Guinea - Health Services Development Project

4 , Document of The World Bank FOR OFFICIAL USE ONLY ' &Q8 /7f 3 7 Report No. P-4587-GUI MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT OF SDR 15.1 MILLION (USt19.7 MILLION EQUIVALENT) TO THE REPUBLIC OF GUINEA FOR A HEALTH SERVICES DEVELOPMENT PROJECT May 29, 1987 This document has a restricted distribution and may be used by recipients only in the performance of their officbi duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS Currency Unit = Guinean Franc (GNF) US$1.00 = GNF 410 GNF 1 = US$.00244 GNF 1 Million = US$ 2,439 WEIGHT AND MEASURES Metric System FISCAL YEAR January 1 - December 31 GLOSSARY OF ACRONYMS AGBEF: Association Guin6enne de Bien-gtre Familial (Guinean Association for Family Wellbeing) CTC: Comitd Technique de Coordination (Technical Coordinating Committee) IDA: International Development Association MSAS: Ministere de la Sante et des Affaires Sociales (Ministry of Health and Social Affairs) FPF: Project Preparation Facility SDR: Special Drawing Rights  FOR OMCIAL USE ONLY GUINEA HEALTH SERVICES DEVELOPMENT PROJECT CREDIT AND PROJECT SUMMARY Borrower The Republic of Guinea BeneficiarY : Ministry of Health and Social Affairs Amount : SDR 15.1 million (US$19.7 million equivalent) Terms . Standard Onlending Terms : Not applicable Financing Plan : Government US$ 2.0 million Project Beneficiaries US$ 0.8 million IDA US$19.7 million TOTAL TJS$22.5 million Economic Rate of Return Not applicable Staff APpraisal Report 6679-GUI This document has a restricte-d distribution and may be ua .ts only in the performance of their official duties. Its contents may not otherwise be discloseG without World Bank authorization.  MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT OF SDR 15.1 MILLION (US$19.7 MILLION EQUIVALENT) TO THE REPUBLIC OF GUINEA FOR A HEALTH SERVICES DEVELOPMENT PROJECT 1. The following report on a proposed development credit to Guinea for SDR 15.1 million (US$19.7 million equivalent) is submitted for approval. The proposed credit would be on standard IDA terms and would help finance a health services development project. . 2. Background. Easily treatable or preventable diseases, combined with malnutrition, poor sanitation, and ltnsafe water, contribute to the poor health status in Guinea. Infant and child mortality rates at 174 per 1000 and 44 per 1000, respectively, are very high. Maternal mortality is also high: nearly 800 out of 100,000 pregnancies result in the death of the mother. Life expectancy at birth is only 38 years. With a total fertility rate of 6.0 and a crude birth rate of 47 per thousand, fertility is high, comparable to the average for Sub-Saharan Africa. Although the annual rate of population growth is moderate at 2.4 percent, it will accelerate in the future with expected mortality declines and will pose a serious threat to socio-economic development. 3. The performance of the Guinean health system has been constrained by a lack of financial resources, weak planning and management, inadequately trained personnel, and the absence- of an adequate drug program. As a consequence, facilities and equipment have deteriorated, drugs are scarce, the quality of health services is limited, and the population lacks confidence in the system. 4. The Government has begun to implement a health care policy that emphasizes health promotion, disease prevention, and the provision of basic health care services to mother' and children and to the rural population. In line with this policy, the Government has recently taken a number of steps to address major sectoral constraints. To improve sector efficiency, it merged the former Ministries of Health and Social Affairs into the present Ministry of Health and Social Affairs (MSAS). It has also started to decentralize management and decision-making responsibilities to the regional and prefectoral levels. It has undertaken an inventory of personnel to evaluate skills, assess training needs and improve the allocation of staff resources. It is making efforts to mobilize additional financial resources by improving cost recovery at the hospital level and introducing cost recovery in health centers. It is introducing family planning services in secondary towns and rural areas. Finally, it is encouraging the establishment of private medical practice and private pharmacies.  - 2 - 5. Project ObJectives. The proposed project is an integral part of the Government's new health care program. It will help to: (a) develop planning and management capabilities within the MSAS and introduce policy and administrative reforms to improve the quality and efficiency of basic health services, including family planning; (b) improve basic health care and strengthen financial and operational management of health services in the region of Middle Guinea; and (c) develop, introduce and evaluate cost recovery mechanisms. 6. Project Description. The project includes a health sector management component at the national level and a regional health services component for Middle Guinea. At the national level, the project will improve the capacity of MSAS in planning, management, and staff training. It will also strengthen central level MSAS capability in the key technical areas of maternal and child health, family planning, nutrition, and health education. At the regional level, the project will improve the quality of priority health services in five prefectures in tie region of Middle Guinea by: (a) strengthening the management of regional health services; (b) strengthening basic health services in 5 prefectoral hospitals, 5 urban health centers, and 12 rural health centers with particular emphasis on improving the delivery of priority services in maternal and child health and family planning, nutrition, and health education, inr luding support for a small number of innovative community health activities; and (c) improving and expanding cost recovery, including improved mechanisms for financial management and control. To accomplish these tasks, the project will provide technical assistance, training, equipment, materials, drugs, civil works, and finance incremental non-salary operating costs on a declining basis. 7. Project Cost and Financing Plan. The project would be carried out over five years. The total cost of the project is estimated at US$22.5 million equivalent, with a foreign exchange component of US$11.8 million (52%). IDA would finance US$19.7 million equivalent, the Government of Guinea US$2.0 million equivalent and the beneficiaries US$0.8 million equivalent. A breakdown of costs and the financing plan are shown in Schedule A. Amounts and methods of procurement, a disbursement plan end an estimated schedule of disbursements are shown in Schedule B. A timetable of key project processing events is shown in Schedule C. Two maps are also attached, along with the Staff Appraisal Report No. 6679, dated May 22, 1987. 8. Rationale for IDA Involvement. The project supports the Association's efforts to help Guinea improve the efficiency of existing infrastructure and mobilizing additional domestic resources. It will also raise the quality of Guinea's human resources, which is essential to improving Guinea's long-term development prospects. While donor support in the sector has increased in recent years, it has often been uncoordinated, narrowly focussed on projects, and oriented toward low priority investments. IDA assistance is expected to improve overall management of the sector and aid coordination, and to focus investments on the highest priority policy reforms and service improvements.  - 3 - 9. Agreed Actions. Prior to effectiveness, Government would: (a) staff the newly reorganized units within MSAS that are being strengthened under the project with personnel that is essential to project start-up; (b) develop and put in place simple financial management and control systems for the hospitals and health centers to be renovated under the project to permit proper management of financial resources and submit to IDA the arret6 signed by the Minister of Economy and Finance and the Minister of Health and Social Affairs authorizing the retention and management by those health facilities of resources collected through cost recovery; (c) open a local project account and deposit an initial amount of GNF 86 million (US$210,000 equivalent) into it; and (d) establish a suitable project accounting system. During the execution of the project, the Government would: (a) review annually with IDA, each year by September 30, its three-year rolling sector investment program, with special attention to new projects, recurrent costs and the allocation of the recurrent budget, and organize annually, by November 30 at the latest, a meeting of all aid donors participating in the health sector; (b) submit to IDA by March 31, 1988, a national drug policy and a plan of action for its execution, and then review annually the appropriateness of the policy and progress in its implementation; (c) open and maintain an account for deposit of cost recovery proceeds to be used for the purchase of essential drugs and for the progressive financing of non- salary operating costs; (d) submit to IDA each year by September 30 an annual plan for deployment and in-service training for MSAS medical and non- medical personnel, and an annual evaluation of cost recovery experiences and proposals for further implementation of cost recovery practices; (e) begin to implement cost recovery in project-assisted facilities as soon as they receive their initial stock of drugs; and (f) submit to IDA by June 30, 1988 an action plan for the extension of cost recovery to other health facilities in Middle Guinea. Disbursement of funds for innovative activities being assisted under the project would be conditional upon IDA approval of an annual plan for those a'.tivities. Disbursement of funds for drugs will be conditional upon the opening of an account for deposit of cost recovery proceeds. 10. Justification and Benefits. The project will help the Government to establish a permanent capability for improved health sector planning, policy implementation, and coordination of external assistance. The project will also improve the quality and coverage of basic health services in the region of Middle Guinea for about 1.3 million people. The establishment of regular programe of in-service training and supervision of medical and paramedical personnel will upgrade the skills of personnel and improve the overall quality of services. Strengthening of maternal and child health, nutrition, and health education and promoting and extending family planning services should reduce morbidity and mortality among women and children. If successful, the project would provide a model for improved delivery of primary health care, including family planning, and the mobilization of additional financial resources through cost recovery.  - 4 - 11. Disks. Because the reorganization of the MSAS is only at an early stage, there are risks of delays in project implementation. However, the timely completion of project preparation and the creation of the Technical Coordinating Committee (CTC) within MSAS to oversee project implementation and sector reforms have demonstrated Government's commitment to the project and the competence of thp project management unit, which coordinated project preparation. Technical assistance, training, and the decentralization of sector management would further minimize the risk of delays. Another risk is that the cost recovery program might depress demand for services. To minimize this risk, reasonable targets for cost recovery have been set and these would be reviewed annually. The mechanisms for financial management and control of revenues collected from user charges would be amended in the light of experience before extending cost recovery nationwide. Moreover, cost recovery would initially be limited to curative services, for which the population has already demonstrated its willingness to pay. The project will also strengthen the management and control of financial resources in each facility thereby ensuring a continuous monitoring of cost recovery prior to its extension nationwide. 2. Recommendation. I am satisfied that the proposed credit would comply with 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 29, 1987  -5- Schedule A GUINEA HEALTH SERVICES DEVELOPMENT PROJECT Summary Project Cost Estimate and Financing Plan (US$ million) Local Foreign Total Estimated Costs - Institutional Development of MSAS 0.4 1.9 2.4 - Development of Health Sector 5.2 6.3 11.5 Operations in Middle Guinea - Project Management and Administration 0.6 1.5 2.1 - Repayment of PPF 0.2 0.7 0.9 Base Cost 6.4 10.5 16.9 - Physical Contingencies 0.6 0.9 1.5 - Price Contingencies 3.7 0.4 4.1 Total Proiect Cost 10.8 11.8 22.5 Financing Plan - IDA 7.9 11.8 19.7 - Government 2.0 - 2.0 - Beneficiaries 0.8 - 0.8 Total 10.8 11.8 22.5 Note: Totals may not add up due to rounding. Estimated project costs are net of taxes and duties from which the project would be exempt.  -6- Schedule B Page 1 of 2 GUINEA HEALTH SERVICES DEVELOPMENT PROJECT Procurement (US$ Million equivalent) Procurement Method