Madagascar - Health Sector Improvement Project

Dlocwument of The World Bank' FOR OFFICIAL USE ONLY Report No. P-5504-1AG MEMRAN4D1U AND RECOMMENDATION~ OF THlE * ~~~~INTERNATIONAL DEVELOPMENT ASSOCIA'ioiO TOTHE ON'A ?IR0pOSEDicmrEnT O s1tt 2z..:9 N,L TEO~~C, RUPULIC6k OFRA04G&SC~AR. 1hEALTH` -SECTOR 414PROVEN~NT I'ROJECT MAYt7P 1910 'Thi docuiu,st' has -aestr1et 4fistrib"tIn a"d may be ued b"y r-epients @ ate1r,neo tbei. officlat 46tie;1s i Its ouitts way. no otherwise e iftscloed.withoutWr4kiutolol  Corrency Unit. - Malagasy Franc (FMS) Us$ 1.00 - , 671 FMS 4,000 7MG - US$ 0.57 I. meter - 3.28 etoo I kilometer 0. 62 ini1o I suqare k lomet~er 0,39 Rur mile I hectax* 2.47 acres 3.t 33c3 3.31 3D? Uuropean3 Dev*oen.Fui ViSP'-' t,Xo6n;**b )QmagqmAnt"and- -oci-. Acti on' Pr*94t us ~~~~~helhSectorv VQgam3 lNational, Popj4~tIon' I,aw - ? rimary Ie1h~Vr - UMP Uihit:ed Natione DOv#14l1z1 3 . ~~~~UMA3P United IStionfs, F,unAd tot - ,Popu ti.om ct ivti imco~~~t~~a4Qn hlzniBYi 3 )~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~-t  FOR OWICLd US ONLY LL pTSOAYC RUPDLC OF MaDaGaSCAR Borroers ecsratlc Republic of Madagascar emnfLeLarys MLnstry of ealth (NoN) ,ounts aBSDR 22.9 mllion (US$31.0 mllion equivalent) T.fa Standard IDA texas with 40 year saaturity FinanLino Plan: ===-= US$ million ToalofMu IDA 31.0 73 Government JJ 2 22 42.5 100 1/ Including taxes US$1.3 million but excluding duties of US$1.5 mllion, which will be pald by dlrect budgetary transfer. Staff AunraLsal Madagascar Health Sector Improvement Project Report No. 9417-MAa M3SB No. 20035-R This documnt has a tiled ditibution and may be used by ents only in the pefornan e l of their official duties Its contents may not odtwise be dloed without Wed Bank aunthLaton. |  MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO TIE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE DEMOCRATIC RPUBIC OF M CAR FOR A HEALTH SECTOR INPRVMENT ROECT 1. The following memorandum and recommendation on a proposed Health Sector Improvement Project to the Democratic Republic of Madagascar for 8DR 22.9 million (USS 31.0 million equivalent) la submitted for approval. The * proposed credit would be on standard IDA terms with 40 years' maturity and would help implement the government's policies and strategy in the health sector and help refine the sector policy framework. The proposed project would support the implementatlon of the national Health Sector Program (HOP), element of which are also being supported by the UNDP, UNICEF, UNFPA, WHO, EDF, France, Germany and Switaerland. FARTLI - _H HEATH SECO PROMETPRECT BaUkur2ud 2. Health condition in Madagascar are very poor with high infant, child and maternal mortality and morbidity. Comunicable tropical disease remain a major source of untreated illness and preventable deaths. The Ministry of Health (MMo) is the country's main provider of health care and operates a network of about 2.200 health facilities dSrectly accessible to 65 percent of the population and serving over 80 percent of the population through outreach and community-based health programs. Over the past two decades its ability to provide health care, including medical treatment, has been constrained by inadequate budgetary resources. Coverage of care provided by KOe that operate about 320 Xiilth facilities and by private providers is limited and mostly benefits segments of the urban population with an ability to pay for services. PopultiAo dynamlcs are characterised by fertility, birth and death rates that are average by African standards and that reult in an annual population growth rate approaching 3 percent. Access to family planning (VP) services is limiteds less than 3 percent of the women of reproductive age use modern methods of contraception. Survey data point to a large unmet demand for VP services In urban areas and to complications arising from pregnancy terminations as a leading cause of maternal mortality and morbidity. 3. The government's bhea.b policy focusses on rehabilitating the basic functions of its public health system. Policy and specific programming proposals for 1992-96 are contained in the HSP prepared by the Mo! with inputs from several donors, includlng IDA. The USP and the related public expenditure program for health have been appraised by IDA and accepted by the donor community. They constitute an appropriate package of priority health activities that deserves donor support. 4. The government's population policies are contained in a National Population Law (NPL) promulgated in January 1991. Its adoption by the government and the National Assembly constitutes a major breakthrough reversing former pro-natalist official policies. Major new features includes (a) markedly lower national fertility targets to be attained by voluntary means; (b) the right of couples to decide the timing and number of their children and to have access to VP information and services; and (c) the mandate given to the Mo! to dellver VP servlces. Abortions, except to save the mother's life, remain illegal ln Madagascar.  2 Rationale for IDA Inolvement S. Madagascar hau reached the point in its structural adjustment process where increasing attention needs to be focussed on improving the social sector policy framework and implementation capacity to improve living conditions and alleviate poverty. Under the Public Sector Adjustment Credit No. 1941-NA of 1988 the government prepared a mcprehens se ha lth sector policy statement, which was developed into the g8P which defines the core public health activities needed to attain the policy objectives. The proposed project would help the government implement the ReP by rehabilitating the public health system to address the basic health needs of the population efficiently. It would also support studies to define the next phase and to develop institutional mechanisms for fostering private sector/NG0 response as well as community and beneficiary participation in efforts to meet the national helth objectives. IDA involvement in the implementation of the health sector strategy would ensure timely application of the reforms and contribute to effective donor coordination. The Health Sector Proaram 6. The principal features of the ESP are: (a) delivery of comprehensive communicable disease program to control malaria, tuberculosis, leprosy, sexually transmitted diseases (including AIDS), and the plague, and establishment of a communicable di eae monitoring system; (b) introduction and upgrading of FP services in at least 500 of MoH's clinics offering primary health care (PUC); (c) improved delivery of PHC services, including reasonable access to essential drugs in all the Hof's outpatient facilities; and a strengthening of the capacity of intermediato and tertiary level facilities to provide referral services for PHC care; and (d) the first phase of a long term institutional development program toes (i) progressively restructure and strengthen the KoHo's health delivery ystem, increase Its efficiency and invite greater popular participation and (ii) strengthen the MoB's policy formulation and sector programmig, monitoring and evaluation capacity. The H8P with an estimated cost of about US$100 million over 1992- 96 does not cover the rehabilitation of the public hospital syetem or preservLce paramedical training which are the other major components of the public expenditure program for health. These needs will be studled and implementation proposals prepared under the 5SP. 7. Prospects for timely implementation of NSP have been enhanced by the following measurees (i) presentation to the donor community in September 1990 of the HSP containing detailed proposals for rehabilitating Mo's service delivery and institutional capacities; (ii) reorganisation in February 1991 of the central staff of Hof to addrees weaknesses flagged during the project preparation process; and (iii) successful implementation during 1989-91 of the emergency malaria control program under the Zeoncaic et and Social Action Project (BMWA1) (Credit No. 1967-MAG of 1988). Project Obiectlves and Dpscrioton s. The proposed project ha been designed to provide, within agreed parameters, flexible support towards implementation of the ESP over the five year period 1992-96. It will contribut to achieving national objectives of: (a) reducing mortality and morbidity; (b) moderating fertility leveles (c) improving the effLcieney and sustainability of public expenditures for health, the sector policy framework and Lnstitutional coordination mechanisms. By accolerating the integration of famlly planning services into the basic aotivitioe of the publi health system, it would also contribute significantly to implementation of the NPL adopted ln 1991. The desLgn of the propose4 project calls for the X*o to prepare and IDA to review the annual work progrms (see para. 10 below). The proceeds of the proposed credit will be primarily directed to the malaria and plague control, disease  3 monitoring, family planning and institutional development programs (US$22.2 million equivalent); the balance of the proposed IDA credit would be used to complement the financing of the other HSP components for which other donors are providing inputs and assisting in coordinating. Program and Proiect Cost 9. The total cost of the HSP, net of duties and taxes, is estimated at about US$100 million equivalent, with foreign costs of US$84 million and local costs of US$16 million. The proposed credit would support a project with an estimated total cost of US$42.5 million equwivalent and with a foreign exchange component of US$34.6 million (81 percent). A breakdown of costs, a financing plan for the project and a summary of the use of IDA funds are shown in Schedule A. Amounts and methods of procurmnt and of disbursements, and the disbursement schedule are shown in Schedule S. A timetable of key project processing events and the status of Bank group operations in Madagascar are given in Schedules C and D. A Staff Appraieal Report, No. 9417-MAG dated May 7, 1991 is being distributed separately. Aareements Reached 10. The Government has sent IDA a letter setting forth its objectLves, policies and strategy in the health sector. This letter will serve as the basis for reviewing the annual work programs and evaluatlng project implementation. It has also been agreed that MoH woulds (a) by September 30 of each year, prepare an annual work program for implementing the HSP, convene a donors meeting to review the work program and to firm up its financing plan, and submit the fLnalized work program for IDA's review together with revised lists of goods and services to be financed by the IDA credit; (b) submit by September 30 of each year, a public expenditure program for health for IDA's review; (c) submit acceptable proposals for iatroducLng user charges on drugs as a condition for disbursing against an iaLtial stock of essential drugs to be offered for sale through the X*H1 (d) undertake and discuss with IDA the findings and reccamendatLons of a mid-term review of the ISP and the project implementation before June 30, 1994, including an assessment as to whether the strategies being followed are producing the expected results, a proposal for the government's pharmaceutical policy and a proposal for the development of the non-public sector activitLes in the health sector. Environmental ZmMact 11 The proposed project will have a positive impact on the human environment. It will involve the use of pesticLdes, mainly DDT for controlling malaria transmision and deltametrine for controlling the plague. No negative environmental impact from the use of pesticides is foreseen as the amounts are small compared to pesticide usage in agriculture and the areas to be treated are limited. DDT would be used as a resldual indoor insecticide and carefully controlled to minimize any possible environmental contamination; it does not constitute a health risk to humans. Deltametrine belongs to a class of pesticides that do not present an environmental risk. The project also provides for continuous training on safe application techniques and surveillance of pesticide use and manipulation. The guldelines for the selection and use of pesticldes in publlc health programs in Bank flnanced projects have been followed in the preparation of the project. BMfLit 12. The project will provlde direct bonefits to a large part of Madagascar's population by reducing preventable deaths and illness episodes  4 and by offering women the full range of safe motherhood activities. The VP component will also contribute towards the government's objectives of reducing fertility levels, thereby reducing population preGsures on the land, the environment and budgetary resources for flnancing soclal servLces. The Lnstltutlonal reforms of the MoH are expected to lead to signifLcant effllceney galns ln service dellvery and in the impact of public expenditures. Studles would help prepare further adjustment of the health sector policy framework a A contribute to the design of measures to improve the sustainabillty of public expenditures for health and facilitate a better definLtLon and coordinatLon of the roles and activities of the public and prLvate sectors. Risks 13. Project impl emntation faces two major risks. First, the demands of deliverlng throughout Madagascar the entLre package of prlorlty activlties spelled out in the HSP could strain the institutlonal capacity of Koff. This rlsk is addressed through the reorganizatLon of MNo central staff and the appointment of senlor staff wlth recent field experLence to managerLal positions, the deslgn of the lnstitutional development component includLng the ratlonalizatlon of training programs and the mobilizatlon of technical and adminLstratLve specialists. The preparation of annual work programs allows for instltutional capacity considerations to be built into the operational programs. Second, given the large number of donors involved in the HSP there is a risk of delays in the commitment of external resources. The creation and approprlate staffing of the Projects MonLtoring Unit, the aid coordination mechanisms supported under the project, especLally the agreements calling for the timely preparation of annual work programs and their revlew at a donors meeting, and the access to IDA funds to complement financiLg provlded by other donors serve to minimize this risk. RecommendatLon 14. 1 am satisfied that the proposed credit would comply wlth the Articles of Agreement of the Association and recommend that the Executive Directors approve the proposed credit. Barber B. Conable President Attachments Washington, D.C. May 7, 1991  5 Page 1 of - , -ow aco -m n moaum 3SYIM~U OOYS NDPINANCIN LI _Rat costs ----U$S million --- *-hSL 3s L&L ZMLmon Total 1. COmmnicable Disease Control 1.9 14.6 16.5 46 2. Family Planning 0.1 3.9 4.0 11 3. Other P5C Programs 1.2 7.8 9.0 25 4. Institutional Strength. 1.5 3.4 4.9 14 S. Taxes 1.3 - 1.3 4 Total base costs 6.0 29.7 35.7 100 Physical contingencLes 0.2 1.3 1.S 4 Price contingencies 1.7 3.6 5.3 15 Total project costs 7.9 34.6 42.5 119 Pinancin Plan - --- US$S millon - - - - Loal Fsma ,Totafl IDA 2.3 28.7 31.0 Government 2/ 5.6 5.9 11.5 Total 7.9 34.6 42.5 .J Including taxes estimated at US$1.3 mlIlion equivalent but excluding duties estimated at US$1.S million equivalent, which will be paid by direct budgetary transfer.  6 Page I of 2 NIDMAUCAU: UWBLU SUOO WRO PRJ3S UELANLAD UUDIZ PROCURUZ4UMT ARMANGIIWMTS , Poaurpmsnt Method IUSS Mil1ionk Category Zen CB IS/LS BSW NA cost 1. Civil Works 1.9 2.4 4.3 (1.4) (1.2) Ij (2.6) 2. Vhicles, Squipmmnt 8.6 0.7 0.7 10.0 supplies (8.6) (0 5) (0.5) (9.6) 3. Drugs and technical 10.l 5.4 1S.9 inputs (9.4) (0.1) (9.5) 4. Technical assistance 2.4 2.4 and studies (2.3) (2.3) 5. Training 2.3 2.3 (2.3) (2.3) 6. Stipends and travel 2.2 2.2 (1.3) (1.3) 7. Incremental operating 4.1 4.1 costs (3.4) (3.4) TOTAL 19 1 2.6 8.5 2.4 8.6 41. 21 (18.0)(1.9) (1.8) (2.3) (7.0) (31.0) Note: The figures in parenthesis are the amounts to be financed by IDA. 3J Prudent shopping on basis of a minimum of three quotations 21 Excluding taxes US$1.3 million ICEs International Competitive Bidding LCBs Local Comoatitive Bidding I8: International Shopping L8s Local Shopping DCG: Guidelines for the Selection of Consultants NA: Not applicable  7 Page 2 of 2 NAD&SCAR sum3L 53COR RIRVUU PROJUO! DilbursMent , US$ million Percentage Ctcory (1) Civil works 3.6 100% of foreign expenditures and 85% of local expenditures (2) Uquipment, materials 6.2 100% and vehicles (3) Training, studies and 3.6 100% of foreign consulting services experditures (4) Drugs, medical supplies 5.4 100% of foreign and insecticides, except expenditures those to be sold through the MoH (5) Drugs for initial stok 2.2 100% of foreign to be sold through MoH expenditures (6) Incremental operating 3.8 85% of local costs expenditures (7) PPF Repayment 1.5 Amount due (8) Unallocated 4.7 TOTAL 31.0 gatimted IDA Disbursemnts IDA Fiscal Year (USS million) IY9 FY9 F24 UI1 FYfi F9 Annual 3.9 5.8 6.0 5.8 5.5 31.0 Cumulative 3.9 9.7 15.7 21.5 27.0 31.0  8 Schedule Page 1 of 1 Na~AGAICR2 ALTH SECTORZWOVNN PROJEC TIMETABLE OF X$Y PROJECT PROCESSING EVENTS a) Time taken to prepare s 19 months b) Prepared by s Government with assistance of IDA and sector donors C) First IDA mission s November 1988 d) Appraisal mission departure t May 1990 e) Negotiations t April 1991 f) Planned date of effectiveness s September 1991 g) List of relevant PCRs s none Task Manager s Mr. B. de GaJffier Peer Reviewer s Dr. B. Liese Division Chief s Mr. A. Colliou Department Director * Mr. F. Aguirre-Sacasa  9 Schedule D Page 1 of 2 STAUS OF SANK ROUP OPaTINS IN MADAGASPoR A. STATEMENT OF SAN LOANS AND IDA CREDITS March 81, 1001 Amount In USS Million Loan or (less cancel lation) Crilt Fiscal number Year sorrosr Purpose Bank IDA (1) Undisburs.d 5 loans fully dlbursed 82.67 88 credits fully disbursed 6am Of which 8 SECALi Cr. 1691 66 Madagrscar Agricultural Sector Adj. 29.90 Cr. AG16 06 Madagscar Agric. Sect.Adj. SFA) 88.0 Cr. AM07 86 Madagascar Industrial Aest. SFA) 2.00 Cr. A832 87 Madagascr Induaty A Trade P.l. (SFPA) 07.0 Cr. 18J4 67 Madagascar Industy A Trade Policy Adj. 10.90 Sub-total 156.90 Cr. 13387 8 MadagaJ cr RIce Intensifatieton 18.00 2.89 Cr. 1488 64 Madagascar Cotton Oevlopment a/ 17.90 .14 Cr. 1497 64 Madagascar Urban 12.86 4.99 *Cr. 1641 65 Madag pacr Industrial Assistance 40.00 9.J2 Cr. 1589 65 Madascar Irrigation RehabilIltation 1O.57 7.29 Cr. 101 66 esd agscar Accounting A U9gt. Training 10.90 10.68 Cr. 1694 86 Mdagascar Third Rai way 12.00 4.91 Cr. 1790 s6 Mdagscar Second Ag. Institutions 10.06 8.20 Cr. 1752 e7 Madagascar Port Rehablitation 10.90 9.62 Cr. 1787 67 M gcar Energy 25.00 19.66 Cr. 1804 87 gascar Sbcond ASgrcultural Cr. 10.0 1 .96 Cr. 1678 U Madags car Forests Mt.& Protection 7.oo 4.49 CT. 1995 se Mdagacar Seventh Highway 40.0 8C.58 Cr. 98$ Se Mdagascar Ilenits MIning En. 8.55 .55 _Cr. 1941 88 Madgsar Pub.Sec.Ad( .(Incl. J upp.) 129.89 81.67 Cr. 1967 69 Madagacar Econ.1gmt.& Soal Action 22.90 20.57 Cr. 2942 69 MadagaAcgr NatI gric. Research 24.00 24.54 Cr. 2094 Of Madacascr Education Sect.Reitmorc. $9.90 86.29 Cr. 2194 W90 Madagscar FPi.Sct.APrIv.Eat. 48.04 40.22 Cr. 2117 99 Madgs Antama.Plaim Oew. 80SO 89.61 Cr. 2125 9o Madagascar Environment 268.0 24.79 Cr. 2159 90 Ma s AP.Ext.P1 lot 8.68 8.79 ,- Sub-total active projects 50.560 890.15 Total lass cano llatin"s 82.57 1996.66 of which has bee repaid 14.5W 18.6 Total now aled by Dank and IDA: 16.97 1984.9S (1) Amount sold: 6.86 of which rpaild 6.06 Total undtsbursed: s .0 886.15 * SAL, SECAL, Program Loan aI Includes Special fund (1) Sum at Total now held by IDA an Total Undteburscd Is higher than Toet lutatanding because of depreciation of the S8.  10 Schedule D Page 2 of 2 B. Statement of lFC Investments in Madagascar (as of January 31, 1991) xea Obligor Type of Buusinessoan odnElh 1990 FIARO Development Finance - 0.28 0.28 1980 Bata Shoes Footwear 1.25 - 1.25 1986 COTONA Textiles 10.88 0.18 11.06 1984 Nossi-Be Food and Food Processing 6.94 0.25 7.19 1977 Sotema Textiles 14.73 IL3Q Total Gross Commitments 33.80 1.01 34.81 Less: Cancelations, Terminations, Repayments, Sales, Exchange Adjustments 14.10 14.10 Total Commitments now held by IFC. 19.70 1.01 20.71 Total Undisbursed 0.38 0.00 0.38 Total Disbursed 19.32 1.01 20.33  IBRD 20MR rantslrnana MADAGASC:AR -t) - n- vfoA ,=t *w A* swim # a tv w . S . \ktN %% A~~~~~~~NTSIRANIAZ AU ..* wsMg- @ iai R_*_i ECWP 'It' W,N Ambdcb. _oAlfto '' % ' ' 0 ,' N ito \ 4 . : - /g 5i z .tw . . o . . - // 1 \ \] 4 I . . 1-~ ~ ~~*uS Mh.bv- - v0 t 's ' ; ftr --4Z TOLIARY ~ ~ ~ ~ ~ thocr, 4 FIANAPbsitrOA 4 N~~~~~ t"hibe * 2