Mozambique - Country assistance strategy completion report (CASCR) review for the period FY2001-03 : OED review

88803 M OZAMBIQUE CASCOMPLETIONREPORTREVIEW The OED review of the FYOl-03 CASprogram and the CAS Completion Report (CCR)jinds that there was progress towards attaining the main objectives of the CAS program: increasing economic opportunities, improving governance and empowerment, and improving human capabilities (para. 3). Particularly noteworthy are the reduction in poverty, the high rate of growth, the fall in inflation, the increases in prima y school enrollment, and the reduction in infant and maternal mortality (paras. 6 and 10). The Government, which runs moderate macroeconomic policies, has succeeded in achieving the medium-term targets set in its poverty reduction strategy program (PRSP) and advanced towards achieving some of the Millennium Development Goals (MDGs) (paras. 3, 6, IO). However, future gains are not guaranteed. Growing corruption and a weak investment climate could discourage the growth ofprivate businesses, and a weak financial sector and excessive dependence on foreign aid pose risks to macroeconomic stability (paras. 1, 9). The Bank’s assistance program helped in the progress observed during the period but fell short of its promises (para. 13). The FYOl-03 CAS was relevant but implementation diverged from plan, and the CCR provides inadequate justification for the divergence. Of the nine proposed credits, three were postponed to other CAS periods, but IDA still gave six credits and two grants for $489.1 million (para. 4). Of the I1 formal ES W reports promised, the Region delivered three plus two unscheduled reports-a CPAR and a CFAA (para. 5). The CCR provides a good survey of achievements and candidly acknowledges shortcomings, but relegates to an appendix a straightforward account ofprogress towards the CAS objectives. The assessment is balanced and useful, but shifting definitions ofpillars, objectives, and sub-objectives reduces transparency and accountability (para. 14). This OED review recommends that IDA (para. 15): l plan a smaller program of loans and AAA than in the FYOl-03 CAS; l spend more resources in preparing and supervising projects; 0 underpin all project and program lending with ESW, with special attention to agriculture, education, health, and infrastructure,- l emphasize development impact rather than resource transfer; and 0 assess carefullv whether external aid to Mozambiaue is more effective in the r/J form of debt fo>giveness than in the form of budget support. Background 41. -ll 11 . Pa 1 1 ronowmg years or internal conflict, the economy of Mozambique was in shambles by the mid-80s when the country, in the midst of civil war, joined the World Bank. The war came to an end in 1992, and the first democratic elections were held in 1994. Subsequently, Mozambique became an example of successful post-conflict reconstruction and development, while moving from a one party state to a multiparty  2 democracy, and from a socialist, command economy to a market-based one. GDP grew at 6 percent per year in 1990-2000, inflation had fallen to single digits by 2001, and, according to preliminary survey results, the poverty rate dropped from 70 percent in 1997 to 55 percent by 2002. Good economic management helped the country qualify for HIPC debt relief starting in 1999. Nevertheless, in spite of these achievements, Mozambique remains today one of the poorest countries in the world, its per capita gross national income is 45 percent of the sub-Saharan average, and the country ranks 170th out of 175 on the 2003 Human Development Index. Mozambique has received large flows of external assistance, including debt relief, but its public external debt, at 75 percent of GDP, still burdens the country and poses a substantial risk for its economic stability. Government Objectives, CAS Objectives, Overview of Implementation 2 The CCR covers the FYOl-03 CAS. In 1999 the Government had prepared an Action Plan for the Reduction of Absolute Poverty (PARPA), which served as the basis for its PRSP, completed in 2001. The PARPA was part of the Government’s five-year program (2000-2004), whose poverty reduction strategy was based on three pillars: (a) Economic development (increasing economic opportunities in the CAS) through maintaining a sound macroeconomic environment, developing the financial sector and strengthening the private sector; (b) Organization of the state (improved governance and empowerment in the CAS) through improvements in public service delivery, law and order, and transparency and accountability; and (c) Social development (improving human capabilities in the CAS) through improvements in health and education. 3. The major objectives of the FYOl-03 CAS were aligned with the Government objectives. The three main objectives were broken down into intermediary objectives as follows: (a) The objective of increasing economic opportunities would be pursued through: (i) strengthening the private sector environment and the financial sector, (ii) developing infrastructure, (iii) promoting rural development and agriculture, (iv) ensuring sound environmental management, and (v) promoting innovation, competitiveness and employment; (b) The objective of improving governance and empowerment would be pursued through: (i) reform of the public sector, and (ii) strengthening the rule of law; and (c) The objective of increasing human capabilities was to be achieved through: (i) preventing and reducing the impact of HIV/AIDS, (ii) improving health, and (iii) improving education. Given Mozambique’s development challenges and the broad coverage of the objectives, OED concludes that the objectives were highly relevant. 4. The proposed lending program in support of the objectives is shown in Table 1, with an indication of which project was meant to support which of the three main objectives. The CAS also identified the support expected from ongoing operations. Delays were common, but most of the proposed program was implemented by early F Y 0 4 . The main exceptions were projects in support of the objective of improving human capabilities: the Skills Development project (tertiary, technical and vocational training) was replaced by a Higher Education project and the Health SWAP was delayed because of slow implementation of the previous health project. Details are provided below.  3 Table 1: CAS-Proposed versus Actual Commitments (‘US$ million) C A S ProposaMVew Actual Purpose”’ $ $ FYOl Roads and Bridges APL CAS 80.0 delay to FY02 162.0 a/ Municipal Development CAS 30.0 delay to FY02 33.6 a/ bl Nat. Resource Manag. CAS 10.0 18.0 a/ - FY02 Energy Reform CAS 20.0 delay to FY04 a/ Econ. Man./Priv. Sector CAS 100.0 delay to FY03 120.0 a/ b/ Rural Action CAS 40.0 delay to FY04 a/ ii/ Higher Education new 60.0 replaces Skills 60.0 - c/ Development Communications new 14.9 14.9 a/ FY03 Skills Development CAS 80.0 a/ d Health Swap CAS 40.0 delayed cl Public Sect./Legal Reform 2/ - CAS 54.0 25.6 a/ b/ HIV/AIDS - 2/ new 55.0 55.0 - d TOTAL 583.9 489.1 .lJ In support of pillar # a/ economic opportunity, ]2/ governance, or s/ human capabilities. 21 Grant. Source: CAS 2001-2003; Controllers Department on Actual Loans (intranet information). 5 The proposed AAA program in support of the objectives was somewhat unclear. The CAS explicitly included six formal pieces of ESW, of which three (a PER, a legal reform, and constraints to private sector) were concluded. Another five pieces of ESW were promised in the text of the CAS, none of which was completed. Four non-programmed core diagnostic activities were added, but significantly less ESW was done than proposed in the CAS. The output of other proposed AAA in the form of “advisory services” is difficult to discern. A QAG program review of AAA concluded that the quality of studies was generally satisfactory, but critical tasks were delayed. 1 Overall, AAA delivered was insufficient to support such an ambitious program. CAS Implementation by Objectives Objective I: Increasing Economic Opportunity 6. Outcome. Mozambique continued to record some notable achievements in increasing economic opportunity during the CAS period. Economic growth recovered from severe floods in 2000 to regain the longer-term trend growth of 7-8 percent per annum; inflation and the fiscal deficit were contained (though CAS targets were not achieved); the country reached its HIPC completion point; and, most notably, poverty fell. Overall, the development outcome was satisfactory. Sustainability is less certain, however. Mozambique remains heavily dependent on aid, and growth of non-agricultural output and of exports depended mainly on a few mega-projects which provide little employment; the financial sector continues to pose significant risks to growth, fiscal balance, and macro stability; regulatory impediments to private sector development remain; and rural incomes have grown less rapidly than agricultural output. ’ The QAG report notes that “ . . . several important pieces of high strategic relevance . . . were postponed or dropped. These decisions, which affected more heavily the sectoral component of the AAA program, probably weakened Bank support to the country and left critical elements of the development strategy unattended” 7 The Bank supported increasing economic opportunity through lending, AAA, and Mozambique’s poverty reduction strategy under the PRSP initiative. The bulk of the Bank’s activity, especially lending, was directed toward this objective. Seven of nine new loans supported increasing economic opportunity (see Table l), and fourteen active projects support this objective. At the broadest level, Bank technical assistance and analytical support (especially the CEM) helped improve the focus and results orientation of the country’s poverty reduction strategy. The effectiveness of Bank support for intermediary objectives has been mixed. l Strengthening the private sector environment and the financial sector. The Bank helped attract mega-projects to Mozambique through AAA, TA, and lending. The recently closed Pande Gas project, for example, helped prepare the ground for development and marketing of this valuable resource. But the Bank has had less success in persuading the Government to improve the overall investment and regulatory climate, and local manufacturing firms in most labor-intensive products are uncompetitive. In the financial sector, the Bank completed a Financial Sector Capacity Building project in 200 1, and conducted an informal confidential banking sector study, a joint Bank-Fund Financial Sector Assessment, and other AAA. Despite these efforts, the banking sector was in crisis during much of the period and the financial system poses a substantial risk to macro stability and impediment to private sector development. The new (FY03) adjustment loan- Economic Management and Private Sector Operation (EMPSO)has a financial sector component, but if this fails to encourage change in the financial sector its development impact will be small. l Developing infrastructure. The Bank has successfully supported concessions in ports and railways and has helped expand supply, reduce costs, and improve the quality of infrastructure. The Bank also took advantage of political change to support an unplanned Communications project which helped reduce costs and promote reform in this sector. Progress on infrastructure development has been variable, however. Rural water supply targets are on track, but Bank-supported urban water, power expansion and reform, and road maintenance are behind schedule. l Promoting rural development and agriculture. The Bank supports this objective through participation in an agricultural SWAP and through various infrastructure loans. In general, rural development has lagged behind expectations, and Bank support has fallen short of CAS objectives. A Roads and Bridges APL project was initiated as planned during the CAS period and the Rural Action project will be delivered under the name of Decentralized Planning and Finance, but the proposed rural development strategy study was delayed. l Ensuring sound environmental management. The Bank supported a Mineral Resource Management project (called Natural Resource Management in the CAS) as planned, but did not deliver a proposed study on environmental pressure points. l Promoting innovation, competitiveness, and employment. As noted above, there has been little improvement in the competitiveness and employment generation of Mozambican industry, and Bank efforts to reduce administrative and regulatory  5 constraints have been disappointing. The CAS proposed a Skills Development project to help reduce the skill constraint, but the Bank dropped this project and substituted a Higher Education project. The CCR provides inadequate justification for this change in approach. 8 Overall, the Bank has had some success in helping Mozambique increase economic opportunities, but has fallen short of CAS objectives. This shortfall is partly due to the impact of the flood in 2000, and it is to the Bank’s credit that it responded quickly and effectively to this shock and helped channel donor and government efforts into reconstruction and development as well as humanitarian relief. But the shortfall also reflects an over-ambitious program in relation to Bank resources and Government capacity and willingness to do things. There have been significant delays in project preparation, effectiveness, and implementation. Disbursements on several infrastructure projects have been slow and closing dates have been extended on several projects. During most of the CAS period, there were three problem projects, though this has been reduced to one now. Finally, while the Bank was able to complete several important core diagnostic studies, several other ESW tasks were dropped, delayed, or diluted into informal advice of uncertain effectiveness and insufficient accountability. Objective II: Improving Governance and Empowerment 9. Outcome. Mozambique shows uneven progress in improving governance and empowerment for the period 2000-2003. Gains come from notable improvements in political stability and the rule of law, and moderate improvements in voice and accountability. Losses come from lower effectiveness of government, lower regulatory quality and a decline in the control on corruption. WBI indicators of governance for 199 countries rank Mozambique in the top 40 percent for political stability, in the bottom 15 percent for control of corruption, and in the bottom 50 percent for the other four indicators listed above. Compared with other low income countries, however, Mozambique ranks above the average in all indicators, except in control of corruption. Control of corruption is difficult because the large number of regulations encourage corruption. The Bank’s report on Doing Business finds that among 130 countries Mozambique is one of 10 that regulate the most. The study finds that the regulation of entry alone costs Mozambicans the equivalent of 75 percent of their per capita gross national income (GNI), and that the length of litigation, about 540 days, costs 9 percent of their per capita GNI. IDA credits and ESW have had a modest to negligible impact on each of the intermediary objectives that make up the governance and empowerment objective. Reform of the public sector. Under the Public Sector Reform credit the central government has drafted a strategy for government reform but it has not started implementing it. The Municipal Development credit finances grants to municipalities that use them to pay for local works. So far, five municipalities have received grants on a pilot basis, of which two have succeeded in making the grants operational, two others have succeeded  6 partially, and Maputo has failed. The latter project has an unsatisfactory implementation progress, indicating the difficulty of bringing about change at the local level. The Public Sector Study has yet to have an impact; other than some steps towards decentralization, the other changes recommended under the study have yet to be carried out. The Country Procurement Assessment Report has not yet brought sufficient change in the effectiveness of government expenditures. Strengthening the rule of law. IDA did not deliver the interventions promised for this sub-objective but the Public Expenditure Review has helped to bring some changes in legislation (Public Finance Law), to include some off-budget flows within the budget and donor-funded expenditures in budget reports. More transparency in government accounts should help make expenditures more effective. Objective III: Improving Human Capabilities 10. Outcome. Over the last three years Mozambique has moved to improve its human capabilities, expanding the coverage of education and enhancing the provision of basic social services. The gross enrolment rate for students at primary levels l-5 has reached 100 percent, and that for primary levels 6-7 has reached 30 percent. Both rates have almost doubled their levels of 1995. Progress in health is less significant, but the Government has been tackling the problems, and some indicators show improvement. Between 1996/97 and 2002 maternal mortality per 1,000 births fell from about 2 to about 1.6, and infant mortality per 1,000 live births fell from 146 to about 130. Vaccination coverage increased from 55 percent in 1995 to 82 percent in 2001, and antenatal coverage (first visits) increased from 63 percent to 99 percent. The prevalence rate of HIV/AIDS was reassessed and adjusted downward from 17 percent to 15 percent, but the trend remains upward. 11 IDA has supported this objective forcefully, and most of its interventions have produced clear benefits. HIV/AIDS. IDA has taken an active role in combating the HIV/AIDS epidemic, and granted a loan for that purpose, but project implementation has not started yet. Improving HeaZth. IDA supported improvements in the health system with a Health Sector Recovery credit ($98.7 million); despite delays in implementation the credit has contributed to improve the health outcomes and interventions noted above. IDA also helped to increase access to safe water through the Second National Water Development credit. Socialprotection. IDA helped promptly when two cyclones hit Mozambique in February 2000, stepping in with a successful Flood Emergency Recovery credit for $30 million. IDA is helping in disaster prevention through the rural water development project, which has a component on water resource  7 management. Other donors are also helping to strengthen the country’s readiness for disaster prevention and mitigation. That assistance may be adequate, but if it is not, IDA may consider future assistance in strengthening the capacity for disaster prevention, forecasting, and preparedness. Education. Education has received the most assistance from IDA with three credits for $220 million, but its benefits appear to be less evident. Most of the assistance-about $150 million-has supported higher education, helping to increase the number of university graduates from 150 in 1994 to about 7,000 in 2000 and the graduation rates in secondary schools from 40 to 55 percent. While the credits for higher education may help to alleviate a felt need in the country, the CCR needs to better articulate the benefits of assistance in this sub-sector as against interventions to eradicate youth illiteracy, now at 40 percent. A credit for an Education Sector Strategic Program, approved in February 1999 and expected to close in June 2004, has had problems disbursing; so far, IDA has disbursed $16 million of the $71 million credit. IDA’s experience shows that it needs to select its interventions carefully, taking into account their impact and feasibility of implementation. 12 The Region did not deliver the two pieces of ESW promised, but it carried out a Study on HIV/AIDS Impact on Macroeconomic Growth and another on the Cost and Financing of Education. Though not formally completed and disseminated, the HIV/AIDS study raised awareness in the government and the public about the threat posed by the disease, as noted in the CCR. The education study identified cost and efficiency issues in basic education, and its findings helped IDA to discuss policy issues with the Ministry of Education, which formulated an action plan that has yet to be implemented. Overall OED Assessment 1 3. The information in the CCR indicates that Bank assistance supported more effectively the objective of increasing economic opportunity, followed by improving human capabilities and, with less success, by improving governance and empowerment. Bank support for the PRSP and the HIPC helped to strengthen the Government’s interest in maintaining macroeconomic stability and, as a result, it helped to increase economic opportunities. Mozambique grew rapidly, inflation fell to single digit levels and poverty rates declined. Support for infrastructure and environmental management helped to break bottlenecks in transport and telecommunications and to create conditions to extract mineral resources. IDA’s neglect of agriculture and its limited impact on the financial sector reduced its potential impact on improving economic opportunities. IDA advanced in its objective of improving human capabilities. IDA interventions helped to improve general health conditions (lower infant and maternal mortality rates and higher vaccination rates) and to recover from the impact of two cyclones, but the potential benefits of its interventions in tertiary education require further elaboration, as noted above. IDA’s efforts to improve governance and empowerment have achieved little so  8 far, but success on this front needs patience and persistence. Change is unlikely to come quickly because these IDA activities are new in the country, and the beneficiaries of the present system might try to prevent reforms to it. Overall, Bank assistance helped Mozambique advance towards achieving the MDGs and the objectives of the Government’s PRSP, but the assistance could have been more effective if: (a) projects had been prepared better so as to reduce delays in implementation and improve outcomes; (b) more ESW had supported lending and policy advice; (c) IDA had paid more attention to the agricultural sector; and (d) IDA had been more effective in promoting reforms in the financial sector. Assessment of Completion Report 14 The CCR provides a good survey of achievements and candidly acknowledges shortcomings. The report also provides a straightforward account of progress toward the CAS objectives, but this is relegated to an Appendix. While the CCR is balanced and useful, the main report uses different categories to assess CAS outcomes, which detracts from transparency, learning and accountability. It would have been helpful to have included an explanation of the execution and evolution of the Bank’s business plan (the CAS) in the main text to help evaluate the Bank’s contribution to CAS objectives. Because of the pilot nature of the CCR and the CAS timeline, it was difficult for the CCR to precede the new CAS in order to draw relevant lessons. Lessons and Recommendations 15 IDA proposed in the FYOl-03 CAS a program of credits and AAA larger than the one IDA and the country could execute effectively. IDA delivered a small proportion of the AAA program and substituted credits not envisioned in the proposed lending program to meet its lending target. The gap between plans and results suggests that IDA: Plan a small program of loans and AAA, commensurate with the resources at hand; Spend more resources in preparing and supervising projects because most projects have had implementation problems; Underpin all project and program lending with ESW. In particular, IDA should do more ESW on agriculture and rural development because most Mozambicans live in rural areas, and on education, health, and infrastructure because the bulk of its lending goes to these sectors; Emphasize development impact rather than resource transfer. IDA’s need to meet a lending target is less urgent, as ample external assistance is available to Mozambique through the official channels; and Given Mozambique’s large external debt and delays in implementing projects, assess carefully whether external aid to Mozambique has a larger development impact through debt forgiveness than through direct budget support. Annex Table 1: Mozambique- Economic and Social Indicators, 1991-2002 AveraPe 1990-2002 Bosnia- Low income Mozambique Rwanda Uganda Cambodia Herzegovina countries Series Name 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 G D P g r o w t h ( a n n u a l %) 4.90 -8.10 8.70 7.50 4.30 7.10 11.10 12.60 7.50 1.61 13.80 9.90 6.99 1.69 6.67 20.56 G N I p e r c a p i t a , A t l a s m e t h o d ( C u r r e n t USS) 170 140 130 130 140 150 180 220 210 210 210 174 174.51 258.33 240.83 403.85 GNI per capita, PPP (Current international $) 600 560 610 650 680 710 770 850 910 940 1050 .. 757 771.57 1046.67 1289.17 4132.22 1633.08 A g r i c u l t u r e , v a l u e a d d e d (% o f G D P ) 33.72 31.96 29.50 30.21 37.92 37.32 37.16 32.40 30.46 24.40 22.00 23.27 30.86 30.62 43.96 46.56 19.01 27.09 M a n u f a c t u r i n g , v a l u e a d d e d (% o f G D P ) 9.21 7.64 7.33 7.73 11.19 9.37 10.44 12.15 12.57 11.54 12.02 10.27 10.35 8.04 5.38 19.31 16.76 S e r v i c e s , e t c . , v a l u e a d d e d (% o f G D P ) 48.64 51.69 49.81 46.98 42.73 45.39 43.89 45.53 50.48 52.22 45.69 47.27 47.15 39.18 37.91 54.90 42.85 E x p o r t s o f g o o d s a n d s e r v i c e s (% o f G D P ) 11.19 13.87 13.24 13.97 15.17 12.17 11.33 10.12 12.30 21.66 27.3 1 14.40 14.67 10.49 29.13 24.50 21.07 I m p o r t s o f g o o d s a n d s e r v i c e s (% o f G D P ) 38.44 46.68 48.36 47.66 39.91 35.83 30.83 27.90 37.77 40.03 44.03 51.33 40.73 40.92 22.94 38.84 66.36 22.46 P r i v a t e c a p i t a l f l o w s , t o t a l (% o f G D P ) 0.92 1.37 1.62 1.61 1.95 2.55 1.90 9.58 3.65 .. .. 3.06 0.18 1.43 1.89 . C u r r e n t a c c o u n t b a l a n c e (% o f G D P ) -14.07 -19.01 -22.53 -21.45 -19.24 -14.80 -8.70 -11.08 -22.89 -20.02 -44.47 .. -19.84 -20.37 -7.98 -4.99 -19.71 .. T o t a l d e b t s e r v i c e (% o f g o o d s a n d s e r v i c e s ) 22.5 1 22.85 32.91 31.18 34.50 26.04 19.17 16.41 11.70 3.41 .. 21.70 21.62 32.01 2.40 16.43 20.37 Gross international reserves in months of imports 2.38 2.31 1.70 1.49 1.87 3.48 5.46 4.69 5.07 1.90 1.82 3.16 3.22 4.48 2.72 4.65 G r o s s d o m e s t i c s a v i n g s (% o f G D P ) -11.21 -17.21 -22.39 -13.88 -1.90 -1.83 1.08 9.26 11.88 19.22 21.65 0.12 1.07 4.91 6.54 -11.47 20.74 I n f l a t i o n , c o n s u m e r p r i c e s ( a n n u a l %) 32.93 45.49 42.20 63.18 54.43 48.49 7.37 1.48 2.86 12.72 9.05 16.78 28.08 27.68 10.83 4.37 Current revenue, excluding grants (% of GDP) .. . . I. .. 10.73 11.15 14.93 E x p e n d i t u r e , t o t a l (% o f G D P ) .. .. .. .. 21.43 19.14 17.71 O v e r a l l b u d g e t b a l a n c e , i n c l u d i n g g r a n t s (% o f G D P ) .. .. . .. .. .. -5.19 -2.79 -3.8C Population, total 14.42 14.69 15.01 15.42 15.82 16.23 16.63 16.97 17.30 17.69 18.07 18.44 16.39 8.16 20.13 11.04 4.12 2229.95 P o p u l a t i o n g r o w t h ( a n n u a l %) 1.86 2.12 2.73 2.56 2.56 2.43 1.99 2.24 2.13 2.01 1.90 2.3 1.37 3.05 2.64 -0.47 U r b a n p o p u l a t i o n (% o f t o t a l ) 22.05 23.03 24.05 25.12 26.24 27.32 28.45 29.62 30.84 32.11 33.20 34.33 28.03 5.84 13.06 15.16 41.79 28.14 Illiteracy rate, adult total (% of people ages 15 and above) 65.53 64.54 63.54 62.54 61.53 60.47 59.37 58.27 57.14 55.98 54.76 59.77 37.90 36.73 34.32 42.08 S c h o o l e n r o l l m e n t , p r i m a r y (% g r o s s ) 62.27 58.59 57.06 57.71 60.17 61.50 .. 85.38 91.51 .. .. 68.19 98.20 95.14 114.3 1 72.2 85.11 Immunization, DPT (% of children under 12 months) 46.00 50.00 49.00 56.00 57.00 60.00 61.00 61.00 61.00 .I 80.00 . 58.10 78.30 55.90 42.71 72.11 91.1c I m p r o v e d W a t e r S o u r c e (% o f p o p u l a t i o n w i t h a c c e s s ) . .. .. .. .. .. 57 .. . 57.00 41.00 52.00 30 71.04 I m p r o v e d S a n i t a t i o n F a c i l i t i e s (% o f p o p u l a t i o n w i t h access) .. .. .. .. .. .. 43.00 .. . 43.00 8.00 79 17 36.39 Life expectancy at birth, total (years) 43.42 .. 44.65 45.47 43.07 42.4 1 41.74 41.08 43.12 39.01 43.22 53.42 73.12 58.15 Mortality rate, infant (per 1,000 live births) .. 130.20 126.00 125.00 130.64 108.84 86.48 90.8 15.76 84.75 Source: World Bank SIMA database as of October 15,2003 Annex Table 2: OED Project Ratings, Exit FY 1999-2004 Total Outcome Sustainability Inst Dev Impact Total Outcome Sustainability Inst Dev Impact Region Evaluated % Sat (No) % Likely (No) % Subst (No) Evaluated ($M) % Sat ($) % Likely ($) % Subst ($) (No) Mozambique 13 84.6 81.8 53.8 481.3 93.6 93.0 70 AFR 310 62.3 51.2 37.4 10,045.o 66.5 53.5 34 World Bank 1,213 76.0 69.3 47.9 91,778.0 80.7 76.5 53 Notes: Total Evaluated ($) is Total Net Commitment of evaluated projects which outcome was rated minus total net commitment of evaluated projects which outcome was not rated. Total Evaluated (No) is Total Number of evaluated projects which outcome was rated minus total number of evaluated projects which outcome was not rated. Table 2b Total Outcome Sustainability Inst Dev Total Outcome Sustainability Inst Dev Impact Evaluated Satisfactory Likely Impact Evaluated ($ Satisfactory Likely Substantial ($ million) Fiscal year Proj ID (No) (Number) (Number) Substantial million) ($ million) ($million) ( N u m b e r ) FY99 EDUCATION II 1 1 1 0 54 54 54 0 FY99 LOCAL GOVERNMENT EN 1 0 0 0 14 0 0 0 FY99 FOOD SECURITY 1 1 1 1 4 4 4 4 FY99 MAPUTO CORRIDOR 1 1 1 1 6 6 6 6 FYOO EMRO 1 1 1 1 149 149 149 149 FYOO AGR. SER. REHAB. . 1 0 0 0 17 0 0 0 FYOO INDUSTRIAL ENTERPRISE 1 1 1 1 51 51 51 51 FYOO FIRST ROAD & COASTAL SHIPPING 1 1 1 1 74 74 74 74 FYOO LEG & PUB SEC. CAPAC 1 1 non-evaluable 0 12 12 non-evaluable 0 FYOl RURAL REHABILITATION 1 1 1 0 20 20 20 0 FYOl FINANCE SECTOR CAPACITY 1 1 1 1 8 8 8 8 FY02 CAPACITY BUILDING HUMAN DEV. P R O J E C T 1 1 1 1 44 44 44 44 FY02 Flood Emergency Recovery Project 1 1 non-evaluable 0 29 29 non-evaluable 0 Total (in value) 13 11 9 7 481 451 410 336 Result 100 84.6 81.8 53.8 100.0 93.6 93.0 70 Source : Business Warehouse data as of October 2,2003 The number 1 stands for projects with satisfactory outcome (marginal, satisfactory, highly sastisfactory), with likely sustainability and substantial institutional development impact The number 0 stands for projects with unsatisfactory outcome (marginal, unsatisfactory, highly unsastisfactory), with unlikely sustainability and modest/negligible institutional development impact Annex Table 3: Mozambique: Analytical and Sector Work, 1990-2003 Renort Title Date Report # Economic Reports Mozambique - Restoring rural production and trade 5/22/1990 8370 1 Mozambique - Second public expenditure review 12/31/1992 11524 Mozambique - Restoring rural production and trade, Vol. 2 512211993 8370 Mozambique - Country economic memorandum - growth prospects and reform agenda 21712001 2060 1 Mozambique - Public expenditure management review 12/31/2001 22985 Sector Reports Mozambique - Population, health and nutrition sector report 1/9/1990 7422 Mozambique - The development of industrial policy and reform of the business environment 512211990 7795 Mozambique - Telecommunications sector memorandum 712211991 9353 Mozambique - Public sector pay and employment review 121311991 9815 Mozambique - Financial sector study 911411992 10269 Mozambique - Capacity building study 613011993 10001 Mozambique - National Environmental Management Plan 5/31/1994 El16 Mozambique - Impediments to industrial sector recovery 812211995 13752 Mozambique - Agricultural sector memorandum 4/30/1997 16529 Mozambique - Agricultural sector memorandum, Vol. 2 413011997 16529 ESMAP Paper Mozambique - Household electricity utilization study 3/31/1990 ESM113 Mozambique - Electricity tariffs study 613011996 ESM181 Mozambique - sample survey of low voltage electricity customers 613011997 ESM195 Best practices for sustainable development of micro hydro power in developing countries 8/31/2000 21640 Country Assistance Strategy Documents Mozambique - Country assistance strategy H/7/1995 15067 Mozambique - Country Assistance Strategy 11/21/1997 17180 Mozambique - Country assistance strategy 5/8/2000 20327 Mozambique - Country Assistance Strategy 6/14/2000 20521 Mozambique - Country assistance strategy public information notice 7/31/2000 PIN34 Source: World Bank Imagebank database.  Annex Table 4: Mozambique: Portfolio Status Indicator by Year, 1999-2003 I country IFiscal Year 1999 2000 2001 2002 2003 Mozambique Comm Amt Net Comm Amt # Proj At Risk % At Risk Comm At Risk Bosnia-Herzegovina # Proj 18 13 18 19 20 Comm Amt 322 265 352 364 308 Net Comm Amt 322 265 352 364 308 # Proj At Risk 2 0 0 0 0 % At Risk 11 0 0 0 0 Comm At Risk 25 0 0 0 0 % Commit At Risk 8 0 0 0 0 Cambodia # Proj 9 11 12 14 16 Comm Amt 241 222 267 299 337 Net Comm Amt 241 222 267 299 337 # Proj At Risk 2 2 2 3 4 % At Risk 22 18 17 21 25 Comm At Risk 47 52 47 79 80 % Commit At Risk 20 23 18 26 24 Rwanda # Proj 8 10 10 8 9 Comm Amt 265 302 299 186 297 Net Comm Amt 258 295 292 186 297 # Proj At Risk 2 0 0 1 0 % At Risk 25 0 0 13 0 Comm At Risk 31 0 0 48 0 % Commit At Risk 12 0 0 26 0 m Uganda # Proj 24 24 24 23 21 Comm Amt 1,057 1,111 1,212 884 978 Net Comm Amt 1,031 1,111 1,210 864 961 # Proj At Risk 4 2 2 1 % At Risk 17 8 9 5 Comm At Risk 232 41 158 I 95 I 20 % Commit At Risk 22 4 13 11 2 Source : WB Business Warehouse as of October 1,2003 Annex Table 5: Mozambique: World Bank Net Disbursements and Charges FY 99-04 (US$ million) Fiscal year Total Disbursement Repayment Amount Net Disbursement Cancelled Amount Interest and Charges Fees Net Transfer 1999 78 4 74 10 64 2000 77 682 -605 0 -614 2001 90 4 86 9 80 2002 69 5 64 12 59 2003 293 8 285 8 278 2004 23 0 22 0 21 Overall Result 629 Source : WB Business Warehouse as of October 1,2003 Annex Table 6: Mozambique: Millenium Development Goals Mozambique Social Indicators and Miilenium Development Goals Social Indicators 1990 1995 1999 2000 - = halve 1990 $1 a day 1 Eradicate e x t r e m e p o v e r t y and h u n g -e r : 2015 target _-p o v e r t y _ and malnutrition r a t e s Population below $1 a day (%) .. 37.9 . . .. Poverty gap at $1 a day (%) .. 12 . . .. Percentage share of income or consumption held by poorest 20% .. 6.5 . . .. Prevalence of child malnutrition (% of children under 5) .. 27 . . .. Population below minimum level of dietary energy consumption (%) 69 . . 54 . . 2 Achieve universal primary education: 2015 target = net enroihnent to 100 Net primary enrollment ratio (% of relevant a g eg r o u p ) 46.8 39.8 50.1 .. P e r c e n t a g e o f c o h o r t r e a c h i n g g r a d e 5 (%) 32.9 46.3 46.2 . . Youth literacy rate a (%g e s 15-24) 48.8 54.7 59.4 60.6 3 Promote gender equaiity:2005 target = education ratio to 100 Ratio of girls to boys in primary and secondary education (%) 73.4 71 72 . . Ratio of young literate females to males (% a g e s 1 5 - 2 4 ) 47.8 54.6 60.2 61.5 Share of women employed in the nonagricultural sector (%) 11.3 . . .. .. Proportion of seats held by women in national parliament (%) .. .. 75 . . 4 Reduce child mortality:2015 target = reduce 1990 under 5 mortality by two-thirds Under 5 mortality rate (per 1,000) 238 201.. 199.7 Infant mortality rate (per 1,000 live births) 150.4 135 . . 129.3 Immunization, measles (% of children under 12 months) 59 61 57 . . 5 Improve maternal health: 2015 target = reduce 1990 maternal mortality by three-fourths Maternal mortality ratio (modeled estimate, per 100,000 live births) .. 980.. .. Births attended by skilled health staff (% of total) .. 44 . . .. 6 Combat HIV/AIDS, malaria and other diseases: 2015 target = halt, and begin to reverse, AIDS, etc. Prevalence of HIV, female (% ages 15-24) .. .. 14.7 . . Contraceptive prevalence rate (% of women ages 15-49) .. 5.6 . . .. Number of children orphaned by HIV/AIDS .. .. 310,000 . . Incidence of tuberculosis (per 100,000 people) .. .. 407 . . Tuberculosis cases detected under DOTS (%) .. .. .. .. 7 Ensure environmental sustainability: 2015 target = various (see notes) Forest area (% of total land area) 39.8 . . .. 39 N a t i o n a l l y p r o t e c t e d a r e a s (% o f t o t a l l a n d a r e a ) .. 6.1 6.1 . . GDP per unit of energy use (PPP $ per kg oil equivalent) 1 1.5 2.1 . . CO2 emissions (metric tons per capita) 0.1 0.1 0.1 . . Access to an improved water source (% of population) .. .. .. 60 Access to improved sanitation (% of population) .. .. *. 43 Access to secure tenure (% of population) .. .. .. .. 8 Develop a Global Partnership for Development: 2015 target = various (see notes) Y o u t h u n e m p l o y m e n t r a t e (% o f t o t a l l a b o r f o r c e a g e s 1 5 - 2 4 ) .. .. .. .. Fixed line and mobile telephones (per 1,000 people) 3.3 3.4 4.6 6.9 Personal computers (per 1,000 people) .. 0.8 2.6 3 General indicators Population 14.2 million 15.8 million 17.3 million 1 7 . 7 million Gross national income ($) 2.3 billion 2.2 billion 3.8 billion 4 . 1 billion GNI per capita ($) 170 140 220 230 Adult literacy rate (% of people ages 15 and over) 33.5 38.5 42.9 44 Total fertility rate (births per woman) 6.3 5.6 . . 5.1 Life expectancy at birth (years) 43.4 44.6 43.1 42.4 Aid (% of GNI) 43.2 49.9 21.3 24.5 External debt (% of GNI) 200.4 349.7 184.9 199.2 Investment (% of GDP) 15.6 22.8 31.9 33.7 Trade (% of GDP) 44.2 55.1 48.2 54.5 Source : World Development Indicators database, April 2002 Note: In some cases the data are for earlier or later years than those stated. Goal 1 targets: Halve, between 1990 and 2015, the proportion of people whose income is less than one dollar a day. Halve, between 1990 and 2015, the Goal 2 target: Ensure that, by 2015, children everywhere, boys and girls alike, will be able to complete a full course of primary schooling. Goal 3 target: Eliminate gender disparity in primary and secondary education preferably by 2005 and to all levels of education no later than 20 15. Goal 4 target: Reduce by two-thirds, between 1990 and 20 15, the under-five mortality rate. Goal 5 target: Reduce by three-quarters, between 1990 and 2015, the maternal mortality ratio. Goal 6 targets: Have halted by 2015, and begun to reverse, the spread of HIV/AIDS. Have halted by 2015, and begun to reverse, the incidence of malaria and Goal 7 targets: Integrate the principles of sustainable development into country policies and programs and reverse the loss of environmental resources. Goal 8 targets: Develop further an open, rule-based, predictable, non-discriminatory trading and financial system. Address the Special Needs of the Least Developed Countries. Address the Special Needs of landlocked countries and small island developing states. Deal comprehensively with the debt problems of developing countries through national and international measures in order to make debt sustainable in the long term. In cooperation with developing countries, develop and implement strategies for decent and productive work for youth. In cooperation with pharmaceutical companies, provide access to affordable, essential drugs in developing countries. In cooperation with the private sector, make available the benefits of new technologies, especially information and communications. Annex Table 7: Mozambique: Economic and Sector Work Delivery Name Delivery Date Status Report * Completion Product Number Status * * , Pl inned Formal Acti ities PRSP Support - Poverty Monitoring December 30,200l no ACS Complete PO40270 I PRSP Support - Board September 25,200l no ACS Complete PO71415 I Enhanced HIPC Completion Point n.a. no ACS Completed PO56489 I Public Expenditure Review Volume 1 October 8,2002 ACS Completed I PO72533 Public Expenditure Review Volume 2 September 22,2003 no ACS Completed I PO80698 Public Sector Reform Study June 15,200O no ACS Completed I PO571 19 Environment Critical Pressures l Not done none Constraints to Private Sector Development - Industrial June 9,2003 no ACS Completed PO77907 Performance and Investrnent Climate 2002 I Legal and Judicial Assessment June 9,2003 no ACS With government PO77197 I HIV/AIDS and Growth Linkages June 30,2003 ACS Completed 1 PO78165 Country Assistance Strategy November 4,2003 no ACS Completed 1 PO76323 Planned Informal Activities Private Sector Competitiveness 21 June 30,2004 no ACS Completed PO83420 Private Sector Conference TA 31 no ACS Completed n.a. Financial Sector Advisory - Financial Sector Study June 25,200l no ACS Completed PO72876 Financial Sector Advisory - Financial Sector Assessment M a y I,2003 no ACS Completed PO83095 Program Financial Sector Advisory on Compliance with Base1 October 3 1,2003 no ACS Completed PO8 1740 Priniciples I I I I Regional Energy and Megaprojects Advice 4/ n.a. no ACS Completed none Maputo Corridor n.a. no ACS Completed none Regional Trade Not done Environmental Framework Assessment n.a. no ACS Not completed none Disaster Mitigation and Management n.a. no ACS Not completed n.a. HIV/AIDS I n.a. I no ACS I Completed I none Unplanned Studies and Advisory Services [Due Dilligence 6/l Cost and Financing of Education May 14,2002 ACS Completed PO77867 CEM June 30,200O no ACS Completed PO52035 CPAR December I,2002 no ACS Completed PO76449 CFAA May 24,2002 ACS Completed PO7392 1 CPPR FYO 1, FY03 n.a. n.a. none Source : Mozambique, CAS Completion Report * According to Business Warehouse, as of lo/O2103 11 Technical assistance (TA) provided on disaster management, including through NWDP 1 21 IFC regulatory issues; MIGA support to Investment Promotion Center (CPI); IFC SME Advisory a/ IDNIFC supported annual confaences in 2000,2001, and 2002 4/ Integrated into Maputo Corridor advisory activities, preparation of Energy Reform and Access project, and supervision of Mineral Resource Management project 5/ Integrated into preparation of HIV/AIDS project 61 The Bank is required to update the “due diligence ESWs” every five years. The Bank complied with this requirement and resources were diverted from analytical work planned in the social sectors as a result n.a. = not available