions) run jointly by the MEFP and the regional assemblies to attract a pool as large as possible. The trainings will be short term (less than a year), but would vary according to the initial education level and sub-sector/occupation. In particular, youth with no prior education will receive longer remedial/literacy training. The trainings would largely take place on the workplace (such as agriculture estates, crafts industry workshops and construction sites) by local practitioners, close to the location of residency of the youth, with the possibility of flexible schedules to accommodate different family needs. Practitioners accepting to train the youth will be provided with additional pedagogical and/or technical training before the start of the activities, including training guides and other material, and if needed equipment. All the youth participating in the program will also be receiving complementary literacy (given the low overall literacy rates), life skills and technical trainings, if possible in the existing public and private professional training centers, including the to be revamped rural centers (CAR) of the Ministry of Agriculture, or otherwise by individual trainers recruited for short-term support from existing centers or even local NGOs when relevant. (All options have been used in Mali in other projects with some success and a mapping of options by locality is under way). Importantly, facilitators will be hired (about 85 per region) to accompany youth during the whole process, from initial awareness and mobilization, to choice of the workplace, making the most of training opportunities and providing psychological support and job counseling, including some foundations of entrepreneurship. The most motivated youth will then be able to participate in the entrepreneurship program supported by component 2. 24. Beneficiaries: The dual apprenticeship program will benefit 4,500 (over 5 years) unemployed youth in the 15 to 24 age range with lower secondary education or less. The program will prioritize the three key priority sectors in specific occupations which will be confirmed during the first year of the project and extend to all the country’s regions in selected urban localities. The decentralized skills training program will benefit about 20,000 (over 5 years) unemployed youth in the 15 to 29 age range with lower secondary education or less in the key priority sectors and six of the country’s regions (Bamako, Sikasso, Mopti, Tombouctou, Gao and Kayes) in selected peri-urban and rural localities with high levels of poverty and 43 unemployment. Women will constitute about 30% of the dual-apprenticeship program and 40% of the decentralized training program. 25. Key activities: To sum-up the project will support under this sub-component the following activities related to the apprenticeship program: (a) TA for the identification of additional fields and locations, development of entrepreneurship and other training modules, certification and legal frameworks; (b) the delivery of the 20% training time in the institutes; (c) pre-apprenticeship training of youth; (d) additional training for master apprentices; (e) kits for apprentices and equipment for master apprentices; (f) testing, evaluation and certification of apprentices; and (g) operating costs of the program. The following activities will be supported to support the decentralized skills training program: (a) TA for the mapping of workplace, complementary training and locality options; (b) training and stipends for local practitioners/producers; (c) equipment for local practitioners/producers; (d) the delivery of complementary training off the workplace; (e) training and fees for facilitators; (f) basic post- training installation kits for youth; (g) awareness campaigns; (h) training of key stakeholders and operating costs of the program; and (i) impact evaluation of the program. 26. Implementation arrangements: The dual-apprenticeship program will be implemented by FAFPA (as EA) under the leadership of the DNFP, and in coordination with the Federation of Craftsmen (Federation des Artisans du Mali, FNAM), other industrial associations, and training providers called upon to deliver complementary training modules. FAFPA is well positioned to run the program because of its status of lead public organization for the funding and implementation of apprenticeships and short term in-service training programs in Mali, and its experience in dealing with private sector institutions. It will receive additional strengthening under Component 3. 27. The decentralized non-formal skills training program will be implemented by the PCU under the leadership of the DNFP, in coordination with the MEFP’s deconcentrated offices and Regional Technical Commissions comprising of the Regional Assemblies, the deconcentrated offices of ANPE and APEJ and local community and professional associations. The DNFP and its deconcentrated offices will receive significant institutional strengthening to deliver the program, including through strengthening measures included in Component 3. Component 2: Private-Sector led Job Creation for Youth (Total costs US$25.1 million) 28. The project’s second component will support private sector led youth employment strategies in Mali to improve job opportunities for youth. While investing in skills development to start preparing future workers and addressing the short-term skills development needs of out of school youth, it is necessary to work on both sides of the employment equation by supporting parallel broader strategies to promote employment and job creation for youth. This is critical to ensure a successful transition from skills development to employment. The component’s design will reflect instruments that address critical constraints to job creation/employment generation faced by would-be entrepreneurs and existing MSMEs promoting a more robust private sector. 29. Private sector development is a key driver of sustainable employment in Mali. Youth unemployment/inactivity is high in urban areas (where the rate of youth unemployment/ 44 inactivity is estimated at 30%). Beyond unemployment, most youth are trapped in low productivity small-scale subsistence agriculture or informal precarious urban activities. To contain high unemployment and create good jobs for young people, the country will need to mobilize its private sector. And this needs to be done through fostering youth entrepreneurship, aiming at sustainable micro and small enterprises, in turn capable of creating indirect jobs down the line, and established enterprises with potential for scaling and hiring more youth. And doing this in the formal sector, still embryonic, to support its further growth, and in the informal sector where there is an urgent need for more sustainable better jobs. This strategy is also critical to be able to absorb both the flow and stock of youth with different education and training levels, including some of the youth trained under Component 1. 30. In this spirit, Component 2 will aim to support the establishment of conditions for jobs creation for young people through both self-employment, in the formal and informal sector, and support to the development of established SMEs. This will require close collaboration between private sector organizations and public agencies in charge of employment and investment promotion. The project will be tied to the Government’s Private Sector Development vision, and will complement ongoing initiatives (e.g. IDA’s own PCDA and the PACEPEP program funded by the Embassy of Denmark, which is in part implemented by the Conseil National du Patronat du Mali (CNP)). The design of the component will consider successful experiences developed in other countries, which could be useful to the Mali’s case. 31. More specifically, this component will support private sector led job creation strategies in Mali to improve job opportunities for youth trough two key strategies: (A) entrepreneurship for the youth; and (B) development and strengthening of established micro, small and medium enterprises. In full alignment with Component 1, the first sub-component will support youth with different education and training levels in the creation of new enterprises through varying mechanisms to ensure a continuum from education and training to employment. The second sub- component will entail competitive support to lead enterprises committed to generate employment. This second component will target the same sectors that Component 1, with window for supporting new emerging sectors (including for instance the Telecom 3 and health and pharmaceutical sector). Sub -component 2.1: Supporting Entrepreneurship for Youth (Total costs US$16.9 million) 32. This sub-component will support the employability of youth through entrepreneurship development. Self-employment is likely to be a key source of jobs in Mali, including for women who have high potential for success in particular in rural areas, making it imperative to address the key constraints to self-employment in a comprehensive way. Existing sources point to four key constraints to successful entrepreneurship in Mali: limited technical and business skills; difficulties to put together initial capital; limited access to credit; and lack of coaching and follow-up. While component 1 supports the development of some entrepreneurship skills in youth formally and non-formally trained, this sub-component will bring the support further by 3 There is for instance potential for about 1,000 new jobs over the next 2-3 years in the emerging “mobile money” sector for youth having the skills and means to set up their micro-enterprise (mobile money booths), and another 4,000 jobs for wage employment in existing agencies. In the health sector, there is a high unfulfilled demand for reproductive health services that could be tackled by supporting mid-wives entrepreneurs. 45 accompanying would-be young entrepreneurs all the way to creating their own enterprise through two programs, adapted to 21-35 years youth with different education and training levels, which address the four above highlighted key constraints. 33. Entrepreneurship program for youth with limited education (CAP or non-formal training) (US$9.1 million): through this program youth with lower level formal technical education and non-formal education and training exiting education programs now or already on the market will receive support to create a micro-enterprise. The Mali and international experience show that some elements need to be in place to encourage micro-entrepreneurs, including in rural areas, these are creating awareness on entrepreneurship issues, providing coaching on developing simple business plans, and bringing in some start-up capital while facilitating access to micro-credit. All three elements have been highlighted very clearly by would be young entrepreneurs in Mali. Building on this approach, the proposed program would offer two levels of training, start-up capital and easier access to initial finance and credit for youth. 34. As for the decentralized skills development program, youth participating in the program will be selected according to pre-identified transparent criteria after an intensive local awareness campaign run jointly by the MEFP and the APEJ to attract a pool as large as possible. All youth selected by the program – with the exception of the ones coming from the skills training program supported by Component 1 or having already received some entrepreneurship awareness course in other formal or informal schooling, including through Component 1, would be offered a short awareness training (of a few days) on basic concepts of entrepreneurship, including of simplified business plans, and school to work transition (Level 1 training). This training would be followed for the most motivated and high potential youth by a short more in-depth training and coaching on preparation of simplified business plans, micro-enterprise management, leadership and decision-making with the combined support of mentors and trainers (Level 2 training). About 60% of these would be entrepreneurs will also be supported more closely in the development of a micro-enterprise through start-up funds (capital endowment of up to US$400) to motivate them to implement their simplified business plan over a 12 months period. This more individualized support, adapted to the specific needs of the project, will also include easier access to microfinance through support to the FARE (Revolving Fund for Employment) which will intervene in guarantee of the loans granted the entrepreneurs (for about US$2,000 on average), and markets and operational assistance and coaching for the whole 12 months (1 day per month) with the objective of leading to viable enterprises. Entrepreneurship promotion will also include higher awareness to the needs of the local economy to ensure a better integration of the youth within the economic fabric of their area (in full alignment with the skills training program supported by Component 1) and how to build stronger links between the new micro and small enterprises and the medium and large enterprises already established in the priority sectors to develop synergies and align them to the quality levels required by these larger companies for sub-contracting. It is expected that this program would lead to the creation or consolidation of about 3,000 micro or small enterprises in the three key priority sectors of the project and emerging sectors, leading to the creation of about 6,000 new jobs by the end of the project (assuming 2 people per enterprise, slightly lower than the average statistics on micro and small enterprises in Mali). 46 35. Entrepreneurship program for youth with at least upper secondary education (technical or non-technical) (US$7.8 million): this program will provide opportunities for successful entrepreneurship for youth with at least upper secondary education who have potential for creating somewhat larger enterprises in the informal and formal sector. Building on best practices from international experiences and Mali (the PAJM project in Mali, funded by French Cooperation, being the most relevant with its enhanced coaching and high credit reimbursement rate), the program will support a Business Plan Competition (BPC) for 21 to 35 years old coming out of school (including from the institutes supported in Component 1) or already on the labor market. The program will closely coordinate with the PCDA for the selection of youth potentially interested in developing proposals in the agro-industry sector, and by building on the capacity that the PCDA has created in terms of business plan development in that same sector. More concrete ways of collaborating on the ground will also be explored. 36. The BPC is the right tool to select and motivate young graduates and nurture talent. The BPC process combines training, mentoring, and technical and financial support to help youth translate their initial enterprise idea or development projects of young enterprises (of less than 5 years) into realistic and attractive business plans and ultimately viable and high performing companies. The BPC cycle will include three distinct phases: (i) calls for candidacy, selection, awareness to entrepreneurship issues; (ii) competition including capacity building in the development of business plans, preparation of business plans with mentors, selection of best plans and awards; and (iii) post-competition operational follow-up. The post-competition follow-up will focus on improving management skills through operational coaching for about 12 months. Exchange and experience sharing platforms between entrepreneurs will also help get access to new markets. Overall, the competition would take place in two cycles of two years with 250 youth trained and mentored in the elaboration of business plans or development projects per one year cycle leading to 500 plans/projects viable per cycle. Of these half of the plans/projects (250 per cycle or 500 in total) would receive an award. The winner awards will provide seed funds (of varying amounts per beneficiary – from say US$2,000 to US$10,000 for an average of US$5,300) which will constitute the first step in supporting the financial viability of the enterprise, and will be complemented by enhanced access to credit through the support of the FARE (Revolving Fund for Employment) which will intervene in guarantee of the loans granted to the entrepreneurs (for about US$14,000 on average). It is expected that this program would lead to the creation or consolidation of about 500 small enterprises in the three key priority sectors of the project and emerging sectors, leading to the creation of about 2,000 new jobs by the end of the project (assuming 4 people per enterprise, in line with the average statistics on small enterprises in Mali). 37. Beneficiaries: The entrepreneurship program for non-graduates will provide level 1training to about 10,000 youth, level 2 training to about 6,000 youth and the full package, including access to start-up funds and micro-finance, to about 2,500-3,000 youth in all the country’s regions in rural and urban areas. Women will be expected to represent about 50% of the beneficiaries. Youth joining from the decentralized skills training program will be able to move directly to level 2 training. Youth having launched one to three years old micro or small enterprises and who want to consolidate them will also be eligible to participate in the program. The entrepreneurship program for youth with at least secondary education will target about 2,000 youth from urban areas selected to present initial projects’ proposals, and from these about 1,000 47 youth receiving capacity-building on business plans to participate in the BPC, with about 50% (500 youth) receiving the awards and coaching. The program will target 50% of start-ups and 50% of less than 5 years old enterprises. 38. Key activities supported by entrepreneurship programs are: (a) the training of trainers for the entrepreneurship training; (b) entrepreneurship and business plans trainings of various levels; (c) seed funds for would be or new entrepreneurs; (d) guarantee funds to support access of youth to credit; and (e) coaching activities. 39. Implementation arrangements: The entrepreneurship program for non-graduates will be implemented by APEJ (as EA) in coordination with the FARE and under the co-leadership of the MEFP and Ministry in charge of Industry and Investments (relevant departments) and the overall coordination of the PCU. The entrepreneurship program for graduates will be implemented by a private institution selected competitively (indicated as an EA, but essentially working as a Delegated Contracting Agency (DCA)) in coordination with the FARE and under the co- leadership of the MEFP and Ministry in charge of Industry and Investments (relevant departments) and the overall coordination of the PCU. This implementation arrangement strives to strike a balance between using existing structures and strengthening them (the APEJ) and involving private sector entities with higher levels of readiness and flexibility. Overall, it was also assessed that APEJ has more value-added in the management of the micro-scale entrepreneurship in the informal sector given its reaching out capacity (through its local agencies) and previous relatively positive experience with the distribution of kits/seed funds (the “bourses d’emploi”) and getting reimbursement from rural youth than with its largely unsuccessful attempts at higher levels business plan competitions. The BPC will therefore be run by a private institution with the option that lessons learned may be used to mainstream the program within a strengthened APEJ. APEJ will be duly strengthened to be able to manage the first program both under Component 3 and by using external trainers and coaches to support the program. 40. The FARE, which is an association created to support youth in the creation and development of MSMEs through guaranteeing loans for MSMEs, has been confirmed to be the partner of choice to guarantee loans granted to entrepreneurs given its extended experience and partnering arrangements with several banks, including the BMS (Banque Malienne de Solidarité), BNDA, BOA and BRS, and capacity to reach out to micro-finance institutions. About US$6.1 million allocated for the entrepreneurship programs, and corresponding to a significant share of the proposed credit envelope, will be transferred to the FARE which will manage them through partner banks. The FARE will also have an active role in monitoring repayment of loans. Sub-component 2.2: Supporting Established Small and Medium Enterprises for Job Creation (Total costs US$8.2 million) 41. This sub-component will support the employability of youth through the development and strengthening of established SMEs (with more than 5 years of life). Private sector development is a key driver of sustainable employment in Mali. The private sector has been severely affected by the crisis and, beyond these short-term effects, suffers from key constraints 48 to growth and development, including limited access to finance, market services, and skills, and an overall poor and worsening investment climate. This sub-component will provide business support to selected enterprises with plans to scale-up including facilitating access to markets and credit, and ad-hoc specialized managerial, business and technical expertise. It will also reflect synergies and collaboration with IFC activities with regard to business environment reform and private and financial sector development. 42. The target group of this sub-component will be Malian SMEs in eligible sectors. In alignment with the overall sector focus of the project, the following sectors, with a value-chain approach, will be considered for priority support: agri-business sector, which includes agriculture and livestock sector products with emphasis on fruits and vegetables; construction; and mining sector (with the development of the activities of subcontractors), while leaving space for emerging sectors. Economic and geographical criteria will be taken into account in the identification of the sub-sectors to focus direct interventions towards sectors with high added value in terms of job creation and resources generation, while taking account of the regional potential. The overall objective of the sub-component is to support SMEs with employment potential as per combination of scaling-up ambitions and sector of operation to generate more jobs in the formal sector for youth with academic and technical qualifications. This will then also contribute to create job opportunities for the 2,000 -3,000 youth trained in the technical institutes supported under component 1, while at the same time upgraded training under component 1 will help ease some of the skills constraints faced by firms closing the virtuous cycle. 43. More specifically, the project will support enterprises in targeted sectors through two mutually reinforcing main instruments aimed at improving their competitiveness and addressing credit constraints: 44. Matching grants (US$6.7 million): the objective of these grants is to help high potential local SMEs (e.g. rice importers in Office du Niger, small and medium size mango and papaya producers in Bamako, Sikasso and Segou) improve their productivity, production processes, processing and/or marketing, by facilitating their access to finance, value chain development and just in time specific skills, while supporting sound business plans and developing partnerships with good practice investors. The matching grants will build on best practices, including the recent experience of the PCDA in Mali. SMEs will be able to apply to two windows: (i) matching grants for TA (non-financial services); and (ii) matching grants to bring in financial contributions to scaling-up plans. This second window will have the potential to support critical infrastructures and activities directly related to the value chain or sector of production, including equipment. The grants will finance non-financial and financial services within ceilings and shares determined by the sector and the size of the beneficiary SMEs (grant shares for financial services would be about 50/50 project/firm and for non-financial services about 70/30 for project/firm). 45. Beneficiary SMEs will need to be formal (or in transition to formalization) enterprises and will be selected according to pre-determined criteria including age (at least 5 years), turnover (less than FCFA 1 billion, with preference given to SMEs of between FCFA 100 and 500 millions), an expansion plan in terms of business and jobs creation, viability, high potential 49 priority or emerging sector with good national or regional market prospects and part of a local, regional or international value-chain. Criteria may be softened to include SMEs affected by the crisis whose recovery needs to be supported. It will also be expected that supported SMEs play an active role in organizing career fairs and offering student internships (also to strengthen linkages with sub-component 1.1). 46. Support to the FARE (US$1.5 million – US$7.6 million financed by the credit under this component): In full alignment with sub-component 1 the FARE will receive additional resources to help it fulfill its role of guarantor of loans for SMEs (for about US$ 30,000 on average) and therefore support long term financing to SMEs (overall expected to be the same firms that receive the matching grants) in selected value-chains. The FARE works closely with several banks, including the BMS, and would also have the capacity to select partner banks competitively to get lower interest rates for SMEs. Overall, the FARE will receive about US$7.6 million under Component 2 which should significantly strengthen it and help alleviate credit constraints for new and established MSMEs in Mali. A tripartite MoU will be signed between FARE, the Bank and the beneficiary stating the arrangements under the guarantee. Based on such arrangements and the number of beneficiaries per cycle, FARE will submit a funds request which will include the documentation related to the financing source (bank or IMF), the number of beneficiaries per financing source, the related amount of the loans and the guarantee amount requested from the Designated Account (DA). Funds will be transferred from the DA to FARE sub account at each request up to the ceiling amount of the guarantee for the two first cycles (the guarantee amount is considered renewable for the second cycle) and from FARE Sub-account to Banks to guarantee the loans granted to beneficiaries. Through the multiplier effect it is expected that guarantee funds will leverage from 20% (in case of a guarantee at 80%) to the double amount of loan. Support to the FARE will be complemented by pre-selection and mobilization of financial partners/banks for the project, and technical assistance to those selected banks to help them provide medium term finance to successful MSMEs in close collaboration with IFC. 47. Beneficiaries: Matching grants will benefit about 180 SMEs in key priority and emerging sectors/value-chains, with at least 60% of them expected to get facilitated access to credit through the support of FARE. It is expected that the sub-component will contribute to create about 1,300 new jobs. 48. Key activities: the sub-component will support: (a) matching grants; (b) guarantee loans to support access of SMEs to credit; and (c) technical assistance activities, including the operational manual of the matching scheme. 49. Implementation arrangements: The matching grants will be managed by a private institution selected competitively under the leadership of the Ministry in charge of Industry and Investments (relevant departments) and the overall coordination of the PCU. The experience in Mali shows that this is the best arrangement to ensure the effectiveness and impact of the funds. The institution will be the same than the one managing the matching grants. The remaining funds will be transferred to the FARE for their management. 50. Complementary integrated support to MSMEs through the IFC investment and advisory activities (US$1.7 million of TA funding over 3 years subject to donors approval and 50 US$10 million investment): Finally, this project’s component will further leverage IFC’s strategic directions and operations so as to strengthen impact and delivery effectiveness, with a particular focus on value-chain financing instruments. In particular, the IFC will strengthen Mali’s new, emerging and established MSMEs through three key areas of intervention squarely targeting the reviewed constraints: Improvement of access to credit for MSMEs through: o Supporting leasing development including a strengthening of the currently weak regulatory framework and further development of leasing products (Africa Leasing Facility II, focused on fragile countries (Estimated budget: US$200,000 over 3 years). o Investing in viable micro-finance institutions, which have an essential role in the MSME segment (contemplated investment: US$4M in FY15). o Increasing the use of Risk Sharing Facility, which provides partial guarantee to commercial bank in order to increase loans to SMEs, especially in underserved segments (ongoing US$6.25M RSF with 1 local bank). o Developing the Global Index Insurance Program, which provides weather index insurance to smallholders and facilitates their access to credit. Target coverage is 80,000 smallholders by 2016 (estimated budget to raise: US$250,000). 51. Deployment of capacity building products to MSMEs by providing an integrated package of advisory services (business training, mentoring/coaching, consulting, financial intermediation through Business Edge and SME toolkits program (estimated budget for a pilot program: $250k). IFC will also seek to strengthen banks capacity to improve their governance and ability to manage loans to MSME through the Africa Micro, Small and Medium Enterprise Program (AMSME). 52. Improvement of the investment/business climate at sector, country and regional levels through the third phase of its country specific Investment Climate program and regional initiatives (OHADA and ECOWAS), aimed at: o Improving Doing Business indicators. o Supporting deeper reforms including competition reforms. o Supporting the government in implementing its strategy of investment promotion in key sectors including agriculture and mining to enhance potential for job creation. o Further assessing constraints and drivers to entrepreneurship in Mali including assessing the economic feasibility of a Government business incubator to offer financial and non-financial support to firms. (Estimated budget: US$1M over 3 years) 51 Component 3: Institutional Strengthening and Project Management (Total costs US$8.7 million) 53. This component will support four main types of activities: (a) an effective employment information system, including capacity building for the labor market observatory, and support to conduct employment and tracer surveys and SME inventories and surveys; (b) a more coherent skills certification and employment promotion framework, including updating of relevant legal frameworks, policy documents, and promoting multi-sector consultation frameworks; (c) the institutional strengthening of the relevant technical departments (within MEFP; MEAPLN; and the Ministry in charge of Industry and Investments) and Executing Agencies in charge of the implementation of Components 1 and 2, including capacity building also for monitoring and evaluation, additional human resources, selected equipment and operating costs; and (d) support to the project’s PCU, including project coordination, fiduciary processes, monitoring and evaluation (M&E), selected equipment and operating costs. 52 Annex 3: Implementation Arrangements REPUBLIC OF MALI: Skills Development and Youth Employment Project I. INTRODUCTION 1. The Project will be under the umbrella of the Ministry of Employment and Vocational Training (MEFP). No later than three months after effectiveness, a multi-sectoral Project implementation Steering Committee (SC) will be put in place through a government decree to include all the main project stakeholders, in order to reflect the multi-sectoral nature of the Project. This SC will confirm the Project implementation SC just put in place through a minister’s decision, which builds on the current well performing Project preparation SC. The SC will be chaired by the Minister of the MEFP or his representative. 2. The MEFP will have a global leadership and coordination role, through the SC and by hosting the Project Coordination Unit (PCU), as well as the leadership or co-leadership of all sub-components through its relevant departments. The MEAPLN through the DNETP will have the co-leadership of sub-component 1.1, with the DNES, part of the Ministry in charge of Higher Education, also involved on teacher training issues. The Ministry in charge of Industry and Investments through its relevant departments will have the co- leadership of sub-components 2.1 and 2.2. All these ministries will have an active role in decision-making, by also sitting in the SC, as well as technical activities (including the drafting, or co-drafting, of terms of reference and technical specifications, participation in technical evaluation committees, etc), and in contract and other project activities monitoring. 3. A PCU, housed within the MEFP for capacity building and greater ownership of the project and its sustainability, will be responsible for the overall coordination as well as monitoring and evaluation and reporting of the project. Beyond its broader implementation role, the PCU will directly handle procurement, financial management/accounting and contract management for some sub-components or part of sub-components (see below), while providing oversight, training, and quality control to the Executing Agencies (EA) directly handling these tasks in other sub-components. The recruitment of the project coordinator will be a condition of effectiveness. 4. The signature of subsidiary agreements between MEFP and FAFPA, MEFP and APEJ, MEFP and FARE and MEFP and the competitively recruited private firm will be conditions of disbursement for the relevant activities. These agreements will define together with the PIM the specific roles and responsibilities of each actor. The capacities of the ministries and the EAs involved in project implementation will be strengthened through component 3. 5. More specifically, the main roles and responsibilities of the different stakeholders, which will be further developed in the Project Implementation Manual (PIM), are described in the sections below. The PIM (including coordination mechanisms between all stakeholders involved in project implementation, detailed implementation mechanisms for each sub-component, project administration, financial management, accounting and procurement procedures applicable to the project) will be a condition for credit effectiveness. 53 II. STEERING COMMITTEE 6. The MEFP will be responsible for the Project and chair the SC. The composition of the Project implementation SC may be as follows: Active members may include, inter alia: • SGs of the Ministry in charge of Employment and Vocational Training • SG of the Ministry in charge of Industry and Investment • SG of the Ministry in charge of Secondary Education • SG of the Ministry in charge of Higher Education and Scientific Research • SG of the Ministry in charge of Youth and Sports • SG of the Ministry in charge of Mining • SG of the Ministry in charge of Rural Development • DG of Employment, Vocational Training and Financing and Procurement Departments of the MEFP • DG of the Labor Market Observatory • Permanent Technical Secretary of the Private Sector Framework Law (Loi d’Orientation du Secteur Privé) • Coordinator of the PRODEFPE • One representative from the Conseil National du Patronat of Mali • One representative from the Association of Banks and Financial Establishments • One representative from the Permanent Assembly of the Chambres et Métiers of Mali • One representative from the Permanent Assembly of the Chambres d’Agriculture of Mali • One representative from the Chambre des Mines of Mali • One representative from the Fédération Nationale des Artisans of Mali • One representative from the Conseil National de la Jeunesse Consultative members/observers may include, in alia: • Project Coordinator (PCU) • FAFPA • APEJ • FARE • Private consulting firms managing entrepreneurship and matching grants • Others (to be identified) 7. The role of the SC will be to: (i) review and approve all annual action plans and budgets, before submission to the World Bank; (ii) review and validate the semi-annual Project progress reports, before submission to the World Bank; (iii) resolve coordination issues that may occur between ministries or implementing agencies; (iv) resolve high level technical issues that may occur during project implementation ; (v) propose to restructure the project, if necessary; and (vi) receive, for information, all audit reports, and ensure that corrective measures are taken, as necessary. 8. The SC will meet at least every six months, or more often if necessary to solve any serious issue impeding project implementation. 54 III. LEADERSHIP OF RELEVANT MINISTRIES 9. The following ministries will have the leadership concerning Project implementation: • Ministry in charge of Employment and Vocational Training: overall leadership and leadership or co-leadership of all sub-components • Ministry in charge of Industry and Investments: co- leadership of Component 2 • Ministry in charge of Secondary Education: co- leadership of Sub-component 1.1 • Ministry in charge of Higher Education: co- leadership of Sub-component 1.1 10. As such, their role and responsibilities will be to, inter alia: (i) draft (or co-draft) all terms of references (TORs) and technical specifications, for all consultants services and goods relevant to their area of expertise; (ii) be evaluation committee members for technical evaluation of all consulting services and goods procured under the project, within their area of expertise; (iii) be responsible for the technical validation of the reports prepared by the consultants financed by the project within their area of expertise; (iv) participate in supervision missions organized by the PCU for their sub-component; (v) provide input to the PCU for the preparation of annual action plans and budgets; (vi) recommend, to the PCU, actions to take in the case of poor performance of a consultant or EA, in accordance with the contract/convention; and (vii) recommend, to the SC, changes to be made to Project activities, components, and/or objectives. 11. Each ministry may appoint a focal point responsible for the monitoring of the Sub- component and/or activities for which it has the leadership (within the relevant departments). The relevant technical expertise will be mobilized, as required, within each ministry, in accordance with the task to be accomplished. Civil servant salaries and salary top off will not be paid under the credit. The focal point would be the main interlocutor between his/her ministry and the PCU. 12. More particularly, in addition to the responsibilities described above, the Ministry in charge of Industry and Investments (and who will have the co- leadership of Component 2) may create a focal point team within the Secrétariat Permanent du Conseil Supérieur du Secteur Privé. This team would be delegated by the ministry to take technical decisions in the name of the ministry; and would carry out the monitoring and evaluation (M&E) of project activities and outcomes. Evaluation will be a key role and the capacities of the ministry will be strengthened in this aspect under the project, to ensure that the information gathered and the lessons learned during project implementation are integrated by the ministry in order to inform its decision- making process, and the elaboration of its policies. This role goes beyond project implementation and supervision, and ensures that Project activities are aligned with the private sector strategies in Mali as well as the ministry’s policies. IV. PROJECT COORDINATION UNIT (PCU) 13. The PCU will be created under the authority of the MEFP and will ensure the coordination between all project components, including planning (preparation of comprehensive action plans, procurement plans and budgets), financial management, procurement, and M&E (including preparation of semi-annual progress reports). The PCU will be the direct liaison 55 between Project stakeholders and the World Bank for all project implementation matters. The PCU will also be fully responsible for the fiduciary implementation of Component 3 and activities of Component 1 under the leadership of the relevant ministry departments. In addition, when an EA will carry out procurement and have sub-accounts, the PCU will have a role of training, supervision and quality control. 14. The PCU will be composed of the following key staff members: (i) a Coordinator; (ii) a Procurement Officer; (iii) a Financial Management Officer; (iv) an Accountant; and (v) an M&E Specialist. While expertise does not exist within the Ministry in charge of Employment and Vocational Training, consultants may be hired under the project. The credit will not finance the salary of civil servants. Support staffs are expected to be civil servants. Project steering committee Min. Edu. Min. Tr. Employ. Min. Ind. Invest. Min. HE PFC2 PCU FAFPA APEJ EA Entr.2/MG FARE 56 V. Detailed Component Implementation Arrangements Component 1: Education and Training for Employability • Leadership: MEFP, MEAPLN and to some extent Ministry in charge of Higher Education through relevant departments • FAFPA : Implementation of Apprenticeship and Grants to private TVET institutions • PCU: Direct implementation of component 1.1 except grants to private sector TVET institutions and component 1.2 except apprenticeships, and quality control to FAFPA Component 2: Private-Sector led Job Creation for Youth • Leadership: MEFP and Ministry in charge of Industry and Investments through relevant departments • APEJ : Implementation of Entrepreneurship for non-graduates • Private consulting firm: Implementation of Entrepreneurship for graduates and Implementation of Matching grants • FARE : Guarantee Funds, working with APEJ and private firm • PCU: Quality control of EA Component 3: Institutional Strengthening and Project Management • Leadership: MEFP (in consultation with other concerned ministries) • PCU: Direct implementation 15. FAFPA, APEJ, and FARE are the three pre-selected EAs for the execution of respectively the dual apprenticeship program and support to the private sector scheme; the entrepreneurship for non-graduates program; and the provision of loan guarantees. They will be joined by one additional competitively selected private EA to manage the entrepreneurship program for graduates and the matching grants. The roles and responsibilities of all EAs will be clarified in EAs subsidiary agreements and the PIM. They will be strengthened to mitigate fiduciary risk (see fiduciary assessment) and will remain under the oversight and quality control of the PCU and leadership of the key ministries. VI. Financial Management, Disbursements and Procurement Financial Management Introduction 16. A financial management assessment of the MEFP who will have the overall coordination role under the project was conducted. The objective of the assessment was to determine: (a) whether the fiduciary department (DFM) of the MEFP has adequate FM arrangements in place to ensure that the funds will be used for the purposes intended in an efficient and economical manner and the entity is capable of correctly and completely recording all transactions and balances related to the Project; (b) the Project’s financial reports will be prepared in an accurate, reliable and timely manner; (c) the entity’s assets will be safely guarded; and (d) the Project will be subjected to auditing arrangements acceptable to the Bank. The assessment complied with the Financial Management Manual for World Bank-Financed Investment Operations that became 57 effective on March 1, 2010 and AFTFM Financial Management Assessment and Risk Rating Principles. 17. Three other ministries will be involved in the project and will have technical responsibility: the Ministry in charge of Industry and Investments, under sub-component 2.2, the Ministry in charge of Higher Education and Scientific Research, and the Ministry in charge of Basic and Secondary Education (MEAPLN) under the sub-component 1.1. EAs will execute activities under the different components, namely FAFPA for component 1, APEJ and FARE for component 2. An additional private firm selected on a competitive basis will be contracted as executing agency under component 2. In that regard, financial management assessments of FAFPA, APEJ and FARE was conducted as well with the objective of ensuring mainly (i) they have acceptable FM arrangements in place to ensure that the project funds will be used for the purposes intended in an efficient and economical manner and (ii) they are capable of correctly and completely recording all transactions and balances related to the Project and report appropriately. Executive Summary 18. The Project Coordination Unit that will be established under the MEFP before effectiveness will have the financial management responsibility of the overall project implementation. However it will not implement all project activities but identified EAs including the private firm will have the following assignment under the project: • Under component 1, FAFPA will be responsible of implementing apprenticeship and support to the private sector activities (sub-grants); • Under component 2, (i) APEJ will implement activities of entrepreneurship for non- graduates, (ii) a private firm will be competitively selected under acceptable ToRs, one for the implementation of entrepreneurship for graduates and the implementation of the Matching grants; and (iii) FARE will be responsible for the management of the guarantee funds. 19. Subsidiary agreements will be signed between PCU/MEFP and each agency (FAFPA, APEJ and FARE) early enough to ensure activities under their responsibility will be carried out in due course. 20. The financial management assessments conducted at EAs level revealed that: -FAFPA is a national autonomous entity. It has prior experience with contracting with private sector institutes. It is then technically endowed to be able to conduct assigned activities under component 1 including the close monitoring of the competitive grant mechanism. It has previous experience with donor in general and in particular the World Bank financed projects amongst which the well-known Education sector project PISE. The entity has set up a dedicated unit to donor project management and is endowed with a procedures manual that describes among others roles and responsibility of actors and missions as well as financial and reporting procedures. FAFPA will be capable of receiving funds, managing it and report on the use 58 -APEJ is a national autonomous entity. It is adequately staffed to carry out the project activities related to the management of the micro-scale entrepreneurship in the informal sector. However it does not have previous Bank experience and would need to be strengthened on reporting procedures. -FARE is an association created to support youth in the creation and development of MSMEs providing guarantee for loans. Through commercial banks, it will be responsible to manage guarantee funds allocated to the entrepreneurship programs in collaboration with FAFPA and APEJ. It has the required arrangements in place to carry out the assigned task. 21. To ensure that funds transferred to EAs will be used for the intended purposes and reported on adequately, a subsidiary agreement signed between the PIU and each executing agency will clarify roles and responsibilities, describe financial management and disbursements arrangements, detail actions plans and budgets covering outputs and outcomes to be achieved during the contract implementation period. As such, the project may not transfer funds to the EA unless the subsidiary agreements are signed and the EAs have fulfilled any minimum requirements stated in their contract. 22. In regard to the setup of the PCU and of its FM capacity, the assessment recommends: • Before the project become effective, the elaboration of a project implementation manual detailing roles and responsibilities of all involved stakeholders, the project implementation mechanism. The implementation manual will describe the governance and oversight arrangements as well as the FM procedures required for the project including staffing, budgeting, accounting, reporting, funds flows and disbursement arrangements. The manual will detail in addition the subsidiary agreement requirement and mechanism. • The following actions will be set as dated covenants: (i) recruitment of an FM officer and an accountant, (ii) acquisition and installation of a computerized accounting software capable of correctly record and consolidate financial information obtained from all EAs for automatic generation of financial statements (Interim and annual) , (iii) recruitment of an internal auditor to conduct ex-post reviews of the project transactions and provide training and guidance to the EAs on a regular basis, (iii) recruitment of an external auditor for the audit of annual financial statements. Anti-corruption measures 23. Corruption and poor service delivery are acknowledged as issues in the public sector in Mali and more specifically with project involving several entities with relatively diverse interests and dealing with competitive and matching grant mechanisms. Then the lack of an appropriate oversight and of adequate operational tools might jeopardize the project implementation. The following additional measures are therefore incorporated into the Project design to minimize the above risk: • Oversight: a multi-sectoral Project implementation Steering Committee (SC) will be put in place and include all the main project stakeholders • Internal control: operational manuals will be strengthened and complemented with 59 the details of the operation of the competitive grant mechanism and the matching grant mechanism detailing the selection process that will transparent, details operation, control and reporting arrangements; • Operational review: the technical departments of the involved ministries will be strengthened to better carry out the technical oversight of the EAs activities including the competitive and matching grants subcomponents. 24. The overall risk for the project is rated Substantial. It is considered that the financial management will satisfy the Bank’s minimum requirements under OP/BP 10.00 once the mitigation measures have been implemented. Country Issues 25. Recent assessments performed by or at the request of the authorities have identified a range of weaknesses in Mali’s Public Financial Management (PFM) system. These assessments include the 2007 Public Expenditures and Financial Accountability (PEFA), and the 2008 Public Expenditure Management and Financial Accountability Review (PEMFAR). These reports identified a number of critical shortcomings in budget preparation and execution processes as well as internal and external controls. As an initial response to these challenges, the Government developed an action plan in 2006, which was updated in 2008 to incorporate new challenges highlighted in the 2007 PEFA report. As a result of government’s efforts to address the identified PFM issues, there has been significant progress in the Public Financial Managements reforms. The 2011 PEFA highlighted significant progress made in comparison with the situation reflected in the 2007 PEFA report. 19 indicators have been upgraded in particular in the areas of budget credibility, comprehensiveness and transparency, policy-based budgeting and predictability in budget execution. Despite these improvements, there are some challenges, which still need to be tackled. 60 Financial Management Risk Assessment and Mitigation 26. The table below summarizes the inherent and control risks and mitigation measures proposed. Residual Risk Risk Rating Risk Mitigation Measure Risk Rating Inherent Risks: S S Country: Poor governance The strengthening of public financial management PFM system is weakened by several through the PFM - TA Project is expected to enhance S S key problems in the area of financial the PFM’s system to provide timely and reliable management and control. information and improve governance Entity: A PIM will be elaborated to define clearly roles and Risk remains in terms of responsibilities of the different stakeholders and coordination due to the involvement segregation of duties. of many stakeholders In addition, the set-up of the multi-sectorial steering Delays in project implementation S committee will ensure an adequate coordination of S activities Focal points will be appointed in each ministry to facilitate coordination between the ministries and the PCU Project: The PCU will be set up under the oversight of the MPFE The PCU is not set up yet. before the project becomes effective. The combination of several activities MoUs clarifying roles and responsibilities will be under the responsibility of different completed and signed before funds are transferred to EAs. S S structures and dispersed spending units increases the complexity of the project. Lack of adequate oversight of co- executing agencies. Control Risks: S S Budgeting: The budget process will be clarified in the Financial and Deviations in budget execution of Administrative procedures of the PIM with a clear some components not captured by S description of preparation, approval, authorization and M the reports monitoring processes Variations from budgets not 61 authorized Accounting: Adequate computerized accounting system will be Delays in the consolidation of purchased and customized to fit the project’s needs and financial information S generates useful information and financial statements. S Timeliness of Annual Financial Statements Staffing: MEFP will recruit an FM officer to be fully dedicated to No FM staff within the PCU that is the management of this project and facilitate coordination to be set up S and financial reporting with EAs M An accountant will be recruited to keep day to day accounting record and assist the FMO as appropriate Internal Control and audit: The PIM will help clarify roles and responsibilities and Lack of internal audit function limit related risks Weak internal control environment at An external consultant will be appointed to carry out the district level. S quarterly internal control reviews and physical verifications S Risk in selection process and Operational manual will be elaborated for competitive monitoring of competitive grant and grant and matching grant activities matching grants Funds Flow: A Designated Account into which funds will be deposited Funds may be diverted or used for will be opened and managed by the PCU. non-project eligible purposes. Bank accounts will be opened by EAs. Quarterly Delays on the transfer of funds at S replenishment will be required accompanied by the M EAs level as well as beneficiaries disbursement and procurement plans and the relevant level supporting documents Reporting and Monitoring: Delays on The software will be customized to facilitate compilation the submission of agreed IFRs and S of accounting information. S annual project financial statements. Auditing: Recruitment of qualified, experienced and independent Inadequate institutional arrangements external auditors with TORs acceptable to IDA. S S in place for the appointment of external auditors Overall Risk: S S H – High S – Substantial M – Modest L - Low 62 Weaknesses of the Financial Management System 27. The project financial management is weakened by the following salient features: • The PCU is not set up yet • Weak internal control environment and lack of internal audit function. 28. The following actions need to be taken in order to enhance the financial management arrangements for the Project: FM Action Plan Action Date due by Responsible 1 Draft the PIM including FM procedures Before effectiveness and MEFP disseminate the manual to all parties and staff during PPA implementation involved in the project implementation period (condition of effectiveness) 2 Recruit an FM officer to be fully dedicated to the No later than one month after MEFP management of the project effectiveness (legal covenant) 3 Recruit an accountant No later than one month after PCU effectiveness (legal covenant) 4 Set up a computerized accounting software and No later than two months after PCU train the users effectiveness (legal covenant) 5 Recruit an internal auditor as consultant to Not later than four months PCU perform ex-post audits on a regular basis after effectiveness (legal covenant) 6 Recruit an external auditor Not later than six months after PCU effectiveness (legal covenant) Financial Management Arrangements 29. Budgeting arrangements: The budgeting process will be clearly defined in the PIM inside the FM procedures section and the budget will be reviewed and adopted by the steering committee before the beginning of the year. Annual draft budgets will be submitted to the Bank’s non-objection before implementation. The consolidated Annual Work Plan and Budget approved by the steering committee (oversight committee) will be submitted to the Bank no later than November 30 every year. 30. Accounting arrangements: The current accounting standards in use in Mali for on- going Bank-financed projects will be applicable. SYSCOHADA is the assigned accounting system in West African Francophone countries. Project accounts will be maintained supported with appropriate records and procedures to track commitments and to safeguard assets. Annual consolidated financial statements will be prepared by the PCU in accordance with the SYSCOHADA. Accounting and control procedures will be documented in the updated FM Manual. 63 Internal control and internal auditing arrangements: • Internal Auditing: A consultant will be recruited to perform quarterly ex-post audits. • Internal Control Systems: The project implementation manual will include FM arrangements i.e. budget process, accounting and reporting, internal controls, assets safeguards, and clarify roles and responsibilities of all the stakeholders. 31. The competitive grant and the matching grant mechanisms will be described in dedicated operational manuals. Funds Flow and Disbursement Arrangements Disbursement Methods 32. Disbursement procedures arrangement will be detailed in the manual of accounting, administrative and financial procedures and the disbursement letter. Upon project effectiveness, transaction-based disbursements will be used. An initial advance up to the ceiling of the DA (FCFA 2.5 billion) and representing four months forecasted project expenditures paid through the DA will be made into the designated account and subsequent disbursements will be made on a monthly basis against submission of SOE or records as specified in the DL. Thereafter, the option to disburse against submission of quarterly unaudited IFR (also known as the Report- based disbursements) could be considered subject to the quality and timeliness of the IFRs submitted to the Bank and the overall FM arrangements as assessed in due course. In the case of the use of the report-based disbursement, the DA ceiling will be equal to the cash forecast for two quarters as provided in the quarterly unaudited Interim Financial Report. If and when IFRs are used as the basis of disbursements, the contents and format will be revised to include disbursement-related information. In addition to the “advance” method, the option of disbursing the funds through direct payments to a third party, for contracts above a pre-determined threshold for eligible expenditures (e.g. 15% of the DA ceiling), will also be available. Another acceptable method of withdrawing proceeds from the IDA grant is the special commitment method whereby IDA may pay amounts to a third party for eligible expenditures to be paid by the Recipient under an irrevocable Letter of Credit (LC). 64 33. The disbursement schedule, per disbursement category is as follows: Category Amount of the Amount of the Percentage of Credit Allocated Grant Allocated Expenditures to be (expressed in US$ (expressed in US$ Financed equivalent) equivalent) (inclusive of Taxes) (1) Goods, works, non- consultant, consultants’ services, Training, 16,228,000 10,237,000 100% Stipends, and Operating Costs under the Project (except for Components 1.1. (b) (ii), 1.2 (a), 2.1 (a) and 2.1 (b)) (2) Goods, non- consultant, consultants’ services, Training and 3,850,000 2,875,000 100% Operating Costs under Components 1.1. (b) (ii) and 1.2 (a) of the Project (3) Sub-Grants under Component 1.1 (b) of the Project 2,750,000 2,062,000 100% (4) (a) Consultants’ services, Training, non-consultant services 2,070,000 1,545,000 100% under Component 2.1 (a) of the Project (4) (b) Seed Funds to be implemented under Component 2.1 820,000 620,000 (a) of the Project (5) (a) Consultants’ services, Training, non-consultant services 1,380,000 1,000,000 under Component 2.1 (b) of the 100% Project (5) (b) Seed Funds under Component 2.1 (b) of the Project 1,540,000 1,110,000 (6) Matching Grants under 100% Component 2.2 of the Project 3,800,000 2,900,000 (7) Guarantee Funds: 100% of amounts called and paid (a) under Component 2.1(a) of the 2,100,000 1,540,000 under the Guarantee Project Funds (b) under Component 2.1(b) of the 140,000 2,371,000 Project (c) under Component 2.2 of the 860,000 640,000 Project (8) Refund of Preparation Advance 562,000 TOTAL 36,100,000 26,900,000 Note: totals may not add up and match components costs due to rounding. 65 34. As per the Financing Agreement, the project has the following disbursement conditions, according to which no payment can be made: (a) under Category (2) unless the Subsidiary Agreement has been signed between the MEFP and FAFPA, as Executing Agency, under terms and conditions satisfactory to the Association. (b) under Category (3) unless: (i) the Recipient, through MEFP, has prepared and adopted the Manual for Sub-grants for TVET Institutions, in form and substance satisfactory to the Association; and (ii) a Subsidiary Agreement has been signed between MEFP and FAFPA, as Executing Agency, under terms and conditions satisfactory to the Association. (c) under Category (4) unless a Subsidiary Agreement has been signed between MEFP and APEJ, as Executing Agency, under terms and conditions satisfactory to the Association. (d) under Category (5) unless a Subsidiary Agreement has been signed between MEFP and the respective Executing Agency, under terms and conditions satisfactory to the Association. (e) under Category (6) unless: (i) a Subsidiary Agreement has been signed between the MEFP and the respective Executing Agency, under terms and conditions satisfactory to the Association; and (ii) the Recipient, through MEFP, has prepared and adopted the Manual for Matching Grants in form and substance satisfactory to the Association. (f) under category (7) unless a Subsidiary Agreement has been signed between MEFP and FARE, as Executing Agency, under terms and conditions satisfactory to the Association. Designated Account 35. A Designated Account (DA) will be opened at an acceptable commercial bank to facilitate payment for eligible expenditures. The DA will be managed according to the disbursement procedures described in the Administrative, Accounting and Financial Manual and Disbursement Letter which have been discussed in detail with the relevant government officials during negotiations. The DA will be managed by the PCU. 36. EAs will open bank accounts in order to manage separately funds received from the project. The account will be managed according to the disbursement procedures described in the Administrative, Accounting and Financial Manual and fiduciary arrangements included in agreed MoUs. 37. The minimum value of direct payment and special commitment is 15 percent of outstanding advance made to the DA. 66 Funds flow diagram 38. Funds will flow from the DA to EAs accounts and suppliers, contractors, competitive grant and matching grants beneficiaries’ accounts. IDA- Financing Account Direct payment PCU MEFP DA in a commercial Bank . EAs CG/MG Benef (Sub account) (Accounts) SERVICES AND GOODS PROVIDERS (Contractors, Suppliers) Flow of documents Flow of funds Specific disbursement arrangements for guarantee funds activities managed by FARE under Component 2 39. Support to entrepreneurship and SMEs will be made through the FARE. A tripartite MoU will be signed between FARE, the Bank and the beneficiary stating the arrangements under the guarantee. In fact, based on such arrangements and the number of beneficiaries per cycle, FARE will submit a funds request to the coordination unit. The request will include the documentation related to the financing source (bank or IMF), the number of beneficiaries per financing source, the related amount of the loans and the guarantee amount requested from the DA. Funds will be transferred from the DA to FARE account (“Guarantee Funds Account”) at each request up to the ceiling amount of the guarantee for the two first cycles (the guarantee amount is considered renewable for the second cycle) and from FARE Sub account to Banks to guarantee the loans granted to beneficiaries. Two situations will be considered: 67 • The risk covered by the guarantee funds occurred meaning the beneficiaries is not able to meet his commitment and the bank is paid from the guarantee funds. Such payment is therefore considered as expenditure and will not be refunded to the Bank unless before the closing date the beneficiary has taken necessary repayment actions. • The risk covered by the guarantee funds does not occur then the guarantee funds will be considered as an advance that will be refunded after the project is closed to the Government to be refunded to the Association. Financial Reporting Arrangements 40. The PCU will produce quarterly consolidated unaudited Interim Financial Reports (IFRs) for the designated account. The IFR will include reporting information gathered from the EAs (including the grants to private TVET institutions, matching grants, guarantee funds and seed funds). The IFRs are to be produced on a quarterly basis and submitted to the Bank within 45 days after the end of the calendar quarterly period. The format of the IFRs will be described in the procedures manual. 41. The PCU will also produce the projects Annual Financial Statements and these statements will comply with SYSCOHADA and World Bank requirements. These Financial Statements will be comprised of: • A Statement of Sources and Uses of Funds which recognizes all cash receipts, cash payments and cash balances controlled by the PCU including transactions from EAs; • A Statement of Commitments • Accounting Policies Adopted and Explanatory Notes • A Management Assertion that project funds have been expended for the intended purposes as specified in the relevant financing agreements. Auditing Arrangements 42. The Financing Agreement will require the submission of Audited Financial Statements for the project to IDA and audited financial statements of FAFPA, FARE and APEJ within six months after year-end. External auditor with qualification and experience satisfactory to the World Bank will be appointed to conduct an annual audit of the project’s financial statements. A single opinion on the Audited Project Financial Statements in compliance with International Federation of Accountant (IFAC) will be required. The external auditors will prepare a Management Letter giving observations and comments, and providing recommendations for improvements in accounting records, systems, controls and compliance with financial covenants in the grant Agreement. 68 43. The table below summarizes the auditing requirements: Audit Report Due Date Annual audited financial statements and Management Letter for the Within six months after the end project (including reconciliation of the Designated Account with of each fiscal/financial year. appropriate notes and disclosures). Annual audited financial statements of FAFPA, FARE and APEJ Within six months after the end of each fiscal/financial year. Financial Covenants 44. The Borrower shall establish and maintain a financial management system including records, accounts and preparation of related financial statements in accordance with accounting standards acceptable to the Bank. The Financial Statements will be audited in accordance with international auditing standards. The Audited Financial Statements for each period shall be furnished to the Association not later than six (6) months after the end of the project fiscal year. The Borrower shall prepare and furnish to the Association not later than 45 days after the end of each calendar quarter, interim un- audited financial reports for the Project, in form and substance satisfactory to the Association. The Borrower will be compliant with all the rules and procedures required for withdrawals from the Designated Accounts of the project. 45. Implementation Support Plan. Based on the outcome of the FM risk assessment, the following implementation support plan is proposed. The objective of the implementation support plan is to ensure the project maintains a satisfactory financial management system throughout the project life. FM Activity Frequency Desk reviews Interim financial reports review Quarterly Audit report review of the project Annually Review of other relevant information such as interim Continuous as they internal control systems reports. become available On site visits Review of overall operation of the FM system Semi-annual for PCU (Implementation Support Mission) Monitoring of actions taken on issues highlighted in As needed audit reports, auditors’ management letters, internal audit and other reports Transaction reviews (if needed) As needed Capacity building support FM training sessions During implementation and as and when needed. 69 Conclusion of the assessment 46. The conclusion of the assessment is that the financial management arrangements will meet the Bank’s minimum requirements under OP/BP10.00 once the mitigation measures have been implemented. The overall residual risk rating is Substantial. Procurement Procurement Environment 47. The Procurement arrangements for the project have been designed with consideration for the weakness of national procurement rules and procedures, and past experience in procurement carried out under other Bank financed projects. Reference to National Procurement Regulatory Framework 48. In 2013, under the initiative of the West Africa Economic and Monetary Union (WAEMU) Commission, the Bank financed a study on how to boost Budget Execution for a better development impact. Based on data suggesting that a significant part of the capital investment budgets of WAEMU member states is underspent, this study was undertaken with a view to providing a comprehensive review of the systems, processes and practices used by Finance and Procurement to manage capital expenditure and to identifying practical recommendations that would allow countries to enhance the levels of budget execution. The country report of Mali recommended a series of actions in order to reduce the huge delays of procurement process in Mali and to improve the value of money. The action plan of this study at the regional level was approved on February 28, 2014, when the meeting of the “Comité d’Experts” of the WAEMU held in Burkina Faso. In this regard the replay workshop of some provisions governing the procurement was held in Bamako on March 6, 2014. Urgent measures proposed will come into effect no later than the end of April 2014 to meet the triggers of 2014 DPO and concern inter alia the abolition of dual review Bank - National Control Body for contracts subject to Bank's prior review, the increment of procurement thresholds for certain contracting authorities, the elimination of certain visas, etc. 49. Also a Country Procurement Assessment Review (CPAR) for Mali was carried out in 2007 and an evaluation of the national procurement system based on OECD/DAC methodology was done in September 2011 under EU funding. The assessment of the procurement regulation highlighted that the existing procurement principles and most of the procedures needed to be strengthened. The current regulation on Public Procurement in Mali is the Decree No. 08-045/P-RM dated August 11, 2008. 50. The focus has progressively shifted from reforming the legal and regulatory framework to focusing on strengthening the procurement capacity and the transparency of the national procurement system. In this regard, the Government has taken the following steps: (i) adopted an action plan based on the finding of the CPAR; (ii) set up a new legal and regulatory framework under the new Procurement Code; (iii) issued procurement regulations and standard bidding documents; and (iv) created a Regulatory 70 body for public procurement and established procurement units in regions and technical ministries, including the Ministry of Finance. 51. The National Competitive Bidding (NCB) will be acceptable to the Bank subject to the procedures below and as reflected in the Financing Agreement. (a) Using of competitive method: Even though the National Procurement Code does not apply to some small contracts, the procedures will require that for such contracts, a competitive method be used; (b) Advertising: The General Procurement Notice would be advertised in the United Nations Development Business (UNDB) online and on the Bank’s external website, specific invitation to bids would be advertised in at least one national widely circulated newspapers or on a widely used website or electronic portal of the Recipient with free national and international access; (c) Standard Bidding Documents: All standard bidding documents to be used for the Project shall be found acceptable to the Association before their use during the implementation of the Project; (d) Eligibility: No restriction based on nationality of bidder and/or origin of goods shall apply. Foreign bidders shall be allowed to participate in NCB without restriction and shall not be subject to any unjustified requirement which will affect their ability to participate in the bidding process. Recipient’s government-owned enterprises or institutions shall be eligible to participate in the bidding process only if they can establish that they are legally and financially autonomous, operate under commercial law, and are not dependent agencies of the Recipient; (e) Bid preparation: Bidders shall be given at least thirty (30) days from the date of the invitation to bid or the date of availability of bidding documents, whichever is later, to prepare and submit bids; except in cases of emergency declared by the Recipient, and provided that such emergency is recognized by the Association and the Association has given its approval for less time for the bids submission; (f) Bid Evaluation and Contract Award: the evaluation and contract award process of alternative bids would be revised according to Bank’s Procurement guidelines. The criteria for bid evaluation and contract award conditions shall be clearly specified in the bidding documents; (g) Preferences: No domestic preference shall be given to domestic/ West African Economic and Monetary Union the West African Economic and Monetary Union (WAEMU) countries bidders; to domestically/WAEMU area manufactured goods; and to bidders forming a joint venture with a 71 national firm or proposing national sub-contractors or carrying out economic activities in the territory of the Recipient; (h) Fraud and Corruption: In accordance with the Procurement Guidelines, each bidding document and contract shall include provisions stating the World Bank’s policy to sanction firms or individuals found to have engaged in fraud and corruption as set forth in the paragraph 1.16 (a) of the Procurement Guidelines; and (i) Right to Inspect and Audit: In accordance with paragraph 1.16 (a) of the Procurement Guidelines, each bidding document and contract financed from the proceeds of the financing shall provide that: (i) the bidders, suppliers, and contractor and their subcontractors, agents personnel, consultants, service providers or suppliers, shall permit the Association, at its request, to inspect their accounts, records and other documents relating to the submission of bids and contract performance, and to have them audited by auditors appointed by the Association; and (ii) the deliberate and material violation by the bidder, supplier, contractor or subcontractor of such provision may amount to obstructive practice as defined in paragraph 1.16 (a) (v) of the Procurement Guidelines. (j) Suspension and debarment: The cases of suspension/debarment under the Recipient system shall result from fraud and corruption as set forth in paragraph 1.16 (a) of the Procurement Guidelines and approved by the Association provided that the particular suspension/debarment procedure afforded due process and that the suspension/debarment decision is final. Use of Bank Guidelines 52. Procurement for the proposed Project would be carried out in accordance with the World Bank’s “Guidelines: Procurement under IBRD Loans and IDA Credits” dated January 2011; and “Guidelines: Selection and Employment of Consultants by World Bank Borrowers” dated January 2011, and the provisions stipulated in the Legal Agreement. In addition to complying with IDA’s Guidelines, procurement will also comply with the procurement Decree. However, in the event of a conflict between IDA Guidelines and the Procurement Law, the regulations of the World Bank will prevail. The various items under different expenditure categories are described in general below. For each contract to be financed by the Grant, the different procurement methods or consultant selection methods, the need for pre-qualification, estimated costs, prior review requirements, and time frame are agreed between the Borrower and the Bank in the Procurement Plan that has been agreed during Negotiations. The Procurement Plan will be updated at least annually, or as required, to reflect the actual project implementation needs and institutional capacity. The implementation entities, as well as contractors, suppliers and consultants will observe the highest standard of ethics during procurement and execution of contracts financed under this project. “Guidelines on preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA and 72 Grants” dated October 15, 2006 and revised in January 2011 (the Anti-Corruption Guidelines) shall apply to the project. Advertising 53. A General Procurement Notice (GPN) will be prepared and published in United Nations Development Business (UNDB) online and on the Bank’s external website and in at least one national widely circulated newspaper or on a widely used website or electronic portal of the Recipient with free national and international access after the project is approved by the Bank Board, and/or before effectiveness. The GPN will show all International Competitive Bidding for works and goods contracts and all consulting services involving international firms. Specific Procurement Notices for all goods and works to be procured under ICB and Expressions of Interest (EOI) for all consulting services to cost the equivalent of US$200,000 and above would also be published in the same manner that the GPN. Procurement methods 54. Procurement of Civil Works: Civil works procured under this project will include: the rehabilitation of vocational training facilities. Procurement will be done under NCB using National Standard Bidding Documents agreed with or satisfactory to the Bank. Small value works may be procured under shopping procedures. Direct contracting may be used where necessary if agreed in the procurement plan in accordance with the provisions of paragraph 3.7 to 3.8 of the Procurement Guidelines. 55. Procurement of Goods: Goods procured under this project will include, inter alia: vehicles, office equipment and furniture, software, teacher training institute (and service providers), and equipment for vocational training facilities. Procurement will be done under ICB or NCB using the Bank’s Standard Bidding Documents for all ICB and National Standard Bidding, or Documents agreed with or satisfactory to the Bank. Shopping in accordance with paragraph 3.5 of the Procurement Guidelines will be used for procuring readily available off-the-shelf goods of values less than US$100,000 or simple civil works of values less than US$200,000. Direct contracting may be used where necessary if agreed in the procurement plan in accordance with the provisions of paragraph 3.7 to 3.8 of the Procurement Guidelines. 56. Selection and employment of Consultants: Consultancy services would include, inter alia, advisory services, feasibility studies, and environmental and social impact studies. The selection method will be Quality- and Cost-Based Selection (QCBS) method whenever possible. The following additional methods may be used where appropriate: Quality-Based Selection (QBS); Selection under a Fixed Budget (FB); and Least-Cost Selection (LCS); and Selection Based on Consultants’ Qualifications (CQ). 57. Short lists of consultants for services estimated to cost less than the equivalent of US$400,000 per contract for engineering and contract supervision and US$200,000 per contract for other consultancy assignments may be composed entirely of national 73 consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines. However, if foreign firms express interest, they will not be excluded from consideration. 58. Single Source Selection (SSS) may be employed with prior approval of the Bank and will be in accordance with paragraphs 3.8 to 3.11 of the Consultant Guidelines. All services of Individual Consultants (IC) will be procured under contracts in accordance with the provisions of paragraphs 5.1 to 5.6 of the Guidelines. Procurement Implementation Arrangement 59. The following main agencies will be responsible for the implementation of the various components of the project, including procurement activities for each component (or subcomponent) to ensure smooth implementation: (a) The PCU within the MEFP will be responsible for the overall coordination of the project and the day to day implementation of the project’s activities. However, the PCU may need to delegate some of its responsibilities. (b) The coordination and oversight of the procurement activities of the project will be done by the procurement specialist recruited under the current Bank– financed Agricultural and Diversification Project. The procurement specialist will have his workload adjusted to accommodate the demands of the PPA and allow sufficient time for him to devote to procurement activities of ACDP. (c) The other EAs. (a) FAFPA for part of Component 1; (b) APEJ for part of Sub- component 2.1, have been selected based on their prior field operations and their capacity to implement. (d) The selected entities will be responsible for the implementation of their respective component (or subcomponent/activities). Procurement arrangements for Training and Workshops: 60. For all training activities, the PCU shall prepare and submit for Bank approval, annual training plans and budgets including the objectives of the training, the target participants, format of delivery and the qualifications of the resource person(s) as well as the expected impact of the training before the training can be undertaken. In case the training is to be outsourced, the procurement of the Trainer or the training institution shall be integrated into the project procurement plan and agreed with the Bank. Similarly, the procurement of venues for workshops and training materials will be done by comparing at least three quotations. 74 Assessment of the agencies’ capacity to implement procurement 61. Procurement capacity assessments of the implementing agencies were carried out to determine the institutional and management arrangements that would ensure proper execution of the project. They mainly focused on the capacity and internal arrangements of the recipient and the executing agencies to carry out by themselves procurement planning and implementation, or otherwise proposed alternative arrangements to ensure transparent and efficient implementation. 62. Assessment of the “Direction des Finances et du Matériel” of the MEFP: A procurement assessment has been carried out on February 5, 2014, in the relevant central unit for finance and procurement of the Ministry of Professional Education and Labor: the Direction of Finances and Material (DFM). Procurement issues and risks for the implementation of the project which have been identified include: (i) the absence of a manual of procedures within DFM; (ii) the lack of adequate procurement staff; (iii) the lack of a proficient procurement specialist to implement procurement actions in line with Bank procedures; (iv) the staff responsible for process control and approval are not familiar with Bank procurement procedures; and (v) the shortage of space and the lack of adequate record keeping system. 63. For the above considerations, the procurement risk is estimated Substantial. 64. Assessment of “Agence pour la Promotion de l’Emploi des Jeunes” (APEJ): An evaluation of the capacity of APEJ was carried out by the procurement specialist in Mali, on February 28, 2014. Procurement issues and risks for the implementation of the project which have been identified include: (i) the absence of a manual of procedures within APEJ; (ii) the lack of adequate procurement staff; (iii) the lack of a proficient procurement specialist to implement procurement actions in line with Bank procedures; (iv) the staff responsible for process control and approval are not familiar with Bank procurement procedures; and (v) the shortage of space and the lack of adequate record keeping system. 65. The strengths of APEJ include: (i) APEJ has relevant procurement experience in similar operations; (ii) is very familiar with national procurement procedures and has experience of procurement planning. 66. The procurement risk is estimated Substantial. 67. Assessment of FAFPA: An evaluation of the capacity of FAFPA was carried out by the procurement specialist in Mali, on February 28, 2014. Procurement issues and risks for the implementation of the project which have been identified include: (i) the existing manual of procedures doesn’t meet Bank minimum requirements; (ii) the procurement staff is not adequate; and (iii) the shortage of space and the lack of adequate record keeping equipment. 75 68. The strengths of FAFPA include: (i) FAFPA has relevant procurement experience in AfDB’s operations whose procurement procedures are similar to Bank’s ones; and (ii) FAFPA has an extensive relevant experience in the implementation of the types of activities to be implemented in this project. 69. The procurement risk is estimated Moderate. 70. The overall unmitigated risk for procurement is “Substantial”. The action plan is set to address the risks identified during the assessment and includes the following main actions in the following table: Action Plan for Strengthening Procurement Capacity Risk Action Responsibility Due date DFM-MEFP 1-Absence of a manual of Prepare the Procurement section of the ACD- Condition of procedures within DFM Project Implementation Manual in line with PCU/MEFP Effectiveness World Bank procurement procedures and Public Procurement Code 2- Lack of adequate Provide the unit in charge of procurement MEFP-DFM procurement staff with sufficient number of staff 3- Lack of proficient Recruitment of an experienced procurement ACD- No later than procurement personnel to specialist within the PCU through a PCU/MEFP two months implement procurement competitive process to review the quality of after actions in line with Bank all procurement documents prior to effectiveness procedures submission to the World Bank Training of DFM staff (at least three agents) DFM- No later than on World Bank procurement procedures in MEFP/IDA three months specialized institution (ICP in Bamako or after ISADE and CESAG in Dakar, Senegal) effectiveness 4- Staff responsible for Hands-on training of identified high level ACD-PCU No later than process control and approval staff within the DFM on Bank procurement three months are not familiar with Bank procedures by the PCU which will after procurement procedures implement the Project Preparation Advance effectiveness The Control Body and the Regulation DGMP- Throughout the Authority will have to play their role to DS/ARM-DS project life ensure good governance and limit the opportunities for undue influence by anyone 5- Shortage of space and lack Provision of equipment and adequate space PCU/ MEFP- No later than 3 of adequate record keeping for filing and archiving in order to better DFM months within system keep procurement documents and reports the project and identify a staff responsible for this task. implementation Train staff in data management. APEJ 1-Absence of a manual of Mandatory use of the manual of APEJ Within project procedures within APEJ procurement procedures to be prepared for implementation the project and approved by the Bank 76 2- Lack of adequate Hiring of an interested young professional APEJ At any time procurement staff who shall be trained for bringing support to after the the procurement specialist in place to speed effectiveness procurement processes 3- Lack of proficient Training of APEJ staff (at least two agents) APEJ/IDA No later than procurement staff to on World Bank procurement procedures in three months implement procurement specialized institution (ICP in Bamako or after actions in line with Bank ISADE and CESAG in Dakar, Senegal) effectiveness procedures Prior review by the PCU of all procurement APEJ/PCU Within project activities carried out by APEJ implementation 4- Staff responsible for Hands-on training of identified high level ACD-PCU/APEJ No later than process control and approval staff within APEJ on Bank procurement three months are not familiar with Bank procedures by the PCU which will after procurement procedures implement the Project Preparation Advance effectiveness The Control Body and the Regulation DGMP- Throughout the Authority will have to play their role to DS/ARM-DS project life ensure good governance and limit the opportunities for undue influence by anyone 5- Shortage of space and lack Provision of equipment and adequate space APEJ No later than 3 of adequate record keeping for filing and archiving in order to better months within system keep procurement documents and reports the project and identify a staff responsible for this task. implementation Train staff in data management FAFPA 1-Procurement manual doesn’t Mandatory use of the manual of FAFPA Within project meet Bank minimum procurement procedures to be prepared for implementation requirements the project and approved by the Bank 2- Procurement staff is not Hiring of a procurement specialist to FAFPA Immediately adequate occupy the vacant position of “Chef de Section Approvisionnements” Hands-on training of identified staff within ACD- No later than FAFPA on Bank procurement procedures PCU/FAFPA three months by the PCU which will implement the after Project Preparation Advance effectiveness 3- Shortage of space and lack Provision of equipment and adequate space FAFPA No later than 3 of adequate record keeping for filing and archiving in order to better months within equipment keep procurement documents and reports the project and identify a staff responsible for this task. implementation Train staff in data management. 71. Operating Costs: Operational costs are incremental expenses incurred by the MEFP, Ministry in charge of Secondary Education, Ministry in charge of Industry and Investments, PCU and Executing Agencies, based on the Annual Work Plans and Budgets as approved by the Association, on account of Project implementation, management, and monitoring and evaluation, 77 including the reasonable costs for utilities and supplies, bank charges, communications, vehicle operation, maintenance, and insurance, equipment maintenance, public awareness-related media expenses, travel and supervision, and salaries of contractual and temporary staff, but excluding salaries, fees, honorariums and bonus of members of the recipient’s civil service. 72. Procurement Plans: The Borrower has developed an initial procurement plan indicating procurements to be carried out over the first 18 months of the project. The procurement plan consists of the procurement methods or consultant selection methods, the need for pre- qualification, estimated costs, prior review requirements. The procurement plan will be updated at least annually, or more frequently as required, to reflect the actual project implementation needs and improvements in institutional capacity. The initial procurement plan has been agreed during negotiations. 73. Prior-Review Thresholds: The Procurement Plan will set forth those contracts which will be subject to IDA Prior Review. All other contracts will be subject to Post Review by IDA. However, relevant contracts below prior review thresholds listed below which are deemed complex and/or have significant risk levels will be prior-reviewed. Such contracts will also be identified in the procurement plans. A summary of prior-review and procurement method thresholds for the project are indicated in the table below. All terms of reference for consultants’ services, regardless of contract value, shall also be subject to the prior review by IDA. Thresholds for Procurement Methods Contract Value Expenditure (Threshold) Procurement Contract Subject to Prior Category (US$ 000) Method Review (US$ 000) 1. Works 10,000 or more ICB All Below 10,000 NCB First contract per entity Below or equal 200 Shopping None unless contract specified in the PP No threshold Direct Contracting All 2. Goods 1,000 or more ICB All Below 1,000 NCB First contract per entity Below or equal to 100 Shopping None unless contract specified in the PP No threshold Direct Contracting All 3.Consultancy Firms QCBS, QBS, FBS, All contracts of 200 and more LCS and contracts specified in the PP Individual IC (at least 3 CVs) None unless contract specified in the PP No threshold Single Source All NB: All terms of reference for consulting services will be subject to IDA’s prior review. 74. Frequency of Procurement Supervision. In addition to the prior review, supervision which is to be carried out by the Bank, the procurement capacity assessment 78 recommends at least two supervision missions each year and also one visit to the field to carry out post-review of procurement actions. 75. Post Review Procurement: Post-reviews can be done either by IDA specialists or by independent consultants hired under the IDA project according to procedures acceptable to the Bank to ascertain compliance with the procurement procedures as defined in the legal documents. The procurement post-reviews should cover at least a certain percentage of contracts subject to post-review depending of the level risk (high: 20%; substantial: 15%; and moderate: 10%). Post review consists of reviewing technical, financial and procurement reports carried out by the Recipient’s executing agencies and/or consultants selected. Procurement performance will be assessed on an annual basis (in the form of procurement audits by an external agency). The threshold levels for various methods of procurement may be revised based on the assessment results. Environmental and Social (including safeguards) 76. The proposed project is expected to have a positive social impact. It will benefit selected groups in direct and indirect ways: (1) individuals who are in or out of school will gain from skills upgrading and new job opportunities, leading to increased employability and greater worker productivity and earnings; (2) selected/targeted secondary/TVET/ institutions will be able to raise the quality and relevance of their institutions, and establish direct value-added to their services and increase their capacity for generating revenue. Indirectly, the Project will contribute to sector diversification and economic growth, increasing the country’s welfare and avoiding the negative social impact of inequality. Beneficiaries of Components 1 and 2 will not only have an opportunity to earn an income and learn a skill that will improve their chances of gaining remunerative employment, but the Project will also help them better prepare, and create stronger opportunities in the private sector, for attaining and retaining employment. Increased youth employment and “re-enfranchising” youth will help the country recover from its recent economic and social turmoil. 77. The project will have a positive impact on gender in Mali. Rural entrepreneurship is for instance an excellent mechanism to involve women because they have a lot of potential in this area. It is expected that at least 60% of rural entrepreneurs supported by the project will be women. In addition, the project will include quotas of female beneficiaries in the informal skills training program, as well as to the extent possible in the business plans competition. Another expected positive social effect of the project will be to increase the share of female unskilled workers being trained and subsequently finding employment. 78. This project builds on continuing consultation and communication between the government, the private sector, 4 youth organizations, educational institutions and teachers associations. Eleven different stakeholders are included in the Steering 4 Association Professionnelle des Banques et Etablissements Financiers, Assemblée Permanente des Chambres de Métiers du Mali, Assemblée Permanente des Chambres d’Agriculture du Mali, et Fédération Nationale des Artisans du Mali. 79 Committee, with different roles and responsibilities (as described in the project implementation arrangements). All these stakeholders were strongly involved during project preparation and their inclusion in the project implementation Steering Committee is an additional indication of their commitment to the project. The preparation of this project has already allowed the establishment of communication bridges between the Government, the private sector and civil society. 79. While this dialogue is the most challenging part of the project and will require time, it is also the factor that could change skills development and youth employment in the long term in Mali. 80. The mission met the National Youth Council of Mali on January 30, 2014, at the headquarters of the organization in Badalabougou. The national youth council is a national platform of dialogue, expression, consultation and action of associations, organizations and youth movements in Mali. It is represented in the whole territory and accounts for more than 1,500 associations, organizations and movements. Its main objective is the promotion, the development and the unity of Malian youth. It coordinates all the activities of youth organizations to support the realization of the principal milestones of the national policy of youth promotion, including issues of education and employment. 81. The meeting brought together, besides the member of the council, more than 80 young people with different levels of education and training (from very limited education to vocational training and university education), some with full time or part time job, and others, most of them, out of work (some of them for several years). The main objective of the consultation was to gain a better understanding of the key needs and expectations of the youth to make sure the Project’s activities can best benefit them. 82. Key expressed concerns included: • poor qualifications for the labor market, with many youth pointing to the lack of diversification of programs as a major issue, which led them to choose fields with limited labor prospects; • complete absence of follow-up after graduation; • lack of jobs; • lack of information on how to start own enterprise in certain sectors (including agriculture, livestock, building and public works, etc); • need to overcome many obstacles to start own enterprise, including: difficulty of preparing a negotiable project to access financing; lack of initial personal capital contribution; and lack of orientation, mentoring and follow-up • lack of involvement of the youth in the government’s employment promotion policies and government not held sufficiently accountable for employment outcomes 83. Key recommendations included: • urgent measures to improve the relevance of education and training to labor market needs; 80 • creation of structures and/or mechanisms for follow-up and orientation for graduates and non- graduates; • given the current limited labor absorption capacity, put emphasis on mobilizing the private sector to support job creation, and promote self- employment in productive sectors such as agriculture, livestock, fishing and BT; • provide information on how to create own enterprise in priority fields; • facilitate access to finance, training in project management and entrepreneurship, and more follow-up to acquire tools and skills necessary for the sustainability of projects; • design mechanisms for stronger accountability of institutions and the government for employability, including through better information on employment outcomes; • have a stronger say in employment related policies. 84. These recommendations have fed into the project design. 85. The project has been assigned environmental category B (Partial Assessment). The project is classified category B with respect to activities under Component 1 which will finance the rehabilitation of classrooms in existing schools (within existing school premises), and Component 2 which will support the creation of micro, small and medium enterprises. The expected direct negative impacts of the project will not be large scale, significant or irreversible, instead they would be minor and manageable (temporary nuisances during civil works, safety at work, risk of inadvertent destruction of covered cultural artifacts, potential risk of small land take, etc.); indirect adverse impacts would arise from the new created enterprises supported through the job creation mechanisms (component 2), and be related mainly to wastes and hygiene/sanitation issues. 86. To prevent and manage the said potential impacts, three Bank safeguard policies were triggered: (i) OP 4.01 on Environmental Assessment; (ii) OP 4.11 on Physical Cultural Resources; and (iii) OP 4.12 on Involuntary Resettlement. The WBG environmental, health and safety guidelines (EHS) also apply to activities under component 2. Mali being a fragile state, the project is processed according to para 11 of BP.10.00, which allows the preparation and disclosure of safeguard documents to be deferred to implementation. Below are the main actions to be taken in relation to the application of the relevant policies. 87. An ESMF has been prepared including guidelines and tools (screening checklists and specific ESMP template) and an exclusion list; it will be approved and disclosed in country and at the World Bank Infoshop by project effectiveness. The ESMPs will be prepared by March 2015 for the identified public sector institutions. The PCU will recruit a part-time Environmental Safeguards Specialist to ensure proper implementation, documentation, follow up and reporting of the mitigation measures (screening, execution of specific ESMPs, administering the exclusion list, etc.) recommended through the (ESMF). The budget for this consultant and related training and other activities has been integrated in the project costing. 81 88. The potential negative social impacts of this project are likely to be site-specific and easily mitigated thus no direct or indirect long term impacts are anticipated from the implementation of the project. A resettlement policy framework (RPF) will be prepared during the first year of implementation and disclosed in the country and Infoshop by February 2015. The PCU will recruit a part-time Social Safeguards Specialist to support the preparation of the RPF and screen for resettlement, as well as ensure the preparation and implementation of the RAPs if they would become necessary. The budget for this consultant and related training and other activities has been integrated in the project costing. 89. Additionally, the project Steering Committee made of the stakeholders will also be sensitized/trained on the Bank safeguard policies. Funding has been included in the project budget for the execution of all the above-mentioned measures. Monitoring & Evaluation 90. A comprehensive set of indicators will be utilized for monitoring progress towards achievement of the PDO. A robust M&E system will be developed to ensure adequate information flows among participating agencies, ministries, and other relevant institutions and to document progress and impact of project activities in a timely and effective manner. Indicators will be tracked through this comprehensive M&E system set up under the project and housed at MEFP/PCU. The MEFP/PCU will be responsible for implementing project monitoring (inputs, outputs, financial and technical audits). 91. Most of the data for monitoring project outcomes will come from regular project reports, key existing surveys and the Labor Market Observatory (LMO). When functional, the LMO will support collection of information regarding: (a) labor market trends; (b) labor market insertion of graduates and trainees of the skills training programs (tracer surveys); and (c) feedback from employers. These data will be supplemented by a beneficiary survey (baseline survey to be set up during the first year of project implementation) to be undertaken every three years in order to track: (a) employer satisfaction with the training received by newly hired; (b) youth satisfaction with the training received; and (c) resources received and employment status of program beneficiaries (through a tracer study component of the beneficiary assessment). They will also be complemented by inventories/surveys of SMEs to document trends and key SME’s characteristics in Mali (in terms of size, age, location, sector and sub-sector, staff, etc). Data generated from the project will be disaggregated by gender to track the female participants of the programs, in order to ascertain whether the female enrolment targets are being fulfilled or not. M&E capacities of MEFP and other agencies will be further supported through Component 3, including through a TA to improve M&E systems of the different implementers. See Annex 1 for Results Indicators, including baseline and target values. 82 92. Finally, the monitoring and evaluation of the project will include an impact evaluation with an experimental design (randomized control trial) of the short-term large scale skills training program which if effective has the potential to be a game changer to address the skills needs of out of school disadvantaged youth in Mali. The impact evaluation of the program will compare the first cohort of trainees with a control group that will receive the training in the second cohort or later. Youth that are found to be eligible to participate in the program will be randomly assigned to the two groups. In addition, the impact evaluation will compare a lighter treatment (literacy and technical training) with a fuller treatment (adding entrepreneurship and installation kit), to which will be added an even fuller treatment for the youth continuing into the entrepreneurship program for non-graduates (reinforced entrepreneurship, seed funds and access to credit). Outcomes of interest are employment status and income, but also more intermediate indicators such as perceptions of skills and opportunities. Since there is a strong gender dimension to this program, the impact evaluation will also document ways in which the different interventions impact differently men and women. 83 Annex 4: Operational Risk Assessment Framework (ORAF) Mali: Skills Development and Youth Employment Project (P145861) Project Stakeholder Risks Stakeholder Risk Rating Substantial Risk Description: Risk Management: Description: Perceived A key feature of the project is to have included during preparation, and to sustain during mis-trust between implementation, a multi-sectoral Project Steering Committee that will involve the main project government, education stakeholders as well as capacity building and communication activities. In addition extensive providers and the private consultations have taken place during project preparation and working groups including all key sector may cause stakeholders have been set up. Finally, a communication firm will be contracted before project reluctance to work effectiveness, to ensure that information is available to all, reducing risks for misunderstandings together towards meeting and increasing transparency. the PDO. Resp: Status: Stage: Recurrent: Due Date: Frequency: Client In Progress Both CONTINUOUS Implementing Agency (IA) Risks (including Fiduciary Risks) Capacity Rating Substantial Risk Description: Risk Management: Weak capacity of A strong Project Coordination Unit (PCU) will be established to oversee the whole Project and implementing ensure that the Bank fiduciary and M&E requirements are met. The PCU will be directly departments and entities involved in the execution of Components 1 and 3. However, to help speed up project at all levels may cause implementation, Executing Agencies (EAs) will be used to co-implement Components 1 and 2. delays in Three of these agencies have been selected, and one private EA will be selected shortly after implementation. The effectiveness, on a competitive basis. The EAs will benefit from capacity strengthening as institutional and described under Component 3. PCU staff will be selected on a competitive basis, based on their fiduciary assessments qualifications and experience. PCU staff will receive financial management and procurement have been carried out training as required, as well as the EAs during project Resp: Status: Stage: Recurrent: Due Date: Frequency: preparation and have determined respective Both In Progress Both CONTINUOUS roles and responsibilities, as well as additional risks and mitigation measures. 84 Governance Rating Substantial Risk Description: Risk Management: The decision-making and The roles and responsibilities of all Project implementation stakeholders, including ministries accountability and EAs has been thoroughly discussed during project preparation, will be detailed in a mechanisms may be comprehensive Project Implementation Manual (condition of effectiveness), and will be closely diluted because of the monitored during project implementation and revised if necessary. In addition, a launch number of co- workshop will allow for further clarifications on roles and responsibilities. implementing entities. Resp: Status: Stage: Recurrent: Due Date: Frequency: Bank In Progress Both CONTINUOUS Risk Management: PCU and EA staff will be trained in World Bank fiduciary procedures as soon as the project is effective. Resp: Status: Stage: Recurrent: Due Date: Frequency: Bank Not Yet Due Implementation 01-Dec-2014 Project Risks Design Rating Substantial Risk Description: Risk Management: The project will build to a large extent on existing initiatives mitigating design and The multi sectorial implementation risk. In addition, project preparation and implementation will put great emphasis nature of the project on clarifying roles and responsibilities as well as communication between all stakeholders. entails that a large Operational Manuals will be developed for the subgrants to schools (competitive fund) program, number of stakeholders as well at the matching grants program before disbursement; and a comprehensive Project and implementing Implementation Manual will describe the procedures applying to the guarantee funds, as well as, entities have to work among other things, the coordination mechanisms between all these entities. together which could lead to mis- Resp: Status: Stage: Recurrent: Due Date: Frequency: communications and Client Not Yet Due Both 01-Jan-2015 implementation delays. Risk Management: Some supported The project will start in a limited number of locations and will be scaled up based on lessons programs are learnt and the situation on the ground. In addition, the project will also support institutional decentralized bringing in strengthening at the decentralized level. 85 an additional layer of complexity in relation to Resp: Status: Stage: Recurrent: Due Date: Frequency: coordinating central and local entities. Client Not Yet Due Implementation CONTINUOUS Social and Low Rating Environmental Risk Description: Risk Management: The multi sectorial An ESMF has been prepared during project preparation to ensure that project investments have nature of the project positive social, economic and environmental benefits; most environmental impacts are mitigated entails that a large through good construction practices and carefully incorporated mitigation measures. The ESMF number of stakeholders will also address physical cultural resources requirements. ESMPs will be developed during and implementing project implementation which will outline simple procedures for environmental and social entities have to work screening of portfolio of investments. Activities requiring involuntary land acquisition and together which could resettlement will be dealt with through an RFP/RAPs. The team will also make sure that the PCU lead to mis- has a staff dedicated to monitoring the ESMF/ESMP and RFP/RAPs. This staff will be trained by communications and the Bank safeguards specialist. implementation delays. Resp: Status: Stage: Recurrent: Due Date: Frequency: Client In Progress Both CONTINUOUS Program and Donor Rating Moderate Risk Description: Risk Management: Weak donor coordination The project preparation team has consulted development partners (DPs) in Mali to ensure could lead to overlap of complementarity with all involved in the topic and will continue to coordinate efforts during activities and project implementation. A permanent working group on skills development has also been set up. contradictory approaches Coordination with DPs will continue during project implementation. DPs involved in the sector in support of skills will be invited to the Project Launch Workshop. development and youth Resp: Status: Stage: Recurrent: Due Date: Frequency: employment. Both In Progress Both CONTINUOUS Delivery Monitoring Rating Moderate and Sustainability Risk Description: Risk Management: PCU staff will be selected based on their qualifications and will benefit from strong capacity 86 The PCU has not been building in all the aspects of project management and M&E. In addition, M&E training will be set up yet and it is provided to the ministries and EAs and impact evaluations have been built in the project. therefore impossible to assess their capacity to effectively monitor Resp: Status: Stage: Recurrent: Due Date: Frequency: schedules, costs, quality and timing and Both In Progress Both CONTINUOUS implementation milestones, as well as to Risk Management: carry out M&E. In The team is building to a large extent on existing programs and mechanisms which should addition, the capacities support ownership and sustainability. of ministries and EAs to Resp: Status: Stage: Recurrent: Due Date: Frequency: carry out M&E is relatively weak. Client In Progress Both CONTINUOUS The project is innovative in nature and the efforts to sustain it may not continue after its closure due to a lack of ownership. Overall Risk Overall Rating Substantial Implementation Risk: Risk Description: Key risks likely to affect the PDO include still a volatile political and social environment, and weak implementation capacity of institutions in Mali. In particular, institutions in Mali, at all levels, experience weak implementation capacity due, among other factors, to a weak fiduciary environment and poor governance. Specifically in relation to the project, some risks may be associated with the multi-sector nature of the operation, entailing possible tensions between the many stakeholders involved at implementation stage, and the risk of conflict in some areas of project implementation. This is an innovative multi-sectoral project which requires intensive implementation support and communication. Most implementation related risks are substantial. However, the risks can be mitigated and the benefits outweigh the risks. 87 Annex 5: Implementation Support Plan REPUBLIC OF MALI: Skills Development and Youth Employment Project Strategy and Approach for Implementation Support 1. The Implementation Support Plan (ISP) focuses on mitigating the risks identified in the ORAF, and aims at making implementation support to the client more flexible and efficient. It also seeks to provide the technical advice necessary to facilitate achievement of the PDO (linked to results/outcomes identified in the result framework), as well as identify the minimum requirements to meet the Bank’s fiduciary obligations. • Technical: Implementation support will include: (a) progress on objectives (b) fine tune strategies where required (c) drawing lessons from the implementation for wider applicability. • Financial management. Implementation support will ensure that the project maintains a satisfactory financial management system throughout the project’s life. It will aim at identifying bottlenecks early on and ensure prompt action on potential issues. • Procurement. In addition to prior review of contracts (see Annex 3), procurement implementation support and supervision will include at least two missions each year and one visit to the field to carry out post-review of procurement actions. Post-reviews can be done either by IDA specialists or by independent consultants hired under the project according to procedures acceptable to the Bank to ascertain compliance with the procurement procedures. • Environmental and Social Safeguards. The Bank team will supervise the implementation of the EMSF and ESMPs, and RPF (and RPAs, if necessary). • Other Issues. Sector level risks will be addressed through policy dialogue with the Government, executing agencies and stakeholders. Implementation Support Plan 2. Despite the Bank’s experience in the country, the wide geographical scope and innovations in the project, as well as the risks related to the volatile and fragile environment, will require fairly intensive supervision, especially during the first two years of implementation. The Bank team members will be based both in Washington DC and Country Offices (Bamako or neighboring countries), and will be available to provide timely, efficient and effective implementation support to the clients. NGOs and UN organizations may be approached to facilitate supervision in the north. Formal implementation support missions and field visits will be carried out at least twice annually. These will be complemented with monthly video conferences to discuss project progress. Detailed inputs from the Bank team are outlined below: • Technical, Policy and legal/Regulatory inputs. • Fiduciary requirements and inputs. Training will be provided by the Bank’s financial management and procurement specialists as needed. The Bank team will also help identify capacity building needs to strengthen financial management capacity and to improve procurement management efficiency. Financial management and the procurement specialists will be based in the country office to provide timely support. Formal supervision of financial management and procurement will be carried out semi-annually. 88 • Safeguards. Inputs from the environment and social specialist will be provided as needed. • Operation. The Task Team will provide day-to-day supervision of all operational aspects, as well as coordination with the clients and among Bank team members. Relevant specialists will be identified as needed. Table 1: Main focus in terms of support to implementation during: Time Focus Skills Needed Resource Partner Estimate Role First twelve • Project overview: team leadership US$140,000 months • Private Sector Development annually • Technical and Vocational Education • Overall operational knowledge and project monitoring • Procurement and financial management • M&E • Safeguards 12-48 • Project overview: team leadership US$140,000 months • Private Sector Development annually • Technical and Vocational Education • Overall operational knowledge and project monitoring • Procurement and financial management • M&E Safeguards Remaining As 12-48 • Project overview: team leadership US$140,000 project life months •Private Sector Development annually above. •Technical and Vocational Education Will also • Overall operational knowledge and project include an monitoring impact •Procurement and financial management evaluation •M&E in 2020 • Safeguards • Impact Evaluation Specialist in 2019 89 Table 2: Skills Mix Required Skills Needed Number of Staff Number of Trips Comments Weeks Task team leader/ 10 SWs annually At least 2 implementation DC based or Country Education Specialist support trips Office based Private Sector Development 10 SW annually At least 2 implementation DC based or Specialist support trips Country Office (regional office) based Operations Officer 5 SW annually Trips to project sites as DC based or Country necessary office based Procurement 5 SWs annually Not Applicable Country office based FM Specialist 5 SWs annually Not Applicable Country office based Environment specialist 1 SW annually Trips to project sites as Country office (or necessary regional office) based Social specialist 1 SW annually Trips to project sites as Country office (or necessary regional office) based Technical and Vocational 5 SWs annually At least 2 implementation International Consultant Education Specialist support trips M&E Specialist 3 SW annually Implementation support trip if DC based required (likely for the set up of the M&E framework at the beginning of the project). Support from HQ more likely. More support for Impact evaluation. 90 Annex 6: Economic and Financial Analysis REPUBLIC OF MALI: Skills Development and Youth Employment Project 1. Like most of Sub-Saharan Africa, the Republic of Mali is facing a significant challenge in gainfully employing its growing youth population. 5 The youth in Mali today are more educated than earlier generations, but they do not necessarily face a better economic future. Youth out-of –school is still a big problem—2010 ELIM data shows that 73 percent of the youth between the ages of 15 and 24 are out of school, and half the youth in this cohort have never attended school, and have limited qualifications (Figure 1). Figure 1– Educational Attainment in Mali, by age Source: 2010 ELIM 2. Even the educated youth in Mali are likely to be unemployed or underemployed. Almost 90 percent of the youth in Mali work in low paying jobs in the informal agriculture or service sectors. Data from 2010 suggests that almost a fifth of the youth aged 15 to 34 are either unemployed or inactive (Table 1). In addition, this share is much higher among the Malians who are more educated. For example, almost 40 percent of the youth with a higher education degree either are unemployed or completely outside of the labor market (Table 2). Meager labor market prospects for such a large share of the youth will depress economic growth over the long run. 6 At the same time poor life outcomes for the individuals 7 also lead to a decline in engagement in 5 World Economic Forum. The Africa Competitiveness Report, 2013, http://www3.weforum.org/docs/WEF_Africa_Competitiveness_Report_2013.pdf. Geneva: The World Economic Forum, 2013. February 18, 2014. 6 Heckman, James J. and Dimitriy V. Masterov. http://jenni.uchicago.edu/human- inequality/papers/Heckman_final_all_wp_2007-03-22c_jsb.pdf. Paper Presented as the T.W. Schultz Award Lecture at the Allied Social Sciences Association Annual Meeting, The Productivity Argument for Investing in Young Children, 2007. October 30, 2012. 7 Muennig, Peter. "The Economic Value of Health Gains Associated with Education Interventions," http://www.schoolfunding.info/news/policy/Muennig%20-%20Health%20and%20Education.pdf. Prepared for the Equity Symposium on "The Social Costs of Inadequate Education" at Teachers’, September, 2005. October 29, 2012; Haveman, Robert, Wolfe Barbara and James Spaulding. "Childhood Events and Circumstances Influencing High School Completion." Demography 28, no. 1, February, 1991, 133-157. 91 civic activity and increase in violence, 8 as evidenced by the recent crises and the wave of violence in the country, amplified by youth unemployment. Addressing this challenge youth’s economic security will go a long way in supporting a long-lasting resolution to the crises. Table 1 – Educational attainment and employment Status, age 15 to 34 Total female male Bamako Other urb Rural School only 11.1% 8.4% 14.4% 27.7% 25.3% 4.9% Work only 65.4% 60.8% 71.0% 47.4% 40.6% 74.1% Both work & school 3.0% 1.5% 4.8% 0.4% 2.9% 3.5% Inactive 18.3% 27.0% 7.6% 18.6% 27.1% 16.3% Unemployed 2.3% 2.4% 2.1% 5.9% 4.1% 1.2% Total 100% 100% 100% 100% 100% 100% Source: 2010 ELIM Table 2 – Educational attainment and employment Status (Age 15-34) Unemployed No education 1% Incomplete primary 1% Completed primary 1% Completed lower secondary 2% Completed upper secondary 13% TVET 5% Higher education 32% Total 2% Source: 2013 EMOP (estimates) 3. Education outcomes in Mali, though improved, remain poor, especially in the sector’s ability to meet the needs of the labor market. While there is a wage premium attached to secondary education, it is not as high as primary education, suggesting that the marketplace does not sufficiently value the skills developed at secondary (and even tertiary) institutions (Figure 2 and Table 3). While employers both from the formal and informal sectors complain of difficulties with finding skilled employees, highly educated Malian youth remain unemployed, suggesting that while educated, these youth have not fostered the skills needed in the labor market, or have not specialized in the right sector. Thus one critical challenge for Mali is to support skills development for its vast and uneducated out of school youth stock to support employability and productivity. 8 Junn, Jane. "The Political Costs of Unequal Education," http://devweb.tc.columbia.edu/manager/symposium/Files/73_junn_paper.ed.pdf. Paper Prepared for the Symposium Social Costs of Inadequate Education, October 24-25, 2005, 2005. October 29, 2012. 92 Figure 2– Educational Attainment in Mali, by age Source: Estimates based on ELIM Data Table 3 – Monthly Earnings, CFA Fr, 2010 Total Male Female No Education 30,112 51,677 12,944 Incomplete primary 31,906 44,176 17,349 Completed primary 37,362 50,163 20,787 Completed lower secondary 47,393 56,510 27,899 Completed upper secondary 62,649 71,733 46,812 TVET 102,392 111,708 76,524 Post-secondary 113,023 138,944 69,983 Average Monthly Earnings 33,492 52,784 15,474 Source: 2010 ELIM 4. Mali’s education system offers limited options of formal or informal education and training at technical levels. First, the TVET system is too fragmented: formal TVET programs are under the control of the Ministry of Education and Ministry of Tertiary Education, and informal programs that lead to certification are managed by the Ministry of Professional Education and Labor. The formal TVET sector consists of about 20 public secondary TVET institutions, and over 300, much smaller, private secondary TVET institutions mostly concentrated south of Mopti. 9 In the 2012-2013 school year, the secondary vocational stream enrolled approximately 94,000 students, 80 percent of which were attending private institutions. Most students at the secondary level are in programs that target the service sector. The informal TVET sub-sector includes about four public schools under the Ministry of Professional Education and Labor and a small number under the Ministry of Industry and Ministry of Agriculture, as well as about 100 private institutions, providing non-degree courses. 5. Mali has recently started reforming its TVET sector, but graduates still suffer from many weaknesses. One significant change has been the shift towards a competency based 9 Degrees offered include the 2-year vocational training certificate (Certificat d’Aptitude Professionnelle – CAP), the 4-year technician degree (Brevet de Technicien- BT), the 3-year professional degree (Bac Professionnel), the 3-year technical degree (Bac Technique), the only one offered in the lycées techniques and more geared towards tertiary education, and 2 or 3 year tertiary technical degrees (Diplome Universitaire Technique (DUT), License et Maitrise Technique). 93 approach 10 (Approche par Compétences – APC), which has increased the appeal of the TVET sector. However, most TVET programs remain outdated: the curricula is still tilted towards much theoretical knowledge and provide limited exposure to work experience, and limited access to internships or workshops. TVET programs fail to emphasize core literacy and numeracy skills (crucially missing in the majority of in and out of school youth), as well as transversal skills such as problem solving, thinking skills and entrepreneurial skills. Delivery of TVET education remains rigid, with few attractive options to out-of-school youth seeking to acquire some basic core and technical skills or complement their existing skill set. Apprenticeship programs are in short supply mainly due to funding constraints. The TVET sector also lacks qualified instructors, both in disciplines with rapid advances such as IT and in older disciplines such as construction, mechanics, and electricity. 6. Whether they are educated or not, employment opportunities for youth also remain limited. Mali’s formal employment markets are small, and constrained, and more than four fifths of the jobs in Mali are in the informal sector (Figure 3). In the near future, expansion of economic activity is likely to be in the fields of mining, construction, fisheries, and especially agro-business, and if there would be any expansion in the formal labor markets, this would come from the private sector, especially emerging and established MSMEs. Figure 3– Employment status by age Source: 2010 ELIM 7. Skill mismatches in these areas explain to a degree why youth employment in formal labor markets remains stagnant. At the same time, for small and medium scale firms, operational risks outweigh the returns from investing in workforce development. These firms are generally not interested in developing their own workforce or invest in the longevity of their employees. The biggest impediment in formalizing in the agriculture and services is access to finance, as well as limited availability of seed funds and support services for newly established businesses. These constraints must be addressed to support business and job creation. 10 Since 2007, 27 competency based courses across 22 education and training sectors (including agriculture, tourism, construction and civil works, mechanics, mining and construction sites, and energy and transport among many others) have been developed. But the transition to the competency based approach is still far from complete. 94 Cost-benefit analysis 8. Overall, the project meets several challenges of the education system and job market in Mali. First, interventions for strengthening the public and private TVET institutions by improving curricula, adding work opportunities and apprenticeships, and improving teacher quality will help address the skills gap in the intermediate term. Adding more capacity at the TVET level will help improve the availability of skilled labor in areas that are in high demand. Furthermore, short term training programs for out-of-school youth will add to capacity in the shorter term. This existing gap between demand and supply for skilled human resources reveals a great potential for this project to increase productivity and growth in the targeted sectors, as the project is complementary to other interventions in the education sector. On the demand side, the project addresses one of the biggest constraints for small and medium sized businesses: access to finance and support for entrepreneurial activities. These programs will support expansion of formal labor markets for the youth and/or increase good jobs in the informal sector. 9. The main benefit from the project is in terms of increased employability due to the adaptation of the training to labor market’s needs, and increased earning capacity of the trained youth. The project also supports increased earnings through entrepreneurial activity, a main driver of economic growth, and provides financial stability for small and medium scale businesses. In general, quantifying benefits from improved quality of education and job opportunities could be difficult, since the effect on increased labor productivity, employability, and income are difficult to assess. Therefore, the following paragraphs discuss more qualitatively the benefits expected to accrue from the project components and include quantitative assessments where possible for each of the components of the project. Sub-component 1.1 - Strengthening Technical and Vocational Education and Training (Total costs including contingencies US$14.1 millions) 10. This subcomponent will mainly support two public sector institutions in the agro-industry (Ségou and Bankass Institutes), one public sector institution in construction trades (IFSAB institute in the Bamako area), one public mining institute (Kayes), and about ten to twelve private institutions, either by strengthening or by introducing (if non existing) sectors, sub- sectors and fields. For public institutions, interventions supported by the project are well specified, and they include: support of competency based approach curricula in the priority fields and levels, including modules for entrepreneurship, support for apprenticeships and work-based training, training of trainers, and equipment and capital upgrades. For private institutions, the bank support will be competitive grants of up to US$400,000, which could be spent on improvements and upgrades, also leading to capacity additions. 11. The project is expected to increase both access to and quality of the TVET system in Mali. The project will support quality improvements for existing students (over 2,300 in public entities and approximately 1,000 in private entities) and expand capacity to education for about 1,500 more students across all institutions benefiting from the funds. Finally, it is also envisaged that the institutes be open to welcome about 300 workers per year from the supported and other SMEs for training in the key priority sectors. Improvements in quality are expected to increase employability of existing students, increase graduation rates, and increase income. 95 12. The benefits estimations for the project consider both quality improvements and benefits of increased access. The baseline model assumes that first graduates from the increase in access will emerge in 2020—this is a conservative assumption with a two-year implementation period and a full four-year education cycle (although some beneficiaries will attend two-year programs). The conservative base model also assumes that graduation rate will increase from 60 percent to 70 percent whereas the alternative model assumes that the projected goal of 80 percent will be achieved by 2020. Table 4 – Model Assumptions on graduation rates and implementation Base Model Project assumptions Alternative Model Implementation period 2 years 1 year Use Base Graduation Rate (baseline – Increase to 70 percent Increase to 80 percent Increase to 80 percent 60%) Time to graduate 4 years 3 years 3 years 13. The direct effect of the increased access to TVET can be quantified based on expected wage benefit for those graduating. This will depend on the potential increases in wages and the probability of finding a job. ELIM data suggests that the differences in wages are particularly high going from secondary to TVET education and from TVET to higher education (See Table 3). The base model makes allowances for the alternative paths students would have taken had they not benefited from the capacity expansions for TVET. Specifically, the base model assumes that half the students who would gain access to TVET would have chosen to go to upper secondary in the absence of the project, and the other half would have joined the labor market at the end of lower secondary. Under these assumptions, ELIM data suggests that students would see their annual wages increase by 10 percent. The more optimistic alternative model assumes a 14 percent—that is equivalent to assuming that all newly enrolled TVET students would have dropped out of school at the end of secondary. Both models allow for the opportunity cost for attending TVET since students would have been employed, albeit in lower paying jobs, had they not attended school. Table 5 – Model Assumptions on salaries and employment rate Base Model Alternative Model Salary improvements 10 percent 14 percent 1 1 Baseline employability 91% 80 %2 Employability after graduation from 95% 90% TVET under project 1 Based on the rate of TVET graduates unemployed or inactive in 2013 EMOP. 2 Based on youth who are inactive or unemployed in 2010 ELIM. 14. The effects of qualitative improvements are captured in higher graduation and higher employment rates for existing students. These assumptions for the baseline and alternative models are already displayed in Tables 4 and 5. The increase in employability also takes into account the positive expected impact of the support to MSMEs to grow and create jobs under component 2. 15. The costs account for both the initial investments made by the project and the recurring expenditures that must be paid for by the Malian government. Both the baseline and the alternative model assume that the project will disburse funds from 2015 over six years 96 with heavy investments in the public sector through 2018, and grants to the private sector beginning in 2015 and increasing through 2020. Recurring expenditures will include the cost of expanded teaching force, and the cost of replacing aging equipment provided by the project. Both the base and the alternative model assume that the disbursements from the project are entirely used in quality improvements, and do not support recurring costs. Currently, across the four main public institutions that would benefit from the project, the pupil teacher ratio is 20 to 1 (Table 6). The rate is lowest in ISFAB at 9 to 1.This institution can easily expand capacity without increasing the net number of instructors. At IFP/Bakasse, on the other hand, new instructors must be hired, even in the absence of expansions, to reduce the pupil teacher ratio from its current level of 37 to 1. The base model assumes that across all institutions, the pupil teacher ratio will average 15, which includes improvements over the current averages. The alternative model assumes that the ratio will remain at 20. Table 6 – Pupil-teacher ratios at public institutions Pupil/Teachers IFP/Segou 15 IFP/Bankasse 37 IFP/Kayes 21 IFSAB 9 Average 20 16. In 2010, TVET instructors, on average get paid 7 percent of per capita GDP in Mali every month. 11 Adjusted for inflation, this would equal approximately FCFA 2.7 million annually or US$5,104 annually. The base model assumes that instructor pay will increase to 8.3 percent of per capita income due to improvements in teacher quality. The alternative model assumes that the current rates will continue to prevail. Finally, both base and alternative models assume a depreciation rate of 10 percent annually, which implies that the Malian government would have to spend approximately US$410,000 per year to ensure that the equipment at TVET institutions will be maintained in good order (Table 7). Table 7 – Model Assumptions instructor salaries, pupil-teacher ratios and depreciation Base Model Alternative Model Instructor salaries (monthly) 8.3 percent of GDP/Capita 7 percent of GDP/Capita Pupil-teacher ratio 20 to 1 15 to 1 Depreciation 10% 10% 17. It is important to note that the cost estimates under the alternative model, which is relatively more optimistic, are still conservative. Under the alternative scenario, just increased salaries would expand annual costs by US$127,616 annually. This is five times the per pupil costs at public institutions, which stand at 210 percent of per capita GDP. 18. The base model suggests that under an assumption of a 4 percent discount rate, Component 1.1 of the project (support for public and private TVET entities) will generate a net 11 The World Bank. Le Système Éducatif Malien, Document de Travail de la Banque Mondial No. 98, 2010. 97 present value of US$657.5 million, with an internal rate of return of 43 percent over 25 years. The internal rate of return over the same period for the alternative model is 53 percent. Table 8 – NPV and IRR of Component 1.1 – expanded capacity and quality improvements at TVET level Base Model Alternative Model Discount Rate 4% 4% US$948,731,738 Net Present Value US$657,461,832 IRR 43% 53% Sub-component 1.2 – Dual apprenticeship and decentralized short-term skills training programs for the unemployed youth (Total costs including contingencies US$15.1 million) 19. This subcomponent of the program will target out-of-school youth to improve employability of the participants. The dual apprenticeship program will expand the current program run by FAFPA, both by adding new participants (more than doubling its current capacity by adding 4,500 participants over five years), and expanding program coverage by adding new sectors and localities. The project will also fund options that are more flexible (the current program only has a 3-year option), improve numeracy and literacy education, and provide more support to graduates in certification and job-placement. 12 The program will run for five years and cost US$7 million. 20. The decentralized short-term skills program will support a non-formal vocational education and training program for out of school youth to help prepare them for successful integration in the local labor market in agriculture, livestock, construction, and other activities in the key priority sectors. The program will focus on youth with very limited or no education in peri- urban and rural areas, including post-conflict where this program can also help reintegrating youth at risk. 13 The structure and the duration of the training will depend on the location and the delivery mode, but the training, which will be under one year, will be offered at the workplace such as agricultural estates, crafts industry workshops, and construction sites. The project will also train trainers—an important component since international evidence suggests that some on-the-job training programs suffer due to pedagogical shortcomings. 14 Youth will 12 The program will also leverage some of the quality improvements supported under Component 1.1 13 For example, in Sierra Leone, a mid-term evaluation of a non-formal training program (part of the Employment Promotion Program that was implemented in 2006), which offers combined literacy and skills development courses with socio-pedagogical support for youth, demonstrated reduction of conflicts and violence among trainees, both at training facilities and in the community German Technical Cooperation. "Non-Formal Education and Training," http://www.giz.de/Themen/en/dokumente/gtz2009-en-nfe-sierra-leone.pdf. Project Report, 2010. February 2, 2013. South Africa’s Urban Conflict Management Project (which was active through 2010) was built on a voluntary conflict resolution program, called the Community Peace Workers, and volunteers were offered cognitive and soft skills training as well as apprenticeships. The program not only reduced crime (although hard numbers are not available), almost all of the youth who volunteered as a peace worker received vocational training, which eventually lead to jobs, majority of which are in the security sector German Technical Cooperation. "Urban Conflict Management Peace and Development Project," http://www.giz.de/Themen/en/dokumente/en-suedafrika-conflict- management-PDP-national.pdf. Program Brochure, 2009. February 2, 2013. 14 For example, The Non-Formal Education and Livelihood Skills for Marginalized Street and Slum Youth in Uganda offered apprenticeship opportunities for youth out-of-school and living in slums. The program served 184 youth between 2004 and 2006, majority of whom are females (152 females).Use of local artisans kept training costs 98 also receive complementary literacy and technical trainings, and may benefit from the entrepreneurship program supported by component 2. The financial support for this component of the project is US$8.1. 21. The dual apprenticeship program will benefit 4,500 (over 5 years) unemployed youth aged 15 to 24, with lower secondary education or less. The decentralized skills training program will benefit about 20,000 (over 5 years) unemployed youth in the 15 to 29 age range with lower secondary education or less in the key priority sectors in selected peri-urban and rural localities. 22. The benefits from the dual-apprenticeship program as well as the short-term training programs can be quantified in terms of higher expected wages for participants. First, successful graduates will be more likely to be hired at higher salaries, and will be more likely to find gainful employment. The base model assumes that of the 1,500 students that start the dual apprenticeship program, 80 percent will successfully complete the program. Similar assumptions are used for the short-term training program, each year 20 percent of the students enrolled would drop out. This assumption is based on the experience from Kenya’s Youth Empowerment Project, which serves a similar cohort of youth with similar educational background. 15 The alternative model assumes a dropout rate of 7 percent (based on a similar program in Ghana) for both programs. 16 23. Under the base model, youth are expected to increase their employability by 6 percent under both the dual apprenticeship and short-term training programs. This assumption is based on the outcomes of Peru’s Projoven program, which has similar components. 17 In Uruguay, a similar program has been reported to increase youth employment low; however, lack of training experience and pedagogical knowledge hindered success. Those who completed the program have managed to find gainful employment, and have generally reported improvements in their self- perception. 15 KEPSA. "KYEP Project Achievements," http://www.kepsa.or.ke/kyep/index.php/about-kyep/achievements, 2011. February 2, 2013. 16 It is important to note that other programs in Africa have fared much worse. For example, Nigeria’s Open Access Apprenticeship program, despite reaching large numbers of youth Haftendorn, Klaus and Carmela Salzano. "Facilitating Youth Entrepreneurship, Part II - A Directory of Awareness and Promotion Programmes in Formal and Non-Formal Education." http://www.ilo.org/public/libdoc/ilo/2004/104B09_44_engl.pdf. International Labour Organization 2004ILO SEED Working Paper No. 59. Geneva. February 2, 2013, suffered from high drop-out rates (about 42 percent). In Ghana, pre-employment training offered secondary school graduates or drop-outs, mostly in rural areas suffered from low quality and high drop-out rates among the trainees and coordination problems between the national and regional governments Palmer, Robert. "Skills Development, The Enabling Environment and Informal Micro-Enterprise in Ghana," diss. University of Edinburgh, 2007. http://lac-repo- live7.is.ed.ac.uk/handle/1842/1698. The program, offered by the Integrated Community Centres for Employable Skills (ICCES) Agency, was initially designed as a community based alternative to formal education, where local artisans were expected to train the youth and provide work opportunities. However, the training centers were never able to garner the necessary financial support from the communities Palmer, Robert. "Skills Development, The Enabling Environment and Informal Micro-Enterprise in Ghana," diss. University of Edinburgh, 2007. http://lac- repo-live7.is.ed.ac.uk/handle/1842/1698. Again in Ghana, a short-terms skills development training program called Skills Training and Entrepreneurship Program (STEP) ran into similar problems. Despite high attendance (training costs were covered by the government, and the program offered training, apprenticeship and job placement services and microfinance support to a combined 27,500 trainees through 2006) STEP was riddled with coordination problems between regions and the central government. 17 Betcherman, Gordon, Karina Olivas and Amit Dar. "Impacts of Active Labor Market Programs: New Evidence from Evaluations with Particular Attention to Developing and Transition Countries." 99 by 46 percent. This is a very aggressive improvement. The alternative model assumes an improvement rate of 25 percent, which is the mid-point between the experiences in Peru and Uruguay (Table 9). 18 Table 9 – Model Assumptions for component 1.2 Dual Apprenticeship and decentralized short-term training Base Model Alternative Model Drop-out rate 20 percent 7 percent Baseline employability 80% 80 % Employability after graduation 86% 100% Move earnings from primary Move earnings from primary to Salary improvement to upper secondary upper secondary Percentage who would have worked if 75% 65% not in dual apprenticeship Percentage who would have worked if 50% 50% not in dual apprenticeship 24. Both the base and alternative models assume pre-training employment rates of 80 percent (using the ELIM data which better capture the combination of unemployment and inactivity of youth with limited education than the less comprehensive EMOP data). In addition, the model accounts for the opportunity cost of attending training. The base model for the dual-apprenticeship program assumes that three quarters of the trainees would have been gainfully employed had they not been in dual apprenticeship programs. The alternative model assumes a rate of 75 percent. The model for the short-term training program assumes a 50 percent take-up rate. The model assumes that the programs will expire at the end of the six-year project period, so all recurring costs are paid for by the project. 25. The base model suggests that under an assumption of a 4 percent discount rate, Component 1.2 of the project will generate a net present value of US$39.1 million, with an internal rate of return of 21 percent over 25 years. The internal rate of return over the same period for the alternative model is 30 percent. Table 10 – NPV and IRR of Component 1.2 Dual apprenticeship and short-term training programs Base Model Alternative Model Discount Rate 4% 4% Net Present Value US$39,131,519 US$65,319,679 IRR 21% 30% http://info.worldbank.org/etools/docs/library/251019/day6DiscussionPaperSeries0402April6Se1.pdf. The World Bank, January 2004. Social Protection Discussion Paper Series No. 402. Washington, DC. January 1, 2013. 18 The international evidence on employment gains also is mixed since different projects cater to very different youth. For example, one study from Ghana shows that apprenticeships increase earnings of youth with little formal training by up to 50 percent Monk, Courtney, Justin Sandefur and Francis Teal. "Does Doing an Apprenticeship Pay Off? Evidence from Ghana." CSAE Working Paper Series 2008-08. Center for the Study of African Economies, University of Oxford 2008. CSAE Working Paper Series 2008-08. Oxford. February 2, 2013. 100 Component 2: Private Sector led Job Creation for Youth (Total costs including contingencies US$25.1 million) 26. The project’s second component will support private sector led youth employment strategies in Mali to improve job opportunities for youth. This component will complement the skills development and employability of youth in Mali by ensuring that demand side constraints—mostly financial barriers to businesses—are addressed. Component 2 will support the establishment of conditions for jobs creation for young people through both self- employment, in the formal and informal sector, and support to the development of established micro-enterprises and SMEs. 27. Programs that combine business training with access to finance to help out-of-school youth start their own businesses are widespread across Sub-Saharan Africa, but their performance is mixed. Access to microfinance, combined with business training and services can make significant impact on the lives of the youth. However, youth’s access to microfinance is usually limited because of legal restrictions as well as the general perception among the financing entities that youth is a riskier group. A USAID study counts eight different microfinance entities operating Uganda with some services for the youth (Uganda has one of the most developed microfinance industries in Sub-Saharan Africa), but also notes that less than 10 percent of the youth aged 15 to 24 who start their businesses use these microfinance entities. 19,20 28. Micro-finance programs generally target to overcome the legal and financial barriers for the youth. For example, a quasi-experimental evaluation of Kenya’s Tap & Reposition Youth, a microfinance program that combined training (financial, life skills, and health issues were covered) and mentorship with business grants to groups of young women, so long as the group met a certain savings threshold, showed that participants in the program earned higher wages (20 percent compared to the control group), increased their savings (doubled their savings compared to baseline, and their savings amounts were 50 percent higher than the control group), were more likely to use a bank to keep their savings as opposed to keeping it at home. 21 The study also found some evidence that the girls who participated in the program were more likely to refuse sex or use a condom. The evaluation also showed that drop-out rates were high, especially among the younger girls, and especially when access to credit was delayed because of implementation problems. Other examples across the region include Street Kids International, an NGO that provides entrepreneurial support to marginalized children, with projects in Ethiopia (reached about 2,500 youth in its first five years) and Sierra Leone (plans to reach approximately 3,500 youth in three years.), and Ghana’s Venture Capital Trust Fund, established in 2004, which 19 USAID. "Microfinance, Youth and Conflict: Central Uganda Case Study," http://www.equip123.net/docs/e3- UgandaCaseStudy-FINAL.pdf. MicroREPORT #38, February, 2006. December 2, 2012. 20 The biggest sources of funding for young men are wages (approximately 20 percent) and Rotating Savings and Credit Associations (approximately 14 percent) followed by parents, and stealing. For girls, parents (about 14 percent) and Rotating Savings and Credit Associations (about 17 percent) provide the easiest access to capital followed by funding from own savings, boyfriends, and even prostitution 21 Erulkar, Annabel S. and Erica Chong. "Evaluation of a Savings and Micro-Credit Program for Vulnerable Young Women in Nairobi." http://www.popcouncil.org/pdfs/TRY_Evaluation.pdf. The Population Council, December 2005. Nairobi. February 12, 2013. 101 provides low cost credit to enterprises and business start-ups through tax-exempted intermediary institutions. 22 29. The entrepreneurship subcomponent will support the employability of youth through entrepreneurship development and provision of seed money. It will include an entrepreneurship program for youth with limited education, including some coming from the skills training program supported under Component 1. Participants will also receive seed money for up to $400 and access to funds through FARE for further developing their businesses. This sub-component will cost USD 9.1 million. The entrepreneurship program for youth with at least upper secondary education (technical or non-technical) will provide opportunities for successful entrepreneurship for youth with at least upper secondary education who have potential for creating somewhat larger enterprises in the informal and formal sector. It will also support a Business Plan Competition (BPC) for 21 to 35 years old coming out of school (including from the institutes supported in Component 1) or already on the labor market. It is expected that this program would lead to the creation or consolidation of about 500 small enterprises in the three key priority sectors of the project and emerging sectors, leading to the creation of about 2,000 new jobs by the end of the project (assuming 4 people per enterprise, in line with the average statistics on small enterprises in Mali). 30. The entrepreneurship program for non-graduates will provide Level 1 training to 10,000 youth, Level 2 training for 6000 youth. Out of this group approximately 3,000 youth will have access to access to start-up funds and micro-finance. 1,500 youth will be joining from the decentralized skills training program directly to Level 2 training. Youth having launched one- year-old micro or small enterprises and who want to consolidate them will also be eligible to participate in the program. The entrepreneurship program for youth with at least secondary education will target 1,000 youth from urban areas selected to participate in the BPC and receiving the related capacity-building, with about half (500 youth) receiving the awards. The program will target 50 percent of start-ups and 50 percent of enterprises established within the last three years. 31. Component 2 will also provide support for established small and medium enterprises for job creation (For a total cost of US$8.2 million including contingencies and matching grants of US$6.7 million) and funds for FARE to role as a loan guarantee organization (US$1.5 million). It is assumed that the project will disburse funds for the entrepreneurial support for both non- graduates and support for graduates (including seed money) in similar increments over six years (2015 through 2020). Support for SMEs, including matching grants would be disbursed over five years and FARE support will be disbursed by the end of 2018. 32. The projected benefits from this component will include higher earnings and employability for youth who benefit from entrepreneurial training, seed money, microfinance, and support for business plan development. The program will have multiplier effects, since successful businesses are expected to generate new jobs. The base model assumes that 30 percent of the participants will drop out before completing the program based on the intermediate goals of the project. The alternative model assumes a 20 percent drop out—the rate 22 For details, see http://venturecapitalghana.com.gh/Default.aspx. 102 observed in the similar TAP program in Kenya. 23 For youth with limited education, baseline employability is assumed to be 80 percent, and for youth with secondary education, the baseline employability is assumed to be 91 percent in both models. The models assume that the probability of being employed, either in their own business or in jobs created by the program is between 95 and 100 percent (Table 11). Table 11 – Model Assumptions for component 2 – Entrepreneurial Training for youth with limited education, with secondary education, seed money and business plan support Base Model Alternative Model Drop-out rate – 30 percent1 20 percent2 Baseline employability – limited 80% education 80 % Baseline employability – Secondary 91% 91% school graduates Employability after graduation 95% 100% Move earnings from Salary improvement for youth with Move earnings from incomplete incomplete primary to lower limited education primary to lower secondary secondary Move earnings from lower Salary improvement for youth with Move earnings from lower secondary secondary to upper secondary degrees to upper secondary secondary Job multiplier – seed money and 1.5 2 microfinance Job multiplier – business plan 2.5 5 development Business survival 80% 85% 1 Goal in PAD. 2 Kenya’s TAP program 33. Both the baseline and the alternative model assumes that youth with limited education will increase their earnings from the level of those who have not completed primary education to those who completed lower secondary. This is equivalent to approximately a 48 percent increase. For youth who have completed lower secondary to qualify for the business plan development support, earnings are assumed to increase to the level of those who completed upper secondary. 34. The project goals stated in this PAD estimate that the job creation in each new business could be 2 to 4 new additional jobs per business. The alternative model allows for 2 to 5 jobs. As in previous cases, the models also allow for the opportunity cost of attending the entrepreneurial training and business development activities. The models ascribe no additional benefits from the funds spent on SMSEs, matching grants, and loan guarantees, which are captured through increased employability in component 1. 35. The base model suggests that under an assumption of a 4 percent discount rate, Component 2 of the project will generate a net present value of US$11.0 million, with an internal 23 Erulkar, Annabel S. and Erica Chong. "Evaluation of a Savings and Micro-Credit Program for Vulnerable Young Women in Nairobi." http://www.popcouncil.org/pdfs/TRY_Evaluation.pdf. The Population Council, December 2005. Nairobi. February 12, 2013. 103 rate of return of 15 percent over 25 years. The internal rate of return over the same period for the alternative model is 57 percent. Table 12 – NPV and IRR of Component 2 – Private-Sector Led job creation for Youth Base Model Alternative Model Discount Rate 4% 4% Net Present Value US$10,996,158 US$62,403,319 IRR 15% 57% Overall project assessment 36. When combined together, the total benefits from the project far exceed the total costs. Under the base scenario, and with an assumption of a 4 percent discount rate, the project’s net present value is estimated at US$706.9 million, with an internal rate of return of 31 percent over 25 years. The internal rate of return over the same period for the alternative model is 48 percent. Table 13 – NPV and IRR by sub-component (million 2014 US$) (Base scenario, calculated over 25 years) Base Model Alternative Model NPV IRR NPV IRR Component 1 - TVET improvements US$702.0 37% US$1,019.5 46% and expansion and non-formal skills development programs Component 2 – Entrepreneurship US$11.0 15% US$62.4 57% programs Component 3 - Technical Assistance1 (US$8.7) NA (US$8.7) NA TOTAL US$706.9 31% US$1,075.8 48% 1 Technical assistance is assumed to be disbursed over three years beginning 2016. 37. Excluded from this analysis are other benefits that could accrue due to improvements in overall economic productivity, better social outcomes and a stronger society. More educated and gainfully employed youth are more likely to slip out of poverty, make better parenting decisions, have children at relatively older ages, use modern contraceptive methods, take better care of themselves and their children by receiving antenatal care, improve maternal and child health, and be more knowledgeable about HIV/AIDS. One study suggests that overall well-being of those who complete upper secondary education in Mali, measured across these dimensions, is five times higher than those who have not completed primary education. 24 These benefits are not captured in the cost-benefit analysis presented in this Annex; but they are non-trivial. 24 The World Bank. Le Système Éducatif Malien, Document de Travail de la Banque Mondial No. 98, 2010. 104 Financial Impact of the Project 38. This section discusses the fiscal implications of the project. The bulk of the costs will be incurred during the implementation period, estimated to take place between 2015 and 2019, and will be financed by the World Bank. However, the TVET institutions participating in the project—both public and private—will have to finance recurring costs to ensure that the quality and capacity improvements remain in place. Our analysis suggests that these costs can be absorbed by the participating entities. Project costs 39. As described in the PAD, the World Bank would finance US$63 million of the costs. While the disbursement schedule is still tentative, reasonable assumptions on this schedule were made within the model. In addition, TVET improvements in public and private institutions will require additional expenditures by these institutions, which will continue beyond the implementation period. These amounts will finance both expanded teaching staff and maintenance of equipment purchased through the project. Overall, the project will finance about US$4.1 million worth of equipment in public institutions. With a 10-year depreciation rate, this implies that public institutions would have to increase their equipment spending by US$410 million per year. Additionally public and private institutions are collectively expected to expand their teaching force by approximately 30 instructors over the next three years. The annual cost of expanded teaching force would be approximately US$181,000 per year. Table 14 –Estimated Annual Project costs financed by the public and private TVET Institutions (2014 USD) 2016 2017 2018 2019 2020 Maintenance of $410,000 $410,000 $410,000 $410,000 $410,000 equipment TVET teacher cost $181,579 $181,579 $181,579 $181,579 $181,579 Public $90,790 $90,790 $90,790 $90,790 $90,790 Private $90,790 $90,790 $90,790 $90,790 $90,790 Total $591,579 $591,579 $591,579 $591,579 $591,579 Project costs relative to expenditure spending 40. In 2013, the Republic of Mali budgeted approximately US$522.5 million for its public education expenditures and an estimated US$27.9 million for public TVET education. 25 The total investment by the World Bank (US$63 million) is approximately 12 percent of the total education budget. The fiscal impact from the Project (annual recurring costs that must be financed by the government or the private entities benefiting from the project) amounts to less than 2 percent of the total public expenditure starting 2015 of the public spending on TVET. Table 15 also shows the impacts by type of institution. The four main public 25 This estimate is based on the assumption that the per pupil TVET expenditures were 210 percent of per capita GDP and public TVET institutions enrolled 18,230 students. 105 institutions benefiting from the project will collectively increase their expenditures by US$500,790, which is equivalent to approximately 15.6 percent of their estimated collective budgets. It is important to note that the budgets for these institutions are estimated using the assumption that each enrolled student brings funds that are equivalent to 210 percent of per capita GDP. Data from Institut de Formation Professionnelle (IFP)/Bankasse suggests that this assumption is reasonable—using the actual 2013 budget for this institution, we estimate that the total cost increases for this institution would be approximately 16 percent of its total expenditures. Table 15 –Estimated recurring costs relative to current expenditures and potential new resources Total Budget Estimated Project recurring Additional recurring costs costs as a ratio of annual budget resources due to enrollment Total Education Expenditure $522,449,616 $591,579 0.1% Public TVET Expenditure $27,917,227 $500,790 1.8% Four Public Institutions $3,215,918 $500,790 15.6% $612,556 Example - IFP/Bankasse $767,474 $125,198 16.3% $153,139 Private Institutions $1,472,703 $90,790 6.2% $612,556 41. If the project reaches its intended goals, enrollments in public and private TVET institutions will increase by a minimum of 900 additional students per year over four years. If these goals are met, by the end of the first year, both public and private institutions will have sufficient resources to cover these additional costs (assuming that each new student brings additional funds equivalent to unit costs in Mali). Thus, the public and private institutions can absorb the recurring costs of the project. 106 Annex 7: Sector Issues REPUBLIC OF MALI: Skills Development and Youth Employment Project 1. Mali’s youth are facing deeply rooted employability challenges, further aggravated by the crisis and with the potential to hamper full recovery. More than 70% of its huge youth group between 15 and 24 was out of school in 2010 and had very limited qualifications and skills for employability. The vast majority of these youth are employed in generally low productivity/quality jobs in the informal agriculture and service sector (over 90%). A significant percentage of them are also unemployed or inactive (about 20%). This is a structural longer-term issue for the undiversified Malian economy, but the situation further deteriorated during the crisis with the proportion of out of school, unemployed and disenfranchised youth likely to have further increased (pending updated employment data on the whole country), as a result of the disruption of education institutions and education system overall, the worsening economic context in 2012, and the fall of the terrorist groups in the north. If not addressed quickly, Mali’s youth’s challenges pose a major development and security challenge for the resolution of the crisis. 2. This situation points to two main types of challenges, related to job creation and skills development. The first type relates to jobs – there are too few and they have varying levels of productivity in the formal sector 26 and low productivity and often precarious in the informal sector. The second type relates to skills – too few or simply irrelevant to what the formal and informal sector need to create, fill and/or improve jobs (skills mismatch). While opinions vary on whether demand or supply constraints are more acute, ultimately what is needed is an approach where efforts to create more and/or better jobs in the formal and informal sector and strengthen skills go hand in hand. This approach is even more relevant to the current post-crisis Mali context, where both education and job opportunities have decreased, requiring urgently a two- pronged strategy to promote jobs/employment creation and develop skills (for both the formal and informal sectors). This strategy needs to build on a clear understanding of the labor market and skills development situation and constraints in Mali, as illustrated below. 3. Labor market and job creation constraints: There are several potential sources of job creation in Mali. Employment statistics indicate that about 65% of adults are employed in the agriculture sector, 10% in the industry sector and 25% in the service sector. Recent reports from AFRISTAT confirm that over 80% of these jobs are in the informal sector. They also show that moving forward sources of employment, growth and poverty reduction with high potential for growth will include the exploitation of agri-business potential, mining diversification, the construction industry, and fisheries. This is confirmed by a recent diagnostic undertaken under the project for professional development for employability (Projet pour le Development Professionel pour l’Emploi, PRODEFPE) led by the Ministry of Employment and Vocational Training (Ministère de l’Emploi et de la Formation, MEFP) which points to the need for several hundred thousand occupations, largely focused in agriculture, livestock, fisheries, agro-industry, building and public works, transport and crafts industry. It is however not yet clear how many 26 Firm level productivity is shown to vary a lot in the formal sector of Mali, with efficient and non-efficient firms, according to the Policy Note: SMEs growth, firm performance and job creation in Mali – The World Bank (FPD department), mimeo. 107 new jobs will really be created in those, or other, sectors in the future given the many constraints to the creation and growth of micro, small and medium enterprises (MSMEs). 4. Mali’s potential entrepreneurs and established firms face several constraints to fulfill their potential. While there is no overall reliable number on the total number of MSMEs in Mali, we know that about 20,000 new (formal) MSMEs were created from 2010 to 2013 27 with an average size of 3 workers per enterprise, with a slight decrease in 2012 because of the crisis, and a majority of enterprises in the trade sector and in the Bamako region. Both formal and informal businesses face constraints to consolidation or growth. The most recent Enterprise Surveys 28 ask a sample of formal firms about a range of potential constraints they may have to develop and grow and to rate how severe each constraint is (using a Likert scale (0 to 4) with zero indicating ‘no obstacle and four indicating a very severe obstacle). The three main cited constraints to business development are: (a) access to finance (over 50% of the firms); (b) access to land (about 30%); and (c) corruption (about 25%). A recent survey of a sample of 18 to 35 years youth located in four localities with different socio-economic levels 29 highlights four key constraints to the creation and development of micro-enterprises: (i) the lack of technical and business management skills and expertise, in particular in rural areas; (ii) difficulties to put together sufficient initial capital to get started; (iii) very limited access to credit; and (iv) lack of longer-term mentoring and coaching. These constraints are also highlighted in other sources, 30 including in the additional youth consultations which took place during preparation of this project. Overall, a key driver of job creation in Mali is likely to be the further development of the private sector, including the promotion of new, emerging and established MSMEs, which are shown to create comparatively more jobs (percentage employment growth) than larger firms. Access to seed funds, finance and complementary training, support and coaching services, in particular for MSMEs, are therefore constraints that will need to be addressed to support business and job creation in Mali. These constraints have been magnified by the crisis. Indeed the private sector has been severally affected by the crisis - directly due to suspension of public procurement, mounting arrears of the public sector, collapse of tourism, destruction and disorganization in the North, and indirectly through knock-on effects on other private sector activities and the financial sector, combined with continued fiscal pressure on the formal private sector through taxes on turnover and salaries. 5. Lack of access to finance, management capacity, and skills and other key constraints are confirmed from recent assessments of the business climate. Mali’s commitment to improving the investment climate and in particular the Doing Business indicators has been recognized internationally. These efforts were supported by the World Bank Group, including through dedicated IFC and IDA (PAC) operations. As a result of the crisis, Mali’s ranking deteriorated to 155/189 in the latest (2014) World Bank Doing Business Report -- thereby losing its leadership as top regional reformer. Despite some progress the investment climate in Mali overall remains still poor. Deeper and broader reforms (beyond those promoted by Doing Business) should be implemented as private sector led-growth faces various other major 27 Between 4,000 and 5,000 a year except in 2012 (Data from API Mali). 28 2007 and 2010 ICAs for Mali. 29 See 2013 CBDS-Université de Bamako study on youth entrepreneurship in Mali. 30 See PRODEFPE studies on the rural sector and the 2013 AFRISTAT studies on the Mali labor market and youth employment. 108 challenges -- notably: (i) poor access to industrial and agricultural land; (ii) complex import and export logistics (road infrastructure, organization of the trucking industry, customs, etc.) creating costs and delays; (iii) investment policy not aligned with international best practice; (iv) a weakened banking system; (v) weak institutional arrangements for private sector development; and (vi) weak human capital and skills base. In relation to banking and SMEs, for instance, lending to SMEs is considered risky because of a history of high default, and potentially bankable SMEs lack the management capacity, business planning, and financial skills to develop into attractive propositions for banks. 6. Beyond the short-term measures that may be required to help the private sector recover from the crisis it is now facing, in the medium-term it is imperative that the activities of the private sector be strengthened, expanded, and diversified in order to create sustainable jobs for its burgeoning working age population. Measures will need to be put in place to support both short-term recovery and longer term issues with the business climate, access to finance, coaching and skills. 7. Skills development constraints: Low schooling levels, and weak quality and relevance, are a key constraint to youth employability, firms and jobs in the short and longer run-in Mali. Job and employment prospects need to go hand in hand with skills development. Not only are existing jobs often constrained by lack of skills but lack of skills can hamper the creation of future jobs (such as the limited development of the mining auxiliary services because of lack of local entrepreneurship capacity to develop small and medium enterprises to capture new business opportunities). 8. Education outcomes are still poor in Mali pointing to a skills miss-match with current and future labor market needs. Although the gross primary enrollment rate (GER) reached around 76% in 2010, according to household survey data (and 81.5% in 2011, according to administrative data), this rate is unlikely to allow Mali to achieve universal primary education (UPE) by 2015. And, at less than 60% in 2010, the primary completion rate is even more of an issue. While increasing from 2006 to 2010, only about one-third of the relevant school age population was enrolled in upper secondary education and a very small fraction would continue onto tertiary education 31. Significant returns to primary and secondary education, as illustrated in the economic analysis section, suggest short-term shortages of skills at those levels. In fact, lack of education is cited as a major or very severe constraint to business by about 15% of the firms included in the recent enterprise surveys. At the same time, the fact that returns on lower secondary education have increased relative to all other levels in the 2006-2010 period points to increasing needs for basic core skills. Even more than schooling levels, quality and relevance of schooling are a short and longer-term constraint to Mali’s development. Results obtained from the 2010 national student assessment show that only 41% and 38% of second grade students in Mali perform satisfactorily in reading comprehension and in Math, respectively, while the results of sixth grade students are 48% in French and 31% in Math, respectively. Additionally, employers in the formal and informal sector already complain of difficulties in finding individuals with the right skills, including basic technical skills. Unemployment rates of youth with completed upper secondary education and particularly some post- secondary education are 31 There is also still an important gender issue with a gap of about 8-9% in the gross primary enrollment rate and about 10% in the primary completion rate in 2010, and this gap increases at higher levels. 109 higher than the average pointing, among other reasons, to an issue of limited relevance to labor market needs of many of those degrees. But at the same time detailed diagnostics undertaken in the agriculture, livestock, agro-industry, construction and tourism sectors 32 show that employers need occupational fields and skills that are currently not provided. Some of these will be increasingly needed in the future. 9. Skills development is even more of an imperative for the youth stock. Most recent household survey data 33 show that about 70% of the 15 to 24 years old, and 80% of the 15 to 29 years old, are out of school, of which only about 30% have received formal schooling at primary or secondary level. While only about 2% of the out of school 15 to 29 years old are unemployed, about 22% are unemployed or inactive. And of the 78% who are employed the vast majority is under-employed in the agriculture and services informal/low productivity sector, pointing to a mix of employment and skills constraints. Current skills levels appear to be neither sufficient to migrate to the formal sector nor to increase productivity and employability in the informal one. About 75% of the 15 to 34 years old out of school youth are illiterate and recent youth surveys/consultations also point to significant lack of even basic technical skills, aggravated by poor leadership and communication skills (in the words of the youth themselves). A critical challenge for Mali is to support skills development for its vast out of school youth stock to support employability and productivity, tailored to address the widespread skills gaps. 10. Mali’s quantity and quality related skills challenges are related to issues with the education and training sector that will need to be addressed. At the post-primary education level, the system suffers from a lack of diversification and options for post-primary education. Over 90% of secondary level students are enrolled in the general academic secondary stream (collège and lycée), with less than 10% in the TVET stream. The general secondary academic stream is often too theoretical and disconnected from the workplace, with low levels of internal efficiency. Along the same line, tertiary education is also generally of poor quality and does not correspond to labor market demands. In particular, the bulk of enrollments are concentrated in the humanities for which there are no promising employment opportunities for graduates, while technical, scientific and engineering disciplines are characterized by under-enrollment. The lack of diversification of the formal education stream and related lack of labor market prospects is a key determinant of the decision to drop-out of school for Mali’s youth 34, in combination to some extent with demand side constraints such as poor family education 35, making it imperative to rebalance the system towards applied technical, science, engineering and technology skills starting from secondary education. Finally, there are limited options of informal education and training at basic and technical level. TVET, formal and non-formal, and tertiary technical tracks can be a potentially relevant option to address youth employability in Mali, given high unfulfilled demand for technical skills in some key labor intensive sectors as illustrated above, and further confirmed by unemployment rates of TVET graduates which appeared to be less than half the ones for general academic secondary graduates in the 2013 EMOP data (5 versus 12%). However, they are in need of urgent improvement to fulfill their full potential. 32 See PRODEFPE project. 33 ELIM 2010 and EMOP 2011 and 2013. 34 According to youth consultations made during project preparation (see Annex 3). 35 Which however are significantly more relevant to the explanation of the in/out-of school pattern than the magnitude of drop-outs. 110 11. The TVET related skills development system presents some strengths but also suffers from many challenges to make it higher quality and more demand-driven. In Mali the secondary and tertiary TVET system is managed by the Ministry of Education (Ministère de l’Education, de l’Alphabétisation et de la Promotion des Langues Nationales, MEAPLN) and Ministry of Tertiary Education (Ministère de l’Education Supérieure et de la Recherche Scientifique), for formal education and training leading to a degree (formations diplomantes), and by the Ministry of Employment and Vocational Training (Ministère de l’Emploi et de la Formation Professionelle, MEFP), complemented by other line ministries like the Ministry of Industry and Mining and the Ministry of Agriculture, for informal education and training leading to a certification (formations qualifiantes). In 2012/2013 there were about 20 public secondary TVET institutions, including 4 lycées techniques and 4 agro-pastoral schools, with about 1,200 teachers, and over 300, much smaller, private secondary TVET institutions very inequitably distributed 36 (only about 25 institutions in Mopti and beyond to the north). These were complemented by public and private institutions offering technical tracks at the tertiary level. Degrees offered include the 2-year vocational training certificate (Certificat d’Aptitude Professionnelle – CAP), the 4-year technician degree (Brevet de Technicien- BT), the 3-year professional degree (Bac Professionnel), the 3-year technical degree (Bac Technique), the only one offered in the lycées techniques and more geared towards tertiary education, and 2 or 3 year tertiary technical degrees (Diplome Universitaire Technique (DUT), License et Maitrise Technique). In the secondary vocational stream (CAP, BT) about 18,000 students were in the public sector and 76,000 in the private sector (which represents therefore about 80% of the enrollment), with an over-supply of enrollees in professions for the service sector 37. Also in tertiary education a majority of students are enrolled in the private sector. Finally, the informal TVET sub-sector includes a small number of public institutions under the umbrella of the MEFP, and a small number under the Ministry of Industry and Ministry of Agriculture, as well as about 100 private institutions, providing non-degree courses. More recently MEFP defined 43 priority education and training tracks in 10 economic sectors (for which demanded skills have been precisely identified) for this training sub-sector. 12. Altogether these sub-sectors are targeted towards in and out of school youth, unemployed youth, apprentices with and without education, reconverted adults, etc. A key strength of the system is the conceptual and strategic framework which highlights the competency based approach (Approche par Compétences – APC 38) across all technical streams. In 2007, the APC approach defined 22 education and training sectors, including agriculture, tourism, construction and civil works, mechanics, mining and construction sites, and energy and transport among many others. Within these 22 sectors, 27 competency based courses (CAP, BT and BAC Technique) have been developed, of which 19 are under execution. In 2012, 24 technical tracks were also 36 Many schools ceased to function in the north during the occupation and have yet not re-opened bringing the total number of schools down since 2012. 37 Private institutions tend to offer training oriented toward the service sector (accounting, secretarial work, sewing, commerce, social work, youth counseling, culture, communications, computers, etc.). Overall, across the public and private sector, about 68% of the students are attending courses preparing for the tertiary sector (services), 25% for the secondary sector (industry) and 7% for the primary sector (agro-pastoral). 38 The APC approach is typically structured around key identified professional competencies and its application requires several steps, from initial sector and labor market diagnostics to the development and application of the programs themselves, in coordination with the private sector, and accompanying guides. 111 defined following the APC for the tertiary education cycle. There are however also still many challenges, of which four key challenges stand out: -Inadequate TVET Programs: First, the transition to the competency based approach is still far from complete. Although according to a 2011 Decree all programs should now be competency based in the country, only a share of the programs was developed in formal TVET and even less are under execution and very few programs were developed for the informal TVET sector. Related to the above, most programs remain quite outdated, emphasize theoretical knowledge and provide limited exposure to the world of work (internships tend to be few and often short in duration; workshops are insufficient), are supply-centered, and rigid in their approach, with over- crowded workshops. They also put insufficient emphasis on core literacy and numeracy skills (crucially missing in the majority of in and out of school youth), as well as life skills such as problem solving, thinking skills and entrepreneurial skills. -Rigid TVET Service delivery: To date, informal education still offers few attractive options to out-of-school youth who either would like to acquire some basic core and technical skills or complement their existing skill set. Apprenticeship programs are generally considered one of the main available skill development options for informal sector employees 39 or out-of-school youth with limited education level but they remain under-used in Mali. MEFP has been running dual apprenticeship programs 40, short term skills development programs with dual training elements, or even mobile unit education programs, but this was either made possible through donor’s financing which has come to an end or hardly saw the light because of lack of funding and implementation issues. Beyond small scale initiatives supported by a few donors and NGOs, and the broader scale FIER project just launched by IFAD in rural areas, there is little in terms of short-term flexible skills development options for out of school youth in urban and rural areas. A clear indication of the lack of flexible options is the very tiny fraction of out of school youth managing to do both work and school (less than 5%). -Lack of TVET instructors: Third, there is an absence of qualified instructors. Technical and professional schools lack qualified instructors not only in fields such as ICT where scientific and technical advances are rapid and new occupational streams are emerging, but also in older disciplines such as construction, mechanics and electricity. Instructors are out of touch with developments in their professional disciplines due to the absence of an organized system to keep their skills and knowledge current. -Inefficiencies in TVET sector management and financing: Finally, there are inefficiencies in the management and financing of the system, including a segmentation in the management and coordination of informal TVET offerings, weaknesses in the way public and private institutions are managed and funded (including weak partnerships with the private productive sector, and lack of focus on results and public-private complementarity in offerings for key sectors), and limited attention given to school to work transition. On a more positive note, a training fund has been set up with the institutional mandate of financing in-service training, vocational informal training, and apprenticeships (the Fonds d’Appui à la Formation Professionnelle et à 39 They have been shown to increase productivity in the informal sector according to international evidence. 40 Apprenticeships run in coordination with the artisans’ association including 80% of time in the workplace and 20% of time in training at a training center. 112 l’Apprentissage – FAFPA) which appears to be working relatively well. The financing of the Fund and its mandate could however be revisited to make it more relevant and effective. 13. Beyond the education and training sector, employability is also constrained by the lack of effective public employment promotion strategies. The country has set up agencies within its broader national employment policy to support school to work transition of students coming from the formal and informal education and training sector. The key agencies are the Agence pour la Promotion de l’Emploi des Jeunes (APEJ) and the Agence Nationale pour l’Emploi (ANPE). Both of these agencies are not very effective and have had limited coverage and success in their interventions (from short term complementary training to internships, job counseling and entrepreneurship programs). There is also a strong segmentation in terms of employment promotion initiatives offered from within and outside these agencies, as well as a worrisome lack of private sector involvement, while the private sector should have a strong say in employment policies and the lead in job creation. A recent organizational audit and renewed political commitment have strengthened the mandate and potential effectiveness of the APEJ but much support is needed to improve its core interventions. 14. Along this line, underlying or aggravating skills and jobs constraints to employability are also some additional barriers related to location, family education and income, gender and more broadly information. Many of these barriers work through the education and job dimensions, contributing to explain the lower education levels and job opportunities. Recent household and employment survey data, for instance, point to the 15 to 34 years old youth leaving in Bamako and urban areas, and from the highest income quintile, as being significantly less likely to have no education than youth from rural areas and lowest quintile (about 40% versus 80%). They also show that youth coming from households with a household head with at least some education are significantly less likely to be out of school (about 25% versus 70%). Also, beyond family education, information also matters as illustrated by the reluctance of some families to have their youth pursuing a technical and vocational track while in fact there is substantial demand for the right technical skills by employers. Finally, limited family income is also a deterrent to self-employment by constraining the seed capital needed to launch a micro-enterprise. At the same time, some of these barriers have also an independent effect on employability 41. For instance, even controlling for their education level, female youth are significantly more likely to be unemployed/inactive (by a difference of easily 20% points) and so youth in urban areas (with Bamako somewhat in the middle), illustrating constraints related to social norms which make female work less accepted and more limited job opportunities or higher reservation wages and/or poorly functioning labor markets in urban areas. Differences in employment across genders are less strong in rural areas where rural entrepreneurship is an important, although still under-used, source of jobs for women. Recent youth surveys also show that domestic and family commitments are a constraint to both training and employment, in particular for women (also pointing to the advantages of entrepreneurship for women given the higher work flexibility that it entails). These constraints, which depict a more comprehensive picture of the challenges of in and out of school youth including significant differences between urban and rural challenges, will need to be taken into account in the design of skills and jobs-related interventions. 41 As confirmed by regression analysis on household survey data. 113 15. To sum up, Mali will need a two-pronged strategy to develop skills and create jobs. Mali needs an effective strategy to improve youth employability. This will require a two-pronged approach to address skills constraints and job creation constraints. And this approach will need to be applied to both the formal and informal sector. The informal sector because this is where the largest potential for job creation is in the short run, the formal sector because this is where significant potential for job creation may exist in the longer-run. A two-pronged strategy for the formal sector will require tackling quality and relevance issues in the formal education and training sector to improve graduate employability (and retention at school), while at the same time supporting the creation of more jobs in the modern sector to absorb those youth. On the other hand, in the informal sector, most of the actions will have to concentrate on how to improve the employability of the out of school youth stock with currently very limited education and skills, while developing more opportunities for productive and rewarding self-employment. Finally, whatever strategy is applied will also need to factor in the relevant location, family and gender constraints. Policy framework 16. Mali’s employment policy is driven by the Mali’s Government Growth and Poverty Reduction Strategy Framework (GPRSF) and the National Employment Policy (Politique Nationale de l’Emploi, PNE). The GPRSF points to the importance of the development of SMEs for employment creation and its employment strategy and therefore includes supporting SME development and developing local financing and private services markets in order to support businesses. The PNE, still to be formally adopted, focuses on three major employment related constraints: (a) the insufficient supply of productive and decent jobs; (b) the lack of skills leading to low employability of human resources; and (c) weaknesses in the labor market in terms of employment information and recruitment practices, and the way demand and supply meet. The Government’s commitment to address youth employment has also led to the creation of a national youth employment program (Programme Emploi Jeunes, PEJ) to be developed in two stages and the creation, in 2003, of an agency for youth employment (Agence pour l’Emploi des Jeunes, APEJ). 17. Additionally, the Government of Mali has made the promotion of the private sector one of its key priorities, as evidenced by the adoption of the “Loi d’Orientation du Secteur Privé”. The objective of this “Loi d’Orientation du Secteur Privé” is the promotion of sustainable jobs and growth to reduce poverty. This law defines a clear framework in which all initiatives to promote private sector are listed. A Superior Council of the Private Sector in which all private sector organizations are involved is created under the responsibility of the President of Mali. 18. The Government has also put special emphasis on skills development through different plans, strategies and initiatives over the years. As part of the broader ten year plan to develop the education sector (Programme Décennal de Développement de l’Education, PRODEC) the government has elaborated a program of execution of the plan (Programme d’Investissement pour le Secteur de l’Education, PISE) in three phases. The objective of the third phase (PISE III (2010-2012) is to improve the quality and effectiveness of the education system in Mali building on the lessons of the past programs, PISE I and II. One of the key pillars of the program is technical and vocational education and training (at all levels) to regulate access, diversify 114 programs, and improve the alignment between supply of and demand for skills. These objectives are further spelled out in the framework on a National Policy on Technical and Vocational Education and Training (Politique Nationale de l’Enseignement et de la Formation Technique et Professionnelle, PNEFTP, elaborated in January 2011). This framework puts special emphasis on matching the technical and vocational programs with the needs of the labor market and increase graduate employability, as well as improving financing mechanisms of TVET. 19. More specifically at the vocational/informal level, the government has also adopted in 2009 a National Policy on Vocational Education (Politique Nationale de la Formation Professionnelle, PNFP) aimed at improving the quality, relevance and equity of vocational programs, with emphasis on human resources, a competency based approach to defining programs, competency certification and school to work transition, and the role of communities to define priorities for skills development at the regional and local level. Revamping apprenticeships and skills development for unemployed youth with very limited education is part of this policy. This policy is being translated into a program for the development of vocational education for employment (Programme de Développement de la Formation Professionnelle pour l’Emploi (PRODEFPE)), under development, aimed at supporting fast and efficient responses to the shortage of skills through strategies and mechanisms which respond to urgent demand needs. Partners’ Activities 20. Several partners are active in the skills development and youth employment sector. The project’s proposed interventions are complementary to existing or planned partners’ interventions, while also building as much as possible on lessons learned from interventions in Mali and elsewhere. There are three main types of projects supported by other donors relevant to skills and employment for youth: (i) projects focusing only on skills development in the formal or informal education and training sector; (ii) projects adopting a mixed approach from skills development all the way to supporting school to work transition and self-employment; and (iii) projects largely focused on supporting employment generation in the private sector. - Type (a) projects include: the Programme d’Appui à la Formation Professionnelle (PAFP/Swiss Development Cooperation), supporting dual apprenticeships for youth; the Programme d’Appui à la Formation et à l’Insertion Professionnelle (PAFIP/LuxDev), supporting vocational training for out of school through public and private sector institutions; and the Programme pour l’Emploi et la Formation (ACEFOR/AFD), supporting technical secondary schools. - Type (b) projects include: the Project d’Appui aux Jeunes Entrepreneurs (PAJE- Nièta/USAID), supporting would be young entrepreneurs through training in the workplace, coaching and kits; the Projet d’Appui aux Entrepreneurs en milieu Rural (FIER/IFAD), supporting vocational training and coaching to foster rural youth entrepreneurship; and several small projects run by NGOs to deliver informal training and coaching in the workplace through local practitioners and support micro-entrepreneurs (such as the one run by CAEB). - Type (c) projects include: the Programme d’Appui à la Jeunesse Malienne (PAJM/AFD), supporting would be young entrepreneurs through business plan competitions, coaching and 115 access to seed money and credit; the Programme d’Appui à la Promotion de l’Emploi dans le Secteur Privé (PAPESPRIM/Danish cooperation) and the Project for Economic Growth and the Promotion of Employment stimulated by the Private Sector (PACEPEP/ Danish cooperation), both supporting SMEs through matching grants, access to credit and other services; and the Projet d’Appui à la Décentralisation et au Développement Economique Régional (PADDER/African Development Fund), supporting employment generation at the local level. 21. All these projects were closely reviewed to ensure in depth understanding and be able to build complementarities in the proposed project. In general all existing projects are limited in scale, in terms of regions, sectors or beneficiaries, providing significant scope for complementarity and scaling-up. At the same time, some of them introduce or have introduced innovations or broader scale interventions worth building on (functional complementarity). The proposed project will build complementarities by, notably: (i) focusing most of its training for out of school youth out of the Ségou region already extensively covered by the LuxDev project and some NGOs –this way regional coverage can be maximized across donors; (ii) upgrading the dual apprenticeship program, now closed, supported by Swisscontact (successful in providing higher quality apprenticeships as per completed impact evaluation), and entrepreneurship programs supported by AFD and CAEB (the PAJM in particular was very successful in recovering the loans made to young would be entrepreneurs also thanks to thorough and continuous coaching); (iii) focusing either on sectors/value-chains insufficiently covered by other donors (such as livestock and construction), or on sectors with large unfulfilled needs (such as agro-industry); and (iv) factoring in the strengthening of the Ministry of Agriculture’s rural training centers (the Centres d’Animation Rurale, or CAR) and creation of the regional resource centers to assess regional labor markets needs, both supported by IFAD in its new FIER project, in the design and implementation of the decentralized out of school youth training program. 116 Annex 8: Documents in project file Agency for the promotion of investments in Mali, October 2013, Note on the contribution of API-Mali to the problem of youth employment. Agency for promotion of youth employment APEJ, September 2012, organizational diagnosis of APEJ directed by Koni Expertise. Adama COULIBALY, engineer Economist Consultant, February 2013, review of existing studies sectors in the formulation of the new program of support for economic growth and jobs stimulated by the private sector (PACEPEP). AFRISTAT, September 2013, promote an accelerated, sustainable growth, creative jobs and income generating activities in Mali: What levers? (Synthesis document, version 1) Ahmar Touré, 30 juillet 2009, Rapport d’évaluation finale du programme emploi jeunes (PEJ) Cabinet of expertise in development studies - support Council (CADEX), April 2011, assessment of vocational training and apprenticeship support Fund (FAFPA) - draft report Centre for artificial insemination and embryo, ANPE, performance report period 17 June 2013 to 17 September 2013, artificial training program, 3rd promotion Channel research, November 2012, final Evaluation of FSP 2007-36 Mali youth support Program (PAJM). Copenhagen Business School Centre for Business and Development Studies (CBDS), University of Bamako Faculty of Humanities and Sciences of Education (FSHSE), June 2013, young entrepreneurship in Mali, case studies: Bamako, Ségou, Konobougou and Niono. FENATRA 2006, directory of the operations of the agro-food sector, small and medium agri- food units – Mali IFAD, 21/11/2013, no. 1661 project, vocational training, integration and support to rural youth entrepreneurship. François Robert, Consultant, April 11, 2011, the development of a quality approach in private education and vocational training in Mali. Ministry of education, literacy, and national languages, January 2011, national policy of education and of technical and vocational training (TVET) secondary level (project pending adoption) Ministry of education, literacy, and national languages, January 2000, ten-year Program of development of education, the educational policy guidelines, 117 Ministry of education, literacy, and national languages, Program of investment for the sector of education, description of the third stage (2010-2012) Ministry of employment and vocational training, March 2003, youth employment program I (JEJ) in Mali Ministry of employment and vocational training, July 2011, youth employment program II (PEJ) in Mali Ministry of employment and vocational training August 2000, National Program of action for employment to reduce poverty (PNA/ERP) Ministry of employment and vocational training July 2009, national policy of vocational training Ministry of employment and vocational training, 2012, draft document framework of the national employment policy. Ministry of employment and vocational training, December 28, 2011, ten-year Program of development of vocational training for employment PRODEFPE (including summary report and sector case studies) Mohamed B. Diallo, January 2014, note on the sub-sector of livestock and the situation of the sectors of production and animal industries. Support program for economic growth and Employment Promotion stimulated by the private sector in Mali (PACEPEP) 2013-2018, program document, Version August 2013 Report Facilitation for the choice of value chains in the Formulation of the PACEEM process (Program to support growth and employment in Mali (Danida Mali), S. M. Perakis (MSU) N. N. Dembélé (MSU), with the assistance of Ramziath T. Adjao (MSU)) 118 IBRD 33443R MALI SELECTED CITIES AND TOWNS MAIN ROADS PROVINCE CAPITALS RAILROADS NATIONAL CAPITAL REGION BOUNDARIES RIVERS INTERNATIONAL BOUNDARIES 5°W 0° 0 100 200 300 Kilometers To Chenachane 0 50 100 150 300 Miles 25°N MALI To El Mreîti S a h a r a D e s e r t ALGERIA To El Mreîti Taoudenni To Poste Maurice Cortier TOMBOUCTOU To Abalessa 20°N Tessalit 20°N M A U R I TA N I A KIDAL si Araouane du Tilem Kidal llée Va k Tombouctou Gourma ua Rharous o za (Timbuktu) GAO L’A Bourem r Nige de To Vallée To Ayun Lac Niangay Gao Kifa el ’Atrous Niafounke Menaka To Néma Hombori Lac Tondo (1,155 m) Ansongo Nara Nampala Débo Nioro To 15°N 15°N RO du Sahel Douentza Abala MOPTI To Niamey Mopti O Kayes Bandiagara Niono NIGER IK To K AY E S Goudiry Ba SÉGOU UL fin lé Kolokani To Baou Ségou Bani Ouahigouya O r g ge Ni K To San Kédougou Kita To Kéniéba niéba Kéni ba BAMAKO Koulikoro Nouna BURKINA Koutiala FASO To Siguiri Bougouni To DISTRICT Sikasso Bobo GUINEA DE BAMAKO SIKASSO Dioulasso To BENIN Kankan 10°N To 10°N Korhogo GHANA This map was produced by the Map Design Unit of The World Bank. The boundaries, TOGO SIERRA colors, denominations and any other information shown on this map do not imply, on LEONE CÔTE D’IVOIRE the part of The World Bank Group, any judgment on the legal status of any territory, or any endorsement or acceptance of such 10°W 5°W 0° boundaries. MAY 2009