FOR OFFICIAL USE ONLY IN THE AMOUNT OF SDR 5.6 MILLION (US$8.5 MILLION EQUIVALENT)

Transcription

1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Document of The World Bank FOR OFFICIAL USE ONLY INTERNATIONAL DEVELOPMENT ASSOCIATION PROJECT PAPER FOR A PROPOSED PRE-ARREARS CLEARANCE GRANT IN THE AMOUNT OF SDR 5.6 MILLION (US$8.5 MILLION EQUIVALENT) TO THE REPUBLIC OF LIBERIA FOR A HEALTH SYSTEM RECONSTRUCTION PROJECT Human Development, Group I1 Africa Region May 3 1,2007 Report No LR This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank Group authorization.

2 CURRENCY EQUIVALENTS (Exchange Rate Effective March 2007) Currency Unit = Liberian Dollars (LR$) 1US$ = LR$ US$ = SDR FISCAL YEAR July 1 - June30 ABBREVIATIONS AND ACRONYMS AID BPHS CAS CH&SWT CPA CQS DFID EPP EIP ECHO EU FM FMT GAVI GDP HIV/AIDS HMIS ICR ICB IDA IBRD IFR ICT IMCI IPRS IMF IRP IPRSP ISA ISN IAPSO LACE LICUS LCS LRDC MDGs MOF MOHSW Agricultural and Infrastructure Development Basic Package of Health Services County Assistance Strategy County Health and Social Welfare Team Comprehensive Peace Agreement Selection Based on Consultant s Qualifications U.K. Department for International Development Emergency Project Paper Emergency Infrastructure Project European Commission Humanitarian Aid European Union Financial Management Financial Management Team Global Alliance for Vaccines and Immunization Gross Domestic Product Human Immune Deficiency Virus and Acquired Immune Deficiency Syndrome Health Management Information System (HMIS) Implementation Completion Report International Competitive Bidding International Development Association International Bank for Reconstruction and Development Interim unaudited financial reports or statements Information Communication Technology Integrated management of childhood illness Interim Poverty Reduction Strategy International Monetary Fund Infrastructure Rehabilitation Project Interim Poverty Reduction Strategy Paper International Standards of Auditing Interim Strategy Note Inter-Agency Procurement Services Office Liberian Agency for Community Empowerment Low-Income Country under Stress Least-Cost Selection Liberia Reconstruction and Development Committee Millennium Development Goals Ministry of Finance Ministry of Health and Social Welfare ii

3 NCB NGO NTGL OFDA OFM PCT PMI PF PRSP PIU PHC QCBS RRC FUTF SBD sss UNICEF UNMIL UNDP USAID UNFPA UNITAID TORS WHO FOR OFFICIAL USE ONLY National Competitive Bidding Nongovernmental organization National Transitional Government of Liberia Office of U.S. Foreign Disaster Assistance Office of Financial Management Program Coordination Team Project Management Unit Procurement Firm Poverty Reduction Strategy Paper Project Implementation Unit Primary Health Care Quality- and Cost-Based Selection Rapid Response Committee Results Focused Transitional Framework Standard Bidding Documents Single-Source Selection United Nations Children s Fund The United Nations Mission in Liberia United Nations Development Programme United States Agency for International Development United Nations Population Fund Unit Aid (UN Fund for drugs against HIV/AIDS, Malaria, and TB) Terms of Reference World Health Organization This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not be otherwise disclosed without World Bank authorization.

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5 REPUBLIC OF LIBERIA HEALTH SYSTEM RECONSTRUCTION PROJECT Table of Contents A. Introduction... 1 B. Country Context, Recovery Strategy, and Rationale for Bank Involvement... 1 C. World Bank Group Response: The Project... 6 D. Appraisal of Project Activities E. Implementation Arrangements and Financing Plan F. Project Risks and Mitigating Measures G. Terms and Conditions for Project Financing Annexes Annex 1. Detailed Description of Project Components Annex 2. Results Framework and Monitoring Annex 3. Summary of Estimated Project Costs Annex 4. Financial Management and Disbursement Arrangements Annex 5. Procurement Arrangements Annex 6. Implementation and Monitoring Arrangements Annex 7. Project Preparation and Appraisal Team Members Annex 8. Appraisal: Economic and Financial Sustainability Annex 9. Technical and Fiduciary Appraisal Annex 10. Environmental and Social Safeguards Framework Annex 11. Summary of Government s Policy and Plan for Health Annex 12. Documents in Project Files Annex 13. Statement of Loans and Credits Annex 14. Country at Glance Annex 15. Republic of Liberia: Donors Assistance Maps and Country Map iv

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7 Emergency Project Paper Data Sheet Date: May 3 1,2007 Country: Republic of Liberia Project Name: Health System Reconstruction Project ID: P Team Leader: Alexander S. Preker Sector Manager: Eva Jarawan Country Director: Mats Karlsson Environmental Category: B Source of Financing: IDA Grant Estimated disbursements (Bank FY/US$ m) Closing date: October 1,2010 Project development objectives: The proposed Project will contribute to: (a) the strengthening of policy making and management functions of the Ministry of Health and Social Welfare; and (b) the provision of critical inputs to sustain the referral system needed to support essential health services. Source Local Foreign Total Recipient [BRDDDA 1.o rotal 1.o V

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9 A. INTRODUCTION 1. This Emergency Project Paper (EPP) seeks the approval of the Executive Directors to provide a Pre-Arrears Clearance Grant in the amount of SDR 5.6 million (US$8.5 million equivalent) to the Republic of Liberia for a Health System Reconstruction Project. 2. The years of civil war, which spanned from 1989 to 1997 and from 2001 to 2003, left Liberia one of the poorest countries in the world and had a devastating effect on many of the systems that contribute to good health: basic housing, water, electricity, sanitation, roads, education, and health care. The Comprehensive Nutrition and Food Security Survey conducted in Liberia in 2006 revealed that 68 percent of households covered by the study had no access to improved water sources, and 76 percent had no access to sanitary facilities. The Interim Poverty Reduction Strategy Paper (IPRSP, 2006) reported that only 41 percent of the population has access to health services. 3. Today, almost 80 percent of health facilities and a significant share of human resources and supply chains are supported through humanitarian assistance by international nongovernmental organizations (NGOs). However, those organizations are beginning to phase-out as Liberia moves from a relief to development stage. The government now faces the challenge of ensuring a relatively smooth transition from humanitarian relief to longer-term development. 4. In partnership with other donors, the proposed Project will contribute to: (a) strengthening policy making and management functions of the Ministry of Health and Social Welfare; and (b) providing critical inputs to sustain the function of essential health services. B. COUNTRY CONTEXT, RECOVERY STRATEGY, AND RATIONALE FOR BANK INVOLVEMENT Country Context 5. Liberia, which is divided into 15 counties and has a population of approximately 3.2 million people (estimates range from 3.2 million to 3.6 million), is just beginning to recover from years of civil war. It is among Africa's poorest nations, with a Gross Domestic Product (GDP) per capita of approximately US$151 and arrears to the International Financial Institutions (IFIs) amounting to US$1.4 billion, of which US$460 million is owed to the Bank. General government expenditure on health as a percentage of total government expenditure was fluctuating in the last six years between a maximum of 17.6 percent in 2003l and a minimum of almost 8 percent for If the available data are accurate, public expenditure on health care dropped to around US$3.2 per capita in The health status of the Liberian population is among the worst in the world. Life expectancy at birth has dropped to 42 years (WHO 2006), which is below the 45-year average for other low-income countries under stress (LICUS). Infant mortality was estimated at 157, and under-5 mortality at 235, per 1,OOO live births, among the highest in the world in The maternal mortality ratio is also very high, estimated at 760 deaths per 100,000 births in 2004 (WHO/UNICEF). Among the general population, lack of access to effective and affordable interventions at the time of illness often leads to permanent disability and death. 7. Preventable diseases like malaria, diarrhea, respiratory infections, and measles are thought to be the main direct causes of under-5 mortality. According to the IPRSP, malaria remains the leading cause ' WHO, The World Health Report 2006: Working together for Health, Geneva: WHO.

10 of child morbidity in Liberia, accounting for about 42 percent of cases, followed by diarrhea with 22 percent, and acute respiratory infections with 12 percent. 8. Malnutrition is an important underlying cause of disease. The Comprehensive Nutrition and Food Security (CNFS) Survey, conducted in 2006, indicated that 39.2 percent of children in Liberia suffer from malnutrition-caused stunting. Inadequate and unbalanced diets, combined with poor hygiene and other environmental conditions, often lead to a fatal combination of diarrhea- and pneumonia-causing infectious diseases. High maternal mortality in Liberia can be attributed to high fertility (6.8 births per women of reproductive age), high prevalence of teenage pregnancy (median age of 17 at first pregnancy), malnutrition, anemia, unsafe abortions, cultural and traditional practices, poor skills of the local health care providers, and lack of access to health services (particularly in rural areas). 9. The Comprehensive Nutrition and Food Security Survey conducted in Liberia in 2006 also revealed that 68 percent of households covered by the study had no access to improved water sources and 76 percent had no access to sanitary facilities. Only 10 percent of the communities assessed reported having access to health care services nearby. 10. The government health sector is ill-equipped to cope with the enormity of the country s health needs. Much of the physical infrastructure and equipment that is crucial to the health sector was destroyed during the war. Many hospitals and clinics were burned to the ground. Others, including the JFK hospital in Monrovia, were stripped bare by looters. Today, the X-ray machine at JFK hospital is among the few still functioning in the country. Very few county hospitals have fully functional laboratories, and most county hospitals and heath centers are without running water, electricity, or functioning basic sanitary systems. Lack of transportation and other communication systems prevent the sick from calling for help or getting to the health centers where they can receive care. 11. Furthermore, the government relies heavily on foreign assistance for the provision of health services. By 2006, 80 percent of the 390 functional health facilities were being fully supported by NGOS.~ Similarly, most supplies, drugs, and incentives for health care providers are provided by relief organizations and through foreign assistance. As humanitarian funding is reduced and relief agencies begin to phase-out their assistance, there is a fear that access to basic health services and supply chains will decrease significantly. For example, the country s main pediatric and maternity referral hospitals are both staffed by MCdecins sans Frontihres (MSF). Assistance to one will terminate in 6 months and the other in 18, and existing facilities at JFK and county hospitals are not adequately equipped to receive the children and women that the MSF-supported hospitals were serving. 12. The health sector in Liberia also suffers from severe shortages of human resources. During the war many health workers fled the country, leaving the health sector with one of the lowest per capita staff-to-population ratios in the world and serious skill shortages (0.04 physicians per 1,000 population and 0.2 nurses per 1,000 population, assuming 3.4 million inhabitants). Many health clinics are being operated by nurses aids rather than by registered nurses or certified midwives. The country.has no pediatrician, anesthesiologist, or histopathologist, and only one working urologist and radiologist. The few skilled health workers that remain work almost exclusively in and around Monrovia. The public medical schools do not have fully functioning classrooms, clinical laboratories, or dormitories for their students. * MOHSW, Christian Health Association of Liberia, and UNICEF, 2001, Liberia National Nutrition Survey , Monrovia, Liberia MOHSW, 2006, Liberia National Health Plan: , Monrovia, Liberia 2

11 13. Finally, the capacity within the Ministry of Health and Social Welfare itself is limited. Though one of the more engaged and capable ministries in the country, it still lacks the skills and personnel needed to manage the complexities of the transition period. The Government s Recovery Strategy 14. In August 2003, the warring parties ended hostilities and signed the Comprehensive Peace Agreement (CPA) in Accra, Ghana, and a National Transitional Government (NTGL) was established to administer the two-year interim period before national elections in October The United Nations Mission in Liberia (UNMIL) was created and mandated to support the implementation of the peace process. Immediately after the conflict, the United Nations Development Programme (UNDP) and the International Development Association (The Association) of World Bank Group undertook a needs assessment for Liberia, which led to the development of a Results Focused Transitional Framework (RFTF) for the transition period. After the elections, the new government established the Liberia Reconstruction and Development Committee (LRDC), which is chaired by the President of Liberia, to oversee the reconstruction. The LRDC, like the IPRSP, is split into four pillars: security, economic revitalization, democratic governance and the rule of law, and infrastructure and basic services. 15. In March 2004, the Bank s Executive Directors discussed a strategy for Liberia that included three priority areas for engagement: economic management, infrastructure rehabilitation, and communitybased de~elopment.~ Since that time, the Bank has become increasingly involved in providing support for the fourth LRDC pillar (infrastructure and basic services). The Bank s Interim Strategy Note (ISN), covering the period FY08-09, is based on the government s Interim Poverty Reduction Strategy Paper (IPRSP). The ISN provides for a scaled-up IDA program in infrastructure, economic governance reform, and delivery of basic services. These areas are expected to be continuing priorities under the government s full PRSP, being prepared in the coming year, and the corresponding future Bank strategy. 16. The security situation in Liberia is stable, but it is widely recognized that the peace is fragile. Although the presence of 15,000 peacekeeping troops would prevent any resurgence of conflict for the time being, popular dissatisfaction will pose an increasingly serious threat if there is no improvement in the general population s standards of living. High unemployment (estimated at 80 percent), extreme poverty, and poor service delivery erode popular support for the government, and if unaddressed, will provide the most likely impetus for renewed conflict. As such, the government is focusing its efforts on effecting visible change in people s lives in crucial areas, such as water and sanitation, education, and health care. A New Vision for Better Health and Social Reconciliation 17. As set out in the IPRSP, securing equitable access by different segments of the population to an efficient and effective system of health and education is a central part of the government s quest for social reconciliation and poverty alleviation. Since August 2006, the MOHSW, in collaboration with international partners, has designed a comprehensive National Health Policy, which offers a vision for the future health system, and a National Health Plan which provides a detailed road map to guide decision makers through the next five years (see httd /liberiamohswsw.orrz /documentation./ documentation.htm). IDA, March 2004, Liberia: Country Re-Engagement Note and Additional Activities, Washington, DC, IDNR IDA, 2007, Interim Strategy Note (ISN) Washington, DC, IDAR and IDA, 2007, Interim Poverty Reduction Strategy, Washington, DC, IDNSecM

12 The National Health Policy 18. The central vision of the National Health Policy is a nation with improved health and social welfare status as well as equity in health. The Ministry regards health as a basic human right and has devoted itself to ensuring that every Liberian has access to health and social welfare services regardless of economic status, origin, religion, gender, or geographic location. 19. During the crisis the Liberian health sector benefited from extensive support from international humanitarian relief organizations. The mandate of many emergency and relief organizations is close to an end. Both the donor community and Liberian government are concerned that some health services could collapse in areas where relief organizations pull out before other organizations have been contracted to deal with the health needs of the population they used to serve (see Transition Gap maps in Annex 15). 20. To secure sustainability of the sector and avoid a significant decrease in the provision of essential services during this transition, the National Health Policy calls for a two-pronged approach (see Annex 11 for an executive summary of the National Health Policy): Begin strengthening the delivery and management of an equitable, effective, efficient, responsive, and sustainable health care system Secure and expand access to basic health care of acceptable quality by (a) attracting additional funding for infrastructure, human resources, management systems, and recurrent expenditures; and (b) reducing systemic inefficiencies and improving operational management; and The National Health Plan 21. The National Health Plan outlines the objectives, strategies, and resources crucial to reforming the health sector so that it can deliver quality health and social welfare services to the people of Liberia. Both the National Health Policy and Plan are designed around four strategic orientations: Primary Health Care, Decentralization, Community Empowerment, and Partnerships for Health. The operational and integrated framework for implementing the National Health Policy and National Health Plan has four key components (see Annex 11 for a summary of the National Health Plan): 0 Basic Package of Health Services Human Resources for Health 0 Infrastructure Development Support Systems. 22. The plan envisages a variety of partnerships supporting these components. The plan is designed to be implemented in two phases: (a) a transition phase between 2007 and 2008; and (b) a development phase between 2009 and Transition activities focus on the challenges posed by the withdrawal of humanitarian actors from Liberia, while development activities are oriented toward capacity building and long-term reconstruction. The EPP will focus on bridging the needs between the relief and development phases. Rationale for World Bank Group Emergency Project 23. The technical support and resources needed to sustain access to basic health services during the transition from emergency relief to long-term development go beyond the capacity of any one of the 4

13 international partners currently working in Liberia. Thus, Bank involvement will be closely coordinated with and complement action taken by the other partners. An emergency response by the Bank will be critical for several reasons. 24. First, support through a Bank grant will help to fill a critical anticipated funding gap left after other donors have made their contribution. Total health care spending is currently US$60 million: US$10.1 million from government; US$30 million to $35 million in cash and kind from donors; and US$20 million from individual households (see table 1). Table 1. Sources of Health Financing, Liberia, 2006 Source US$ (million) US$ per capita % Total HF % Gov. exp. Government Private Donors Total Source: World Bank, December Early estimates indicate that the other major donors (USAID, EU, DFID, Irish Aid and others) are likely to provide annual support in the range of more than US$30 million per year during the next two years. This still leaves a gap in the range of US$15 million to US$25 million to sustain current and anticipated future funding needs. Although government expenditure on health is expected to increase each year, even under optimistic scenarios such funding alone will not reach the level of care provided by the health sector for vulnerable populations today. It is estimated that continued support from the donor community, including the Bank will be needed for at least another decade 26. Second, many of the NGO-supported activities and bilateral projects are focused on short-term humanitarian relief. They also secure access to basic health services and targeted programs such as HIV/AIDS and malaria interventions. By virtue of their mandate, few of the other donors are able to address the second, third, and fourth pillars of the National Health Plan-human resources, infrastructure and support systems-in a systematic way. 27. Bank strengths are in health financing (budgetary flows, risk management, and contracting), economics, public sector management, institutional development, and activities that require multisectoral coordination. Therefore, the Bank grant will focus on these areas, in which the other donors are less engaged, with a particular emphasis on strengthening the policy-making and management functions of the Ministry of Health and Social Welfare that are needed for health services to function effectively. 28. Third, the Bank has extensive experience in facilitating the execution of complex projects in which many donors contribute to a common agenda and there is a need for intersectoral synergies. In Liberia, the Bank currently supports projects in several sectors that affect health, including infrastructure (roads, facility rehabilitation, water and sanitation, and electricity) and community-driven development (through the Liberian Agency for Community Empowerment, LACE). A significant effort will be made to complement valuable investments made in these sectors where there are mutual benefits to be gained from such synergies. For example, although LACE is financing the construction of health clinics in some communities and can finance the initial stocks of pharmaceuticals and equipment, it is not providing the resources needed to hire staff. Some of these facilities can be financed by the Bank, to become functional. 29. Fourth, collaboration is already good among a variety of partners, including ECHO, EU, DFID, Irish Aid, Mddecins sans Frontih-es (Belgium), Merci, Merlin, OFDA, Save the Children, UNDP, 5

14 UNFPA, UNICEF, USAID, WHO, World Vision, various faith-based organizations, and many others. Although many NGOs are scheduled to phase-out of Liberia in the next one to two years, some would reconsider their engagement if major donors, including the Association, were to provide support during the transition period. In this respect the Bank would work with its other major donor partners to support the NGOs and encourage them to cover the transition period and also to transfer their know-how to local providers before they leave. 30. Finally, during the Liberia Partners Forum, which took place in Washington D.C. February 13-16, 2007, major commitments were made by USAID, the European Commission Humanitarian Aid Department (ECHO), the U.K. Department for International Development (DFID), Irish Aid, and the World Bank Group. But many of the smaller and private sector donors present at the meeting have not yet offered concrete proposals. Bank follow-up in collaboration with some of the other major donors will be critical in brokering additional external pledges for funding. Project Design C. WORLD BANK GROUP RESPONSE: THE PROJECT 31. This Project aims to build on the Bank s current engagement in other sectors in Liberia while addressing the needs that are most urgent for the health sector during a three-year period. In doing so, the Project takes into consideration the planned activities of other donors in the sector, so as to avoid wasteful duplication in effort and scarce resources (see table 2). Infrastructure HMIS Communication Systems Leadership and Management Training JFK Other facilities USAID, World Bank Group, WHO, USAID World Bank USAID, World Bank Group, EU, WHO World Bank Group, EU World Bank Group 6

15 32. The LRDC framework, under which the Bank has taken a lead in infrastructure and basic services, emphasizes the need to increase access to basic social services. This is also a central component of the government s IPRSP and ISN, which lays out a comprehensive 18-month development strategy for Bank engagement in Liberiae6 The Project will deepen and complement other Bank-funded projects in infrastructure, including EIP, EIPSC, IRP, and the upcoming AID. It will take advantage of ongoing interventions in sanitation, infrastructure, and public utilities (electricity and water). And it will ensure that ministry-approved community health clinics that are supported by the Bank through the LACE project are adequately staffed, equipped, and supplied. 33. At the same time, the Project is designed to complement but not duplicate actions taken by the other partners ( ECHO, EU, DFID, Irish Aid, MCdecins sans Fronti5res (Belgium), Merci, Merlin, OFDA, Save the Children, UNDP, UNFPA, UNICEF, USAID, WHO, World Vision, various faith-based organizations, and many others as they work to support the implementation of the National Health Policy and National Health Plan. 34. As shown above, many of the other development agencies will be helping the government to address basic health care needs by supporting service-providing organizations. However, as noted, the war destroyed the foundations of the health sector, including governance and financing systems, the institutional environment, the organizational structures, and the regulatory framework, along with many of the physical facilities and much of the equipment. These foundations need to be reestablished if the MOHSW is to have the capacity to manage the transition period. 35. World Bank Group support will address three of the four pillars of the health plan, adding to the resources provided to the sector by the government and other donors in order to achieve the greatest effect. The Project will also build on existing Bank experience in emergency reconstruction (Afghanistan, Bosnia, Chad, Democratic Republic of Congo, Guinea, Rwanda, and Sierra Leone) and human resources strategies developed for similar conditions in other African countries. Project Development Objectives Overall goal 36. Under the National Health Policy and Plan, the government has reaffirmed its commitment to working toward achievement of the Millennium Development Goals (MDGs) with a particular focus on activities that will contribute to overall improvements in maternal and child survival. 37. During and after the years of conflict, the health sector in Liberia benefited from extensive donor assistance focused on addressing the basic health care needs of the population. However, the foundations of the health sector such as policy making, governance, human resources, physical infrastructure, and equipment were destroyed. Many of the precious resources brought by other donors are now at risk of being wasted due to the collapse of the underlying health systems. 38. The overall goal of the Project is to address these issues by helping the government rebuild some of the critical underlying building blocks needed for a functioning health sector. IDA, 2007, Interim Strategy Note (ISN), Washington, DC, IDNR

16 Objectives 39. In partnership with other donors, the proposed Project will contribute to: (a) strengthening of policy making and management functions of the Ministry of Health and Social Welfare; and (b) providing critical inputs to sustain the referral system needed to support essential health services. 40. The Project will achieve these objectives by: 0 Strengthening policy making, planning, management, policy monitoring, and evaluation capacity of the MOHSW Increasing the number doctors, nurses, and allied health workers in critical areas of staff shortages through recruitment and training Contributing to the necessary infrastructure and equipment for MOHSW clinics, county referral centers, and JFK hospital, especially in the case of services used by mothers and children. 41. The Bank will work with the government and other donors in conducting semi-annual reviews of (a) progress made to implement the Health Policy and Plan; and (b) forward-looking action plans to address problems identified at the time of these reviews. Summary of Project Components 42. The Project will build on work carried out by the MOHSW and international partners in supporting implementation of the main pillars of the National Health Plan (Annex 11). See Annex 1 for greater details on the main components of the Project: Project Components Component A. Support Systems (US$2,365,000) Component B. Human Resources (US$2,830,000) Component C. Infrastructure and Equipment (US$3,305,000) Component A. Support Systems (US$2,365,000) 43. This component will support the operational capacity of MOHSW to effectively manage the Project by, inter alia, strengthening its management capacity, and expanding its monitoring and evaluation mechanisms, all through the provision of technical advisory services, training, and Incremental Operating Costs. 44. Provision of technical assistance and training to MOHSW staff to: (a) develop policy in the following areas: (i) health financing; (ii) contracting with health providers; (iii) health labor market dynamics; and (iv) decentralization of health services; and (b) strengthen their administrative and technical capacities to manage and implement the Recipient s National Health Plan and related policies. 45. It will also provide information communication technology to MOHSW staff to support a health management information system. 8

17 Component B. Human Resources (US$2,830,000) 46. This component will support hiring of clinical teachers, including medical doctors, nurses, midwives, and allied health workers for purposes of training and supervision of Recipient s clinical care staff. 47. It will support hiring of medical officers, laboratory technicians and radiographers to fill-in critical staffing needs in the Recipient s health clinics and hospitals. 48. It will provide technical assistance and training to Recipient s public education institutions to reform their curriculum to enhance the education level of medical doctors, nurses, and allied health workers. 49. It will also provide, training, technical advisory services, and equipment to enhance the technical and managerial capacity of key staff in the Recipient s health sector including, inter alia: (a) transportation costs of trainers and trainees; (b) per-diem of trainers and trainees; (c) workshops; (d) seminars and courses; (e) rental of training facilities and equipment; (f) acquisition of training equipment and teaching material; (g) Internet access to online learning; and (h) study tours. Component C. Infrastructure and Equipment (US$3,305,000) 50. This component will support a rehabilitation of Recipient s essential medical facilities and medical teaching institutions, including the maternal and child wards at the John F. Kennedy Hospital and the A.M. Dogliotti College of Medicine It will also support acquisition of basic medical supplies, medical emergency equipment, radiology and laboratory equipment, communications equipment, energy generating equipment, Internet connection equipment, ambulances for MOHSW clinics and health centers, county hospitals, and the John F. Kennedy Hospital. Eligibility for Processing under OP/BP The Project is an important part of the Bank s overall emergency response in Liberia as described above. It is consistent with OPBP 8.00 criteria in that it will provide critical support in preventing a collapse in health services as humanitarian relief organizations begin withdrawing from Liberia. It will strengthen the policy-making and management functions of the MOHSW so that the Ministry can better manage its health sector and resources provided by other donors as the country transitions from a state of emergency to one of development. Consistency with Country Strategy (IPRSP) 53. Consistent with both the IPRSP and the ISN, the Project emphasizes the institutional development needed to protect access by vulnerable populations to basic health services. In addition, the Project reflects the Bank s engagement with the fourth pillar of the LRDC: infrastructure and basic services. Expected Outcomes 54. By the end of the Project, the following outcomes are expected: 9

18 Expected Outputs Demonstrates the effectiveness of measures introduced to strengthen institutional and management capacity in policy making, planning, monitoring, and evaluation. Ensures that selected education and referral services have the staff needed to function properly, improve supervision, and provide quality of care. Provides concrete evidence that selected health clinics and referral centers meet minimal equipment and infrastructure standards needed to function properly. 55. By the end of the Project, the following outputs will have been achieved: A rapid monitoring and evaluation instrument to track implementation of the health plan will have been designed. New policies will have been introduced in the areas of health labor market, health financing, contracting and decentralization. New procedures in contract management will have been developed and implemented. Clinical teachers and staff (doctors, nurses, midwives and other allied health workers) in areas of critical shortage will have been recruited. Medical school and other educational curriculum will have been revised to address critical needs during the transition. Health services, especially those used by mothers and children, will have been provided with minimal equipment to function properly D. APPRAISAL OF PROJECT ACTIVITIES 56. Being new to the health sector in Liberia, the Bank worked closely with the government, the Dogliotti College of Medicine, international donors (USAID, EU, DFID, Irish AID, PMI, and Global Fund), UN partners (UNICEF, WHO, UNFPA, and UNDP) and NGOs to appraise the Project. However, the Bank does have experience working on emergency reconstruction in the health sector and contracting services from nongovernmental providers (Afghanistan, Bosnia, Chad, Democratic Republic of Congo, Guinea, Rwanda, and Sierra Leone) as well as developing health human resources strategies in other African countries. Lessons learned from these experiences have been applied to the design of the Project and will be applied during implementation. Economic and Financial Evaluation 57. As noted, current total spending on health i s around US$60 million. The MDG spending target of US$34 per capita would require total spending of US$l08 million, leaving a shortfall of US$48 million. In the short run, the MOHSW has set more modest target of around US$18 per capita. 58. Early estimates indicate that the other major donors (USAID, ECHO, DFID, and Irish Aid) are likely to provide annual support in the range of US$20 million to US$25 million over the next two years, leaving a US$5 million to US$10 million shortfall in 2007 compared with spending levels in A steady GDP growth rate of 5 percent over the next decade would double the resources devoted to the health sector, if current relative growth rates are maintained during this time period. This would allow Liberia to reach the US$34 per capita target by the year 2015 through its own resources. Liberia will therefore remain dependent on extensive external assistance in the health sector for the next decade. 10

19 Technical Appraisal 59. Being new to the health sector in Liberia, the Bank worked closely with other donors (USAID, EU, DFID, Irish AID, PMI, Global Fund, GAVI, and UNITAID), UN partners (UNTCEF, WHO, and UNFPA), and NGOs that have been supporting the Liberian government in its efforts to develop and start implementing its comprehensive National Health Policy and National Health Plan. 60. Despite the weak institutional context in Liberia today, the Project is underpinned by many analyses and has been designed in collaboration with all the other major donors. A Rapid Needs Assessment of the Health System (USAID and MOHSW), a Comprehensive Nutrition and Food Security Survey (WHO and UNICEF), Liberia Health Evaluation Report (Inter-Agency Health), Millennium Development Goals Report, 2004 (Government of Liberia and UN and others) a Malaria Gap Analysis (MOHSW and WHO), etc constitute the basis for this Project together with other short reports and findings during the three missions in 2006/2007. These documents, available for review, were satisfactory for the purpose of project appraisal. 61. To address these weaknesses, the MOHSW will maintain a Steering Committee throughout the period of implementation of the Project, with a structure, functions and responsibilities, acceptable to the Association, for purposes of overseeing the execution of the Project. The Steering Committee shall be chaired by the MOHSW and comprise of the heads of the following units: (a) service delivery; (b) policy and planning; and (c) administration. 62. The MOHSW will maintain at all times during Project implementation, a Program Coordination Team (the PCT), with a structure, functions and responsibilities acceptable to the Association. This would include, inter alia, the responsibility of the PCT to assist the MOHSW, the Steering Committee, the Project Financial Management Unit (PFMU) in the MOF and the Office of Financial Management (OFM) in the MOHSW in the coordination, implementation, monitoring, evaluation and supervision of the Project. 63. The MOHSW will ensure that the PCT: (i) has, at all times during Project implementation, a Project coordinator; and (ii) is adequately staffed with professionals under terms of reference, in numbers, with qualifications and experience acceptable to the Association. The MOHSW will also ensure that the PCT: (i) has, at all times during Project implementation, a Project coordinator; and (ii) is adequately staffed with professionals under terms of reference, in numbers, with qualifications and experience acceptable to the Association. The Project coordinator will support the technical teams responsible for implementing the project under the PCT. The Project coordinator will also help finalize preparation of the Operations Manual. 64. The MOHSW will recruit additional staff as needed in the areas of executive management, project management, financial management and procurement. Such technical assistance as well as training will ensure a strengthening of the technical capacity of the MOHSW during the course of the Project. Fiduciary Appraisal 65. The Project will build on the already existing fiduciary experience arrangements established under other Bank projects. It will not establish similar dedicated financial management units. 66. During an Interim Period of one year or more, the financial management of the Project will be carried out through the PFMU at the MOF, with a structure, functions and responsibilities acceptable to the Association, including, inter alia, the responsibility of the PFMU to assist the MOHSW, the Steering 11

20 Committee, the OFM and the PCT in the coordination, implementation, monitoring, evaluation and supervision of the Project. 67. At all times during the Interim Period, the PFMU will be adequately staffed with professionals and administrative personnel, all hired under terms of reference, in numbers, with qualifications, and experience acceptable to the Association, including: (i) a unit manager; (ii) a Project accountant; and (iii) an internal auditor. The PFMU will at all time during the Interim Period use an integrated accountingfinancial management software system, acceptable to the Association. 68. During the Interim Period, the PFMU will: (i) provide training, technical assistance and capacity building in financial management matters to the OFM to enable said OFM to carry out all the financial management responsibilities of the Project; (ii) maintain the accounting records and prepares the financial statements of the Project; (iii) prepare the financial aspects of the Interim Un-audited Financial Reports; (iv) prepare process payments of Project Eligible Expenditures; and (v) facilitate the financial audits of the Project. 69. There will be no changes in the number of positions of the PFMU or in the professional skills required for occupying such positions, unless such changes have been previously agreed with the Association in writing. 70. In addition, the MOHSW will maintain at all times during Project implementation, an OFM, with a structure, functions and responsibilities acceptable to the Association, including, inter alia, the responsibility of the OFM to assist the MOHSW, the Steering Committee, and the PCT in the financial management of the Project. 71. The OFM will at all times during Project implementation be headed by a financial management specialist and adequately staffed with professionals under terms of reference, in numbers, with qualifications, and experience acceptable to the Association. Except as the Recipient and the Association may otherwise agree in writing, the Recipient shall not introduce changes in the number of positions of the OFM or in the professional skills required for occupying such positions, unless said changes have been previously agreed with the Association in writing. 72. The OFM will be responsible for: designing and establishing a computerized fiduciary management system for the MOHSW, and-after transfer of such responsibilities from the PFMUapprove disbursement of funds to implementing partners, maintaining up-to-date accounting records and ledgers, recording fiduciary transactions for all activities pertaining to the Project, submitting audit reports, and ensuring that a proper internal control system is in place to achieve accountability at all levels. 73. The MOHSW is in the process of preparing a Financial Management Manual (FMM). This manual will be completed and adapted to the special needs of the activities that will be undertaken by the MOHSW within 3 months of effectiveness. Procurement 74. The Project will build on the already existing procurement processes established under other Bank projects. The MOHSW has established a Procurement Committee and Procuring Unit, as mandated by the Public Procurement Law, but these units need to be strengthened. 75. An assessment of the capacity of the MOHSW to implement procurement actions was carried out by the Bank. The assessment reviewed to some extent the organizational structure for implementing 12

21 projects and the interaction between the Project s staff responsible for procurement and the government s relevant central unit for administration and finance. 76. The key issues and risks concerning procurement for implementation of the Project were identified and include (i) limited institutional capacity of the MOHSW to manage the procurement process; (ii) lack of knowledge of Bank s procurement policies and guidelines, and of the newly enacted Government of Liberia Public Procurement and Concessions Act of 2005; and (iii) possible delays in executing procurement activities. 77. To address these weaknesses, it has been agreed that MOHSW will recruit the services of an independent Procurement Management Firm with a proven track record in executing Bank projects, that will provide training to MOHSW staff in procurement matters and that at the same time will provide technical assistance to build procurement capacity at MOHSW. Workshops will be held on Bank procurement policies and guidelines. The risk of delays in processing procurement will streamline procedures through the use where possible of the services qualified UN agencies andor suppliers (for goods) and civil works contractors through Direct Contracting or Shopping. 78. The MOHSW has prepared an overall procurement plan for project implementation which provides the basis for the procurement methods, and a draft procurement plan for the first six months with schedules and processing times, both of which are acceptable to the Association. The MOHSW is also in the process of preparing a Procurement Manual. This manual will be completed and adapted to the special needs of the activities that will be undertaken by the MOHSW within six months of effectiveness. 79. In addition, the procurement team from the MOHSW will seek guidance in the beginning from technical staff who have experience implementing Bank projects working in other ministries, notably in the area of civil works. 80. Three to four supervision missions will be conducted each year to visit the field and to carry out a post-review of procurement actions. The Bank team will be strengthened with the relevant technical expertise to provide the required technical inputs. The procurement post-reviews should cover at least 20 percent of contracts subject to post-review. In addition, post-reviews of in-country training will be conducted from time to time to review the selection of institutions/facilitators/course contents of trainees and justifications thereof, and costs incurred. Institutional Appraisal 81. The MOHSW is working in a weak institutional environment. The National Health plan will require new regulatory instruments to implement future policies. A review of the institutional environment has been initiated to examine which laws and regulations need to be updated in the context of recent developments. The Project would support this review as well as further elaboration of policies related to health financing, labor markets, contracting, and decentralization. Social Aspects 82. The Project is designed to underpin the core health sector recommendations presented in the recent IPRSP. Consultation took place with a wide range of stakeholders from the government, civil society, NGOs, and donor community. The Project responds to social priorities by: (a) ensuring that basic supplies and equipment will be used in a nondiscriminatory way; (b) removing financial and physical barriers to access; (c) improving referral systems and strengthening providers that serve the poor and other vulnerable populations; and (d) undertaking monitoring and evaluation to ensure that activities are benefiting their target populations. Civil works done under the Project involve existing buildings currently used for medical care; thus, there will be no involuntary resettlement. 13

22 Environmental Sa feguurds 83. The Project is rated as a Category B, and only the Environmental Assessment policy would be triggered (Environmental Assessment, OP/BP/GP 4.01). 84. The main environmental issues for the Project relate to the handling and disposal of supplies such as medical laboratory substances, X-ray films, and other medical products and waste generated during the provision of health care. It also involves some waste generated during the rehabilitation of JFK and a couple of other health care facilities. However, these buildings, though currently in use as health facilities, are stripped-down concrete shells, so there would be no asbestos removal and disposal issues. The Project will not finance insecticides and/or larvicides for malaria control. No new construction will be financed under the Project, and therefore there will be no land acquisition. The environmental issues relevant for the Project include not only medical waste management issues, but also construction-related issues like health and safety, contamination of surface water, soil erosion, loss of vegetation, etc. These will be addressed by an Environmental and Social Management Framework (ESMF) which will include the production of a Medical Supplies and Medical Waste Management Plan (MSMWMP), to be completed six months after Project effectiveness. Because the Project is relatively small in scope (US$8.5 million) and has a short implementation period (three years), incinerators would not be a realistic option. All implementing partners will be instructed to carry out the MWMP in the areas where they intervene. The ESMF will also cover environmental and social issues related to the health sector in general and help produce a national plan to be implemented, with a lifespan beyond that of the Project. The Project will finance technical assistance in support of the preparation and implementation of the ESMF and the MWMP. While the ESMF is being prepared, all contractors involved in rehabilitation work will be guided by standard conditions that will be included in their contracts to prevent or mitigate adverse environmental and social impacts. Social Safeguards 85. Although some civil works will take place under the Project, they involve only minor rehabilitation of a few health facilities. These health facilities are all currently in operation, so no issues of involuntarily displaced persons are expected as a result of the Project. Any other potential social safeguards issues for the Project would be included in the ESMF described above. Broader social issues for the health sector will be considered during the production of a national social plan by the MOHSW. Exceptions to Bank Policy 86. There are no exceptions to Bank policies, required for the proposed project activities. Because Liberia's arrears to the Bank and to other MDBs have not yet been cleared, this project is being proposed in the context of IDA'S framework for pre-arrears clearance grants7. E. IMPLEMENTATION ARRANGEMENTS AND FINANCING PLAN 87. Overall responsibility for the Project will be vested in the Minister of Health, who will be supported by the PCT and technical specialists from the line departments of the MOHSW (see Annex 6 for a more detailed assignment of responsibility per component). A Steering Committee chaired by the Minister of Health and consisting of the senior management team from the MOHSW, will be responsible Paragraph 106 below includes a request from Management that the Board grant a partial waiver in respect of one of the five conditions applicable under the pre-anears clearance grants framework which the Board approved on July 9,2001 (Democratic Republic of Congo: Emergency Early Recovery Project, IDA Report No: P 7469 ZR). 14

23 for policy guidance and broad oversight. This committee already meets regularly, and will be supported by the Technical Committee that has been considering issues related to donor harmonization. Finally, Working Groups have been established to elaborate the activities and procedures necessary to implement the four pillars of the National Health Plan. These activities include drafting bid specifications for procurement of equipment, TORS for consultant services, and architectural plans for rehabilitating physical facilities. 88. The PFMU in the MOF will handle fiduciary aspects related to financial management, disbursement, audit functions for one year or more, until the OFM has demonstrated, after a full fledged financial management assessment, that it has a capacity agreeable to the Association to assume this role (see Annex 4 on Financial Management for more details). Technical assistance will be provided by the partner agencies (World Bank Group, USAID, DFID, EU, and others) to strengthen the core capabilities of the MOHSW. Procurement activities will be the responsibility of the Ministry s Line Department for Administration (see Annex 5 on Procurement and Annex 4 on Disbursements for more details). 89. The Project will be implemented by the MOHSW with the assistance from the PFMU, OFM, PCT, project coordinator, and Procurement Firm as described in detail in Annex The Project will be implemented from October 1,2007, to October 1,2010. The closing date will be October 1, Transitional Management Support 91. Given the urgent nature of the Project and the limited experience by the MOHSW in implementing projects supported by the World Bank Group, the line department from the MOHSW responsible for executing tasks under the Project will seek guidance during the first year from the other sectors (agriculture, infrastructure and community empowerment) that already have projects and established units in Liberia. The Project will also support hiring of additional technical specialists in financial management, procurement and project management. Monitoring and Evaluation 92. The MOHSW will monitor progress against agreed indicators, as shown in the Results Framework. The PCT will be responsible for ensuring that reports are submitted in a timely manner and in accordance with the agreed formats (forthcoming). The PCT will review the reports and prepare a comprehensive report for the Project. In addition, a technical audit will be undertaken prior to the midterm review of the Project to provide further quality assurance. The monitoring activities will verify if project objectives are being achieved and ensure proper financial management and procurement processes. Reporting 93. The MOHSW will prepare quarterly progress reports for the Project. Full details of the Project, including outcomes and results indicator data, analysis, and recommendations will be reported annually and audit reports completed (see Simplified Procurement Plan for details). Bank Supervision 94. To ensure rapid implementation, an experienced Bank team of specialists will undertake frequent supervision and implementation-support missions. During the three years of implementation, it is 15

24 expected that four in-depth supervision missions per year will be undertaken by a team of two Technical Specialists (with particular areas of expertise) in addition to participating Bank staff. Summary of Project Cost by Component and Activity 95. Table 3 summarizes the Project costs per component. The Project will be 100 percent Bankfinanced. Significant parallel financing will be provided by other major donors: USAID, ECHO, DFID, GAVI, Global Fund, Irish Aid, PMI, and others (see Annex 6 for a detailed cost table and estimated parallel financing). Table 3. Project Cost, by Component and/or Activity Total (US$ IDA Component/activity million) (US$ million) Support systems 0 2,365,000 Human resources 0 2,830,000 Infrastructure and equipment 0 3,305,000 Total project costs 0 8,500,000 F. PROJECT RISKS AND MITIGATING MEASURES 96. The Project faces several risks. Some are related to the external environment; others are intrinsic to the health sector itself. Despite the recent political stability and resumption of economic growth, the general socioeconomic and political environment is still fragile. Continued poor service delivery could erode the government s popular support. Political struggles and changes in government could slow down and even reverse the reform process. Likewise, the current level of economic growth could drop significantly if a government with less fiscal discipline came to power. Even with high growth rates, many Liberians will remain in extreme poverty for the near future. 97. Overall, the Project faces a moderate risk of closing because of the risk of conflict recurring, based on the experience of other post-conflict countries. Several other risk factors are more specific to the health sector. They include the following: 98. Reduced and irregular donor funding. Volatility in donor funding and lack of long-term commitment present a major risk for the Project. Since the Bank is providing only a small part of the overall external funding envelope, it is exposed to the choices of the other donors. The negative impact of the recent withdrawal by the Global Fund from support for malaria is a good example of this reality. This risk is especially pertinent in the case of components of the Project that depend heavily on the other partners commitments for its overall success. This risk will be mitigated by encouraging the government to seek multiyear commitments from the major donors and seeking support for a common program of work rather than allowing any one subsector become excessively dependent on one donor. 99. Competition for scarce resources by vertical Dromams. The international development community continues to focus on specific vertical program interventions at the expense of the health system reform needed to make those programs sustainable. As a result, large amounts of money flow into narrow programs like HIV/AIDS and malaria, which complement but also compete with basic health programs for scarce financial and human resources. This risk will be mitigated by working closely with 16

25 the donors and the government to ensure that these programs are closely coordinated under the National Health Plan and integrated into basic health services rather than executed as free-standing vertical programs Weak manayement capacity and weak incentive environment. Capacity in both the MOHSW and the provider network is weak, and those who are capable often lack the authority to make decisions. These risks will be mitigated through on-site tutoring of local staff by external experts, provided by technical assistance. They will also be addressed through incentives that will reward specific desirable behavior changes Excessive focus by develoument partners on Drocess rather than contents. Donor harmonization is important, but it is time consuming and sometimes can become an end in itself. These risks will be mitigated by encouraging the donors to agree on a joint program of work but not insist on a one-size-fitsall approach in terms of financing or project management mechanisms Slow execution of tasks. Although the Project is intended as a short and quick-disbursing operation, even streamlined Bank procedures and processes can be challenging to a new recipient. Delays in the execution of critical activities will affect both the Bank-funded activities and those of the other donors, because they will depend on strengthening policy -making and management capacity of the Ministry of Health and Social Welfare. This risk will be mitigated by preparing TORS and bid packages as soon as possible and by working closely with the Ministry of Finance and Ministry of Public Works during the first couple of procurement cycles. G. TERMS AND CONDITIONS FOR PROJECT FINANCING 103. The Project is an IDA grant and will finance 100 percent of project activities under Liberia s current Country Financing Parameters. There are no conditions to effectiveness attached to the Project. Covenants Quarterly progress reports including procurement, physical, and financial progress will be prepared and sent to the Bank no later than 45 days from the end of the quarter; Annual audit reports will be prepared and submitted to the Bank within six months of the end of the year audited; Preparation of Operational Manual; Complete Environmental and Social Management Framework (ESMF) and adapt Medical Supplies and Medical Waste Management Plan (MSMWMP); Provide Annual Work Plans to the Association. Legal Basis for Financial Assistance to Countries in Non-Accrual Status 104. Beginning with the IDA12 Replenishment, IDA donor funds may be used for pre-arrears clearance grants in the context of assistance to post-conflict countries with large and protracted arrears, where the needs are great and alternative sources of financing are inade uate. A framework for providing pre-arrears clearance grants was approved by the Board in July 2001 I?. It outlined the following five * The use of pre-arrears clearance grants was provided for in paragraphs 38 of the IDA12 Replenishment report (IDNR98-195). The IDA12 Resolution specifies that such grants should be used under a framework approved by the Executive Directors. Such a framework was detailed in paragraphs 24 and 25 of the project documentation for the first IDA pre-arrears clearance grant to the Democratic Republic of Congo: Emergency Early Recovery Project, IDA Report No: P 7469 ZR. The framework and the grant to DRC were approved on July 9, In 17

26 conditions, four of which have been met in Liberia's case, and one of which has only been partially met: (a) the proposed grant has been designed in accordance with OP 2.30; (b) early performance is promising as evidenced by the recipient country having taken convincing steps towards social and economic recovery; (c) arrears to IBRD and/or IDA are large and protracted and cannot be easily or quickly cleared using domestic resources; (d) a concerted international effort to provide positive financial flows and other assistance is underway, and other creditors have agreed not to make net withdrawals of financial resources from the country; and (e) alternative sources of financing for post-conflict recovery are inadequate or available only on inappropriate terms With respect to condition (a), the objectives, terms and conditions of the proposed operation are consistent with OP 2.30, the Guidelines on Operational Development and Conflict. With respect to condition (b), Liberia has taken convincing steps towards social and economic recovery as evidenced by the Government's track record of good policy performance over the last 15 months, which has been supported by the Governance and Economic Management Assistance Program (GEMAP), and by the IMF's staff monitored program (SMP) which meets the standard of an upper credit tranche Fund arrangement, as discussed by the Fund's board in February With respect to condition (c), Liberia has been in non-accrual since 1987, and total arrears to IBRD and IDA amount to nearly $460 million, which compares to a GDP of approximately $530 million. With respect to condition (d), a concerted effort is being made to provide positive financial flows and other assistance to the Government as it tackles the challenges left behind by the war; in this regard new pledges of donor support were made at the Liberia Partners' Forum which was co-hosted by the Bank, the UN, the EC, the IMF, the AfDB, and the U.S. in February The Bank, the IMF and the AfDB have also been working closely with partners to forge a comprehensive solution to clear Liberia's arrears. In the meantime, however, the Liberian government has been making "good faith" payments to the IMF, the AfDB and the Bank as part of their arrears clearance strategy. With regard to condition (e), the immense reconstruction needs facing Liberia overwhelm the financing that is currently available from donors or domestic resources. Waiver of Compliance with Framework Condition (d) 106. In October 2006, Executive Directors approved a waiver of the condition relating to "good faith" payments in order to make additional financing available for the Emergency Infrastructure Project. In light of Liberia's urgent reconstruction needs, the Government's strong track record of good policy performance, and the fact that the delay in arrears clearance is unrelated to the efforts of the Liberian Government, Management requests that the Board grant a similar waiver in this instance to allow the exceptional financing of the proposed Health Reconstruction Project. turn, these provisions were carried over in Annex 2 to IDA's Thirteenth Replenishment Resolution and in paragraph 9 of Annex 1 to IDA's Fourteenth Replenishment Resolution. 18

27 ANNEX 1. DETAILED DESCRIPTION OF PROJECT COMPONENTS Overall goal 1. The overall goal of the Project is to help Liberia recover from the damage done to the health sector during the years of civil war. Under the National Health Policy and Plan, the government has reaffirmed its commitment to working toward achievement of the Millennium Development Goals (MDGs), with a particular focus on activities that will contribute to overall improvements in maternal and child survival. Project Development Objectives 2. In partnership with other donors, the proposed Project will contribute to: (a) strengthening policy-making and management functions of the Ministry of Health and Social Welfare (MOHSW); and (b) providing critical inputs to sustain the referral system needed to support essential health services. Project Design 3. The Liberia Reconstruction and Development Committee framework, under which the Bank takes a lead in infrastructure and basic services, emphasizes the need to strengthen access to basic social services. Such activities are also central to the government s Interim Poverty Reduction Strategy Paper (IPRSP) and the Bank Interim Strategy Note (ISN), which lays out a comprehensive 18-month development strategy for Bank engagement in Liberia.g A significant effort will be made to complement valuable investments made in these sectors where mutual benefits are to be gained from such synergies. For example, although LACE is financing the construction in some communities, it cannot finance staff and specialized equipment. Some of these facilities can be financed by the Bank, to become functional. 4. At the same time, the Project is designed to complement but not duplicate action taken by the other donors (USAID, EU, DFID, Irish AID, PMI, Global Fund, GAVI, and UNITAID), UN partners (UNICEF, WHO, and UNFPA), NGOs and large numbers of individually motivated people in supporting implementation of the National Health Policy and National Health Plan. 5. As described earlier, many of the other development agencies will be helping the government to address basic health care needs and will provide funding to ease the transition as some of the humanitarian relief agencies and NGOs withdraw their support. However, during the war the foundations of the health sector, including governance, financing, institutional environment, organizational structures, and the regulatory framework were destroyed, along with many of the physical facilities and much of the equipment. 6. World Bank Group support will focus on addressing three of the four pillars of the health plan. In this way, the scarce resources provided to the sector by the government and other donors can achieve the greatest effect. The Project will also build on existing Bank experience in emergency reconstruction and contracting with nongovernmental services providers (Afghanistan, Bosnia, Chad, Democratic Republic of Congo, Guinea, Rwanda, and Sierra Leone) as well as the health and human resources strategies developed for similar conditions in other African countries. The Bank will work with government and its other donor partners in conducting semiannual reviews of (a) progress made to implement the Health Policy and Plan and; (b) forward-looking action plans to address problems identified at the time of these reviews. IDA, 2007, Interim Strategy Note (ISN), Washington, DC, IDNR and IDA, 2007, Interim Poverty Reduction Strategy, Washington, DC, IDNSecM

28 Project Components: Component A. Support Systems (US$2,365,000) Component B. Human Resources (US$2,830,000) Component C. Infrastructure and Equipment (US$3,305,000) Component A. Support Systems (US$2,365,000) 7. This component will strengthen the policy-making, policy-monitoring and evaluation, and management capacity of the MOHSW. It will support the operational capacity of MOHSW to effectively manage the Project by, inter alia, strengthening its management capacity, and expanding its monitoring and evaluation mechanisms, all through the provision of technical advisory services, training, and Incremental Operating Costs. Provision of technical assistance and training to MOHSW staff to: (a) develop policy in the following areas: (i) health financing; (ii) contracting with health providers; (iii) health labor market dynamics; and (iv) decentralization of health services; and (b) strengthen their administrative and technical capacities to manage and implement the Recipient s National Health Plan and related policies. It will also provide information communication technology to MOHSW staff to support a health management information system. 8. The technical assistance will be offered to design a policy-monitoring and evaluation system to track implementation of the health plan and introduce measures to address identified problems. The Project will also support the design of policies and introduction of early actions that would mitigate problems when detected. The policy studies will focus on health financing, contracting, labor markets, and decentralization, which have already been identified under the National Health Policy and Plan as priority areas of further policy development. 9. The Project will strengthen MOHSW capacity to introduce contracts with targeted clinics and referral centers that will be rehabilitated and equipped. Incentives related to improving the case mix and the utilization rate of the health facilities will constitute an important part of these contracts. The Project will also support the introduction of contracts with the John F. Kennedy hospital and JFK teaching facilities and Dogliotti Medical College that will be reequipped and rehabilitated under the Project. The proposed system can constitute the basis for an accreditation process of health care providers in the future. 10. To strengthen the health system, Information Communication Technology (ICT) support for the new Health Management Information System (HMIS) at the central and county levels. It will include computers, printers, networks, electricity, and satellite Internet connections. This part of the Project will be implemented in close coordination with USAID, which will provide training and technical assistance in designing and implementing the MOHSW HMIS system. Maintenance will be provided for the procured equipment. 11. The Project will introduce new procedures and training in contract management. The Project will also support a strengthening of the MOHSW basic administrative unit responsible for accounting, budgeting, audits, and contracting-all essential functions in managing large contracts with independent providers. The Project will also support the introduction of new financing arrangements to mobilize and pool both domestic and external resources to support such activities. Component B. Human Resources (US$2,830,000) 12. This component of the Project will increase the number doctors, nurses, and allied health workers in critical areas of staff shortages through recruitment and training. It will support hiring of clinical 20

29 teachers, including medical doctors, nurses, midwives, and allied health workers for purposes of training and supervision of Recipient s clinical care staff. It will support Hiring of medical officers, laboratory technicians, and radiographers to fill-in critical staffing needs in the Recipient s health clinics and hospitals. It will provide technical assistance and training to Recipient s public education institutions to reform their curriculum to enhance the education level of medical doctors, nurses, and allied health workers. It will also provide, training, technical advisory services, and equipment to enhance the technical and managerial capacity of key staff in the Recipient s health sector including, inter alia: (a) transportation costs of trainers and trainees; (b) per-diem of trainers and trainees; (c) workshops; (d) seminars and courses; (e) rental of training facilities and equipment; (f) acquisition of training equipment and teaching material; (g) Internet access to online learning; and (h) study tours. 13. The Project will recruit clinical teachers (doctors, nurses, midwives, and allied health workers) in areas of critical shortage who can both act as faculty for teaching and contribute to the supervision of clinical care in the following areas of acute staff shortage: (a) doctors (pediatrician, anesthesiologist, pathologist, and urologist); and (b) nurses (nurse/midwife, nurse practitioner, nurse anesthesiologist, environmental health, and mental health). A particular emphasis will be made on securing both faculty and staff needed to treat mothers and children. The Project will also recruit medical officers, laboratory technicians, and radiographers to fill-in critical staffing gaps in the existing workforce. An attempt will be made to recruit from the Africa Region or to ensure that the recruited staff understands the special clinical challenges faced in low-income and severely resource-constrained environments. High-level externally recruited experts will be expected to contribute to both active clinical case management and teaching of local staff. In addition, national Liberian staff will be paired with all expatriate staff to ensure maximum transfer of knowledge and local capacity building. 14. Parallel to this recruitment, the Project will support a revision of the curriculum for training doctors, nurses, and midwives so that it is aligned with the economic and political realities that are likely to prevail during the next decade in Liberia. The Project will also support procurement of (a) teaching materials such as books, journals, and classroom materials; (b) Internet access to online learning (satellite access and solar panel electricity); and (c) equipment for teaching laboratories. For the procured equipment, technical and maintenance training will be provided 15. Parallel to this recruitment, the project will offer stipends (fees) to increase the intake of students in public schools and offer short-term financial support (fees, travel, and cost of living) for skills upgrading of the medical personnel in neighboring countries. The stipends will be offered on a competitive basis to students, priority being given to students from disadvantaged areas. A preference will be given for placements in neighboring West African countries such as Ghana, Nigeria, and Sierra Leone, countries that share the same accreditation system, to support a strengthening of this local network. Training activities supported through this component will coordinate closely with the Global Task Force on Scaling-up Human Resources in Health and development of a West Africa Health Sciences Campus. Component C. Infrastructure and Equipment (US$3,305,000) 16. This component will contribute to the necessary infrastructure and equipment for MOHSW clinics, county referral centers, and JFK hospital, especially in the case of services used by mothers and children. This component will support a rehabilitation of Recipient s essential medical facilities and medical teaching institutions, including the maternal and child wards at the John F. Kennedy Hospital and the A.M. Dogliotti College of Medicine. It will also support acquisition of basic medical supplies, medical emergency equipment, radiology and laboratory equipment, communications equipment, energy generating equipment, Internet connection equipment, ambulances for MOHSW clinics and health centers, county hospitals, and the John F. Kennedy Hospital. It will complement, not duplicate, actions 21

30 taken by other donors such as the GF, the PMI, and Clinton Foundation as well as the reconstruction of local clinics under the Association s LACE project. 17. The equipment provided would include basic clinical equipment, diagnostic equipment (radiology and laboratory equipment), emergency equipment (operating rooms and casualty departments), communications, ambulances, and solar panels. A special effort will be made to ensure that needed supplies and equipment are available to deliver integrated management of childhood illness (IMCI). This would include immunization as well as diagnosis and treatment of malaria, diarrhea, acute respiratory illness (ARI), and other maternal and child conditions. New contracts between the MOHSW and health providers will be renewed only if the minimum equipment is in place and utilized at the time the contracts are negotiated. Priority for equipment supply will be given to clinics, referral centers, and hospitals that are strategically placed or have a higher service utilization rate than other facilities. The Project will introduce contracts with MOHSW-targeted clinics and referral centers to be rehabilitated and equipped. Under the contracts, incentives related to improving the clinics case mix and the utilization rate will be the basis for contracts issued over the next three years to clinics receiving the equipment as well other clinics that already have the minimum equipment. 22

31 ANNEX 2. RESULTS FRAMEWORK AND MONITORING PDO Contribute to: (a) strengthening of policy making and management functions of the Ministry of Health and Social Welfare; and (b) providing critical inputs to sustain the referral system needed to support essential health services. Oh iectives Component A: Support Systems Strengthening policy making, planning, management, monitoring and evaluation capacity of the MOHSW Component B: Human Resourct Increasing the number doctors, nurses, and allied health workers in critical areas of staff shortages through recruitment and training Project outcome indicators Based on semiannual reviews, satisfactory (a) implementation of the National Health Plan and (b) preparation of forward-looking action plans. One functional secondary referral center per county Intermediate outcome indicators Policy monitoring and evaluation system to track progress in executing the National Health Plan designed and implemented New procedures in contract management developed and implemented New policies in the areas of health labor market, health financing, contracting, and decentralization drafted and discussed at senior policy level Number of clinical teachers and staff recruited in areas of critical shortage (doctors, nurses, midwives, and other allied health workers) Use of project outcome information Demonstrates the effectiveness of measures introduced to strengthen the underlying health system in order to prevent deterioration in the functioning of essential health services. Use of intermediate outcome monitoring Demonstrates the effectiveness of measure introduced to strengthen institutional and management capacity in policy making, planning, monitoring and evaluation. Ensures that education and referral services have the staff needed to function properly, improve supervision, and provide quality of care. Component C: Infrastructure ai Contributing to the necessary infrastructure and equipment for MOHSW clinics, county referral centers, and JFK Hospital, especially in the case of services used by mothers and children Number of targeted clinics restored to fiinrtinnalitxr thrniioh nrniricinn nf new c J L"'VU6'A YL", IU1VII VI 11v I. I UllV.1V &lull equipment and staff Number of targeted referral centers restored to functionality through provision of new equipment and staff Number of targeted new maternity and child wards of JFK Hospital equipped and renovated Provides concrete evidence that eccential health ceniirec and VUUIllblUl llvulyl UVI IIVVU UllU referral centers meet minimal equipment and infrastructure standards needed to function properly. 23

32 8 R 5 E s N 3 c1 In Is n lo lo

33 ANNEX 3. SUMMARY OF ESTIMATED PROJECT COSTS Summary of Project Cost by Component and Activity Total US$ IDA US$ Component/ activity million million Management Support Systems 0 2,365,000 Human Resources 0 2,830,000 Infrastructure and Equipment 0 3,305,000 Total Project Costs 0 8,500,000 Detailed Cost Breakdown I I Subtotal I Total Support Systems 1 2,365,000 Management Support Policy Development (Studies) Health Management and Information System Monitoring and Evaluation 8 10, , , ,000 Human Resources 2,830,000 Trainers and Clinical Staff Teaching Materials Students Intake and Output 1,906, , ,000 Infrastructure and Equipment 3,305,000 I Basic Health Care Level I I I Referral Centers at County Level 1 1,075,000 I Dogliotti Medical Colleague,JFK Hospital I 1,730,000 I I Communications and ambulances I I Overall Budget 8,500,000 25

34 Introduction ANNEX 4. FINANCIAL MANAGEMENT AND DISBUWEMENT AFWNGEMENTS 1. The Project will build on the already existing fiduciary experience arrangements established under other Bank projects. It will not establish similar dedicated financial management units. 2. During an Interim Period of one year or more, the financial management of the Project will be carried out through the PFMU at the MOF, with a structure, functions, and responsibilities acceptable to the Association, including, inter alia, the responsibility of the PFMU to assist the MOHSW, the Steering Committee, the OFM, and the PCT in the coordination, implementation, monitoring, evaluation, and supervision of the Project. At the end of the Interim Period and after a full fledged financial management assessment that shall determine that the OFM has financial management capacity, acceptable to the Association, the OFM will take over the financial management of the Project. 3. The office will be charged with the disbursement of funds to Implementing Partners and the External Evaluation Agency. Disbursement from the IDA grant will be transaction-based (replenishment). A Designated Account (DA), maintained at a Liberian Commercial Bank in U.S. dollars will be opened on terms and conditions acceptable to IDA. It will finance all eligible expenditures. A qualified, experienced, and independent external auditor will be appointed on terms and conditions acceptable to IDA. The audit will cover all aspects of the project activities, including eligibility of expenditures and physical inspections. 4. At all times during the Interim Period, the PFMU will be adequately staffed with professionals and administrative personnel, all hired under terms of reference, in numbers, with qualifications, and experience acceptable to the Association, including: (i) a unit manager; (ii) a Project accountant; and (iii) an internal auditor. The PFMU will at all times during the Interim Period use an integrated accountingfinancial management software system, acceptable to the Association. 5. During the Interim Period, the PFMU will: (i) provide training, technical assistance and capacity building in financial management matters to the OFM to enable said OFM to carry out all the financial management responsibilities of the Project; (ii) maintain the accounting records and prepares the financial statements of the Project; (iii) prepare the financial aspects of the Interim Un-audited Financial Reports; (iv) prepare process payments of Project Eligible Expenditures; and (v) facilitate the financial audits of the Project. 6. There will be no changes in the number of positions of the PFMU or in the professional skills required for occupying such positions, unless such changes have been previously agreed with the Association in writing. 7. In addition, the MOHSW will maintain at all times during Project implementation, an OFM, with a structure, functions and responsibilities acceptable to the Association, including, inter alia, the responsibility of the OFM to assist the MOHSW, the Steering Committee, and the PCT in the financial management of the Project. 8. The OFM will at all times during Project implementation be headed by a financial management specialist and adequately staffed with professionals under terms of reference, in numbers, with qualifications, and experience acceptable to the Association. Except as the Recipient and the Association may otherwise agree in writing, the Recipient shall not introduce changes in the number of positions of the OFM or in the professional skills required for occupying such positions, unless said changes have been previously agreed with the Association in writing. 26

35 9. The OFM will be responsible for designing and establishing a computerized fiduciary management system for the MOHSW, and-after transfer of such responsibilities from the PFMUapprove disbursement of funds to implementing partners, maintaining up-to-date accounting records and ledgers, recording fiduciary transactions for all activities pertaining to the Project, submitting audit reports, and ensuring that a proper internal control system is in place to achieve accountability at all levels. 10. The MOHSW is in the process of preparing a Financial Management Manual (FMM). This manual will be completed and adapted to the special needs of the activities that will be undertaken by the MOHSW within three months of effectiveness. Appraisal of Financial Management and Disbursement Arrangements 11. A financial management assessment was carried out in accordance with standard Bank procedures. The objective of the assessment was to determine whether the implementing entities have acceptable financial management arrangements, which will ensure: (1) the funds are used only for the intended purposes in an efficient and economical way; (2) the preparation of accurate, reliable, and timely periodic financial reports; and (3) safeguard the entity s assets. Overview of Project Implementation Arrangements 12. Overall responsibility for the Project will be vested in the Minister of Health who will be supported by a Program Coordination Team (PCT) and technical specialists drawn from the departments of the MOHSW. The Project will be implemented by the MOHSW with the assistance of the PCT as described in detail in Annex 6. Country Accountability Issues 13. Due to the extended conflict situation in the country which led to disengagement, the Bank has not carried out a Country Financial Accountability Assessment (CFAA) or similar FM related ESW in Liberia in recent years. The earliest FM diagnostic exercise is only scheduled to take place within the next two years. Thus there is limited country knowledge, with the only information at hand based solely on project implementation experience, which itself is still in its infancy. Clearly, Liberia is emerging from 15 years of civil war. Both physical and bureaucratic infrastructure was decimated by the war, including an exodus of most skilled personnel. Capacity in the area of FM (as in other professions) is weak, affecting both the private and public sectors. The development partners have been assisting by sponsoring quick solutions such as the centralized Project Financial Management Unit (PFMU) in the Ministry of Finance (MOF) to create a reservoir of skilled personnel that would be available to a number of projects. It is in this spirit that DFID is also helping through the creation of an Office of Financial Management (OFM) within the MOHSW which will help it strengthen its capacity in financial management. Summary of Risk Analysis Inherent risk Country Level Country will not have adequate FM systems during the life of the Project. Risk rating S Risk mitigation measure Technical assistance will be provided to strengthen the FM capabilities of the MOHSW 27

36 No Country-wide FM diagnostic ESW will be carried out during the implementation period of the Project. The country may not have adequately qualified FM professionals. Overall inherent risks Control risk: Ministry of Health and Social Welj2u-e: Stafing: a) The Ministry does not have a full complement of required accounting staff. b) Any accounting staff at post may not have experience in World Bank Group FM and disbursement procedures. c) The government salaries may not be adequate to recruit the required competent staff immediatelv. Internal Control Procedures: a) The Ministry has not documented any of FM procedures in a manual and such policies may not be adequate and may not even be in place. b) That management may override any existing controls. Fund flows a) Project may not submit withdrawal applications on timely basis, thereby causing possible implementation delays. Internal Audit (IA) The MOHSW has no functioning IA unit, and may not establish an IA as part of its operations. S H S M S Reliance will not be placed on country or public systems unless additional special arrangements are developed to ensure that project funds will be safeguarded. An FM ESW is scheduled to take place within two years. Competitive recruitment will be extended to the international and subregional market to ensure that the right caliber of Drofessional staff i s recruited. DFID is supporting the establishment of an OFM with competent staff. Project resources will be made available for the recruitment of qualified accounting staff for the OFM. Qualifications and experience will be set out clearly in the TOR for the positions. Staff without the requisite training in WB procedures will be afforded training opportunities. OFM staff will train available government staff to improve their capacity during project implementation. The OFM will be required to customize the PFMU FM manual to make it suitable for use in the MOHSW, as part of the PIM, within 6 months of their appointment. The use of qualified financial staff will minimize any control override that may occur under the project. In addition, frequent Bank oversight and periodic external reviews will be instituted. Staff of the OFM will be trained in Bank procedures, including the need to submit withdrawal applications on a monthly basis. The financial procedures and policies put in place will ensure adequate internal checks to address any weaknesses, but the Ministry will be encouraged to establish an IA unit to complement these. 28

37 External Audit The audited financial statements of the Project will be submitted late. Information Systems A computerized accounting system may not be implemented in a satisfactory manner. Overall Control Risk. M M S The selection of independent auditors would be completed within six months of effectiveness, and the need for timely audit submission emphasized. The OFM will be required to implement such a system within six month after their engagement or establishment. Strengths and Weaknesses Strengths 14. There is a strong commitment by the Ministry of Finance and the MOHSW to support the implementation of the Project. The implementing agency-line departments of the MOHSW-will ensure effective project management. Fiduciary performance will be strengthened by hiring of international staff to head the OFM. The OFM will establish and maintain at all times appropriate financial management systems and practices that will meet the FM requirements of the Association. Weaknesses 15. As in other post conflict countries, the overall fiduciary environment in Liberia is very weak. The accounting staff at the MOF and MOHSW has little experience with Bank financial and disbursement procedures. This will be mitigated by the establishment of the OFM described above. Implementation of the Project already has a strong ownership and active support from governmental authorities. FM Staffing for the OFM 16. The OFM will be headed by a qualified accountant with experience in public financial management and experience acceptable to IDA. He/she will be supported by a mix of specifically recruited accounting staff, and existing ministry staff selected for training as part of long term capacity building for the Ministry. One of the TORS of the expatriate staff will be to train local staff working with them as part of knowledge transfer. Accounting Undertaken by the OFM 17. The OFM will establish an effective accounting system that provides for adequate segregation of functions, capable of recording all accounting transactions, and reporting correctly all assets and liabilities of the Project. The system will have capacity to produce accurate periodic financial reports including quarterly Interim Un-audited Financial Reports (IFR) and annual project financial statements once such functions are transferred from the PFMU to the MOHSW. 29

38 18. The Project will adopt the cash basis in the treatment and recording of all transactions, and shall comply with international accounting standards. In addition, the Project will maintain a statement of liabilities outstanding at all times to correctly reflect the Project s indebtedness to suppliers and third parties. The OFM will be tasked with documenting the Financial ManagemendAccounting procedures manual which must be cleared by the Association once it takes over this function from the PFMU which will assume these and other fiduciary activities during an interim period of one year or more. Budgeting Arrangements 19. The MOHSW will prepare an annual budget for the Project based upon the agreed program to be financed by the Project. Most of the activities of the key components are already known and these will be included in the Project s annual budgets. The annual project budget will be reviewed and agreed with the Association, and No Objections will be issued for only activities agreed in the budget. Flow of Funds 20. A single Designated Account (DA) will be opened in a Liberian Commercial Bank agreed upon by the Liberian government for purposes of receiving project funds. The DA will be under the control of the PFMU until the OFM takes over this function. The carrying amount of the DA will be advised in a Disbursement Letter to be issued separately. 21. The Project arrangements are such that there will be no implementing entities at any decentralized position and the PFMU and OFM will operate a centralized funds management system for the Project. All approved requests for payment will be sent to the Accountant for processing and payments. Where a particular payment is above a defined threshold, it will be processed and sent to the Bank for direct payment to the third party. There will be a requirement for the PFMU and later OFM to submit withdrawal applications in respect of the Project to the Association on at least a monthly basis. This will ensure the Project has funds for operations at all times. Auditing Arrangements 22. Independent and qualified auditors, acceptable to the Bank, would be selected to carry out the external audit of the Project. The selection of auditors shall be on competitive basis and in accordance with the Bank s guidelines and would be in place within six months after the effectiveness of the Project. During the first year of operation when FM will be managed by the PFMU, arrangements can be made for the existing PFMU auditors to vary their contract and include the new project in their mandate. 23. The Project financial statements including movements in the designated accounts will be audited in accordance with International Standards of Auditing (ISA) and a single opinion will be issued to cover all project activities, the Project financial statements, SOEs and the designated account, in accordance with the Bank s new audit policy. 24. The auditors report and opinion in respect of the financial statements and the management letter, inclusive of project management responses to the issues raised by the auditors, would be furnished to the Association within six months of the close of each fiscal year. 25. Once it takes over this function from the PFMU, the OFM will be required to hire an internal auditor to augment internal controls, as well as ensure wider audit coverage than is possible with external auditors only. 30

39 Reporting and Monitoring 26. The Project will prepare quarterly project interim unaudited financial reports or statements (IFR) in the areas of finance, procurement, including complaints from bidders, and project progress. The financial management system put in place should be capable of producing these reports. The minimum reports are: 27. The Quarterly Financial Reports: which would consist of a statement of cash receipts by sources and expenditures by main expenditure classifications for the period and cumulatively; cash balances of the Project; and supporting schedules comparing actual and budgeted expenditures; 28. Quarterly Physical Progress Report: include a narrative information and output indicators, linking financial information with physical progress and report on issues that require attention; 29. Quarterly Procurement Management Report: would consist of information on procurement for goods and works and that for consultants services and compliance with agreed procurement methods. The report compares procurement performance against the plan agreed at negotiations and appropriately updated at the end of each quarter. The report should also provide any information on complaints by bidders, unsatisfactory performance by contractors, and any contractual disputes. 30. The PMFU of the MOF and later OFM of the MOHSW will be responsible for preparing the financial reports required as part of the interim unaudited financial reports required to be produced under the Project. These financial reports will be consolidated and copies submitted to the Bank within 45 days of the end of each quarter. The content and format of these reports will follow closely the agreed formats in use for the ongoing project. Disbursement Arrangements 31. Disbursement will be Transaction-based. The following table specifies the category of Eligible Expenditures that may be financed out of the proceeds of the Financing, and the percentage of expenditures to be financed for the Eligible Expenditures: Allocation of Grant Proceeds 32. The proceeds of the Grant would be disbursed over a three-year period. A period of four (4) months after the closing date, as agreed with IDA, would be allowed to make disbursements for expenditures incurred on goods and services received before the closing date of the Grant. The Grant amount will be disbursed against the category described below. Disbursement category Amount of the financing allocated ( US$ million) Percentage of expenditures to be financed All Goods, Works and Services Eligible for Financing through the Association % 31

40 Use of Statement of Expenditures (SOEs) 33. Disbursement for all expenditures would be against full documentation, except for items of expenditures under contracts and purchase orders below US$200,000 equivalent each, for works, below US$lOO,OOO equivalent each, for goods, below US$lOO,OOO equivalent each for consulting firms, and US$50,000 each for consultant services (individuals), training and incremental costs for which disbursements would be based on statement of expenditures (SOEs). Supporting documentation for SOEs would be retained for review by IDA missions and external auditors. Conditionalities 34. The following agreements have been reached with the Recipient: 35. Negotiations 0 0 Agreement on interim project accounting arrangements Agreement on format of IFRs 36. Effectiveness 0 None FM Covenants FM Action Plan Quarterly progress reports including procurement, physical and financial progress will be prepared and sent to the Bank no later than 45 days from the end of the quarter. Annual audit reports will be prepared and submitted to the Bank within six months of the end of the year audited. 37. areas: The Project will support the MOHSW in strengthening its management capacity in the following Action 1. Negotiate an interim accounting arrangement with PFMU (MOHSW) Agreed at the time of 2. Agree on formats of IFRs to be prepared under the Project (MOHSW) OFM Manager, - accountant, financial analyst, internal auditor, recruited (MOHSW) Customization of PFMU Financial Management Manual to the MOHSW (OFMI Engage a project external auditor (MOHSW) Installation of integrated accounting software, including data testing. The software will be an off the shelf package customized for the projects being managed by the OFM (OFM) effectiveness Following the Interim Period I 32

41 Supervision Plan 38. During the first year of project implementation, intensive supervision will be required in order to ensure that the project financial management arrangements are in place and functioning. The first supervision mission after effectiveness will take the form of an FM Specialist visiting MOHSW to review interim arrangements for project FM. Thereafter, there will be a minimum of four supervision missions per year. Conclusion of FM Assessment 39. The financial management assessment rated the fiduciary risk for the Project as Substantial. However, several actions have been lined up to mitigate the identified risks with successful implementation of these actions, residual risk is rated moderate. In spite of that hopeful note, intensive supervision is recommended; as this is a high-risk project in a high-risk country, and there i s a chance the proposed actions may themselves not be fully accomplished. 40. Meanwhile, it is the conclusion of the assessment that the proposed FM arrangements for the new Emergency Health Project to be managed by the MOHSW meet the minimum requirements for financial management under OPBP

42 ANNEX 5. PROCUREMENT ARRANGEMENTS A. General 1. Due to the 14 years of civil war in the country, the legal and institutional frameworks for Public procurement were completely destroyed, and the procurement policies and practices of the Government of Liberia lacked the basic principles of accountability, economy, efficiency, and transparency. In the absence of a CPAR, the United Nations and the Association carried out a Needs Assessment under their Economic Management Assistance Program for Liberia, which determined that Public Procurement Reform was critical to Liberia s post-conflict transition. Following this assessment, the government embarked on the Public Procurement Reform, starting with the enactment of the Public Procurement and Concessions Act (PPCC) in The Act is comprehensive and governs all government contracts, including those that may be financed out of fiscal resources, for example, concessions and donor funds, and mandates the formation of Procurement Committee and Procuring Unit within each Procuring Entity. Currently, the functions of these two institutions are yet to be articulated and they are mostly nominal. In addition, there are no control mechanisms that provide checks and balances within the Liberian procurement system. In reality, independent and credible procurement audits and internal quality controls are nonexistent. The Act also established the Public Procurement and Concessions Commission (PPCC), charged with the implementation of government s Public Procurement and Concessions Reform (PPCR). The reform is being supported by the Liberia Public Procurement Reform Project (LICUS TF Grant # TF056754). 2. Procurement of goods, works, and services required for the Project and to be financed out of the proceeds of the Grant shall be governed by the provisions of (a) Guidelines: Procurement under IBRD Loans and IDA Credits, May 2004, revised October 2006; (b) the Guidelines: Selection and Employment of Consultants by the World Bank Recipients, May 2004, revised October 2006; and (c) the Legal Agreement as said provisions may be further elaborated in the Procurement Plan. The various items under different expenditure categories to be financed are described below. For each contract to be financed with Grant proceeds, the different procurement methods or consultant selection methods, the need for pre-qualification, estimated costs, and prior review requirements have already been agreed between the Government of Liberia and the Association and are embedded in the Procurement Plan. The Procurement Plan will be updated at least annually or as required to reflect the actual project implementation needs and improvements in institutional capacity. 3. Selection of Consultants: Consultancy services valued at about US$3 million to be provided include project audits, works supervision, monitoring and evaluation, capacity building, project management, and supervision. The project has been classified as a rapid response where, in conjunction with the New Policy Framework, (OP S.O), accelerated and Streamlined Procedures may apply to improve the flexibility, speed, and effectiveness of the Bank s emergency response. Therefore the use of a pool of experts or a list of pre-selected consulting firms and/or individuals was considered an appropriate method for supporting counterpart agencies at various steps of project execution. Such a method will remain consistent with QCBS, CQS, and/or the Selection of Individual Consultants. The selection process would be conducted by the Recipient for a series of assignments-with standard TORS -before credit effectiveness and would be subject to Bank prior reviews, as usual. During project execution, the Recipient would hire experts or f m s from the list, based on their availability to cany out the assignment. Remuneration and fees would be resolved, at time of pre-selection, and prescribed in a framework agreement-a sort of retainer contract. While this approach will expedite ad hoc recruitment of consultants for specific frequent assignments, it does not require any special waiver or clearance, because it will be fully consistent with the regular procedures. For all contracts to be awarded following QCBS, CQS, and LCS the Bank s Standard Request for Proposals will be used. Sole-sourcing of consulting 34

43 firms or individual consultants already working in the areas and having a proven track record for provisions of technical assistance, and the extension of contracts issued under existing projects for similar activities through increase in their corresponding contract amounts, would be explored case by case and subjected to Bank non-objection. 4. Training: Training valued at about US$0.5 million to be provided includes support for students studying in Liberia and abroad as well as short-term training for professional staff and managers. Candidates will be selected by the MOHSW and education centers on a competitive basis. 5. Procurement of Goods: A total of about US$ 4.0 million of goods would be procured under the project. These would include: (a) medical equipment, (b) X-ray machines, (c) laboratory equipment, (d) teaching material, (e) computers, printers, networks, photocopiers, fax machine, (f) software, (8) electricity, and (h) satellite dishes for Internet connectivity. Direct contracting with the Inter-Agency Procurement Services Office (IAPSO) would be used for the procurement of vehiclehnbulances and telecom equipment, and office equipment costing $200,000 or less. 6. Procurement of Works: A total of about US$ 0.8 million of works would be procured under the Project. These would include: (a) rehabilitation of two wards in KFK Hospital; (ii) rehabilitation and refurbishing of teaching facilities in JFK and Dogliotti Medical College; (iii) and selective rehabilitation of referral centers which will receive laboratory and X-ray equipment. The services of qualified civil works contractors already mobilized and working in emerging areas (for works) may be procured through direct contracting or simple shopping, or through the extension of civil works contracts issued under existing projects for similar activities through increases in their corresponding contract amounts, where necessary, subject to the Bank s no objection. 7. Operating Costs: incremental recurrent expenditures incurred by the MOHSW for Project implementation including office supplies, fuel, and maintenance of vehicles, maintenance of equipment, telephone, and other communications charges, costs related to administration of works, bank and services fees, travel and supervision, but excluding salaries of officials of the Recipient s civil service (unless expressly agreed upon with the Bank, based on the Country Financing Parameters). They will be procured using the implementing agency s administrative procedures reviewed and found acceptable to the Association. 8. The use of World Bank Group Standard Bidding documents (SBDs) is mandatory for all ICBLIB procurement of works and goods. The Bank has reviewed the National SBDs for Works and for Goods and found that them acceptable for use for Bank-funded NCB procurement subject to some modifications (e.g., references to domestic preference). B. Assessment of the Agency s Capacity to Implement Procurement 9. The implementation Agency for the Project is the MOHSW, which will have the overall responsibility of (a) assuring steady progress of the procurement in accordance with an implementation schedule reviewed and approved by the Association; and (b) ensuring satisfactory implementation of activities included in all contracts. The MOHSW has established a Procurement Committee and Procuring Unit, as mandated by the Public Procurement Law, but these units are more nominal than functional. 10. An assessment of the capacity of the MOHSW to implement procurement actions was carried out by Amadou Tidiane Toure (Lead Procurement Specialist). The assessment reviewed to some extent the organizational structure for implementing projects and the interaction between the Project staff responsible for procurement and the government s relevant central unit for administration and finance. 35

44 11. The key issues and risks concerning procurement for implementation of the Project have been identified and include (i) insufficient institutional capacity of the MOHSW to manage the procurement process; (ii) lack of knowledge of Bank procurement policies and guidelines and of the newly enacted Government of Liberia Public Procurement and Concessions Act of 2005; (iii) delays in executing procurement activities. To address these weaknesses, the following specific actions are recommended: 12. Due to the lack of necessary organization, resource, and experience, it has been agreed, in consultation with the Recipient that a Procurement Firm (PF) should be hired to provide training to MOHSW staff in procurement matters and to provide technical assistance to build procurement capacity at the MOHSW. The Firm will: (a) second qualified procurement staff to plan, manage, and report on the most urgent procurement activities and (b) build capacity within the MOHSW to take over the procurement function within one year of implementation. The capacity building would entail the establishment of a well-functioning Procurement Committee and Procurement Unit within MOHSW as mandated by the Public Procurement Act (staffing, procurement manuals and instructions, and procurement filing and reporting system). The contract of the Firm will include provisions that would link payments to clear performance indicators related to the speedy management of procurement and to the capacity-building mandate regarding the MOHSW. It is envisaged to use streamlined procedures to select those services, and the Procurement Plan has been revised accordingly. Instead of using a Single- Source Selection (SSS) as initially envisaged, the Recipient will select the PA through the Consultants Qualification (CQS) method, in accordance with Para. 3.7 of the Consultants Guidelines. In this particular case, the Loan Agreement would determine a dollar threshold of US$400,000 for CQS, which exceeds the current limit of US$200,000. This method has the merit of ensuring greater quality and transparency than SSS. A formal endorsement from the RPM Office has been obtained to exceed the US$200,000 threshold normally applied to CQS. 13. Active support will be provided by the Bank at various stages of the procurement process, including the hiring of a qualified Procurement Management Firm, the preparation of Terms of Reference and short-list request for proposals, and bidding documents. The Bank team will be strengthened with the relevant technical expertise to provide the required technical inputs (specifications and TORS as well as teaching materials, IT equipment, medical and lab equipment) 14. The overall project risk for procurement is high. C. Procurement Plan 15. The government has prepared an overall procurement plan for project implementation which provides the basis for the procurement methods, and a draft procurement plan for the first six months with schedules and processing times. This plan, agreed with the government during negotiations, will be available at the MOHSW. It will also be available in the Project database and on the Bank s external website. The Procurement Plan will be updated annually or as required to reflect the actual project implementation needs and improvements in institutional capacity. D. Frequency of Procurement Supervision 16. Three to four supervision missions will be conducted each year to visit the field and to carryout a post-review of procurement actions. The procurement post-reviews should cover at least 20 percent of contracts subject to post-review. In addition, post-reviews of in-country training will be conducted from time to time to review the selection of institutions/facilitators/course contents of trainees and justifications thereof, and costs incurred. 36

45 17. Procurement Audits: Not later than three months after the end of each financial year, the MOHSW will submit to the Bank a procurement audit report prepared by a qualified auditor based on approved TOR incorporated in the project implementation manual. The audits would: (a) verify that the procurement and contracting procedures and processes followed during project implementation are in accordance with the Grant Agreement ; (b) verify technical compliance, physical completion, and price competitiveness of each contract in the selected representative sample; (c) review and comment on contract administration and management issues as dealt with by participating agencies; (d) review capacity of participating agencies in handling procurement efficiently; and (e) identify improvements in the procurement process in the light of any identified deficiencies. 18. Contract Management and Expenditure Reports: The MOHSW will submit contract management and expenditure information in quarterly reports to the IDA. E. Details of the Procurement Arrangements Involving International Competition 1. Goods, Works, and Non-consulting Services (a) List of contract packages to be procured following ICB and direct contracting: i Review by Expected Domestic Bank bid- ;! + Contrapct Estimated Procurement P- preference (prior/ opening (descri tion) cost method - Q (yedno) post) date Teaching E No No Prior Mar ,000 Materials - No No Prior Mar 08 IT Equipment 855,000 ICB and accessories Office 180,000 equipment Alternate 300,000 electricity Medical and laboratory 1,980,000 equipment (including maintenance and training) Basic + equipment 200,000 package for clinics 200,000 Equipment and services 100,000 I ICB ICB Direct Contract-IAPSO Direct Contract- IAPSO No - No - No - No No - No - No No No No No Prior Prior Prior Prior Prior Prior Nov 07 Mar 08 Mar 08 Sept 07 August 07 37

46 Rehabilitation of the JFK Wards, Dogliotti Medical colleges and referral centers receiving equipment 8oo ooo Direct contractslshoppingtextension No No (b) ICB contracts estimated to cost above US$200,000 per contract and all direct contracting will be subject to prior review by the Bank. 2. Consulting Services (a) List of consulting assignments with short-list of international firms. n 3 4 Description of assignment Project Management Recruitment of the independent Procurement Management Firm Estimated cost onitoring and Selection method oordination CQS Prior 1 Aug2007 Comments three-year contract Project Financial Auditor Procurement audits Project Coordinator Financial Specialist Supervisor for equipment logistics and rehabilitation works Policy Development S Financing Contracting Health Labor Market Dynamics Decentralization Human resources 48,000 I LCS 30,000 c 100,000 IC 95,000 IC 95,000 IC 95,000 IC Prior Prior July 2007 Prior Oct 2007 Prior Oct 2007 Prior Oct 2007 Prior Oct 2007 three -year contract Training 424,000 CQSISSS Prior Sept

47 19. (b) The selection process that lead to the compilation of a pool of experts or a list of preselected consulting firms and/or individuals as well as standard TORs developed by the Recipient for a series of assignments, would be subject to Bank prior reviews. Similarly, the terms of employment and performance monitoring measurement of Key Project management staff and health services providers will be subject to prior review by the Bank. (c) Short-lists composed entirely of national consultants: Short-lists of consultants for services estimated to cost less than US$lOO,OOO equivalent per contract may be composed entirely of national consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines. I?. Prior Review 20. All contracts not subject to prior review will be post-reviewed Thresholds, Procurement Methods, and Prior Review Requirements - Expenditure - No category Contract value threshold (US$) 500,000 or more Less than 200,000 Procurement method ICBI Other methods as agreed NCB 1 Works 50,000 or less Shopping Contracts subject to prior review (US$ ) All contracts First 3 (three) contracts None All values 200,000 or more Direct Contracting Extension of existing contracts ICB All contracts All contracts Less than 200,000 NCB First 3 (three) contracts 2 Goods and Services (other than Consulting Services) Less than 100,000 50,000 or less All values NCB Shopping Direct Contracting Extension of existing contracts U.N. Agencies None None All contracts 100,000 or more (firms) QCBS, CQS, LCS QCBS, CQS, LCS All contracts 3 - Consulting Services Less than $100,000 (firms) Individuals (All) All Values QCBS, CQS, LCS IC Single-source selection Extension of existing contracts Qualifications of Proposed pool of consultants + TORs and Terms of Employment Qualifications of proposed pool of consultants + TORs and Terms of Employment All contracts 39

48 ANNEX 6. IMPLEMENTATION AND MONITORING ARRANGEMENTS 1. The Project will be implemented by the MOHSW with the assistance of the Program Coordination Team (PCT), Office of Financial Management (OFM), and Project Financial Management Unit (PFMU) in the Ministry of Finance (MOF) which will handle fiduciary aspects related to financial management, disbursement, audit functions, and procurement. The capacity of the MOHSW will be strengthened during the Project through recruitment of specialists in the area of financing, procurement, budgeting, accounting and project management. 2. Project implementation period: October 1,2010. The project will be implemented from October 1, 2007, to A. Governance and Accountability 3. A Steering Committee, chaired by the Minister of Health and consisting of the senior management team from the MOHSW will be responsible for overall project oversight and policy guidance. This committee already exists and has been meeting regularly. The Steering Committee is supported by a Technical Committee, which also exists and has been meeting to work out issues related to donor harmonization and funding mechanisms to allow smaller donors a vehicle for supporting the MOHSW programs. Finally Working Groups have been established to elaborate the activities and procedures to implement the different pillars of the National Health Plans. This includes drafting bid specification for procurement of equipment? TORS for consultant services? and architectural plans for rehabilitating physical facilities. B. Implementation Arrangements and Plans for Strengthening Core Capacity of the MOHSW 4. The Project will be implemented through the core line departments of the MOHSW, and will provide support to strengthen and expand some of their central functions. 5. Overall responsibility for the Project will be vested in the Minister of Health who will be supported by a Program Coordination Team (PCT) and technical specialists drawn from the line departments of the MOHSW. 40

49 6. The Deputy Minister for Planning Research and Development-will be responsible for implementation of the following components of the Project: Support Systems-management support (leadership training), policy development and information systems, policy monitoring and evolution system. 7. The Deputy Minister of Health Services (Managing Director)-in close collaboration with the managers from recipient health clinics, health centers, county health services, JFK hospital, training centers (medical, nursing, and technical training schools) and Dogliotti College of Medicine and Ministry of Education-will be responsible for implementation of the following components of the Project: Systems Support-supply Human Resources-new chain management, communications, and transportation staff hired on contracts, updating teaching curriculum Rehabilitation of Infrastructure and Equipment-clinics, basic health center, referral centers including JFK and teaching facilities. 8. The Deputy Minister for Administration-in close collaboration with other branches of the ministry, the MOF, and external partners-will be responsible for the following components of the Project: Support Systems-management support (finance, disbursement, and procurement) Human Resources-hiring new health personnel. 9. The Deputy Minister for Social Welfare-in close collaboration with other branches of the ministry-will be responsible for a number of critical social programs that interact with the activities supported by the Project. Once a National Policy and Plan has been developed for Social Welfare, future World Bank Group support would also be considered for this area of work. Technical assistance will be provided by the partner agencies (World Bank Group, USAID, DFID, EU, and others) to strengthen the core capabilities of the MOHSW core branches so that they can perform their functions competently. C. Transition Management Support 10. Given the urgent nature of the Project, the short time frame for implementation, and the limited capacity of government, it is agreed that financial management and procurement staff from MOHSW will initially seek support from technical staff in other ministries that have experience implementing Bank projects to develop their own internal capabilities. It is expected that they would need such support for two or three rounds during the first year of the project. D. Project Management through MOHSW line Departments 11. Because the basic elements of the Project are designed to strengthen the capacity of the MOHSW and related institutions in running the existing health services and health education system, it is particularly important that support provided under the Project be directly focused on capacity building, both at the management and organizational level. All technical assistance provided under the Project should therefore be fully integrated into the function and physical location where staff in MOHSW work. A local counterpart to all external staff should be recruited for strategic management and implementation support. 41

50 12. The Project will support hiring of a senior management adviser to work directly with the minister and the management team comprised of the four deputy ministers. Funds will be made available for leadership training for the senior echelon of policy makers and managers in collaboration with similar support provided by USAID. 13. The Project will hire a financial management specialist, internal auditor, and procurement agency to support the finance and procurement staff working with the OFM under the Deputy Minister of Administration. 14. The Project will hire a project coordinator and other specialists to support the technical teams responsible for implementing the project under the Deputy Minister of Health Services. 15. And the Project will hire several specialists to support the technical staff who will work on policy development under the Deputy Minister of Planning in executing the planned policy development studies. 16. Ofice of Financial Management (OFM) in MOHSW under Deputy Minister of Administration. The financial functions of the Administration branch of the MOHSW will be strengthened through technical assistance provided by DFID in several main areas of activity: Budget, disbursement, accounting, payroll, project management, auditing, donor coordination, and so forth (see figure). The Project will provide support, in addition to the long-term technical adviser that would be provided by DFID, in establishing a functional new Office of Financial Management. Office of Financial Management 17. Reporting: Full details of Project, (including outcome and results indicator data, analysis, and recommendations) will be provided in regular quarterly reports as well as audit reports. 0 0 Quarterly progress reports (including financial and procurement status reports) will be prepared by the PCT on the basis of project implementation plan. Bank supervision missions will be conducted quarterly (jointly with the USAID, EU, DFID, Irish Aid, and other major partners). 42

51 An Implementation Completion Report (ICR) will be prepared at the end of the Project and presented within six months of the closing date of the Grant. 18. The monitoring activities will verify if project objectives are being achieved, as well as financial management and procurement aspects. Bank Supervision 19. To ensure a fast pace of implementation, an experienced Bank team of specialists will undertake quarterly supervision and implementation support missions. In addition to Bank staff, two Technical Specialists will be brought in to the team for specific areas of expertise. 43

52 ANNEX 7. PROJECT PREPARATION AND APPRAISAL TEAM MEMBERS Appraisal Appraisal RCC Review PID to PIC ISDS to PIC Planned/ actual March 10, 2007 May 3, May 15,2007 I Mav I,, Board ADDroval I June 14,2007 A I Planned Effectiveness Mid-term Review Closing Date October 1,2007 December, 2008 October 1,2010 Bank staff and consultants who worked on the Project included: Management Team Mats Karlsson Luigi Giovine Eva Jarawan Core Technical Team Alexander S. Preker Hortenzia Beciu Frank Baer Daniele A-G. P. Jaekel Adriana Cunha Costa Ruth Mulahi Country Director Country Manager Sector Manager Lead Economist, TTL Public Health Specialist, Consultant Health Systems Specialist, Consultant Operations Analyst Program Assistant Team Assistant AFCW1 AFMLR AFTH2 AFTH2 AFTH2 Independent AFTH2 AFTH2 AFTH2 Bank Country Team Paul Kriss Sr. Economist/Cluster Leader AFMLR Kremena Ionkova Operations Officer AFMLR Eduardo Brito Sr. Counsel LEGAF Modupe Adebowale Sr. Finance Officer LOAG2 Jonathan Nyamukapa Sr. Financial Management Specialist AFTFM Samuel Bruce-Smith Financial Management Specialist AFTFM Amadou Tidiane Toure Lead Procurement Specialist AFTPC Anthony Mensa-Bonsu Procurement Specialist AFTPC Ferdinand Tsri Apronti Procurement Specialist AFTPC Warren Waters Regional Environmental and Safeguard Adviser AFT'QK Thomas Walton Environmental Specialist ENV 44

53 ANNEX 8. APPRAISAL: ECONOMIC AND FINANCIAL SUSTAINABILITY 1. During the civil war, government financing of all public services significant decreased. Funding for the health sector consisted mainly of direct out-of-pocket payments to providers and indirect support from the international NGO community. Context 2. The economy is now recovering, with an estimated nominal GDP reaching US725 million in FY06/07 (table 1). The real GDP growth rate for the same period is estimated at 7.7 percent, increasing to over 10 percent in Government revenues, currently estimated at US120.9 million, are expected to increase as embargos are lifted and trade resumes. Real GDP per capita in (1992 values) i s estimated at US120.9 in FY06/07, projected to reach US170 in Table 1. Selected Economic and Financial Indicators, Source: IMF Total government spending on health care is estimated at US$10.1 million for FY06-07, 16.8 percent of total health care expenditure (table 2). Donor spending has been estimated at around US30 million to US35 million (50 percent of total health care expenditure). Based on a recent household survey, out-of-pocket spending has been estimated at 3 percent per capita of total household expenditure for a rural and semiurban population sample with an average income of 749 Liberties per capita per month. Without adjusting for rural urban differences in household spending, this would indicate that total private expenditure on health care is at least US17.3 million. Adjusting upward for the higher spending in urban areas, private spending can be estimated at US20 million (33 percent or more of total health care expenditure). Government Private Donors

54 4. Table 3 provides an estimate of per capita and total expenditure needs for The projections are based on an assumption that the per capita expenditure of US$12 in 2007 will increase to US$15 in 2008, US$18 in 2009, US$18 in 2010, and US$17 in Agency and overhead costs are estimated at 33 percent. The annual population growth rate is estimated at 2.45 percent. rable 3. National Health Plan Multiyear Budget, (US$) Year Area Total" Human resource for health 15,300,000[ 19,149, ,608, ,079,000 74,136,000 Health support system Basic package (PHC) Infrastructure Social welfare Subtotal Transition gap and health plan implementation costs Total 6,800,000 15,300,000 1,700,000 1,700,000 40,800,000 13,600,000 54,400,000 6,963,000 19,149,000 1,741,000 1,741,000 48,743,000 16,247,000 64,990,000 7,130,000 19,608,000 8,913,000 1,783,000 57,042,000 19,014,000 76,057,000 10,952,000 20,079,000 12,778,000 1,869,000 65,757,000 21,904,000 87,617,000 31,845,000 74,136,000 25,132,000 7,093, ,342,000 70,765, ,064,000 Issues 5. Despite anticipated economic recovery and high growth rates, Liberia will remain one of the poorest countries in the world during the next decade, failing to reach a per capita income of US$1 per day by 2015, the target date for the Millennium Development Goals (MDGs). A. Severe finding shortfall and fragmentation in the mobilizing of health care$nancing 6. The MDG spending target is around US$34 per capita (WHO Commission on Macroeconomics and Health 2003; World Bank 2004; and UN Millennium Development Project 2005). At an estimated population of 3.2 million in 2006, spending on health care in Liberia would have to increase to US$108 million to reach this goal. 7. As described above, the government i s currently spending about US$10.1 million on health care, while donor contributions in cash and kind has been estimated at around US$30 million to US$35 million, and direct contribution by households at US$20 million for a total of US$60 million. The current shortfall in reaching the MDG spending target of US$34 million in Liberia is therefore US$48 million In the short run, the MOHSW has set more modest targets (table 3). Early estimates indicate that the other major donors (USAID, EU, DFID, Irish Aid and others) are likely to provide annual support in the range of more than US$30 million per year during the next two years. This still leaves a gap in the range of US$15 million to US$25 million to sustain current and anticipated future funding needs. Although government expenditure on health is expected to increase each year, even under optimistic scenarios such funding alone will not reach the level of care provided by the health sector for vulnerable populations today. It is estimated that continued support from the donor community, including the Bank will be needed for at least another decade 8. The activities described below summarize the potential source of funds that would lever up the limited funds available through the Bank in supporting the full range of activities needed for 46

55 implementation of the government s health policy and plan. Funds provided by the Bank would therefore play a critical role in helping reduce the projected funding gap during the transition period. Table 4. Ongoing Financed Projects in Health and Other Sectors Relevant to Health (US million) Source: MOHSW, March 15, 2007, Liberia Donor Coordination Meeting; National Health Plan, Total Health Expenditure, Estimates. 9. In addition to failing to meet the funding gap for reaching the MDG targets in Liberia, existing financing is extremely fragmented. Many of the current NGO-sponsored and bilateral projects are focused on short-term humanitarian relief rather than medium- to long-term development goals. Such funding is known to be fraught with problems of volatility, lack of medium-term sustainability, and substitutions for government financing of priority health programs. Over time, these problems of high donor dependence are likely to become increasingly apparent. B. Heavy reliance on direct out-of-pocket payments for many health services 10. A recent household survey found that 80 percent of all households suffer from income poverty. At least 56 percent of the population lives in rural areas, and 80 percent of that population are subsistence farmers with little or no cash income. According to a recent UNDP report (2001), 86 percent of rural households are estimated to be poor and an additional 64 percent living in severe poverty. In large urban areas, 75 percent of households are poor, and 40 percent live in extreme poverty. 11. Illness contributes to poverty in two ways. First income is forgone when a key family breadwinner falls ill. Second, where the underlying health of health financing are weak, households often have to rely on out-of-pocket expenditure to pay for all or at least part of their health care costs. 12. This is true in Liberia. A recent household survey indicated that households in semiurban and rural areas spend twice as much on health care (US$20 million) as the government itself (US$lO.l million). In urban areas, the cost of a medical visit can be as high as US$25; visits involving an operation 47

56 or other specialized procedure can cost much more. In rural areas, the reference price of a visit is 50 Liberties for adults and 25 for children., 13. Although more work is needed to fully understand the incidence of the financial burden of illness, experience from other countries indicates that out-of-pocket spending on health care can have a significant impoverishing effect. Illness can plunge both poor and better-off households into poverty. C. Fragmented payment systems and weak per$ormance incentives 14. Most health care facilities in Liberia receive some form of support from NGOs or relief organizations. Sometimes the external support is provided in-kind through direct staffing of hospitals and clinics with doctors, nurses, and other health personnel. At other times, the in-kind support involves donation of equipment, drugs, and supplies. Estimates indicate that as many as 80 percent of the public service delivery providers now rely some form of in-kind contributions from the international donor community. 15. In addition in-kind contributions, staff working in many publicly run health care facilities receive some financial support from the NGO community. The monthly pay scale for nurses in public clinics is around US$21 dollars and US$78 for doctors. In the private NGO sector, the standard income is US$250 a month for nurses and up to US$450 for doctors. To motivate staff working in public facilities, some NGO provide an incentive (salary top-up) that often doubles the staff income. 16. With some private and NGO health care providers paying staff as much as US$2,000 or more a month and a new influx of donor funding through vertical funding streams, the Ministry of Health faces a major challenge retaining and motivating its own health care providers and staff. Strategy A. Short Term Provide emergency bridge funding; for the health sector at the time of the Partner Forum 17. During the immediate post-conflict period, many needs compete for scarce resources. A compelling case has already been made for rebuilding the underlying infrastructure of the public sector and stimulating private sector development. Safe roads, transport, clean water, sanitation systems, improved communication systems, electrical power, and other public utilities are all critical not only for economic recovery but also for a functioning health sector. 18. No priority, however, is more urgent than addressing the health needs of the population to foster social reconciliation and secure a social safety net for the poor and other vulnerable populations during the transition. The febrile child suffering from malaria, an acute respiratory infection, or severe diarrhea will die within a few hours without effective interventions from competent staff. The pregnant mother suffering from post-partum bleeding will die within a few minutes. 19. There are cost-effective and affordable interventions for all these conditions. Yet large segments of the population will soon not have access to them. All require a sustainable source of funding without the erratic fluctuations characteristic of today s splintered and poorly coordinated donor funding. 20. At the time of Liberia s Partners Forum in February 2007 addressing the health funding gap and securing a sustainable source of funding for critical health services were highlighted as the highest priority for the international donor community. The donor community pledged a clear commitment to 48

57 providing donor assistance for the health sector that will directly address the imminent withdrawal of many relief organizations over the next three years. Based on preliminary estimates, this would require an additional US$15 million the first year, US$20 million the second year, and US$25 million the third year. Use subsidies, not exemption policies, to deal with the health needs of the poor 21. Exemption polices may be popular in other settings, but they make no sense in Liberia, where most public health care providers are underfunded or not paid at all. Instead, an explicit subsidy program should be put in place to pay for health services provided to the poor to ensure they receive the same level and quality of care as that received by others. 22. The subsidies should be aggregated at the community level to provide some cross-population risk-sharing and buffer against variations in individual expenditure needs. This could be achieved by a simple population risk-adjustment, used by many NGOs providing care to specific population groups within their catchments areas. 23. At the same time, a program should be introduced immediately to conduct routine and repeated surveys of benefit incidence in health care spending to ensure that the poor and other vulnerable groups are not adversely affected during the recovery period. Contract services from NGOs and the private sector whenever possible 24. By most accounts, the current support provided by the NGO community and other nongovernmental entities has been highly successful in delivering critical health services during the war years and immediate post-conflict period. 25. The salary top-ups and other incentive payments to health care providers that have been used by the NGO community have created a performance-based environment for personnel in the NGO sector. As the Ministry of Health begins to implement its new health policy, much can be learned from this experience. 26. During and after the transition period, building on some of these successful experiences will be important. One possibility would be for the Ministry of Health to continue contracting for services directly with the NGO community and other nongovernmental providers while encouraging them to employ Liberians, as expatriate staff from the relief agencies move on to other priority areas. 27. This would serve two purposes. First, it would avoid wasteful duplication in areas where the NGO community already provides functional health services. Second, it would allow the Ministry of Health to concentrate on its policy and stewardship roles rather than as a producer of health services. B. Long Term Fiscally sustainable source of financing 28. The government s health policy calls for an increase in public spending on health care from its current level of 8.4 percent of total government spending to 15 percent. This represents an additional US$8 million over the current spending level of US$lO.lmillion but still leaves the sector US$90 million short of reaching the US$34 per capita MDG target. 49

58 29. Donor contributions in cash and kind have been estimated at between US$30 million and US$35 million, and direct contribution by households at US$20 million. This would still leave Liberia with a US$40 million shortfall, even if the government increases its contribution to the 15 percent spending target and donors maintain their currently high commitment to development assistance. 30. A steady GDP economic growth rate of 5 percent over the next decade would double existing resources devoted to the health sector. This would allow Liberia to reach US$34 dollars per capita by the year Risk Pooling 31. As described earlier, a recent household survey indicated that households in semiurban and rural areas already spend twice as much on health care (US$20 million) as the government itself (US$10.1 million). This indicates that households are both able and willing to contribute toward the cost of illness. Given the likely limits to the government funding for health during the next few years, it will be important to channel some household spending on health care through financial risk-management mechanisms such as insurance. This will help reduce the impoverishing financial burden of the current high reliance on out-of-pocket user charges. Contracting 32. In a context where the Ministry of Health is likely to channel at least part of its resources through contracts with non governmental providers, it will be important to introduce new performance-based incentives for providers. 50

59 ANNEX 9. TECHNICAL AND FIDUCIARY APPRAISAL A. Technical 1. The Project is designed to underpin the MOHSW National Health Policy and National Health Plan which emphasizes several critical challenges that need urgent attention to avoid a significant decrease in health services during the transition from relief to longer-term development assistance. The Project is designed to address the following critical issues highlighted by these reports: High burden of disease caused by infectious disease(among the worst in the world) Severe staff shortages compounded by low pay, lack of motivation, weak skills, and uneven distribution of the health workforce Destroyed infrastructure and depleted medical equipment and supplies Significant decrease in institutional foundations needed for a functioning health sector, leaving weak policy making and management capacity, broken supply chains in the delivery of supplies and drugs, poor health information, and poor telecommunications systems. 2. Being new to the health sector in Liberia, the Bank worked closely with other donors (USAID, EU, DFID, Irish AID, PMI, Global Fund, GAVI, and UNITAID), UN partners (UNICEF, WHO, and UNFPA), NGOs and NGOs that have been supporting Liberian government efforts to develop and start implementing its comprehensive National Health Policy and National Health Plan. 3. Despite the very weak institutional context of Liberia today, the Project is underpinned by good analyses and has been designed in collaboration with all the other major donors. Appraisal of these documents (which are available for review) and counterpart agencies by the Bank and its other development partners indicated that they were satisfactory for the purpose of implementing the Project. 4. Technical assistance and training will nevertheless be needed to ensure that the MOHSW and other key stakeholders strengthen their technical capacity during the course of the Project. This includes a need for immediate assistance in setting up the financial management, procurement, and project implementation processes as well as the preparation of bid documents and terms of reference for major consultancies that could be launched immediately after the planned Board date, June 14,2007. B. Fiduciary 5. The Project builds on the existing fiduciary experience arrangements established under other Bank projects. 6. The Project will not establish similar dedicated financial and project management units. Instead, its line departments will be responsible for: (a) ensuring steady progress of the procurement in accordance with an implementation schedule reviewed and approved by the Association; (b) ensuring satisfactory implementation of activities included in all contracts; (c) ensuring satisfactory maintenance of financial and accounting records; and (d) ensuring timely preparation of financial statements and reports for management and audit purposes. 7. The financial management assessment conducted during the project appraisal mission revealed that the MOHSW would need support in the following areas: (i) securing sufficiently qualified staff, (ii) upgrading accounting standards that will be acceptable to the Bank; and (iii) becoming familiar with the IDA procedures for financing, procurement, disbursement, reporting, and auditing. 8. To address these weaknesses, it was agreed that MOSW will recruit additional staff to work with MOHSW staff in the areas of executive management, financial management, procurement, and project 51

60 management. This support would be provided in addition to the long-term technical adviser to be provided by DFID in establishing a new Office of Financial Management within the Administrative Department of the MOHSW. In the beginning of the Project, MOHSW staff will receive guidance from technical staff working in other ministries who have experience implementing Bank projects. 52

61 ANNEX 10. ENVIRONMENTAL AND SOCIAL SAFEGUARDS FRAMEWORK A. Environmental Safeguards 1. The Project is rated as a Category B, and only the Environmental Assessment policy would be triggered (Environmental Assessment, OP/BP/GP 4.01). 2. The project. The Project consists of three components for: (a) strengthening support systems; (b) scaling up human resources; and (c) rehabilitation of some essential infrastructure and equipment. The Project will finance items such as technical assistance and training services; rehabilitation and reequipment of health facilities including solar panels, X-ray and operating room equipment; books and other teaching material; equipment for teaching labs; electrical and electronic connectivity (computer equipment, Internet and satellite connections, basic solar lighting systems); ambulances and other medical transport vehicles; communication equipment such as radios and cell phones. 3. As this Project is an emergency operation, of small scope (US8.5 million) to be implemented in a short period of time (three years), it is expected that only a limited number of safeguard aspects would be handled as part of project implementation. However, it is planned that the Project will finance technical assistance to help government carry out a more general assessment of environment and social safeguards according to the Environmental and Social Management Framework (ESMF). This assessment would produce environmental and social management plans for implementation beyond the project life. Medical Supplies and Medical Waste Management Plan (MSMWMP) 4. The main environmental issues for this Project relate to the handling and disposal of supplies such as medical laboratory substances, X-ray films, and other medical products and waste generated during the provision of health care. It also involves some waste generated during rehabilitation of JFK and a couple of other health care facilities. No new construction would be financed under the Project and therefore there will be no land acquisition. The environmental issues relevant to the Project not only include medical waste management issues, but also construction-related issues like health and safety, contamination of surface water, soil erosion, loss of vegetation, and so on. These will be addressed within an Environmental and Social Management Framework (ESMF) which will include the production of a Medical Supplies and Medical Waste Management Plan (MSMWMP), to be completed six months after Project effectiveness Other Environmental Aspects. 5. The buildings to be renovated, though currently used as health facilities, are stripped-down concrete shells, so there would be no asbestos removal and disposal issues. The Project will not finance insecticides and/or larvicides for malaria control, so no vector management plan would be needed for project implementation. Dissemination of information 6. In accordance with Bank guidelines, the safeguard-related documents produced under this Project will be made available at public sites and disseminated to all project-affected facilities and communities. All implementing partners will be instructed to carry out the MSMWMP in the areas where they intervene. 53

62 Bank input. 7. If deemed necessary, the Bank will include a specialist in medical waste management on its Implementation Support Team. A. Safeguard Policies Applicable? Safeguard Policies Triggered by the Project [XI Environmental Assessment (OPBP 4.01) [I Natural Habitats (OPBP 4.04) [I Pest Management (OP 4.09) [I Involuntarv Resettlement (OPBP 4.12) [I Indigenous Peodes (OD 4.20) [I Forests (OPBP 4.36) [I Safety of Dams (OPBP 4.37) [I Cultural ProDerty (draft OP OPN 11.03) [I Proiects in Disputed Areas (OP/BP/GP 7.60)a [I Projects on International Waterways (OPBP/GP 7.50) a. By supporting the proposed project, the Bank does not intend to prejudice the final determination of the parties' claims on the disputed areas. B. Social Safeguards 8. Although some civil works are to be implemented by the Project, it is only minor rehabilitation for a few health facilities. These health facilities are all in operation, so no issues of involuntarily displaced persons are expected as a result of the Project. Any other potential social safeguard issues for the Project would be included in the ESMF described above. Broader social issues for the health sector will be covered during the production of a national plan for the longer term, which will be financed by the Project. C. Arrangements for Recipient to Address Safeguard Issues 9. The general capacity of the government in the area of environmental and social safeguards is weak. Technical assistance would be provided under the Project to assist government in producing the required documents for project implementation (the MSMWMP), as well as for carrying out a more general assessment of environmental and social safeguard needs for the health sector for implementation beyond project life (the ESMF). 54

63 ANNEX 11. SUMMARY OF GOVERNMENT S POLICY AND PLAN FOR HEALTH A. National Health Policy ( ) Introduction 1. This health policy has been formulated at a crucial time in Liberian history. After decades of turmoil, the country is enjoying peace and stability, under the watch of a legitimate government, recognized and supported by the international community. However, the scale of the destruction i s such that it will be overcome only after decades of sustained efforts. Aware of the complexity and risks of the course ahead, the Ministry of Health and Social Welfare (MOHSW) has pressed on with the formulation of a health policy and an accompanying National Health Strategic Plan explicitly aimed at guiding decision makers through the next five years. The health policy will evolve over time as data become more reliable, health sys terns are strengthened and financial and human resources become more secure. The most urgent priorities will be addressed first, and other less pressing, but equally important challenges will be addressed in the near future, once the system has acquired additional capacity. The health sector faces two huge, competing challenges: i. Expanding access to basic health care of acceptable quality. This will be possible only by: (a) Attracting additional investments in infrastructure, human resource development, and management systems, and resources to fund recurrent expenditures (b) Reducing systemic inefficiencies and improving operations management. ii. Establishing the building blocks of an equitable, egective, efjicient, responsive, and sustainable health care delivery system. 2. A social welfare policy has not yet been developed as substantive preparatory work is still needed. Therefore, a major review of the social welfare field will be carried out in The review will start with a thorough situation analysis where issues such as poverty, violence, displacement, unemployment, gender inequality, disability, and vulnerability will be explored in detail. The new social welfare policy will build on this assessment and will aim at restructuring a sector that is now fragmented and under-resourced, and is thus unable to address the enormous needs of the Liberian population. Mission and Vision 3. The mission of the MOHSW is to reform the sector to effectively deliver quality health and social welfare services to the people of Liberia. Its vision is a nation with improved health and social welfare status and equity in health. The Ministry regards health as a basic human right, and as such has devoted itself to a ensuring that every Liberian will have access to health and social welfare services regardless of economic status, origin, religion, gender or geographic location. The Ministry wishes to serve as a model of post-conflict recovery, and is committed to efficient use of its resources to achieve maximal health outcomes at the lowest possible cost. Policy Orientations 4. The health sector will be restructured to reflect the government s commitment to decentralization. Consistent with this mandate, the National Health Policy and Strategic Plan takes a primary health care approach, focusing on the community and the county as a locus for decision-making in relation to resource management and service delivery. The MOHSW is committed to ensuring equity and quality through the delivery of a Basic Package of Health Services, including essential preventive 55

64 and curative care services to be provided at each level of the health system-from the community to referral hospitals. To realize its potential, the system must be supported by adequate referral capacity. 5. The County Health and Social Welfare Service Administration is the operational management structure, which includes the County Health and Social Welfare Team (CH&SWT). County health authorities will manage county health facilities. They will be responsible for financial management and personnel and will be fully accountable to local constituencies, as well as to overseeing public bodies. The Ministry will focus on health legislation and law enforcement; policy formulation, revision and enforcement; resource mobilization and allocation, national and long-term planning; broad health sector programming; monitoring and evaluation; and technical oversight of service delivery, regulation, and major research and development initiatives. The Ministry will work collaboratively with a diverse set of public, private, and NGO health sector partners to ensure full coverage of health services for the Liberian people. 6. The national health system will consist of three main levels of care-primary, secondary, and tertiary. Clients will directly access primary health care services and be referred to higher levels of care, except in cases of emergency. The Government of Liberia is committed to financing health care at the highest level compatible with its revenues, taking into consideration competing priorities. As such, the government will strive to progressively increase the share of its budget apportioned to the health sector. A mix of other financing strategies (including health insurance, and other forms of prepayment) will be pursued. The Ministry has suspended the administration of user fees at the primary health care level. The suspension will remain in place until the socioeconomic and financial management of the system improves. 7. The cost of revitalizing the devastated health system will be enormous, vastly surpassing internal revenues. Donors will be invited to support the recovery process by channeling their contributions in predictable, effective, and efficient ways, consistent with government policies. The present fragmentation of services will be addressed by changing the way external assistance is managed by negotiating with the Ministry of Finance and donors to introduce financial packages that are appropriate to the current Liberian context. 8. A Basic Package of Health Services (BPHS) is the cornerstone of the national health care delivery strategy. The BPHS lists in detail a standard set of prevention, care, and treatment services that will be available at each level of the health system. BPHS components are affordable, sustainable interventions that have been chosen on the basis of their effectiveness in reducing morbidity and mortality. The MOHSW recognizes that human resources are the most valuable asset of the health sector. The Ministry will ensure that the right health workers are in the right place at the right time with the right skills to deliver the basic package of health services. A long-term comprehensive program will be launched to produce a gender-balanced health workforce with the skill mix needed by the health services at different levels of care. 9. The Ministry will conduct a thorough study of existing facilities (both public and privately owned), including utilization, population distribution, access to roads and transportation, operational costs, and socioeconomic factors to determine the number, size, and types of health facilities needed to compose the future health care network. The Ministry will establish objective planning criteria with the collaboration of concerned parties. Primary, secondary, and tertiary health levels shall be provided the equipment necessary to discharge the functions attributed to them by the BPHS. 10. The Ministry will restructure the procurement system to achieve efficiency gains and ensure a reliable supply of effective drugs and commodities. A flexible, decentralized, competitive internal distribution system will be established in collaboration with concerned partners, guided by the National 56

65 Drugs Policy. The essential drugs list, standard treatment guidelines, and formulary will be updated to ensure consistency with the BPHS. 11. The MOHSW will develop strong internal and external communication capacity, so that it can convey the rationale behind the National Health Policy and resource allocation decisions to concerned audiences in clear, understandable ways to foster trust and openness. The Ministry will develop a policy monitoring and evaluation system, based on policy goals and an agreed set of indicators. The system will monitor the enforcement of the policy against the overall performance of the health sector and the health impact of development initiatives through analysis of routine health information, surveillance data, and periodic survey results. The Health Management Information System (HMIS) will be strengthened in order to better collect, organize, and maintain relevant data in a timely way. 12. The enforcement of the policy will be continuously monitored. Progress and constraints shall be regularly communicated to the public and health stakeholders. The MOHSW will invest in the establishment of adequate regulatory capacity for legislation, standards setting, inspection and operational guidance. The Ministry will seek to strengthen technical and procedural capacity of the regulatory body and provide adequate resources to ensure its operation according to objective and transparent criteria. 13. The Government of Liberia will take the lead and ownership in mobilizing funding and ensuring the availability of resources for the effective implementation of the policy. The government will strive to increase its health spending progressively to meet the Abuja target of 15 percent of national budget, with a specific commitment to supporting the implementation of this policy. The Ministry will pay particular attention to increasing the effective absorption of funds allocated to health and ensuring long-term funding for critical health services. A Health Management Fund will be established to purposefully support policy implementation and review mechanisms. B. National Health Plan ( ) Context of the National Health Plan: 14. The National Health Plan outlines the objectives, strategies, and resources to reform the health sector to effectively deliver quality health and social welfare services to the people of Liberia. The MOHSW vision is improved health and social welfare status and equity in health; therefore, becoming a model of post-conflict recovery in the health field. The five-year health plan ( ) will operate within the framework of the Interim Poverty Reduction Strategy (IPRS) and also guide the transition from humanitarian to development assistance. Components of the National Health Plan: 15. The National Health Policy and Plan are designed around four strategic orientations of Primary Health Care, Decentralization, Community Empowerment and Partnerships for Health. The operational and integrated framework for implementing the National Health Policy and Plan is based on four key components-( 1) Basic Package of Health Services; (2) Human Resources for Health; (3) Infrastructure Development; and (4) Support Systems. 16. The Basic Package of Health Services (BPHS) is the cornerstone of the National Health Plan. It defines an integrated minimum package of standardized prevention and treatment services. The BPHS will be adapted for each level of the health system-community, health clinic, health center, county hospital, and tertiary hospital. The BPHS will be introduced incrementally to become functional in 70 percent of existing health facilities by the end of

66 17. Human Resources for Health will ensure that the right numbers of health workers are in the right place, at the right time, and with the right skills to delivery the BPHS. This component will (1) Ensure a coordinated approach to human resource planning; (2) Enhance health worker performance, productivity and retention; (3) Increase the number of trained health workers and their equitable distribution; and (4) Ensure gender equity in all aspects of employment. 18. Infrastructure Development will increase geographic access to the BPHS, especially for clinics and health centers, which comprise 94 percent of facilities. County health development plans will be prepared by County Health Teams in collaboration with districts, health facilities, communities and local partners. The National Health Plan in years one and two will consolidate health work in existing health facilities. At the same time longer-term plan for major rehabilitation and construction will be prepared in the future. 19. Support Systems are the planning and management functions required to deliver the BPHS. This includes Policy Formulation and Implementation; Planning and Budgeting; Human Resources Management; Health Management Info Systems; Drugs and Medical Supplies; Facility and Equipment Maintenance; Logistics and Communication; Supervision, Monitoring and Evaluation; and Stakeholder Coordination. The Plan will incrementally and pragmatically decentralize decision making, especially to the county level. 20. These components will be supported through health financing and implemented in collaboration with a variety of partnerships for health. The integrated strategic National Health Plan is like a child whose body is like a child whose head (the BPHS) guides its heart (its capable human resources); and whose arms (its strong support systems and infrastructure) and legs health financing and partnerships) support the body. Costing and Financing the National Health Plan: 21. Costing and financing the National Health Plan requires a balancing investment costs with anticipated funding. While Millennium Development Goals recommend a US$34 per capita investment level, experience from other post-conflict countries indicates that rebuilding health systems can begin with US$lO-$20 per capita. The proposed four-year budget of US$283 million is based on US$12 per capita and increasing to US$18 per capita. Health Support System Basic Package (PHC) 22. Financing of the National Health Plan will combine funding from four sources-( 1) the National Budget; (2) National Programs; (3) HumanitariadDevelopmental funds; and (4) Other Sources. The financing proposal shown below is based on the following scenario: 58

67 The National Budget: US$10 Million in 2007 and increasing to US$33 million by 2010; National Programs, Humanitarian and Developmental: Maintain the current US$40 million funding level by replacing humanitarian funding dollar per dollar with developmental funding; and Other Sources: NGO and private not-for-profit contributions (and potentially user fees). Financing of the National Health Plan (US$ million) Source of fundinn MOHSW + JFK (increasing to 15% of Nat. Budget) National Programs, Humanitarian and Develoument Funding Other Funding (NGO, BO, User Fees) Total Total Imdementation and Monitoring: 23. The MOHSW will coordinate partners and resources needed to implement the National Health Plan. Contracting mechanisms with NGOs will be selectively used for both geographic and programmatic focused projects. A comprehensive system for monitoring and evaluation of the Plan will also be put in place. 59

68 ANNEX 12. DOCUMENTS IN PROJECT FILES A B C Project Preparation Documents Identification mission -Aide Memoire, November-December 2006 Appraisal Mission -Aide Memoire, March 2007 Project Implementation Manual Bank Staff Assessments Interim Poverty Reduction Strategy, February, 2007 Health sector dialogues- Aide Memorie (December 2006) Report on Maternal and Child Health Status in Liberia and Immunization process (December 2006) Report Malaria Programmatic and Financial Gap Analysis in Liberia (December 2006) Report on Health Human Resources in Liberia (March 2007) Other MOHSW, 2007, National Health Policy and Plan, Liberia: MOHSW Government of Liberia, UN Agencies, 2006, The Comprehensive Nutrition and Food Security Survey, Liberia: UNICEF MOHSW, and USAID, June, 2006, Rapid Assessment of the Health Situation in Liberia, Monrovia: USAID MOHSW, Christian Health Association of Liberia, and UNICEF, 2001, Liberia National Nutrition Survey , Liberia: UNICEF Ministry of Planning and Economic Affairs, UNDP, September 2004, Millennium Development Goals Report, Monrovia: Government of Liberia Ministry of Health and Social Welfare, August, 2006, National Health and Social Welfare Policy, Monrovia: MOHSW UNDP, 2005, Immunizations rates among one year old, New-York: UNDP WHO, The World Health Report 2006: Working together for Health, Geneva: WHO UNICEF, 2006, Liberia country in Crisis at 60

69 0

70 t

71 ANNEX 14. COUNTRY AT GLANCE Liberia at a glance Key Development Indicators (2005) Population, mid-year (millions) Surface area (thousand sq. km) Population rowth (%) Urban popjation (% of total population) GNI (Atlas method, US$ billions) GNI per capita Atlas method, US$) GNI per capita [PPP, international $) GDP growth (%) GDP per capita growth ( 7) Liberia Sub- Saharan Africa , , (most recent estimate, ) Poverty headcount ratjo at $1 a day PPP % 44 Poverty headcount ratio at $2 a day [PPP: %I 75 Life expectancy at birth ( ears) Infant mortality (per 1,008 live births) 157 I00 Child malnutrition ( 7 of children under 5) Adult literacy, male (% of ages 15 and older) Adult literacy, female (% of ages 15 and older) Gross primary enrollment, male (% of age group) Gross primary enrollment, female (% of age group) I Access to an improved water source (% of population) Access to improved sanitation facilities (%of population) Low Income 2,353 29, , , May 2007 Age distribution, 2005 Female I M percent I Under-5 mortality rate (per 1,000) M 0 laso XKLl Liberia BSub-Saharan Africa Net Aid Flows s (US$ millionsj,,, Net ODA an official aid Top 3 donors (in 2004): United States United Kingdom Sweden rowth of GDP and GDP per capita (%) Aid (?A of GNI) Aid per capita (US$) Long-Term Economic Trends Consumer prices (annual % change) GDP implicit deflator (annual %change) Exchange rate (annual average, local per US$)l.O Terms of trade index (1997 = 100) Population, mid-year (millions) GDP (US$ millions) Agriculture 32.2 Industry 25.2 Manufacturing 6.9 Services 32.3 Household final consumption expenditure 66.1 General gov t final consumption expenditure 19.1 Gross capital formation (?A of GDP) L +GDP -GDP per capita (Average annualgrowth %) Exports of goods and services Imports of goods and services Note: Figures in italics are for years other than those specified data are preliminary estimates... indicates data are not available a. Aid data are for Development Economics, Development Data Group (DECDG) and PREM 4 (AFTP4), Africa Region. 63