Document of The World Bank FOR OFFICIAL USE ONLY Report No: 52875-SZ PROJECT APPRAISAL DOCUMENT ON A PROPOSED LOAN IN THE AMOUNT OF US$20 MILLION TO THE KINGDOM OF SWAZILAND FOR A HEALTH, HIV/AIDS AND TB PROJECT February 11, 2011 Health, Nutrition and Population Unit Southern Africa Country Cluster 1 Africa Region This document is being made publicly available prior to Board consideration. This does not imply a presumed outcome. This document may be updated following Board consideration and the updated document will be made publicly available in accordance with the Bank's Policy on Access to Information. CURRENCY EQUIVALENTS Currency Unit = US$ FISCAL YEAR April 1 ­ March 31 ABBREVIATIONS AND ACRONYMS AAP Annual Action Plan MMR Maternal Mortality Ratio AIDS Acquired Immune Deficiency MNCH Maternal, neonatal, and child Syndrome health ANC Antenatal care MNH Maternal and Neonatal Health ARV Antiretroviral MOF Ministry of Finance CBO Community based organization MOH Ministry of Health CIPS Chartered Institute of Purchasing MOW Ministry of Works and Supply CPS Country Partnership Strategy MTA Ministry of Tinkundla and Administration D-CXR Digital chest x-rays MVA Manual vacuum aspiration DHS Demographic and Health Survey NCB National Competitive Bidding DPM Deputy Prime Minister's Office NCCU National Children's Coordination Unit DPT Diphtheria, pertussis and tetanus NCP Neighborhood Care Points DSW Department of Social Welfare NERCHA National Emergency Response Council for HIV/AIDS EHU Environmental Health Unit NGO Non-Governmental Organization EPR Emergency Preparedness and NHSSP National Health System Sector Response Unit Strategic Plan EmONC Emergency obstetric and neonatal NPA National Plan of Action care EMPs Environmental Management Plans NSF National Strategic Framework EHCP Essential Health Care Package OVC Orphans and Vulnerable Children ESAMI Eastern and Southern African PEPFAR President's Emergency Plan for Management Institute AIDS Relief ESMF Environmental and Social PER Public Expenditure Review Management Framework ESMP Environmental and Social PCT Project Coordination Team Management Plan EU European Union PER Public Expenditure Review FDI Foreign Direct Investment PFMA Public Financial Management Act GAC Governance and Accountability PHC Primary Health Care GDP Gross Domestic Product PIT Project Implementation Team GFATM Global Fund to Fight HIV/AIDS, PLHIV People Living with HIV Tuberculosis and Malaria i GIS Geographic Information System PMTCT Prevention of Mother to Child Transmission HCWM Healthcare Waste Management POM Project Operations Manual HDI Human Development Index PRSAP Poverty Reduction Strategy and Action Plan HIV Human Immunodeficiency Virus PS Principal Secretary HMIS Health Management Information QIMS Quality of Impact Mitigation System Survey IC Infection Control RFP Request for Proposal ICB International Competitive Bidding RHM Rural health motivators ICF Intensified case finding RHMT Regional health management teams IDF Institutional Development Fund SACU Southern Africa Customs Union IEC Information, Education and SAM Service Availability Mapping Communication IMR Infant Mortality Rate SBD Standard Bidding Document ISN Interim Strategy Note SCCS Schools as Centers of Care and Support JSDF Japan Social Development Fund SIL Specific Investment Loan M&E Monitoring and Evaluation SRH Sexual and Reproductive Health MAP Multi-country HIV/AIDS Program SWAp Sector Wide Approach MCH Maternal and Child Health TB Tuberculosis MDG Millennium Development Goal UNAIDS United Nations Programme on HIV/AIDS MEPD Ministry of Economic Planning UNFPA United Nations Population Fund and Development MIS Management information system UNICEF United Nations Children's Fund Vice President: Obiageli Ezekwesili Country Director: Ruth Kagia Sector Manager: Eva Jarawan Task Team Leader: Kanako Yamashita-Allen ii SWAZILAND HEALTH, HIV/AIDS AND TB PROJECT TABLE OF CONTENTS Page I. STRATEGIC CONTEXT AND RATIONALE ............................................................. 1 A. Country and Sector Issues................................................................................................ 1 B. Rationale for World Bank Involvement ......................................................................... 4 C. Higher Level Objectives to Which the Project Contributes ......................................... 6 II. PROJECT DESCRIPTION ............................................................................................. 7 A. Lending Instrument .......................................................................................................... 7 B. Project Development Objective and Key Indicators ..................................................... 7 C. Project Components.......................................................................................................... 7 D. Lessons Learned and Reflected in the Project Design ................................................. 12 E. Alternatives Considered and Reasons for Rejection ................................................... 14 III. IMPLEMENTATION .................................................................................................... 14 A. Partnership Arrangements ............................................................................................ 14 B. Institutional and Implementation Arrangements ........................................................ 15 C. Monitoring and Evaluation of Outcomes/Results ........................................................ 16 D. Sustainability ................................................................................................................... 18 E. Critical Risks and Possible Controversial Aspects ...................................................... 18 F. Governance and Accountability .................................................................................... 21 G. Loan Conditions and Covenants ................................................................................... 22 IV. APPRAISAL SUMMARY ............................................................................................. 23 A. Economic and Financial Analyses ................................................................................. 23 B. Technical .......................................................................................................................... 25 C. Fiduciary .......................................................................................................................... 25 D. Social ................................................................................................................................ 27 E. Environment .................................................................................................................... 27 F. Safeguard Policies ........................................................................................................... 28 G. Policy Exceptions and Readiness ................................................................................... 29 iii Annex 1: Country and Sector Background .............................................................................. 30 Annex 2: Major Related Projects Financed by the World Bank and/or other Agencies ..... 35 Annex 3: Results Framework and Monitoring ........................................................................ 40 Annex 4: Detailed Project Description ...................................................................................... 50 Annex 5: Project Costs ............................................................................................................... 64 Annex 6: Implementation Arrangements ................................................................................. 66 Annex 7: Financial Management and Disbursement Arrangements ..................................... 70 Annex 8: Procurement Arrangements ...................................................................................... 81 Annex 9: Economic and Financial Analysis ............................................................................. 94 Annex 10: Safeguard Policy Issues .......................................................................................... 101 Annex 11: Project Preparation and Supervision ................................................................... 103 Annex 12: Documents in the Project File ............................................................................... 105 Annex 13: Statement of Loans and Credits ............................................................................ 108 Annex 14: Country at a Glance ............................................................................................... 109 iv SWAZILAND HEALTH, HIV/AIDS AND TB PROJECT PROJECT APPRAISAL DOCUMENT AFRICA AFTHE Date: February 11, 2011 Team Leader: Kanako Yamashita-Allen Country Director: Ruth Kagia Sectors: Health (65%); Other social services Sector Manager: Eva Jarawan (16%); Central government administration (14%); sub-national government administration (5%) Themes: HIV/AIDS (25%); Population and reproductive health (27%); Tuberculosis (10%); Health system performance (30%); Other accountability/anti-corruption (8%) Project ID: P110156 Environmental category: B - Partial Assessment Lending Instrument: Specific Investment Loan Joint IFC: Joint Level: Project Financing Data [ X] Loan [ ] Credit [ ] Grant [ ] Guarantee [ ] Other: For Loans/Credits/Others: Total Bank financing (US$m.): 20.00 Proposed terms: IBRD Flexible Loan, in USD, with a variable spread, currency and interest rate conversions included in the Loan Agreement, principal repayment linked to commitments, with a five-year grace period and 20-year final maturity, Front-End Fee to be paid from Loan resources, and repayment dates of May 15 and November 15. Financing Plan (US$m) Source Local Foreign Total BORROWER/RECIPIENT 2.0 0.0 2.0 European Union (EU) 5.1 13.9 19.0 International Bank for Reconstruction and 5.3 14.7 20.0 Development (IBRD) Total: 12.4 28.6 41.0 Borrower: Kingdom of Swaziland Responsible Agency: Ministry of Health P.O. Box 5 v Mbabane Swaziland Deputy Prime Minister's Office P.O. Box A33 Mbabane Swaziland Estimated disbursements (Bank FY/US$m) FY 11 12 13 14 15 16 Annual 1 2 4 4 5 4 Cumulative 1 3 7 11 16 20 Project implementation period: Start: June 1, 2011 End: May 31 , 2016 Expected effectiveness date: June 1, 2011 Expected closing date: May 31 , 2016 Does the project depart from the CAS in content or other significant respects? [ ]Yes [X] No Ref. PAD I.C. Does the project require any exceptions from Bank policies? Ref. PAD IV.G. [ ]Yes [X] No Have these been approved by Bank management? [X]Yes [ ] No Is approval for any policy exception sought from the Board? [ ]Yes [X] No Does the project include any critical risks rated "substantial" or "high"? [X]Yes [ ] No Ref. PAD III.E. Does the project meet the Regional criteria for readiness for implementation? [X]Yes [ ] No Ref. PAD IV.G. Project development objective Ref. PAD II.C., Technical Annex 3 The project development objectives (PDOs) are: (i) to improve access to and quality of health services in Swaziland with a particular focus on primary health care, maternal health and Tuberculosis (TB), and (ii) to increase social safety net access for OVC. Project description Ref. PAD II.D., Technical Annex 4 The project comprises three main components: (i) Strengthening the Capacity of the Health Sector; (ii) Facility-level support to Improve Access, Quality and Efficiency of Services; and (iii) Strengthening of the Orphans and Vulnerable Children (OVC) Safety Net. Component 1 will support interventions, which will strengthen the capacity of the health care system at different levels especially in the areas of governance, management and performance. Component 2 will: (a) provide support to clinics, health centers and hospitals to improve access to and quality of health services; and (b) support nursing training institutions to expand midwifery training. Component 3 aims to strengthen the capacity of the Department of Social Welfare (DSW) and the National Children's Coordination Unit (NCCU) to provide social safety net access for OVC. This will be done through two phases: (3a) Capacity Building and Systems Strengthening; and (3b) Cash Transfer Pilot for OVC. Which safeguard policies are triggered, if any? Ref. PAD IV.F., Technical Annex 10 The project triggers OP 4.01 for Environmental Assessment on two key aspects: rehabilitation/renovation of selected hospitals, health centers and clinics and the expected vi increase in the generation of health care waste at these health facilities because of increased health care services. Significant, non-standard conditions, if any, for Board presentation: None Ref. PAD III.F. Loan effectiveness: 1. The POM has been adopted by the Borrower in form and substance satisfactory to the Bank. 2. One procurement specialist and one financial management specialist have been recruited, all pursuant to terms of reference, qualifications and experience acceptable to the Bank. 3. One Project coordinator and one Project accountant have been appointed for the MOH PIT and one Project coordinator and one Project accountant have been appointed to the DPM's Office PCT, all pursuant to terms of reference, qualifications and experience acceptable to the Bank. 4. All conditions precedent to the effectiveness of the Co-financing Agreements as to the right of the Borrower to make withdrawals under such Co-financing Agreements (other than the effectiveness of this Agreement) have been fulfilled. Covenants applicable to project implementation: 1. The Borrower shall: (i) finalize the terms of reference for an external auditor, through the Auditor General's Office, in form and substance satisfactory to the Bank within 2 months from the Effective Date; and (ii) recruit, no later than 6 months after the Effective Date, an external auditor, pursuant to terms of reference, mentioned under (i) above, qualifications and experience acceptable to the Bank. 2. The Borrower's Internal Audit Department shall assign, no later than 6 months after the Effective Date, an internal auditor to the Project. 3. The Borrower shall furnish to the Bank, in a form satisfactory to the Bank, the Annual Work Plan and Budget for the first year of Project implementation within 3 months from the Effective Date. 4. The Borrower shall reassign staff from the DPM's Office to handle the procurement function within 4 months after effectiveness. 5. The Borrower shall recruit, no later than 6 months after the Effective Date, one procurement specialist and one financial management specialist for the MOH PIT, all pursuant to terms of reference, qualifications and experience acceptable to the Bank. 6. The Borrower shall provide evidence, in form and substance satisfactory to the Bank, that all MOH/DPM's Office procurement staff and Project's procurement specialist have received and completed the procurement training at ESAMI within 6 months from the Effective Date. vii 7. The Borrower shall provide evidence, in form and substance satisfactory to the Bank, that all MOH procurement staff have received and completed training in supply chain and health procurement within 12 months from the Effective Date. 8. The Borrower shall provide evidence, in form and substance satisfactory to the Bank, of the commencement of Chartered Institute of Purchasing and Supply (CIPS) training for MOH procurement staff within 12 months from the Effective Date. Disbursement Condition: No withdrawal shall be made in respect of Grants under Component 3b of the Project, until the following conditions are met, in a manner satisfactory to the Bank: (i) completion of the OVC Manual; (ii) installation of a functional MIS: and (iii) selection and establishment of a payment system for the OVC Scheme. viii I. STRATEGIC CONTEXT AND RATIONALE A. Country and Sector Issues 1. Swaziland is a lower-middle income country, one of the few IBRD countries in Africa. It has a population of about 1.0 million, which has not grown since 1998. It comprises essentially one ethnic group -- the SeSwati nation. In 2009, Swaziland had a Gross Domestic Product (GDP) per capita income of US$2,533.1 The estimated Gross National Income (GNI) per capita, often taken to be a more realistic reflection of individual household income levels was US$ 2,4002 per capita in 2008. Income distribution, however, is heavily skewed; 54.6% of the wealth is held by the richest 20% of the population compared to 4.3% of wealth held by the poorest 20% with a Gini coefficient of 51%.3 69%4 of the population lives below the upper poverty line of E 71.07 (US$ 9.50) per capita per month. 2. Swaziland's economy has deteriorated in recent years. Swaziland's GDP growth rate has consistently been lower by more than 1 percent of GDP than other Southern Africa Customs Union (SACU) member states. In the wake of the global downturn, GDP growth for 2009 is estimated to have been only 1.2 percent of GDP, which represents a decline by 2.4 percent in 2008. Prospects for 2011 are less favorable, with GDP predicted to rise by 0.5%, due to the need for a fiscal adjustment - far below the 5% required for basic development. Swaziland's revenue base has been severely affected by the global economic downturn: while approximately 60% of government revenue were comprised of SACU receipts in 2008, it is estimated at 9.3 for 2010. This has a major impact on overall government spending, which expanded to more than 43 percent of GDP in 2009 (of which more than 17 percentage points for the wage bill). The need for an expenditure restraint has implications for all sectors, although health and education are expected to be less affected. 3. Swaziland's middle-income status is misleading from a human development perspective. The Demographic and Health Survey (DHS) 2006-2007 indicates that Swaziland is off track to meet its health Millennium Development Goal (MDG) targets with MDGs 4 and 5 worsening ­ maternal mortality ratio (MMR) increased from 229 per 100,000 live births (in l997) to 589 per 100,000 live births (in 2006/07) and infant mortality rate (IMR) increased from 67 per 1,000 (in 1996) to 85 per 1,000 (in 2006/7). Average life expectancy at birth has fallen from 60 years in 1997 to 435 years in 2007. This represents one of the lowest life expectancies in the world. The Human Development Index (HDI) rose from 0.535 in 19806 to 0.641 in 1995 then declined to 0.572 in 2007. Health outcomes are worsening due to high levels of HIV/AIDS and Tuberculosis (TB), and limited progress with maternal, neonatal and child health (MNCH). 4. Swaziland has the highest prevalence of HIV in the world. HIV prevalence is 26% among the sexually active population (15-49 years), with infection rates higher among women 1 The World Bank, World Development Indicators, 2009 2 Data taken from Swaziland Country at a Glance, with information produced from Development Economics LDB database, December 9, 2009. 3 Data from 2009 National Health Sector Strategic Plan, based on the Poverty Reduction Strategy and Action Plan (PRSAP) 2006. 4 Yingcamu, Poverty Reduction Strategy and Action Plan (PRSAP) 2006. 5 Tables for the Key Findings from Census 2007, Central Statistical Office, Swaziland, available at http://www.gov.sz/ 6 Swaziland Country Fact Sheet, UNDP Human Development Report 2009 available at http://hdrstats.undp.org/en/countries/country_fact_sheets/cty_fs_SWZ.html (31%) than men (19%).7 Almost one in two women aged 25-29 are HIV positive. In 2009, approximately 90%8 of those in need were receiving antiretroviral (ARV) treatment. Despite the country's efforts to respond to the HIV/AIDS epidemic, with increasing assistance from development partners, the disease has overwhelmed Swaziland's weak and inefficient health service delivery system and the country has not been able to reverse worsening health outcomes associated with high levels of HIV/AIDS. 5. Tuberculosis (TB) has become a major public health problem. The AIDS epidemic has also given rise to a concurrent TB epidemic in the country. Recorded new cases rose from less than 1,500 in 19939 to over 9,600 in 2007. TB is the biggest cause of death among People Living with HIV (PLHIV) and accounts for over 50% of all deaths and over 25% of hospital admissions. HIV co-infection is estimated to occur in over 80% of all TB cases. The TB case detection rate (57%) and cure rate (42%) are also far below the internationally accepted targets of 70% (detection) and 85% (cure). 6. The HIV/AIDS and TB co-epidemic have led to a sharp increase in the number of orphans and vulnerable children (OVCs). Approximately one third of Swazi children (about 144,000) are estimated to be orphans and vulnerable children (OVC) and the number is expected to grow further.10 According to the DHS 2006-7, OVC are less likely to have their basic material needs11 met than non-OVC (61 percent compared to 77 percent), and the percentage of OVC decreases as the wealth quintile of the household they reside in increases (from 37 percent in the lowest quintile to 22 percent in the highest). The percentage of children who were orphaned or vulnerable increases rapidly with age, from 18 percent of children younger than 5 years to 43 percent of children in the age group 15-17 years. Overall, 11 percent of OVC were underweight as compared to 7 percent of non-OVC. In terms of school attendance, there is very little difference between OVC and non-OVC (slightly over 90 percent of them aged 10 to 14 attend school12). In 2006, 43 percent13 of Swazi households were hosting orphans. 7. Infant mortality rate (IMR) and maternal mortality ratio (MMR) have worsened over the last decade to levels equivalent to those last seen in the 1980s. Despite good antenatal care (ANC) attendance and a relatively high proportion of institutional deliveries, Swaziland has a high maternal mortality ratio (MMR). In 2006-2007, for example, the MMR was estimated to be 589 (per 100,000 live births) compared to MMR of 370 (per 100,000 live births) in 2000 and the national target of 140 (per 100,000 live births). The infant mortality rate (IMR) increased from 67 per 1,000 (in 1996) to 85 per 1,000 (in 2006/7), with 25% of all infant deaths taking place in 7 Swaziland Demographic and Health Survey (DHS) 2006-2007. 8 Table 7: Number of people actively on ART in 2007 and 2009, Swaziland Country Report March 2010, Monitoring the Declaration of the Commitment on HIV and AIDS (UNGASS) available at http://data.unaids.org/pub/Report/2010/swaziland_2010_country_progress_report_en.pdf 9 Data on TB rates and cases is taken from the National Health Sector Strategic Plan 2008-2013, Ministry of Health, Swaziland, 2009. 10 The DHS2006-7 defines OVC as a child (below the age of 18) who (a) has lost one or both parents and/or (b) a child who has a very sick parent, or who lives in a household where an adult has been very sick, or has died in the past 12 months. Note that the DHS excludes children in institutional settings (e.g., orphanages) and therefore most likely provides a conservative estimate of the actual number of vulnerable children. 11 In the DHS 2006-7 children were considered to have their basic material needs met if they had a pair of shoes, two set of clothes, and at least one meal per day. 12 DHS 2006-07. 13 DHS 2006-07. 2 the neonatal period.14 The main causes of this are preterm delivery, asphyxia, and infections. The high MMR and IMR indicate deficiencies in the provision of emergency obstetric and neonatal care (EmONC) services. The report on Improving Quality of Maternal and Neonatal Health services in Swaziland: a Situational Analysis (conducted by MOH/World Bank/UNICEF/WHO/UNFPA in January 2010) which assessed 59 key health facilities confirmed these deficiencies. 8. There is an unequal distribution of health facilities and personnel in Swaziland. Swaziland has 223 health facilities, of which 44.8% are Government owned.15 While there are 80 health facilities in Manzini region, there are only 34 health facilities in Shiselweni region. Shiselweni region16 also has the least number of midwives and doctors, and no obstetrician. There are 1.77 midwives per 100,000 population in Shiselweni compared to 3.47 midwives per 100,000 population in Hhohho region. Likewise, there are 0.43 doctors per 100,000 population in Shiselweni compared to 0.84 doctors per 100,000 population in Hhohho region. 9. Unequal access is influenced by the types of services offered across health facilities. Only around 63% of the Swazi population can access a health facility within a one-hour walk.17 Furthermore, 80% of health facilities are clinics without maternity care, and only 12% of health facilities have in-patient beds and provide only the most basic services. This suggests that actual access to primary health care is much lower than the 80% figure suggests. 10. There is much inefficiency in the functioning of health and social welfare institutions in Swaziland. Inefficiency in the health system is evidenced by, inter alia, low hospital bed occupancy, a lack of standardized protocols, the absence of a rational essential care package, deficient supply systems, inefficient recruitment procedures, and poor staff retention at all levels of the health system. The latter is worsened by the impact of a brain drain to South Africa. Similar inefficiencies are evident in the implementation of the social safety net, including assistance for children and pensioners. The Department of Social Welfare (DSW), for example, notes that there are duplicate payments made to some children, while others are not receiving any support; late payments; leakage; and few economies of scale in the information and institutional systems that support the administration of social assistance grants. 11. Swaziland has emphasized health as a priority on the national agenda. The 2009 National Health Sector Strategic Plan (NHSSP), for example, identifies critical areas in the health sector that require support, and aims to improve low health outcomes and inefficiencies. In addition, there is support at the highest level of the Swazi Government for health as it is considered a key sector in Swaziland's plans for growth and development.18 This is evident in the Poverty Reduction Strategy and Action Plan19 (PRSAP), which stresses the vulnerability of the population, especially the poor, to HIV/AIDS, economic shocks and food insecurity. In 2010, 14 http://www.who.int/whosis/mort/profiles/mort_afro_swz_swaziland.pdf 15 Service Availability Mapping (2007), Ministry of Health, Swaziland. 16 Table 8, Improving Quality of Maternal and Neonatal Health services in Swaziland: a Situational Analysis report, World Bank, WHO, UNFPA, and Ministry of Health, January 2010. 17 MoHSW 8th round sentinel surveillance report. 18 Prime Minister's Speech to both houses of Parliament, Government Programme of Action 2008 -2013, March 2009; Budget Speech 2010, presented by Majozi V. Sithole, Minister of Finance to Parliament, 2/26/10. 19 Yingcamu ­ Towards Shared Growth and Empowerment ­ A Poverty Reduction Strategy and Action Programme, September 2007. 3 the Government adopted a National Gender Policy and one of its key areas is health, particularly women's health. A number of strategies in this policy aim to counter the vulnerability and effect of HIV on women and children in Swaziland and are in line with the national initiatives to prevent infection, and ensure access to treatment, care and support for HIV positive men, women and children. 12. In addition, the government has substantially increased its expenditure on health. Both the health budget and public expenditure per capita on health have shown strong increases over the last three years. An increasing level of resources, both absolutely and proportionately, are allocated to health, although the overall allocation remains below 15%. Annual per capita spending in nominal terms reached over US$100 (E966) for the first time in 2008/09, rising from E486.97 in 2006/07. A high level of annual per capita spending underlines inefficiency in the health system. Improving efficiency is paramount while the Government and Development Partners make further investment in the health sector. 13. Social safety net for OVC is also a priority in the national agenda. The Revised National Plan of Action (NPA) for Children 2011-2015 is seen as an imperative due to the high impact of HIV and AIDS on children and states that "The NPA 2011-2015 is for all children in Swaziland," a significant policy shift from the previous NPA which only targeted OVC. While targeting all children, the NPA 2011-2015 places special emphasis on the vulnerable categories of children."20 This NPA also recognizes both the challenges posed by the increased number of orphans and child headed households, and the strain faced by traditional extended family. 14. A new Health, HIV/AIDS and TB project is proposed to support the Government in its commitment to improve the health status of Swazis and by addressing some of the most pressing health sector challenges noted above. The World Bank and the European Union (EU) will jointly finance the project.21 Specifically, the proposed project will contribute to: (i) the strengthening of the institutional capacity of the MOH to improve the performance of core health sector functions at all levels; (ii) increase access to essential, quality health services; and (iii) increase social safety net access for OVC. At each rehabilitated health facility, the following three interventions will be strengthened: the TB and HIV Co-epidemic Response; EmONC, and Health Care Waste Management. B. Rationale for World Bank Involvement 15. The proposed project is fully consistent with the Interim Strategy Note (ISN) for Swaziland (2008-2010) approved by the Board in March 2008 and remains highly relevant today.22 The strategy identifies: (i) fighting HIV/AIDS, (ii) improving governance, and (iii) increasing competitiveness as the main development issues facing the country. The ISN 20 Revised National Plan of Action (NPA) for Children ­ 2011-2015, First draft, National Children Coordination Unit, Deputy Prime Minister's Office, November 30, 2009. 21 Preparation of this project has taken over two years for a number of reasons. These include: the GOS's initial reluctance to borrow funds for HIV/AIDS, combined with their desire to develop a full national health strategy before agreeing on the content of this project; staff turnover at the MOH; and adjustments to the project to meet changing circumstances, changing priorities, and changing inputs from development partners. 22 Preparation of a new World Bank strategy (ISN/CPS) has been initiated and is expected to be presented to the Board in the first quarter of Fiscal Year 2012. 4 proposed a scaling up of the World Bank's (IBRD lending) program in Swaziland, with a focus on two sectors -- health (in particular, HIV/AIDS) and local government. 16. The proposed project is aligned with previous and current World Bank support in the health sector. Since 2003, the World Bank has supported the MOH through analytical work. Most notable amongst these is analytical work done under a special arrangement by the Africa Region Vice President for a rapid response stand-alone technical assistance fund.23 This was the first such fund approved by the World Bank on an exceptional basis, to respond to the unique situation of Swaziland facing an HIV/AIDS epidemic, but being an IBRD country, and hence being unable to benefit from the IDA funded Multi-Country HIV/AIDS Program (MAP) for Africa. In addition, the proposed project builds on the current World Bank health project in Swaziland: "Delivering Maternal Child Health (MCH) Care to Vulnerable Populations Project."24 The project aims to increase the demand for and access to MCH services in the Lubombo region through interventions such as transport vouchers, recruitment of lay counselors, and performance-based incentives to communities based on achievement towards key MCH indicators. 17. The project is consistent with both the Bank-wide and Africa Region HNP Strategies,25 which stress the Bank's comparative advantage in addressing health systems bottlenecks. In addition, the World Bank also has extensive experience designing and implementing social protection programs. The specific actions selected under the project are in line with the Bank's core competencies. Using its technical expertise and significant experience working across sectors globally, this project will focus on high impact interventions, which respond to both the HIV/TB co-epidemic, and challenges faced in primary health care (PHC) and EmONC, whilst also attempting to increase the capacity of the MOH, DSW, and National Children's Coordination Unit (NCCU). In addition, the World Bank can add value to the project due to its significant operational experience in designing and implementing cash transfer programs in Latin America and Asia. 18. The proposed project is consistent with Government priorities for national development, health and HIV/AIDS. The National Development Strategy (NDS) (Vision 2022) was adopted in 1997 with a 25-year outlook prioritizing human development. The 2006 Poverty Reduction Strategy and Action Plan (PRSAP) operationalized the Vision 2022 by aiming to halve poverty by 2015 and eradicate it by 2022. The National Health Sector Strategic Plan 2008 ­ 2013 (NHSSP) identifies critical areas in the health sector that require support, and aims to improve low health outcomes and inefficiencies. NHSSP goals are translated into specific objectives and activities with designated roles, responsibilities, budget and monitoring indicators. 23 Additional analytical work includes reviews of the Mbabane General Hospital,23 the Phalala Fund,23 the 2009 Modes of Transmission Study and the Quality, Relevance and Comprehensiveness of Impact Mitigation Services Survey (QIMS). In addition, the World Bank has also recently conducted an Improving quality of Maternal and Neonatal Health services in Swaziland: a situational analysis of over 50 health facilities, undertaken by the MOH/World Bank/UNICEF/WHO/UNFPA, January 2010. 24 This project is funded by a $2.57 million grant from Japan Social Development Fund (JSDF) grant and became effective in January 2010. 25 The World Bank Strategy for Health, Nutrition, and Population Results (April 2007); and Improving Health, Nutrition, and Population Outcomes in Sub-Saharan Africa: The Role of the World Bank (December 2004). 5 19. In 2009, the National Emergency Response Council on HIV/AIDS (NERCHA) developed a five-year (2009-2014) multi-sectoral National Strategic Framework (NSF) to guide the response to HIV and AIDS. The NSF programs are grouped under four thematic areas: (i) prevention; (ii) treatment, care and support; (iii) impact mitigation; and (iv) response management. The Revised National Plan of Action (NPA) for Children 2011-2015 recognizes the challenges posed by an increasing number of orphans and child-headed households. The NPA also highlights the fact that the traditional extended family, which has been the safety net for vulnerable children, has been "under extreme strain as a result of the loss of many family breadwinners and relatives." It emphasizes that government, civil society, and communities must collectively address the issues through public policy implementation strategies to meet the needs of children. While prevention and treatment of HIV/AIDS are supported by donors such as the USG President's Emergency Plan for AIDS Relief (PEPFAR) and the Global Fund to Fight HIV/AIDS, Tuberculosis and Malaria (GFATM), the other two NSF priorities require urgent attention. 20. The project supports implementation of the MOH's NHSSP and Annual Action Plan 2010-2013 (AAP). The MOH's NHSSP aims to enhance health system capacity and performance, and has recently operationalized this strategy in the AAP. The World Bank and the EU, as key partners in the Health Partners Coordination Consortium, have agreed to support specific areas of the NHSSP; in particular to fill financial and capacity gaps in the areas of HIV/AIDS, TB, maternal and neonatal health (MNH), OVC, capacity building and overall governance, management and planning in the health sector. Guided by this, and cognizant of the worsening economic forecasts for Swaziland, this project will focus on seeking to improve the quality, access and efficiency of health sector expenditures, and emphasis will be placed on helping Swaziland to increase its return on investments in the health sector. This strategic principle underpins the World Bank's engagement in Swaziland. C. Higher Level Objectives to Which the Project Contributes 21. The Swaziland Health, HIV/AIDS and TB Project will contribute to the achievement of objectives and goals in the NHSSP and AAP. Specific project interventions will focus on reducing maternal, neonatal and child mortality, controlling HIV/AIDS and TB, and mitigating the impact of HIV/AIDS for OVC. In so doing, the project will also contribute towards achievement of the health-related MDGs.26 22. The project is also aligned with one of the focus areas of the World Bank's Africa Action Plan to strengthen national health systems and combat HIV/AIDS,27 and is consistent with the World Bank's Health, Nutrition, and Population (HNP) Strategy,28 which emphasizes the need to strengthen country health systems, as a key means to achieving results on the ground. The specific objectives of the strategy are: (i) to improve the level and distribution of key HNP outcomes (e.g. MDGs), outputs, and system performance to improve living conditions, 26 The health-related MDGs are: (i) have halted and begun to reverse the AIDS epidemic and other major diseases, including TB (MDG6); (ii) have reduced the maternal mortality ratio by three-quarters (MDG5); and (iii) have reduced by two-thirds the under-five mortality rate (MDG4). These goals are associated with a set of specific and time-bound targets. 27 Accelerating Development Outcomes in Africa: Progress and Change in the Africa Action Plan, DC2007-0008. 28 Healthy Development: The World Bank Strategy for Health, Nutrition, and Population Results. CODE2007- 00016. 6 particularly for the poor and the vulnerable; (ii) to improve financial sustainability in the HNP sector; and (iii) to improve governance, accountability, and transparency in the health sector. The project is also consistent with EU-Swaziland development cooperation as detailed in the Country Strategy Paper and National Indicative Programme for 2008-2013 (CSP). Specifically, the two focal sectors for EU-Swaziland cooperation for 2008-2013 are, human development (through support to the health and education sectors), and, improving the supply of water to the poor. In health, the CSP recommends: (i) strengthening the health system; (ii) reinforcing the planning capacity of the MOH; (iii) developing the primary health care system; (iv) supporting the prevention of poverty-related diseases such as AIDS, TB and malaria; and (v) improving maternal and neonatal health (MNH). II. PROJECT DESCRIPTION A. Lending Instrument 23. The proposed project lending instrument is a Specific Investment Loan (SIL). An IBRD loan of US$ 20.0 million will be combined with financing from the EU (14.5 million Euro or US$ 19.0 million equivalent) and Swaziland (US$ 2.0 million). The project implementation period is five years. B. Project Development Objective and Key Indicators 24. This project has two main sectoral foci: a primary focus on the health sector and the services it delivers to the Swazi population, and a secondary focus on social protection to mitigate the impact of HIV/AIDS on OVC. 25. The Project Development Objectives (PDOs) are: (i) to improve access to and quality of health services in Swaziland with a particular focus on primary health care, maternal health and TB, and (ii) to increase social safety net access for OVC. 26. Progress towards achieving these objectives will be monitored by the following key performance indicators (KPIs): Percentage of health facilities that provide at least five public health services.29 Percentage of births delivered by a skilled attendant in a health facility.30 TB case notification rate.31 Percentage of OVC beneficiaries that receive cash transfers regularly (as defined in the OVC Implementation Manual). C. Project Components 27. The design of this jointly financed project derived from close consultations with the Government, EU and development partners, and NGOs. The project placed a premium on 29 The five public health services are family planning (modern methods of contraception), post-natal care, management of STI, immunization and growth monitoring which is part of the essential health package (EHCP). 30 This data will be obtained from a representative sample survey, such as the DHS. Where such data is not available, it will be collected through estimates using routine statistics. 31 In line with revised WHO good practice standards, the project will monitor TB case notification rate. 7 ensuring alignment with national strategic plans and objectives; major financial, capacity and program gaps; the need to adopt a harmonized approach and reduce transaction costs; and the importance of focusing on results to improve both performance and efficiency. 28. Based on these project design principles, the challenges faced by the health and social welfare sectors, and the existing support to the sectors from the Government and other development partners, the project comprises three main components. These are: (i) Strengthening the Capacity of the Health Sector, (ii) Facility-level support to Improve Access, Quality and Efficiency of Services, and (iii) Strengthening of the OVC Safety Net. Components and their associated sub-components are outlined below and described in detail in Annex 4. Component 1: Strengthening the Capacity of the Health Sector (US$ 3.90 million) 29. This component will support the improvement of governance and management of the health system at different levels and health care regulation through the development of a regulatory and accreditation framework. Specifically, the project will support: (a) Improved regulation mechanisms, (b) Regional-level capacity building and (c) Health Planning and Coordination. 30. The component will support strengthening regulatory functions in the health sector by: (i) reviewing the legal and regulatory framework; (ii) reviewing and adopting international and regional health agreements with a focus on public health; (iii) strengthening the oversight functions of government and of professional health regulatory bodies, including the Medical and Dental Council and the Nursing Council. 31. The component will also support: (i) strengthening the accreditation system in the health sector, including for health facilities, and associated health training institutions; and (ii) strengthening hospital boards for improved planning, management and increased autonomy. Some of these hospitals may also receive support for rehabilitation, equipment and supplies as well as skills training under Component 2. 32. In addition, Component 1 will support strengthening planning and fiduciary functions by building capacity of the the Health Planning Unit for better planning and coordination, with focus on the development of health planning skills and capacity of the four Regional Health Management Teams (RHMTs). The component will also support: (i) finalizing the Essential Health Care Package (EHCP); (ii) improving monitoring and evaluation; and (iii) providing technical assistance and training on financial management and procurement within the MOH. Component 2: Facility-level Support to Improve Access, Quality and Efficiency of Services (US$ 24.38 million) 33. This component aims to improve access to and quality of health services through management and technical skills training as well as the rehabilitation and equipping of selected clinics, health centers and hospitals. It will also support nursing training institutions to expand midwifery training. The Project will have a particular focus on Primary Health Care (PHC), the HIV and TB Co-epidemic Response and Emergency Obstetric and Neonatal Care (EmONC). The project will also support health care waste management to mitigate the environmental risks at the facilities receiving support. 8 Sub-component 2a: Support to Clinics, Health Centers and Hospitals (US$ 19.69 million) 34. This sub-component will support: (i) developing and disseminating guidelines and protocols; (ii) rehabilitating/renovating selected health facilities; (iii) providing essential equipment and supplies; (iv) strengthening the referral and transport system; and (v) building skills and capacity to manage health facilities and will address the following aspects: Improving PHC: The project will provide support for the infrastructure rehabilitation of selected clinics and health centers, including physical and utility upgrading, as well as equipment and a maintenance plan for building and equipment. This activity will be underpinned by the MOH providing appropriate human resources for the rehabilitated facilities based on the essential health care package of services at the clinic and health center levels. Strengthening TB and HIV Co-epidemic Response: Activities include: (i) community- based interventions for early diagnosis and treatment adherence; (ii) strengthening TB infection control (IC) at the facility level; (iii) provision of digital x-rays at regional and national level; and (iv) training of health workers on managing TB/HIV. These activities are intended to better calibrate aspects of the response currently not funded by the government or other donors, and respond to priorities identified in the AAP on control and management of TB. Improving maternal and neonatal health care, focusing on EmONC. This support will entail: (i) development and dissemination of detailed EmONC guidelines and protocols; (ii) rehabilitation of health center, clinic and hospital maternity wards through provision and upgrading of essential EmONC equipment and supplies, and training in the use of procured equipment; (iii) on-the-job training of midwives and medical doctors in EmONC, postnatal care and post-abortion care; (iv) strengthening the referral and transport system; (v) development of maternal and perinatal death review guidelines; and (vi) training of health personnel in record-keeping and analysis to increase capacity for monitoring MNH outcomes. 35. HealthCare Waste Management (HCWM) and ESMPs: A Health Care Waste Management Plan (HCWMP) has been prepared which provides proper guidelines for comprehensive health care waste management to prevent, reduce and mitigate environmental health impacts on facility staff and the public caused by poor health care waste management. The approach of the HCWMP involves reinforcing the national legal framework for HCWM in Swaziland, improving and strengthening of the institutional arrangements, improving HCWM in health facilities, providing training for health care staff and other health care waste practitioners on acceptable waste management practices, raising awareness among the general public on risks associated with health care waste handling, and development of a monitoring system for the implementation of the HCWMP. The Project will support preparation of ESMPs for each of the three categories of health care facilities to be rehabilitated in line with the framework provided in the Environmental and Social Management Framework (ESMF) prepared for the project. The ESMP reports will also spell out the specific requirement for each site or health facility. 9 Sub-component 2b - Support to the nursing training institutions(US$ 2.35 million) 36. This sub-component will improve the quality of nursing skills and increase access to nursing and midwifery services through : (i) rehabilitation of selected nurse training institutions; (ii) strengthening management capacity; (iii) development of a national strategic plan for nursing and midwifery; (iv) updating the existing national midwifery curriculum; and (v) development of guidelines and implementation of manuals for mentorship and preceptorship. Component 3: Strengthening of the Orphans and Vulnerable Children (OVC) Safety Net (US$ 6.17 million) 37. This component will support the implementation of the OVC cash transfer scheme (OVC Scheme) to increase social safety net access for OVC. The following activities will be implemented during the first phase: (a) developing and refining key features of the OVC Scheme and the OVC Scheme Manual that outlines the operational set-up and processes of the OVC Scheme; (b) preparing and installing a cash transfer payment mechanism; (c) providing training and technical support for the Department of Social Welfare (DSW) and National Children's Coordination Unit (NCCU) to ensure effective implementation of the OVC Scheme; and (d) establishing a Management Information System (MIS) and designing an impact evaluation during the first phase. In addition, a list of beneficiaries will be developed and updated during phase 2. During the second phase the OVC Scheme will be piloted, by providing OVC cash grants to beneficiaries to strengthen the ability of vulnerable households to care for OVC and meet their basic needs. The component will also support the monitoring of the OVC Scheme through the MIS, external monitoring and impact evaluation. 38. Given the high number of OVC in Swaziland and the limited financial envelope available for this pilot, it will be important to prioritize those OVC that most need support. The following are some criteria that will be used as a guide for identification of potential beneficiaries: poverty status (using poverty indicators to be defined in collaboration with the Swaziland statistics office); employment status; and being beneficiaries of other OVC support programs.32 Community validation of identified beneficiaries will be carried out in coordination with traditional Swazi structures (community leaders). Phase 1: Capacity Building and System Strengthening 39. During the first phase, the project will help develop the capacity of the DSW to manage the OVC cash transfer scheme and to establish the necessary operational systems required for effective and efficient implementation of the OVC cash transfer scheme. By the end of the first phase, the following key features of the OVC cash transfer scheme will be in place: Awareness raising and outreach o Sensitization of communities and potential beneficiaries o Explanation of eligibility/benefits/rights/obligations to potential participants 32 The exact indicators to be used will be specified during Phase 1 of this component and included in the implementation manual. 10 Beneficiary enrollment, registration and verification system33 Management Information System (MIS) Payment delivery mechanism Appeals and complaints mechanisms34 Sanctions on misbehavior35 Program monitoring and case management system36 Beneficiary graduation system based on exit criteria 40. Technical support will be provided to support the DSW in the development of an OVC implementation manual that will detail operational procedures and processes most suitable for the Swaziland context. These include: i) developing a Management Information System (MIS), which will form the basis for a national registry of OVC; ii) establishing beneficiary enrollment, registration and verification system; iii) setting up payment delivery mechanism. The MIS will not only facilitate maintaining accurate data on OVC, but will also ensure coordination with other ongoing OVC support interventions37 and monitor the implementation of the OVC cash transfer pilot. Human and institutional capacity of the DSW and NCCU will be enhanced at the central and regional levels to ensure effective implementation of the proposed OVC cash transfer pilot and to improve coordination with other Ministries, development partners and NGOs/CBOs for more comprehensive and efficient OVC support.38 In phase one, the design of an impact evaluation study will be finalized and baseline will be determined to evaluate the impact and effectiveness of the OVC cash transfer pilot. During Phase 1, OVC that will benefit from the OVC cash transfer pilot will be identified.39 41. Prior to commencement of Phase II, i.e. disbursements for cash transfers to beneficiaries40, the DSW shall have: (a) completed the OVC Implementation Manual; (b) installed a Management Information System (MIS); and (c) selected and established a payment system for the OVC scheme, all in a manner satisfactory to the World Bank. 33 Enrollment based on eligibility criteria and its compliance will be monitored. Community validation of criteria and potential beneficiaries will take place during phase one. Provisions will be taken to monitor fraud and corruption. 34 Appeals for individuals who feel they have been unfairly excluded as beneficiaries and believe they meet the eligibility criteria. Complaints regarding quality of services and payments (absence, delays and discrepancies) 35 The scheme will include sanctions for misbehaviour such as: presentation of false information related to eligibility and/or fraud committed against the scheme. 36 This will include assessment of the satisfaction of OVC cash transfer beneficiaries, and monitoring through spot checks and citizen report cards. 37 Ongoing OVC support include: innovative community driven initiatives for food and care through "Kagogo" centers; feeding and non-formal education support through "Neighbourhoood Care Points (NCPs)"; formal education support through the "capitation grant" system; and psychosocial support through "Lihlombe lekukhalela ­ a shoulder to cry on". 38 The Government is committed to provide consolidated support to meet the needs of OVC, including: education, health, food and nutrition, shelter, psychosocial support and legal aid. 39 The identification, registration and validation of beneficiariesmay also take place in Phase 2, since the pilot will be gradually expanded. 40 The OVC implementation manual will specify to whom the cash transfer will be paid. Cash transfers are normally paid to the caregiver of the OVC. 11 Phase II: Cash Transfer Pilot for OVC 42. The OVC cash transfer aims at strengthening the ability of caregivers to care for OVC and meet their basic needs (in the DHS 2006-7 children were considered to have their basic needs met if they had a pair of shoes, two sets of clothes, and at least one meal per day). The cash transfers will also contribute to promoting investments in human capital by encouraging desirable behaviors from OVC and their caregivers in areas such as health, nutrition and schooling. The beneficiaries are expected to fulfill co-responsibilities such as: (i) school enrollment; (ii) minimum level of school attendance; (iii) growth monitoring for children under 2 years; and (iv) full immunization.41 43. During the second phase, the system of OVC cash transfers will be pilot tested, using the information and operational systems put in place and human resources of the DSW and NCCU that have been strengthened during the first phase. The pilot testing will take place in four constituencies (in four different regions), selected based on the data from the Swaziland Statistics Office and Quality of Impact Mitigation Survey (QIMS).42 44. As part of the OVC cash transfer pilot, an impact evaluation will be conducted to determine: 1) the welfare impacts of the cash transfer scheme; 2) the human development impacts of the cash transfer scheme; 3) the operational effectiveness of the cash transfer scheme; and 4) generate lessons for potential future expansion. At the end of phase two, the OVC cash transfer pilot is expected to provide empirical evidence on the impact of OVC cash transfer system in Swaziland and compile lessons learned. D. Lessons Learned and Reflected in the Project Design 45. Given the limited experience of Swaziland with World Bank projects, the lessons learned in this project are derived from experience with earlier World Bank projects in Swaziland; projects under preparation; other development partner projects in Swaziland; and World Bank experience in designing projects of this nature. 46. Government ownership and commitment is critical. The last World Bank project in Swaziland - an urban development project - closed in March 2005. The follow-up project has been under preparation since then. Two other projects (on OVC support and on rural electrification) were in advanced stages of preparation when they were dropped in 2003 and 2006 respectively, due to lack of Government commitment. Cognizant of this, this project prioritized Government commitment and ownership as a key to promoting the project's implementation readiness and success. The task team has engaged in constant dialogue with the highest leadership and technical working levels, and modified the design in response to both the changing needs and priorities of Swaziland. In addition, the project is closely aligned with the Government's strategic direction and priorities as identified in the NHSSP, the 2010-2013 AAP, the 2009­2014 NSF and the National Action Plan (2011-2015). 41 The exact definition of the co-responsibilities will be agreed upon in Phase 1 and clearly specified in the OVC implementation manual. 42 A purposive sample will be drawn from regions with QIMS data and that is broadly representative of poverty in Swaziland (rural). 12 47. Since 2005, the only World Bank-financed operation that has been implemented and completed is a modest Institutional Development Fund (IDF) project, whose objective was to help build and provide capacity for an HIV/AIDS monitoring and evaluation (M&E) system. The IDF project achieved its development objective and was generally considered best practice in design, relevance and timeliness. At project closing in 2006, however, more than one third of the grant was undisbursed. 48. In an environment in which there is limited Bank experience, there is a need for close collaboration and continuous support. In recognition of this, the project will provide technical support and fiduciary oversight to MOH/DPM through frequent supervision, site visits and training. In addition, the adoption of the Project Operations Manual (POM), and procurement and financial management staffing have been included as effectiveness conditions. Furthermore, a consultant has been recruited in Mbabane to provide on-going operational support, with further support available from the World Bank's Pretoria and Washington, DC offices. 49. In low-capacity settings, reduced transaction costs for the government are particularly important. The project will be co-financed jointly with the EU and managed by the World Bank. This will reduce transaction costs and the administrative burden to the Government. This is particularly important given the capacity constraints in Swaziland. Development partners providing support to related areas were carefully consulted in order to avoid duplication and ensure both complementarities and synergy between interventions. A positive externality is that the project will contribute to improved coordination among partners and more efficient resource allocation and management through its support for sector planning and the MOH's proposed Sector Wide Approach (SWAp). 50. Flexibility in design is important for project success. Given that the health and social welfare context surrounding the HIV/TB co-epidemic is evolving in Swaziland, it is important for the design to maintain flexibility. Indicative component allocations have been made for the project, but the actual allocations will be adjusted based on the MOH's AAP and DPM's annual budget. This will allow the project to respond to the country's emerging needs as well as learning and making course corrections based on project performance and implementation experience. 51. Project Development Objective (PDO) and Results Framework: efforts have been taken to define a PDO to which the project funding will realistically contribute. This is supported by a results framework with indicators linked to a clear results chain, and duly supported by baseline data. Special attention was paid to the use of existing government-driven data collection and information systems. 52. Managing cost escalation: This project involves considerable work on health facility infrastructure. Experience from health projects with sizeable infrastructure components supported by other development partners shows that these are often associated with substantial cost escalation. In order to mitigate against possible cost escalation, detailed feasibility and architectural design studies (including costing) will be completed so that adjustments can be made to the implementation plan before the contracting process begins. 13 E. Alternatives Considered and Reasons for Rejection 53. The following alternatives were considered: (i) budget support, (ii) a standalone HIV Project, and (iii) two separate projects. 54. Budget support. There is consensus among development partners in Swaziland that a traditional investment approach for financing support to the health and social welfare sectors is the preferred initial approach, as opposed to general budget support. The current yearly budget process is transparent and budget execution is able to track the use of resources accurately. There is excessive scope for adjustments in the allocations within the budget year. In the absence of a client relationship with significant financing in over a decade, a transitional phase of traditional sector-specific support in health and social welfare will be necessary before the Health and Social Welfare Sectors can fully benefit from budget support. Support in financial management, governance, planning and coordination, provided through this project, will help to facilitate possible future budget support. 55. A standalone HIV Project. GFATM, PEPFAR and other health partners are investing significant funds in the Swaziland HIV/AIDS program. Given this, consensus has emerged from both Swaziland and development partners that World Bank/EU support should focus on key aspects of capacity building in the health and social welfare sectors, which are currently not being funded. In addition, it was also agreed that the project should support targeted facility level interventions and HIV impact mitigation that are receiving only limited support from other development partners, and in which the World Bank has a comparative advantage. 56. Two separate projects. A decision was taken early on, with World Bank management concurrence that the project should remain as one rather than be split into two projects - one on health and another on social protection. Operational support will be provided through this project to the two sectors, particularly with respect to financial management and procurement. This would reduce transaction and administrative costs for both Swaziland and the World Bank. In addition, the project focuses on human capital development as a whole, thereby creating synergies between the health and social welfare sectors. III. IMPLEMENTATION A. Partnership Arrangements 57. The proposed project is expected to be jointly financed by the World Bank and the EU. The financing will consist of the EU grant (14.5 million Euros or US$ 19.0 million equivalent) and World Bank loan (US$20.0 million). 58. The European Commission, represented by the College of Commissioners, approved this project on December 14, 2010 to be financed from the 10th European Development Fund. This decision commits the EU to provide 14.5 million Euros through a World Bank-administered trust fund. Following the Bank's Executive Board approval of this project, the EU and the World Bank will stipulate the modalities of the partnership arrangements as well as the roles and responsibilities of both organizations during project implementation in an Administration Agreement (AA). The project's Financing Agreements (Loan Agreement and the Trust Fund Grant Agreement between the World Bank as trustee for the EU and Swaziland) will be signed 14 after the signing of the EU financing instrument with Swaziland as well as the Administrative Agreement (AA) between the EU and the World Bank, . 59. This partnership arrangement will reduce the transaction costs and result in a reduced net overall financial burden for Swaziland through the combination of the EU grant and IBRD loan for project financing. B. Institutional and Implementation Arrangements 60. As far as possible, implementation arrangements have been aligned with national processes and systems. This would contribute to both sustainability and improved coordination. The MOH will have overall responsibility for implementing Component 1 (Strengthening the Capacity of the Health Sector) and Component 2 (Facility-level Support to Improve Access, Quality and Efficiency of Services), while the DPM's Office will be responsible for implementing Component 3 (Strengthening of the OVC Safety Net). 61. The overall project will be guided by a Steering Committee (SC) consisting of the Principal Secretaries from the Deputy Prime Minister's Office, Ministry of Finance (MOF), Ministry of Economic Planning and Development (MEPD), Ministry of Health, Ministry of Public Service with the participation of a representative of the EU delegation to Swaziland as an observer. Other ministries may be invited, as needed. The SC will be responsible for providing oversight to the project and making policy decisions to facilitate project implementation. The SC will be chaired by the Principal Secretary (PS) MOH and meet at least every six months during project implementation. 62. Within the MOH, the existing Policy and Planning Committee (PPC) comprised of senior officials from all departments at the central level which will be responsible for the technical oversight of project activities under Components 1 and 2. The PPC will meet at least monthly during the first year of project implementation and at least every two months thereafter. A Project Implementation Team (PIT) within the MOH, under the leadership of the Project Coordinator will be responsible for day-to-day implementation of project activities. The Project Coordinator will be a civil servant43, with qualifications satisfactory to the World Bank, appointed by the MOH to ensure integration of project activities within the MOH. The Project Coordinator will be a member of the Policy and Planning Committee, and will be responsible for regular reporting on implementation progress and other issues, but will not have a vote in decision-making. 63. Led by the Project Coordinator (civil servant), the PIT will include an M&E officer (civil servant), a Project Accountant (civil servant), two Financial Management Specialists (1 senior and 1 intermediate specialist - consultants), and two Procurement Specialists (1 senior and 1 intermediate specialist - consultants). The Project Coordinator and Accountant for the MOH PIT, at least one Procurement Specialist, and at least one Financial Management Specialist will be appointed by project effectiveness. 64. For components 1 and 2, the composition of technical teams for respective sub- components have been provided by the MOH, e.g. Chief Nursing Officer and Training Officer 43 All civil servants assigned to work in the Project shall be paid by the MOH. 15 for Sub-component 2b--support to the nursing training institutions. The heads of these units will be responsible for the implementation of project activities, which fall under their respective technical areas. The MOH will appoint focal persons to lead project implementation of the respective sub-components. As needed, additional TA will be provided to strengthen the technical units and ensure prompt implementation. 65. The project will implement activities through the central MOH and its four regional offices following current established practice and division of labor. The regional offices will coordinate with local traditional authorities and communities. Existing arrangements for coordination with development partners, especially those linked to the evolving sector-wide approach will continue. 66. For component 3, a project coordination team (PCT) will be established under the overall guidance of the Principal Secretary, Deputy Prime Minister's (DPM) Office. In terms of project management and administration, a Project Coordinator will be appointed by the PS, DPM's Office. An M&E officer (civil servant) and an Accountant (civil servant) will also be appointed to the PCT. The intermediate financial management specialist and procurement specialist recruited for the MOH PIT will allocate half of their time to support the PCT. The Project Coordinator for the PCT and the PCT Accountant will be appointed by project effectiveness. 67. The Ministry of Health will prepare and submit to the Bank consolidated semi-annual project progress reports for all the project components. The reports will contain a general description of the project and will outline progress to date on capacity building, physical outputs, institutional impact, safeguards, institutional and management arrangements, training, status of key performance indicators and any issues/challenges encountered. The reports will be prepared for the six-month periods and will be submitted not later than one month after the end of the each period. 68. In addition, there will be a formal mid-term review (MTR). The MTR will assess the overall project progress made during the implementation, including the quality and effectiveness of the project activities and the results of the monitoring and evaluation activities. Further details on the project implementation arrangements and institutional structure are provided in Annex 6. C. Monitoring and Evaluation of Outcomes/Results 69. Monitoring and evaluation as a performance management tool -- and the strengthening of government-implemented M&E systems with which to track performance -- has been an increasing area of focus for the Government of Swaziland, given additional impetus by the government's decentralization efforts. For the first part of the PDO, the project measures some of the national health sector objectives (relating to increased access to and increased quality of primary health care) to which the project contributes, and to the extent possible, uses national level indicators. The indicators related to the second part of the PDO are more modest, and only measure achievements of the pilot cash transfer program itself. At the intermediary outcome level, the project measures what the project is directly funding, e.g. measuring achievements at targeted health facilities whilst using existing government and World Bank standard indicators, where possible. 70. Data sources for the results framework: Data will be collected through existing surveys and using existing government M&E systems, whilst being cognizant of the need to build and 16 strengthen these government systems, and to have back-up plans in place in case the government M&E systems are unable to deliver the results needed. This decision carries some risk, as the project measurements are reliant on the government M&E systems to function. However, such an approach is in line with the World Bank's operational policy (OP13.60), World Bank commitments made during the Paris Declaration on Aid Effectiveness, and the Ghana Third High Level Forum on Aid Effectiveness Agenda for Action--all of which commit the World Bank to using (and strengthening, where necessary) country-level systems for measuring development and operational results. 71. The ability to measure project outcomes and objectives is dependent on national data sources being functional in their ability to provide accurate, reliable and timely information when needed. To mitigate the risk of data gaps arising due to weaknesses in the government M&E systems, the project will implement the following measures to mitigate against the risk of no / low levels of data collection: a) Include contingency funding for direct data collection of routine data from health facilities supported by the project, should the Health Management Information System (HMIS) not be able to generate data on time as needed for the measurement of project outputs and outcomes b) Alternative definitions for population-based indicators: Where indicators rely on population-based surveys (not funded by the project) for temporal indicator values, the results framework identifies equivalent, non-survey-based indicators. With such indicators, data collected from health facilities will generate the numerators, whereas population size estimates will be used for the denominators c) Increased focus during supervision: Close supervision of the status of M&E systems and data quality during the project period will form part of supervision processes and remedial actions will be taken. d) Support for Government M&E systems: The project will strengthen M&E systems by assisting the government's efforts to build a management information system for the OVC cash transfer program, and e) Project-specific M&E: The project will also fund project-specific data sources in order to ensure that project results can be measured, to mitigate against challenges in obtaining data from the HMIS in a timely manner. 72. Standard work plan template forms will be used, and specific output indicators data will be tracked. For any health facility project-specific data, actual records at health facilities supported by the project will be used. In addition, there may be a need to undertake surveys or assessments over and above the government system. For component 3, the DSW will monitor cash transfer activities and produce quarterly progress reports through the MIS. In addition, external monitoring will be undertaken through spot checks/citizen report cards and an external impact evaluation study of the cash transfer project. The data sources for project M&E are defined in Annex 3. 17 D. Sustainability 73. Swaziland finances a large proportion of its government expenditure from its own resources, despite the changes in circumstances with the SACU receipts. Current concerns about the implications of reductions in SACU revenue for Swaziland will be addressed through project efforts to increase efficiency in utilizing available resources for the health and social sectors and thereby help the Swaziland get "more health and safety net for the money." 74. Positions recruited under the project are critical in improving the efficiency and effectiveness of the MOH and DPM's Office to fulfill their respective roles and manage ongoing activities. The incremental recurrent costs arising from these positions are modest since additional staff positions are already planned for in the reorganization of the MOH, and can be absorbed by the MOH and DPM budget. Furthermore, the small number of incremental posts that are planned to continue after project closing will be financed out of project counterpart funds during the fourth and fifth years of implementation as a transitional measure into full government absorption. In addition, while significant resources will be earmarked for health infrastructure rehabilitation, priority has been placed on renovation of existing infrastructure with the aim of ensuring their functionality. In order to mitigate the contingent liabilities arising from health infrastructure related works, construction of new facilities will not take place under this project. Based on discussions with both sectors, the recurrent project costs from the recruited positions are well within the regular budget envelopes of the sectors. 75. This project will also finance a significant amount of technical assistance (TA). The Sexual and Reproductive Health Unit, for example, will receive TA during project implementation to monitor and reinforce the protocols, training and equipment provided by the project. Similarly, the MOH Planning Unit will benefit from focused technical assistance in planning and coordination and develop the enhanced capacity to coordinate donor, NGO and MOH activities for the health sector. By the end of the project, the Health Partners Coordination Consortium should be playing a greater role. 76. DSW and NCCU will receive TA and system support through the project to maintain the OVC database and effectively manage or scale up the OVC cash transfer mechanism. Several development partners have already expressed interest in providing funds for cash transfers to OVC, once a reliable and well functioning cash transfer system is in place. The skills and systems built with the project's support will remain with MOH and DPM, enabling them to use their resources more efficiently to produce better results. 77. The financial impact of the project on government's health spending will be felt mainly in terms of additional resources for maintenance of renovated facilities as well as repairs and replacements of medical equipment. E. Critical Risks and Possible Controversial Aspects 78. Risks identified in the project, and their associated risk mitigation measures are outlined in Table 1 below. There are no anticipated controversial aspects to the proposed project. 18 Table 1. Risks and Risk Mitigation Measures Risk rating Risk Risks Risk mitigation measures with Rating Mitigation Low level of past World Bank S - Technical support and fiduciary M engagement: The MOH and DPM have no oversight will be provided to the previous experience working with the MOH/DPM through frequent supervision, World Bank except for ESWs and small site visits and training. projects funded by Trust Funds. There is - Preparation and adoption of POM as no Country Office and mechanisms for well as recruitment of procurement and collaboration are still evolving. financial management specialists are Unfamiliarity with World Bank's effectiveness conditions. operational procedures, coupled with weak - A consultant based in Mbabane has institutional capacity--and World Bank been recruited to provide on-going unfamiliarity with Government systems- operational support. Additional support could lead to implementation delays. to the program will be provided from World Bank's Pretoria and Washington, DC offices, and the EU delegation based in Mbabane. Weak resource management: Weak S - An IDF grant to improve public S enforcement of procurement and financial expenditure management has been management controls in the central mobilized and the World Bank together government44 may lead to inefficient with UNDP is supporting reform of the utilization of existing and additional Public Financial Management Act resources, and hence misallocation of (PFMA). project resources. - As part of the WB GAC initiative, of which Swaziland is a pilot, measures to strengthen public financial management (PFM) are being identified under the new ISN (including strengthening of MOF, Parliament, and focus on the demand-side of governance). - The proposed project will also support capacity building with respect to financial management and procurement. - The World Bank will continue to collaborate with development partners involved in country-wide Procurement Reform. Lack of focus on priorities: While the M - The World Bank has communicated its L NHSSP shows the MOH's commitment for concern with lack of focus on priorities improving health outcomes, the plan through policy dialogue with the MOH. contains over 600 activities and indicators. The Ministry has recently developed the This could lead to a fragmentation of AAP with activities that are more sector efforts and dilution of results on the streamlined and indicators, although this ground. is heavily front-loaded. - Long term technical assistance is in place to advise on planning of activities. Human resource constraints: It will be H - The project will support establishment S challenging to ensure that health facilities of guidelines, standards and protocols, have a sufficient number of service including staffing norms. providers, due to the HIV/AIDS epidemic, - Upgrading of training facilities for 44 World Bank analytical work has found that the Auditor General's yearly report consistently raises similar (if not the same) issues. The anti-corruption commission, which was set-up in 1998 under defunct statutes and has been reinstated, has yet to refer a single case for prosecution. 19 Risk rating Risk Risks Risk mitigation measures with Rating Mitigation brain drain and staff turnover. For nurses/midwives will alleviate HR example, limited human resource capacity constraints and increase the quality and at the central MOH exists particularly in quantity of the cadres, which are critical the areas of procurement and financial for provision of essential health services. management. This may lead to delays in It will also facilitate task shifting for project implementation given that the more efficient utilization of human project entails considerable civil works. resources. There is also limited procurement and - The MOH has engaged a procurement financial management in the DSW, which specialist from Crown Agents to build may lead to implementation delays of capacity within the MOH. component 3. - Procurement specialists and financial management specialists will be supported through the project for the PIT in the MoH. They will also provide support to the DSW. In addition, training will be provided to the relevant staff on financial management and procurement. Lack of coordination with project S - Detailed work plan and procurement M inputs: Some components of the project plan for respective components will be will require coordination of inputs such as developed. Renovation of facilities and facility renovation, procurement of installation of equipment will be done in equipment and supplies as well as phases to ensure that there will be recruitment and training of service sufficient trained staff to provide providers. The MOH and facility services. managers may lack capacity to ensure - Training in use of equipment and health correct sequencing and proper care waste management will be carried coordination. out in parallel. - For component 3, significant technical assistance will be provided to support the DSW in the implementation of project activities. Lack of sufficient governance and S - A detailed OVC Implementation M accountability for the cash transfer Manual (IM) will be developed as the project: Given the nature of a cash transfer first step of the project, including clear project, transferring cash to beneficiaries, it project description, complaints will be very important to incorporate mechanisms, roles, and responsibilities. mitigation measures to decrease the risk of - The cash transfer payments will ensure mismanagement of funds and ensure good greater efficiency and accountability governance and accountability of project through external monitoring and audits, implementation. spot checks/citizen report cards, an impact evaluation study ­ as well as internal monitoring through a Management Information System (MIS). Lack of data for project's results S -Use routine indicator data as proxies if S framework: Government M&E systems survey data are not available. may not be able to deliver the results -Additional attention to M&E during needed project supervision -Contingency funding for additional data collection and surveys Euro exchange rate fluctuation: M M fluctuations in the Euro-USD exchange -Financing tables include contingencies rate may result in a significant loss of that can be reallocated as needed. available funds for the proposed project. Overall Risk Rating S 20 Risk rating High Risk (H)--greater than 75% probability that the outcome/result will not be achieved. Substantial Risk (S)--probability of 50 - 75% that the outcome/result will not be achieved. Modest Risk (M)--probability of 25 - 50% that the outcome/result will not be achieved. Low or Negligible Risk (N)--probability of less than 25% that the outcome/result will not be achieved. F. Governance and Accountability 79. The Government of Swaziland has pursued a combination of governance reforms. First, a reform of the Public Financial Management Act (PFMA) with support from the World Bank and UNDP to improve public expenditure management. Second, a reform of the national public procurement system financed by the Ministry of Finance with support from the Crown Agents aims to sustain long-term improvements in procurement practices. 80. The procurement reform entails: 1) reform of the legal and regulatory framework; 2) development of key procurement institutions; 3) comprehensive capacity building of government officers and suppliers; and 4) hands-on training for the Tender Board and various Ministries. It is expected that these reforms will contribute to enhanced transparency, governance and accountability resulting in improved efficiency and quality of public services. While the procurement indicator under Integrated Fiduciary Assessments improved from D+ to C+ between 2007 and 2009, the overall CPIA score remained below 3 (2.8 between 2007 and 2009). These ratings suggest significant governance challenges with respect to existing fiduciary systems and practices. 81. The MOH also has on-going initiatives to strengthen its management functions in planning and budgeting, personnel management, procurement and logistics management. Among the key initiatives are: 1) re-organization of the MOH; 2) development of Annual Action Plans to operationalize the National Health Sector Strategic Plan (NHSSP); and 3) establishment of a Procurement Unit together with procurement technical support and capacity building at the MOH, including the Central Medical Stores. The MOH is committed to enhancing competition and transparency in procurement and supply of pharmaceuticals, medical supplies and other goods. 82. The proposed Project will support the MOH management and governance reforms underway, including: 1) development of a regulatory and legal framework; 2) establishment of an accreditation system for facilities and services; 3) support for professional regulatory bodies; 4) strengthening hospital boards; and 5) support for procurement and financial management reforms. This support is expected to improve overall sector stewardship at the central and facility levels, particularly in view of enhanced supervision, internal controls and access to information. Given that the project will support substantial renovation and rehabilitations of existing structures and procurement of high value medical equipment, risk control measures are included such as: 1) conducting a technical assessment and costing of the rehabilitation needs of selected health facilities; 2) estimating prices and qualification criteria for procurement of medical equipment and supplies based on market surveys; 3) recruitment of a firm of architects/quantity surveyors to supervise the civil works before the rehabilitation is initiated; and 4) development of the Procurement Manual, as part of the POM. 83. Adequate governance and accountability for the cash transfer pilot is particularly important, given the nature of transferring cash to beneficiaries. A detailed OVC implementation manual will be developed with clear project description, complaints mechanism, roles, and 21 responsibilities. External monitoring and evaluation (spot checks/citizen report cards as well as an impact evaluation study) will ensure greater efficiency and accountability. 84. The Government of Swaziland is committed to good information flow, transparency and social accountability to its citizens. Social accountability mechanisms build community and citizens' capacity to engage with public administrations to provide feedback whether quality services are being provided and thus directly influence behavior change of service providers. In order to be effective, citizens should be provided with the necessary tools and information so that they can assess whether public resources are used efficiently and effectively. In this regard, community scorecards ­ a proven and useful tool in other countries ­ will be piloted in Swaziland. The European Union has committed to supporting this activity with 2 million Euros which will be channeled through non-state actors under the same 10th European Development Fund. G. Loan Conditions and Covenants 85. The project will include the following effectiveness conditions, dated covenants, and disbursement conditions. Effectiveness Conditions: The POM has been adopted by the Borrower in form and substance satisfactory to the Bank. One procurement specialist and one financial management specialist have been recruited, all pursuant to terms of reference, qualifications and experience acceptable to the Bank. One Project coordinator and one Project accountant have been appointed for the MOH PIT and one Project coordinator and one Project accountant have been appointed to the DPM's Office PCT, all pursuant to terms of reference, qualifications and experience acceptable to the Bank. All conditions precedent to the effectiveness of the Co-financing Agreements as to the right of the Borrower to make withdrawals under such Co-financing Agreements (other than the effectiveness of this Agreement) have been fulfilled. Dated Covenants: The Borrower shall: (i) finalize the terms of reference for an external auditor, through the Auditor General's Office, in form and substance satisfactory to the Bank within 2 months from the Effective Date; and (ii) recruit, no later than 6 months after the Effective Date, an external auditor, pursuant to terms of reference, mentioned under (i) above, qualifications and experience acceptable to the Bank. The Borrower's Internal Audit Department shall assign, no later than 6 months after the Effective Date, an internal auditor to the Project. . 22 The Borrower shall furnish to the Bank, in a form satisfactory to the Bank, the Annual Work Plan and Budget for the first year of Project implementation within 3 months from the Effective Date. The Borrower shall reassign staff from the DPM's Office to handle the procurement function within 4 months after effectiveness. The Borrower shall recruit, no later than 6 months after the Effective Date, one procurement specialist and one financial management specialist for the MOH PIT, all pursuant to terms of reference, qualifications and experience acceptable to the Bank. The Borrower shall provide evidence, in form and substance satisfactory to the Bank, that all MOH/DPM's Office procurement staff and Project's procurement specialist have received and completed the procurement training at ESAMI within 6 months from the Effective Date. The Borrower shall provide evidence, in form and substance satisfactory to the Bank, that all MOH procurement staff have received and completed training in supply chain and health procurement within 12 months from the Effective Date. The Borrower shall provide evidence, in form and substance satisfactory to the Bank, of the commencement of Chartered Institute of Purchasing and Supply (CIPS) training for MOH procurement staff within 12 months from the Effective Date. Disbursement Conditions: No withdrawal shall be made in respect of Grants under Component 3b of the Project, until the following conditions are met, in a manner satisfactory to the Bank: (i) completion of the OVC Manual; (ii) installation of a functional MIS: and (iii) selection and establishment of a payment system for the OVC Scheme. IV. APPRAISAL SUMMARY A. Economic and Financial Analyses 86. Swaziland relies predominantly on its SACU receipts for government revenue, with about 60% of government expenditures being financed by annual SACU receipts. Although this mechanism will continue, Swaziland's share of the SACU receipts is expected to decline significantly. According to World Bank/IMF estimates, revenues should fall by approximately 50% in 2010/2011. This will have a major impact on overall government spending, and with it, implications on health sector spending. Health and education funding, however, are less likely to be affected given their priority status on the national agenda. 87. The indicative allocated MOH budget for 2010/11 is USD 185 million; of which USD 19.4 million is earmarked for subventions to NGOs. The MOH budget was increased by 2.5% with additional funding for recruitment of new personnel to support the reorganization and restructuring of the Ministry. As noted in the February 2010 budget speech, the government expects to realize the benefits of initiatives to increase efficiency in the MOH budget expenditure and improved health outcomes through this project. In addition, efficiency gains and improving 23 absorptive capacity are focus areas for Swaziland as volatility in revenue streams from SACU, Foreign Direct Investment (FDI), and domestic sources continue to put pressure on the Government. 88. The draft findings of a recent Public Expenditure Review (PER) of the health sector shows that the MOH budget as a proportion of government budget has been increasing since 2006/07 from E505.7 million (8.27%) to E802.1 million (8.4%) in 2008/09.45 This does not include expenditures through the Phalala Fund Medical Referral Scheme or health sector expenditures undertaken through other line ministries. Additionally, the data shows that the funds spent on recurrent expenditures are used largely to fund personnel costs, drugs, and subventions to various health facilities. This is a cause for concern especially when compared to the number of vacant personnel posts and the estimated needs for health personnel in the country. As already identified by the MOF, current levels of recurrent expenditure cannot be sustained without significant gains in expenditure efficiencies to offset any decreases in the government budget. 89. The PER also showed that in 2008/09 Swaziland spent approximately USD 93.8 (E703.65)46 per capita per annum on health. When funds from development partners are included, this rises to more than USD 150 per capita. For comparison purposes, countries in the Southern African sub-region reported per capita health expenditures in 2007 varying from USD 139 for Zimbabwe, USD 42 for Mozambique, USD 58 for Malawi, USD 38 for Angola and USD 63 for Zambia.47 Additional data indicates that Swaziland's per capita budget increased further to USD 120 in 2009/10; this rises to almost USD 170 when donor funding is included. The quality of services provided, however, does not reflect this high level of per capita expenditure. This suggests considerable inefficiencies in the current health systems, which are further compounded by poor coordination between various health programmes (including the National AIDS Programme, National TB Control Programme and Sexual Reproductive Health Programme) and regional health services. In addition, low absorption rates due to under expenditure of the capital budget, however, ensure that expenditure, as a proportion of GDP has been lower, but still increasing.48 Cost estimates for component 3 show that a national program covering all poor OVC49 would have an annual cost of US$ 19.8 million and represent only about 0.7 percent of GDP. A program covering 50% of all OVC would subsequently cost around US$ 9.9 million and represent around 0.35% of GDP.50 90. The economic justification for this project is based on the following expected benefits. Firstly, there are large positive externalities associated with the investments to be financed. High 45 Data taken from MOH draft Public Expenditure Review (PER) of the health sector, Dec. 2009. 46 Based on 2008/09 data from MOH draft PER, Dec. 2009. 47 Per capita health expenditures by Country, Human Development Report 2007, United Nations, as viewed on http://www.infoplease.com/ipa/A0934556.html It should be noted that these per capita figures represent both public and private expenditures, while the figures for Swaziland represent the public figures. 48 This has also led to a gradual fall in the proportion of Government expenditure accounted for by health, falling from 7.75% to 7.51%. Swaziland has modest levels of government health spending and formal and informal social protection expenditures targeting vulnerable children. However, even for the existing spending, the country is not getting the necessary returns, as evidenced by the worsening human development indicators. 49 Assuming a total of 144,000 OVC and using the same poverty prevalence as the national average (69%) there would be an estimated 100,000 poor OVC. 50 A review of spending on social protection interventions shows that the average spending on social protection interventions in low income countries represents between 1 and 2 percent of GDP (Weigand, Grosh 2005). 24 impact interventions, like MCH interventions for example, have a disproportionately large impact on health status. Secondly, the project will contribute to improving the efficiency and effectiveness (and associated returns) of existing spending. Improved hospital management, for example, can improve resource allocation, whilst capacity building of MOH, DSW and NCCU can help to promote efficacy in the health and social welfare sectors. Third, indirect benefits from the OVC cash transfer pilot are expected to yield long-term positive impacts from the anticipated incentives created by the cash transfers, such as improved school attendance among vulnerable children of school-going age. Given that two of the project components prioritize interventions based on socio-economic criteria (e.g. OVC Cash Transfer Program targets poor OVC, and selection of facilities for rehabilitation), the economic justification for the project, and in effect, distributive arguments, are particularly compelling in a country with one of the highest Gini-coefficients globally. B. Technical 91. The choice of project sub-components and interventions has been guided by the need to: ensure alignment with national strategic plans and objectives; prioritize the most pressing health systems issues (financial, capacity and programmatic) and bottlenecks that are currently inadequately addressed; adopt a harmonized approach and reduce transaction costs; and seek opportunities for Swaziland to maximize its investment in the health sector by focusing on efficiency, and improving quality and access to health services. 92. The project has a significant focus on high-impact activities such as improving primary health care and EmONC as well as the HIV/TB co-epidemic response. The project activities are based on the latest normative guidelines and standards with a focus on cost-effective interventions. The project also seeks to initiate systemic changes in the way that health and social welfare sectors are managed. C. Fiduciary 93. The financial management capacity assessment concluded that the financial management system meets the minimum requirements of the World Bank's policy on financial management, OP/BP 10.02. There is, however, the need to strengthen the internal audit capacity and financial management capacity for the project. The project task team will provide basic training to the MOH, DPM, and MOF staff on World Bank financial management and disbursement policies and procedures. As Swaziland has limited experience working with the World Bank, staff in the project implementing entities will participate in periodic finance and disbursement courses organized by World Bank recognized institutions. 94. The overall conclusion of the assessment is that the financial management arrangements proposed for the project meet the minimum requirements of the World Bank subject to the implementation of the actions described in Annex 7. The financial management risk is assessed as Substantial. 95. Procurement under the project will be carried out in accordance with the World Bank's "Guidelines: Procurement under IBRD Loans and IDA Credits" dated January 2011, and "Guidelines: Selection and Employment of Consultants by World Bank Borrowers" dated January 2011, and the provisions stipulated in the Financing Agreement. All procurement and consultant selection undertaken will be done using the Bank's Standard Bidding Documents 25 (SBD) and Standard Requests for Proposals respectively. The project will carry out implementation in accordance with the "Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD and IDA and Grants" dated October 15, 2006 and revised January 2011 (the Anti-Corruption Guidelines). 96. Swaziland has commenced public procurement reforms and the MOH and the Ministry of Works (MOW) have been prioritized in this process. Over the last 18 months, new bidding documents for procurement of works and goods and requests for proposal documents have been introduced. These documents are still undergoing review by Swaziland. The new Procurement Bill, approved by the Cabinet, is to be presented to Parliament. Swaziland contracted Crown Agents to provide technical support for the procurement reform process. Swaziland promulgated the Public Procurement Regulations of 2008 that saw the introduction of the National Tender Board and modification of the procurement process. However, some procurement under the MOH and DPM's Office are still being carried out in accordance with the provisions of the Stores Regulations of 1973. This outdated legislation does not provide all the elements for a transparent and modern procurement system and therefore cannot be used in the framework of the project. MOH is still undergoing institutional reform and is in the process of creating a Procurement Unit. The DPM's Office needs to separate the financial and accounting function from the procurement function by reassigning suitable staff to manage the procurement function. 97. For both MOH and the DPM's Office, key issues concerning procurement for project implementation have been identified. These include: (i) the absence of a Procurement Unit at MOH and absence of dedicated staff to handle the procurement function at the DPM's Office; (ii) foreseeable staff capacity gaps to meet World Bank-financed procurement practices; (iii) capacity gaps in the technical departments in preparation of technical specifications, terms of reference, and to supervise consultants; (iv) capacity gaps in Supply Chain Management and Health Procurement; and (v) the lack of staff membership in a purchasing/procurement professional body and absence of a professional code of ethics for procurement staff as some may have non-procurement backgrounds. Furthermore, since the project will pool EU, Swaziland and World Bank funds, there is a likelihood of erroneously using Swaziland procurement procedures for World Bank-financed activities. 98. Agreed upon corrective measures to mitigate the overall risks are: (i) MOH will recruit two Procurement Specialists (1 senior and 1 intermediate specialist) and the DPM's Office will share the intermediate procurement specialist with the MOH to handle the procurement function, (ii) MOH and the DPM's Office will prepare a Project Operations Manual, including procurement section to clearly indicate the roles and responsibilities of different staff and the procurement procedures to be followed under the proposed project, (iii) provision of training on World Bank procurement at the Eastern and Southern African Management Institute (ESAMI) for the MOH and DPM procurement staff; (iv) provision of training in Supply Chain Management and Health Procurement to MOH Procurement Unit staff; and (v) provision of Chartered Institute of Purchasing and Supply (CIPS) Training to MOH Procurement Unit staff. 99. The results of the assessment indicate that the procurement management overall risk rating for the project is Substantial. 26 D. Social 100. The considerable social advantages for Swaziland of having an unusually strong traditional culture and, effectively, one ethnic group, have been undermined by the impact of having the highest HIV and TB prevalence rates in the world. This has resulted in, inter alia, large numbers of OVC. Under overwhelming pressures, the traditional extended family and Swazi support systems that have looked after OVC and the elderly for centuries are under strain and breaking down. This is compounded by high levels of inequality. An estimated 200,000 citizens out of the one million Swazi population subsist on food aid. UNICEF emphasizes the devastating impact of the "triple threat" of HIV, poverty, and food insecurity. Many human development indicators are worse than those of low-income countries. The potential for increased crime and social unrest is clear. If major steps are not taken, the outlook for Swaziland's social and economic future is bleak. 101. Swaziland is well aware of existing problems and has developed policies and strategies that seek to address some of these social issues. The overall response and implementation, however, has been inconsistent. On the positive side, the social aspects of the current HIV policy and strategy are especially strong and among the best when compared to nearby countries. On the negative side, coverage of social interventions is limited, their administration is deficient, coordination between schemes leaves much to be desired, and schemes are severely underfunded.51 Associated problems include the performance of public education--while Government spends approximately 20% of its overall budget on education (Budget 2006-2009), outcomes remain poor. Enrollment rates remain low and only an average of 11.3% of 20-50 year old Swazis completed primary school. Disabilities because of HIV are rising sharply while overall health spending has reached a plateau (see above). The project will support key aspects of several of these social interventions. In particular, the project will seek to improve: (i) inequities in the access to and use of health services especially for the rural poor; (ii) maternal health services, which will disproportionately benefit disadvantaged women; and (iii) direct support for OVC, through cash transfers. E. Environment 102. The results of a rapid assessment undertaken on a sample of health care facilities in the country indicated that Health Care Waste Management (HCWM) is very weak and inadequate. Key constraints revealed include the absence of a legal framework and operational procedures for HCWM; no formalization of HCWM in health care facilities; limited numbers of, or absence of, appropriately trained staff; technological challenges for handling, treatment and disposal of HCW; and inadequate budgetary resource allocations for HCWM. 103. During the preparation of the project, a HCWM Plan was prepared which seeks to address the above-mentioned constraints in health care facilities and to provide a comprehensive approach for HCWM in Swaziland. The Plan will be implemented by the Environmental Health Unit (EHU) located within the MOH. The Unit has sufficient human resources as it is represented by officials at all offices in the various regions of the country. Additional training for the officials on health care waste management will be required for effective execution of the HCWMP. The project has prepared a budget for implementing the HCWMP. 51 For example, Swaziland has less than 30 social workers. 27 104. The project will also undertake infrastructural rehabilitation works for existing health facilities and selected nurse training institutions. No major and/or irreversible negative impacts are expected from the rehabilitation works because all rehabilitation and construction will be done within existing premises where the biophysical environment is already altered. An ESMF has been prepared for establishing a unified approach for the management of potential negative impacts as a result of the rehabilitation works. The ESMF provides sample environmental management plans (EMPs) for each category of health care facility to be rehabilitated. Extensive consultations were conducted with various stakeholders during the preparation of the ESMF. The ESMF also includes information on relevant legislation, institutional arrangements, and indicative costs for implementing the EMPs. The project will support preparation of ESMPs for each category of health care facility to be rehabilitated, along the lines of the sample ESMPs provided in the ESMF for the project. The ESMP reports will also spell out the specific requirements for each site or health facility. The project does not involve land acquisition, as the sites to be rehabilitated are on government land on which there are no claims. 105. The HCWMP and the ESMF were disclosed both in-country and at the Bank's InfoShop. F. Safeguard Policies 106. The project is classified as Category B - Partial Assessment as it triggers OP 4.01 for environmental assessment because of the anticipated increase in health care waste to be generated by the health facilities, the disruptions in normal health care services during the rehabilitation of some of the health facilities, and the environmental and social impacts of the civil works. A HCWMP and an Environmental and Social Management Framework (ESMF) address two key aspects, proper health care waste management and the environmental effects of rehabilitation works, respectively. The HCWM Plan provides: a) measures for addressing shortcomings identified in the HCW management system; b) guidelines for developing a sound legal framework; c) institutional arrangements for proper HCW management in the country; d) appropriate training for health care practitioners; and e) awareness raising strategies for the public. The ESMF provides information and guidance on potential impacts and mitigation measures for rehabilitation negative impacts will be addressed through the EMPs which will be prepared, disclosed, and consulted upon once the specific sites and works are identified. Safeguard Policies Triggered by the Project Yes No Environmental Assessment (OP/BP 4.01) [ X] [] Natural Habitats (OP/BP 4.04) [] [ X] Pest Management (OP 4.09) [] [ X] Physical Cultural Resources (OP/BP 4.11) [] [X ] Involuntary Resettlement (OP/BP 4.12) [] [X ] Indigenous Peoples (OP/BP 4.10) [] [ X] Forests (OP/BP 4.36) [] [ X] Safety of Dams (OP/BP 4.37) [] [ X] Projects in Disputed Areas (OP/BP 7.60)52* [] [ X] Projects on International Waterways (OP/BP 7.50) [] [X ] 28 G. Policy Exceptions and Readiness 107. The proposed project does not require any exceptions from World Bank policy and meets the regional requirements for readiness for implementation. 29 Annex 1: Country and Sector Background Swaziland Health HIV/AIDS and TB Project 108. Swaziland is a lower-middle income country, one of the few IBRD countries in Africa. It has a population of about 1.0 million, which has not grown since 1998. It comprises essentially one ethnic group -- the SeSwati nation. In 2009, Swaziland had a Gross Domestic Product (GDP) per capita income of US$2,533.53 The estimated Gross National Income (GNI) per capita, often taken to be a more realistic reflection of individual household income levels was US$ 2,40054 per capita in 2008. Income distribution, however, is heavily skewed; 54.6% of the wealth is held by the richest 20% of the population compared to 4.3% of wealth held by the poorest 20% with a Gini coefficient of 51%.55 69%56 of the population lives below the upper poverty line of E 71.07 (US$ 9.50) per capita per month. 109. Swaziland's economy has deteriorated in recent years. Swaziland's GDP growth rate has consistently been lower by more than 1 percent of GDP than other SACU member states. In the wake of the global downturn, GDP growth for 2009 is estimated to have been only 1.2 percent of GDP, which represents a decline by 2.4 percent in 2008. Prospects for 2011 are less favorable, with GDP predicted to rise by 0.5%, due to the need for a fiscal adjustment - far below the 5% required for basic development. Swaziland's revenue base has been severely affected by the global economic downturn: while approximately 60% of government revenue were comprised of Southern Africa Customs Union (SACU) receipts in 2008, it is estimated at 9.3 for 2010. This requires a major impact on overall government spending, which expanded to more than 43 percent of GDP in 2009 (of which more than 17 percentage points for the wage bill). The need for an expenditure restraint has implications for all sectors, although health and education are expected to be less affected. 110. Swaziland's middle-income status is misleading from a human development perspective. The Demographic and Health Survey (DHS) 2006-2007 indicates that Swaziland is off track to meet its health Millennium Development Goal (MDG) targets with MDGs 4 and 5 worsening ­ maternal mortality ratio (MMR) increased from 229 per 100,000 live births (in l997) to 589 per 100,000 live births (in 2006/07) and infant mortality rate (IMR) increased from 67 per 1,000 (in 1996) to 85 per 1,000 (in 2006/7). Average life expectancy at birth has fallen from 60 years in 1997 to 4357 years in 2007. This is one of the lowest life expectancies in the world. The Human Development Index (HDI) rose from 0.535 in 198058 to 0.641 in 1995 then declined to 0.572 in 2007. In addition, health outcomes are worsening due to high levels of HIV/AIDS and TB, and limited progress with maternal, neonatal and child health (MNCH). 53 The World Bank, World Development Indicators, 2009 54 Data taken from Swaziland Country at a Glance, with information produced from Development Economics LDB database, December 9, 2009. 55 Data from 2009 National Health Sector Strategic Plan, based on the Poverty Reduction Strategy and Action Plan (PRSAP) 2006. 56 Yingcamu, Poverty Reduction Strategy and Action Plan (PRSAP) 2006. 57 Tables for the Key Findings from Census 2007, Central Statistical Office, Swaziland, available at http://www.gov.sz/home.asp?pid=75 58 Swaziland Country Fact Sheet, UNDP Human Development Report 2009 available at http://hdrstats.undp.org/en/countries/country_fact_sheets/cty_fs_SWZ.html 30 111. Swaziland has the highest HIV prevalence in the world at 26% among the sexually active population (15-49 years), with infection rates higher among women (31%) than men (19%) do.59 Almost one in two women aged 25-29 are HIV positive. Despite the country's efforts to respond to the HIV/AIDS epidemic, with increasing assistance from development partners, the disease has overwhelmed Swaziland's weak and inefficient health service delivery system and the country has not been able to reverse worsening health outcomes associated with high levels of HIV/AIDS. 112. Tuberculosis (TB) has become a major public health problem. Recorded new cases rose from less than 1,500 in 199360 to over 9,600 in 2007. TB is the biggest cause of death among PLHIV; it accounts for over 50% of all deaths and over 25% of hospital admissions. HIV co- infection is estimated to occur in over 80% of all TB cases. The TB case detection rate (57%) and cure rate (42%) are also far below the internationally accepted targets of 70% (detection) and 85% (cure) respectively. 113. HIV-related illnesses have become the major cause of morbidity and mortality among under-5 children. According to the MOH, HIV-related illnesses account for 47% deaths among under-fives. Pneumonia and diarrheal diseases account for 12% and 10% respectively. HIV infection could be a contributory factor to mortality due to pneumonia and diarrheal diseases, whereas limited access to clean water and sanitation, especially in rural areas are indicated as the major direct risk factor. In 2005 mother to child transmission of HIV infections was reported to have been reduced by 1.74%. Access to Prevention of Mother to Child Transmission (PMTCT) has been scaled up with the result that by mid-2006 PMTCT services were available in 79%61 of 172 health facilities. 114. The HIV/AIDS and TB co-epidemic have led to a sharp increase in the number of orphans and vulnerable children (OVCs). Approximately a third of Swazi children (about 144,000) are estimated to be orphans and vulnerable children (OVC) and the number is expected to grow further.62 According to the QIMS formative research report63, it is projected that there will be 120,000 children orphaned due to AIDS by 2010, while there are likely to be higher numbers of other vulnerable children. In the absence of an adult caregiver, the inter-generational effects of the HIV/AIDS pandemic will continue to be experienced by future generations. According to the 2006-7 DHS, OVC are less likely to have their basic material needs64 met than non-OVC (61% compared to 77%), and the percentage of OVC decreases as the wealth quintile increases (from 37% in the lowest quintile to 22% in the highest). Overall, 11% of OVC were underweight as compared to 7% of non-OVC. In terms of school attendance, there is very little 59 Swaziland Demographic and Health Survey (DHS) 2006-2007. 60 Data on TB rates and cases taken from the National Health Sector Strategic Plan 2008-2013, Ministry of Health, Swaziland, 2009. 61 Swaziland Country Report March 2010, UNGASS available at http://data.unaids.org/pub/Report/2010/swaziland_2010_country_progress_report_en.pdf 62 OVC is defined as a child (below the age of 18) who (a) has lost one or both parents and/or (b) a child who has a very sick parent, or who lives in a household where an adult has been very sick, or has died in the past 12 months (as defined in the DHS 2006-7). Note that the DHS excludes children in institutional settings (e.g., orphanages) and therefore provides a conservative estimate of the true number of vulnerable children. 63 Pilot+ Report: Quality, Relevance and Comprehensiveness of Impact Mitigation Services Survey (QIMS) in Swaziland, June 2009. National Emergency Response Council on HIV/AIDS (NERCHA) and the World Bank. 64 In the DHS 2006-7 children were considered to have their basic material needs met if they had a pair of shoes, two set of clothes, and at least one meal per day. 31 difference between OVC and non-OVC (slightly over 90 percent of them aged 10 to 14 attend school).65 115. Infant mortality rate (IMR) and maternal mortality ratio (MMR) have worsened over the last decade to levels equivalent to those last seen in the 1980s. Despite good antenatal care (ANC) attendance and a relatively high proportion of institutional deliveries, Swaziland has a high maternal mortality ratio (MMR). In 2006-2007, for example, the MMR was estimated to be 589 (per 100,000 live births) compared to MMR of 370 (per 100,000 live births) in 2000 and the national target of 140 (per 100,000 live births). Most maternal deaths occur during childbirth and the postpartum period. The infant mortality rate (IMR) increased from 67 per 1,000 (in 1996) to 85 per 1,000 (in 2006/7), with 25% of all infant deaths taking place in the neonatal period.66 The main causes of this are preterm delivery, asphyxia, and infections. The high MMR and IMR indicate deficiencies in the provision of emergency obstetric and neonatal care (EmONC) services. This is confirmed by the report on Improving Quality of Maternal and Neonatal Health services in Swaziland: a Situational Analysis jointly conducted by the MOH/World Bank/UNICEF/WHO/UNFPA in January 2010, which assessed 59 health facilities. 116. There is an unequal distribution of health facilities and personnel in Swaziland. Swaziland is serviced by 223 health facilities, of which 44.8% are Government owned.67 Whilst there are 80 health facilities in Manzini region, there are only 34 health facilities in Shiselweni region. Shiselweni region68 also has the least number of midwives and doctors, and no obstetrician. There are 1.77 midwives per 100,000 population in Shiselweni compared to 3.47 midwives per 100,000 population in Hhohho region. Likewise, there are 0.43 doctors per 100,000 population in Shiselweni compared to 0.84 doctors per 100,000 population in Hhohho region. 117. Unequal access is influenced by the types of services offered across health facilities. Although 80% of the Swaziland population lives within an 8km radius of the nearest health facility, only around 63% can access a health facility within a one-hour walk.69 Furthermore, 80% of health facilities are clinics without maternity care, and only 12% of health facilities have inpatient beds. These provide only the most basic services. This suggests that actual access to primary health care is much weaker than the 80% figure suggests. 118. There is much inefficiency in the functioning of health sector institutions in Swaziland. Inefficiency in the health system is evidenced by, inter alia, low hospital occupancy, a lack of standardized protocols, the absence of a rational essential health care package, deficient supply systems, inefficient recruitment procedures, and poor staff retention at all levels of the health system. The latter is worsened by the impact of a brain drain to South Africa. Similar inefficiencies are evident in the implementation of social safety net, including assistance for children and pensioners. The Department of Social Welfare (DSW), for example, notes that there are duplicate payments being made to some children, while others are not receiving any 65 DHS 2006-07. 66 http://www.who.int/whosis/mort/profiles/mort_afro_swz_swaziland.pdf 67 Service Availability Mapping (2007), Ministry of Health, Swaziland. 68 Table 8, Improving Quality of Maternal and Neonatal Health services in Swaziland: a Situational Analysis report, World Bank, WHO, UNFPA, and Ministry of Health, January 2010. 69 MOHSW 8th round sentinel surveillance report. 32 support; late payments; leakage; and few economies of scale in the information and institutional systems that support the administration of social assistance grants. 119. There is lack of training capacity for health personnel in Swaziland. The three health training institutions in the country produce approximately 30 nursing assistants, and 100 nurses, midwives and environmental health officers per annum.70 There are no facilities within the country to train and produce specialists, doctors, pharmacists, laboratory staff; health workers sent for training outside the country often do not return. Various options need to be explored to produce qualified staff and develop capacity to meet service delivery needs, to address neglected public health areas and to scale up major health interventions. These could include task shifting; expansion and upgrading of current hospital and training facilities to provide specialist training, and strengthening partnerships between the private and public sector.71 120. Health is high on the national agenda. The National Health Sector Strategic Plan 2008 ­ 2013 (NHSSP), for example, identifies critical areas in the health sector that require support, and aims to improve low health outcomes and inefficiencies. NHSSP goals are translated into specific objectives and activities with designated roles, responsibilities, budget and monitoring indicators in the AAP. In addition, high levels of the Swazi Government have emphasized health as a key sector in Swaziland's plans for growth and development.72 This is evident in the Poverty Reduction Strategy and Action Plan73 (PRSAP), which stresses the vulnerability of the population, especially the poor, to HIV/AIDS, economic shocks and food insecurity. The PRSAP's overall aim is "to reduce poverty by more than 50% by 2015 and ultimately eradicate it by 2022" and is supportive of the MDGs. The PRSAP updated and operationalized the National Development Strategy (NDS) called Vision 2022. The NDS was adopted in 1997 with a 25-year timeframe prioritizing human development. 121. Social Development is also a key priority. The National Social Development Policy74 was approved in November 2009 and proposes a policy framework for the provision of social services in Swaziland. The policy states that: "In pursuance of the social development agenda, the notion of social protection has gained recognition as a viable approach to eliminate or reduce poverty." The Revised National Plan of Action (NPA) for Children 2011-2015 is seen as an imperative due to the high impact of HIV and AIDS on children and states that "The NPA 2011- 2015 is for all children in Swaziland, a significant policy shift from the previous NPA which only targeted OVC. While targeting all children, the NPA 2011-2015 places special emphasis on the vulnerable categories of children."75 This NPA recognizes both the challenges posed by the increased number of orphans and child headed households, and the strain faced by traditional extended family. In response to this, the NPA emphasizes that Government, civil society and 70 EU/Ministry of Health and Social Welfare (2008) Draft HRH Rapid Assessment 71 World Bank Swaziland's Funding of Referrals Abroad: Assessment of the Phalala and Civil Servants' Medical Schemes and Options for Improvement 72 Prime Minister's Speech to both houses of Parliament, Government Programme of Action 2008 -2013, March 2009. 73 Yingcamu - Towards Shared Growth and Empowerment - A Poverty Reduction Strategy and Action Programme, September 2007. 74 Swaziland National Social Development Policy, Final Draft, Deputy Prime Minister's Office, Government of Swaziland. October 2009. 75 Revised National Plan of Action (NPA) for Children ­ 2011-2015, First draft, National Children Coordination Unit, Deputy Prime Minister's Office, November 30, 2009. 33 communities must collectively address the issues through public policy implementation strategies, to meet the needs of children. 34 Annex 2: Major Related Projects Financed by the World Bank and/or other Agencies Swaziland Health, HIV/AIDS and TB Project Table A2-1. World Bank-Financed Projects in Swaziland Ratings76 Completed Projects Outcome Sustainability ID Impact IDF Grant for Capacity Building for Monitoring and Evaluation of the HIV/AIDS Program Closed in 2006. Swaziland Urban Development Project S L M (LN 3807-SW) Closed March 2005 Ongoing Projects Swaziland JSDF Project on Delivering Maternal and Child Health Care to Vulnerable Populations (effective January 2010) 122. Swaziland is fortunate to have considerable government support for the health sector in addition to support from bilateral, multilateral development partners, and UN agencies. The MOH is currently undertaking an exercise to codify all donor and partner support to strengthen their ability to identify gaps. Bilateral support is available from the US Government, primarily through PEPFAR, the European Union and Italian Cooperation. Multilateral agency support is primarily available from UN agencies such as UNAIDS, UNICEF, UNFPA, WFP, WHO, and the Global Fund. The African Development Bank provided support to the MOH to undertake an Infrastructure Rehabilitation Requirements Study, which was completed in March 2009. Follow- up activities from this study have not been identified but the African Development Bank is prepared to support the Government when requested to complement activities funded by other partners. Donor support is further outlined in Table A2-2 with additional details on each partner's support provided below. 123. European Union and Italian Cooperation. The EU delegation has been engaged in the health and education sectors, providing considerable technical assistance support to the MOH, providing funds for the primary school feeding programs in the Ministry of Education, and some support to OVC mitigation through caregiver grants in the Department of Social Welfare. The EU has also been involved in Swaziland's response to HIV/AIDS through an "HIV/AIDS Prevention and Care project" completed in December 2008 (4,103,000 provided through the 8th and 9th European Development Funds) and two ongoing grant contracts signed with NGOs: (i)"A Community based response to HIV/AIDS in rural areas of Lubombo Region" (2,100,000 ) and (ii) "An Integrated HIV/AIDS and livelihoods project" (750,000 ). Similarly, Italian Cooperation has provided significant support to the MOH in terms of technical assistance on human resource skills of service, some rehabilitation of health facilities, and other MOH bottlenecks in laboratory services. 76 Ratings code: (HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HL=Highly Likely, L=Likely, UN=Unlikely, HUN=Highly Unlikely, HU=Highly Unsatisfactory, H=High, SU=Substantial, M=Modest, N=Negligible), source: Swaziland Urban Development Project Implementation Completion Report, No: 33497. 35 Table A2-2: Partner and WB/EC Support alignment with AAP Strategic Objectives OTHER DONORS AND ANNUAL ACTION PLAN 2009 PARTNER UNDERTAKING JOINT EU/WB PROJECT ACTIONS Project Indicative project actions under taken by the Final EU/WB Project structure Strategic Areas of the AAP that are suppoted by the joint Sub-Objectives Main actors and actions Development project (may not include all action listed under an and links to SOs and SSOs of Objectives EU/WB Project Objectives SOO) the AAP 1.1. To strengthen the governance and 1.1 WHO co-chair of 1.1. To strengthen the governance and 1.1 Governance at both national and regional level. RESULT 1. The capacity of the management capacity of MOH to effectively and SWAp; ICAP management capacity of MOH to effectively and Governance is taken to mean management and health sector will be efficiently perform and discharge its core functions efficiently perform and discharge its core promotion of autonomy, capacity development and strengthened including sector-wide leadership functions including sector-wide leadership support to lower levels, programming, planning and budgeting, (Linked to many other areas due to 1.2. To strengthen the MOH financial management 1.2. To strengthen the MOH financial management 1.2 Strengthening financial management and and administrative support capacity to ensure and administrative support capacity to ensure accounting procedures (LINK 1.1; 1.5; 2.3) maximum accountability, efficient resource maximum accountability, efficient resource utilization and delivery of quality health services utilization and delivery of quality health services 1.3. To strengthen the human resources 1.3 PEPFAR (SAHCD and 1.3. To strengthen the human resources See 1.10 - training of nurses and midwives management systems and capacity TA planning and management systems and capacity Planning, management and management); Global Fund governance capacity of the MoH is improved 1.4 To deepen the implementation of the health 1.4 To deepen the implementation of the health sector decentralization process and strengthen the sector decentralization process and strengthen capacity of regional and community based health the capacity of regional and community based SO 1. To reform systems health systems and enhance the i) To improve institutional 1.5. To establish enabling institutional mechanisms 1.5 PACTS (NSAs) 1.5. To establish enabling institutional 1.5 Support to SWAp (linked to 1.1; 1.2) access to and capacity of the to promote and manage health sector coordination, mechanisms to promote and manage health quality of health Ministry of Health public- private partnerships (PPP) within a sector sector coordination, public- private partnerships services in to ensure wide approach (PPP) within a sector wide approach Swaziland with a efficient and 1.6 A. To build the MOH capacity at all levels to 1.6 A WHO particular focus on 1.6 A. To build the MOH capacity at all levels to 1.6 Setting up PIU for WB/EU joint project and all effective primary health performance of effectively perform and facilitate health sector policy, effectively perform and facilitate health sector other cooperating partners projects on the sector care, maternal the core health planning and M&E functions policy, planning and M&E functions (link 1.1) health and TB sector functions 1.6 B. Perform health sector M&E, HMIS and 1.6B PEPFAR (Health 1.6 B. Perform health sector M&E, HMIS and at all levels. Research functions Matrix Network); PACT Research functions 1.7. To strengthen the regulatory capacity of the MoH (NSAs) John Snow 1.7. To strengthen the regulatory capacity of the 1.7 Professional and quality standards (essential MoH packages) and protocols, accreditation , Service Charter (Link 1.1; 1.10) 1.8. To increase and diversify investment in health 1.8. To increase and diversify investment in health through innovative health financing strategies through innovative health financing strategies 1.9 Strengthen MOH Procurement & Logistics 1.9 Global Fund 1.9 Strengthen MOH Procurement & Logistics 1.9 Develop MoH procurement plan for health capacity and capability for goods, services and (procurement unit of MoH); capacity and capability for goods, services and commodities for the project. works Crown Agents; PEPFAR works (MSH - supply chain 1.10 Strengthen the nursing services, including the 1.10 Republic forecasting) management of China 1.10 Curriculum development, training of assistant 1.10 Strengthen the nursing services, including nursing department, the Quality Assurance (QA) (Taiwan) and University of the nursing department, the Quality Assurance nurses and midwives, quality assurance and programme and the Nursing Council Taipei (QA) programme and the Nursing Council Nursing Council (link 1.7; 2.3) 36 Table A2-2: Partner and WB/EC Support alignment with AAP Strategic Objectives Project Indicative project actions under taken by the Final EU/WB Project structure Strategic Areas of the AAP that are suppoted by the joint Sub-Objectives Main actors and actions Development project (may not include all action listed under an and links to SOs and SSOs of Objectives EU/WB Project Objectives SOO) the AAP 2.1. To strengthen the referral system and to ensure RESULT 2. Access, quality and the population's equitable access to a range of efficiency of services at health quality and affordable primary and specialized facilities will be improved clinical, diagnostic and rehabilitative services in accordance with the level of health facility 2.2. To provide essential clinical care, targeting: mental health, oral health, eye care, ENT services, i) To improve rehabilitative and palliative care SO 2. To ensure access to and the population's 2.3. To improve the health infrastructure and 2.3 AfDB quality of health 2.3. To improve the health infrastructure and 2.3. Rehabilitation of clinics, health centres, universal access equipment management systems in order to services in equipment management systems in order to regional hospitals and MGH (maternal health) to essential, provide quality health care Swaziland with a provide quality health care including equipment, management and affordable and particular focus maintenance (link 1 1; 2 1; ) 2.4. To strengthen the national pharmaceutical 2.4 PEPFAR (MSH - supply 2A. Services provided by quality curative on primary health services to assure consistent availability of chain management, selected clinics, health centres health care. care, maternal pharmaceutical, non-pharmaceutical and forecasting) and hospitals are improved health and TB equipment 2.5. To strengthen the central, regional and health 2.5 PEPFAR (American facilities capacity to provide appropriate and public health labs) customized clinical laboratory and blood transfusion 2.6. i strengthen the central, regional and health To centre facilities capacity to provide high quality, safe and efficient radiological services 37 124. United States Government/PEPFAR. The US government, under the umbrella support of the President's Emergency Program for AIDS Relief (PEPFAR) and through its various technical agencies such as USAID and CDC has a large program with the MOH and through various NGOs. PEPFAR's annual support in previous years was in the magnitude of US$15 million but has now been increased to about US$27 million. Funding for activities generally flows through PEPFAR-contracted NGO partners, but planned support for 2010 includes planning and financial management support (US$500,000) for the MOH directly. 125. Primary support areas include: (i) human resource management, (ii) medical supplies and commodity procurement and pharmaceutical supply chain management, (iii) policy revision, quality assurance, provision of technical assistance and documentation support for laboratory services, (iv) improving HIV testing in TB sites; improved screening and infection control procedures; and support of the MDR TB diagnosis and treatment, (v) strengthening the health metrics network data especially for antiretroviral drugs, (vi) building capacity for NGOs; (vii) increasing community-based HIV counseling, testing, and awareness; (viii) promoting coordination of national prevention strategies, including male circumcision and PMTCT; (ix) support of HIV care and treatment programs with the uniformed services (i.e., military, police, correctional officers); and (x) decentralization and quality improvement of comprehensive care and treatment programs for HIV patients. PEPFAR also envisages limited technical assistance to finalize various social protection policies, developing a minimum package for OVC, conducting an OVC situation analysis, strengthening 200 neighborhood care points (NCPs) with Peace Corps volunteers, and working with the "Shoulder to Cry On" program to help prevent and reduce sexual violence against children. 126. The Global Fund. The MOH and NERCHA receive substantial support from the Global Fund in Rounds 2, 4, 7 and 8. In the case of the MOH, Round 8 proposals on health systems strengthening was approved for US$ 15 million, TB for US$11.8 million, and Malaria for US$ 13 million over the next 5 years. Currently the Government, through NERCHA as the Principal Recipient and other institutions, is implementing Global Fund consolidated support from Rounds 4 and 7 (US$ 115 million) that were primarily focused on school feeding, feeding at NCPs, blood transfusion services, and the roll-out of HIV testing and treatment throughout the country. This support has been hampered by challenges of absorptive capacity and management of funds, which resulted in Conditions Precedent being set against the current support. 127. UNICEF supports MOH staff members in the Nutrition Council, Expanded Programme on Immunization, a technical officer for PMTCT and a laboratory technologist. MOH Programme areas include child health and nutrition, PMTCT and water and sanitation with budgets of US$1.6 million in 2007, US$2.0 million in 2008, and just over US$1 million for 2009. Additional UNICEF support goes towards the NCPs providing food (in collaboration with WFP), immunization services, early childhood development, child welfare services through biannual nurse visits to screen children, and improving the Schools as Centers of Care and Support (SCCS) teams. UNICEF is working with the Government to ensure that NCPs provide a more comprehensive package of services and to improve the quality of services based on recommendations from the NCP assessment report. UNICEF also carried out a vulnerability assessment survey (2007) and sexual violence study with CDC (2007). Two additional studies relevant for improving impact mitigation efforts were completed late in 2009--a child-headed household study with Save the Children Fund, and a quality of impact mitigation study with NERCHA. 38 128. Several donors are funding in-service training (IST) for management staff and health professionals. PEPFAR-funded organizations often work directly with and/or provide funds directly to regions and/or facilities for specific training interventions. However, interventions need to be better coordinated and monitored to reduce duplication; certified modular, on the job and mentoring training approaches need to be promoted to prevent staff absence; in-service training modules need to be integrated into pre-service training; interventions need to be aligned with and supportive of MOH plans and priorities; trainer skills need to be improved and M&E systems strengthened.77 129. Various donors are supporting HR planning, management and development interventions. The US Government through several PEPFAR funded organizations such as the South African Human Capacity Development Coalition (SAHCD) is providing support to the MOH restructuring process and the staffing and funding of key positions; HR information systems and recruitment procedures; quality assurance and standard setting; and leadership and management capacity development. The International Center for AIDS Care and Treatment Programs (ICAP) is supporting the Faculty of Health Science with pre-service and in-service training programmes and developing nurse mentor programmes. The EU has provided Technical Assistance to assess the HRH situation. Italian Cooperation, WHO, other UN agencies and the Global Fund have provided technical assistance to specific areas and funded technical posts. The Commonwealth Fund for Technical Cooperation has funded the development of a comprehensive plan for HRD Training for the whole public sector, which will focus on strategic and planning skills for human resources management and planning. 130. The MOH, with technical and financial support from development partners including the UNFPA, WHO and UNICEF, has instituted programs on family planning, nutrition, prevention and control of sexually transmitted infections (STIs) / reproductive tract infections (RTIs) and the Prevention of Mother-To-Child Transmission (PMTCT). However, Emergency Obstetric and Neonatal Care (EmONC) has not received much attention and support despite the high maternal mortality ratio. 77 EU/Ministry of Health and Social Welfare (2008) Draft HRH Rapid Assessment, recommendations from a meeting of USG Partners in July 2008. 39 Annex 3: Results Framework and Monitoring Swaziland Health, HIV/AIDS and TB Project Results Framework 131. The results framework shown in Table A3-1 will guide project management and supervision. (** indicates indicators that are also in the Annual Work Plan of the Ministry of Health, whereas *** indicates indicators in the national HIV M&E plan for 2009 ­ 2014, and **** indicates that the indicator is part of the World Bank's set of core indicators for the health sector). Table A3-1. Results Framework PDO ­ Project Development Objective Project Outcome Indicators Use of Project Outcome Information and Outcomes PO1. % of health facilities that Improve access to and provide at least five public PO1 and PO2 will measure increased access to health services79 quality of health services in higher quality public health services, whereas Swaziland with a particular PO2. % births delivered by a skilled PO3 will measure the effects of the project focus on primary health care, attendant in a health facility80 focusing on improving the quality of TB/HIV maternal health and TB78 ** service delivery. PO3. TB case notification rate81 This indicator will measure whether designated PO4. % of OVC beneficiaries that OVC receive support (the intermediate outcome Increase social safety net receive cash transfers regularly indicator) regularly in a predictable manner, thus access for OVC (as defined in the OVC enabling them and their families to consider the Implementation Manual) cash transfer as a regular source of income, and being able to plan around that. 78 This PDO is aligned with the following HSSP strategic objectives: a) `to reform and enhance the institutional capacity of the Ministry of Health to ensure efficient and effective performance of the core health sector functions at all levels'; b) `To ensure the population's universal access to essential, affordable and quality curative health care'; and c) `To improve provision of and increase access to essential, affordable and quality public health services in order to significantly reduce the burden of diseases, morbidity and mortality and improve the health status and quality of life of the Swazi population'. 79 The five public health services are family planning (modern methods of contraception), post-natal care, management of STI, immunization and growth monitoring which is part of the essential health package (EHCP). 80 This data will be obtained from the UNICEF Multiple Indicator Cluster Survey (MICS) and the DHS. 81 The Annual Work Plan of the Ministry of Health monitors TB case detection. In line with revised WHO good practice standards, the project will monitor TB case notification rate. 40 Intermediate Outcomes by Intermediate Outcome Use of Intermediate Outcome project component Indicators Monitoring Component 1 intermediate outcome: Strengthening the Capacity of the Health Sector This indicator will measure the extent to IO1. % of health facilities that submit which the performance of health facilities is HMIS reports on time82 monitored and the timeliness with which HMIS reports are submitted. Component 1: Planning, Management and Governance Improved management at the decentralized Capacity Building. IO2. % of clinics that have had at least levels is a key aspect of this component. As 6 supervision visits in the last 12 such, supervision visits are being used as a months83 proxy of the strength of management oversight at the level of clinics. Component 2 intermediate outcome: Facility-level Support to Improve access, Quality and Efficiency of Health Services IO3. Number of health facilities This indicator will measure progress in constructed, renovated, and/or rehabilitating facilities targeted with the equipped **** project funding. Screening HIV patients for TB will monitor IO4. % of PLHIV who are screened the effects of the project on the HIV-TB co- for TB epidemic. Improved infection control will lower IO5. % of targeted health facilities nosocomial transmission of TB, and with TB infection control therefore reduce the number of cases of TB Sub-Component 2a: Support to measures84 in place or the risk of MDR or XDR TB infection by Clinics, Health Centers and TB patients. Hospitals This will assess whether the health centers to be provided with the equipment and supplies to perform basic EmONC procedures are actually doing so. Provision IO6. Number of health centers that of Basic EmONC services at health centers provide Basic EmONC services will indicate that the clinics are referring obstetric complications to the health centers instead of directly to the hospitals (i.e. not overburdening hospitals), as was revealed in the baseline survey. IO7. Number of women who deliver Women who deliver in health facilities are at targeted health facilities direct beneficiaries and hence this indicator. IO8. % of targeted health facilities This indicator assesses implementation 82 Within two weeks of due date. 83 Supervision at the facility level being active is a sign post of a health planning and M&E system functioning, of funding being available, and of attention being paid to performance ­ by the health sector managers at different levels. Therefore, although the project will not directly fund these visits, this was chosen as a proxy indicator for managerial capacity that has been strengthened as a result of the project funding being used to build managerial capacity. 84 These include cough monitors, administrative procedures, safety equipment (masks), and ventilated waiting areas. 41 with health care waste progress about the coverage of health waste management facilities in place management at targeted facilities. This indicator will assess the extent to IO9. Number of students who are which the capacity improvements at the Sub-Component 2b: Support to trained under the newly nurse training institutions is increasing the nurse training institutions developed guidelines for number of nurses who are trained under the mentorship and preceptorship newly developed guidelines for mentorship and preceptorship Component 3 intermediate outcome: Strengthening of the OVC Safety Net The MIS will be crucial for the cash transfer Sub-Component 3a: Capacity IO10. % of quarterly progress reports pilot to function efficiently and for the Building and System produced by the Management government's stated policy of community- Strengthening Information System (MIS), driven impact mitigation services to be according to agreed reporting implemented. Therefore, the number of standards reports submitted is used as a proxy for whether the MIS is working. This measures the actual number of OVC IO11. Number of OVC directly beneficiaries who receive support, and can Sub-Component 3b: Cash supported through this cash be used to compare against the targeted Transfer Pilot for OVC transfer pilot number. Arrangements for results monitoring 132. Arrangements for results monitoring are summarized in Table A3-2. Data sources for the indicators in the results framework come primarily from government sources ­ the Ministry of Health's routine Health Management Information System, the Demographic and Health Survey, and health facility surveys, and the to-be-established (with project funds) management information system (MIS) for the OVC cash transfer program. Specifically, related information systems that are relevant to the project and, in particular, project-level indicators, are described below. National Health Information System (HMIS), managed by the MOH85: The MOH, after a national review of their health information system in 2006, has embarked on a national revamping of the HMIS. A national Health Information Policy has been written and approved, registers at health facilities have been rationalized and their future updates synchronized, a new national Strategic Information Department (amalgamation of existing departments, located across the organizational structure) has been created, a 85 During a 2009 data quality assessment of the HIV component of the MOH HMIS, the system scored an overall rank of 3.9 out of 5. This suggests that whilst there were some weaknesses, MOH data being collected was of reasonable standard. A Health Metrics Network (HMN) assessment of the entire HIS is planned for 2011 to shed light on continuous areas of weakness and how to address these. Any data gaps in the HMIS (due to either low or no reporting, or gaps in data collection tools) will be assessed by the PIT, who will travel to the health facilities to tally the data directly from the health facilities. In addition, an MNH assessment might be needed, as well as a medical graduate survey. Given that both the notion of an integrated HMIS, as well as decentralized management of health data (in line with the country's national policy of local government decentralization), however, are new, challenges in the HMIS include the lack of a central database (development plans are underway), lack of standard, timely reporting to stakeholders, and limited use of information for decision making. 42 national Health Information System Technical Working Group has been formed, and the HMIS management has been decentralized to the four regional health management teams. Where new services are being established (such as EmONC at health facilities), data collection efforts will need to be initiated and integrated within HMIS reporting. Some of the routine data collected under the HMIS (all data regarding HIV service delivery), forms part of the national Swaziland HIV/AIDS Programme Monitoring System (SHAPMoS). National OVC M&E system (managed by the Department of Social Welfare and the NCCU). UNICEF is providing support for the development of a national OVC M&E system. Once developed, the system will be harmonized with efforts of the Ministry of Local Government and Tinkhundla to record who is vulnerable and which services they receive. The DSW M&E system will also be harmonized with the national HIV M&E system, through integration of reporting with SHAPMoS. National HIV M&E system (managed by NERCHA). As the mandated coordinator of the national HIV response, NERCHA is also responsible for the national HIV M&E system with support from the HIV M&E technical working group. The long-term, outcome-level result of the national HIV M&E system is to ensure that this system is functional and provides timely and quality-assured data on the HIV response (as defined in the 2009 ­ 2014 NSF) on an ongoing basis. This data in turn can be used to track progress (against pre-defined targets) in responding to HIV. A national HIV M&E system assessment in 2007 and 2008 rated the system functional, as more than 60% of organizations reported data when needed. The weakest part of the system is the community reporting components (which is the data the project needs). Therefore, the PIT should liaise closely with NERCHA to follow up on the implementation and strengthening of the community-reporting component of SHAPMoS. Remedial actions, and a back-up strategy should other data not be available, could include either an assessment or a census amongst Kagogo centers to obtain the data, with a relatively minor cost implication. National Local Government M&E System managed by the Ministry of Tinkundla and Administration (MTA). The MTA's team is responsible for the initiation and administration of a system entitled "Tinkundla Enterprise." This GIS system aims to capture data--from household level--about every person in Swaziland, as well as a vast amount of data on Neighborhood Care Points and register OVC households. Swaziland Central Statistics Office (CSO). The CSO has a key role to play in the execution of national surveys in Swaziland. The Strategic Plan for CSO (2004/2005- 2008/2009) states that the mission of the CSO is "to effectively coordinate the National Statistical System, provide high quality statistical data and information required for evidence-based policy, planning and decision-making for national socio-economic development, administration, accountability, and to promote a culture of using statistics." The World Bank currently provides technical assistance to the Government of Swaziland (project end date of June 2010) with the overall objective of developing a National Strategy for Statistical Development for the period up to 2015. This includes a time- bound action plan with a budget, which covers the whole statistical system including relevant line ministries and all data collecting units. The specific objectives are to: (i) 43 assess the entire national statistical system including physical infrastructure and equipment; (ii) prepare a detailed plan for the development of a harmonized and well- functioning national statistical system; and (iii) organize workshops with stakeholders in order to design and disseminate the plan. 133. Annual efforts to collect data from targeted health facilities, for the first 3 years: Such efforts would entail visiting all of the facilities supported directly by the project to determine service coverage data. Although all the required data are currently captured at health facilities in registers, data do not always feed up to regional or national levels, or from the national level to other organizations who need such data. The project's support to improve monitoring and evaluation capacity in the health sector through Component 1 is expected to improve the quality and timeliness of HMIS routine data. 134. Impact evaluation of the OVC Cash Transfer Pilot: Given that Component 3 will pilot a cash transfer project for OVC, an impact evaluation study will be carried out to measure the improvements in human development indicators, such as health, nutrition and education. The study will focus on the use of the cash transfer and its effect on households' consumption as well as operational aspects of the project such as timeliness of the delivery of the cash transfers. The impact evaluation study will therefore feed into the measurement of the PDO indicator 4. The study will also compile lessons learned that will guide future expansion of the program. 44 Table A3-2. Arrangements for Results Monitoring Target Values Data Collection and Reporting Output Indicators Baseline 2011 2012 2013 2014 2015 Frequency and Reports Data Collection Responsibility for Instruments Data Collection PO1. % of health MOH Strategic facilities that Information Numerator and provide at least five 60% 60% 65% 70% 75% 80% Will be determined from SAM data Department denominator: SAM public health collects and services86 analyses data. Numerator and PO2. Percentage of births n/a (not n/a (not n/a (not denominator: Survey The CSO will run delivered by a measured measured measure This data are calculated every 2-3 74% (2007) 80% 85% data, or see foot note the survey and skilled attendant at a by by d by years from DHS and MICS for alternative, using report the results health facility.87 surveys) surveys) surveys) routine data Numerator: Annual MOH Strategic number of newly Information PO3. TB case notification This data is collected once a year, 1083 1100 1125 1150 1175 120089 notified cases Department rate.88 using routinely collected data. Denominator: 100,000 collects and population analyses data. PO4. % of OVC beneficiaries90 that This data are calculated monthly and receive cash DSW will extract routinely by monitoring the Numerator and transfers regularly 91 92 data from the MIS, 0% (2010) 0% 0% 15% 45% 75% timeliness of the cash transfer to denominator: Data (as defined in the and report it on a those who are part of the cash from the OVC MIS OVC regular basis transfer pilot. Implementation Manual) 86 The five public health services are family planning (modern methods of contraception), post-natal care, management of STI, immunization and growth monitoring which is part of the essential health package (EHCP). 87 This data will be obtained from the UNICEF Multiple Indicator Cluster Survey (MICS) and the DHS. 88 This includes smear-positive, smear-negative, extra pulmonary, retreatment and relapse. 89 This target is the Ministry's own target for its program. 90 This indicator focuses ONLY on those OVC that to be supported through the cash transfers that the project will fund, and not other OVC social safety net programs. 91 The baseline is zero because the OVC cash transfer pilot has not yet been established 92 The value for Years 1 and 2 is zero, because the cash grant pilot will be designed and built in the first 2 years, and it is not expected that actual grants will be paid during this period. 45 Target Values Data Collection and Reporting Output Indicators Baseline 2011 2012 2013 2014 2015 Frequency and Reports Data Collection Responsibility Instruments for Data Collection Component 1 Numerator: Number of health facilities and hospitals whose HMIS MOH Strategic Numerator: This will be collected reports are submitted on IO1. % of health facilities Information through routinely collected data. time that submit HMIS 77% 78% 79% 81% 83% 85% Department Denominator: 223 reports on time collects and Denominator:223 facilities. facilities -number of analyses data. health facilities according to the SAM survey Numerator: HMIS- data on supervision visits IO2. % of clinics that will be captured MOH Strategic Numerator: Number of clinics have had at least 6 routinely. This should Information visited at least 6 times in the last 12 supervision visits in 35%94 40% 50% 60% 70% 80% be in place by project Department months. the last 12 months.93 effectiveness collects and Denominator: 202 clinics. *** Denominator: 202 ­ analyses data. number of clinics according to r the SAM survey 93 Supervision at the facility and regional level being active is a sign post of a health planning and M&E system functioning, of funding being available, and of attention being paid to performance ­ by the health sector managers at different levels. Therefore, although the project will not directly fund these visits, this was chosen as a proxy indicator for managerial capacity that has been strengthened as a result of the project funding being used to build managerial capacity 94 These are estimates. The baseline and associated targets will be finalized following determination of the target facilities 46 Target Values Data Collection and Reporting Output Indicators Baseline 2011 2012 2013 2014 2015 Frequency and Reports Data Collection Responsibility Instruments for Data Collection IO3. Number of health PIT records and PIT will measure facilities 96 measured through quarterly reports progress reports from and assess the constructed, 0 0 4 8 12 15 contractors progress on renovated, and/or ongoing basis equipped 95**** Numerator: Number screened for MOH Strategic Numerator and TB at every visit, reported monthly Information IO4. % of PLHIV who denominator: HMIS 55%97 60% 65% 70% 75% 80% Denominator: Number of PLHIV Department are screened for TB records (routine health- registered collects and facility data) analyses data Numerator: Number of facilities that have all infection control measures Numerator: TB MOH Strategic IO5. % of targeted health in place, as assessed during a routine department supervision Information facilities with TB 100% supervision visit, which is reported 0% 10% 20% 51% 80% checklist data Department infection control (all) on an ongoing basis as the Denominator: Targeted collects and measures in place98 supervision visits take place facilities from AWP analyses data Denominator: Targeted facilities from Annual Work Plan (AWP) RHMTs will report Number of health centers that on this to MOH provide basic EmONC, based on Strategic IO6. Number of health yearly EmONC procedures Information HMIS records, or MNH centers that provide performed (because the indicator is Department if 0 1 2 4 5 5 assessment, when Basic EmONC a number, there is no numerator or routine data are undertaken services denominator) used. Otherwise, the MOH Strategic Information department (at 95 This is one of the IDA core indicators, however this project will not have any new construction. 96 The associated target and progress data only refer to the number of health facilities to be renovated and equipped. 97 These are estimates. The baseline and associated targets will be finalized following determination of the target facilities. 98 These include: cough monitors, administrative procedures, safety equipment (masks), ventilated waiting areas. 47 Target Values Data Collection and Reporting Output Indicators Baseline 2011 2012 2013 2014 2015 Frequency and Reports Data Collection Responsibility Instruments for Data Collection national level) will manage the MNH assessment MOH Strategic IO7. Number of women Information who deliver at target 5247 5400 5650 5900 6200 6500 Once a year HMIS records Department health facilities99 collects and analyses data. Numerator: Number of facilities with health care waste management IO8. % of targeted health Numerator: WB project facilities in place, as reported on a facilities with health work plan and PIT PIU to calculate quarterly basis to HMIS and as care waste 10%101 25% 40% 60% 75% 100% records from project verified through periodic management Denominator: Targeted records supervision visits to facilities facilities in place100 facilities from AWP Denominator: Targeted facilities from AWP IO9. Number of students Number of students who are trained who are trained under the newly developed under the newly guidelines for mentorship & Nurse training developed preceptorship at the end of the Nurse training facility facilities will guidelines for 0 0 40 60 80 100 academic year (because the records report this data to mentorship & indicator is a number, there is no the PIU preceptorship numerator or denominator) Component 3 IO10. % of quarterly Numerator: number of quarterly Numerator: Number progress reports reports that have been produced as will be calculated DSW will produce produced by the per reporting standards, measured through the MIS for the 0% 0% 102 10% 50% 75% 75% quarterly reports Management annually OVC Cash Transfer through the MIS Information System, Denominator: 4 reports per year per Pilot according to agreed in each of the 4 regions (16 in total) Denominator: 16 99 This indicator is to measure "Direct Project Beneficiaries" which is one of the IDA core indicators. 100 Health care waste management facilities include: incinerators, colour-coded bins, training, and containers for disposing sharp objects. 101 The baseline is an estimate and will be finalized following determination of the target facilities. 102 Target values in Year 1 of implementation remains the same as baseline values because it is a new system that needs to be built 48 Target Values Data Collection and Reporting Output Indicators Baseline 2011 2012 2013 2014 2015 Frequency and Reports Data Collection Responsibility Instruments for Data Collection reporting standards. reports (maximum) IO11. Number of OVC DSW will produce 0 (pilot directly supported 103 The MIS will collect this data after MIS for the OVC Cash the quarterly 0 not yet 1000 4000 6000 8 000 through this cash each payment process. Transfer Pilot reports through the started) transfer pilot**** MIS 103 These target values are rough estimates and the final number of beneficiaries will depend on several factors, such as the level of cash transfer provided to the beneficiaries 49 Annex 4: Detailed Project Description Swaziland Health, HIV/AIDS and TB Project 135. The design of the jointly financed project derived from close consultations with the Government, EU and development partners, and NGOs. A premium was placed on ensuring alignment with national strategic plans for health and HIV/AIDS; major financial, capacity and program gaps, the need to adopt a harmonized approach and reduce transaction costs; and the importance of focusing on results as a means to improve both performance and efficiency. 136. Based on these design principles, the challenges faced by the health and social welfare sectors, and the existing support to the sectors from the Government and other development partners, the project is comprised of the following three components: (1) Strengthening the Capacity of the Health Sector; and (2) Facility-level support to Improve Access, Quality and Efficiency of Services; and (3) Strengthening of the OVC Safety Net. Component 1: Strengthening the Capacity of Health Sector (US$ 3.90 million) 137. This component will support interventions to strengthen the health care system at different levels especially in the areas of governance, management, planning and coordination. The NHSSP highlighted the need to build skills and capacity to improve health managers' leadership, governance, and management and supervision skills as well as promote the autonomy of Mbabane Government Hospital and larger health sector institutions. Managers need the knowledge, skills and behavior (competencies) to organize their teams; they also need effective management support systems (including mentoring) to manage resources and an enabling environment, which addresses their expectations, their supervision framework and incentives for performance. 138. Key regulatory, governance and management issues preventing effective and efficient service delivery are: Limited decision making powers of management; Absence of both performance (results-based) management and a `customer' based approach; Lack of a `problem solving' or crisis management approach to management of daily challenges; Ineffective management of hospital and health information systems; and Lack of separation of the MOH governance and regulatory functions from MOH oversight and management. 139. In light of the range of challenges in planning, management, governance and coordination, it was necessary to be selective about the areas included in the project. Priority was given to NHSSP areas earmarked to start in the current AAP and, as far as possible; this component is consistently organized along the AAP categories. That said, Swaziland is a small country ­ while it needs the basic superstructure of regulation, accreditation, etc, it can `borrow' much of the basic work from neighboring countries and adapt it to Swazi circumstances. Furthermore, the institutions, which need to be regulated, are very small and easily accessible given the country's good communications network. Thus, while the project seeks to address a 50 wide variety of areas, implementation will be relatively straightforward. Given the nature of issues in this component, the inputs comprise TA, training, and workshops together with limited inputs for computers, software and furniture. Specifically, the project will support: (a) Improved regulation mechanisms, (b) Regional-level capacity building; and (c) Health Planning and Coordination. 140. (a) Improved Regulation Mechanisms -- the project will support the strengthening of regulatory functions in the health sector. This support includes technical assistance for: i. Finalization of the first draft Essential Health Care Package (EHCP) that WHO is supporting.104 ii. Review of the legal and regulatory framework, and development of regulations to incorporate international and regional health agreements with the focus on public health. The MOH's legal unit is comprised of one individual currently; project support will contribute to the current work program, which includes further updating of the outdated legislation and drafting of both new legislation and regulations to support the NHSSP. The planned new legal framework is closely linked to the 2007 sector policy framework and will also incorporate provisions that arise from the international,105 inter- ministerial106 and transversal107 obligations that Swaziland has accepted and impact health care delivery. Project inputs will also support the parliamentary oversight process for the health sector (see below). iii. Strengthening the accreditation system for facilities providing health services, professional service standards and associated training institutions. Based on lessons learnt from accreditation visits to selected health facilities conducted by the Council on Health Services Accreditation of South Africa (COHSASA) and the development of an essential health care package, the project will support the establishment of standards, guidelines, and protocols, and their dissemination and implementation. The project will also support the strengthening of a MOH standards and compliance unit to coordinate accreditation activities, monitor interventions and ensure capacity building in accreditation of systems, training institutions and facilities and services. iv. Linked to (iii) above, the project will support regular information sharing and capacity building initiatives for members of parliament (MPs) and the professional regulatory bodies (Medical and Dental, and Nursing Councils). The project will also strengthen oversight of the health sector and enhance accountability and support for NHSSP implementation. At present, the health professional councils are not administratively independent of the MOH. Clear separation is needed for them to function effectively as custodians of professional conduct, certification for practice, and protection of the public in the event of malpractice by registered health professionals. The Councils also have varied capacities, which the project will strengthen through support for their technical 105 These include commitments under International Health Regulations and various multilateral commitments and declarations e.g., MDGs, TRIPS etc. 106 These include Public Service reforms, environmental legislation etc. 107 These include requirements under the Public Finance Management framework etc. 51 development and operating procedures, as well as the subsequent dissemination and implementation of revised rules and practices.108 v. PEPFAR has been supporting the MOH in its central functional, structural and organizational reform. The new MOH structure was approved by the cabinet in May 2010. This project will provide very limited support through one long-term adviser to follow up on MOH organizational development and helping to establish a mentoring program for senior staff. 141. (b) Improving governance and management at regional-level. The central reforms are also mirrored in technical assistance support to: (i) reform and improve decentralized management of the four regions and (ii) strengthen the management of hospitals. This includes: (i) Revamping the capacity of the 4 Regional Health Management Teams (RHMTs) including management development and team building.109 (ii) Strengthening hospital boards and improving hospital management in regional and national hospitals, through better planning, enhanced professional training, and increased autonomy. Hospital boards are potentially key governance, advisory, support structures, and are a recent development in Swaziland. Hospital boards can play an important role in communicating with patients, families and communities; enhancing the hospital image; assisting with fundraising and serving as a conduit for community complaints and praise. The project will assist in improving the rules governing the selection process to appoint board members; developing board capacity building programs, and putting in place an M&E system to improve decision-making by the hospital boards. Given the large resources consumed by hospitals (50% of the public health budget), enhancing management capacity is vital to the effective delivery of health services and efficient functioning of hospitals. Specific activities will include the development of more functional hospital organograms that incorporate clinical management and support, general management (including infrastructure and equipment) and hospitality management; skills audit of the current management teams; and starting a mentoring and coaching management development program for hospital management teams. 142. (c) Health Planning and Coordination. Project support will focus on strengthening the Health Planning Unit, but concentrating on development of health planning and budgeting skills and capacity. This includes the creation of a sub-unit within the Health Planning Unit that would specialize in health financing. Therefore, the project will finance short-term health financing and 108 In many countries, health profession councils also accredit training institutions that produce health professionals, oversee internship programs for newly qualified graduates and support continuing professional development programs. With the partial exception of the Nursing Council, the professional councils are not up to this standard. There is some discussion of creating an independent Health Professions Council that will be able to undertake all these functions, improve the team approach to health service delivery, avoid duplication of functions, and gain economies of scale in the administration of registration fees and certification. 109 The public health system is decentralized from the central MOH to the four Regional Health Offices (RHOs) in Hhohho, Lubombo, Manzini and Shiselweni. Each RHO is headed by a Regional Health Administrator supported by his/her Regional Health Management Team (RHMT) whose mandate is to provide technical and administrative leadership in executing MOH policies. The RHMT is also responsible for planning, monitoring and supervision of all health related activities within its region. The RHMTs play a critical role in the decentralized response, combined with provision of specialist technical support from the central MOH. 52 planning training, and one long term TA. As a critical first step towards improving health financing, the Planning Unit recently produced a substantive public expenditure review for the health sector and will continue with work on National Health Accounts and a Public Expenditure Tracking Study,110 which would need to be widely disseminated to generate discussion on how to improve the financing. The project will also provide limited support for enhancing the nascent SWAp processes through TA from neighboring countries where the SWAp process is more advanced to ensure that the wheel is not reinvented. 143. Furthermore, the project will support: (i) strengthening financial management capacity; and (ii) strengthening procurement capacity within the MOH, particularly through the provision of training sessions in Goods, Works and Consultant Selection at ESAMI for all staff in the new Procurement Unit; CIPS Training for all Staff to be hired who do not possess CIPS Training in Supply Chain Management and Medical Procurement; and procurement of a motor vehicle to enable the PU to conduct procurement inspections. Component 2: Facility-level Support to Improve Access, Quality and Efficiency of Services (US$ 24.38 million) 144. This component will: (a) provide support to clinics, health centers and hospitals to improve access to and quality of health services; and (b) support nursing training institutions to expand midwifery training. Sub-Component 2a: Support to Clinics, Health Centers and Hospitals 145. This sub-component will focus on primary health care (PHC) in an effort to improve access, quality and efficiency of services provided by clinics, health centers, and hospitals. Specifically, this will involve: a) rehabilitation and provision of equipment to priority health facilities, and b) strengthening and integrating the following interventions at rehabilitated facilities: TB and HIV Co-epidemic Response; Emergency Obstetric and Neonatal Care (EmONC); and Health Care Waste Management (HCWM). In order to be effective, interventions should be underpinned by the provision of appropriate staff for the rehabilitated facilities based on the EHCP. Currently, there is no functional referral system for rationalization of service delivery at the various levels, leading to congestion at the main hospitals. The roll-out of the EHCP is expected to address this bottleneck. 146. Rehabilitation and provision of equipment to selected facilities: Infrastructure rehabilitation will include physical and utility (water, electricity, sanitation, waste, fire, communication and infection control including sluice rooms) upgrading, provision of equipment and furniture, and development of a maintenance plan for buildings and equipment. There will be no land acquisition or Greenfield construction done under this project; infrastructure rehabilitation indicated above will be undertaken to improve patient care and management and increase infection control measures in the selected health facilities. The provision of equipment will be based on the recently developed standard medical equipment package for each level of the referral system. 110 Both studies will be financed outside of this project. 53 147. The following criteria will be used to prioritize health facilities in need of rehabilitation: i) geographical location, i.e. priorities will be given to rural areas: ii) facilities in urgent and greatest need of rehabilitation; iii) facilities in need of maternity services; and iv) minimum population coverage. 111 The total number of clinics selected will depend on both the financial envelope and the costs of rehabilitation, equipment and maintenance. Further, health facilities to be rehabilitated will be identified based on findings of facility assessment and costing. 148. Apart from this rehabilitation, the maternity and neonatal wards of selected health facilities will be equipped to enable them to provide emergency obstetric and neonatal care (EmONC). Furthermore, the MOH Biomedical Engineering department will be strengthened in their capacity for the proper maintenance of health infrastructure and medical equipment. 149. At each rehabilitated health facility, the following three interventions will be strengthened: the TB and HIV Co-epidemic Response; EmONC, and Health Care Waste Management. 150. Strengthening the TB and HIV Co-epidemic Response: Activities under this intervention are intended to fill gaps in the response to the co-epidemic that are unfunded by Swaziland and other developments partners, and are priorities in the AAP section on TB control and management. Activities will be underpinned by the new UNAIDS priority to "reduce the number of people living with HIV who are dying from TB" by 50% by 2015 compared with 2004 levels. This is highly relevant in the Swaziland context. Two ways to achieve this goal are to: a) accelerate early diagnosis of cases through Intensified Case Finding (ICF), and b) expand decentralized services towards the community level. 151. The following activities will be supported: Human resource capacity development (one HIV/TB-IC Coordinator at the national level, and 4 HIV/TB-IC Coordinators at Regional level, and training of health workers, and mobilization and training of ex-TB patients. Commissioning of a study on models of decentralized HIV/TB services at community level to, inter alia, evaluate good practice approaches, and cost implications. Strengthening infection control at the national TB center (which sees about 40% of TB patients). 112 111 The 2008 Service Availability Mapping (SAM) indicates that there are 223 health facilities in Swaziland comprising: 1 national referral hospital, 3 regional hospitals, two specialized hospitals (tuberculosis and psychiatry), 2 sub-regional hospitals, 5 health centres, 8 public health units, 24 clinics with maternity and 178 clinics without maternity. 112 Infection Control (IC) is critical in congregate settings, particularly at all points of care where people access services related to HIV/AIDS. All people, PLHWHA and health workers in particular, must be protected from acquiring TB in health care settings. The project will support: a) TA to design costed facility-specific IC plans (e.g., TB and HIV clinics); and b) refurbishment of high-risk, high-patient volume facilities (identified by government through the above study) in order to minimize the risk of health facility-acquired TB. This is already financed under the support to hospital and health centres sub-component 2(a). 54 152. Establishment of digital x-ray capability at national and regional level. The project will support strengthening the central and regional health facilities' capacity to provide high quality, safe and efficient radiological services. Given the potential high-impact of digital chest x-rays (D-CXR) for increasing early TB case-detection,113 the project will support an innovative approach optimized to address the particular diagnostic challenges of an HIV/TB co-epidemic.114 In particular, the project will finance one digital x-ray at the national level, four at regional level, and training for health care workers in the use of DXRs (e.g., capacity building for radiographers). By investing in digital x-rays at targeted facilities, the possibilities for rapid, high-quality diagnosis of vulnerable groups--particularly those living with co-infection-- becomes easier. Results can be rapidly accessed during follow-up and complicated cases sent by e-mail for interpretation to centers of excellence at national level. 153. Successful implementation of these activities should lead to the following results: faster detection of TB cases and the number of people cured (particularly among PLHIV), decreased TB transmission (TB and MDR-TB); increased survival time of PLHIV; increased protection of patients and health workers and reduction in their rates of nosocomial TB infection; reduced burden on the hospital system as a result of fewer admissions for TB; and reduced overall morbidity and mortality. 154. Improving Emergency Obstetric and Neonatal Care: This intervention has two key focus areas: i) increasing availability of Basic and Comprehensive Emergency Obstetric and Neonatal care (EmONC) in public and private health facilities; and ii) increasing capacity for monitoring maternal and newborn health outcomes. 155. Increasing availability of Basic and Comprehensive EmONC. Under the project, the availability and quality of EmONC will be increased by: a) developing and disseminating EmONC Guidelines and Protocols; b) providing health personnel with hands-on training on lifesaving EmONC procedures; c) upgrading maternity wards and providing essential EmONC equipment and supplies; and d) strengthening the referral and transport system. The project will support the MOH to develop detailed guidelines and protocols, based on the 2008-2015 Sexual and Reproductive Health (SRH) Strategic Plan, to improve and standardize the provision of EmONC. The guidelines will elaborate the minimum package of maternal, neonatal and child health services for the various health facility levels (clinics, health centers, and hospitals), staffing norms, and maternal and perinatal death reviews. Midwives and medical doctors (in both public and private facilities) will be provided with appropriate on-the-job hands-on training to perform EmONC procedures. This will 113 Government plans additional investment in analogue x-ray systems. In light of advances in digital x-ray technology and their advantages vis-à-vis traditional x-ray equipment, it may be prudent to evaluate the cost effectiveness of analogue vs. digital x-ray approaches. 114 World Health Organization: "Improving the diagnosis and treatment of smear-negative pulmonary and extra pulmonary tuberculosis among adults and adolescents: Recommendations for HIV prevalent and resource- constrained settings," 2007. The importance of x-ray as a complimentary diagnostic tool for TB (particularly for difficult to diagnose cases e.g., among PLHIV, or in children) is well accepted. While it is clear that sputum smear microscopy is the cornerstone of the TB diagnostic network, chest X-rays play a significant role in shortening delays in diagnosis. This area was significantly scaled-back in the GFATM Round 8 grant due to funding shortfalls. 55 ensure that obstetric complications are treated promptly and properly.115 The January 2010 baseline EmONC assessment of all health facilities that provide delivery services in Swaziland revealed that no health facility offers the full complement of Basic or Comprehensive EmONC. Accordingly, all midwives and medical doctors providing obstetric services at health centers and hospitals will receive the requisite in-service training (including use of partograph as well as appropriate referral of complicated cases). In addition, the baseline assessment also indicated that abortion complications account for more than half of all obstetric complications and two-fifths of maternal deaths in 2009. In response to this, training in post-abortion care (including treatment of complications with MVA, family planning counseling, and appropriate referral where necessary) will be emphasized as stipulated in the 2008-2013 National Health Sector Strategic Plan (NHSSP). Nurse anesthetists will be recruited to fill vacant positions at health centers and hospitals to provide anesthesia for Caesarean deliveries. The maternity wards of selected health centers will be renovated and equipped to provide Basic EmONC or comprehensive EmONC, while selected hospitals will be upgraded to provide comprehensive EmONC. Additionally, selected clinics will be renovated to provide normal delivery services. In collaboration with NERCHA, WHO, GFATM, and PEPFAR, effective and efficient blood transfusion services will be established at health centers and hospitals. This will comprise blood grouping and cross-matching at health centers and hospitals; blood storage refrigerators at selected health centers and hospitals; and a blood bank at Mbabane Government Hospital. An effective and efficient referral system ensures that clinics provide normal deliveries while health centers and hospitals are able to treat obstetric complications promptly and properly. According to the 2010 MNH assessment, 88 percent of all deliveries occurred in hospitals with 5 percent of deliveries occurring on the way to a health facility. These statistics indicate a deficiency in the referral system. In an effort to address this, the following measures will be taken under this intervention: a) health personnel, including rural health motivators (RHMs), will receive training on appropriate identification of obstetric complications and referral procedures; b) ambulances will be purchased to support the MOH's national Emergency Medical (ambulance) Services (EMS)116; c) strengthen the management of the Emergency Preparedness and Response Unit (EPR), and create awareness in communities of the existence of the EPR; d) maternity waiting homes at regional hospitals will be upgraded (or established) to accommodate women from remote communities, who wish to stay close to a health center or hospital prior to delivery; and e) appropriate Information, Education and Communication (IEC) materials 115 A Basic EmONC facility provides 7 critical lifesaving procedures: administration of parenteral antibiotics, oxytocic drugs, and anticonvulsants (magnesium sulphate) for pre-eclampsia/eclampsia; manual removal of retained placenta; removal of retained products of conception (manual vacuum aspiration [MVA] or dilatation and curettage [D&C]); assisted vaginal delivery (vacuum extraction or forceps delivery); and basic neonatal resuscitation (bag and mask). Additionally, a comprehensive EmONC facility offers blood transfusion and Caesarean delivery. 116 The EMS currently has four ambulances and a total of 12 will be in the fleet by the end of 2010. The EMS is being decentralized in all four regions with ambulances based at satellites sites (instead of hospitals) to allow quicker response to medical emergencies. Existing ambulances have equipment for advanced life support but additional ambulance purchases will take into consideration the terrain in rural communities and could have only basic life support since not all emergency transport will require advance life support. The EMS is supported by an Emergency Call Centre with one toll-free number which operates 24 hours a day. 56 will be developed to promote delivery by midwives at the nearest clinics and obstetric complications reported to the health centers and hospitals. 156. Increasing capacity for monitoring MNH outcomes. This will include activities to strengthen the HMIS to provide routine data to monitor MNH outcomes, expand and strengthen maternal and perinatal death reviews, and improve overall management of MNH services. The MNH assessment has provided baseline data and revealed gaps in the routine HMIS for monitoring the MNH program. In consultation with the HMIS committee, the obstetric registers and the monthly summary sheets will be updated to generate information on relevant MNH indicators for monitoring and supervision of this sub-component. Additionally, health personnel will be trained in recordkeeping, analysis, interpretation of the findings such as display of graphic representation of key MNH indicators, and use of information for decision-making. 157. A national Confidential Enquiry into Maternal Deaths Committee has been formed to conduct maternal death audits. The committee meets quarterly to review maternal deaths in the preceding quarter. Since maternal and perinatal death audits are not routinely conducted at health facilities, review committees will be formed at various hospitals and health centers, with support from the regional health management teams (RHMT). These hospital committees will also review maternal and perinatal deaths at the lower level facilities. Under the project, maternal and perinatal death review guidelines will be developed, committee members will be trained, and RHMTs will regularly supervise and provide feedback to the hospital review committees, and ensure implementation of the committee recommendations. When the facility-based reviews are fully functional, it will be extended to cover community-based deaths and near misses. 158. The MOH Sexual and Reproductive Health (SRH) unit will be strengthened to provide supportive supervision and coordinate the provision of MNH services. The SRH Unit together with the RHMT will monitor the HMIS monthly summary reports and provide timely feedback to health facility managers. The existing Interagency Maternal and Child Health Coordinating committee117 will continue to support the SRH unit in coordinating all MNH activities, including the engagement of the private sector. 159. Improving Health Care Waste Management: The project is envisaged to result in increased generation of health care waste at health care facilities supported by the project. As such, this intervention will provide support to Swaziland in the health sector in the appropriate management of health care waste. The support will be multi-pronged in an effort to be comprehensive and sustainable beyond the lifespan of the project. 160. A Health Care Waste Management Plan (HCWMP) has been prepared which provides proper guidelines for comprehensive health care waste management. The ultimate goal of the Plan is to prevent, reduce, and mitigate environmental and health impacts on health care staff and the general public caused by poor health care waste management (HCWM), through both the promotion of best practices and the development of safety standards. The project will support 117 The committee is comprised of the SRH unit, WHO, UNICEF, UNFPA, Family Life Association of Swaziland (FLAS), Elizabeth Glaser Pediatric AIDS Foundation, Population Services International (PSI), and the Red Cross. The committee is chaired by the MOH Deputy Director of Health Services (Public Health). 57 implementation of the HCWMP at selected health facilities with the comprehensive approach outlined in the Plan as follows: Reinforcing the national legal framework for HCWM Improving and strengthening of the institutional arrangement for HCWM. Improving HCWM in health facilities - This will include provision of consumable, re- usables and technologies for treatment and disposal of health care waste. Providing training for health care staff and other health care waste practitioners on acceptable HCWM practices. Raising awareness among the public on risks associated with health care waste handling. Development of a monitoring system for the implementation of the HCWMP. 161. The environmental health unit within the Ministry of Health (MOH) will be responsible for implementation of this sub-component. Capacity exists for implementation of the plan as the unit is represented at all levels of government throughout the country. A budget has been prepared by the project for the implementation of the HCWMP at selected health facilities. The project will also support preparation of environmental and social management plans (ESMPs) for each of the three categories of health facilities to be rehabilitated. The ESMP reports will also spell out the specific requirement for each site or health facility. 162. Safeguard policy issues are detailed in Annex 10. Sub-Component 2b: Support to the nursing training institutions 163. Human resources are one of the most important assets of a health care system with direct bearing on the quality of services, productivity and performance. The health sector in Swaziland is experiencing a critical staff shortage. Existing training institutions currently lack the ability to produce and supply the required volume and type of human resources for health. In particular, Swaziland has a major shortage of midwives, with a huge backlog of general registered nurses awaiting enrollment into midwifery schools. The MOH plans to increase the number of midwives who are competent in the provision of integrated care, including antenatal care, delivery, postnatal care, family planning, child health, basic emergency obstetric and neonatal care, and HIV/AIDS in health facilities as well as provide services in communities. 164. There are three nursing training institutions in the country - Nazarene College of Nursing, University of Swaziland Faculty of Health Sciences, and Good Shepherd Nursing School. The first two provide general nursing training as well as midwifery while the third only trains nursing assistants. Recognizing human resource constraints, the sub-component will support the: a) development of a national strategic plan for nursing and midwifery (although the Cabinet recently approved the revision of the 1965 Nurses and Midwives Act, a strategic plan does not yet exist); and b) updating of the existing midwifery curriculum (so that graduates are trained to provide integrated services), c) development and implementation of guidelines and manuals for mentorship and preceptorship to ensure that nursing students and new graduates acquire the necessary clinical skills, and d) rehabilitation of selected nurse training institutions. Selection of training institutions will be finalized based on cost estimates and needs assessment. 58 Component 3: Strengthening of the OVC Safety Net (US$ 6.17 million) 165. This component aims to increase social safety net access for OVC by establishing an OVC cash transfer scheme that would be appropriate for the Swaziland context. The component will strengthen the capacity of the Department of Social Welfare (DSW) and National Children's Coordination Unit (NCCU) to ensure effective implementation of the OVC cash transfer scheme. This component will be implemented in two integrated phases that are crucial for setting up an effective and efficient cash transfer mechanism. During the first phase (Years 1-2 of project implementation), the project will provide technical assistance to establish the necessary operational systems for community sensitization, OVC identification and enrollment, payment, complaints process, M&E and a Management Information System (MIS). Once these operational systems are in place, the OVC cash transfer mechanism will be piloted during the second phase (Years 3-5 of project implementation) to generate lessons for future scaling up. The operational effectiveness as well as the welfare impact of the pilot scheme will be subject to a rigorous impact evaluation. 166. Given the high number of OVC in Swaziland and the limited financial envelope available for this pilot, it will be important to prioritize those OVC that most need support. The following criteria will be used as a guide for identification of potential beneficiaries: poverty status (using poverty indicators to be defined in collaboration with the Swaziland statistics office); employment status; and being beneficiaries of other OVC support programs.118 Community validation of identified OVC will be completed in coordination with traditional Swazi structures (community leaders). Phase 1: Capacity Building and System Strengthening 167. During the first phase, support will be provided to: (i) develop and refine the key features of the OVC cash transfer scheme119; (ii) prepare a payment mechanism for the cash transfer; (iii) establish a Management Information System (MIS); (iv) improve management and training for DSW and NCCU; and (v) design an Impact Evaluation. The project will help develop the capacity of the DSW to manage the OVC cash transfer scheme and to establish the necessary operational systems required for effective and efficient implementation of the OVC cash transfer scheme. By the end of the first phase, the following key features of the OVC cash transfer scheme will be in place: Awareness raising and outreach o Sensitization of communities and potential beneficiaries o Explanation of eligibility/benefits/rights/obligations to potential participants Beneficiary enrollment, registration and verification system120 118 The exact indicators to be used will be specified during Phase 1 of this component and included in the implementation manual. 119 An Implementation manual which describes the operational details of the OVC cash transfer scheme will be prepared with the support of a consultancy firm with extensive experience in cash transfer programs. 120 Enrollment based on eligibility criteria and its compliance will be monitored. Community validation of criteria and potential beneficiaries will take place during phase one. Provisions will be taken to monitor fraud and corruption. 59 Management Information System (MIS) Payment delivery mechanism Appeals and complaints mechanisms121 Sanctions on misbehavior122 Program monitoring and case management system123 Beneficiary graduation system based on exit criteria 168. Development and refinement of the key features of the OVC cash transfer scheme. This activity will support the refinement of the cash transfer scheme for OVC. Technical support will be provided to support the DSW in the development of a OVC program implementation manual (IM) that will provide a detailed description of the program as well as implementation modalities, operational procedures and processes most suitable for the Swaziland context. A consultancy firm with extensive experience in similar cash transfer programs will be recruited to support the DSW in the development of the key features of the OVC cash transfer scheme. 169. The OVC IM will outline the following key features: (a) Outreach to (potential) beneficiaries; (b) Beneficiary enrollment, registration and verification system; (c) Management Information System (MIS); (d) Payment mechanism; (e) Appeals and complaints mechanisms; (f) Sanctions on misbehaviour; (g) Beneficiary graduation system; (h) Monitoring and Evaluation, including internal and external monitoring and design of an impact evaluation. 170. Beneficiary enrollment, registration and verification. The project will target OVC. OVC are defined as a child (below the age of 18) who has (a) lost parents and/or (b) a very sick parent, or who lives in a household where an adult has been very sick, or has died in the past 12 months (as defined in the DHS 2006-7). Given the high number of OVC in Swaziland and the limited financial envelope for the pilot, a set of objective eligibility criteria will be identified , in coordination with the DSW and the Swaziland Statistical Office. Complementing the objective criteria will be community validation that will take place at community level to validate the beneficiaries. 171. Community representatives will support the targeting process to limit the administrative burden of this process for the DSW social workers. While this does not remove the role of the social worker in verifying a sub-set of program candidates deemed eligible, it does avoid potential bottlenecks in enrollment and ensure that the scarce skills of the country's social workers are used optimally. 172. Management Information System (MIS). The Management Information System (MIS), will form the basis for a national registry of OVC and monitor the implementation of the OVC cash transfer pilot. In an effort to reduce duplications and enable better coordination of current 121 Appeals for individuals who feel they have been unfairly excluded as beneficiaries and believe they meet the eligibility criteria. Complaints regarding quality of services and payments (absence, delays and discrepancies) 122 The scheme will include sanctions for misbehaviour such as: presentation of false information related to eligibility and/or fraud committed against the scheme. 123 This will include assessment of the satisfaction of OVC cash transfer beneficiaries, and monitoring through spot checks and citizen report cards. 60 and future OVC interventions, all stakeholders will have access to this registry at the central and regional levels. Some important features of the MIS are cost effectiveness, flexibility, government ownership and user friendliness. Setting up the MIS will include identification of design options for the MIS and the minimum infrastructure requirements, training relevant staff to use the MIS and support to the purchase of software and basic infrastructure (such as computers).The MIS will facilitate maintaining accurate data on OVC and ensure coordination with other ongoing OVC support interventions.124 173. Payment Mechanism. Technical support will be provided to set up an adequate payment mechanism, which will reduce the administrative burden on DSW staff and appropriately address security and efficiency concerns. The DSW has some experience with electronic transfer of cash to beneficiaries through an ongoing elderly grant program. In addition, the EU is exploring the possibility of supporting digital transfers for an OVC education grant program under an initiative separate from this project. This project will coordinate closely with the EU initiative to both contribute to and learn from their experience and ensure that an adequate payment mechanism is established, using the technology available to beneficiaries in selected communities. 174. Management Support and Training for DSW and NCCU. Training will be provided to the DSW in the implementation of the OVC IM, the use of the MIS and facilitating the payment mechanism. In addition, management support will be provided to the PCT and staff of the DSW and the NCCU to enable them to better coordinate and implement ongoing OVC support programs in Swaziland including the cash transfer pilot supported by this project. Some of the areas of training and technical assistance to be provided are: (a) project management and coordination; (b) financial management; and (c) procurement. Specific support will also be provided to the DSW to enable them to acquire the relevant skills needed to implement the cash transfer (based on the OVC IM). Support will facilitate sensitization of government officials and communities through different communication activities. As a result, the human and institutional capacity of the DSW and NCCU will be enhanced at the central and regional levels to ensure effective implementation of the proposed OVC cash transfer pilot and to improve coordination with other Ministries, development partners and NGOs/CBOs for more comprehensive and efficient OVC support. 125 175. Prior to commencement of Phase II, i.e. disbursements for cash transfers to OVC, the DSW shall have: (a) developed an OVC Implementation Manual (IM) that outlines the operational set-up and processes of the OVC cash transfer scheme; (b) installed a Management Information System (MIS); and (c) selected and put in place a payment system for the OVC cash transfer pilot, all in a manner satisfactory to the World Bank. 124 Ongoing OVC support include: innovative community driven initiatives for food and care through "Kagogo" centers; feeding and non-formal education support through "Neighbourhoood Care Points (NCPs)"; formal education support through the "capitation grant" system; and psychosocial support through "Lihlombe lekukhalela ­ a shoulder to cry on". 125 The Government is committed to provide consolidated support to meet the needs of OVC, including: education, health, food and nutrition, shelter, psychosocial support and legal aid. 61 Phase II: Cash Transfer Pilot for OVC 176. The OVC cash transfer aims at strengthening the ability of vulnerable caregivers to care for OVC and meet their basic needs (in the DHS 2006-7 children were considered to have their basic needs met if they had a pair of shoes, two sets of clothes, and at least one meal per day). The cash transfers will also contribute to promoting investments in human capital by encouraging desirable behaviors from OVC and their caregivers in areas such as health, nutrition and schooling. The beneficiaries are expected to fulfill co-responsibilities such as: (i) school enrollment; (ii) minimum level of school attendance; (iii) growth monitoring for children under 2 years; and (iv) full immunization.126 177. During the second phase, the system of OVC cash transfers will be pilot tested, using the information and operational systems put in place and human resources of the DSW and NCCU that have been strengthened during the first phase. The pilot testing will take place in four constituencies (in four different regions), selected based on the data from the Swaziland Statistics Office and Quality of Impact Mitigation Survey (QIMS).127 Piloting the project in each region will ensure that the capacity of the DSW is built in all four regions. The project will provide cash transfers to OVC for a period of approximately three years, through a gradual scale-up in all four constituencies. Criteria will be further developed to select the four constituencies with support from the Swaziland Statistics Office and available QIMS data. 178. Given that the DSW is a relatively newly established department and that the social workers in the DSW will have other duties and responsibilities, the design of the project will take into consideration these constraints and will involve streamlined procedures. The amount of OVC cash transfer to be paid per child, will be determined during the design phase. . This analysis will require support from the Swaziland Statistics Office and should take into account the most recent data on household consumption and poverty lines in the country.128 Among others, such analysis should reconcile the need-based determination of the level of the cash transfer (for example, the level implied by the commodity basket that would satisfy the minimum needs of a child) with the trade-off between serving more OVC, at a relatively lower level, and fewer, at a relatively higher level. 179. Monitoring and Evaluation (M&E). The M&E will consist of: (i) internal monitoring using the MIS; (ii) external monitoring; and (iii) impact evaluation. The MIS will be used to assess if OVC cash transfers are delivered regularly, if beneficiaries meet the targeting criteria and if co-responsibilities have been fulfilled. To assess satisfaction of cash transfer beneficiaries, external monitoring will be conducted through spot checks/citizen report cards. To measure the impact of the cash transfer on the wellbeing of OVC an impact evaluation will be undertaken. The impact evaluation will determine: 1) the welfare impacts; 2) the human development 126 The exact definition of the co-responsibilities will be agreed upon in Phase 1 and clearly specified in the implementation manual. 127 A purposive sample will be drawn from regions with QIMS data and that is broadly representative of poverty in Swaziland (rural). 128 According to the 2000/01 Swaziland Household Income and Expenditure Survey (SHIES), at prices of January 2001, in urban areas, the food poverty line was E 68.30 per capita per month, while the poverty line was E 128.60 per capita per month. 62 impacts; 3) the operational effectiveness; and 4) generate lessons for potential future expansion. The impact evaluation will include a baseline study at the beginning of the pilot of the cash transfers and a follow-up study towards the end of the pilot. At the end of phase two and with the results of the impact evaluation, the OVC cash transfer pilot is expected to provide empirical evidence on the impact of OVC cash transfer system and compile lessons learned. Based on this, the Government of Swaziland will be able to make an informed decision on whether to continue and expand the OVC cash transfer scheme. 63 Annex 5: Project Costs Swaziland HIV/AIDS Project Table A5- 1. Financing Table by Component, by Source (US$ million) EU IBRD GoS Total Project Cost By US US US US Component $million $million $million $million Component 1 1.90 2.00 0.44 3.90 Component 2 11.89 12.48 0.44 24.38 Component 3 3.01 3.16 1.08 6.17 Total Baseline Cost 16.80 17.64 1.95 36.39 Physical and Price Contingencies (10%) 1.68 1.76 3.44 Unallocated 0.52 0.55 0.05 1.12 Total Project Costs 19.00 19.95 40.95 Front-end Fee (0.25%) 0.05 0.05 Total Financing Required 19.00 20.00 2.00 41.00 180. Swaziland counterpart contribution will be US$ 2 million to cover project expenses incurred locally for recruited positions and operating expenses for years 4 and 5. The project will cover all these costs during years 1 ­ 3. Based on the amounts available from each donor, the disbursement percentages that should be applied for withdrawal of funds would be 49 percent from the EU grant and 51 percent from the World Bank loan. Table A5-2. Financing Table by Expenditure Category, by Source (US$ million) Category EU IBRD GoS Total US US US US $million $million $million $million Civil Works 5.99 6.24 12.23 Goods 3.64 3.78 7.42 TA/Consulting 2.87 2.99 5.86 Training & Workshops 0.87 0.91 1.78 Grants [1] 2.09 2.18 4.27 Operating Costs [2] 1.41 1.46 1.95 4.82 Contingencies/Unallocated 2.13 2.39 0.05 4.52 Front-end Fee 0.05 0.05 Total Amount 19.0 20.0 2.00 41.0 [1] Grants include OVC cash transfers only. [2] Operating Costs include costs for dissemination materials, travel for TA and staff, and salaries (2 Financial Management Specialists and 2 Procurement Specialists) in years 1-3 of the project. 64 Table A5-3. Financing Table Component, by Local/Foreign Cost (US$ million) Local Foreign Total Project Cost By US US US Component $million $million $million Component 1 1.86 2.48 3.90 Component 2 4.20 20.61 24.38 Component 3 6.28 0.97 6.17 Unallocated 0.05 4.51 4.56 Front-end Fee 0.05 0.05 65 Annex 6: Implementation Arrangements Swaziland Health, HIV/AIDS Project 181. The project is designed to contribute to the implementation of the existing strategies and plans of the government in both the health sector and social welfare sector. While this is a large project in financial terms and in terms of its spread across a number of priority activities, all three financiers--the government, the EU and the World Bank--have minimum fiduciary and reporting requirements, which need to be met. The project's implementation arrangements need to accommodate this while simultaneously seeking to minimize additional administrative work. 182. The following principles have guided project implementation arrangements: The implementation arrangements should be designed, as far as possible, to be aligned with national processes and systems and thereby contribute to sustainability and coordination. Government structures and systems should be used for project implementation. It is government policy to discourage separate project implementation units, with a preference for focusing on capacity building within existing structures. The existing implementation structures have limited capacity and are already over- stretched. Technical assistance will be used to fill existing capacity gaps--but include a strong component of skills transfer. Contract renewals will be based on a performance assessment by MOH/DPM's Office and include an evaluation of skills transfer. The implementation arrangements for the MOH components and the DPM's Office component will be partly separate. The maturing of the health sector SWAp over the next 2-3 years will be an important consideration for project implementation. In line with Government policy, implementation should incorporate gender sensitivity principles at all levels and stages. 183. Project implementation will follow the same procedures and mechanisms irrespective of whether the activity is financed by the government, IBRD or EU. The MOH will have overall responsibility for implementing components 1 (Strengthening the Capacity of the Health Sector) and 2 (Facility-level Support to Improve Access, Quality and Efficiency of Services) while the Deputy Prime Minister's Office will be responsible for implementing component 3 (Strengthening of the OVC Safety Net). 184. The overall project will be guided by a Steering Committee consisting of the Principal Secretaries from Deputy Prime Minister's Office, Ministry of Finance, Ministry of Economic Planning and Development, Ministry of Health, Ministry of Public Service with the participation of a representative of EU Delegation to Swaziland as an observer. Other relevant ministries will be invited as needed. The Steering Committee will be responsible for providing oversight to the project to facilitate project implementation. It is expected that the Steering Committee will be chaired by the PS MOH and meet at least twice a year. 66 Within the Ministry of Health, the existing Policy and Planning Committee, comprising of senior officials from all departments at the central level, will have technical oversight of project activities under Components 1 and 2. The Project Coordinator for these components (civil servant) will be appointed by the MOH. This will help ensure integration of project activities within the MOH and build sustainable capacity in the Ministry in managing donor-funded projects. The Project Coordinator will be an ex-officio member of the Policy and Planning Committee who will participate in meetings, but he/she will not have a vote in decision-making. 185. Responsibility for implementation of day-to-day activities and follow up with MOH technical departments will lie with the Project Implementation Team (PIT), housed in the MOH Planning Unit. The MOH PS will delegate day-to-day management of the project to the PIT Project Coordinator. Led by the Project Coordinator (civil servant), the PIT will include an M&E officer (civil servant), an Accountant (civil servant), two Financial Management Specialists (1 senior and 1 intermediate specialist - consultants), and two Procurement Specialists (1 senior and 1 intermediate specialist - consultants). In order to strengthen the PIT's capacity in World Bank procedures, the project will recruit TA with extensive knowledge of World Bank projects and operations to provide support to the Project Coordinator (and MOH in general) on World Bank procedures. The intermediate Financial Management and Procurement Specialists will provide support to the Deputy Prime Minister's Office for 50% of their time. M&E matters will be largely handled through the existing Strategic Information Unit and an M&E Officer will be appointed to the MOH PIT. A mid-term review of the project will be conducted no later than 36 months after effectiveness. 67 186. These implementation arrangements are summarized below: 187. As the project includes civil works contracts for selected health facilities, the government will contract a firm of architects/quantity surveyors to provide overall supervision and advice for these works and as necessary on the smaller civil works contracts. This supervision and advisory contract will be in place by commencement of the rehabilitation of health facilities. As part of the Ministry's move towards a sector-wide approach, the MOH's policy is to establish one central management unit for all externally funded projects headed by a senior Operations Manager. It is expected that the PIT will merge into the new combined unit from year 3 onwards. 188. Components 1 and 2 have a natural home within MOH--health planning and coordination in the Planning Unit, emergency obstetric care in the Sexual and Reproductive Health Unit, etc. The government established a task team to facilitate project preparation and implementation, which is comprised of the heads of these Units together with the relevant senior managers. The heads of these Units will work with the Project Implementation Team on the implementation of project activities in their respective subject areas. As needed, additional TA will be provided to strengthen the technical units and ensure prompt implementation. 189. The project will implement activities through the central MOH and its constituent four regional offices, which will be strengthened through the project, following current established practice and division of labor. The regional offices coordinate with the local traditional authorities and communities. Existing arrangements for coordination with development partners, especially those linked to the evolving sector-wide approach will continue to be used. The 68 Project Coordinator of the PIT will be responsible for regular reporting on project progress and issues to senior management and the technical committee--and to other forums as appropriate. Project progress reports will be submitted to the Bank through the Ministry of Finance. 190. For component 3, a project coordination team (PCT) will be established under the overall guidance of the Deputy Prime Minister's (DPM) Office. The DPM's Office will second the following staff to the PCT: a Project Coordinator, an Accountant (with the approval of the Accountant General); and an M&E officer. The intermediate financial management specialist and procurement specialist recruited for the MOH PIT will allocate half of their time to support the PCT. Within the Deputy Prime Minister's Office, a Technical Committee consisting of the Director DSW, Director NCCU, Project Coordinator (ex officio) and the DPM Accountant will be formed to provide technical guidance for implementation. 191. Current divisions of responsibility within the Government allocate World Bank matters to the Ministry of Finance, and EU matters to the Ministry of Economic Planning and Development. For the purposes of government-wide project coordination, the policy level Steering Committee chaired by the PS MOH will meet at least every six months. The project's annual work plans and required implementation reports will be prepared by the MOH PIU and DPM's PCU. 192. A Project Operational Manual (POM) will be adopted by the Government by the Effective Date., This manual will provide a comprehensive and detailed overview of the project coordination and implementation arrangements. This will include the project reporting requirements, procurement and financial management arrangements, along with the TORs for the project steering committee and the summary TORs for the staff of the two project coordination units. 193. The Ministry of Health will prepare and submit to the Bank consolidated semi-annual project progress reports for all the project components. The reports will contain a general description of the project and will outline progress to date on capacity building, physical outputs, institutional impact, safeguards, institutional and management arrangements, training, status of key performance indicators and any issues/challenges encountered. The reports will be prepared for the six-month periods and will be submitted not later than one month after the end of the each period. In addition, there will be a formal mid-term review (MTR). The MTR will assess the overall project progress made during the implementation, including the quality and effectiveness of the project activities and the results of the monitoring and evaluation activities. 69 Annex 7: Financial Management and Disbursement Arrangements Swaziland Health, HIV/AIDS and TB Project 194. The World Bank conducted a Financial Management Assessment of MOH as required by the World Bank's policy on Financial Management, OP 10.02, and in accordance with the provisions of the Financial Management Manual for World Bank-financed investment operations dated March 1, 2010. MOH and the DPM's office are the implementing agencies for the proposed Swaziland Health, HIV/AIDS and TB Project. The main objective of the assessment, which included a review of the budgeting, accounting, internal controls, flow of funds, financial reporting, auditing arrangements at MOH and the DPM's Office, and completion of the FM assessment questionnaire by some officials of the implementing agencies, was to ensure that acceptable financial management arrangements are in place for the implementation of the project. 195. Acceptable FM arrangements ensure that: the funds are used only for the intended purposes in an efficient and economical way; all transactions and balances are correctly recorded to support preparation of regular and reliable financial statements that are subject to auditing arrangements acceptable to the World Bank; and internal controls are considered capable of safeguarding the agencies' assets. 196. The overall conclusion of the Financial Management Assessment is that the proposed project's financial management arrangements satisfy the World Bank's minimum requirements under OP/BP 10.02. The FM overall risk rating is "Substantial" and implementation of the actions recommended in the FM action plan will improve the FM arrangements. The effectiveness of the proposed risk mitigation measures will therefore be closely monitored as part of the implementation support and supervision arrangements. A. Overview of the project and implementation arrangements 197. The project will support the Government to reverse the declining health status of the Swazi population through enhancing the health system capacity and ensuring equitable access to affordable, efficient, cost effective and quality health care. The project is comprised of three main components, namely: (1) Strengthening the Capacity of Health Sector; and (2) Facility- level support to Improve Access, Quality and Efficiency of Services; and (3) Strengthening of the OVC Safety Net. The details of the project description and components are provided in Annex 4. 198. The proposed IBRD loan (US $20 million) will be pooled with financing from the EU (Euros 14.5 million or US $19 million equivalent) and Government of Swaziland (US $ 2.0 million). The funding from the EU will be transferred to the World Bank under a trust fund Administration Agreement clearly stipulating modalities of partnership arrangements as well as roles and responsibilities of both organizations during project preparation and implementation. This partnership arrangement will help reduce transaction costs to the Government, while also allowing the Government to leverage the grant funds provided by the EU together with the loan 70 funds from the World Bank, resulting in reduced overall financial burden in borrowing for the project. The World Bank will enter into a Grant Agreement with Swaziland through which the EU funds will be disbursed to Swaziland for the purposes of financing the Project. 199. The MOH will have overall responsibility for implementing components 1 and 2 while the DPM's office will be responsible for implementing component 3 of the project. A project implementation team (PIT) will be established within the MOH Planning Unit comprised of a full time Project Coordinator (civil servant) responsible for day-to-day management of the project, 2 Financial Management Specialists (FMS), and 2 Procurement Specialists. The senior FMS will solely work on MOH issues on a full-time basis while the intermediate FMS will divide his time equally between the MOH and DPM's Office. The Project Coordinator (civil servant) and at least one FMS and at least one procurement specialist will be appointed or recruited by effectiveness. 200. The DPM's office will also have a project management unit to oversee component 3. The intermediate FMS and the intermediate Procurement Specialist will be based in the MOH PIT, but will provide 50 percent of their support to the DPM project unit. MOH and the DPM's office will also identify and second two Accountants (one in each Ministry) to the respective project units with the approval of the Accountant General. The Accountant will be appointed and one FMS will be recruited by the Effectiveness Date. B. Country issues 201. A Country Financial Accountability Assessment (CFAA) has not yet been carried out, and because of the limited engagement in Swaziland, World Bank fiduciary assessments have not been undertaken on a regular basis.129 A Public Expenditure Review (PER) was carried out in 2006. The main conclusion was that Swaziland's public expenditure management process suffers from systemic weaknesses in most critical stages of the budget cycle. Specifically, the report highlighted excessive growth of budgeted expenditures, poor expenditure execution controls and lack of respect of budget ceilings, and inadequate capacity, reporting and transparency. Technical assistance and institutional strengthening was provided for: (i) strengthening capital expenditure planning; (ii) strengthening internal and external audit capacity; (iii) improving procurement process; (iv) preparing and disseminating budget execution progress reports; (v) improving payroll controls; and (vi) a comprehensive technical assistance program. The World Bank has already approved an Institutional Development Fund (IDF) grant amounting to US$497,000 for the strengthening of capacity for effective public expenditure management. This grant has not yet disbursed funds but the selection of consultants is being undertaken. Disbursements will be made as soon as the consultants' contracts are signed. 202. Risk Assessment and Mitigation: The table below shows the results of the risk assessment and identifies the key risks project management may face in achieving project objectives and provides a basis for determining how management should address these risks. 129 A Country Integrated Fiduciary Assessment has recently been completed. 71 Table A7-1 Financial Management Risks and Mitigation Measures Conditions of Risk Mitigating Measures Negotiations, Residual Risk Risk incorporated into the Board or Risk Rating Project Design Effectiveness Rating (Yes or No) Inherent Risk Country Level- H The government is undertaking No H Swaziland's public some PFM reform initiatives, expenditure management which include preparation of a process suffers from new Public Financial systemic weaknesses in Management Act with support most critical stages of the from the World Bank and budget cycle. UNDP. A follow up Public Expenditure Review is currently underway to support the implementation of the recommendations to address fiscal weaknesses. Use of outdated Financial and Accounting procedures Preparation of new Financial and dated 1993. Accounting procedures has already started. Entity Level- S Project Units will be Yes. M The entities may not be able established within MOH and Recruitment of to meet the financial DPM's office to handle fiduciary one qualified management requirements matters (FM, Disbursement, and and experienced due to lack of financial Procurement) of the project. project FMS is a management capacity. Qualified and experienced FM condition of staff will be recruited for this effectiveness unit. Project Level- H The project support teams will No M Implementing agencies have undergo detailed training in Bank no prior experience in procedures to ensure compliance project implementation. with Bank requirements in the areas of procurement and financial management. Control Risk Budgeting- S The project uses government No M The implementing agency budgeting procedures, which may not prepare realistic have serious weaknesses. annual plans and budget Stringent mitigation measures will include the preparation of a detailed project budget and close monitoring of the expenditures. Disbursement of cash The mitigation of this risk will transfers in component three be detailed in the OVC might cause accountability Implementation Manual for the concerns OVC Cash Transfer Pilot after 72 Conditions of Risk Mitigating Measures Negotiations, Residual Risk Risk incorporated into the Board or Risk Rating Project Design Effectiveness Rating (Yes or No) completion of the comprehensive review of the most appropriate cash transfer mechanisms. Accounting- M The Project Unit will use a No M The accounting system may conventional accounting package not be capable of producing to account for project funds. necessary reports to monitor and manage the project. Internal Control- M The project will have an internal Yes. M Risk that some internal audit function manned by a Qualified and control procedures may not qualified and experienced experienced be observed by the project internal auditor. The internal internal auditor staff. auditor will provide an objective appointed no later assurance service to the project. than 6 months after the Effectiveness Date. Funds Flow- S The mitigation of this risk will No S Cash transfers may not be detailed in the OVC reach the intended Implementation Manual for the beneficiaries OVC Cash Transfer Program. An experienced consultant will be engaged to support the design of procedures and guidelines aimed at mitigating the risk of ineligible payments. Financial Reporting- M Two FMSs will be employed Yes. M The project may not be able with specific responsibility for IFR formats and to produce periodic reports financial management of the contents have to enable the monitoring and project, including financial been agreed effective management of the reporting. The FMSs will take during project. full responsibility for producing negotiations. IFRs for timely submission to MOF and the World Bank. MOH and the DPM's office will also identify and second two Accountants to the respective project units with the approval of the Accountant General. Auditing- M The project will be audited by an No. L Audit reports not submitted independent external audit firm to the World Bank within annually. Terms of reference for six months time to comply the audit will be finalized within with World Bank audit 2 months of Effectiveness Date. 73 Conditions of Risk Mitigating Measures Negotiations, Residual Risk Risk incorporated into the Board or Risk Rating Project Design Effectiveness Rating (Yes or No) requirements due to delays in appointment of the project external auditors. Overall Risk S In view of the general country S financial management issues and the issues peculiar to the project, the overall financial management risk rating for the project is Substantial. Rating: H (High), S (Substantial), M (Moderate), L (Low) 203. Major Strength- The project FM is strengthened by the adequate external and internal audit arrangements. An independent external audit firm will audit the project financial statements under terms of reference acceptable to the World Bank. An experienced internal auditor will be recruited to provide the objective internal assurance and consulting function for the project. 204. Weaknesses and Action Plan- The Financial and Accounting Instructions of 1970 and the Financial Management and Accounting Procedures Manual of 1993 are outdated. These documents are currently under review by the relevant government departments. The impact of using outdated Accounting Instructions and Procedures in the project will be mitigated by the use of the financial regulations that will be documented in the Operations Manual. 205. Budgeting - The annual budget will be prepared based on the government policy guidelines and regulations with a strict emphasis on adherence to budget projections and approval of any deviations. However, the government budget process has serious weaknesses. There is a Medium-Term Expenditure Framework (MTEF) process followed by the government (based on three-year budget projections) and serving as the foundation for the preparation of ministerial budget estimates. While the MTEF, in principle, should impose budget discipline through adherence to budget projections, these projections become obsolete as ceilings are progressively increased during the budget process. The PIT and PCT will be responsible for preparing annual budgets and they will produce budget variance reports on a monthly and quarterly basis. These reports will be part of interim unaudited financial reports (IFRs) which will be submitted to the World Bank on a quarterly basis. 206. Accounting - The project accounting system will be based on off-the-shelf software. The accounting package will enable transaction processing, production of project annual financial statements, IFRs, and other reports as required for the effective management and monitoring of the project. The project will use the cash basis of accounting as prescribed under the Cash Basis Standard as issued by the International Public Sector Accounting Standards Board. 74 207. Staffing - The overall responsibility for project FM rests with the two project Financial Management Specialists (FMSs) who will report to the Project Coordinator in the MOH and the Project Coordinator in the DPM's Office. The respective project units' financial management capacity will comprise a qualified and experienced project FMS and an Accountant. The regular FMS within the MOH PIT will provide 50% of his/her time as support to the DPM project unit with regard to financial management. MOH and the DPM's office will identify and second Accountants to the respective project units with the approval of the Accountant General. C. Internal control and internal auditing arrangements 208. Internal Controls - The project's internal controls are based on the government's established accounting systems. The Financial and Accounting Instructions of 1970, and the Financial Management and Accounting Procedures Manual of 1993 provide guidance as to how funds and assets should be sourced, managed and controlled. The impact of using outdated Accounting Instructions and Procedures in the project will be limited by the use of the financial procedures set out in the Operational Manual. 209. Internal Audit. The internal audit unit based at Ministry of Finance has the responsibility of performing internal audit functions across the all entities of the Government of Swaziland. Therefore, the internal audit unit will designate an internal auditor with relevant experience in the operations of donor-financed projects within six months after Effective Date. His/her duties will include the independent appraisal of internal controls, performing audit reviews of the project, identification of financial and operational process improvement opportunities, and recommending corrective actions to project management. 210. Financial Reporting. Each implementing agency (MOH and DPM) will produce interim unaudited financial reports (IFRs) on a quarterly basis. The contents of these reports should consist of: (a) A narrative summary of the project implementation highlights including explanation of variances between actual and budgeted expenditure; (b) Sources and uses of funds by disbursement categories; (c) Uses of funds by project component/activity- both actual and cumulative; (d) The Designated Account Activity Statement; (e) Summary of payments made for contracts subject to the World Bank's prior review; and (f) Summary of payments made for contracts other than those subject to the World Bank's prior review. 211. The Quarterly Sources and Uses of Funds and utilization of funds report will reflect contributions from all the financiers, while the reports listed in (d) to (f) will reflect World Bank- eligible expenditures only. 212. The Project accounting system will be capable of producing the quarterly reports (IFRs). The reports will be submitted to the MOF with relevant supporting documentation within 30 75 days of the end of the reporting quarter. The submission of the reports to the World Bank by MOF is due within 45 days of the end of the reporting period. 213. The respective implementing agencies will also produce annual project financial statements, which will consist of: 214. A Statement of Sources and Uses of Funds/Cash Receipts and Payments that recognizes all cash receipts, cash payments and cash balances controlled by the entity for this project. 215. The Accounting Policies Adopted and Explanatory Notes should be presented in a systematic manner with items on Statement of Cash Receipts and Payments being cross- referenced to any related information in the notes. Examples of this information include a summary of fixed assets by category of assets. 216. A Management Assertion that IBRD funds have been expended in accordance with the intended purposes as specified in the relevant World Bank Loan Agreement. D. Funds Flow and Disbursement Arrangement 217. The funds flow diagram is presented below, and should be viewed in the context of the funds flow arrangement as well as disbursement arrangements described on the next page: 76 Figure A7-1. FUNDS FLOW CHART 218. Funds Flow. Upon the signing of the Loan Agreement, the World Bank will open a Loan Account in its books, in the name of the Government. Funds will flow from the World Bank (Loan Account) into two separate Designated Accounts to be opened by Swaziland and maintained by MOH and the DPM's Office. With regard to the EU funding, the World Bank acting as the administrator of the trust fund will disburse funds to the Designated Account in conformity with the terms of the Administrative Agreement. Funds in the Designated Accounts will be used to finance activities of the respective project components as managed by MOH and the DPM's Office. 77 E. Banking Arrangements 219. Designated Account. Two designated accounts (MOH and the DPM's Office) will be opened at the Central Bank of Swaziland and denominated in United States Dollars. Disbursements from the World Bank Loan and EU trust fund will be deposited in these accounts to finance the project activities. 220. Disbursement Arrangements. The project will use the transaction-based disbursement method whereby withdrawals from the loan account will be deposited in the DAs for payment of the World Bank-financed eligible expenditures. Disbursements from the loan account will be based on Statements of Expenditure (SOEs) to be prepared and submitted by the MOH and the DPM's office to the World Bank and the Ministry of Finance. The SOEs will be supported by documentation as may be required by the bank. For withdrawal from the loan and grant proceeds, MOH and the DPM's Office will be responsible for submitting withdrawal applications supported by SOEs at the end of each month. The Government will also have the option of using: (i) the Direct Payment disbursement method involving direct payments from the loan account on behalf of the Government to the suppliers of goods and services that have a value above set threshold; (ii) the Reimbursement disbursement method, whereby the Government makes payments for the World Bank eligible expenditures and submits withdrawal application for reimbursement; and (iii) the Special Commitment method whereby the World Bank, at the request of the Government, will issue special commitments to suppliers of the goods under the World Bank-financed components. 221. The table below shows the allocation of the proceeds of the financing. Category Amount of Amount of Total Financing EU IBRD Amount of percentage financing financing financing allocated allocated allocated Civil Works 5.99 6.24 12.23 51% Goods 3.64 3.78 7.42 51% TA/Consulting 2.87 2.99 5.86 51% Training & 0.87 0.91 51% Workshops 1.78 Grants130 2.09 2.18 4.27 51% Operating Costs131 1.41 1.46 2.87 51% Unallocated 2.13 2.39 4.52 0.05 Front-end Fee Total Amount 19.0 20.0 39.00 130 Grants include OVC cash transfers only. 131 Operating Costs includes costs for dissemination materials, travel and subsistence costs for TA and staff, and some staff salaries within the MOH PIT (except for the PIT Project Coordinator who will remain a civil servant under GOS remuneration) and DSW PCU in years 1-3 of the project, which will be financed through the counterpart funds in years 4-5. 78 222. Counterpart Funds. The Government counterpart contribution totals US$ 2 million. 223. External Audit. An independent external audit firm will audit the project financial statements land in accordance with the International Standards on Auditing. The audit report together with the management letter will be submitted to the World Bank within six months after the financial year-end, that is, by September 30 each year. 224. The External Auditor will be required to express a single opinion on the project financial statements. These will include financial information of activities implemented under all project components. In addition, a detailed management letter containing the auditor's assessment of the internal controls, accounting system and compliance with financial covenants in the IBRD Loan Agreement, suggestions for improvement, and management's response to the auditor's management letter will be prepared and submitted to management for follow-up actions. 225. The figure below identifies the audit reports that will be submitted by the project implementing agencies and the due date for submission. Audit Report Due date Project specific financial statements 30th September of each year 226. Project Governance and Accountability. The Auditor General's report for 2008 highlighted concerns with the abuse of public funds within various government ministries and departments. However, the project will have adequate financial management arrangements in place to ensure that funds are used for the purposes intended and to prevent material errors and fraud. The World Bank will review adequacy of project financial management during implementation review missions, and the government of the Kingdom of Swaziland will ensure that adequate financial management arrangements are maintained throughout the implementation of the project. The project will be audited annually by an independent external audit firm. F. Conditionality 227. Effectiveness. The conditions of effectiveness include recruitment of at least one qualified and experienced project Financial Management Specialist for the PIT and the appointment of project coordinator and project accountants for the PIT in the MOH and the PCT in the DPM's Office. 228. Covenants ­ Dated covenants. No later than six months after the effectiveness date, the Internal Audit Department of the Government of Swaziland will designate an Internal Auditor for the project. 229. Action Plan. In order to establish an acceptable control environment and to mitigate financial management risks the following measures should be taken by the due dates as indicated in the financial management action plan below. 79 Action Responsibility Completion date MOH/DPM/World 1. Agree format and content of IFRs Negotiation Bank 2. Agree External Audit Terms of MOH/DPM/World Within 2 months from Reference Bank effectiveness 3. Recruitment of at least one qualified and experienced project FMS and MOH/DPM Effectiveness appointment of project accountants for the PIT and PCT. 4. Recruit a qualified and experienced Within six months of PIT/MOH/DPM effectiveness external auditor for the project Within six months 5. Hiring of the 2nd FM Specialist MOH/DPM from effectiveness Internal Audit Within six months 6. Designate Internal Auditor Department /GOS from effectiveness 230. Supervision Plan. Financial management supervision will be carried out by the World Bank Financial Management Specialist (FMS) twice a year in line with the "Substantial" risk rating requirements. The FMS will also review: The quarterly IFRs; and, The Audit Reports and Management Letters from the external auditors and follow-up on material accountability issues by engaging with the TTL, Client, and/or Auditors. G. Overall Conclusion 231. The overall conclusion of the Financial Management Assessment is that the project's financial management arrangements have an overall risk rating of "Substantial." The proposed project's financial management arrangements satisfy the World Bank's minimum requirements under OP/BP 10.02. 80 Annex 8: Procurement Arrangements Swaziland Health, HIV/AIDS and TB Project A. General 232. Procurement for the proposed Project would be carried out in accordance with the World Bank's "Guidelines: Procurement under IBRD Loans and IDA Credits" (dated January 2011), "Guidelines: Selection and Employment of Consultants by World Bank Borrowers" (dated January 2011), and the provisions stipulated in the Loan Agreement. The various items under different expenditure categories are described in general below. For each contract to be financed by the Loan, the different procurement methods or consultant selection methods, estimated costs, prior review requirements, and time frame are agreed between the Borrower and the Bank in the Procurement Plan. The Procurement Plan will be updated at least annually or as required to reflect the actual implementation needs and improvements in institutional capacity. The project will carry out implementation in accordance with the "Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD and IDA and Grants" dated October 15, 2006 and Revised in January 2011 (the Anti-Corruption Guidelines). 233. Swaziland has commenced Public Procurement Reforms and so far, the Ministry of Health (MOH) and the Ministry of Works (MOW) have been prioritized in this process. Over the last 18 months, new Bidding documents for procurement of works and goods and Requests for Proposals documents have been introduced. These documents are still undergoing review by Swaziland. The new Procurement Bill has been approved by Cabinet and is to be presented to Parliament. The Government-contracted Crown Agents who have been instrumental in providing technical support for the procurement reform process. The Government of Swaziland will use the World Bank's SBD and RFP's for both International Competitive Bidding (ICB) and National Competitive Bidding (NCB), as appropriate. Swaziland promulgated the Public Procurement Regulations of 2008 that saw the introduction of the National Tender Board and modification of the procurement process. However, some Procurement activities under Ministry of Health and Deputy Prime Ministers Office are still being carried out in accordance to the provisions of the Stores Regulations of 1973. While the legislation may have been updated from time to time, it is outdated legislation that does not provide all the elements for a transparent and modern procurement system and therefore, cannot be used in the framework of the project. 234. The Ministry of Health (MOH) and the Deputy Prime Minister's Office will be the executing agencies for the proposed project. The MOH will be responsible for the implementation of the Strengthening the Capacity of Health Sector (component 1) and Facility level Support to Improve Access, Quality and Efficiency of Services (component 2). The Deputy Prime Minister's Office will be responsible for the Strengthening of the OVC Safety Net (Component 3). 235. For the MOH, additional capacity to ensure timely project implementation will be essential. Overall, to ensure prompt project start up, a full time Project Coordinator (civil servant), two Procurement Specialists, two Financial Management (FM) Specialists and a Monitoring and Evaluation (M&E) Officer (civil servant) should be in position to provide the necessary technical support to the Ministry, including project management, procurement and 81 financial management, and assist in the preparation of work plans, budgets, progress reports, and coordination of the overall implementation of the project. 236. For the Deputy Prime Ministers Office, the procurement capacity of the DSW and the NCCU will require strengthening by reassigning existing staff to handle the procurement function. The Procurement Specialist hired at MOH will also provide procurement support to staff at the DPM's Office. 237. Swaziland is in the process of reforming Public Procurement whilst the MOH is still undergoing institutional reform and is in the process of creating a Procurement Unit. Meanwhile, the DPM's Office needs to reassign existing staff to handle the procurement function. Consequently, the risk for carrying out procurement is rated as substantial. To ensure adequate implementation of the project, the MOH and the DPM's Office should maintain qualified Procurement Specialists throughout the life of the project. 238. With the measures above, the procurement arrangements for the project are considered adequate. B. Procurement of Works 239. Works to be procured under this project estimated in aggregate at US $12 million. This, however, will include rehabilitation of existing selected health care facilities and nurse training institutions. The procurement of works will be done using the World Bank's SBDs for all procurement under ICB. Swaziland will use the World Bank's SBDs for both ICB and NCB as appropriate. Works contracts estimated to cost more than US$75,000 but less than US$1,000,000 equivalent per contract would be procured through NCB procedures. All NCB contracts estimated to cost more than US$500,000 but less than US$1,000,000 equivalent will be subject to prior review. Works contracts estimated to cost less than US$75,000 equivalent per contract may be procured using the shopping procurement method by requesting at least three written quotations from qualified contractors with contracts awarded on a lump sum basis. Direct Contracting may be used when competition is not advantageous with the World Bank's prior review and approval. The prior review threshold for works contracts will be US$1,000,000 equivalent per contract for ICB and US$500,000 for NCB. Pre-qualification of contractors is not envisaged under this project as only minor works are expected to be carried out. 240. Small simple works with individual contracts, which are not expected to cost higher than US$ 75,000 equivalent, may be procured under lump sum, fixed price contracts awarded using shopping procedures based on requesting at least three written quotations from qualified contractors. C. Procurement of Goods 241. Goods to be procured under this project estimated in aggregate at US $7.4 million. The procurement of goods will be done using the World Bank's SBDs for all procurement under ICB. Swaziland will use the World Bank's SBDs for both ICB and NCB as appropriate. Goods estimated to cost US$200,000 equivalent or more per contract will be procured through ICB 82 procedures. Goods estimated to cost less than US$200,000 but more than US$75,000 equivalent per contract will be procured through NCB procedures. Goods contracts estimated to cost less than US$75,000 equivalent per contract may be procured using the shopping procurement method. UN Agencies and direct contracting may also be considered with the World Bank's prior review and approval. The prior review threshold for goods will be for contracts estimated at US$200,000 or equivalent per contract. D. Procurement of Services (other than consultants' services) 242. Services (other than consultants' services) to be procured under the project estimated in aggregate at US$ 1,000,000 will include printing of laminated protocols and basic package of services for all health facilities, services for contracts for installation and technical support of telecommunication and computerized systems and public awareness campaigns among others. Swaziland will use the World Bank's SBDs for both ICB and NCB as appropriate. E. Selection of Consultants 243. Consultants' services required for firms and individuals estimated in aggregate at US $6 million to cover consultancies for: (i) design, preparation of bidding documents and supervision of construction of rehabilitation works; (ii) TA support to the MOH and DPM's Office; (iii) institutional assessments, (iv) training needs assessments; (iv) various studies; (v) training providers and advisory services, among others. 244. All consulting service contracts costing equal to or greater than US$ 100,000 equivalent for firms will be awarded through Quality and Cost Based Selection (QCBS) method in accordance with paragraphs 2.1 to 2.31 of the Consultant Guidelines. Contracts for highly specialized assignments estimated to cost less than US$ 100,000 equivalent may be contracted through Consultants' Qualification (CQS) in accordance with paragraphs 3.7 of the Consultant Guidelines. 245. Least-Cost Selection (LCS) will be used for selecting consultants for assignments of a standard or routine nature (audit services) where well-established practices and standards exist estimated to cost less than US$ 100,000 in accordance with paragraphs 3.6 of the Consultant Guidelines. 246. Single Source Selection (SSS) may be employed with prior approval of the World Bank and will be in accordance with paragraphs 3.8 to 3.11 of the Consultant Guidelines. 247. Service providers, including NGOs, may be contracted, in partnership with smaller local organizations at community level, to provide facilitation and community capacity development services to the project in accordance with paragraphs 3.16 of the Consultant Guidelines. 248. All services of individual consultants (IC) will be procured under individual contracts in accordance with the provisions of paragraphs 5.1 to 5.6 of the Consultant Guidelines. 83 249. Short lists of consultants for services estimated to cost less than US$ 100,000 equivalent per contract may be composed entirely of national consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines. F. Training 250. This category would cover all costs related to the carrying out study tours, training courses and workshops, i.e., hiring of venues and related expenses, stationery, and resources required to deliver the workshops as well as costs associated with financing the participation of community organization in short-courses, seminars and conferences including associated per diem and travel costs. Training programs would be part of the Annual Work Plan and Budget and will be included in the procurement plan. Prior review of training plans, including proposed budget, agenda, participants, location of training and other relevant details, will be required only on annual basis. G. Operating Costs 251. Incremental operating costs include expenditures for maintaining equipment and vehicles, fuel, office supplies, utilities, consumables, allowable travel per diems and, allowable travel and accommodation expenses, workshop venues and materials. These will be procured using the Borrower's administrative procedures, acceptable to the World Bank. H. Procurement Manual 252. The procurement procedures and SBDs to be used for World Bank-funded procurement will be presented in POM, including the procurement section in line with the guidelines of the World Bank. The procurement manual would include the component descriptions, institutional arrangements, regulatory framework for procurement, approval systems, activities to be financed, procurement and selection methods, thresholds, prior review and post reviews arrangements and provisions, filing and data management and the procurement plan for the first 18 months for all project components. I. Assessment of the agency's capacity to implement procurement 253. At the MOH, in the recent past drug procurement was being done by Central Medical Stores whilst some was done by user departments. In addition, recurrent procurement of small value items was being done by the Finance Department whilst capital procurement was being done by user departments. MOH is in the process of departing from a fragmented procurement system to establishing a Procurement Unit with the technical assistance of Crown Agents who have been contracted for this task. This would include total supply chain management from selection, procurement, storage, distribution and disposal of drugs. The current proposal is for the unit to be headed by a Procurement Manager assisted by 3 Procurement Officers. Though the recruitment process is still under way, when staff are hired there will be need for mentoring in Public Procurement in general and Bank Procurement in particular. The Procurement Unit will quantify and estimate all requirements, manage the procurement process and take custody of contract management whilst ensuring end-user involvement. The Central Medical Stores will be 84 re-oriented and be responsible for the receipt, storage, distribution and disposal of drugs. The Procurement Unit will need to be strategically placed and the staff will need to be recognized as professionals and remunerated accordingly if the Unit is to perform to expectation. Currently the MOH only has capacity to procure small value items using price quotations. With the technical support of Crown Agents, the MOH will be able to procure high value items and will be able to meet Bank requirements for procurement. 254. Procurement under DSW and NCCU is done by their respective Finance Departments. Every year the Government of Swaziland carries our supplier registration and awards tenders for supply of goods and services based on rate contracts. Government Departments needing goods or services request for these from the approved suppliers. If the approved suppliers do not have the goods or services or if the goods or services have not been tendered for by suppliers, then the Government Department obtains 3 quotations evaluates and recommends award of contract. For goods and services valued up to E20,000 (US$2,700) the approval is obtained from Government Stores. For procurements above E20,000 (US$2,700) the Department forwards the request to MOF who in turn seeks a waiver from the Central Tender Committee. At DSW, an Assistant Accountant had been trained in the new Procurement Regulations but he/she has since left the DSW. Currently DSW and NCCU only have capacity to procure small value items using price quotations. There is low capacity to procure high value items using any other method of procurement. For DSW and NCCU to be able to meet Bank requirements for procurement, there is need for the Procurement capacity to be enhanced, and it is expected that the DPM's office will assign a member of staff to be responsible for procurement who will be mentored by the Procurement Specialist at MOH assigned to handle DPM's Office procurement. 255. A review of the Rate Contract system revealed deficiencies such as: (i) no systematic management of supplier registration; and (ii) approved suppliers having to distribute their approval letters to Government Departments on their own. 256. A review of the current price quotation system revealed deficiencies such as: (i) no threshold for price quotations hence no financial delineation between price quotation and formal tendering process; (ii) inconsistence use of requests for quotations; and (iii) lengthy approval system. 257. For both MOH and DPM's Office, the procurement functions should be separated from the Finance functions in order to ensure the appropriate checks and balances. 258. For both the MOH and DPM's Office, the key issues and risks concerning procurement for implementation of the project have been identified and include: (i) absence of a Procurement Unit at MOH and requirement for reassigning existing staff to handle the procurement function at DPM's Office; (ii) foreseeable staff capacity gaps in Bank financed procurement practices; (ii) capacity gaps in the user/technical departments both in preparation of technical specifications and Terms of Reference, and to supervise Consultants; (iii) as the project will pool EC, Swaziland and Bank funds, there is a likelihood of erroneously using EC or Swaziland procurement procedures for World Bank-financed activities; (iv) capacity gaps in Supply Chain Management and Health Procurement; and (v) non membership of a purchasing/procurement 85 professional body and absence of a professional code of ethics for procurement staff as some may have non-procurement back grounds. 259. The corrective measures which have been agreed to mitigate the overall risk are: (i) MOH and DPM's Office will prepare a Procurement Manual, as part of the POM, to clearly indicate the roles and responsibilities of different staff and the procedures to be followed in executing procurement under the proposed project; (ii) hiring of Procurement Consultants to provide hands-on coaching and mentoring; (iii) provide MOH and DPM's procurement staff training in World Bank procurement at ESAMI; (iv) provide Training in Supply Chain Management and Health Procurement; and (v) provide CIPS Training to MOH Procurement Unit staff. 260. The overall Country context risk for procurement is rated substantial as procurement legislation is still undergoing reform and country capacity to execute World Bank-financed procurement is weak. Given that the MOH is still establishing a Procurement Unit, the DPM's Office has yet to reassign existing staff to handle the procurement function and both institutions have no experience in World Bank-financed procurement, the overall project risk for procurement is substantial. 261. Risk mitigation action plan. The following actions are suggested to mitigate the procurement risk and facilitate the implementation of the program Table A8-1. Procurement Management Action Plan to Mitigate Procurement Risk Risk Mitigation/Action Responsibility Due Date 1. Capacity in procurement MOH/ Effectiveness weak Recruitment of at least one qualified and DPM's experience procurement specialist. Office 2. Procedures for Produce and adopt a POM, including MOH and Effectiveness procurement not properly procurement section, acceptable to the DPM's established World Bank. Office 3. DPM's Office capacity in DPM's 4 months procurement is weak Reassign staff to handle the procurement Office after function effectiveness 4. Insufficient Procurement MOH 6 months Hire the 2nd Procurement Specialist Management capacity after effectiveness 5. Weak capacity and MOH and knowledge of World Bank- Provide Training for MOH Procurement DPM's 6 months financed procurement and Staff and Procurement Specialists at Office after Health Procurement ESAMI effectiveness 6. Weak capacity and MOH knowledge of Supply Chain 12 months Management and Health Provide Training in Supply Chain after Procurement Management and Health Procurement effectiveness 86 Risk Mitigation/Action Responsibility Due Date 7. Newly hired MOH PU MOH staff may not regard 12 months procurement as a profession Provide CIPS Training for MOH after and resultantly may not Procurement Staff effectiveness adhere to any professional code of ethics J. Procurement Supervision 262. Given the country context and the project risk above indicated, the need for a more systematic ex-post review is high in addition to the semi-annual supervision missions by the World Bank. Annual Post Procurement Review will be carried out either by the World Bank or World Bank-appointed consultants. 263. To enhance the transparency of the procurement process, the Borrower shall publish the award of Contracts procured under ICB procedures or selected under QCBS method, generally within two weeks of receiving the World Bank no-objection to the recommendation of award of Contract, in accordance with the Procurement and Consultant's Guidelines. Additional procedures, as elaborated in the procurement manual, will govern the disclosure under other procurement and selection methods. K. Procurement Plan 264. The Borrower, at appraisal, has developed a procurement plan for project implementation, which provides the basis for the procurement methods. This plan has been agreed between the Borrower and the Project Team on January 31, 2011 and is available at the MOH located at Mhlambanyatsi Road, Mbabane and the DPM's Office located at Gwamile Street, Mbabane. It will also be available in the project's database and on the World Bank's external website. The Procurement Plan will be updated in agreement with the Project task team annually or as required to reflect the actual project implementation needs and improvements in institutional capacity, and should cover at least the next 18 months (currently June 2011- December 2012). 265. The thresholds for the use of the various procurement and selections methods are summarized below: I. Goods and Works and non-consulting services. 266. Prior Review Threshold: Procurement Decisions subject to Prior Review by the Bank as stated in Appendix 1 to the Guidelines for Procurement. 87 Table A8-2. Prior Review Threshold: Good, works and non-consulting services Procurement Method Prior Review Threshold Comments $US WORKS 1. ICB >$1,000,000 All 2. NCB >$500,000 - $1,000,000 All 3. NCB >$75,000 - $500,000 As per procurement plan 4. Shopping (Small <$75,000 As per procurement plan contracts) 5. Direct Contracting N/A All Goods and Services (Excluding Consultants Services) 1. ICB >$200,000 All 2. NCB >$75,000 - $200,000 As per procurement plan 3. Shopping <$75,000 As per procurement plan 4. Direct Contracting N/A All 1. Reference to Project Operational/Procurement Manual: Procurement Manual Health, HIV/AIDS & TB Project: Approved: (Date June 2011132) 2. Procurement Packages with Methods and Time Schedule A) Implementing Agency: MOH (Component 1 & 2) Table A8-3. Procurement Package: Implementing Agency- MOH 1 2 3 4 5 6 7 Ref Contract Estimated Procurement Review Expected Comments No (Description) Cost Method by Bank Bid-Opening $US (Prior/Post) Date (*) WORKS 1 Rehabilitation of existing health 710,438 NCB Prior March 2012 (1) infrastructure (clinics) in Hhoho and Manzni regions 2 Rehabilitation of existing health NCB Prior March 2012 infrastructure (clinics) in Lubombo 961,707 and Shiselweni regions 3 Rehabilitation of a referral Hospital - 2,663,499 ICB Prior March 2012 (1) maternity/labor/gynecology/neonatal wards 4 Rehabilitation of maternity/labor 1,000,000 ICB Prior November (1) wards of 5 health centers 2012 5 Rehabilitation of teaching facilities at 1,000,000 ICB Prior July 2012 nurse training institutions for training general nursing students 6 Computer laboratory with 25 100,000 NCB Prior July 2012 computers at Univ. of Swaziland Faculty of Health Science 7 Renovation of student hostels at 700,000 NCB Prior March 2012 (1) Sithobela Health Center for student 132 June 2011 is the expected Effectiveness date. 88 1 2 3 4 5 6 7 Ref Contract Estimated Procurement Review Expected Comments No (Description) Cost Method by Bank Bid-Opening $US (Prior/Post) Date (*) nurses 8 Establishment of satellite sites for 100,000 NCB Prior July 2012 ambulances 9 Rehabilitation of maternity waiting 100,000 NCB Prior July 2012 homes (3 regional, 2 sub-regional locations) 10 Rehabilitation of national TB center 70,000 Shopping Prior March 2012 to strengthen IC Total: 7,405,644 GOODS 1 Equipment 133 for: ICB Prior November a) 5 health centers and clinics 2,750,000 2012 b) 3 regional, 2 sub-regional 550,000 hospitals -- based on MNH assessment c) Mbabane Government Hospital 515,064 d) Supplies for EmONC including 500,000 long arm gloves for placenta removal - mainly for shortfalls from the central medical stores 2 Vehicles ICB Prior December a) Ambulances (8) 440,000 2011 b) SRH unit (2), Regional offices 130,000 (2) c) Two double cab 76,000 (Implementation Team) d) Vehicles for HIV/TB IC 63,000 Coordinators (2) e) 5-ton truck for transporting 70,350 waste f) College bus (Nurse Training) 45,000 3 Large and medium Incinerators and 350,000 ICB Prior December (1) Reusable bins for variety of HCW 2011 treatments 4 HCWM Re-usable and consumable 1,600,000 ICB Prior December (1) supplies -- Sharps containers, 2011 segregation bins, variety of bin liner colors 4 Digital x-rays available at national 50,000 Shopping Prior July 2012 and regional levels for boosting TB 133 Includes the cost of the maintenance contracts for equipment. Maintenance contract is assumed to be 10% of equipment cost (i.e. $250,000 for this line item). 89 1 2 3 4 5 6 7 Ref Contract Estimated Procurement Review Expected Comments No (Description) Cost Method by Bank Bid-Opening $US (Prior/Post) Date (*) case detection during prevalence surveys 5 Furniture for 4 classrooms, 25 130,000 NCB Prior November computers for laboratory, library, and 2012 offices 6 Printing of laminated protocols and 159,000 NCB Prior March 2012 guidelines 6 hospitals, 5 health centers and 42 clinics with maternity for 5 years 7 Equipment to replace old 30,000 Shopping Prior December equipment/software computers and 2011 printers for FM unit 8 Laptops & Desktops (1b) 20,000 Shopping Post December Impl Team 2011 9 Office Furniture (MOH project team 55,500 Shopping Post December Impl Team and nurse training teaching offices) 2011 10 Printing of laminated protocols and 60,000 Shopping Post March 2012 (**) basic package of services 11 Communication Equipment 10,000 Shopping Post December (**) 2011 12 IEC campaign on EmONC 10,000 Shopping Post July 2012 (**) 13 HCWM Information, Education and 60,000 Shopping Prior July 2012 (**) Communication (IEC) 14 Computer Laboratory 25 computers 100,000 Shopping Post December (**) (Nurse Training) 2012 15 Standby Generator 19,500 Shopping Post July 2012 (**) 7,748,414 B) Implementing Agency: DPM (Component 3) Table A8-4. Procurement Package: Implementing Agency- DPM 1 2 3 4 5 6 7 Ref. Contract Estimated Procurement Review Expected No. (Description) Cost Method by Bank Bid-Opening Comments (Prior/Post) Date (*) 1 Computers & Software 12,700 Shopping Prior July 2011 (**) 2. Vehicle 38,000 Shopping Prior July 2011 3 Office furniture & equipment 10,000 Shopping Post July 2011 (*) Based on the assumption the project will be effective in June 2011. (**) Shopping procedures using the Standard Request for Quotations attached to the Procurement Manual. II. Selection of Consultants Prior Review Threshold: Selection decisions subject to Prior Review by Bank as stated in Appendix 1 to the Guidelines Selection and Employment of Consultants: 90 Table A8-5. Prior Review Threshold: Consultants Selection Method Prior Review Comments Threshold 1. QCBS >, =$100,000 All 2. LCS and CQS <$100,000 As per procurement plan 2. Single Source (Firms) N/A All 3 Individual Consultants >, =$50,000 All 4 Individual Consultants <$50,000 As per procurement plan 5 Single Source (Individual Consultants) N/A All QCBS = Quality- and Cost-Based Selection (Section II of the Consultants' Guidelines) LCS = Least Cost Selection (Para. 3.6, of the Guidelines) CQS = Selection based on Consultants' Qualifications (Para. 3.7 of the Guidelines) 1. Short list comprising entirely of national consultants: Short list of consultants for services, estimated to cost less than $100,000 equivalent per contract, may comprise entirely of national consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines. 2. Consultancy Assignments with Selection Methods and Time Schedule A) Implementing Agency: MOH (Component 1 & 2) Table A8-6. Procurement Package: Implementing Agency- MOH 1 2 3 4 5 6 7 No Description of Assignment Estimated Selection Review Expected Method by Bank Proposals Comments Cost Prior/ Submissi Post on $US Date (*) 1) Strengthening the Capacity of the Health Sector 1 Review of current status and issues 4,000 IC Prior September Local STC with financial management in health 2011 sector 2 Situation analysis including issues and 27,500 IC Prior September Regional solutions (regional, community, 2011 STC hospitals) 3 Accreditation of medical staff 14,000 IC Post March TORs 2012 Support for Project Implementation Team (Component 1 & 2) 1 TA to Project Coordinator MOH 252,000 IC Prior June 2011 2 Procurement Specialist (2) 252,000 IC Prior April 2011 ­ for Senior Specialist and October 2011 ­ for Intermed. Specialist 3 Financial Management Specialist (2) 252,000 IC Prior April 2011­ for 91 1 2 3 4 5 6 7 No Description of Assignment Estimated Selection Review Expected Method by Bank Proposals Comments Cost Prior/ Submissi Post on $US Date (*) Senior Specialist and October 2011 ­ for Intermed. Specialist 2a Support for Hospitals, Health Centers and Clinics 1 Support development of a Regional 150,000 IC Prior July 2012 TA for 1 infrastructure maintenance program year (under the leadership of the Ministry (building & of Works) equipment) 2 Conduct skills and needs audit of 20,000 IC Post December TORs supervisors 2011 3 Environmental Assessment 6,000 IC Prior May 2011 4 Construction Supervision 400,000 QCBS Prior June 2011 5 Facility Assessment of Health Centers 150,000 QCBS Prior June 2011 6 Develop curriculum for supervisors 18,000 IC Post Sept. 2011 TORs Strengthening TB and HIV Co-epidemic Response 1 Study MSF HIV/TB model and other 9,000 IC Post February TORs models of decentralized provision of 2012 HIV/TB services at community level Improving Maternal and Neonatal Care 1 Consultant(s) to develop obstetric 12,000 IC Post November TORs protocols & guidelines 2011 Health Care Waste Management 1 Analysis of current laws, bylaws and 30,000 IC Prior January regulations 2012 2 Development of National Policies for 45,000 IC Prior January TORs HCWM 2012 3 Development of Regulations and 99,000 IC Prior January bylaws with clear responsibilities 2012 4 Finalize National Health Care Waste 66,000 IC Prior January Guidelines 2012 Total: 1,790,000 B) Implementing Agency: DPM (Component 3) Table A8-7. Procurement Package: Implementing Agency-DPM 1 2 3 4 5 6 7 No Description of Assignment Estimated Selection Review Expected Comments Method by Bank Proposals Cost (Prior / Submission Post) Date $US 1 International consultancy firm - 250,000 QCBS Prior August International support to design, OVC 2011 Consultancy implementation manual (IM), MIS, firm 92 1 2 3 4 5 6 7 No Description of Assignment Estimated Selection Review Expected Comments Method by Bank Proposals Cost (Prior / Submission Post) Date $US training on IM and MIS and support to selection of payment service provider 2 Medium term consultant for support 106,000 IC Prior January project management 2012 IC = Individual Consultants: Selected in accordance with Section V of the Consultants Guidelines. (*): Based on the assumption the project will be effective in June 2011. All TORs to be subject to prior review. III. Implementing Agency Capacity Building Activities with Time Schedule 1. Agreed Capacity Building Activities with time schedule Table A8-8. Implementing Agency Capacity Building Activities No Expected outcome / Estimated Cost Estimated Start Date Comments Activity Description Duration 1 Procurement Training at ESAMI $30,000 3 weeks November (Both Implementing Agencies) 2011 2 CIPS Training for Procurement Unit $10,000 January Staff 2012 3 Supply Chain Management and Health $40,000 3 weeks March Procurement 2012 93 Annex 9: Economic and Financial Analysis Swaziland Health, HIV/AIDS and TB Project 267. Economic analysis plays a significant role in informing the choice of project alternatives, design arrangements and implementation strategies and is often used to make judgments on how a proposed or existing project efficiently makes use of resources. In the health sector, economic analyses commonly rely on four techniques, namely: cost-minimization analysis, cost- effectiveness analysis, cost-utility analysis and cost-benefit analysis. Because of measurement challenges arising from difficulties in valuing incremental costs and impacts of health interventions, rigorous economic analyses commonly performed in other sectors are seldom conducted in the health sector. This analysis assesses (a) economic rationale for investing in the health sector in Swaziland; (b) economic justification for the selection of the project components and activities; (c) financial sustainability of the health sector; and (d) project sustainability. The analysis is mainly informed by the recent draft findings of a Performance Expenditure Review (PER) in Swaziland. A. Economic rationale for investing in the health and social protection sectors 268. A cursory glance at health statistics in Swaziland highlights the challenges facing the country. Life expectancy, for example, has fallen from 60 years in 1997 to 43 years in 2007. This is largely due a HIV prevalence of 26% (the third highest level in the world) and TB prevalence of 812/100,000- these are amongst the highest indicators in the world. TB case detection (57%) and cure (42%) rates are both well below the WHO targets of (70%) and (85%) respectively. The DHS 2007 reports that among children that showed ARI symptoms, 73 percent received medical attention and 24 percent received antibiotics. Around six in ten children with fever received medical attention - 17 percent were given antibiotics, and 1 percent treated with an anti-malarial drug. 269. Child health outcomes represent a serious problem for Swaziland, not least in light of the fact that 31 % of all children are OVC. According to the DHS 2006-7, OVC are less likely to have their basic material needs met than non-OVC (61 percent compared to 77 percent), and the percentage of OVC decreases as the wealth quintile increases (from 37 percent in the lowest quintile to 22 percent in the highest). Twenty nine percent of children under 5 are stunted (DHS 2007); this can lead to long-term and irreversible impacts on the cognitive and physical development of children. The draft Public Expenditure Review (PER) notes that while it may not be possible to attribute this to HIV, scatterplots produced by UNICEF from data of southern African countries show the perplexing result that, ceteris paribus, child underweight prevalence is higher in low HIV prevalence areas (UNICEF, 2003). Hence, it is possible that more intensive programmatic support in high-HIV-areas will result in better-nourished children, thus confounding the easy association of HIV prevalence with malnutrition prevalence. Data from the Swaziland DHS 2007 suggests that stunting is a bigger problem in the Hhohho (31.6%) and Manzini (29.5%) regions as compared to Shiselweni (28.9%) and Lubombo (24.4%). 270. A key concern of a well-functioning health system is inequalities in health status and provision of health care. In Swaziland, it is estimated that 67% of the recurrent health budget is spent on central urban hospitals and curative services, while only 20% was spent on rural clinics, 94 despite the fact that clinics provide 80% of health care services. In addition, the DHS suggests that there is an unequal access to maternity care across the regions. For example, deliveries in a health facility range from 79.8% in Manzini, to 65.1% in Shiselweni. The DHS also confirms that mothers in Shiselweni and Lubombo are less likely to receive antenatal care from a skilled provider. 271. Swaziland's economy has deteriorated in recent years. Swaziland relies predominantly on Southern Africa Customs union (SACU) receipts for government revenue, with about 63.8% of government revenue and grants financed by annual SACU receipts. While this increased from USD 653 million in 2007/08134 (25.4% of GDP and 60% of recorded public resources) to USD 800 million in 2008/09, receipts dropped by more than 50% to USD 262.5 million in 2010/11.135 Although this mechanism will continue, Swaziland's share of the SACU receipts is expected to decline significantly in 2011 with World Bank/IMF estimates136 of almost a 50% decrease in Swaziland's SACU revenue. This sharp decline will have an impact on overall government spending, with a knock-on effect on health sector spending. Health and education, however, may be less affected than other sectors since they are high priorities on the national agenda. 272. The global economic downturn has negatively affected Swaziland directly through a decline in private sector activity. The manufacturing, sector, for example, lost about 3,000 jobs by mid-2009 because of the closure of the main wood pulp plant and reduced employment in the textile industry; and the garment sector has lost about 20,000 jobs (two thirds of its peak employment) since 2006. 137 The recent budget speech by the Minister of Finance emphasized the effects of the SACU receipts decline, the global recession, and additional constraints on the Swazi Government budget, particularly the high personnel cost burden (representing 51% of the recurrent budget for 2010/11). Additional estimates indicate an overall budget deficit of 13% of GDP compared to 8% of GDP for the year 2009/10, which includes a 14% cut on base budgets though not for priority areas such as increasing access to health care and continuing the fight against HIV/AIDS which received additional allocations. The Ministry of Finance noted concern for the continued contribution of personnel costs to the recurrent budget, and indicated that 100% of recurrent budget expenditures were disbursed while only 80% of capital budget expenditures were disbursed in 2009/10. The fiscal deficit is estimated at 8.0% of GDP in 2008/2009 and is expected to reach more than 16% of GDP this year, and remain unsustainably high at more than 18% thereafter. 273. The high level of expenditure mentioned above (on par with many OECD economies as a percentage of GDP) is underpinned by an increase in wages, which accounted for more than 18% of GDP in 2009/2010--the single highest level in Sub-Saharan Africa. The status of key economic indicators is outlined in table 9-1 below. 134 Using exchange rate of 1 USD = SDE 7.5 for conversion of SDE figures presented in government documents. 135 Budget Speech 2010, presented by Majozi V. Sithole, Minister of Finance to Parliament, 2/26/10. 136 BTOR, IMF Article IV Mission ­ Swaziland, November 17-December 2, 2009. 137 Budget Speech 2010, presented by Majozi V. Sithole, Minister of Finance to Parliament, 2/26/10. 95 Table 9-1: Key Economic Indicators (in percent of GDP, unless specified) 2006 2007 2008 2009 2010 2011 2012 est. proj. Real GDP growth rate (year-on- 2.9 3.5 2.4 0.4 1.1 2.5 2.5 year) Inflation (period average) 5.3 8.2 12.9 7.3 6.2 5.6 5.0 Broad money growth (year-on- 25.1 21.4 15.4 ... year) CA Balance -7.4 0.7 -4.1 -8.4 -10.7 -11.0 -8.6 Total expenditure * 32.8 32.3 40.6 44.5 45.7 45.9 46.8 Recurrent expenditure 25.1 24.1 30.7 33.9 33.4 33.1 33.2 goods and services 6.4 6.3 6.7 7.9 7.6 7.2 6.8 Wages 13.8 12.8 16.5 18.4 18.4 18.1 17.9 transfers and subsidies 3.9 4.1 6.5 6.7 6.2 6.0 5.9 interest 0.9 0.8 1.0 0.9 1.2 1.8 2.6 Capital expenditure 7.7 8.1 9.9 10.6 12.3 12.8 13.6 Total revenue 43.0 38.9 40.5 36.5 29.4 27.9 28.6 SACU revenue 28.5 23.3 25.3 20.5 13.5 12.0 12.5 Other tax revenue 12.0 13.1 13.6 13.3 13.1 13.1 13.5 Non-tax revenue 0.9 3.3 1.5 1.4 1.5 1.7 1.7 Grants 0.9 0.3 0.6 1.0 1.1 1.1 1.1 Fiscal balance (incl. grants) 10.2 6.5 -0.1 -8.0 -16.3 -18.0 -18.2 Public debt 18.8 18.4 16.6 22.6 38.9 56.9 75.1 Gross Official Reserves 747.2 722.5 825.4 703.2 567.5 490.4 458.4 Source: IMF and WB estimates. *: all expenditure data are for the fiscal year ending in the next calendar year. 274. The indicative allocated MOH budget for 2010/11 is USD 185 million; USD 19.4 million of this amount is earmarked for subventions to NGOs. The MOH budget was increased by 2.5% with additional funding for recruitment of new personnel to support the reorganization and restructuring of the Ministry. In addition, a USD 2 million allocation to support ART enrollment increased the drugs budget to USD 30 million. As noted in the February 2010 budget speech, the government expects to realize the benefits of initiatives to increase efficiency in the MOH budget expenditure and improved health outcomes through the joint World Bank/EU project to strengthen health systems and restructuring of the MOH. Efficiency gains and improving absorptive capacity are focus areas for Swaziland as volatility in revenue streams from SACU, FDI, and domestic sources continue to put pressure on the Government. 275. The draft findings of a recent Public Expenditure Review (PER) of the health sector shows that the MOH budget as a proportion of government budget has been increasing since 2006/07 from E505.7 million (8.27%) to E802.1 million (8.4%) in 2008/09.138 This does not include expenditures through the Phalala Fund Medical Referral Scheme or health sector expenditures undertaken through other line ministries. Additionally, the data shows that the 138 Data taken from MOH draft Public Expenditure Review (PER) of the health sector, Dec. 2009. 96 funds spent on recurrent expenditures are used largely to fund personnel costs, drugs, and subventions to various health facilities. This is a cause for concern especially when compared to the number of vacant personnel posts, and the estimated needs for health personnel in the country. As already identified by the Ministry of Finance, current levels of recurrent expenditure cannot be sustained without significant gains in expenditure efficiencies to offset any decreases in the government budget. 276. The PER also showed that in 2008/09 Swaziland spent approximately USD 93.8 (E703.65)139 per capita per annum on health. When funds from cooperating partners are included, this rises to more than USD 150 per capita. For comparison purposes, countries in the Southern African sub-region had per capita health expenditures in 2007 varying from USD 139 for Zimbabwe, USD 42 for Mozambique, USD 58 for Malawi, USD 38 for Angola and USD 63 for Zambia.140 Additional data indicates that Swaziland's per capita budget increased further to USD 120 in 2009/10; this rises to almost USD 170 when donor funding is included. The quality of services provided, however, does not reflect this high level of per capita expenditure. This suggests considerable inefficiencies in the current health systems, which is further compounded by poor coordination between various health program (including the National AIDS Program, National TB Control Program and Sexual Reproductive Health Program) and regional health services. Low absorption rates due to under expenditure of the capital budget, however, ensure that expenditure, as a proportion of GDP has been lower, if still increasing. It has also led to a gradual fall in the proportion of Government expenditure accounted for by health, falling from 7.75% to 7.51%. 277. Swaziland has modest levels of formal and informal social protection expenditures targeting vulnerable children.141 Expenditure on orphans and vulnerable children (OVC) increased from USD 10.3 million in 2005/06 to USD 14.9 million in 2006/07, of which USD 10.2 million was financed from domestic sources142 to support an estimated 130,000 OVC in 2006. With these high expenditure levels, it is apparent that Swaziland is not getting the necessary returns as evident from the worsening human development indicators. The reforms and support provided under this project will increase the technical and allocative efficiency of the existing and future government resources towards health and impact mitigation. B. Economic justification for the selection of the project components and activities 278. The economic justification for this project is based on the following expected benefits. Firstly, there are large positive externalities associated with the investments to be financed. High impact interventions, like MCH interventions for example, can have a significant impact. This is particularly important since while Primary Health Care (PHC) is prioritized by the National Health policy, its share of the budget has fallen over the last 3 years, from 14.82% in 2006 to 139 Based on 2008/09 data from MOH draft PER, Dec. 2009. 140 Per capita health expenditures by Country, Human Development Report 2007, United Nations, as viewed on http://www.infoplease.com/ipa/A0934556.html It should be noted that these per capita figures represent both public and private expenditures, while the figures for Swaziland represent the public figures. 141 Overall health spending is down from 13.2 percent of government spending in 2003 to 8.4 percent in 2008/09, and lies well below the Abuja target of 15%. Social protection spending is 2.4 percent of government spending. 142 Unpublished draft, Fiscal Dimensions of HIV/AIDS in Swaziland, M. Haacker, World Bank, December 2009. 97 9.49% in 2008/09. This is problematic given that Swaziland is off-track to meet all of the health MDGs; these in turn depend on well-functioning PHC systems. Secondly, the project will contribute to improving the efficiency and effectiveness (and associated returns) of existing spending. Improved hospital management, for example, can improve resource allocation, whilst capacity building of NGOs to implement performance-based financing, can help to promote health sector efficacy, and improve efficiency through a focus on results. Results-based financing pilots in a range of countries like Rwanda, Burundi and Haiti show convincing positive results; this includes increased utilization of health services, and improved quality of care and absorptive capacity. 279. Third, indirect benefits from component 3are expected to yield long-term positive impacts because of anticipated incentives created by the cash transfers in terms of improved school attendance among vulnerable children of school-going age (expected to be a soft condition of the cash transfer program). The high level of poverty and increasing prevalence of HIV/AIDS and OVC is one of the main challenges facing Swaziland and its people and it has become evident that it is crucial to support the poorest and most vulnerable in the country to not only reach expected growth, but to sustain it. It is in general difficult to quantify in monetary terms, social and economic benefits of a cash transfer program and in the case of this pilot project, it is even more difficult to quantify expected program benefits, since there are no ongoing activities to measure potential benefits. Some generally expected program benefits can however be highlighted (these will also depend on the final design of the OVC Cash Transfer Program) such as positive impact on school enrollment and attendance, improved food consumption and increased registration of OVC. In addition, since the OVC Cash Transfer Pilot will target poor OVC, the economic justifications for the project, and in effect, distributive arguments, are particularly compelling in a country with one of the highest Gini-coefficients globally.143 280. Well-designed cash transfer programs can cost effectively reach the poorest and most deserving beneficiaries and, where these are present, replace badly targeted and inefficient subsidies. There is mounting evidence that cash transfer programs are an efficient way of redistributing income to the poor and thereby raising their consumption levels. Moreover, robust impact evaluations of well-designed cash transfer programs are starting to provide sound evidence of positive impacts on school enrollment and attendance rates.144 C. Financial sustainability of the health sector 281. Swaziland is an IBRD country, which finances a large proportion of its government expenditure from its own resources, despite the changes in circumstances with the SACU receipts. Current concerns about reductions in SACU revenue for Swaziland will be addressed through project efforts to increase efficiency in utilizing available resources for the health and social sectors and help Swaziland get "more health and safety net for the money." Positions recruited under the project are critical to improve the efficiency and effectiveness of the MOH 143 With a Gini coefficient of 0.61, Swaziland has the 7" most unequal income distribution in the world. 144 Fiszbein and Schady, Conditional Cash Transfers for Attacking Present and Future Poverty, draft report May, 2008. 98 and DPM's Office to fulfill their respective roles and manage ongoing activities. The incremental recurrent costs arising from these positions are modest since additional staff positions were largely already planned for in the reorganization of the MOH, such as for the Procurement Unit and Planning Unit, and will be absorbed by the MOH and DPM budget. D. Project Sustainability 282. The project inputs will lay the foundation for improved capacity for both the MOH and DPM's Office and the internal units responsible for implementing various aspects of the project. While significant resources will be earmarked for health infrastructure, priority will be placed on renovation of existing infrastructure with the aim of ensuring their functionality. In order to mitigate the contingent liabilities arising from health infrastructure related works, expansion of existing facilities and construction of new facilities will not take place under this project. 283. This project will also finance a significant amount of TA. The Sexual and Reproductive Health Unit, for example, will receive TA during the project implementation and should be in the position to monitor and reinforce the protocols, training and equipment provided by the project. The MOH Planning unit with enhanced capacity will continue to coordinate donor, NGO and MOH activities for the health sector. By the end of the project, the Health Partners Coordination Consortium should be playing a greater role in SWAp-based resource allocation. DSW and NCCU will receive TA and system support through the project and should be able to maintain the OVC database and effectively manage the OVC cash transfer project set up with support from the project. Several development partners have also expressed interest in providing cash transfer to OVC, once a reliable and well functioning cash transfer system is in place. The skills and systems built with the project's support will remain with MOH and DPM, enabling them to use their health and social welfare resources more efficiently to produce better results. Several development partners have also expressed interest in providing cash transfer to OVC, once a reliable and well functioning cash transfer system is in place. The skills and systems built with the project's support will remain with MOH and DPM, enabling them to use their health and social welfare resources more efficiently to produce better results. 284. The financial impact of the project on government's health spending will be felt mainly in terms of additional resources for maintenance of renovated facilities and repairs and replacements of medical equipment. These costs, however, will require a commitment by government if the project's benefits are to be sustained beyond the project's life span. 285. For component 3, cost estimations show that even a full-scale program, reaching all poor OVC145 would be affordable. Table 1 presents the estimated cost of the OVC Cash Transfer Pilot, depending on the number of total OVC beneficiaries and the level of the cash transfer. A national program covering all poor OVC would have a total annual cost of around US$ 19.8 million and represent only about 0.7 percent of GDP. A program covering 50% of all OVC would subsequently cost around US$ 9.9 million and represent around 0.35% of GDP. The delivery cost used for these estimations is 10%, which is likely to be higher at an initial stage and 145 Assuming a total of 144,000 OVC and using the same poverty prevalence as the national average (69%) there would be an estimated 100,000 poor OVC. 99 possibly lower as the program expands, depending on program design and efficiency. A review of spending on social protection interventions shows that the average spending on social protection interventions in low-income countries represents between 1 and 2 percent of GDP (Weigand, Grosh 2005). Table 1: Estimated Total Cost of the OVC Cash Transfer Program 100 Annex 10: Safeguard Policy Issues SWAZILAND Health, HIV/AIDS and TB Project 286. The project triggers OP 4.01 for Environmental Assessment due to the expected increase in the generation of health care waste at health care facilities supported by the project. Some of the health care waste will be hazardous and infectious. If not properly managed, such waste poses potential adverse impacts on the natural environment, health care workers and the public. 287. A Health Care Waste Management Plan (HCWMP) has been prepared as a measure to address shortcomings that were identified in the management of health care waste (HCW) in the country. The HCWMP was consulted upon, disclosed both in-country and at the Bank's InfoShop. The Plan focuses on the following key aspects: a. Reinforcing the national legal framework for HCWM. This process will involve: (i) analysis of all existing laws, bylaws and regulations; (ii) development of a national policy for health care waste management; (iii) development of regulations for HCWM that clearly assign responsibilities to the various levels of government; establishment of roles and procedures for controlling waste streams; and finalization of the National Health Care Waste Guidelines. b. Improving the institutional framework for HCW management. This will involve: (i) defining and harmonizing the duties and responsibilities of each practitioner in HCW management; facilitating the establishment of inter-sectoral working groups and focal points at all operational levels; and (iii) developing of a monitoring and evaluation (M&E) plan for the system. c. Improvement of HCW management at health care centers. This process will be initiated by doing an inventory of access in all health care centers to HCW treatment facilities, including treatment and disposal technologies. Following this assessment, the most appropriate treatment technology will be chosen for each health care centre. Health care centers will be provided with materials and equipment for their identified treatment technology. Such material and technologies will include consumables (such as bin liners), re-usables (such as plastic/metal storage bins for waste before final disposal and incinerators) and lined pits as appropriate. d. Awareness campaigns and training for HCW practitioners. Awareness campaigns will be used to inform the public on risks associated with mismanagement of and scavenging on dumpsites infested with HCW, and proper handling of such waste for home based care patients. In addition, training on the handling HCW will be provided to all HCW practitioners at all levels. e. Support initiatives for partnership with, and involvement of private sector in HCW management. This will entail informing private companies of existing business opportunities in solid and health care waste management in order to attract skilled practitioners to the sector. f. Development of monitoring system for the implementation of the HCWMP. In an effort to ensure that the objectives of the HCWMP are achieved, the implementation of the Plan will be monitored by either internal or external bodies to the MOH. In some aspects of the HCWMP, it could be both. This monitoring will assist the MOH in identifying the strengths and weaknesses of the Plan and the programs to be 101 implemented under it. Where weaknesses exist, the Plan will be revisited and improvements made accordingly. 288. A budget has been prepared for implementation of the HCWMP. The Environmental Health Unit (EHU) within the MOH will be responsible for overseeing the implementation of the Plan. The Unit has the required skills and capacity to implement the HCWMP, but additional training will greatly enhance existing capacity. In terms of human resources, the Environmental Health Unit is represented at both national and regional levels. 289. The project will also undertake rehabilitation of existing health care facilities, which will also include rehabilitation of selected nurse training institutions. The rehabilitation work will entail extensive upgrading of physical utilities, equipment provision and a maintenance plan for buildings and equipment. The rehabilitation works will be done on existing buildings within the selected health care facilities and are thus not envisaged to have severe permanent and/or unmanageable adverse impacts. 290. Extensive consultations were conducted with a wide range of stakeholders during the preparation of the ESMF which included the Swaziland Environmental Authority, local police, local churches, staff at the health care facilities, neighboring communities, local schools, Swaziland Traditional healers' Association, Ministry of Tinkundla, Traditional Rural Authorities, Ministry of Agriculture and Ministry of Public Works. 291. The ESMF outlines potential environmental and social impacts of the rehabilitation of health facilities, along with mitigation measures in the form of sample Environmental and Social Management Plans (ESMPs) for the three categories of health care facilities found in Swaziland. The ESMF also includes information on relevant legislation, institutional arrangements, and indicative costs for implementing the ESMPs The project will support preparation of ESMPs, at least one for each category of health care facility to be rehabiliated. The ESMP reports will also spell out the specific requirement for each site or health facility. The project does not involve land acquisition, as the sites to be rehabilitated are on government land on which there are no settlers/settlements or claims. The ESMF has been disclosed both in-country and at the Bank's InfoShop. 102 Annex 11: Project Preparation and Supervision Swaziland HIV/AIDS Project Planned Actual PCN review 08/21/2008 08/21/2008 Initial PID to PIC 10/17/2008 10/15/2008 Initial ISDS to PIC 10/17/2008 11/06/2008 Appraisal 05/03/2010 05/05/2010 Negotiations 01/10/2011 02/01/2011 Board/RVP approval 3/10/2011 Planned date of effectiveness 06/1/2011 Planned date of mid-term review 11/1/2013 Planned closing date 5/31/2016 1. Key institutions responsible for preparation of the project: Ministry of Finance Ministry of Economic Planning & Development Ministry of Health Deputy Prime Minister's Office National Emergency Response Council on HIV/AIDS (NERCHA) European Union Delegation to the Kingdom of Swaziland World Bank staff and consultants who worked on the project included: Name Title Unit Kanako Yamashita-Allen Senior Health Specialist AFTHE Christopher Walker Lead Specialist/Cluster Leader AFTHE Patrick Lumumba Osewe Lead Health Specialist AFTHE Joel C. Spicer Senior Health Specialist AFTHE Cassandra de Souza Operations Analyst AFTHE Gayle Martin Senior Economist (Health) AFTHE Eugenia M. Marinova Senior Country Officer AFTHE Carolyn Shelton Operations Officer AFTHE Rianna Mohammed Health Specialist AFTHE Samuel Lantei Mills Senior Health Specialist HDNHE Marelize Gorgens Monitoring & Evaluation Specialist HDNGA Luz Meza-Bartrina Senior Counsel LEGAF Jose C. Janeiro Sr. Finance Officer CTRFC Lungiswa Thandiwe Gxaba Sr. Environmental Specialist AFTEN Chitambala John Sikazwe Procurement Specialist AFTPC Joseph Byamugisha Financial Management Specialist AFTFM Tandile Gugu Ngetu Financial Management Analyst AFTFM Emma Mistiaen Operations Officer AFTSP 103 Milan Vodopivec Sector Leader AFTSP Luc Lapointe Procurement Consultant AFTPC Eva K. Ngegba Program Assistant AFTHE Marietou Toure Diack Program Assistant AFTHE Faith Babalwa Chirwa Team Assistant AFCS1 Barry Kistnasamy Consultant AFTHE Eriko Saito Consultant AFTHE Callista Chen Consultant AFCS1 World Bank funds expended to date on project preparation: 1. World Bank resources: FY08 $171,249.59 FY09 $158,959.27 FY10 $233,066.79 TOTAL $563,275.65 2. Trust funds: 3. Total: $563,275.65 Estimated Approval and Supervision costs: 1. Remaining costs to approval: FY 11 $50,000 2. Estimated annual supervision cost146: FY11 $110,000 FY12 $150,000 FY13 $150,000 146 This reflects BB only and does not include enhanced supervision resources from the EU. 104 Annex 12: Documents in the Project File Swaziland Health, HIV/AIDS and TB Project 1. Swaziland Demographic and Health Survey (DHS) 2006-2007, Macro International, 2008 2. Revised National Plan of Action (NPA) for Children 2011-2015, First draft, National Children's Coordination Unit, Deputy Prime Minister's Office, 2009. 3. Service Availability Mapping, Ministry of Health, Swaziland, 2009 4. MOHSW 8th round Sentinel Surveillance Report. Government of Swaziland, 2009 5. National Health Sector Strategic Plan (NHSSP) 2008-2013, Ministry of Health, Swaziland, 2009 6. Yingcamu ­ Towards Shared Growth and Empowerment ­ A Poverty Reduction Strategy and Action Programme (PRSAP), Government of Swaziland, 2007 7. Prime Minister's Speech to both houses of Parliament, Government Programme of Action 2008 -2013, 2009. 8. Interim Strategy Note (ISN) for Swaziland (2008-2010), World Bank, 2008 9. Modes of Transmission Study, NERCHA and World Bank, 2009. 10. Quality, Relevance and Comprehensiveness of Impact Mitigation Services Survey (QIMS), NERCHA, Swaziland 2009. 11. January 2010 baseline maternal and neonatal health (MNH) assessment in collaboration with WHO, UNICEF and UNFPA, World Bank, 2009 12. Strategy for Health, Nutrition, and Population Results, World Bank, 2007 13. Improving Health, Nutrition, and Population Outcomes in Sub-Saharan Africa: The Role of the World Bank, World Bank, 2007 14. Multi-sectoral National Strategic Framework (NSF), 2009-2014, NERCHA, Swaziland, 2009 15. Annual Action Plan (2010-2013), Ministry of Health of Swaziland, 2009. 16. Accelerating Development Outcomes in Africa: Progress and Change in the Africa Action Plan. DC2007-0008, World Bank, 2007 105 17. Healthy Development: The World Bank Strategy for Health, Nutrition, and Population Results, CODE2007-00016, World Bank, 2007. 18. Country Strategy Paper and National Indicative Programme for 2008-2013, Delegation of the European Commission to Swaziland, 2008. 19. Draft HRH Rapid Assessment, EU/Ministry of Health and Social Welfare, Government of Swaziland, 2008 20. Draft Health Care Waste Management Plan (HCWMP), Environmental Council of Swaziland, 2009 21. Vision 2022, National Development Strategy (NDS), Government of Swaziland, 1997 22. Swaziland National Social Development Policy, Final Draft, Deputy Prime Minister's Office, Government of Swaziland, 2009. 23. Swaziland Urban Development Project Implementation Completion Report, No: 33497, World Bank. 24. National HIV M&E plan for 2009 ­ 2014, NERCHA, Swaziland 2009. 25. First draft of Essential Package of Health Services (EPHS), Ministry of Health, Government of Swaziland, 2010 26. Draft Public Expenditure Review (PER) of the health sector, Ministry of Health, Government of Swaziland, 2009 27. Improving the diagnosis and treatment of smear-negative pulmonary and extra pulmonary tuberculosis among adults and adolescents: Recommendations for HIV prevalent and resource-constrained settings, World Health Organization, 2007 28. 2008-2015 Sexual and Reproductive Health (SRH) Strategic Plan, Ministry of Health, Government of Swaziland, 2008 29. Choice, Dignity and Empowerment - An evaluation of Save the Children's Emergency Drought Response, 2007/08, Save the Children Fund,2008. 30. Budget Speech, presented by Majozi V. Sithole, Minister of Finance to Parliament, Government of Swaziland, 2010. 31. BTOR, IMF Article IV Mission ­ Swaziland, November 17-December 2, 2009. 32. Fiscal Dimensions of HIV/AIDS in Swaziland, M. Haacker, World Bank, 2010. 106 33. Swaziland's Funding of Referrals Abroad: Assessment of the Phalala and Civil Servants' Medical Schemes and Options for Improvement, World Bank, 2009 34. General Assessment of the Mbabane Government Hospital in Swaziland, World Bank, 2009 35. National HIV M&E system assessment in 2007 and 2008, NERCHA, Swaziland, 2008 36. Strategic Plan for Central Statistical Office in Swaziland (2004/2005-2008/2009), Government of Swaziland, 2010 37. Council on Health Services Accreditation of South Africa (COHSASA) Round 9 report for Swaziland. Government of Swaziland, 2010 38. Swaziland Public Financial Assessment, World Bank, 2010. Websites 1. http://data.un.org/CountryProfile.aspx?crName=Swaziland 2. http://www.who.int/whosis/mort/profiles/mort_afro_swz_swaziland.pdf 3. http://www.infoplease.com/ipa/A0934556.html 107 Annex 13: Statement of Loans and Credits Swaziland Health HIV/AIDS AND TB Project Difference between expected and actual Original Amount in US$ Millions disbursements Project ID FY Purpose IBRD IDA SF GEF Cancel. Undisb. Orig. Frm. Rev'd Total: 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 SWAZILAND STATEMENT OF IFC's Held and Disbursed Portfolio In Millions of US Dollars Committed Disbursed IFC IFC FY Approval Company Loan Equity Quasi Partic. Loan Equity Quasi Partic. 2000 AEF Swazi Wattle 0.00 0.00 0.80 0.00 0.00 0.00 0.80 0.00 1986 SIDCL 0.00 0.70 0.00 0.00 0.00 0.70 0.00 0.00 1993 SIDCL 0.00 0.35 0.00 0.00 0.00 0.35 0.00 0.00 2002 Swazi Paper Mill 4.33 0.00 0.00 0.00 4.33 0.00 0.00 0.00 1978 Swazi Sugar 0.00 0.41 0.00 0.00 0.00 0.41 0.00 0.00 Total portfolio: 4.33 1.46 0.80 0.00 4.33 1.46 0.80 0.00 Approvals Pending Commitment FY Approval Company Loan Equity Quasi Partic. Total pending commitment: 0.00 0.00 0.00 0.00 108 Annex 14: Country at a Glance SWAZILAND Health, HIV/AIDS and TB Project 109 110