Zambia - Health Sector Project

Report No. PID1084 Project Name Zambia-Health Sector Project (@) Region Africa Sector Health, Population and Nutrition Project ID ZMPA3239 Borrower Government of the Republic of Zambia Implementing Agency Ministry of Health Attn: Dr. K. L. Buyala Permanent Secretary Woodgate House, Cairo Road P.O. Box 31205 Lusaka, Zambia Tel: (260) (1) 222048/Fax: (260) (1) 223435 Contact for contractors Ms. Esther Ngoi Mulenga, Donor Coordinator, Ministry of Health PO. Box 32588, Ndeke House, Lusaka, Zambia, Tel (260) (1) 254427/Fax: (260) (1) 253173 Date of this PID October 11, 1998 Appraisal Date April 1994 Board Approval November 15, 1994 1. Background. A key area of concern of Zambia's adjustment program and in the Government's overall development strategy as stated in the Policy Framework Paper is the rehabilitation and reform of social service delivery. As with all social sectors the health sector has suffered severe cutbacks in funding during the economic crisis of the 1980s. Existing infrastructure is severely dilapidated. Health status seems to be deteriorating, as indicated by rising infant mortality and malnutrition rates between 1980 and 1990; maternal mortality rates are also unacceptably high. The health sector has suffered from excessive centralization and irregular availability of funds at points of service. The Nutrition sub-sector lacks strategic focus, and suffers from lack of coordination and a cohesive institutional "home". 2. Government has initiated the application of innovative and wide-ranging health care reforms whose basic thrust is to assure the delivery of an affordable, quality package of health services which includes basic curative and preventive care, family planning, and nutrition. In August, 1995, The Government of the Republic of Zambia (GRZ) passed the National Health Services Act which established a Central Board of Health (CBoH), District Health Boards and Hospital Management Boards. The CBoH is responsible for the provision and production of health services. This includes monitoring and evaluation, commissioning responsibility for service delivery to district and hospital boards, and setting standards. The Ministry of Health (MOH) retains responsibility for policy formulation and resource mobilization. Since August 1993, all districts have received funding for recurrent costs: first on a  pilot basis and financed by donors, then co-financed with Government since January 1994. Funding is contingent upon the development and approval of district plans that include monitorable indicators; district management must also have proven accounting capacity to handle these funds locally. Substantial consensus and capacity building activities have been and continue to be undertaken, by training and involving health staff in districts in the definition and planning of their own agenda. 3. Project Objectives. The project supports the Government's health reform program with a view to improving access to, and the quality of basic health services. Fulfilling these objectives will contribute to the social sustainability of the adjustment program and strengthen the human capital base necessary for the future growth of Zambia. 4. Project Description. The project supports a share of a program prepared by Government and agreed by all the core donors to the sector. This program is described in the annually-updated National Health Strategic Plan (NHSP), and focuses on decentralization of authorities and responsibilities; increasing the motivation and skills of staff; defining and delivering a package of essential services to the entire population; distribution reallocating resources towards cost-effective care; and establishing appropriate, affordable and sustainable standards for service delivery, infrastructure, pharmaceuticals, and personnel training, remuneration and distribution. 5. Project Financing. IDA plays the role of "lender" of last resort", by supporting those elements of the agreed program for which there is no other donor funding. IDA will not explicitly finance ineligible expenditures, e.g., land purchases, taxes, civil service salaries. To date, this has resulted in a large proportion of the Credit being allocated to the rehabilitation of basic infrastructure, and the capitalizing of a centralized revolving fund for pharmaceuticals and medical supplies. Donor grants or in-kind support has been preferred for technical assistance, operational research and co-financing recurrent costs of service delivery with GRZ. The budget is based upon annual agreement on the Implementation Plan and Budget. The recurrent costs are intended to be fully financiable by the GRZ at the conclusion of the program. Investment and interim external financing is aimed at "retooling" the system into one which can more cost-effectively and affordably provide basic services. Co-financing is on a parallel basis with each donor funding "full contracts" (complete sets of goods, that do not depend upon administrative obligations of other donors to complete the procurement). Efforts are being made to harmonize donor, IDA and GRZ requirements for disbursements, procurements, accounting, auditing and reporting. A draft MOU was developed in 1997 which describes the aim of this coordination, and efforts have begun in the co-financing of district grants and the drafting of joint procurement procedures. 6. Project Implementation. The Government, IDA and core donors annually (Oct/Nov) agree on the implementation process of the reform program, and review progress jointly (April each year). Each year, the Government presents its updated National Health Strategic Plan which outlines the framework and standards for the new system, including: content and cost-effective delivery -2 -  methods for the basic package; roles and responsibilities of each level of the system (community, health center, general hospital, district health board, referral hospitals, regional hospital boards, Central Board of Health and Ministry of Health); policies for drugs, supplies and human resources. This plan is annually jointly "appraised". The majority of donors have indicated their commitment to fund only items included in NHSP. 7. Project Sustainability. The project will strengthen the capacity of the health sector to respond to evolving epidemiological and financial circumstances, thereby ensuring the development of sustainable services. A stated aim of reforms is the establishment of a system which the country can afford to sustain, yet the retooling of the delivery system from the present inefficient, centralized system requires short-run cost increases. The GRZ allocation to the health sector has increased to 13t (8t of GDP), and intrasectoral allocations evidence the commitment to finance basic care for all rather than sophisticated care for few (the allocation to district services has increased to 30- with a stated objective of 60-, and funding for the central hospital has decreased from 43t to 17h). The role of nominal fees which have been initiated throughout the public health care system is explicitly not to recover costs, but to regulate use (e.g. by-passing primary care facilities) and foster ownership at the community level. 8. Environmental Aspects. The operation has an environmental rating of C due to the sector reform nature of the credit. 9. Program Objective Category. This program forms part of the core poverty alleviation program of IDA. An integral part of the poverty reduction aspects of the reform program is the improved efficiency and effectiveness of social service delivery - and within this the health sector is taking the lead. The project contains major elements of civil service reform and improved private/public mix in service delivery. It includes the de-linking of health professionals from the civil service and allowing Boards authority to hire, fire and reward performance. Contact Point: The InfoShop The World Bank 1818 H Street, N.W. Washington, D.C. 20433 Telephone No. (202)458 5454 Fax No. (202) 522 1500 Note: This is information on an evolving project. Certain activities and/or components may not be included in the final project. Processed by the InfoShop week ending October 16, 1998. - 3 -