Sierra Leone - Health and Population Sector Support Project

Damseo The World Bank FOR OFmFCIL USE ONLY CR. /GSS- it Report No. P-4296-SL REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTOR? ON A PROPOSED CREDIT OF SDR 4.6 MILLION TO THE REPUBLIC OF SIERRA LEONE FOR A HEALTH AND POPULATION PROJECT APRIL 22, 1986 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 US$1 Le 5.26 1/ Leone 1 = US$0.19 SDR 1 US$1.16 FISCAL YEAR July 1 to June 30 ABBREVIATIONS AND ACRONYMS C4O - Chief Medical Officer IEC - Information, Education and Communication MCH/FP - Maternal and Child Health/Fatily Planning MODEP - Ministry of Development and Economic Planning MOH - Ministry of Health NPC - National Population Commission EHC - Primary Health Care PHU - Peripheral Health Unit PIC - Project Implementation Committee PMISU - Planning, Management Information and Statistics Unit 1/ The official exchange rate in Sierra Leone has been fluctuating since it is based on a basket of currencies. The rate used in this report is US$1 = Le 6.  FOR OFFICIAL USE ONLY SIERRA LEONE HEALTH AND POPULATION PROJECT CREDIT AND PROJECT SUMMARY Borrower: Sierra Leone Beneficiaries: Ministry of Health (MOH) and National Population Commission (NPC). Amount: SDR 4.6 million (US$5.3 million equivalent) Terms: Standard Project Description: The proposed project is designed to: strengthen MOH's capacity for planning, management, coordination and monitoring; improve basic health and family planning services; and help develop population policy and programs for family planning demand generation activities. A key project objective is to reduce dependence on public expenditure to finance developments in the sector by using available resources more efficiently and by significantly improving cost recovery and cost containment practices. To assist in the policy reforms and management improvement efforts, the project would provide technical assistance and training, equipment, materials, vehicles and incremental staff. To strengthen health and family planning service delivery, it would finance renovation and equipping of a limited number of service facilities and provision of essential drugs and medical supplies. Benefits and Risks: The project would help reorient Sierra Leone's health and population programs away from their current urban bias to improving health services in rural areas. It is estimated that over US$1.25 million would accrue each year from the cost recovery measures and savings from the cost containment measures. The project would extend primary health care in three presently underserved districts with a total population of 1.2 million. Through its support for population programs, the project would help lay the foundation for the development of a national population program by increasing awareness of and access to services. Institution building in both health and population would contribute to improved planning, policy implementation and close coordination. As the project would be the first Bank-financed operation in the sector, there is a risk of delays in implementation. Also, due to Sierra Leone's precarious financial situation, the Government may be unable to support fully incremental I doument ha a resticted distrbution and may be ued by recipients only in dhe perfornane of|thk officiid dutieL Its contents may not othewise be disclosed without World DBank authoiation.  - ii - recurrent cost at the end of the project. To minimize these risks, additional higher-level staff would be added to key units in MOH and technical assistance would be provided. The project proposal has been scaled down and revised with the objective of cost-minimization. It is expected that the incremental recurrent costs would be more than offset by budgetary resources freed up as a result of cost-containment and efficiency measures required under the project. Estimated Cost: Local Foreign Total --- -US$ Million---- Policy and Institutional Reforms 0.26 1.23 1.49 Improvement of Health Facilities 0.33 0.48 0.81 Essential Drugs and Medical Supplies 0.11 0.82 0.93 Health Education and Training 0.34 0.52 0.86 Monitoring and Evaluation - 0.12 0.12 Population Policy and Program Development 0.22 0.18 0.40 BASE COST 1.26 3.35 4.61 Repayment of PPF 0.05 0.20 0.25 Physical Contingencies 0.06 0.20 0.26 Price Contingencies 0.20 0.39 0.59 TOTAL PROJECT COST 1.57 4.14 5.71 Financing Plan: Local Foreign Total IDA 1.2 4.1 5.3 Government 0.4 - 0.4 1.6 4.1 5.7 Estimated Disbursements: ---- ---US$ Million -- IDA FY 87 88 89 90 Annual 1.30 1.35 1.50 1.15 Cumulative 1.30 2.65 4.15 5.30 Rate of Return: Not applicable Staff Appraisal Report: 5995-SL, dated April 22, 1986 Map: IBRD 19459  INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO SIERRA LEONE FOR A HEALTH AND POPULATION PROJECT 1. I submit the following report and recommendation on a proposed development credit to Sierra Leone for the equivalent of SDR4.6 million (US$5.3 equivalent) on standard IDA terms to help finance a health and population project. PART I - THE ECONOMY 2. An economic report entitled "Sierra Leone - Prospects for Growth and Equity" (No. 3375-SL) of July 31, 1981 was distributed to the Executive Directors. The folloving discussion is based on that report and on the findings of missions which visited Sierra Leone during 1984 and 1985 for purposes of assisting the Government in the preparation of a structural adjustment program. Country data sheets are contained in Annex I. Structural Characteristics 3. Sierra Leone has a population of 3.7 million (1985), growing at 2.3 percent a year. Sierra Leone has been classified as a "least- developed" country by the U.N. Its per capita income, which declined nearly 2 percent a year since 1980, was estimated at US$330 in 1983. Even the US$330 gives a misleadingly high impression of living standards because the distribution of income is markedly uneven. About two-thirds of the population are estimated to live below an absolute poverty line of US$75. 4. Agriculture, the dominant sector, provides employment to 65 percent of the labor force. But it accounts for only about 35 percent of GDP, consistent with the dominance of subsistence agriculture using low-input technologies. Rice, the staple food, is grown by more than 80 percent of the farmers. Even so, rice imports to the country have been steadily increasing since the late 1970s. Cocoa, coffee and oil palm are the major export crops. 5. Mining has been a key sector in Sierra Leone. Of the country's mineral resources, diamonds have been the most important. However in recent years the share of mining in total exports drastically declined - 63% in FY75, 30% in FY84, and 15Z in FY85. The other minerals exported are bauxite, rutile and gold. A significant proportion of diamonds and gold have in the past been exported through the illegal parallel market and hence unrecorded; this proportion has increased substantially in recent years as the exchange rate got substantially out of line. The manufacturing sector is small and consists largely of import-substituting industries; it employs 12 percent of the labor force.  - 2 - 6. Sierra Leone's economic and social infrastructure is not well developed. The main road network is generally adequate, but feeder roads are often lacking, and road maintenance is poor. The country has good hydro-electric power potential, but at present the fiscal and balance-of- payments situation is so weak that investment in hydro pover must be temporarily deferred. 7. The development of Sierra Leone's human resources has been poor. The literacy rate is only 15 percent and life expectancy is estimsted at about 38 years, both among the lowest in the world. The key factor in the low life expectancy is the extremely high infant mortality rate, about 200 per 1,000 live births during mid-1983. Access to social services in rural areas is extremely limited. Only 16 percent of the population has access to safe drinking water. The primary school enrollment ratio, at 41 percent of the eligible age group, is even far below the (already low) average for the low income Sub-Saharan countries (71 percent in 1982). The lack of educational and training opportunities is reflected in the shortage of skilled manpower. Although Sierra Leone has a reasonably good administrative structure, with adequate managerial and professional skills at the highest level, skills at the middle and lower levels are generally quite weak. Recent Economic Performance 8. GDP growth during the first decade of independence (1962-72) was impressive at nearly 5 percent a year. The fiscal and foreign exchange situations were quite comfortable. Even after the first oil price shock in 1973, the economy managed to grow at over 3 percent a year during 1972-75. GDP growth slowed down during 1975-80. This was mainly on account of decline in diamond output as a result of depletion of alluvial deposits and of the closure in 1975 of the only iron ore mine, which had been the country's second largest source of export earnings. 9. The situation has worsened in the 1980s. Agricultural and mineral output, which together account for nearly 45 percent of GDP and almost all the country's exports, have decreased further. A sharp decline in the terms of trade, combined with a further drop in diamond output and a substantial increase in debt service obligations resulting from imprudent borrowing in the late 1970s, resulted in severe economic difficulties. GDP has stagnated, resulting in a substantial fall in per capita income at constant prices. 10. Domestic savings performance has declined since the late 1970s as a result of a stagnating economy and high levels of Government consumption. The savings performance has improved slightly in recent years, but the economy still has a low rate of savings (estimated at about 7 percent of GDP for FY85). The rate of taxation and actual tax collections are also low. During 1980-84, the ratio of tax revenue to GDP was about 10 percent, one third less, for example, than the average ratio in Kenya and Senegal.  -3- Fiscal Performance 11. A rapid increase in public expenditure in the 1970s contributed to a deterioration in fiscal performance, which became much more pronounced after 1980 with the slowdown in economic growth and erosion of the export revenue. While public revenues increased 17 percent a year between FY73 and FY81, public spending rose at nearly 23 percent a year. Between FY81 and FY83, public revenues declined slightly, but public spending continued to increase. Because of Government policy of not passing through exchange rate adjustments to prices of commodities such as oil, the budget deficit increased even more rapidly in recent years, reaching 12Z of GDP in FY85. The proportion of public expenditures spent on salaries and wages is large and increasing, because most Government departments are holding down total current expenditures by reducing outlays on current inputs needed for maintenance and operations, while maintaining or even increasing the amount spent on wages and salaries. Rising debt service payments and subsidies to public enterprises also put heavy pressures on the current budget. Because of increases in current expenditures and relative stagnation of revenue, the development budget has been declining since FY80. The declining resources for development have been thinly and wastefully spread over a large number of projects in the absence of well-defined development objectives and priorities. Along with fiscal deterioration, monetary policies have been expansionary; the money supply roughly doubled between 1983 and 1985. Inflation, which was 20-25 percent during 1980-82, reached nearly 80 percent in 1985. Balance of Payments 12. Sierra Leone's balance-of-payments position has deteriorated steadily since the early 1970s as the terms of trade worsened, largely due to sharp increas&s in energy prices after 1973. The cost of petroleum imports jumped from US$8 million in 1971 to US$45 million in FY82, claiming one-third of the country's export earnings; between FY82 and FY84 petroleum's share increased to half. Prices of Sierra Leone's major export commodities fell sharply between FY80 and FY83. Even after a partial recovery during FY84 and FY85, the terms of trade in FY85 were 20 percent lower than FY81. In addition, the growing budget deficits increased domestic demand, which created pressure on imports, while declining production reduced the volume of exports and foreign exchange earnings. Between FY80 and FY82 exports fell 23 percent a year in real terms, while imports declined only 11 percent a year, leading to strains on the balance of payments. Although the exchange rate was devalued in 1983 and 1985, these devaluations were not sufficient. The substantial overvaluation has strengthened the black market, reduced production incentives, particularly for exports, and encouraged excess demand for imports. 13. In FY84 the performance of exports improved for the first time since the beginning of the decade and in FY85 the performance improved further due to favorable world price of coffee and an increase in rutile and gold exports. The FY85 imports, however, were 16 percent higher than the FY84 level. The current account deficit increased from US$30 million  - 4 - in FY84 to US$62 million in FY85. But the overall balance of payments deficit decreased from US$45 million in FY84 to US$32 million in FY85 because of larger official capital inflows. The FY85 deficit was financed partly by some debt relief, but largely by increases in external payment arrears. The accumulated external arrears at th2 end of FY85 were about US$285 million, more than double of FY85 exports. External Debt 14. In the face of the slow growth in public revenues and export receipts, Sierra Leone has relied heavily on foreign borrowing to finance its capital expenditures. External debt increased from US$184 million in 1975 to US$515 million in 1985, of which US$389 million was disbursed. Of the total debt outstanding and disbursed, 22 percent was in commercial credits, 41 percent in bilat2ral loans, and 37 percent in loans and credits from international institutions. As.of December 1985, the Bank Group held about 15 percent of Sierra Leone's external debt outstanding and disbursed. Assistance from bilateral government sources has come mostly from the Federal Republic of Germany, Italy, Switzerland, the United Kingdom and Japan. The maturity structure of Sierra Leone's external public debt has deteriorated since the mid-1970's as a result of substantial borrowing through suppliers' credits. The Government negotiated debt-relief through the Paris Club in 1977, 1979 and again in 1984. The 1984 debt-relief reduced the debt service ratio for 1983/84 from 42 percent to 27 percent. The scheduled debt service obligations for 1984/85 give a debt service ratio similar to that of 1983/84. The ratio, however, would be considerably higher if the external arrears, including overdue obligations to the International Monetary Fund, were taken into account. Further debt relief and continuing access to Fund resources will therefore be necessary to keep the debt service ratio from going over 40 percent again. However, this in turn would be dependent on implementing a major reform program. Recent Reform Measures 15. The Government took some important macroeconomic reform measures. It devalued the Leone by 100 percent in July 1983 and again by over 200 percent in February 1985, (from 1.25 to 2.50 and then to 6 Leones to the dollar). However, as noted earlier, these devaluations were neither timely nor sufficient to correct the serious over-valuation of the Leone. The Government increased agricultural prices up to 100 percent in 1984, and up to 150 percent in 1985, and prepared, with the Bank, a plan to reorganize agricultural services under the Agricultural Sector Support Project (Credit 1501-SL). A Fund standby of SDR 50.2 million was approved on February 3, 1984, but the program was discontinued after two tranches because of disagreement between the Government and the Fund on the question of further exchange rate adjustment after the 1983 devaluation. Following the latest devaluation, the Government and the Fund held discussions for a new standby program. In this instance, the rund required several policy steps, including a managed float of the exchange rate, as conditions for a new program. The Government's inaction on the recommended policy steps, which  -5- is partly explained by the recent political transition, held up progress toward a Fund program. 16. After nearly twenty years of President Stevens' rule, General Joseph Momoh, former Army Chief and a cabinet minister under Stevens, assumed the Presidency recently. Be has recently expressed intentions to implement the steps required for a program with the Fund. His Government has also made a part payment of Fund arrears. Adjustment Policy and Development Issues 17. The Bank has been working with the Government in preparing a medium term reform. In the short-run, weak economic management is still an urgent issue and macroeconomic policy reforms (beyond the exchange rate issue) are required to stabilize the economy and make economic growth possible. These policy reforms include budgetary measures to reduce public sector spending, particularly by eliminating currently large subsidies to public enterprises. Overstaffing in the public sector is also a serious problem. The Government already has initiated process of reducing redundant staff in the Ministry of Agriculture under the Agricultural Sector Support Project (Credit 1501-SL) and similar action is planned in the Ministry of Health under the proposed project. The Government recognizes the need to take similar steps in other ministries as well. 18. For the medium-run, the reform program aims at: (i) improving public sector efficiency by rationalizing and overhauling public enterprises and reforming the Government's budgeting and expenditure system; and (ii) stimulating agricultural and industrial output through maintaining an appropriate exchange rate, ensuring adequate agricultural producer prices, removing price controls and rationalizing tariff policy. The Government has increased agricultural producer prices but further increases for export crops are required. There also is increasing recognition on the Government's part of the desirability of abolishing price controls and using prices, rather than administrative controls, to allocate foreign exchange. The Bank is also helping the Government analyze the impact of adjustment and design measures to mitigate the impact on vulnerable groups. 19. In addition, to achieve economic growth over the longer run, Sierra Leone must step up the mobilization of domestic savings, accelerate agricultural development, provide better health and education facilities and reduce its population growth (which currently is 2.3 percent per year). Domestic savings will improve somewhat with the reversal of economic decline and reduction in Government consumption. The Government will also have to improve the efficiency of tax collection and increase taxation of the mining sector, vhich is taxed quite lightly by international standards. Sustained agricultural development will need - in addition to an appropriate agricultural pricing policy - investment in land improvement, introduction of improved technology and infrastructural development in the rural sector. The ongoing Bank education project (Third Education Project Credit 1353-SL) and this health and population project will improve  - 6 - education and health services. The health and population project will also help the Government in policies and programs to reduce population growth and in providing family planning services in areas where such services are not available now. Future Prospects 20. The next two to three years will be difficult for Sierra Leone. Even with the domestic policy changes under a reform program described above and with investments in agriculture (supported by IDA and other donors), economic growth probably will not be substantially revived before 1988. 21. For future economic growth, Sierra Leone will have to rely more on agriculture than mining. Sierra Leone's relatively abundant land resources provide the basis for a growing agricultural sector. Appropriate agricultural pzices, increased investments in the sector and further improvements in transportation and marketing facilities will, over time, increase export earnings from palm oil, cocoa and coffee and reduce rice imports. Compared to agriculture, the future outlook of the mining sector is at best mixed. The alluvial diamond output has fallen and the prospects of underground diamond mining seem limited. As noted, the country's only iron ore mine has closed because of depletion of reserves. Large iron ore reserves have been discovered in other areas, but most of these are of low grade and presently are not economic to mine. Mining of rutile is likely to continue operating well below capacity because of production problems and market conditions. Bauxite mining has recently improved, but its known deposits are of low quality. In recent years, interest in gold mining has revived, but its recorded production remains small. 22. The balance of payments will continue to be under pressure in the short run. Further rescheduling of both official and private debt servicing will be necessary. Sierra Leone's extremely difficult economic conditions and its vulnerability to fluctuations in primary product export earnings make it desirable for future debt service obligations to be kept low. These conditions and the country's low per capita income mean that Sierra Leone will have to depend upon IDA resources for Bank Group borrowing over the next several years. PART II - BANK GROUP OPERATIONS IN SIERRA LEONE Past Operations 23. Since 1964, when the Bank Group financed its first operation in Sierra Leone, the Bank has made five loans amounting to US$18.7 million and thirteen IDA credits totalling US$110.3 million-for agriculture (44 percent), education (23 percent), power (16 percent), highways (15 percent) and technical assistance (2 percent). Five Bank loans and seven IDA credits are fully disbursed. IFC has provided a loan of US$2.1 million to  - 7 - Sierra Cement Manufacturing Company, Ltd. which is now fully disbursed. Annex II contains a summary statement of Bank loans and IDA credits as of December 31, 1985. 24. Agriculture has been a major focus of the Bank Group lending in Sierra Leone. Agricultural projects have provided impro-ued extension services, feeder roads and farm inputs to small-holder farmers. Earlier assistance in agriculture supported the Government's emphasis on concentrating scarce resources directly on increasing production in specific areas with high potential by implementing integrated agriculture development projects (IADPs). The Bank Group contributed to the financing of two IADPs, through a phased approach under loans and credits rade between 1973 and 1981 (Cr. 323-SL, Cr. 568/Ln. 1138-SL, Cr. 1094-SL and Cr. 1128-SL). These IADPs complemented the efforts of other donors like the International Fund for Agricultural Development (IFAD) and the European Economic Commmnity (EEC). In late 1982, the Bank carried out a review of the agricultural sector which determined the need for a broader reform of the whole sector, for the provision of direct productive investments in rice, coffee and oil palm, and for a smooth integration of the IADPs - which has been managed by the project committees - into the Ministry of Agriculture. In June 1984, a US$21.5 million Agricultural Sector Support Project (Cr. 1501-SL) was approved to address key priorities of the sector at the national level as identified by the sector review. The project combines the sectoral reorganization and policy reforms with financing of imports of key agricultural inputs and specific investments. 25. In education, the Bank Group's first and second education projects (Cr. 170-SL of January 1970 and Cr. 573-SL of July 1975, respectively) supported the Government's priorities for skilled manpower by providing assistance to improve secondary education and technical training. The third education project (Cr. 1353-SL of May 1983) is assisting in the improvement of the quality of primary education and increase in access to primary education in rural areas. In power, the Bank Group has provided a total of US$20.9 million for power generation and distribution in Freetown and provincial centers, technical assistance and a feasibility study and preparation for the Bumbuna hydroelectric project, through two fully disbursed loans (Ln. 338-SL of August 1964 and Ln. 553-SL of August 1968) and one credit (Cr. 734-SL of September 1977) and one ongoing credit (Cr. 1265-SL). In infrastructure, the Bank Group's first highway project (Cr. 218-SL/Ln. 710-SL of October 1970) included sections of the country's main trunk road system and a maintenance program, as well as studies for further improvements of the road system. The second highway project (Cr. 1129-SL of October 1981) is being implemented to strengthen the country's capacity to maintain its road network and to rehabilitate major roads. In December 1979, a technical assistance project (Cr. 970-SL) was approved to strengthen the Government's capability in development planning, preparation of development projects, training of local staff, and monitor- ing and evaluation of public investment programs.  - 8- Project Implementation Experience 26. Until the early 1980s, implementation of the Bank Group projects was reasonably satisfactory. Disbursements during FY78-FY81 amounted to more than 40 percent of loans and credits outstanding at the beginning of each fiscal year. The implementation performance has greatly deteriorated since then and the disbursements have fallen to below 20 percent of the outstanding commitments since FY1984. Because of the present economic difficulties, each of the Bank Group-assisted projecta is suffering from serious counterpart fund shortages, inadequate foreign exchange allocation and inefficient management. Furthermore, arrears in service payments to the Bank Group and others have caused frequent suspensions of disbursements by the Bank Group and the other cofinanciers causing costly disruptions in project implementation. The Bank Group has started a review of each project to examine if any adjustments are required to meet the project's basic objectives. A country implementation review was held in Freetown in February 1986 to identify steps which could be taken by the Government or the Bank Group to improve implementation performance. Bank Group Strategy 27. Given the present deteriorating economic condition of the country, the principal objective of Bank Group assistance to Sierra Leone is to work with the Govrernment to design and implement economic reform measures that will stabilize the economy and stimulate production growth. The country's structural adjustment program is the main vehicle through which the Bank Group is seeking to implement this objective. Such an 'adjustment program would be designed to improve the efficiency, and reduce the scope, of the public sector and to create stronger incentives for private sector production in agriculture and industry through more attractive pricing and trade policies. Therefore, for the i-ediate future, both lending and economic and sector work will give particular emphasis to promoting and supporting the urgently required reforms. 28. The Bank's economic and sector work is expected to prepare and underpin policy reforms, to broaden and deepen our understanding of constraints which are likely to impede the recovery process, and to provide direction to our future lending. The lending program would focus on stimulating productive sectors with emphasis on institutional reforms and greater incentives, on improving essential infrastructures, with emphasis on rehabilitation and capacity utilization, and on developing human resources with emphasis on greater tfftciency and cost effectiveness. In both lernding and economic sector work, particular attention will be given to ways of strengthening the institutions responsible for economic policy- making, management and project implementation. 29. With decline in the production of diamonds, improvement in agricultural production has become increasingly important to reduce imports of rice and to increase exports of major crops (cocoa and coffee). The Bank Group will work intensively with the Sierra Leoneans to implement the ongoing Agricultural Sector Support Project (para 24) and to prepare an  -9- appropriate sequel to this project and for tree crops and forestry development. In the power sector, the immediate objectives are to assist in the urgently required rehabilitation of the generation and distribution of electricity and to rebuild the National Power Authority's management and finances. A longer-term objective is to develop renewable energy alterna- tives, particularly the Bumbuna hydro-electric project. Regarding roads, the Bank Group's emphasis will be to strengthen local capacity to plan, to implement and maintain highway systems, to assist in the rehabilitation of major highway networks and to continue development of feeder roads. Emphasis will also be given to develop local private contractors to carry out small construction and maintenance in a more cost- effective way. Development of human resources also will continue to receive high priority. Sector work will be carried out to provide direction for Bank Group assistance beyond the ongoing Third Education Project. The proposed Health and Population project seeks to improve health and family planning services in the country and to initiate a process for more efficient resource allocation and greater cost recovery in the sector. 30. As stated above (para 22), Sierra Leone's low per capita income and extremely difficult economic conditions mean that the country will have to depend upon concessionary resources for external financing. The country will also need a very high proportion of external financing, including of local costs, to implement externally financed development projects. The Government hopes to mobilize increased external assistance for its develop- ment projects and intends to make special efforts during the UNDP sponsored Round-table Conference expected to take place in late 1986. The extent of the Government's success in mobilizing external resources will depend in part upon its record in implementing the structural adjustment programs. PART III - THE HEALTH AND POPULATION SECTOR Sector Status 31. Sierra Leone's health and nutrition conditions are precarious. In 1983, life expectancy at birth was 38 years (well below the sub-Saharan African average of 49 years). The country's infant mortality rate (198 in 1983 compared to 119 for sub-Saharan Africa) is about the highest in the world; the lead causes include tetanus, whooping cough, polio, measles and malaria, most of which are treatable and preventable. Protein calorie malnutrition is widespread, the available daily calories per capita is about 85 percent of need. Malnutrition among the most vulnerable population groups (young children and pregnant and lactating mothers) is very high. 32. The country's mid-1985 population was estimated at 3.7 million, crude birth rate was 1,9 per thousand population and the fertility rate was high at 6.5. While the present rate of population growth is low at 2.3 percent, compared to the regional average of 2.8 percent, it is mainly  - 10 - because of a very high death rate of 27 per thousand compared to the regional average of 18 per thousand. Population projections indicate that the country's population will double in 30 years and over the same period the labor force will grow from the present 1 million to 2 million. 33. Health Services in Sierra Leone are provided by the Government, non-Governmental organizations (NGOs) and by private practitioners and industries. In mid-1984, there were 25 Government and 24 non-Government hospitals with a total of about 4,600 beds, concentrated in urban areas. At the Chiefdom and village levels, there were nearly 250 peripheral health units (PHUs) to provide preventive, promotive and curative services, including maternal and child health (NCH) services, immunization and treatment of common diseases and injuries. Although about 40 percent of the country's hospital beds are in the private sector, they are concentrated in urban areas and cater mainly to the higher income group. The Government's role is, therefore, important in making the health services more widely available. Nutrition activities are considered a part of the Government's primary health care (PHC) program but no national organization is promoting and monitoring nutrition policy and programs. A large number of un-coordinated fledging population and family planning activities are underway mostly sponsored by NGO's. Recently, the Government, with assistance from UNFPA and USAID started programs to increase family planning awareness and improve services. Currently, only about 20,000 couples (less than 5 percent of those eligible) are estimated to be practicing contraception, and over 80 percent of those couples live in or around the capital city. So far, the existing family planning programs have failed to generate any significant increase in demand for services or create facilities beyond the capital area. 34. Total private and public health services expenditures in 1983/84 were estimated at Le 160 million (US$26.7 million), about 3 percent of GNP or about Le 44.4 (US$7.4) per capita. This compares with the per capita expenditure of US$4.7 in Burkina Faso and US$4 in Ghana in 1984. Over the past five years, current health expenditures have been increasingly dominated by personnel costs, which in 1983/84 accounted for nearly 60 percent of expenditures. The greatest increases have been for daily wages. On the other hand, allocations for maintenance, service delivery and supervision have decreased significantly. The regional distribution of expenditures has been very uneven with three-quarters spent on urban health programs. Over the past five years, health expenditures have averaged about 9-10 percent of total Government expenditures which is considerably more than the average for Western Africa (6 to 7 percent). Yet, the country's health conditions are extremely poor (see para 31). Therefore, it is critical that the available resources be utilized efficiently if adequate health coverage is to be achieved. 35. Organization. The Ministry of Health (MOH) is responsible for formulation and implementation of national health policy and for the overall administration, coordination and management of the country's health system. It is headed by the Minister of Health and comprises two arms: an administrative arm supervised by the Permanent Secretary, and a technical  - 11 - arm headed by the Chief Medical Officer (CMO). The CMO is assisted by a number of professional staff with specific functions, such as the PHC Coordinator, the NCH Director, the Immunization Director, the Chief Pharmacist and the Chief Statistician. In each of the country's three provinces (Northern, Eastern and Southern) and the Western Area (around the capital), health services are under Principal Medical Officers reporting directly to the CMO. The District Medical Officers manage the district, sub-district and chiefdom level health services. Overall, the country's health services structure is centralized, with senior MOH officials in Freetown holding most decision-making authority. 36. In 1982, a National Population Commission (NPC) was established to formulate overall population policy. It is a multi-sectoral body comprising representation from several Ministries, including Development and Economic Planning (MODEP), Health, Agriculture, Social Welfare and Education. The NPC is supported by a small secretariat within the Population and Human Resources Sector of MODEP. The NPC has also constituted a number of Population Policy Task Forces to examine specific issues (e.g. fertility and mortality determinants, population and environment, and labor and employment) and make appropriate recommendations. The functioning of the NPC, its secretariat and the task forces has, however, been constrained by continuing shortages of physical, financial and staff resources. Policies and Programs 37. The Government has been increasingly aware that, to raise the national health status, health conditions and services in the rural areas - where 77 percent of the population lives - must be improved. This implies a major shift away from the currently predominant urban hospital-based programs. In 1982, through a series of national seminars and vorkshops, MOR reviewed past experiences with primary health care and developed a policy paper which is the basis for new health services in several communities. 38. Under its new policy, the Government aims to reduce national mortality and morbidity levels through the development of a uniform primary health care (PHC) system for nationwide application. Its operating strategy is to use the existing network of the peripheral health units (health centers, treatment centers and dispensaries) as the focal point for delIvering six priority health interventions: maternal and child health (MCH) services, including family planning; immunization; health, nutrition and family planning education; prevention and control of endemic diseases; environmental health services; and treatment of common diseases (e.g. malaria or diarrheal diseases). The main target groups for these interventions would be mothers and children under five. Each peripheral health unit (PHU) would be staffed by a minimum of four paramedicals (1 nurse-dispenser, 2 MCH nurses and 1 public health inspector) trained in community health and receive in-service training and at least bi-monthly visits for technical supervision and guidance from the nearest district hospital. The policy also places emphasis on the need of regular supply of  - 12 - essential drugs, vaccines, contraceptives and other medical supplies at PHUs, and advocates instituting user fees. To improve community outreach, home visits are also provided. 39. The Government's policy thus contains the key ingredients essential for the development of a comprehensive, broad-based system of health care. This system has been implemented on a pilot basis in Bo and Pujehun districts with assistance from the Federal Republic of Germany and in Bombali district with UNICEF assistance. Initial evaluation of two of the largest PHC pilots indicate better utilization of health facilities, improved coverage, more widespread and quicker treatment of diseases, and improved health and nutrition knowledge and practices in the communities themselves. Both pilot programs have been largely successful in mobilizing incremental resources for the health system through the introduction of user fees and through community involvement in the construction and renovation of health facilities (see also para 50). Issues and Constraints 40. The major constraints to health service delivery in Sierra Leone include: lack of data-based analysis of policies, program priorities and resource allocation; poor planning, coordinating and implementing capacity of HOH; lack of access to and under-utilization of public health facilities; low credibility of public health services due to inadequate provision of drugs and other essential supplies; lack of trained staff; and insufficient community education activities. Given the budget constraints (see para 34), there is also an issue of how to institute a system of user fees that would work. With regard to population, the chief constraints are: weak policy formulating and coordinating capacity within the National Population C,ommission; and the poor capacity to coordinate successful, albeit fraglented, family planning initiatives in the country. As a result, the country does not have a national population policy and plan of action to serve as an overall framework for national program development. Bank Role cmd Strategy 41. The Bank Group's past assistance in this sector has been confined to the provision of two man-years of consulting services for health planning under the Technical Assistance Project (Credit 970-SL). The consultant assisted MOH in assessing the health sector needs. His recommendations were considered in designing the proposed project. 42. There is an urgent need to improve the health services in Sierra Leone without increasing the Government's financial burden beyond the already high share enjoyed by the sector (see para. 34). The Bank Group has a useful role to play in meeting the serious need for strengthening sector capacities as well as in dealing with structural adjustment issues like the correction of internal imbalances (in resource allocation and service delivery), institutional reorganization and strengthening, and the establishment of a system of cost recovery that is workable and equitable. Assistance in the population sub-sector needs to be focused on the  - 13 - development of a national policy and on strengthening the institutional capacity of the NPC to coordinate and monitor numerous fragmented and duplicative activities. The activities proposed in the project are consistent with the recommendations of the recent review of the country's public expenditure program. PART IV - THE PROJECT Background 43. The project was prepared by the Ministry of Health with assistance from the consultants recruited under a project preparation facility advance. The project was appraised in July 1985 and the staff appraisal report (No. 5995-SL) is being circulated separately. Negotiations took place in Washington, DC in March, 1986; the Sierra Leone delegation included Dr. Belmont Williams, Chief Medical Officer and Mr. W. B. Munu, Permanent Secretary of Health. Significant events and special conditions are summarized in Annex III (Supplementary Project Data). Project Objectives 44. The proposed project would assist the Government to restructure the country's health and family planning policies and institutions and improve and expand the services. As already noted, Sierra Leone has one of the highest infant and maternal mortality rates in the world although the country's per capita health expenditures are also among the highest in the region. Furthermore, because of general economic decline, the condition of the country's health facilities is fast deteriorating. The reform measures included in the project are expected to benefit the whole sector. A key element of the reforms would be to reduce the sector's dependence upon public expenditure by intensifying cost-containment and cost-recovery measures. Specifically, the project has three objectives: (a) to help achieve necessary adjustments in the health sector (including nutrition) through policy developments and reforms and strengthening of MOH's capacity to plan, manage, coordinate and monitor programs; (b) to help develop population policies and strengthen programs designed to generate demand for family planning; and (c) to strengthen basic health and family planning services with emphasis on a PEC approach. Project Description 45. Project activities are divided into four parts: (a) health policy reforms, (b) institutional development for MOH, (c) strengthening of basic health and family planning services, and (d) population policy and program development.  - 14 - (a) Bealth Policy Reforms 46. As part of its effort to address sectoral issues, the Government has completed, with assistance from Africare (a US-based NGO) and PPF-financed consultants, studies pertaining to health manpower, facilities and services utilization, health expenditures, and drug logistics. These studies have identified a number of policy reforms which are included in this project. They are: cost recovery and cost containment measures, daily wage expenditure reduction, reallocation of resources away from urban bias to rural health services, decentralized management of drugs and medical supplies and improved health services staffing. In addition, several key policy issues pertaining to organizational and financial management reform.s are being studied and their recommendations would also be implemented during the project period. MOR would review the results of these ongoing studies, including their recommendations, by March 31, 1987 and would incorporate the agreed recommendations in the long-term health investment plan. MOH would provide IDA by September 30, 1987 for its review the draft health investment plan, and in each year thereafter would also provide an annual investment plan for IDA's review. The project includes technical assistance to design and implement these reforms. (b) Institutional Development for MKO 47. (i) Planning. Management Information and Statistics. The Government intends to merge MOH's health planning and medical statistics units to establish a single Planning, Management Information and Statistics Unit (PMISU) to help improve the planning and management capabilities of MOB. The project would provide the PMISU with micro-computer and office equipment, vehicles, local and overseas training, technical assistance and funds for operational research studies. Establishment of the PNISU and assignment of a Principal Health Planning Officer would be a condition of credit effectiveness. 48. (ii) Financial Management and Cost Recovery. The Government, with the assistance of PPF-financed consultants, has identified three areas requiring close attention, namely, budgetary control and financial reporting, cost-containment and cost recovery. The project would provide MOH with incremental staff, staff training, equipment, vehicles, and technical assistance to improve financial management at the central and provincial levels. Improved financial control is expected to increase receipts of hospital user fees from hospitals from Le 100,000 at present to about Le 1 million per year. 49. Cost containment is crucial to meet the new investment needs of this sector (see para 34). In particular, in line with the recommendations of the Bank's public expenditure review, significant reduction in wage expenditure is both a possibility and a need. To implement the reduction, a health expenditure analysis was carried out which identified daily wage expenditures that would be phased out over the next three year period. A detailed plan is being worked out. The Government would reduce the nunber of MOH's daily wage employees by at least 10 percent annually starting from  - 15 - the fiscal year ending June 30, 1987 as a condition of disbursement for expenditures of civil works, local training and operating costs after June 30 of each year. Under the project, a total of at least 30 percent reduction in the number of daily wage employees, as determined on December 31, 1985, is expected by June 30, 1989. 50. User fees to recover costs of drugs are already being charged in three pilot PHC districts (Bo, Pujehun and Bombali, see para 39) but only 50-75 percent of the costs are being recovered in these districts at this time. The Government intends to institute similar cost recovery measures in the three districts where PHC programs would be extended under the project where full costs are expected to be recovered. An operation plan to carry out these cost recovery measures, with appropriate improvements based on lessons learned from the pilot experience, has been developed for implementation under this project. The operation plan includes methods to retain the fees collected in a revolving fund to replenish drug supplies. 51. (iii) PHC Coordination. To help alleviate the adverse implications of MOB's vertical structure and overcentralization, the project would improve institutional capacity for coordination and management of the PHC program at the central, proviucial, district and PHU levels. The project would provide incremental technical staff, vehicles, equipment and materials. To assist the provincial and district medical officers in the project areas, the Government would appoint an administrative officer in each provincial health office and a medical officer in each district health office. Appointments of additional staff in the PHC Co-ordination Unit and at provincial and district levels would be a condition of credit effectiveness. No difficulties are anticipated in recruiting or redeploying these incremental staff. (c) Basic Health and Family Planning Services 52. The Government intends to extend the PEC approach 1/ to health services delivery to the whole country in the long run. In view of existing institutional and financial constraints, it has identified three districts for extension of PHC coverage under this project: Kenema in the Eastern Province, Moyamba in the Southern Province and Tonkolili in the 1/ Under this approach, the health units would be focal points for delivering six priority health interventions: MCH services, including family planning; immunization; health, nutrition and family planning education; prevention and control of endemic diseases; environmental health services; and treatment of common diseases.  - 16 - Northern Province 2/. With the addition of these districts - which are contiguous to the three existing PHC districts -- six of the country's twelve districts would have health infrastructure capable of providing the priority preventive, promotive, and simple curative health services at a cost affordable to the community. In contrast to the existing three pilot projects, the PHC program would now be implemented within the Government's existing management structure. 53. To assist the Government in extending PHC to the three additional districts, the project would finance physical rehabilitation of the three district hospitals, a referral hospital and 42 PHUs. It would also assist in standardizing and upgrading staffing pattern, in--service training and management at the PHU level. 54. Drug supply and distribution problems are a major cause of low efficiency and under-utilization of health services. There is an acute shortage of essential drugs and medical supplies throughout the system because of low budget allocations, inefficient and very costly procurement practices, poor drug selection and inventory management and almost total lack of transportation and distribution facilities. As a first step in addressing this situation, the Government has developed a standard list of drugs, contraceptives and medical supplies with assistance from the WHO and an IDA project preparation mission and has agreed with the Bank's recommendation to employ international competitive bidding (ICB) to procure drugs. The MOH, with assistance from Africare, has started to improve overall drug supply management and control. 55. The project would finance renovation of the central medical store warehouses, furniture, equipment, vehicles, technical assistance and training in record-keeping and inventory management, and the production of a prescription manual for training of and use by health workers. In addition, the project would provide, for the three new PEC districts, technical assistance, vehicles, drugs, contraceptives and vaccines to improve drug supply in the project districts and to serve as a base from which to develop cost-recovery and drug supply replenishment programs. The Government would (a) not later than December 31, 1986, finalize the standard drug list, a prescription manual and a plan for procurement, storage, distribution and safe-keeping of drugs, and (b) not later than March 31, 1987, begin training of health workers on drug storage distribution and prescription. IDA disbursement for the cost of drugs would be contingent upon the procurement by the Government under ICB of all essential drugs, vaccines and medical supplies for the public sector (except those provided by the donor agencies as grants or tied credits). Mechanism for monitoring procurement under ICB has been finalized. 2/ The criteria used for selecting the project districts are: (a) underserved areas with poor health indicators; (b) geographical contiguity with districts currently having PHC program; and (c) availability of health staff.  - 1I7 - 56. Given the importance of ensuring a reliable and regular supply of essential drugs, vaccines and medical supplies, the Government has established a revolving fund in the form of an escrow account at the Bank of Sierra Leone. The fund would consist of the money collected under the cost recovery system (para 50) to replenish the drugs and supplies in the project districts. The Government would deposit the annual foreign exchange requirement to procure these drugs and supplies for the three districts in the escrow account. 57. To assist in the Government's program of providing community health interventions required at the district level and below, the project would finance training of about 60 Assistant Community Health Officers, one each to be posted in the project PHU's, and technical assistance to introduce comnnnmity health content into curricula for pre-service training of all paramedicals. Technical assistance would also be provided to develop a consolidated in-service training plan. In addition, based on a review of the ongoing manpower study, a comprehensive health manpower plan would be developed for implementation in the short- to medium-term. Finally, to help develop a coherent, coordinated effort in health, nutrition, and family planning education, the project would strengthen the Council on Health Education and Nutrition and the Health Education unit within NOR through support for staff training, office equipment and materials. A comprehensive plan for community education would be prepared and furnished to the Association no later than December 31, 1987. (d) Population Policy and Program Development 58. The project would assist in strengthening the National Population Commission's (NPC's) capacity, to implement, coordinate, monitor and evaluate family planning by providing incremental staff, vehicles, equipment and materials to the NPC Secretariat. To enable the NPC to increase population awareness among policy-makers, planners and other Government officials, the project would provide funds for training seminars and workshops and for the development and production of informational materials. UNEPA has been assisting the Government in the development of a national population policy and an action plan for its implementation. To ensure participation and commitment of various segments of the population, especially of the professionals, the Government has established a number of task forces to study and report on various aspects of a population policy. The task forces are expected to report by mid-1986. Based on these reports, a comprehensive national population policy and an action plan are to be finalized. The Government would submit to IDA for its review and comments a draft national population policy statement by December 31, 1986 and an action plan not later than July 31, 1987. -The Government would carry out a study of the legal status, composition, structure and functions of NPC and its secretariat, and submit to IDA by July 31, 1987, proposals on how to upgrade the position of NPC and its secretariat in the Government organizational structure.  - 18 - 59. To complement the Government's efforts to increase the demand for family planning, the project would help strengthen the ongoing information education and communication activities of the principal NGOs -- the Planned Parenthood Association and the Home Economics Association -- by providing vehicles, equipment and materials. The NGOs would work closely with the NPC Secretariat to ensure appropriate coordination. In addition, the project would assist the Government to complete the process of integrating population content in the curricula of both formal and adult education programs (already started with assistance from UNFPA) by supporting education material development and teacher's training. Project Costs and Financing 60. Total project costs are estimated at US$5.7 million, net of duties and taxes from which the project would be exempt. Its foreign exchange component is US$4.1 million (or 70 percent). Physical contingencies are 10 percent. The base cost estimates are expressed in US Dollars determined by using the approximate average rate of exchange prevailing during project appraisal which was US$1 = Le6. The assumed rates of increases in international prices are: FYs 1986-87, 7%; FY1988, 7.5%; and FY1989, 7.7%. These rates were used for estimating price contingencies for both local and foreign costs, on the assumption that periodic local currency devaluations, estimated on a purchasing power parity basis, would compensate for differences, between projected US dollar inflation and local inflation rates. 61. The project cost of US$5.7 million does not include other important activities which have been identified and appraised but would be implemented if cofinancing is available. These include: (a) construction, equipping and furnishing of additional 18 PHUs (US$1.1 million); (b) support to the Census Commission and the Ministry of Social Welfare (US$0.3 million); and (c) research contracts (US$0.6 million). There have been a few indications of cofinancing possibilities but they are still uncertain. The proposed IDA credit would finance US$5.3 million and the Government would contribute US$0.4 million. Operating Costs and Affordability 62. The proposed project concentrates on rehabilitating and increasing the efficiency of existing facilities, and implementing cost-containment measures. The project, upon completion, is expected to add about US$0.4 million in recurrent costs each year, approximately 7 percent of MOR's 1983184 budget. However, these incremental costs would be offset by the cost containment measures introduced by the project. For example, the daily wage reduction alone would save US$0.4 million annually. Moreover, the cost recovery measures would yield another US$0.8 million yearly so that, on balance, the measures introduced by the project would result in a net annual saving of US$1.2 million or 20 percent of the projected FY1989 recurrent expenditures of MOH. Thus, the Government should be able to replicate this project on a national scale, when its implementation capacity is improved. Experience gained in the project should indicate how rapidly the PHC approach can be replicated nation-wide.  - 19 - Project Implementation 63. The proposed project would be implemented by strengthening existing units in MOH and NPC. No separate project management unit is .envisaged. A Project Steering Committee (PSC) has been established to deal with broad policy matters, oversee implementation, review performance, assure timely financial flow and advise IDA of project progress. The PSC is chaired by the Financial Secretary and its members include the Health Secretary, Development Secretary, the Chief Medical Officer (CMO), the Principal Planning Officer of MODEP (who represents NPC and also acts as Secretary of PSC) and a health and family planning NGO's representative. A Project Implementation Committee, chaired by the CHO and comprising the heads of various inRlementation units and its members, has also been established to monitor timely implementation of annual plans and coordinate all implementation activities. The establishment of provincial and district implementation teams in each project province and district would be a condition of credit effectiveness. 64. A comprehensive mid-term evaluation of the project is planned to review progress in policy development and reforms, particularly the recommended shifts in financial resources allocation, cost recovery and cost containment measures (including increased hospital users' fees) population policy, project cost and disbursement status and general implementation progress. It would also review the need foi changes in project scope and restructuring if cofinancing becomes available or the country's economic situation dictates such change. The project evaluation would be carried out jointly by the Government and IDA within 18 months from the credit effectiveness. Status of Project Preparation 65. Project preparation, facilitated by the PPF advance, is considerably advanced. Almost all ten pre-project activities agreed with government during appraisal have been completed. The activities pertaining to an improved financial and drug management system, appointment of key project staff and consultants, and drafting of PEC operational plan and manuals have been completed. Preliminary reports of the health manpower and health services utilization studies have also been completed. Additional preparatory activities pertaining to training of key project staff, preparation of draft tender documents and a renovation plan for health facilities and introduction of improved financial and drug management system, funded under the second tranche of PPF advance, are already ongoing. No difficulties are foreseen for timely start-up of project implementation.  - 20, - Procurement 66. Procurement arrangements are suu.arized as follows: Amounts and Methods of Procurement (U.S.$ million) a/ Project Element ICB LCB Other N.A. Total Cost Civil Works - 0.3 0.3 - 0.6 (0.3) (0.3) (0.6) Furniture, Equipment, Vehicles, Materials 1.5 0.3 0.1 1.9 (1.5) (0.3) (0.1) (1.9) Technical Assistance - - 1.2 - 1.2 (1.2) (1.2) Fellowships - - 0.1 - 0.1 (0.1) (0.1) Group Training - - 0.4 - 0.4 (0.4) (0.4) PPF Refinancing - - - 0.3 0.3 (0.3) (0.3) Operating Costs - - 0.6 0.6 1.2 (0.6) (0.2) (0.8) TOTALS 1.5 0.6 2.7 0.9 5.7 (1.5) (0.6) (2.7) (0.5) (5.3) Note: Figures in parentheses are the respective amounts to be financed by IDA. a/ Costs include physical and price contingencies. b/ Other procurement includes prudent shopping, technical assistance and fellowships, and training overheads. 67. All goods and services financed by the IDA credit would be procured in accordance with IDA guidelines. Contracts for the renovation of two Central Medical Stores buildings, the Bo Paramedical School and three district hospitals totalling US$0.3 million would be too small and dispersed to attract foreign bidders and would therefore be awarded through local competitive bidding (LCB) procedures, which are acceptable to IDA.  - 21 - Construction materials costing less than US$8,000 per PHU may be procured on the basis of prudent local shopping procedures acceptable to IDA. Drugs, medical supplies, vehicles, equipment and materials (including those for the NGOs) valued at about US$1.5 million, would be grouped to the extent practicable into bid packages estimated to cost US$50,000 equivalent or more and would be awarded on the basis of international competitive bidding in accordance with IDA guidelines. Local suppliers would be eligible to bid and, in the evaluation of bids, would be eligible for a margin of preference equal to 15Z of the CIF costs of competing imports, or the prevailing customs duty, whichever is lower. Furniture and standard office equipment, available at competitive prices locally, would be procured following local competitive bidding procedure". Items would be grouped to the extent practicable to encourage competitive bidding and to permit bulk procurement. Miscellaneous equipment and materials in packages not exceeding US$5,000 equivalent, and subject to an aggregate total of US$0.1 million equivalent, may be procured through prudent shopping. Selection and appointment of technical assistance consultants would be carried out in accordance with Bank guidelines. Fuel, operation and maintenance and perishable supplies (about US$0.7 million) would be procured by local shopping. Prior IDA review would be required for all contracts to be awarded under ICB and all other contracts of US$50,000 equivalent or more. Sample post-award reviews of contracts of less than US$50,000 equivalent would be carried out during project supervision missions. Disbursement 68. The proposed IDA credit would be disbursed as follows: 90% of the cost of civil works, (US$0.6 million); 100Z of foreign expenditures and 85Z of local expenditures for equipment and materials, vehicles, drugs, and medical supplies (US$1.9 million); 100% of technical assistance and fellowships (US$1.4 million); 1OOZ of the cost of local training and recurrent cost except for building and equipment maintenance, and stipends (US$0.8 million); 1OOZ refunding of the project preparation advance (US$0.3 million); and unallocated (US$0.3 million). 69. Disbursements for contracts of less than US$20,000 equivalent for local training and recurrent costs would be made against statements of expenditure. Documentation for these items would not be submitted for review but would be retained by the Government at one central location and would be the subject of an annual audit by auditors acceptable to IDA. In  - 22 - addition, all documentation should be readily available for review by IDA representatives during project supervision. In view of the Special Account to be opened for the project IDA would not accept reimbursement applications for less that US$60,000 equivalent. 70. In the absence of a country disbursement profile, the disbursement schedule was based on the standard disbursement profile for West Africa Education projects. The estimated disbursement schedule would be reviewed at mid-term and amended, if necessary. Special Accounts 71. In order to ensure that project funds are readily available as needed, a special account (in US$), operated by the Project Implementation Committee, would be established in a commercial bank in Freetown with an initial deposit of US$0.3 million equivalent, corresponding to about 4 months of IDA's share of estimated project expenditures. To ensure that the Government's counterpart funding also would be available when needed, the Govertment would establish a separate replenishable local advance account in local currency of about Le 0.2 million. Establishment of the local advance account and depositing the initial amount of Le 0.2 million would be a condition of credit effectiveness. Project Benefits and Risks 72. Benefits. Through its support for sectoral adjustment in health, the project would help reorient the health system away from its present urban bias and towards improved health services for the majority of the population located in rural areas. In so doing, the project would increase the quality and accessibility of health and family plan-ning services, particularly to mothers and children. The project would strengthen PHC services, particularly MCR/family planning in three presently underserved districts with a total population of 1.2 million. It would help lay the foundation for the development of a national population and family planning program, by increasing awareness of and access to services in both urban and rural areas. Support for ongoing institution-building in both health and population would contribute to improved planning, policy implementation and donor coordination. By reducing wage-labor expenditures, increasing the collection of user fees and introducing other cost-containment and cost recovery measures, the project is expected to free up resources of about US$1.25 million per annum, by the end of the project period, for the regular supply of essential drugs to contribute to improving the management and operation of the health program. Finally, the project would introduce improvements in procurement and management of essential drugs, vaccines and other medical supplies thus increasing their supply and the efficiency of the health services. 73. Risks. As the proposed project wo'ald be the first Bank-financed operation in the sector in Sierra Leone, there is a risk of delays in implementation. However, project preparation, facilitated by PPF assistance, is well advanced and the Government has demonstrated strong  - 23 - commitment to the project's objectives. Moreover, the addition of several higher-level staff to the key units concerned with project implementation and the provision of technical assistance to these units should further minimize the risk of delays. In addition, an initial project "launch" workshop is planned prior to effectiveness to familiarize middle-level staff with the project's scope and requirements. PART V - RECOMMENDATION 74. I am satisfied that the proposed credit would comply with the Articles of Aireement of the Association and recommend that the Executive Directors approve the proposed credit. A. W. Clausen President by Moeen A. Qureshi Attachments Washington, D.C. April 22, 1986  - - 24 - ANNEX I Pa2e 1 of 6 StEaM Lao - SOCtA. nezenon0R OASA SlEET SICIIA LEONL REPENE DainwS (WEIGHED AVRAGS i NOST (mOE? ECE E3TINAT) /b 191.Jb j97 JUCIbILOt INCOME AFRICA MEDALL rnwu 1I ! Go /!b 19701-b. lolgsr="Anl souTm or SANAtA AFICA S. OF SAHARA A-A (TMOA- SQ. no TOTAL 71.7 71.7 7L.7 AGRICULTURAL 35.9 36.9 39.5 GW P CAPIU us) . 130.0 238.5 1063.6 -r ama. mr crna (KILOGRSAS OF oIL EqUIVALD 66.0 152.0 110.0 62.3 581.5 nwwgana. Am ITAL sCXunma POPULATION.NaD-YAR (THOUSANDS) 2371.0 2762.0 3700.0* URBAN POPULATION (R OF TOTAL) 13.0 18.1 23.0 2n.1 32.0 POPULATINW PRWECrtOS POPULATION IN TZAR 2000 MILL) 5.4 STATIONAY POPULATION (HILL) 17.0 POPULATION MlET 1. POPULIATION DEMS ITT PER SQ. ax. 13.0 38.5 50.0 33.2 65.1 PER SQ. 9M. AGRI. LAND 66.0 74.8 68.2 112.8 124.8 POPULATION AGE STRUCTURE CZ) 0-14 IRS 41.1 42.9 40.9 46.0 45.1 15-64 YRS 55.0 53.7 52.8 50.8 51.5 65 AND ABV 3.4 3.2 2.9 2.9 2.7 POPULATION CROWT RATE (I) TOTAL 1.3 1.5 2.3* 2.8 2.9 URBW 4.6 4.6 3.5 6.4 5.1 CRUDE 81T RAru (PER THOUS) 48.0 46.3 49.1 47.2 47.0 CRUDE DEATH RATE (PER THtlS) 33.9 30.8 26.5 17.8 15.0 GOSS REPRODUCTION RATE 3.0 3.0 3.2 3.3 3.2 FAMILY PLUNING ACCEPTORS, ANNUAL (THOU.S) usERs (K OF ARRID OEN) .. .. .0 3.3 6.4 INDCX OF FOO PIOD. PER CAPITA (1969-71-100) 96.0 99.0 32.0 83.3 62.9 PER CAPITA SUPPLY OF CALO!IES (C OF REQUIRESNTS) 69.0 88.0 39.0 87.7 96.5 PRTINS (GRAMS PER DAY) 34.0 '2.0 47.0 51.9 55.4 OF WHICH AItHAL AND PULSE 12.0 14.0 17.0 /c 15.7 16.5 CHILD (AGES 1-4) DEATH RATE 73.2 6".J 5.0 23.1 16.6 LIFE EXPSCr. AT UtE (CLARS) 31.8 34.0 37.6 47.8 52.0 INFANT lOSr. RATE (PER THOUSI 234.0 227.5 198.0 119.5 108.8 ACCESS TO SArE WATER (XPOP) OL .. 12.0 16.0 id 27.1 42.4 URUAN *- 75.0 50.0 7d 63.5 67.5 RURAL .. 1.0 2.0 7 19.3 35.8 ACCESS TO EXCRETA DISPOSAL CR OF POPULATION) TOTAL .. .. 13.0 Id 26.5 28.9 URBA .. .. 31.0 7d 65.4 57.7 RURAL .. .. 6.0 71 20.6 20.7 POPULATION PER PHYSICIAN 22370.0 1354O.O 17790.0 1. 27901.7 117!. 7 POP. PER NURSING PERSON 3200.0 3900.0 2070.0 7 3308.4 2459.8 POP. PER WSPITAL NE TOTAL 1370.0 1120.0 840.0 /I 1273.6 981.1 URBAN 310.0 380.0 .. 428.2 368.8 RURAL .. .. .. 3292.5 4371.9 ADKISSIONS PR HOSPITAL BCD . .. .. .. 27.2 AVERAGE SIZE OF WUSEHOLD TOTAL .. 6.5 URBAN .. 5.7 RDRAL .. 6.7 AVERAGE NO. OF PERSOIISIROO TOTAL .. .. URBAN .. 2.1 . RURAL .. .. PClA or DWmlLiE S WITH ELECT. TOTAL .. .. URBAN .. .. RURAL 2.0 lf ..  - - 25 - ANNEX I r'age _ o f 6 SIERtA LO - SOCIAL INDICATORS DATA SHEET SIERRA LIONE RENCE GROUPS (CEIGUTD AVELAGES) /a "DST (MOST RECNT ESTtNATE) lb bECEb T LOW INCOME AFRtCA NaouLE 1C igeoLk 1970Lk! ElST9PIATEI SOUTH OF SAARA ARICA S. OF SAKA UICAInM ADJUSMD EHUJOE? ItATIOS PRINAt: TOTAL 23.0 33.0 41.0 /d 71.0 95.7 IILZ 30.0 40.0 .. 77.6 100.0 P31*1 15.0 26.0 .. 54.9 51.2 SCNAOIDUYt TOTAL 2.0 9.0 13.0 Id 13.5 17.3 KILE 3.0 12.0 .. 17.9 25.0 EAL 2.0 5.0 .. 9.1 14.6 VOCATIONAL (c or SECOeDaIT) 7.2 1.5 1.4 /a 13.2 5.9 PUPIL-TEAHR RfATIO PRIMR 36.0 32.0 25.0 /d 44.9 41.1. SECOIDART 17.0 20.0 22.0 7 27.4 25.5 PASSEINGER CAPSITUOUSAND POP 2.1 D.5 6.0 Ih 3.8 20.J RADIO UCETVEESITOUSAI MP 3.9 14.5 1U5.2 55.J 107.6 TV IESCVES/TMOUSAND FO 0.2 /I 1.1 6.3 2.6 20.8 HENSPAPE MALY GENERAL LmTRE:) CZCULAATIO PER THOOSAD POMATWOI 6.3 16.3 2.8 5.0 16.4 CXNMA ANWAL AT-EMMJJC/CAPITA 0.2 0.0 .. 0.5 0.4 TOTAL LABOR FORCE (TWUS) 1041.0 1112.0 1257.0 FUW.E (PECENT) 36.6 35.6 34.2 34.2 36.2 ACRICULTUUI tPERCT) 7S.0 71.0 65.0 /d 77.5 54.5 INDUSTRY (CPZRCZT) 12.0 15.0 19.0 7d- 9.7 16.3 PARTICIPATION RATE ( PRCEIT) TOAL 42.1 39.2 36.2 39.3 36.8 MALE 54.7 51.5 49.2 50.9 47.1 FRIELE 30.0 27.5 24.8 28.1 27.2 ECONMIC DEPENDENCF RATIO 1.1 1.2 1.2 1.3 1.3 - D 113UITIU PERCENT OF PRIVATE ncE ECEIVED bT IGET 3SW HOrSUSOLDS .. 27.ME HGET 20207 WOUSLDS .. 52.5 L-MEST 20S OP HO OS .. 5.6 LouE 4020or 7DwsOas .. 15.2 - I - -TO ABSOLUTE PCVET INCOM LVEL CUSS PM CAPZTA) URAW .. .. 105.0 le 165.5 590.7 IURAL .. .. 75.07 95.0 275.3 ZrESTATED SELATIVE POVERT INCOSZ LEVEL (USS PER CAPITA) UIlIA .. .. 198.0 /a 113.1 545.6 RAL .. .. 40.0 7; 67.6 201.t RSTIMATED POP. EMW AES.UTE POEST INCONE LEVEL CZ) URIN .. .. .. 36.6 RURAL .. .. 65.0 / 61.8 NT AVAILABLE NOT APICAULZL SOTES La TbS groop avgrage for each indicator are populatioumelgbted arithmtic mea. Coverage of coentries ionS rbe Indicators depend. on availabliety of data ad ia not uniform. /b Unless otb riae noted. 'Data for 1960r retfr to any yer betwee 1959 and 1961; "Date for 1970" betwesn 1969 and 1971; ad data for eNot Race. atimte between 1981 ad 1983. /c 1977; /d 1960; /a 1979; /f 1962; jL 1967; /b 1976; /t 1963. * 1985 caum ae t =tae. iUNE. 1985  -26 - ANNEX I - Page 3 of 6 D 0T0O OF SOCIAL IdICATS No_: Altho tI data am drwn arm msoai ginaflly judd inhe mong audontine and mlable. i should als be naied dint they may nat be iaumuonaly compable becale the lack of 1andwd dindMtmna and cnamp sad by differet cmuna in collecung ght data. The duu r- inonedt_ai uwful to d be gardia afma_ _udL mudiU tu-d and em nat _aRd diffn betn countr. The r e - pu ar (1 t untAy ppaf d aubjsacounta y ad t2) cotry roup wt somewhat biger avea incme than the country group dthe ubi _ any ( t to -HIg o Oil EpO group-here -M.ddle Income Nortb Afra ad imdc Eastiioen be me Orslionr omo-c.uudalbalmemto IN abm gro_p da the *ang am popuaon w_gtd an_hiei mmes for each indiaor and shown only wha niajonay ofthe onan in a Wapli dat for tIu inditor. Since tbe crng arcaunutm among the indcaton depends on the asalabthty ofdaa *nd is not umrnvim. cautmon m beeurcndin_iug ang agone o nodicatr to anotha. Thm aanup ae aly umeful m companng the walue ofone indritor atA tw amog |tbe counay and I a AREA (thouand sq.km.) Crude hi Atwe (per thmai-Nd)-Number of live births in the year T4val-Total surfac arw cmprsing lkad area and irand watem per thousand of itl-year population; 1960. 1970. and 1983 ata 1960. 1970 and 1983 data. Crde Deal*tR (per rauad)J-Number of deaths in the year AgrkjiEah -Estimate of agricultural area used temnporanly or per thousand of mid-year population. 1960. 1970. and 1983 data. pemanetly for crops papsture market and kithben gardens or to Grs Rep.* _iu Rae- Avrage nunmber of daughtes a woman lie fallow. 1960. 1970 and 191^2 data. wvi bear in her norraal reproductive period if she expenences present age-specific fertility rates; usually five-year averages ending GNP PER CAPITA (USS)-GNP per capita estimates at current in 1960. 1970. and 1983. market prices calculated by sane conveion method as World w Pkaiq-Accepr.rs. d4uma (rhasaafhj-Annual num- Bank Ada (I 9911843 basis); 1983 data. ber ofacceptors of birth-control devces under auspices of national ENERGY CONSUMPTlON PER CAPITA-Annual apparent family planning program consumption of commercial primary energy (coal and lignite. F b LIy Plwiq-L ars (peetr fmWriet m)-Theprcen- petroleum, natural gas and hydro-. nuclear and geothermal clec- tage of manrried women of child-bearing age who are practicing or tricityq in kilograms of oil equivalent per capita; 1960. 1970. ad whos htusbands are practicing any form ofcontraception. Women 1982 data. of child-beanng age are generally women aged 15-49. although for some countries contraceptive use is measured for othwr age POPULATlON AND VITAL STATSTICS groups. Tvalhpu1 aiM. Wid- Y- (9tkausmdr-As of July 1: 1960. 1970. FOOD AND NUTRIMON and 1933 data. Po RrtfFoohd Predua Pr CqApa (1969-71 - 100J-Index of per popula on_ different efimous of q,t' an areRsomay urbanetoetotal capita annual production of aDl food comnmodities Production populaton; different defintionis of urban area my affect compar- exudsamlfedndedfoagiltr.Fdcmoiis ability of dat among countries; 1960. 1970. and 1983 data. indude primnry commodities (esg. sgacane isood comfodstirs - Awjectiu which are edible and contain nutrients (e.g. cofree and tea are Popuation in year 2W0-The projection of population ror 2000. exdluded); they comprise cereals, root crops. pubes oil sds. made for each eeonomy sepaately. Starting with information on vegetables. fruits nuts. sugarcatte and sugar bets. Iiwvtock, and total population by ae and,. fertility rs mortality rates and livestock products. Aggregte production ofeach country is basd international nugration in the base year 1910. thew paramets on national average producer price weights. 1961-65. 1970. and wer projected at rive-ycar intervals on the basis of genalized 1912 data. assmptions until the population became stadonary. Ptr Cap SW& ofCaae (peet frew-emesD-comput- S:tatioay popuhlnia-4s one in whicb age- and sex-specific mor- ed from calorie equivalent of net food supplies available in country tality rates have not changed over a long period, while age-pecific per capita per day. Available supplies comprise domestic produc- fertiliy rates have simultaneously remaied at replment level tion. imports less exports. and changes in stock. Net supplies (net reproduction rate -I ). In such a population, the birth rate is exdude animal feed, seeds for usem agricture quantities used in constant and equal to the death rte, the age structure is alo food processing, and losses in distribution. Requirements were constant, and the growth rate is zero. The stationary population estimated by FAO based on physiological needs for normal activity size was estimated on the basis of the projected characteristis of and bealth considering environmental temnperature. body weights. the population in the year 2000. and the rare of decli of retiity age and sex distribution of population. and allowing 10 percent for rrte to replacemt level, wase at household level. 1961. 1970 and 1982 data.. Popukun Momka-I the tendency for population growth to Pr Cpit Suly of Pfte (grau per d7)-Protein content of continue beyond the tie that replacement-level fertility has been percapita net supply or food per day. Net supply of food is defined achived: that is. even after the net reproduction rate has reached as above. Requirements for all countries established by USDA unity. The momcntum of a population in the year r is mnessured as provide for minimum allowances of 60 grams of total protein per a ratio of the ultimate sttionary population to the population in day nd 20 grams of animal and pulse protein of which 10 grams the r t. given the assumption that fertilty remains at replace should be animal protein. These standards are lower tban those of mnent lve from yr t onward. 1985 dat 75 grams of total protein and 23 grms of animnal protein as an -P fants - Davmky average for the world, proposed by FAO in the Third World Food Per sqk-Mid-year population per square kilometer (100 hec- Supply. 1961. 1970 and 1982 data. tames) of totl are 1960. 1970. and 1983 data. hr Cpta otwein Sp*p From Auiuulm Pubse-Protein supply Per sq.knL agriadnatl nd--Computed as above for agricultural of food deived from animalsand pulses in grams perday. 1961-65. land only. 1960. 1970. and 1982 data. 1970 and 1977 data. pAV&" Age Swerr (percew)-Childmn (0-14 years). work- Cid (age 1-4) Deth Ate (pR er trh usad)-Number of deaths of ingage(15-64yes).andretred(65years ndover)asypercentge children aged 1-4 years per thousand children in the same age of mnid-yar populatoe 1960. 1970. and 1983 data. group in a given year. For most developing countries data derived Popalutia. Greuth Rore (perceau)-ea.d---Annual growth rates of from life tables: 1960. 1970 and 19f3 data. total mid-year population for 1950-60. 1960-70. and 1970-33. KEALIH Pbpulds GiCwtl Date (pwcea)-whm--Amnual growth rates Lje Epeetwy rh (ywur-Nurnber of years a newborn of urban population for 1950.60. 1960-70. and 1970-83 data. infant would live if prevaiing patterns of mortality for all people  -27 - _ ~~~~~~~~ANNEX I Page 4 of 6 at the time of of its birth were to stay the same throughout its life; AvpM-iencher Ratio - pru. and soredw-Total students en- 1960. 1970 nd 1983 data. rolled iu primary snd secondary kve divided by numbers of 1*rw MuveMh Rot (pi *_d)-Number of infants who die achm in the corresponding klvL befor raching one year of age per thousad live births in a given year 1960. 1970 and 19U3 dat CONSUMPTION Ace so SAO W_W (Pu'f _-J- ei6 d A1-.mr w Cds (pe unarmed pa sheo,ieaaJ-P enrer car com- nwd-Number of people (1 toLmuban. and rural) with reasnable prie motor cas sating less than eight persons. excludes ambul- access to safe watr supply ntbis tated surface waten or an