Angola - Health Project

,i Document of The World Bank FOR OFFICIAL USE ONLY CONFIDENTIAL Report No. 10750-ANG M I CRO)FICHE rCOPY CONFIDENTIAL: Report No. :10750-ANG Type: (SAP) Title: FIRST HEALTH PROJECT Author: 11ERSIER, P Ext. :34900 Room:J7043 Dept. :AF3PH STAFF APPRAISAL REPORT PEOPLE'S REPUBLIC OF ANGOLA HEALTH PROJECT October 23, 1992 Population and Human Resources Division Operations Department II Africa Region- This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  ANGOLA HEALTH PROJECT Currency Eauivalents Currency Unit KWANZA (Kz) US$1 KzSSO 1/ Kz 1,000 US$1.8 1/ The rate of Kz 550 applies to exports and imports. Individual transactions are conducted through the commercial banks at free market rates (Kzl,600) as of April 30, 1992. Measurms Metric British/US Eauivalent I meter (m) 3.28 feet 1 square meter (sq. m) 10.76 square feet 1 kldometer (km) 0.62 mile 1 square kilometer (sq. kIm) = 0.39 sq. mile Glossary and Abbreviations AIDS Acquired immuno-deficiency syndrome AfIDB African DevQlopment Bank EEC European Economic Community ETPS Health Provincial Technical School (Escolas Tecnicas Provinciais de Saude) FAPLA Armed Forces for the Liberation of Angola (Forcas Armadas Para Libertacao de Angola) GOA Government of Angola IDA International Development Association IMS Medium Level Institute for Health Technician (Institutos Medios de Saude) IPPF International Planned Parenthood Federation ISE Higher Level Institute for Nurses (Instituto Superior de Enfermagem) MMS Military Medical Service MSP Physicians Without Borders (Medicos Sin Fronteras) MOH Ministry of Health MPLA Popular Movement for the Liberation of Angola FP Family Planning NFPP National Family Planning Program NGO Non Governmental Organization PHN Population, Health and Nutrition PIU Project Implementation Unit PNLS National AIDS Control Progmm (Programa Nacional de Luta Contra o SIDA) SIDA Swedish International Development Authority SRPA Special Relief Program for Angola SSA Sub-Saharan Afrioa STD Sexually Tansmitted Disease UNESCO United Nations Educational, ScientiSc and Cultural Organization UNFPA United Nations Fund for Popuhtion Activities UNICEF United Nations Children's Fund USAID (United States) Agency for International Development Fiscal Year January 1 - December 31  ANGQLA HEALTH PROJECT CREDIT AND PRO,ECT SUMMARY Borrower: People's Republic of Angola Beneficiary: Ministry of Health (MOH) Amount: SDR million (US$19.9 million equivalent) Terms: Standard, with 40 years' maturity ProJect Description: Objectives: The project objectives are to: (a) strengthen MOH's capabilities in essential areas of health policy, health sector management and public health program development; and (b) improve health care in selected regions, through the rehabilitation of training and health facilities, including the improvement of health training and service delivery. Comnents: (a) Strenethening Health Sector Policy and Management through: (i) a comprehensive technical assistance program in planning and management; (ii) short term training for senior staff; and (iii) provision of consultancies for investment studies; and (b) Selected Rehabilitation Program through: (i) support for priority national health programs and Family Planning; (ii) rehabilitation of selected health posts in the province of Huila; (iii) relocation and upgrading of the health professional school, the health center and two health posts and minor rehabilitation and essential equipment for the pediatric center and the municipal health center in Lubango; and (iv) rehabilitation of the Porto Amboim hospital and two health posts. Benefits: The main benefits of the project would include: (i) strengthened MOH policy maidng and management capabilities which will contribute to improve health services and, in turn, the health status of the population; (ii) enhanced manpower training; (iii) contribution to establishing an ef-ctive and sustainable health care system oriented to providing basic services to the majority of the population; and (iv) increased efficiency of public expenditures. RislU: The main risk is the weak management capacity of the health sector, the scarcity of qualified staff, and MOH's inexperience with project implementation and procurement procedures. These risks would be minimized irough implementtion guidelines, provision of specialist services and staff training, the utilization of the services of experienced NGOs and the use of standard bidding documents.  -2- ProJect Cost Estimates US$ million - Estimated Costs Local Foreign Total Institutional Development 1.1 3.4 4.5 Rehabilitation Programs AIDS/STD and Family Planning 0.1 1.1 1.2 Huila Province Health Posts 0.1 0.7 0.8 Lubango Health School 1.0 7.7 8.7 Porto A nboim Hospital 0.6 2.3 2.9 PPF 001.2 1.2 Total Base Costs 2.9 16.4 19.3 Physical Contingencies 0.2 1.0 1.2 Price Contingencies 0.3 1.4 1.7 Total Project Costs 3.4 18.8 22.2* Flnancing Plan IDA 1.1 18.8 19.9 Government 2.3 2.3 Total 3.4 2 2 Estimated IDA Disbursements FY94 FY95 FY96 FY97 FY98 FY99 IDA's Fiscal Years l Annual 3.4 5.7 6.8 2.8 1.0 0.2 Cumulative 3.4 9.1 15.9 18.7 19.7 19.9 * Excluding US$500,000 for taxes and duties.  ANGOLA HIEALTH PRQIECT STAFF APPRAISAL REPORT Table of Contents PART I. INTRODUCTION ............................ 1 PART H. SECTORAL CONTEXT ............................ 1 A. Socioeconomic Background ........................... 1 B. The Health Sector ............................. 3 C. Health Sector Issues ............................ 12 D. Health Sector Strategy ............................ 14 PART m. THE PROJECT ............................ 15 A. Project Objectives ................................ 15 B. Project Description ................. 15 C. Project Costs and Financing Plan ........... ...... 18 D. Project Implementation .................. 21 PART IV. PROJECT BENEFITS AND RISKS ......................... 28 A. Benefits ........ ................ 28 B. Risks ........ ................ 28 PART V. AGREEMENTS AND RECOMMENDATION ........ ........... 29 A. Prior to negotiations ............................... 29 B. During negotiations ............................... 29 C. Conditions of effectiveness ............ .............. 30 D. Conditions of disbursement ............ .............. 30 E. Recommendation ................................ 30 This rport is based on the findings of an ppraisal mission that visited Angola in ApriUMay 1992. The mission members were Messrs./Mmes.: Pierre Mersier, Miuion Leader, Eugene Boogstom, Health Speciaist; Christian Rey, Implementation Specialist; Eileen Murray, Fnancial Analyst. The Report was processed by Mrs. Franpoise Duchesne. Dr. Salim Habayeb, Juliana Weisman and Deas Broun were the peer reviewers. Mr. Francisco Aguire-Sacasa and Mr. Abin Coiliou are the Department Director and Managing Division Chief respectively for the operation. 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.  -2- Table of Contents (Continued) ANNEXES 1. Basic Data Sheet and Comparative Indicators 2.1 MOH Organizational Structure 2.2 Health Sector Financing 2.3 Health Care Facilities 2.4 Health Personnel and Training Facilities 2.5 MOH Statement on Issues and Policy Actions in the Health, Population and Nutrition Sector 3.1 PIU Description and Terms of Reference 3.2 Technical Assistance Terms of Reference 3.3 Training Programs 3.4 AIDS and Family Planning Programs 3.5 Health Posts in Huila Province - Description 3.6 Lubango Health School Organizational Chart and Architectural Progiam 3.7 Porto Amboim Hospital and Health Posts Rehabilitation, Functioning and Architectural Program 3.8 Project Costs 3.9 Project Performance Key Indicators 3.10 Supervision Summary 3.11 Implementation and Disbursement Schedules MAP IBRD 23931  PARTI - INTRODUCTION 1.1 The Government of Angoia has requested IDA's assistance in financing the rehabilitation and progressive expansion of its health system as part of the country's development efforts. The Government is in the process of defining a policy for the sector, including health planning and management, medical education and the improvement of health services delivery. The estimated project cost is about US$22.2 million (net of taxes and duties), with a foreign exchange component of US$18.8 million (about 84 percent). Taxes and import duties amount to US$500,000. Contributions from the Government total US$2.3 million, with a remaining US$19.9 million equivalent financed by IDA. 1.2 The project will be IDA's first contrioution to Angola's health sector. The project will help the Government strengthen its capabilities in essential areas of health policy, health sector management and public health program development, and improve health care in selected regions, through the rehabilitation of training and health facilities, including the improvement of training and service delivery. PART I - SECTORAL! CONTEX A. SOCIQECONOMIC BACKGROUND Setting 2.1 Angola is the fifth largest country in Africa (1,246,000 square kilometers) and is endowed with abundant natural resources. In addition to extensive lani areas suitable for agricultural and livestock production, the country has large forests, a 1,650 kilometer coastline on the Atlantic with rich fishing grounds, and rivers with considerable potential for hydraulic powe.r generation. Its mineral resources include diamonds, iron, manganese, copper, and extensive petroleum reserves. The production and export of oil is presently the mainstay of the economy and accounts for half of the GDP of approximately US$720 per capita, 90% of exports, and almost all government revenue. Population 2.2 Angola had a total population estimated at 10 million in 1990. The population density of 8 inhabitants per Km2 is less than half the sub-Saharan African (SSA) average. The population grew at an estimated annual rate of 2.5 percent in 1980-89, compared to 3.2 percent for SSA. About 51 percent of the population is female, and approximately 51 percent of the total population is below 14 years of age. The urban population represents 37 percent of the total population and grew at an estimated annual rate of 7.5 percent in 1987-90, compared with an estimated 0.30 percent average annual growth (0.10 percent in 1990) for the rural population during the same period. The crude birth rate of 47 per thousand for the 1980-85 period reflects a high total - fertility rate combined with a large proportion of women of fertile age. The crude mortality rate of 19 per thousand for the same period is significantly higher than the average in SSA. Civil war, since independence in 1975, has been responsible for widespread malnutrition, precarious sanitary conditions, high illiteracy, and inadequate health facilities.  -2 - Status of the Economy 2.3 Despite the country's abundant natural resources and the rapid developierat of the oil sector, the economic growth r dte has been disappointingly low during the past ten years. The poor performance of the ecoLomy is largely explained by three factors: (a) the civil war, which made life in the countryside too insecure for agricultural production and transport, required heavy military expenditures (contributing to chronically large fiscal deficits), and destroyed a substantial part of the economic and physical infrastructure; (b) severe human resource constraints, due to the massive exodus of Portuguese settlers at Independence and the resulting skiil shortages; and (c) ineffective economic management with excessive reliance on central planning and pervasive administrative controls. 2.4 This sitt'ation has affected many sectors of the economy. Angola, which was an important net exporter of agricultural products, has in recent years `ieen increasingly dependent on food imports (and food aid) to supply its urban population. There are severe shortages of essential consumer goods and services throughout the country. Marketing infrastructure and rural trade systems have been devastated, and a policy centered on support to state enterprises has perpetuated the colonial tradition of overlooking the dominant peasant sector. There is a shortage of trained personnel in all sectors. The concentration of war-displaced populations in various rural and urban fringe areas is a contributing factor to environmental degradation. 2.5 A limited recovery was achieved in certain sectors until 1981, but non-oil output declined again thereafter. In most sectors, output has remained far below the ievels reached during the colonial period. With the exception of the oil industry, the capacity utilization of manufacturing industries has been severely affected by lack of inputs, spare parts and maintenance services, as well as the distorted policy environment. The fiscal deficit has been about 25% of GDP on average in recent years, and a massive external debt accumulated. Economic Prqsnects 2.6 Since early 1991, peace has been achieved and significant progress has been made in introducing initial economic reforms. In March 1991, the Government opened the door to multipartism, and on May 31, a comprehensive peace agreement was signed - with mediation by Portugal, the U.S., and the former Soviet Union. So far, the internationally-monitored implementation of the agreement has proceeded well. The assembly and disarmament phases of demobilization are in the process of being completed, although reintegration of the former soldiers and officers into the economy is only beginning; elections took place at the end of September 1992 and the new national army is being formed, with a purely defensive mission. 2.7 After formulating but not implementing several economic reform plans since 1987, the Government enacted a far-reaching package of reforms between November 1991 and January, 1992. The reforms included currency devaluation, remonetization of public sector wages, abolition of most price controls, removal of most profit margin controls, and initial transfers of public enterprises to private operators. These reforms have radically altered the incentive framework and had immediate effects on reducing the distartions in Angola's economy. However, without fiscal contraction and monetary restraint, there is a risk that inflation will nullify these benefits. Important key structural constraints remain, including the extreme institutional weakness, the war-devastated infrastructure, and the ineffective incentive system.  -3 - Angola's medium and longer term growth prospects depend on four factors: (a) continued peace; (b) the speed and success with which economic policy reforms proceed; (c) the rapid rehabilitation of the economic and social infrastructure; and (d) the need to overcome the constraint on longer term development imposed by the shortage of skilled personnel and low level of education. 2.8 Angola needs support in its transition from war to peace, from authoritarian to accountable governance, from a command economy to a market-based system, and from consumption- oriented to investment-oriented policies. The objective of the strategy which the Bank proposes for Angola is to facilitate a rapid economic transition, to help create a fully open market-based economic system by 1995, to mobilize resources that would put Angola on the path to sustained, economic growth so as to generate the resources needed to develop its human capital. A sharp and rapid reduction of public consumption will be needed in order to release resources for well-conceived public investments (for economic and social infrastructure) and for private investment. Import-dependent private consumption must also contract substantially. In addition, the efficiency of public expenditure must rise, not only by a reallocation from military (currently estimated at 15-20% of GDP) to developmental and social services spending, but also by tightening the management and improving the quJity of expenditures across the board. This must include the promotion of efficient and imaginative ways to cushion the social effects of the transition as part of a comprehensive program of public expenditure, including provisions for a well-targeted "safety net." An immediate priority is to improve the effectiveness of the institutions charged with public expenditrre programming and execution. One focus needs to be on public investment, particularly in view of the massive aid coordination problems. Donors in general have expressed support for Bank leadership in aid coordination. Angola needs to ensure that scarce IDA resources are used in a catalytic way, and to mobilize as much as possible co-financing and/or provide a general program umbrella within which other donors' assistance can take place in pursuit of common objectives and based on well-defined and agreed criteria. B. THE HEALTH SECTOR Population. Health and Nutrition: Status and Determining Factors 2.9 Population and Family Planning. Angola's population grew at average aanual rates estimated at 2.8% in 1965-1980 and 2.5% in 1980-89 with a current birth rate estimated at 47/1,000 population and a current crude death rate estimated at 19/1,000 population. The total fertility rate is estimated to be 6.5 in 1990. These estimates are tentative and are based on weak data: a national Demographic and Health Survey proposed for 1993/94 and a proposed national census will provide a better population data base. The high fertility rate constitutes a contributing factor to poor maternal and child health. - 2.10 The Ministry of Plan's Population Studies Unit is developing a National Population and Family Planning Policy. The National Family Planning Program (NFPP) is part of the Maternal and Child Health Department in the Ministry of Health's National Public Health Directorate. There is unmet demand for family planning services. NFPP has been expanding, with financial and technical support from UNFPA (training, medical equipment and supplies, and some contra- ceptives), Swedish SIDA (coordination of obstutric care in Luanda Province), and the Iaternational Planned Parenthood Federation (population sensitization/mobilization for MCH/family planning, and the majority of the NFPP's contraceptives). UNICEF supports  -4- community level activities, with empiAasis on the training and supervision of traditional birth attendants. There are now 43 NFPP family planning service points, nationwide, and UNFPA estimates that contraceptive prevalence rate will approach 6% in 1993 (although reliable estimates of current lovels are not available). Eowever, NFPP remains an urban program with limited coverage. A National Conference on Safe Motherhood, in December 1991, strongly supported expansion of family planning services, strengthening their integration into maternal and child health care, assuring adequate community awareness, and giving special attention to the needs of adolescents. In addition to permitting couples to control their own fertility, a clearly defined and mandated national population program and greatly augmented family planning services could contribute to slowiLg the population growth rate (thereby decreasing the requirements for social services, and housing) and to improving health (for example, through lengthened birth intervals, and reduced high-risk pregnancies and births). 2.11 Mortality and Morbidity. UNICEF has estimated the Infant Mortatility Rate (IMR) and the under-five mortality rate in 1988, at 172 per 10,000 (it was estimated at 154 in 1980) and 70.6 per 10.000 respectively. There are among the highest figures in the world. The major causes of death include malaria, acute respiratory infection, diarrheal diseases and prenatal tetanus. Malnutrition contributes to the high mortality rates: one hospital study in Luanda associated 50% of child deaths with malnutrition. Maternal mortality was estimated at 5.7 per 1000 live births in 1988 and 6.5 in 1989, but was much higher in some areas, such as Huambo (19.6 in 1988) and Kuando Kubango (16.1 in 1988). 2.12 Data collected from the records of Luanda cemeteries in 1989 indicate that 52% of deaths were attributed to infectious and parasitic diseases. Infectious disease statistics for the first semester of 1990 indicate that the six most common infectious diseases reported are malaria (53.0%), acute diarrheal disease (24.7%), acute respiratory disease (17.7%), schistosomiasis (1.0%), cholera (1.0%), and measles (1.0%). The diseases targeted by the Expanded Program of Immunization caused 15.1% of infectious disease deaths. AIDS is a growing problem, with 195 cases reported by June 1990 and 420 reported as of May 1992. WHO estimates that during the year 1992 700 new AIDS cases will occur, 120 of them among children. MOH officials are certain there is substantial under-reporting and suspect that by now AIDS has spread throughout the country, although case reports are concentrated in Luanda and in the areas bordering Zaire. The number of HIV infected persons is estimated at 10,000 in 1992. However, this number could increase rapidly due to increased mobility within the country and to the return of Angolans from neighboring countries where the HIV prevalence is much higher. Tuberculosis, trypanosomiasis, yellow fever and rabies are resurgent problems. 2.13 Nutrition and Food Security. Malnutrition and food insecurity are widespread. The MOH estimates that at least 20% of the under-five children ate malnourished since the mid-1980s. Factors contributing to malnutrition in Angola include war, decreased agricultural production, and drought. Food production and importation data show a continual foL I insecurity since the second half of the 1980s. A recent UNICEF/Ministry of Plan household survey in Luanda indicated that 70% of Luanda's population could be classified as food insecure and that malnutrition is widespread. While health services have an important role to play in nutrition education and in the prevention, detection and treatment of malnutrition and of related diseases, major improvements in food security and in nutritional status will require coordinated improvemenis in many areas (e.g., agriculture, food transportation and marketing, income distribution, poverty, safe water supply).  2.14 Water and Sanitation. Approximately 30% of the total population, primarily in urban areas, has access to safe water. Water supply in Luanda is subject to frequent interuptions, and cross-onnections lead to fecal contamination of the city's inadequately chlorinated water supply when the f.equent pressure losses occur. Given the high incidence of water-borne diseases (incIuding cholera outbreaks in recent years), waver supply and sanitation should be given high priority as means of improving health status. In some cases, discussions with government officials and donor representatives have indicated that although major rehabilitation of urban water distribution systems will require large investments over a period of years, repairs to the production systems could be accomplished relatively quickly, with major potential benefits to the urban populations. In addition, water supply and sanitation problems in many health facilities ars serious and shall be a focus of priority attention in rehabilitation efforts, Health Services Coverage and Facilities 2.15 Health Services Coverag. Only an estimated 30% of Angola's population has access to health services. In the aftermath of war, Angola faces serious problems in providing adequate health care due to the deterioration of health facilities, shortages in medical supplies, and geographic distribution of service heavily biased in favor of urban areas. Health services are at present accessible primarily to the inhabitants of Luanda and of provincial capitals and immediately adjacent areas. Of the country's 163 municipalities, only 43 (26.4%) have i physician. Immunization coverage is low, although it has improved markedly in recent years in the cities of Luanda and Lubango. There are marked differences in coverage among provinces. At the national level, officially reported immunization coverage rates for 1990 were 48% for BCG, 24% for DPT3, 23% for polio 3, 38% for measles, and, among pregnant women, 25% for Tetanus Toxoid 2. 2.16 Medical/Health facilities. Health care facilities are classified into three levels of care: (a) at the primary level - health posts, rural/urban health centers and municipal health centers; (b) at secondary level - municipal, provincial and regional hospitals; and (c) at the apex - national hospitals. The distribution of facilities by types and location is summarized in Table 2.1 below. Table 2.1: Health Facilities TYPE OF FACILllY IN_PQINCIAL IN RURAL TOTAL CAPITALS AREAS HOSPITALS 32 26 58 HEALTH CENTERS 71 106 177 HEALTH POSTS 20Q 572 133 .863 711 1574 Source: MOH, 1990  -6- 2.17 The number of inpatient beds is estimated at 12,000. This figure translates to ai average of about 12 beds per 10,000 population, with 7 bedsil0,000 population in national/provincial hospitals and 5 beds/10,00P population in health centers/nunicipal hospitals. There is a marked regional variation in bed supply, ranging from 3.9 beds per 10,000 population in Malange to 41.6 per 10,000 population in Luanda Morte. About 16.5 beds per 10,00(0 population are available in the capital, Luanda. 2.18 Most health facilities have become inop"rable. The physical infrastructure (primary care units, health centers, general hospitals and sanatoria) is often overcrowded in terms of patients, but underutilized in terms of functions appropriate to the level of each facility, because of its deteriorated condition, lack of basic equipment, and severe shortages of supplies. Annex 2.3 prcvides statistics on the disxibution of health care facilities by type of facility and by prov-nce. 2.19 Most facilities were built in the 1960s to early 1970s and are in need of replacement, substantial renovation or upgrading. Many buildings are functionally and physically obsolescent. Primary care services are poorly equipped in terms of essential diagnostic and treatment equipment, essendal drugs, transport and communication facilities and basic supplies. Within individual institutions, the number of beds per area of floor space needs major adjustment and the patients' comfort needs to be improved. In the case of larger health institutions, renovation rather than replacement is the preferred option, it being the cheaper option in the short run even though preliminary assessments show that overall efficiency gains and reduced operating costs could be achieved through replacement. In the case of primary care units and health centers, replacement is more often the most cost-effective approach, as many facilities are makeshift and housed in former residential and commercial units which are inappropriate for the purpose. Considering that the great majority of the existing primary and secondary level health facilities need major repairs and/or replacement, there is a strong case for dwveloping and using standard building designs to improve efficiency and reduce operating costs. 2.20 The Military Medical Service (MMS) operates a network of health facilities which serve primarily military personnel, but also, in some areas, the general population. The MMS health facilities include the Principal Military Hospital in Luanda (400 beds), a Central Hospital in Huambo (300 beds), three first class hospitals (180 beds each), and a classified number of 60-bed hospitals, 50-bed infirmaries, and one medical post for each 1,000 soldiers in military area of the country. Information gathered by WHO in Luanda from the Special Relief Program for Argola (SRP- toe High Commission for Refugees, and ONGs active in the field indicates that as of 1991 approximately 339 non-MOH facilities were functioning in areas which were under UNITA influence or control during the war, with most of the facilities in the provinces of Kuando Kubango (214) and Bie (114). Human Resources and Training 2.21 Quantitative and qualitative health manpower problems, both immediately and over the long term, are among the most serious challenges faced by the MOIH. Human resources in the health sector need to be inventoried and reviewed, as the first step in developing the human resour;as sections of a National Health Development Plan. The review should build upon the initial findings of a recent sector review flnan-ced by the African Development Bank (AfDB). The appropriateness of the mixed skills and levels of personnel, and their deployment and use within the system, need X be carefully considered, along with the appropriateness of training programs.  -7 - 2.22 Angola lacks specialized health workers particularly since the departure of Cuban and eastern European physicians and technic&q. It is estimated that 85% of MOH personnel have educational levels corresponding to eight or fewer years of schooling. Official MOH reports indicate that as of 1990 the number of MOH health workers was 27,771, including 662 physicians (of whom 281 in Luanda and 412 foreigners), 13 other higher level, 9,145 paramedical (mainly nurses, all but approximately 600 of them "basic" nurses), 1,691 traditional birth attendants, 4,165 health promoters (and others with little or no health training), 10,047 administrative personnlI, and 2,048 low-level workers. These MOH data exclude military health workers. The i itios of providers to population derived from these data (one physician per 15,000 persons and one nurse per approximately 1,500 persons) are characttristic of low income countries. In addition, 36% of all MOH physicians and 23% of MOH paramedical personncl are in Luanda where only 15% of the national population leaves. Annex 2.4 shows the distributions of MOH health personnel by type and by province given by other WHO/Government sources. 2.23 Demobilization of military health personnel (physicians and others) would increase the number of trained and experienced health workers. The government forces include approximately 250 physic-ans. Up to 10,000 other military personnel have some health training, including one thousand with at least 3 months' intensive training in curative care and sanitation. Most military health personnel have had at least several years of experience in the army. Some of the physicians worked in the MOH after completing medical school and before mobilization. A few military physicians have postgraduate training in public health and health systems management. Some of the demobilized personnel, including physicians, other health workers, and trainers of health workers, will be absorbed into the MOH, and some of those with post-training service obligations could be assigned to complete their military service within the MOH. 2.24 There are three types of health training institutions in Angola (Annex 2.4): (a) 21 Provincial Health Traininv Schools (Escolas Tecnicas Provinciais de Saude, ETPS, at least one in each province) administered exclusively by the Ministry of Health (MOH); (b) seven Mid-Level Health Training Institutes (Institutos Medios de Saude, IMS) administered by MOH but under the pedagogical supervision of the Ministry of Education (MOE); and (c) one High-Level Nursing Institute (Instituto Superior de Enfermagem, ISE) in Luanda administered by MOH but also under the pedagogical supervision of Ministry of Education through the Agostinho Neto University. In addition, the university's Fac"'ty of Medicine trains physicians, and medical internships and practical health worker training are provided in four hospitals in Luanda. The ETPSs provide basic courses ranging from basic nursing care to health promotion activities. The IMSs provide technical traning for more specialized nursing skills and for pharmacology, radiology and laboratory technicians at the pre-university level (grades 9-12). The ISE provides training at the post-secondary level leading to bachelors degrees in nursing, health management, health education and research. In the 1980's, the Swedish aid agency (SIDA) provided long term technical assistance to improve training, with a particular focus on a revised training program for mid-level nurses; MOH training officials report that the new curriculum is now being used in the training of both mid-level and basic level nurses. A fundamental restructuning of training programs is needed, coordinated wi.th ther changes leading to a more rational distribution of health facilities and personnel across the country and carried out in conjunction with reforms in the structure of the Angolan education system. MOH is considering major reforms in the system of health worker training, which will be facilitated by parallel reforms to be carried out in and by the Ministry of Education. Major changes in health worker training proposed by the MOH include changes in admissions standards (and admissions testing), reduction in the numbers of health  -8- training institutions, merging of the mid-level and basic level training institutions, elimination of general education components from the curricula, reduction in the length of certain curricula, introduction of higher standards, and changes In the status and working conditions of non- university trainers. 2.25 Health training facilities are in general inappropriately housed and poorly equipped and staffed. The health training institutions are inefficient and unable to provide the appropriate learning environment to trainees. The wide dispersal and limited capacities of these facilities make it uneconomic to provide a wider range of health training opportunities in most of them. The schools also cannot provide boarding, needed to accommodate non-local trainees. Boarding could help make the operation of these institutions more viable and sustainable, for example by reducing dropout rates and permitting cost-effective specialization of certain institutions to train specific types of health workers for several provinces or even for an entire region. Annex 2.4 provides statistics on the distribution of health training facilities. Health Policy and Legislation 2.26 Current Angolan law charges the MOH with assuring the universal availability of free health services within the country. In 1975, private medical practice was banned. Angola has a declared primary health care policy. In 1986, the Ministry of Health adopted the following priorities: (i) strengthening health nutritional information and guidance education, and prevention; (ii) immunization of the population, especially against measles and tetanus; (iii) water supply and environmental sanitation; (iv) maternal and child health, including family planning; (v) prevention and control of the principal endemic diseases (especially malaria); (vi) training of health personnel and improvement of their geographic distribution; (vii) improvement in logistic support for health services (improved distribution of drugs and of other medical goods and supplies); and (viii) implementation of an information system. 2.27 In December 1991, the government approved five important laws and decrees which would strengthen health policies and the health system. They included the following: National Health System (Lei de Base do Sistema Nacional de Cuidados de Saude); Private Practice Authorization (Regulamento do Exercicio da Medicina Privada); Public Medical Practice in the NHS (Regulamento do Regime Especial de Carreiras Medicas do Servigo Nacional de Sadde); Pharmacy Ownership and Practice (Regulamento do Exercicio da Actividade Farmaceutica); and Private Health Services (Regulamento das Instituigoes Privadas de Assistencia Medico-Sanitaria). The first law, from which the others are derived, was approved by the People's Assembly in April 1992, but only after intense debates regarding private health care and fees and with the condition that the application of the law will be suspended until late in 1992 (i.e., after the September elections). Therefore, the new laws and decrees have yet to be published. 2.28 The new, unpublished and unimplemented health law provides for fundamental improvements in the health sector, for example by re-authorizing and regulating the private practice of medicine and user payments for health services and by encouraging decentralization/deconcentration of health services management. However, the law and its accompanying decrees could be significandy improved upon. Revisions to the decrees (or, with much greater difficulty, to the law itself) should be made prior to the implementation of the raw. In particular, the decrees should clarify and strengthen matters related to private health insurance, incentives for the private management of pubiic sector health services, and specific allowance for  -9 - the coexistence of private sector activities within public hospitals. In a related area, change is already underway through the involvement of private enterprises, under contract, in the provision of management and support services for health facilities and services (such as management and support of the rehabilitated Americo Boavida Hospital). Other health sector decrees, norms and regulations which have been prepared and discussed, but never issued, deal with important reforms in MOH training programs, with norms for peripheral health facilities, and with family planning. MOH Organization and Management 2.29 The current organizational structure of the MOH (Annex 2.1), is centralized. There is an extreme degree of concentration of decision-making. MOH officials have expressed interest in decentralization and regionalization as part of an approach to overcoming their recognized problems in the planning, management, provision and support of health services. The Minister does not have a Director to assist him on policy issues. Moroever, management and planning skills are scarce, and technical professionals (physicians, nurses) with little or no management expertise are in charge at most levels. Actions to overcome these problems, particularly in the context of decentralization, will need to consider realistic assessments of current staff availability and should be based on definitions of the roles, responsibilities and attributes associated with key posts at each level of the health care system. Inadequate information availability and use are serious obstacles to more effective planning and management in MOH. MOH is also weak in the related areas of supervision and evaluation. Special attention needs to be given to training health managers, to incorporating appropriate basic management and planning skills in health workers' training curricula, and to in-service training to upgrade those skills among those who need them in their work. Simultaneously, the planning and management systems of the MOH need to be reviewed and rehabilitated. 2.30 Health planning capacity is weak, because of the lack of competent staff and the weakness of the data base. To a great extent donor-developed project have replaced, effective national and provincial health planning. A comprehensive National Health Developrient Plan needs to be developed to translate health policies into specific objectives and progr:ams supported by well- documented cost and resource estimates and a realistic timetable. Ope .ating costs and sustainability should be considered for each intervention and for the prposed programs and actions. The recently proposed legislation regarding the health sector, described above, provides the opportunity for health planning to include development of the private sector, while maintaining the essential role and functions of the MOH in the sector. Health services are an important part of the set of services which will be necessary to permit and encourage dislocated populations to return to and remain in their areas of origin. The end of the military conflict makes it possible and necessary for the government to restore destroyed, deteriorated and dysfunctional health facilities and services. There is a need to rehabilitate health facilities damaged or deteriorated during the years of war and certain priority rehabilitation and reconstruction efforts are needed immediately, and an overall rehabilitation and infrastructure investment and maintenance program should be a main component of a National Health Development Plan. This will require, inte aD, (i) a clear set of decision criteria regarding the sizes, types and functions of failities to be provided; and (ii) an inventory of the status of current and potential service capacity of health facilities (public, private and NGO) throughout the - country. The national health development plan should provide a framework for provincial plans. Given the low levels of service accessibility and the high levels of preventable disease, broad-  - 10- based, high coverage preventive programs need to be emphasized in Angola's health plans, through expansion of coverage, provision for direct support to existing programs, and integration of existing vertically-oriented programs into a more coordinated overall program which should enhance the efficiency of the overall efforts. Donor support for those efforts needs to be well- coordinated. 2.31 The war, which destroyed or closed many health facilities, also made supervision, support and logistics in many areas of the country difficult or impossible. Even in accessible zones, however, there are majot deficiencies in those areas. Health staff supervision visits, which normally are also the occasion to resupply the local health facilities with drugs and other supplies, took place regularly in less than half of the communes in the 7 (of 18) provinces reporting, and the situation is likely to be worse in the 1I provinces not reporting. Drug and supply shortages and outages have been frequent, even in major hospitals. Supply of drugs in the form of kits tailored to provide essential drugs appropriate to the functions of peripheral health facilities has helped, but inappropriate use (related to inadequate training of staff) has caused wastage. With peace and increased access, upgrading and expanding supervision, support and logistics for MOH health services constitutes a major challenge which needs to be faced in the context of clear definitions of the functions, staffing and support needs of each level of health care facility. The National Health Development Plan must provide that context and specify the means of meeting this challenge, with realistic adaptations to local conditions and to the availability of personnel and of other resources. Health Financing 2.32 Government Financing of Health Setor= Health services are financed from the general budget of the government (6.3% in 1988). The incompleteness of the available information makes it difficult to analyze health expenditures in Angola, and the financing pattern will likely change somewhat once the new health law is implemented. The health budget as a percentage of GNP decreased from 3.3% in 1985 to 2.7% in 1988 and 1.89% in 1989. Moreover, actual expenditures in the health sector have fallen far short of the budgeted amounts, by 50% in 1990, (Annex 2.2, Tables PER 2 and 3). The 1991 Ministry of Health budget is summarized in the following table.  ffi ~~~~~~~~~~- 11 - Table 2.2: Ninistrv of Health 1991 Actual Expenditures (MitLions K(z) NATURE AMOUNT PERCENTAGE Personnel 14,968.7 48.8 Goods 2,369.5 7.7 Pharmaceuticals 4,221.9 13.8 Services 2,298.6 7.5 External Aid 2,429.4 7.9 Investments 4-394.3 14.3 TOTAL 30.682.5 100.0 Source: Ministry of Finances, Budget 1991 2.33 After decades of relative neglect, major expenditures for replacement, rehabilitation/repair and maintenance of facilities and equipment are needed. The proportion of expenditures for personnel costs is likely to increase with re-monetarization of the economy, with budgeted costs approaching the real values of payments to the workers, due to the cessation or reduction of indirect payments through foreign exchange purchasing rights. This will leave fewer funds for payment of non-salary recurrent expenditures, which already are inadequate. Drugs occupy an important, but not dominant place in the budget. Shortages and outages of essential drugs have been reported, in spite of donor-assisted efforts to assure their supply and distribution. MOH budgets and expenditure data for recent years indicate that drug expenditures increased between 1986 and 1988, then decreased in both relative and absolute terms to about 14% of MOH expenditures in 1990 and 1991, although MOH expenditures on health also decreased significantly in 1991 (Annex 2.2, Table PER 4). 2.34 Donor Support and NGO Activities. Official foreign aid is important in the health sector. WHO estimates that external assistance amounts to about 25% of MOH expenditures in the health sector and that about 80% of that assistance is directed to the rehabilitation and restructuring of hospital/medical services and for acquisition of equipment. Major donors active in Angola's health sector include Sweden (health manpower, endemic disease control, health education, essential drugs, AIDS), the European Economic Community (infrastructure), the African Development Bank (essential drugs, pharmaceutical industry, health sector studies and TA, institutional strengthening of MOH), Italy (infrastructure rehabilitation through EEC and bilaterally, essential drugs, epidemiology, TA), UNICEF (immunization, nutrition, community health), UNFPA and IPPF (family planning), and WHO (technical advice to MOH). Representatives of the donors and of the Ministies of Health and Plan have confirmed that they would welcome Bank assistance in the coordination of donor support to the health sector. 2.35 Data indicate the hi! degree of dependence on foreign support for health sector investments, either through grants (31.1%) or long-term loans (65.5%) (Annex 3, Table PER 8). The largest portion of current investments (48.3 %) is for the pharmaceutical sector, supported by the US$103 million project financed by the Afl)B and Belgium. The EEC-financed rehabilitation of the Americo Boavida Hospital is the second largest. OnIV about 6% of the investment  - 12 - expenditures are for primary health care, while 20% are for the secondary care level (municipal and district hospitals) ana 29% for the tertiary level. There is a notable concentration on rehabilitation of municipal hospitals, some of which were severely damaged in the war. Extremely little (0.6%) is being invested at present in training facilities. 2.36 Health Expenditures covered by enterprises. Dublic (parastatal) and private firms provide or finance curative health care services for their salaried employees, and in some cases for the families of their employees. Services offered, service quality, the inclusion of family members, and the mechanisms for provision or payment of services vary greatly among firms. Very little information is available regarding the costs and the number of persons covered. Certain firms also finance portions of the operating costs of MOH health facilities near their principal worksites in some provinces. Recently, certain firms have made services available for non-affiliated paying patients at some of their own health services facilities. C. HEALTH SECTOR ISSUES MOH Planning and Management Capacity 2.37 The MOH needs to be strengthened to play its role in Angola's development and in the current transitions. For the MOH, particular challenges are presented by: (a) the need to incorporate demobilized military health personnel and facilities; (b) to extend the provision of health care to previu. sly inaccessible areas and for resettled or returning populations; (c) the need to improve allocative efficiency; (d) the coordination of donor support and of intersectoral programs; and (e) the development of more adequate health services support and management programs. In order to deal with these challenges, MOH organizational structure will have to be revisited (with creation of a technical director position under the Minister of Health). Human resources constraints of MOH will have to be addressed. This will have to be in the context of the redefinition of public and private/NGO sector roles in health, and the demobilization of army health personnel. The Limited Coverage and Quality of Health Services 2.38 There is a need to increase the coverage of health services and to improve their quality, and to develop acceptable and effective cost-recovery mechanisms. It will be necessary to specify a set of priority PHN services to be provided at each level of the PHN services system, and to conform the sector's plans and expenditure patterns to those priorities. The new health law approved in April 1992 authorizes private/N.GO health care, permits user charges for health services, and partially specify relationships between the MOH and private and NGO subsector actors in the health sector. The new law is compatible with the Bank's view that government should set health policy and priorities, coordinate programs, assure adequate quality control and the maintenance of appropriate priorities (e.g., regarding preventive care), and develop sustainable financing mechanisms for health services, while increasing the participation of the private and NGO sectors in the direct provision of health services. At negotiations, the Bank will discuss with government Bank-proposed modifications of the new health law and of the accompanying implementation decrees, modifications which would eliminate or reduce certain constraints to competition (e.g., regarding authorization for individuals and firms to enter private medical practice and certain aspects of pharmaceutical product approval and packaging). Specification of the exact roles and responsibilities of the public, private and NGO subsectors will  -13- depend in part on the facilities and resources available in each subsector. This gives added importance to carrying out inventories of facilities and personnel, to provide crucial data needed for health system planning and management. 2.39 Health services provided or financed by firms warrant carefiul study on several grounds. The facilities, services and financing which they provide, both in Luanda and in the provinces, should be taken into account in the preparation of budgets and of a National Health Development Plan. They constitute a nucleus of private (and parastatal) sector facilities and services, and their experiences should be useful in planning for the implementation of the new health law and in possible adjustments to the law and/or the accompanying implementation decrees. In some cases they have applied limited user charges for their own beneficiaries. A few firms have begun to provide preventive services (e.g., immunizations). They provide services whicb might relieve the MOH of part of its burden of health services provision, and their potential bene. ciaries could exceed two million since many firms cover the families of employees. Finally, the availability of alternative curative services to a limited strata of the population, which happens to be a better-off and politically influential, primarily the urban group, might tend to decrease that group's support for the development of the kind of high-impact, high-coverage preventive and curative services which are needed in order to make an effective health services contribution to improving the health status of the entire population, and especially of those most at risk of major health problems. The involvement of NGOs in the sector, the rehabilitation, construction and equipment of health and health training facilities within the proposed health project, along with the project's support for training, will contribute to improving the coverage and quality of health services (Paras. 3.5 to 3.8). The Inadequacy of Family Planning Services and of AIDS Control. 2.40 Angola's high maternal, infant and under-five mortality rates point to a need to improve family planning services coverage. A large unmet demand for family planning services exists. In the course of the proposed project, technical advisors will assist the MOH to review the current and proposed policies and programs with regard to population, population growth and family planning and to develop recommendations based on both health needs and more general development considerations. The recommendations will focus on the further development and integration of family planning services within public and private/NGO PHN services, but also on the provision of family planning through other channels and on the need take initiatives which go beyond family planning in order to encourage greater and more effective use of family planning services (paras. 3.3 and 3.4). 2.41 AIDS is a growing threat. Technical advisors under the proposed project will assist MOH officials to review the National AIDS Control Program. The reviews will cover, inter alia, available information on AIDS in Angola, review existing programs and their appropriateness, effectiveness, targeting, support and coordination. The advisors will assist MOH personnel to assess the adequacy of the program, its needs for improvement and for additional support, and its absorptive capacity, and to make recommendations to strengthen the program suid its targeting and coverage. The proposed proje^t will also provide support for AIDS education Vtara. 3.4).  - 14 - D. SIE SEC R TEGY 2.42 The Government has prepared a Health Policy Statement and Public Expenditure Proposal which follows a three-pronged strategy to improve health care in the country: (a) immediate large- scale operational support to basic medical care, with a focus on Maternal and Child health; (b) rehabilitation of the health infrastructure, starting with the most dilapidated facilities; and (c) restructuration of the health system to improve its coverage and efficiency. 2.43 Part (a) of the strategy is aimed at addressing the most urgent medical needs of the most vulnerable population groups through the provision of medical supplies in adequate quantities for priority public health programs such as malaria control, immunizations, treatment of communicable diseases, AIDS prevention and family planning. The health personnel in charge of delivering these services will benefit from in-service training and technical assistance to improve their performance as well as from demobilized military health personnel. This military staff, estimated at 28,000 including 660 physicians, is experienced and will be distributed in areas where needs are most important. Part (b) of the strategy will complement and enhance the operational support just descr ,ied. The rehabilitation program will be balanced between primary health care facilities and hospital structures on the basis of the National Heaith Plan prepared by the MOH. This plan takes into consideration the specific needs of each region as well as the distribution of resources between urban and rural areas. Part (c) of the strategy will have ?. long term impact by addressing imbalances and structural inefficiencies of the current health system. The restructuration of the health system will be guided by a clear definition of the respective roles of the State and the non-governmental sector in health care and will be carried out along a reform agenda including the functions and regulations of: (i) the health administration at both the central and peripheral levels; (ii) public health car providers and public health services; (iii) private health care providers; and (iv) non-profit NGOs involved in the health sector. 2.44 The basic principles of such a reorganization have been enunciated in the Health Policy Statement. Under the new health sector law, the state will no longer be responsible for providing free universal health care. User charges will be introduced, and private sector care will be paid for by users or by third party payers. Given the low incomes and poor health status of a large proportion of the Angolan population, cost recovery mechanisms should be carefully designed, on the basis of relevant experience in Angola and elsewhere, and should be thoroughly tested prior to widespread implementation. The proposed changes may alleviate part of the financial burden for health services. However, private services are likely to be curatively oriented and primarily to serve employed persons in urban areas. Cost recovery is likely to cover a relatively small portion of MOH expenditures, and MOH services wiUl need to be strengthened and made more efficient, in part to provide the health services aspects of a social safety net during structural adjustment. Therefore major state financing of health services will need to continue. Initial review of available information regarding health sector expenditures indicates that a better financial information system is needed, that there is relatively little relationship between budgets and expenditures, and that investment and operational expenditures are skewed away from primary health care and basic level services-and toward hospital services which are less cost-effective in terms of improving health. 2.45 Through the proposed project and in the course of sector work and public expenditure reviews, the Bank will support the implementation of the sector strategy, with a focus on: (a) capacity building of the MOH; (b) support to service delivery; and (c) efficient use of the  resources allocated to the sector. Major donors inputs will be required to rehabilitate and strengthen health services in Angola. Donor coordination w!ll be facilitated by a coherent and comprehensive National Health Development Plan, along with the recently approved health sector law and the development of policies, norms and standards and well-defined integrated health service programs. A round table will be organized once an adequate National Health Development Plan is available to provide a solid basis for the sector's rehabilitation and development and for coordinated donor commitments. Such a resource mobilization effort assures that the peace process would be satisfactorily implemented. PART m - THIEPR.E A. PROJECT OBJECTIVES 3.1 The proposed project will address the key issues of MOH planning and management capacity, the limited coverage and quality of health services, and the inadequacy of family planning services and of AIDS control (Paras. 2.37 to 2.41). Its main goal is to assist GOA in rapidly providing basic health services to the population. The project has two specific objectives: (i) to strengthen MOH's capabilities in essential areas of health policy, heaith sector management and public health; and (ii) to improve health care in selected regions, hrough the rehabilitation of training and health facilities, including the improvement of service delivery. These objectives are complementary to other donor-supported activities in the health, population and nutrition sectors. B. PROJECT DESCRIPTION 3.2 The proposed project has two components. The two components correspond to recognized priorities in the sector. In addition, the implementation of activities in the Huila province and Porto Amboim is feasible in the current economic and political context. The first component will aim at strengthening Health Sector Policy and Management. It will include support for health policy development and institutional strengthening of the MOH and provision for preinvestment studies. The second component wil focus on selected programs. It will include: (a) support for priority national programs currently underway including AIDS/STD Control and Family Planning in Huila Province; (b) rehabilitation of selected health posts in the region of Matala; (c) in Lubango City, relocation and upgrading of a Health Professional School, rehabilitation of the health center and of two health posts (all attached to the School), and partial rehabilitation of the pediatric center; and (d) in the city of Porto Amboim, rehabilitation of the hospital, and two health posts. the Government has already put in place a Project Implementation Unit (PIU) within the MOH Planning Department and has appointed a Director (Annex 3.1). The project is designed to be implemented over a five-year period starting in April 1993.-  - 16 - (Component -) - Strengthening HeAth Sector Policy and Management (US$5.64 million) 3.3 MOH health policy formulation and health services programming and management need to be strengthened (Para. 2.37). A draft Policy Statement and a draft Public Expenditures Note have been prepared (Annexes 2.2 and 2.7) and discussed during project appraisal. The Government will have also to define the role of demobilized personnel in the project. These Government documents will be discussed and agreed upon during negotiations (Para. 5.2(a) and (c)). They will be updated during the project implementation and reviewed during the project's mid-term review. The project will assist MOH's Planning Department and MOH's Public Health and Human Resources Departments in defining health pol!:ies and in managing the sector. In addition, the project will include a provision of consultant services to conduct investment studies on certain topics that wUI require more information during the implementation of the project, such as Health sector Management, Human Resources development, MST/FP, health facilities rehabilitation, and to collect information necessary for the preparation of a possible Second Health Project. The project will finance 120 man-months of expert services in planning and management for the MOH Planning, Public Health and Human Resources departments, 60 man-months of expert services and 16 man-months of consultancies for the PIU, and a provision of 14 man- months of consultancies for investment studies. Terms of Reference for long term technical assistance agreed with the Government are proposed in Annex 3.2. The project will also fniance computers, reproduction and audio-visual equipment and vehicles (US$300,000) for MOH and PIU. In addition, the project will finance short term training for six senior staff in the fields of Health Policy and Health Sector Management. The proposed Training Program is given in Annex 3.3. For negotiations the Government is expected to bring the revised Policy Statement and Public Expenditures Note; the decrees for the creation of the PIU and the appointment of its staff; and the short list of long term Technical Assistaace (Para. 5.1 (a), (b) and (c)). (Component - -qg upnort for Selected National Health and Rehabilitation Programs (U '$15.7 million) (a) Support for Priority National Health Programs (US$1.4 million). 3.4 The MOH has embarked on several health programs co-financed with external donors. Among the more important ongoing programs are the AIDS/STD Control Program (PNLS) and the National Family Planning Program (NFPP) which are co-financed mainly by the Government, SIDA, EEC and UNFPA. The go\ rnment, however, would like to increase the scope and the impact of these programs (Paras. 2.40 and 2.41). The project will support these two programs by providing training, information activities and equipment, according to the action and financing plans proposed in Annex 3.4. The PNLS sub-component will be implemented by WHO and the NFPP sub-component by UNFPA, who are already coordinating these activities. Implementation agreements between the Government and these organizations will be prepared before negotiations for the executdon of the programs financed by the credit. The credit will finance TA (17 man- months), equipment (US$840,000) and training (US$150,000). As a condition of disbursement, the Government will sign with WHO and UNFPA implementation agreements satisfactory to IDA (Para. 5.4(a)).  - 17 - (b) Rehabilitation of selected Health Posts in the Province of Huila (US$.9 million). 3.5 Under this component, the project will upgrade/rehabilitate, furnish, equip and reorganize about ten existing health posts in the municipio of Matala, province of Huila, that have been damaged during the war. The municipio of Matala has been selected for its increasing population density (including returning migrants), and because of the presence of dynamic NGO (Medicos Sin Fronteras (MSF - Spain) involved in the rehabilitation of the Matala hospital. Due to the evolving political, economical and social situation of the country, the selection of centers/posts for rehabilitation will be done on an individual basis during project implementation. To ensure adequat.e rehabilitation and functioning, the Government, due to its weak management capabilities in remote areas, will subcontract the rehabilitation of the health posts and monitoring of their functioning to M.S.F. - Spain. This NGO will proceed with the physical rehabilitation and functioning by involving local communities. A Government/M.S.F. - Spain agreement is under preparation which indicates respective Government and M.S.F. - Spain technical and financial responsibilities and participation. The project will finance rehabilitation, including waste disposal, sanitation and sanitary water supply, equipment and partial functioning of about ten posts for a total amount estimated at US$900.000. Description of a standard Health Post is given in Annex 3.5. As a condition of disbumsen , the Government will sign an agreement/contract with MSF satisfactory to IDA (Para. 5.4(b)). (c) Relocation and Upgrading of the Health Professional School and the Health Center and the two Health Posts, and rehabilitation and eguipment for the Pediatric Center and the existing Municipal Health Center, in Lubango (US$10.0 million). 3.6 The existing training facilities of nurses and health technicians for the Huila, Namibe, Cunene and Kuando provinces are located in Lubango, province of Huila. They provide the provinces with about 80 basic level nurses (of which 70% are female) per year, and about 55 technicians (of which 60% are female) per year. The two institutions are inefficient, and the qualifications of the graduates of the health technician training program in particular do not correspond to the real needs of the health facilities. The project will finance the construction, equipment, organization and operation of a new training facility in the suburbs of Lubango which is expected to accommodate 380 trainees. Boarding accommodations would be provided for 200 persons. The training programs will include a two year program for basic level nurses, a three year program for medium level nurses, several one to two year programs for technicians in the areas of health center or health services management, X-Ray, laboratory, stomatology, pharmacy, nutrition and rehabilitation. In addition, the school will be designed so as to also provide a number of short term upgrading/refresher courses and continuing education in the fields needed. This facility will serve as a prototype for other similar institutions in the country. A new health center will be built in the School's campus. It will provide the neighboring population with primary health care and will serve as a training facility for the students. In addition, two healths posts, Tioccho and Namambe, located in Lubango's suburb will be rehabilitated and will be used as practice facilities for the school. The school wIll also include a health equipment maintenance center which will serve the Huila province. The technical assistance for the School will be provided through twinnmg contract with similar foreign institution. The project will finance construction/rehabilitation (US$4.8 million), furnishing and equipment (US$1.1 million) and Technical Assistance (114 man-months of consultancies) for the new school, the Health Center and the two Health Posts attached. Health School Organizational Chart and Architectural Program are given in Annex 3.6.  - 18- 3.7 The overcrowded Lubango Pediatric Center neads major building repairs such as roofing, water and electricity supplies, and it lacks basic equipment. To make it able to work at full capacity and to make it more efficient, the project will finance civil works and equipment, for the laboratory in partieular. The existing Municipal Health Center in Lubango will be partially rehabilitated and equipped. The total estimated amount for these rehabilitations is US$350,000. (d) Rehabilitation of Porto Amboim Hospital and two Health Posts (US$3.3 million) 3.8 The existing hospital of Porto Amboim, a city located 243 miles south of Luanda. This is the only facility able to provide primary and secondary medical care to a population of about 120,000. At present, the hospital is lacking qualified staff, equipment as well as additional space. The hospital will be rehabilitated, including adequate waste disposal, sanitation, water and emergency power supply services, and furnished and equipped in order to accommodate 100 beds. Basic services to be provided include: minor surgery, radiology, maternity and pediatrics, adult medicine, laboratory, administrative, as well as basic supportive services. The existing Health Posts in Pinda and km 42 are to be rebuilt and provided with adequate equipment, furniture, and sanitation water. The supervision of the works, as well as the management of the three facilities will be ensured by the Catholic Church, according to an Agreement being signed with the Government which will indicate respective Government and Catholic Church technical and financial responsibilities and participation. The medical staff will be provided by MOH, the Catholic Church and other Technical Assistance, the recurrent costs by the Government, and rehabilitation and equipment by the project. The project will include a provision of US$1.2 million for civil works, US$700,000 for equipment, and a provision of 250 man-months for expert services and 16 man-months for training of hospital personnel. Description of hospital and Health Posts rehabilitation, functioning and Architectural Program are given in Annex 3.7. As a condition of disbursement, the Government will sign an agreement with the Catholic Church satisfactory to IDA (Para. 5.3(b)); and will furnish IDA satisfactory evidences of land and building ownership related to PIlU's building and all rehabilitations included in component 2 (Para. 5.4(c)). C. PROJECT COSMS AND FINANCING PLAN 3.9 The project will be implemented over a five year period. Total costs for the proposed project are estimated at US$22.2 million. Base costs are estimated at US$18.5 million and contingencies have been esdmated at US$2.9 million. In addition, taxes and import duties amount to US$500,000. Foreign exchange costs account for US$18.8 million (84 ircent of total project costs) and local costs for US$3.4 million. Project costs by category of expenditure are summarized in Table 3.1 below and details are provided in Annex 3.8. Civil works account for 33 percent of base costs, technical assistance and studies for 32 percent, and equipment and materials for 17 percent. These costs are based on estimates provided by MOH with the assistance from a consulting firm. The appraisal mission reviewed these costs in collaboration with the entities who will be in charge of executing the various components. Due to exchange rate uncertainties all costs have been estimated in dollars only.  - 9- Table 3.1: Prolect Cost by Cateaorv of Exoenditure _____________________Lca_orin Total [ FOREIGN BASE COSTS 1. INVESTENWT COSTS - A. Eauipment, Vehicles Nat. 72 3196 3269 93 17 B. Training and Seminars 66 758 823 92 4 C. Civil Works 968 5486 6454 85 33 D. Tech. Assist. & Studies 792 5500 6293- 87 32 E. PPF 0 1209 I 1209 100 6 TOTAL INVESTMENT COSTS 1899 16150 T 18048 89 93 11. RECJRRENT COSTS _ A. Ov.rating Costs 1057 260 1317 20 7 TOTAL BASELINE COSTS 2956 16409 19365 85 100 Physical Contingencies } 196 1034 1231 84 6 Price Contingencies 293 1318 1660 82 8 TOTAL PROWECT COSTS 3445 162 z7 84 115 Values scaled by 1000.0 3.10 Contingency Allowances. Physical contingencies have been calculated at 10 percent for civil works and 5 percent for equipment, vehicles, food and materials. Price contingencies have been calculated at 3.6 percent per year throughout project duration. 3.11 Estimates for civil works were prepared by MOH in collaboration with a consulting firm. For new construction (Health Professional School of Lubango, the Campus Health Post, Pinda and Km42 Health Posts, and the extension of the Porto Amboim Hospital) the cost of works was estimated at US$700 per sq. m. The cost for rehabilitation of selected sites (such as the Thioco Health center) was estimated at US$300 per sq. m. These relatively high costs are due to a combination of factors: a distorted exchange rate, hig.h import content of construction materials (about 50%), high proportion of foreign labor (50 percent on average in the large firms), inadequate tendering procedures resulting in limited competition, and the Government's poor payment record which has led contractors to inflate prices. However, due to the volume of civil works under this project in addition to those anticipated under the IDA fi"anced First Education Project among others, and th* ise of international bidding procedures is expected to increase competition. IDA reviewed estmates for vehicles, equipment, materials and international technical assistance which are based on estimates used in similar projects financed by other donors. With regards to training, training abroad was estimated at US$40,000 per person/year and for local training US$30 per day/person. Local salaries and operating expenses were estimated using UNDP standards.  -20 - 3.12 Project costs by component are shown in Table 3.2 below. The institutioaal development component for MOH accounts for 23 percent of base costs, and the National Health Programs including: (i) AIIDS/PP accounts for 6 percent of base costs; (ii) the rehabilitation of the selected health centers in the Huila Province for 4 percent of base costs; (iii) the rehabilitation and/or construction of the Luibango health school and annexes for 45 percent; and (iv) the rehabilitation of the Porto Amboim Hospital and health centers for 15 percent of base costs. 3.13 ustoms duties and taxes. All Items imported tor the purposes of executing this project would be exempt from direct customs duties and taxes, in line with the standard practice of the Government, except for the local materials to be used for the construction and furnishing of health centers, the Lubango Health School and the Porto Amboim Hospital and for small purchases related to project operating costs. Of the estimated costs of construction and furnishing of the above mentioned facilities, approximately US$500,000 represents customs duties and taxes. During negotiations, the Government will be requested to give assurances that all items imported for the project will be exempt from direct customs duties and taxes (Para. 5.2(d)). Table 3.2: Cost Sumay FOREIGN BASE I ___________ LOCAL FOREIGN TOTAL EXCHANGE COSTS A. INSTITUTIONAL DEVELOPMENT 1136 3377 4513 75 23 B. NA7L. HEALTH PROGRAMS 1. AIDS and FamilY Planning 151 1099 1249 88 6 2. Health Centers Huila 68 682 750 91 4 3. Lubango Health School 1041 7690 8731 _ 88 45 4. Porto Amboim HospStal 560 2353 2913 81 15 Sub Total 1820 11824 13644 87 70 C. PPF 0 1209 1209 100 6 TOIAL BASELINE COSTS 2956 16409 19365 85 100 Physical Contingencles 196 1034 1231 84 6 Price ContIngences _ 293 1318 1611 82 8 TOTAL PROJECT COSTS 3445 18762. 22207 84 115 Values scaled by 1000.0 3.14 Recuffent Coss The recurrent cost implications of the proposed operation are mainly the operating costs for the infrastructure being rehabilitated or built under the project. These costs amount to US$300,000 per year. This represents and increase of about five percent over the current public expenditure program for the Ministry of Health. Given the importance of these health care facilities, it is also anticipated that other donors will also contribute to the financiag of these and other recurrent costs upon project completion.  -21 - 3.15 Of the total project cost of US$22.2 million, IDA is expected to finance 89 percent of total costs (US$19.9 million); the remainder will be financed by the government which is ex- pected to fund 10 percent of all civil works, 80 percent of all operating costs and 5 percent of training activities. Prior to credit effectiveness of the proposed credit, the Government will make an initial deposit of the equivalent of US$200.000 in a project account opened in a commercial Bank acceptable to IDA (Para. 5.3(c)). Table 3.3: Financing Plan bv Disbursement Category IDA Government Total Poreign Local - Exchange (Excl. Amount % Amount % Amount % TAM) A. Equipment, Vehicles, Purniture Supplies 3709 100 0 0 3709 17 3625 84 B. Civil Works 6892 90 766 10 7658 34 6498 1160 C. Training & Studies 929 100 0 0 929 4 854 75 D. Technical Assistance 6823 95 364 5 7188 32 6277 911 E. Operating Costs 299 20 1216 80 1515 7 299 1216 F. PPF 1209 100 0 0 1209 5 1209 0 Total Disbursement 19861 9 22207 100 18762 3445 D. PROJECTIMPLEMTATION Proiect Prenaration 3.16 The Health Project was identified in October 1990, pre-appraised in November 1991, and appraised in April 1992. The project is now in its final preparatory stage. The working documents prepared by the Government with assistance from a consulting firm funded under PPF have been reviewed, completed and agreed upon with Government officials during appraisal. A Public Expenditures Note and a Draft Policy Statement have been prepared and reviewed during Appraisal (Annex 2.2 and 2.5). Preliminary drawings and bidding documents for construction, rehabilitation and preliminary list of equipment, furniture and vehicles have also been prepared. Technical assistance programs have been defined and detailed terms of reference have been finalized (Annexes 3.1 and 3.2). Following the granting of a PPF advance, MOH is expected to carry out the process of recruiting: (a) the long-term technical assistance; (b) an architectural firm to prepare designs for the rehabilitation of the PIU's facility; and (c) constructioid firms- for the rehabilitation of the PIU's building and for the housing of the technical assistance in Luanda. Organization and Management 3.17 The proposed project will be implemented by the MOH through a Project Implementation Unit (PIU) (Annex 3. 1), which is part of the Planning Department. The PIU is under the direct authority of the Ministry of Health, according to the Implementation Schedule by component  - 22 - given in Annex 3.11. The PIU is headed by a full-time national director. The proposed staff: one senior accountant and one junior, one engineer, one responsible for procurement, and support staff will be supplemented by an international project advisor responsible for monitoring the project implementation under the supervision of the Director. The PIU will be responsible ij A&ia for: (i) coordination of project-related activities and distribution of project documentation among all relevant MOH's Departments; (ii) overall coordination of project implementation; (iii) compliance with monitoring and reporting requirements under the Project, including quarterly progress reports and annual progress report, detailed costs and budgetary requirements for project-supported activities to be carried out during the upcoming project year; (iv) interliaison with governmental, international and private institutions, donor agencies active in the sector, and the Association in order to facilitate project implementation. 3.18 Implementation of Proiect Components. Unler the coordination of the PIM, the implementation responsibility of thle project components will be the following: * The Support to Health Policy Development and Institutional Strengthening and Pre-Investment Studies component will be the responsibility of the Planning Department of the MOH. * The Support for the Priority National Health Programs subcomponent will be implemented by: (i) WHO for the AIDS program; and (ii) UNFPA for the Family Planning program. * The Construction of the Health Professional School, the Health Center, the two Health Posts attached and the Maintenance Center, the rehabilitation of Pediatric Center and Municipal Health Center in Lubango will be implemented by the Human Resources Department of the MOH in close collaboration with the Provincial Health representative in Lubar,go. The technical assistance for the School will be provided through contracts (twinning contract) with institutions involved in health training (e.g. Public School of Health, School of Medecine, University) and selected according to Bank procedures. * Rehabilitation of Health Centers and Posts in the Province of Huila will be implemented by the NGO MSF - Spain in close collaboration with the Provincial Health Representative in Lubango. * The Rehabilitation of Porto Amboim Hospital and two Health Posts will be implemented by the NGO Catholic Church from Luanda which has already a representation in Porto Amboim and is involved in the management of the hospital in close collaboration with the Regional Health Representative in Porto-Amboim. Involvement of agencies and NGO's which will be responsible for project implementation have been defined in accordance with Bank policies: (a) NGO's MSF - Spain and the Catholic Church are implementing projects of health infrastructre rehabilitation, training and management with the government or other donors (e.g. EEC) in the same geographical area (Lubango and the south for MSF - Spain and Porto Amboim for the Catholic Church. These two NGO's are already involved in improvement and development of primary health care with population participation and limited resources; (b) WHO and UNFPA are already implementing the National AIDS and Family Planing programs, respectively; and (c) MOH Planning Department and the Human Resource Division of Ministry of Health used to manage and follow up the implementation of programs financed by other donors (Sweden, AfDB and EEC) including supervision of private sector involved in construction and rehabilitation (architects, engineers and contractors) through the full  - 23 - time appointed architect working in the Planning Agency. The Project Implementation Schedule by category is shown in Table 3.4 below. The project is expected to be completed by June 30, 1998 and the credit closed by December 31, 1998. Table 3.4: IMPLEMENTATION SCHEDULE (US$ million) Project Element Pre-Project Project Year Total 1 2 3 4 5 PaymentRemark Loan Timing Sign/Effec./Close * *** *#* Civil Work 1. Lubango 1.1 Construction 2.7 2.7 5.4 ICB 1.2 Rehabilitation 0.2 0.1 0.3 LCB 2. Huila Province Posts 0.1 0.2 0.2 0.1 0.5 LCB ... XXXX... XXXXL....XXXXX..... XXxx 3. Porto Amboim 0.4 1.0 .... 3rx =xxx Goods 1. Equipment 0.2 2.1 0.3 2.6 ICB ...xxxxD.. .... XXXX 2. Furniure, Office Supplies 0.3 0.1 0.1 0.7 Local ... X<XX ... 1Shopping 3. Vehicles 0.3 0.1 0.1 0.4 ICB ... xx ... . .. xxx Consultancies 1. Archit. Design & Superv. 0.2 0.2 0.4 Other ............ Ix x 2. Tech. Assistance 1.4 1.5 1.4 1.9 0.7 6.8 Other 3. Training/Seninars 3.1 Abroad 0.4 0.4 3.2 LocaUly 0.1 0.1 0.1 0.1 0.1 0.5 ...XXXX ... .XD ... XXXX ... .X ... XXX Miscellaneous 1. Operating Costa 0.3 0.3 0.3 0.3 0.3 1.5 2. Refinancing PPP 1.2 TOTALS 3.6 6.3 8.1 3.0 1.2 22.2 (Bank Financed) (3.4) (5.7) (6.8) (2.8) (1.2) (19.9)  - 24- Monitoring and Evaluation 3.19 The PIU will monitor and evaluate project implementation (Annex 3.1) with the person responsible for the execution of each component according to the proposed performance indicators (Annex 3(a)). The PIU will have an overall view of problems and issues in project implementation and be in position to recommend any corrective actions that maybe required. The PIU will be in charge of preparing the quarterly reports mentioned above. These reports will be presented to and approved by the Minister of health before being submitted to IDA. It was agreed that a project performance review, including management, will be carried out annually under terms of reference acceptable to IDA and that the review findings and recommendations will be discussed with IDA no later than October 31 of each year of project implementation. This will include review and updating of the Project Performance Key Indicators (Annex 3.9). During negotiations, the Government will be requested to give assurance that, no later than July 31 of each year of project implementation, the PIU will make available to IDA the necessary documents and evidence for a review of (i) project implementation; and (ii) the state of mnaintenance of buildings constructed or rehabilitated with IDA credits (Para. 5.2(b)). 3.20 IDA will review project implementation progress according to the Supervision Summary given in Annex 3.10. At mid-term, the Government and IDA will undertake a more comprehen- sive and detailed evaluation of the progress of implementation and of the extent to which the project is achieving its expected development impact. The evaluation will aim to check if: (a) the activities mentioned in Annex 3.9 have been completed; (b) the project designed at appraisal needs to be adjusted in accordance with the implementation experience; (c) the terms of reference for the technical assistance have been respected; (d) the disponibility of counterpart funds; and (e) if the staffing of the project unit is satisfactory to allow an adequate implementation and in particular, that the project coordinator position is filled with an experienced and qualified person. The Government will review and finalize the Health Policy Statement and the Health Public Expenditures Note. In view of the nature of this review and as an input to it, an evaluation will be undertaken by independent outside consultants. During negotiations, the Government will be requested to give assurance that the Policy Statement and the Public Expenditures Note will be reviewed and updated during project implementation, and finalized during the mid-term review of the project (Para. 5.2(a)). Project Sustainability 3.21 The proposed project will lay the groundwork for the sustainabiity of GOA's health system. Preinvestment studies in the areas of health sector management, human resources development, health financing STDs/FP and health facilities rehabilitation will be the basis for the development and expansion of the sector and the preparation of futher operations. The operational sustainability of the project will be achieved by relying on experienced NGOs to implement the various project components. The sustainability of each of the project components will be reviewed during the mid-term review.  -25 - P-rocuremen 3.22 Procurement arrangements are summarized in table 3.4 below TABLE 3.5: PROCUREMENT ARRANGEMENTS (Total Costs of Proposed Program Components Including Contingencies) (US$ million equivalent) Procurement Method Project Element 'Cs LCB OTHER N.B.F. TOTAL COSTS 1. Works | 1.1 Construction 6.2 . 0.5a 6.7 t6.2) (6.2) 1.1 Rehabilitation 0.8 0.1b 0.9 (0.8) (0.8) 2. Goods 2.1 Equipments/VehfcLes 3.0 0.7d 3.7 (3.0) (0. _ _ (3.7) 3. Consuttancies 3.1 Design/Supervision _ 0.3 --- 0.3 __________ __________ __________ ________ -0 3 (0.3) 3.2 Technical Assistance/ . 7.7 _ 7.7 Training/Studies (7.4) (7.4) i) Technical Assistance 6.0 if) Training Studies 0.8 iii) NGOsB 0.3 (servfces:0.1/T.A:0.5) _ 0.6 4. Niscellaneous .4.1 Refinancing PPF --- _ -- 1.2 --- 1.2 _____ _____ _____ _____ _____ __ __ _____ _ ___ _____ (1.2) (1.2) 4.2 Operating Costs ... ... 0.3 1.4c 1.7 _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ ____ ____ _ _ _ _ _ _ _ _ __0_ _3__ (0.3) 9.2 0.8 9.5 2.0 22.2 TOTAL (9.2) (0.8) (9.2) (19.9) Note: Figures In parenthesis are the respective amounts financed by IDA N.B.F.: not financed by IDA (a) financed by Government (b) financed by Goverrment (c) financed by Government td) international or local shopping  - 26 - 3.23 Civil works. Civil works contracts will be awarded following competitive bidding procedures acceptable to IDA in accordance with IDA guidelines for procurement: * International competitive bidding (ICB): civil works in Lubango (construction: the Health Professional School, one health center and the maintenance center), and the rehabilitation of the hospital of Porto Amboim and two health posts will be awarded following international competitive bidding (totaling about US$6.2 million). In comparing the bids to be procured through ICB, domestic contractors would be allowed a preferential margin of 7.5%. Architectural designs and construction plans for the construction and/or rehabilitation of these facilities would be drawn up by qualified architectural/engineering consultants, who would also design the primary health care facilities. * Local Competitive Bidding (LCB): refurbishment of existing buildings (the rehabilitation of about 10 healths posts in Huila Province, the rehabilitation of the pediatric center and the municipal health center in Lubango, will be awarded following local competitive bidding (totaling about US$800,000). Tenders would be advertised locally, bidders would be given minimum 45 days for submission of bids, evaluation criteria would be specified, all bids would be opened in presence of bidder's representatives, no preference margin would be allowed to national contractors, eligible foreign contractor would be allowed to participate in the bidding, and standard bidding documents would be reviewed and approved by IDA prior to advertising. * Selected NGO's will be responsible for the implementation of the sub-components Porto Amboim (hospital and two health posts), and the rehabilitation of about ten health posts in Huila Province, municipio of Matala. 3.24 G Goods financed under the project will include vehicles, furniture, medical equipment, and other equipment and materials. Except as provided below, goods would be procured through international competitive bidding (ICB) in accordance with IDA's Guidelines for Procurement under IBRD Loans and IDA Credits (May 1992). When ICB procedures are used, a preferential margin of 15%, or the applicable customs duty, whichever is less, over the c.i.f. prices of competing goods would be given to domestic manufacturers in accordance with IDA Guidelines. Contracts for goods procured through ICB would amount US$3.0 million, repre- senting about 81% of the total value of goods financed by IDA. The remaining 19% of the total value of goods, mainly supplies and vehicles for the various components, which cannot be grouped into bids packages of at least US$25.000 equivalent, up to an aggregate limit of US$700,000, would be procured through international or local shopping on the basis of price quotations from at least three suppliers. 3.25 Technical Assistance. Technical Assistance will be selected in accordance with principles and procedures acceptable to the Bank on the basis of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executive Agency". Consultancies services financed by IDA will total about 1133 man-months, of which about 334 man-months would be for locally-recruited specialists whenever the expertise required exists in Angola and whenever there would be no particular advantage to resort to the more costly use of international specialists. Details on consultancies are given in Annex 3.2.  -27 - 3.26 Bank Review Requirements. Working drawings, draft tender documents, master lists of: furniture, equipment, supplies, and vehicles, will be reviewed by IDA. IDA review of tender documents prior to award will be required only for contracts above US$200,000 equivalent for civil works, and US$25,000 equivalent for goods. All other contracts will be subject to selective post award review by IDA. IDA will organize a project launching workshop when the Credit is effective and will prepare an implementation book including IDA's standard bidding documents for goods and works and IDA's standard letters of invitation for consultants, for the use of the PIU and NGOs (Para. 5.2(e)). isbursemen 3.27 The proposed IDA credit of SDR 14.9 (US$19.9 million) will be disbursed in accordance with Table 3.6 below. Table 3.6: Disbursement Catefories US$million Percentage Civil Works 6.0 90 Equipment, vehicles, furniture, materials, 3.2 100 pharmaceutical supplies Training, studies, technical assistance, and 7.2 95 audits Incremental operating costs 0.3 20 PPF 1.2 100 Non-allocated 2.0 TOTAL 19.9 3.28 Contracts for goods and services or single purchases of less than US$20,000, all operating costs will be submitted against statements of expenditure (SOE). All disbursements will be fully documented in a manner acceptable to IDA. The project implementation unit within the MOH will be responsible for monitoring disbursements. The SOEs and all records such as contracts, orders, invoices, and payroil vouchers will be retained by this unit for inspection by supervision missions and reviewed by the annual audit. The project advisor will be responsible for designing this system and training a national staff to undertake this task. The Project Director will be the primary liaisoh person between IDA and the borrower for all disbursement issues pertaining to the project.- It is expected that the closing date of the credit will be December 31, 1998 in accordance with the standard disbursement table (Annex 3.11). 3.29 To ensure that funds for this project are readily available and to facilitate disbursement an initial deposit in the Special Account of US$200,000 will be advanced from the IDA credit.  - 28 - These funds will be deposited in a commercial bank acceptable to IDA. The funds in this special account will be managed by the project coordinating unit and all documentation pertinent to this account will be maintained in a manner acceptable to IDA for inspection during regular supervision missions. The project director will be responsible for disbursements during project implementation and will provide quarterly statements to IDA and will be responsible for submitting applications for the replenishment of this account. Accounting. Financial Reporting and Auditing Arrangements 3.30 The PIU will establish and maintain separate accounts by project component and will be responsible for their consolidation and submittance to IDA in a timely fashion. Such accounts shall be maintained in accordance with sound and locally recognized accounting principles and practices satisfactory to the Bank. The PIU will submit quarterly and annual financial statements to the IDA. An auditor's opinion and reports satisfactory to the Bank on such statements will be provided within six months of the close of the fiscal year. The auditor' report will include a statement and a management letter on the adequacy or otherwise of the accounting system and internal controls, the reliability of statements of expenditures as a basis for loan disbursements, and compliance with financial covenants. The foregoing accounting, financial reporting, and auditing arrangements should provide adequacy and timely information to the Bank for supervi- sion of the project. PART IV - PROJECT BENEFITS AND MIKS A. BE{EfITS 4.1 The main benefits of the project include: (i) improvement of MOH's policy making and managerial capabilities that would contribute to a better planned and more focused development of the health sector; (ii) contribution to the establishment of an effective and sustainable health care system geared towards providing basic health care to the majority of the population; (iii) improvement of human resource qualifications needed to provide quality health services; (iv) reinforcement of the efficiency and management of current expenditures as well as the relevance of investment expenditures within the sector and relative to the macro-economic framework; (v) increased health care coverage in the region which will benefit from project support; and (vi) expansion of the AIDS and Family Planning programs. B. RISKS 4.2 The main risks of this project are: (i) the weakness of MOH in planning and management and the scarcity of qualified personnel with experience in IVA's implementation and procurement procedures; (ii) the difficulties related to the execution of works and delivery of equipment in remote areas because of a weak local administration; and (iii) the political uncertainty. In order to minimize the first risk, the project will strengthen MOH's planning, programming and implementation capacities through human resources rationalization and training and the provision of equipment to the central as well as peripheral levels. In addition, a project implementation unit staffed with technical assistance experienced in IDA's procurement procedures will provide management training to nationals. Regarding the second risk, the project will rely on NGOs that are experienced in implementing projects in remote areas such as the Catholic Church, and MSF -  -29 - Spain to undertake the various activities and provide them with the necessary funding for equipment, training and technical assistance. The third risk should be minimized by the facts that the two main political parties (MPLA and UN1TA) agree on the need for improving health care and that the project components are not sensitive to policy changes. PART V - AGREEMENTS AND RECOMMENDATION A. Prior to negotiations 5.1 The Government is expected to bring for negotiations: (a) the revised Policy Statement and Public Expenditures Note discussed during appraisal (Para. 3.3); (b) the decrees for the creation of the PIU within the MOH Planning Department and the appointment of its staff including a director, two accountants, one engineer, one procurement specialist, and support staff (Para. 3.3); and (c) the short list of long term Technical Assistance related to component 1 in health sector planning, health sector management, and project management (Para. 3.3); B. During ne&otiations 5.2 The Government will have to give assurances that: (a) the Policy Statement and the Public Expenditures Note will be reviewed and updated during project implementation, and finalized during the mid-term review of the project (Para. 3.20); (b) not later than July 31 of each year of project implementation, the PIU will make available to IDA the necessary documents and evidence for a review of (i) project implementation, and (ii) the state of maintenance of buildings constructed or rehabilitated with IDA credits (Para. 3.19); (c) not later than June 30, 1993, MOH will furnish to IDA a document defining the role of army health personnel in the project (Para. 3.3); (d) all items imported for the project will be exempt from direct customs duties and taxes (Para. 3.13); and (e) IDA's standard bidding documents for goods and works and the IDA's standard biddign documents for goods and works and IDA's standard letter of invitation for consultants will be used by PIU and NGOS for project implementation (Para. 3.26).  - 30 - C. Conditions of effectiveness 5.3 The Government will: make an initial deposit of US$200,000 equivalent in the project account opened in a commercial Bank acceptable to IDA (Para. 3.15). D. Conditions of disbursement 5.4 (a) sign implementation agreements satisfactory to IDA with WHO and UNFPA on their contribution to the project (Para. 3.4); (b) sign implementation agreements/satisfactory to IDA with MSF - Spain and the Catholic Church for the implementation of components 2.b and 2.d, respectively (Paras. 3.5 and 3.8); and (c) furnish to IDA satisfactory evidence of land and huilding ownership related to the PIU's building and all rehabilitations included in component 2 (Paras. 3.5 to 3.8). E. Recommendation 5.5 Subject to the agreements and conditions set forth in Paras 5.1 to 5.3 above, the project is suitable as a basis for an IDA credit of US$19.9 million equivalent to the People's Republic of Angola.  ANNEXES p1  ANNEX- Page 1 of 2 REPUBLIC OF ANGOLA Basic Data Sheet and Comparative Indicatg= GENERAL GNP per capita (1992) US$720 Land area 1,247 million km2 Population density 8/nm2 Population growth rate 2.9%* Crude birth rate (per thousand) 47* Crude death rate (per thousand) 19* Maternal mortality (estimated in urban areas) (per 100,000 live births) 700* Infant mortality rate (per thousand live births) 172 Life expectancy at birth (both sexes) 45* Total fertility level 6.5* Health Personnel Ratio Physicians 1/15,400 inhabitants Registered nurses 1/3,675 inhabitants *: World Bank Development Report, 1991.  ANNEX-1 Page 2 of 2 Comparative Sociocconomic Indicators ANGOLA COTE KENYA NIGERIA SUB-SAHARAN D'IVOIRE AFRICA TOTAL POPULATION (MILLION) 10.0 11.7 23.5 113.8 481 URBAN POPULATION (%) 37 48 23 35 33.1 CRUDE BIRTH RATE 47 S0 46 47 46.7 CRUDE DEATH RATE 19 14 _ 10 15 15.5 AVERAGE ANNUAL GROWTH POPULATION (1980 1989) 2.8 4.1 3.9 3.4 3.7 TOTAL FERTILITY RATE 6.5 7.3 6.7 6.5 6.59 INFANT MORTALITY RATE 132 92 68 100 106.9 LIE EXPECTANCY AT BIRTH 45 53 59 51 51.0 POPULATION PER PHYSICIAN 15,400 - 10,150 6,440 | POPULATION PER NURSE 1,020 - - 900 DAILY PER CAPITA CALORIES SUPPLY 1,725 2,365 1,973 2,039 _ ADULT ILLITERACY RATE (%) 59 57 41 58 53.4 PER CAPITA INCOME 720 790 360 250 340 AVERAGE GROWTH GDP 19 -19 (%) 0.8 2.0 0.2 HEALTH EXPENDITURE AS % OF CENTRAL GOVERNMENT EXPENDITURE 6.3 6.1 0.8 3.5 Source: World Development Report, 1991.  | I N IT |VC-IISTER(S)| F~~~ ~~~ CoslaieConiN inister (s) Minister's Office | Office of international Re(ations Planning Unational Institute of Pubific Health LalUnit l ationa lnsrpectort | | | | ~~~~~~ ~ ~~Heatth National Directorste National Directorate National Directorate National Directorate National Directorate Nationat Dir. of of Public Health for Endeminc Controt for Drugs of Equipment of Human Resources Admin., Ngmt. & Budget DEPARTMENTS DEPARTMENTS DEPARTMENTS DEPARTMENTS DEPARTMENTS DEPARTMENTS 9 H"iene |. q Zalario Y Pro~duct ion~ N|edical and W [ Lower Level F | Finance