PROJECT INFORMATION DOCUMENT (PID) APPRAISAL STAGE Report No.: 85206 Project Name Support for Development of a MIS and Single Registry of Beneficiaries Region Africa Country Zambia Sector AFTSE Lending Instrument Grant Project ID P147659 {If Add. Fin.} Parent Project ID Borrower(s) Republic of Zambia Implementing Agency Ministry of Community Development Mother and Child Health Environmental Screening { }A { }B { X }C { }FI Category Date PID Prepared February 12, 2014 Estimated Date of Appraisal February 19, 2014 Completion Estimated Date of Board N/A Approval Decision Project authorized to proceed to negotiations upon agreement on any pending conditions and/or assessments. I. Country Context 1. Zambia shares its robust economic growth in the past few years with other Sub-Saharan countries, growth supported by high commodity prices that while declining are still at historical high levels. High commodity prices have induced large foreign direct investment flows, mainly in extractive industries but also in services sector, supporting growth. 2. For 2013 Zambia’s real GDP is projected to grow 6.0 percent, but lower than the initially projected 7.8 percent. Despite a rebound in copper output and strong growth in the public sector, contracting agriculture output (in at least two major corps: maize and cotton) of about 7.4 percent will bring down growth. The final growth outcome will also depend on how the much larger-than-planned fiscal deficit has been financed during 2013. 3. The 2013 budget has come under tremendous stress due to several unplanned expenditures and a shortfall in revenue collection. Additional expenditures include public sector wage awards (0.8 percent of GDP), accumulated fuel supply losses not initially budgeted for (1.0 percent of GDP), and higher spending on the Farm Input Supply Program (–0.4 percent of GDP). In addition, Food Reserve Agency loans guaranteed by the government in 2012 (0.8 percent of GDP) are due to be repaid. Preliminary data on domestic tax collection for the first half of 2013 suggests an estimated shortfall of 1.0 percent of GDP. 4. A very large gap has emerged between available resources and likely spending in 2013. The government is responding with a full range of adjustments, including cutting recurrent spending (such as on travel and motor vehicles), cutting capital spending, and stepping up revenue collection. Even after these efforts the fiscal deficit is likely to expand from 4.5 percent of GDP to 6.5 percent. The government is exploring additional external and domestic borrowing to close the deficit. 5. The large public sector wage award in 2013 is likely to, cut into public investment in human and physical capital for some years to come. Indeed, while Zambia’s mining revenues have grown, they have gone mostly to consumption instead of human capital investment. 6. The government has raised fuel prices and reduced maize and fertilizer subsidies, but the fiscal impacts of these initiatives are uncertain. These reforms aimed to create space for expanding better targeted spending programs. But the fiscal benefits of a fuel price increase could erode if no mechanism is put in place to periodically adjust retail prices to reflect shifts in the world price of oil and in the kwacha–dollar exchange rate. Similarly, fiscal benefits of the reduction in maize subsidies are uncertain, because the government has not decided on the quantity and price of maize to be purchased by the Food Reserve Agency. II. Sectoral and Institutional Context 7. Despite robust annual growth of 5.7 percent in the past decade, poverty in Zambia remains stubbornly high. The poverty headcount rate in 2010 was 60.5 percent and about 42.3 percent of the population live in extreme poverty, with insufficient consumption to meet their daily minimum food requirement. Chronic malnutrition is among the highest in Sub-Saharan Africa, with 47 percent of children under five being stunted in 2010, close to the high levels of early 1990s. Zambia also has a highly unequal distribution of income (Gini coefficient of 0.52) 8. The persistent failure of growth to reach the poor provides a compelling conceptual rationale for greater use of safety nets. Currently, social safety net programs in Zambia have limited coverage and selection of beneficiaries suffers from exclusion errors mainly because of limited budget. At the same time inclusion errors are also common mainly because of difficulties associated with administering relatively complex targeting and enrollment forms and manual registration and verification of information. Currently, only one program, SCTS has an MIS in process of being finalized. 9. Zambian government is in the process of considering using social safety nets and transfers to support a larger number of households living in extreme poverty and has identified the need to strengthen implementation capacity in preparation for scale up to a comprehensive social protection program. There is a good base in several existing social safety nets programs, including: (i) the Social Cash Transfer Scheme (SCTS) which provides bi-monthly cash transfers to destitute and labor constrained households and households with children in selected poor districts, using a mix of categorical, proxy means test and community level targeting ; (ii) the Public Welfare Assistance Scheme (PWAS) that provides ad hoc support, mostly in kind, to a small percentage of the most destitute as identified by the community; and (iii) the Targeted Food Security Pack (TFSP), which provides a small package of seeds and fertilizer to poor food- insecure agricultural households. However, the entire budget for these programs represent less than 0.2 percent of GDP and therefore their coverage is minuscule, most covering 1 to 3 percent of the extreme poor. 10. At the same time Zambia is spending as much as 2.6 percent of GDP on a variety of transfers and subsidy programs, including tertiary bursary, farmer’s inputs Subsides and subsidized maize purchases, but most of it goes to the better off. Almost none of the extreme poor in Zambia are currently benefiting from these programs. 11. Recently the government has moved in the direction of withdrawing fuel and maize subsidies and increase resources towards social safety net programs. The government has proposed that funding for social cash transfers is increased from K72.1 billion in FY13 to K199.2 billion in FY14. However, this scaling up requires an increase in capacity to implement. This capacity would also include building up systems such as a holistic targeting mechanism and a single beneficiary registry. 12. There are two major stumbling blocks to achieve higher coverage of programs targeted to the poor: (i) lack of a clear policy framework for enabling access of a larger number of poor and vulnerable households to social protection intervention; and (ii) limited capacity to identify those in need and deliver predictable benefits in a timely fashion. 13. This project seek to address these stumbling blocks through supporting Government of Zambia in developing management information systems at program level and creating a common platform in the form of a Single Registry to accelerate the identification and enrollment of beneficiaries while including more robust controls on both the eligibility determination into the programs and on the preparation of payroll for payment of benefits. 14. The activities under first area will be supported by a Bank executed trust fund while those under second area will be executed by the Government through the Ministry of Community Development, Mother and Child Health. III. Project Development Objectives 15. The development objective is to support Government of Zambia to strengthen its social protection system by building management information systems and a single registry of beneficiaries to allow robust identification of beneficiaries IV. Project Description Sub-component 1.1: Design and development of a Single Registry (SR). 16. This sub-component aims to develop a Single Registry for the key social safety net programs in Zambia. The SR will be hosted in the Ministry of Community Development Mother and Child Health (MCDMCH), which implements the larger programs in terms of number of beneficiaries, including the Social Cash Transfer Scheme (SCTS), the Public Welfare Assistance Scheme (PWAS), the Food Security Pack (FSP) and the Women Empowerment Fund (WEF). The key functionality of the SR is the inclusion of more robust controls on eligibility determination and enrollment of beneficiaries in individual programs and on periodic updating of information on beneficiaries to ensure they remain eligible. Another functionality is to facilitate rapid identification of beneficiaries for programs that are scaling up or trying to create synergies with complementary interventions to enhance their impact (e.g programs that offer agricultural inputs might be interested to select some of the households with able bodied adults receiving cash transfers). It should also be able to produce key monitoring reports required for decision and management. The Registry will initially link the individual program MISs in MCDMCH. The SR shall also have the functionality to link to other databases of beneficiaries outside the MCDMCH as well with the National Population Registry when these data bases become automated. The key activities that will be supported under this sub-component, include among others: (i) Diagnostic study to identify the information needs of various stakeholders and develop the business specifications and functionalities of SR; (ii) Review of targeting procedures and forms for individual programs to ensure that core household information is collected in a harmonized way by individual programs to allow cross checks against each other via the SR; (iii) Workshops for consultations with various stakeholders to agree on key design for the registry; (iv) Consultancy for development, testing, and installation of the SR; and (v) Acquisition of ICT equipment ( server, workstations, connectivity devices). Sub-Component 1.2: Development and integration of individual program MISs. 17. This component will aim to develop an informatics platform to support key business processes for all key safety net programs in the MCDMCH. Currently MCDMCH has only one program (SCTS) using a functional MIS to support key process including enrollment of beneficiaries, preparation of benefit payroll, and change management. The key activities that will be supported under this component include, among others: (i) System assessment to take stock of existing information systems and databases for each of the programs (this will be done in conjunction with diagnostic study for the SR); (ii) Updating of manual of operations and guidelines for each of the programs to ensure the procedures and information requirements are clearly defined and reflecting current practices; (iii) Consultancy to develop an integrated MIS for the key programs in MCDMCH including WE, PWAS, FSP to include user guide and training materials; (iv) Enhancement of exiting SCTS MIS to ensure compatibility and common standards with the new MIS, and the SR; and (v) ICT equipment (server, work stations, connectivity devices) Sub-Component 1.3: Capacity Building for management, use, and maintenance of MIS and Single registry 18. Recognizing the importance of designing and administering complex informatics systems, this sub-component will provide TA for capacity building in the MCDMCH. Key activities to be supported under this component include, among others: (i) Training of staff in the use, trouble shooting and maintenance of MIS and SR, depending on the roles at each level; (ii) Printing of user guides and manuals for staff at each level; (iii) Provision of ICT equipment; (iv) Exchange visits to learn from experience of one or two countries with good SR and MIS ; and (iv) Strengthening Procurement and FM capacity in MCDMC to ensure proper accountability for RSR funds. V. Financing ($m.) Source: Borrower/Recipient IBRD IDA Others: RSR MDTF 1 Total 1 VI. Implementation 19. The project will be executed by the Ministry of Community Development, Mother and Child Health. The MCDMCH has experience working with other development partners including DFID, UNICEF, Irish Aid which support the implementation of the social cash transfer scheme, the largest social safety net program under implementation. The Ministry operates within a fairly sound and modern legal and regulatory framework for Public Financial management (PFM) and Public Service Management (PSM). The following units will have a role in the execution of the project.  Department of Planning and Information working closely with the Departments of Community Development and Social Welfare within MCDMCH will coordinate and supervise the implementation of the overall project, including the selection and supervision of consultants and preparation of monitoring reports.  Accounts Unit will carry out management of funds using Public Financial Regulations.  Procurement and Supplies Unit will carry out the procurement of technical assistance and equipment  Annual Audit will be done by Auditor General. 20. A technical working group (TWG) is being proposed that will include MCDMCH and other arms government such as Ministry of Agriculture and Livestock which implements the Framers Input Subsidy Program, and the Ministry of Gender and Child Development. The TWG will be involved in conceptualizing the development of the SR to address the needs of various stakeholders. VII. Safeguard Policies (including public consultation) N/A. No direct social and environment effects 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)* X Projects on International Waterways (OP/BP 7.50) X VIII. Contact point at World Bank and Borrower World Bank Contact: Cornelia Mihaela Tesliuc Title: Senior Social Protection Specialist Tel: 254.20.293.6507 Email: ctesliuc@worldbank.org Borrower/Client/Recipient Contact: Felix Nkulukusa Title: Permanent Secretary, Ministry of Finance Tel: 260-211-253786 Email: Implementing Agencies Contact: Prof. Elwyn Chomba Title: Permanent Secretary Tel: +260-211-235327 Email: echomba@zamnet.zm IX. For more information contact: The InfoShop The World Bank 1818 H Street, NW Washington, D.C. 20433 Telephone: (202) 458-4500 Fax: (202) 522-1500 Web: http://www.worldbank.org/infoshop * By supporting the proposed project, the Bank does not intend to prejudice the final determination of the parties' claims on the disputed areas