APPRAISAL REPORT SUPPORT TO THE HEALTH SECTOR PROGRAMME REPUBLIC OF MALAWI

Transcription

1 AFRICAN DEVELOPMENT FUND MALAWI Language: English Original: English APPRAISAL REPORT SUPPORT TO THE HEALTH SECTOR PROGRAMME REPUBLIC OF MALAWI HEALTH DEVELOPMENT DIVISION ONSD SOCIAL DEVELOPMENT DEPARTMENT SEPTEMBER 2005 NORTH - EAST - SOUTH REGION

2 TABLE OF CONTENTS CURRENCY AND MEASURES, LIST OF TABLES, LIST OF ANNEXES, LIST OF ABBREVIATIONS, PROJECT INFORMATION SHEET, BASIC DATA SHEET, PROGRAMME MATRIX, EXECUTIVE SUMMARY Page (i ix) 1. ORIGIN AND HISTORY OF THE PROGRAMME 1 2. THE HEALTH SECTOR Health Status Policy and Organisation of the Health Sector Health Care Financing Major Problems of the Health Sector Activities of ADB and Other Donors THE SECTOR PROGRAMME Sector-Wide Approach (SWAp) Programme Objective Programme of Work (POW) Programme Costs Financing the Programme of Work Annual Work Plan Implementation Arrangements Funding Modalities Mechanisms for Monitoring and Evaluation Road Map ADF SUPPORT TO THE PROGRAMME Concept and Rationale Area and Beneficiaries Strategic Context Objective Description Environmental Impact Costs of the Road Map Financing the Road Map IMPLEMENTATION Executing Agency Institutional Arrangements Implementation and Supervision Schedules Procurement Arrangements Disbursement Arrangements Monitoring and Evaluation Financial Reports and Auditing 29

3 5.8 Aid Co-ordination PROGRAMME SUSTAINABILITY AND RISKS Recurrent Cost Implications Programme Sustainability Assumptions and Critical Risks PROGRAMME BENEFITS CONCLUSION AND RECOMMENDATIONS Conclusion Recommendations and Conditions for Grant Approval 34 This report was pre-appraised by Mr. W. MUCHENJE, Chief Health Analyst (ONSD.2), and Mr. F. Mvula, Senior Architect (ONSD), following their mission to Malawi in June 2004 and updated after a Follow-up Mission in July Enquiries should be addressed to Ms. A. Hamer, Director, ONSD (Extension 2046), Mr. T. B. Ilunga, Manager, ONSD.2 (Extension 2117), Mr. W. Muchenje (Extension 2443) and Mr. F. Mvula (Extension 3688).

4 i LIST OF TABLES Page 2.1 Major Causes of Out-Patient Morbidity Major Causes of In-Patient Mortality Distribution of Health Facilities by Owner and Type, Health Financing by Source MOH Budget ( ) Summary of Donors Supporting the Health Sector Cost of the POW Source of Financing the POW Cost of the Road Map Sources of Financing the Road Map Procurement Arrangements 26 LIST OF ANNEXES Number of Pages I Map of Malawi and Location of Programme Area 1 II SWAP Governance Organizational Structure 1 III Roles and Responsibilities of the Committees 3 IV Selected Indicators and Target for M&E on the SWAp/POW 2 V Disease Surveillance New Cases By Sex, Malawi, VI Disease Surveillance Inpatient Deaths By Sex, Malawi, VII Key Planning Documents of the MOH 1 VIII Implementation Schedule for POW 1 IX Programme Processing Schedule 1 X Bank Group Operations in Malawi 2 CURRENCY EQUIVALENTS (JULY 2005) National Currency = Malawi Kwacha (MWK) 1 UA = MKW UA = US$ WEIGHTS AND MEASURES 1 Kilometer (km) = 0.62 miles 1 Meter (m) = 3.28 feet 1 Hectare = 2.47 acres 1 Inch = 2.54 centimeters (cm) GOVERNMENT FINANCIAL YEAR July 1 to June 30

5 ii LIST OF ABBREVIATIONS AIDS Acquired Immuno-Deficiency Syndrome AWP Annual Work Plan CBC Community-Based Care CDR Crude Death Rate CHAM Christian Health Association of Malawi CHS Chief of Health Services DFID Department for International Development DHMT District Health Management Team DHO District Health Officer DIP District Implementation Plan EHP Essential Health Package EmOC Emergency Obstetric Care EU European Union FMIP Financial Management Implementation Plan GDP Gross Domestic Product GOM Government of Malawi GTZ German Technical Cooperation HIV Human Immuno-deficiency Virus HMIS Health Management Information Systems HSRG Health Sector Review Group ICB International Competitive Bidding IDA International Development Assistance IEC Information, Education and Communication IMR Infant Mortality Rate LC Local Competition LCA Local Currency Account LCS Least Cost Selection LIB Limited International Bidding MDGs Millennium Development Goals MPRS Malawi Poverty Reduction Strategy MOH Ministry of Health and Population MLG Ministry of Local Government MPRS Malawi Poverty Reduction Strategy NACP National AIDS Control Programme NCB National Competitive Bidding NHP National Health Plan NAS National AIDS Secretariat NGO Non-Governmental Organisation PCR Project Completion Report PHC Primary Health Care PMTCT Prevention of Mother to Child Transmission POW Programme of Work PS Principal Secretary RHCP Rural Health Care Project STD Sexually Transmitted Diseases SWAp Sector Wide Approach TB Tuberculosis TBA Traditional Birth Attendant TCR Technical Completion Report TMC Top Management Committee UA Unit of Account UN United Nations UNICEF United Nations Children s Fund USAID United States Agency for International Development WHO World Health Organization

6 AFRICAN DEVELOPMENT FUND iii 01 BP 1387 Abidjan 01 Cote D Ivoire Tel: Fax: BP 323, 1002 Tunis Belvedere, Tunisia Tel: Fax: PROGRAMME INFORMATION SHEET Date: July 2005 The information given hereunder is intended to provide some guidance to prospective suppliers, consultants and all persons interested in the procurement of works, goods and services for projects approved by the Boards of Directors of the Bank Group. More detailed information and guidance should be obtained from the Executing Agency of the Grant Recipient. 1. COUNTRY : Republic of Malawi 2. NAME OF PROGRAMME : Support to the Health Sector Programme 3. LOCATION : National Coverage. 4. GRANT RECIPIENT : Government of Malawi 5. EXECUTING AGENCY : Ministry of Health and Population P.O.Box 30377, Lilongwe, Malawi Fax : / Telephone : / PROGRAMME DESCRIPTION: ADF Support will focus on strategies to accelerate reduction of maternal and newborn mortality through the following programmes: I. Human Resources II Pharmaceutical and Medical Supplies III. Essential Basic Equipment IV Facilities Development V. Routine Operations at Service Delivery Level and VI Central Operations, Policy and Systems Development Programme Its implementation will require the following categories of expenditure: - Services - Goods - Works - Miscellaneous 7. TOTAL COST OF PROGRAMME : USD million

7 iv Government : USD million ADF : USD million (15 UA mill.) IDA : USD million DFID : USD million ( 100 mill) NORAD : USD million OPEC Fund : USD 8.00 million UNFPA : USD 0.10 million Other development partners : USD million 8. BANK GROUP FINANCE i) ADF Grant : UA million 9 DATE OF APPROVAL : November ESTIMATED STARTING DATE AND DURATION : March months 11. PROCUREMENT OF GOODS AND WORKS: International Competitive Bidding (ICB) Works >= USD 1,000,000; goods >= USD 250,000 National Competitive Bidding (NCB) Works >=USD 50,000 - < USD 1,000,000; Goods >= USD 30,000 - <USD 250,000 Short-Listing Technical assistance and training institutions. 13. CONSULTANCY SERVICES REQUIRED Short-term consultants for implementation of strategies to accelerate reduction of maternal and newborn mortality.

8 MALAWI COMPARATIVE SOCIO-ECONOMIC INDICATORS Year Malawi Africa Developing Developed Countries Countries Basic Indicators Area ( '000 Km²) Total Population (millions) , ,200.3 Urban Population (% of Total) Population Density (per Km²) GNI per Capita (US $) Labor Force Participation - Total (%) Labor Force Participation - Female (%) Gender -Related Development Index Value Human Develop. Index (Rank among 174 countries) n.a. n.a. n.a. Popul. Living Below $ 1 a Day (% of Population) Demographic Indicators Population Growth Rate - Total (%) Population Growth Rate - Urban (%) Population < 15 years (%) Population >= 65 years (%) Dependency Ratio (%) Sex Ratio (per 100 female) Female Population years (% of total population) Life Expectancy at Birth - Total (years) Life Expectancy at Birth - Female (years) Crude Birth Rate (per 1,000) Crude Death Rate (per 1,000) Infant Mortality Rate (per 1,000) * Child Mortality Rate (per 1,000) * Maternal Mortality Rate (per 100,000) Total Fertility Rate (per woman) * Women Using Contraception (%) Health & Nutrition Indicators Physicians (per 100,000 people) Nurses (per 100,000 people) Births attended by Trained Health Personnel (%) Access to Safe Water (% of Population) Access to Health Services (% of Population) Access to Sanitation (% of Population) Percent. of Adults (aged 15-49) Living with HIV/AIDS Incidence of Tuberculosis (per 100,000) Child Immunization Against Tuberculosis (%) Child Immunization Against Measles (%) Underweight Children (% of children under 5 years) Daily Calorie Supply per Capita Public Expenditure on Health (as % of GDP) Education Indicators Gross Enrolment Ratio (%) Primary School - Total Primary School - Female Secondary School - Total Secondary School - Female Primary School Female Teaching Staff (% of Total) Adult Illiteracy Rate - Total (%) Adult Illiteracy Rate - Male (%) Adult Illiteracy Rate - Female (%) Percentage of GDP Spent on Education Environmental Indicators Land Use (Arable Land as % of Total Land Area) Annual Rate of Deforestation (%) Annual Rate of Reforestation (%) Per Capita CO2 Emissions (metric tons) Source : Compiled by the Statistics Division from ADB databases; UNAIDS; World Bank Live Database and United Nations Population Division. Notes: n.a. Not Applicable ; Data Not Available. * Data from MOH v

9 vi PROGRAMME MATRIX Narrative Summary Verifiable Indicators Means of Verification Important Assumptions and Risks Sector Goal 1. To establish through a SWAp arrangement, an effective and efficient health care delivery system that is responsive to the needs of the people of Malawi, especially the vulnerable groups, the poor, women and children. Objective of ADF s Contribution 1.The objective of the contribution is to support activities of the programme that are aimed at accelerating reduction of maternal and newborn morbidity and mortality rates. Outputs 1. Adequate number of health facilities upgraded to provide minimum package for maternal and newborn health. 2. Adequate volume of pharmaceuticals, medical and laboratory supplies at service delivery points provided. 3. Awareness of the community on birth preparedness raised. 4. Communication system between health centre and referral hospitals strengthened By 2015 Reduce child mortality by two-third of its 1990 level; Reduce maternal mortality by three-fourth of its 1990 level; Begin to reverse spread of HIV/AIDS; Begin to reverse incidence of malaria and other major diseases. By Increase the number of deliveries attended to by skilled health workers from 56% to 75%. 2 Total fertility rate reduced from 6.3 to Increase proportion of facilities capable of providing Basic Emergency Obstetric Care from 3 to 25%; 2.1 Percentage of health facilities without stock outs of drugs for more than one week at a time increased to not less than 90%. 3.1 Level of awareness in community on birth preparedness increased to not less than 60% Radio or telephone systems installed and functioning in 100% of the facilities providing Basic Emergency Obstetric Care. MOHP statistics Statistics from the National Planning Commission Community survey Health reports from the districts Statistics from health centres Health records from the MOHP Health surveys Baseline surveys Mid year program review reports Periodic Joint Review Meeting PCR Health sector review reports at the central and district facilities GOM maintains its commitment to the POW for SWAp of the sector; Donor community continues to support the SWAp at the same level for the near future; Health personnel will use training to improve the quality of health care delivery; GOM provides adequate recurrent budget for MOH. The donor community continues to support the MOH at the same level for the foreseeable future. Timely disbursement and good planning. There are risks associated with weak implementation capacity of the MOH. There is a risk that the current anti-corruption drive could lead to political instability. Activities Adequate number of health facilities upgraded to provide minimum package for maternal and newborn health (i) Extend the health centres to provide Basic Emergency Obstetric Care; Inputs: ADF contribution will be part of support to the funding of Road Map ( ):USD million Government : ADF : Other development partners: USD million USD million USD million Appraisal Report Government accounts Mid year program review reports Disbursement Reports Supervision Reports Timely implementation of the programme Timely availability of counterpart funds No significant increase in the trend of inflation during the

10 vii Narrative Summary Verifiable Indicators Means of Verification Important Assumptions and Risks (ii) Procure medical equipment for all health facilities providing Emergency Obstetric Care; (ii) Increase and train the number of skilled providers to enable health centers provide 24 hour obstetric care; Total USD million implementation period. Adequate volume of pharmaceuticals, medical and laboratory supplies at service delivery points provided. (i) Procure adequate pharmaceutical, medical and laboratory supplies for all health facilities providing Emergency Obstetric Care; Awareness of the community on birth preparedness and danger signs raised. (i) Develop and disseminate IEC materials; Communication and transport system between health centre and referral hospitals strengthened (i) Install radio or telephone systems in all health facilities providing Emergency Obstetric Care.

11 viii EXECUTIVE SUMMARY Programme Background Achieving the health Millennium Development Goals (MDGs) remains a major challenge, particularly given the poor macroeconomic environment, increasing levels of poverty, the HIV/AIDS epidemic, and the critical shortage of human resources in the health sector. Life expectancy has declined steadily from 40.2 to 37.5 years in the past few years, mainly due to the HIV/AIDS epidemic. These challenges have justified the development of a Sector Wide Approach (SWAp) by the Ministry of Health (MOH) and its Development Partners. The SWAp arrangement is meant to improve efficiency and equity of available resources, by reducing the fragmentation and duplication resulting from a multitude of separate, externally financed projects. In the 4 th National Health Plan , the MOH expressed its intention to adopt and develop the Sector-Wide Approach (SWAp) within which the Programme of Works (POW) would be developed and implemented with the view to improving the health status in Malawi. The POW outlines how the MOH, Development Partners and NGOs will implement the Essential Health Package over a period of six years. ADF s intervention to the implementation of the POW through a SWAp arrangement is specifically intended to finance some of the strategies outlined in the National Road Map for accelerating the reduction of maternal and newborn mortality and morbidity in Malawi. ADF in conjunction with the SWAp Secretariat shall on an annual basis review and select for funding specific activities or interventions from the Annual Work Plans. Resources from ADF to support the health sector programme will be channelled to the Ministry of Health and kept in a special bank account and procurement of goods, works and services will be based on Bank Group Procedures. Purpose of the Grant The proposed ADF grant of UA 15 million will be used to finance goods, works and services needed to accelerate the reduction of maternal and newborn morbidity and mortality rates within a SWAp arrangement. Sector Goal and Objectives of ADF s Contribution. The programme objective is to establish, through a SWAp arrangement, an effective and efficient health care delivery system that is responsive to the needs of the people of Malawi, especially the vulnerable groups, the poor, women and children. The objective of ADF s contribution is to support activities of the programme that are aimed at accelerating reduction of maternal and newborn morbidity and mortality rates. Description The POW includes six programmes, namely, (i) human resources; (ii) pharmaceutical and medical supplies; (iii) essential basic equipment; (iv) facilities development; (v) routine operations at service delivery level; and (vi) central operations, policy and systems development programme. Strategies of these programmes that aim at improving maternal and newborn health constitute the National Road Map for accelerating reduction of maternal

12 ix and newborn mortality in Malawi. ADF s contribution over a period of 42 months will support some of the strategies outlined in the National Road Map cutting across all the six programme areas. Financing Requirements The total cost of financing the Programme of Work ( ) for the SWAp is USD million. The total ADF s contribution to the POW is estimated at USD million (UA million). Sources of Finance The Government and Development Partners will jointly finance all activities of the POW for the SWAp. ADF funds will be utilized to finance services, goods, works, and miscellaneous expenditure under the Road Map for accelerating reduction of maternal and newborn mortality. The total ADF contribution representing 3% of total costs of POW will be utilized to cover both foreign exchange and local costs. Implementation of the Programme The programme will be implemented over a period of 42 months. The executing agency of the programme will be the Ministry of Health. A SWAp secretariat established under the responsibility of the Director for Planning will coordinate all programme activities. Conclusions and Recommendations The proposed ADF contribution will be directed towards reduction of the increasing trend of maternal mortality rate in Malawi. Maternal mortality rate has worsened from 620 per 100,000 live births in 1996 to 1,120 per 100,000 in Initial results from the on-going demographic health survey seem to suggest a further increase in maternal mortality rate. Financial resources from ADF will be channelled to the Ministry of Health and deposited in a special bank account and Bank Group s rules of procedure for procurement will be used to procure goods, works and services. The proposed ADF s contribution will be used to finance some of the strategies outlined in the National Road Map for accelerating the reduction of maternal and newborn mortality and morbidity in Malawi. Strategies in the National Road Map cut across all the six programmes of the POW, namely, (i) Human Resources; (ii) Pharmaceutical and Medical Supplies; (iii) Essential Basic Equipment; (iv) Facilities Development; (v) Routine Operations at Service Delivery Level; and (vi) Central Operations, Policy and Systems Development Programme. It is recommended that an ADF grant not exceeding UA million be extended to the Government of Malawi for the purpose of contributing to the SWAp as described in this report, subject to conditions specified in the Protocol of Grant Agreement.

13 1. ORIGIN AND HISTORY OF THE PROGRAMME 1.1 Achieving the health Millennium Development Goals (MDGs) remains a major challenge, particularly given the poor macroeconomic environment, increasing levels of poverty, the HIV/AIDS epidemic, and the critical shortage of human resources in the health sector. In the 4 th National Health Plan , the Ministry of Health and Population (MOH) expressed its intention to adopt and develop the Sector-Wide Approach (SWAp) within which the Programme of Works (POW) would be developed and implemented. The POW was to focus on the delivery of the Essential Health Package (EHP), which is a component of the Malawi Poverty Reduction Strategy. The development of the POW was an all-inclusive process over a sustained period of time. In November 2002, the MOH, its Development Partners, and stakeholders agreed on the framework within which the GOM would implement the SWAp. To operationalise it, a POW covering the period July 2004 July 2010 was developed. 1.2 The POW outlines a shared and preferred future for the health sector and proposes strategic options for bringing this about. It also highlights priority health activities to be implemented by the MOH, Development Partners and Non-Governmental Organizations (NGOs), and their resource implications. A comprehensive costing exercise of the Essential Health Package preceded the process of developing the POW and several Government policy and planning documents were reviewed. A number of studies were also carried out in order to facilitate the prioritization process. In addition, the POW assessed the strengths, weaknesses, opportunities and threats to its implementation. The development of the POW also took into account Government stated objectives articulated in a number of key policy documents including the Malawi Poverty Reduction Strategy Paper, Vision 2020 Document, the 4 th Malawi National Health Plan , the MDGs, and other policy and operational documents. 1.3 Implementation of POW through SWAps is intended to provide a basis for harmonization of procedures for procurement and financial management, management of logistics, and monitoring and evaluation. The SWAp also offers the opportunity of bringing consistency between national plans, external support, sustainability and commitment of GOM and development partners to the Essential Health Package (EHP) interventions in the POW. The Bank Group took part in joint identification (August 2003), preparation (November 2003), pre-appraisal (April 2004) and post appraisal (July 2004) missions with the World Bank, DFID and NORAD. The design of the Support to the Health Sector Programme is, therefore, a product of a joint definition of critical areas of intervention, funding modalities, implementation arrangements as well as monitoring and evaluation of the activities. The Appraisal Report was updated following the July 2005 follow-up mission. 1.4 The POW includes six programmes, namely, (i) human resources; (ii) pharmaceutical and medical supplies; (iii) essential basic equipment; (iv) facilities development; (v) routine operations at service delivery level; and (vi) central operations, policy and systems development programme. Strategies of these programmes that aim at improving maternal and newborn health constitute the National Road Map for accelerating reduction of maternal and newborn mortality in Malawi. ADF s support through SWAps is specifically intended to finance some of the strategies outlined in this Road Map. ADF s intervention is in line with the objectives of the GOM s goals and objectives in the POW for

14 2 1.5 ADF s support conforms to the Bank Group's efforts to improve the effectiveness, and efficiency of aid delivery and management. The proposed support is also in conformity with the Bank Group s Health Sector Policy, the Guidelines for the Bank Group Operations using Sector-Wide Approaches, and the Bank Group's ( ) Results Based Country Strategy for Malawi which stresses the need to achieve economic growth and sustained development, including poverty reduction and improved quality of human resources. 2. THE HEALTH SECTOR 2.1 Health Status The extent of poverty in Malawi is reflected in its health indicators. Life expectancy has in the past few years declined from 40.2 years (1998) to 37.5 years in 2002 (female: 37.7 years) mainly as a result of the impact of the HIV/AIDS epidemic. The HIV/AIDS epidemic has assumed catastrophic proportions straining most of the limited resources of MOH. It has increased the cost of care and total health expenditure. The epidemic has increased the burden to an already overloaded health service culminating in increased bed occupancy and use of drugs and supplies. Patients who are HIV sero-positive occupy nearly 65% of beds in hospitals Although some of the health indicators are broadly comparable with neighboring countries, the infant mortality and child mortality rates remain high even by regional standards at 104 and 189 per 1, 000 live births respectively. The maternal mortality rate is even more disturbing at 1,120 deaths per 100, 000 live births (2000), an increase from a rate of 620 recorded in the previous 10 year period. The 2005 National Emergency Obstetric Care Assessment showed that the most frequent direct obstetric complication treated in 48 of the hospitals studied was obstructed and prolonged labour (40%). This was followed by complications of illegal abortion (30%), antepartum and postpartum haemorrhage (10%), and pre-eclampsia/eclampsia (9%). The high proportion of abortion complications may be due to the fact that records in some facilities do not differentiate between complicated and uncomplicated cases of abortion The needs assessment also showed that the leading causes of direct maternal deaths in 46 hospitals were ruptured uterus (22%), postpartum sepsis (19%), haemorrhage (14%) and obstructed/prolonged labour (14%). Problems such as HIV/AIDS, malaria and anaemia also contribute to high maternal mortality rates as well. A separate analysis of 81 maternal death audit report (2005) showed that 85% of the deaths took place in rural areas and 15% in urban areas. The World Bank estimates that if 99% of women had access to professionally delivered interventions, up to 74% of current maternal deaths could be averted. Maternal mortality, apart from reflecting access and coverage of maternal health care services, is a proxy for general socio-economic conditions and nutrition. It is estimated that 49% of children under the age of five years are clinically malnourished or stunted. Child mortality reflects the extent and impact of prevailing poverty levels and, thus, is an indicator of socioeconomic development Facility-based morbidity and mortality figures indicate that Malawi's disease patterns are similar to those of other tropical countries of Africa. As shown in Table 2.1, the leading causes of morbidity in 2002 were malaria, acute respiratory diseases and diarrhoeal diseases.

15 3 Table 2.1 Major Causes of Out-Patient Morbidity 2002 Diseases New Cases Malaria 26% Respiratory Diseases 14% Diarrhoeal Diseases 11% Nutritional deficiencies 5% Traumatic conditions 3% Others 41% Total 100% Source: MOH (2003) The principal causes of mortality in all age groups, as shown in Table 2.2, were malaria, respiratory diseases, malnutrition and diarrhoeal disease Table 2.2 Major Causes of In-Patient Mortality 2002 Diseases New Cases Malaria 23% Respiratory Diseases 23% Malnutrition 9% Diarrhoeal Diseases 9% Tuberculosis 7% Anemia 7% Others 22% Total 100% Source: MOH, WHO (2003) In the absence of data by age and sex due to inadequate staffing, Malawi s Health Management Information System (HMIS) undertakes Annual Facility Based Records Review for age-sex disaggregated data. The main objective of the review is to collect age and sex disaggregated data from facility-based records of the routinely collected data in order to understand better the distribution of diseases and utilization of services at national level. The most recent review was conducted in 2003 and its results indicate the following: From the 5,366 sample cases that visited Out Patients Department for treatment (Annex V), 54% were female and 46% male. Out of the 1,722 malaria cases observed, 58% were female and 42% male. For upper respiratory infection, 55% were female and 45% male. The results above underscore the fact that malaria is the leading cause of morbidity in the country. Out of a sample of 1,479 inpatient deaths, 51% were male and 49% female (Annex VI). Out of the 320 malaria inpatient deaths, 53% were male and 47% female. For pneumonia-all ages, 52% were male and 48% female. The sex distribution on inpatient deaths for most diseases was similar to those shown above HIV/AIDS is the leading contributor to the causes of death in the most productive age group (20-48 years). Sentinel surveillance of HIV/AIDS amongst women attending antenatal

16 4 clinics gives an overall prevalence of 24%, with regional variations: 27.6% in the south; 23% in the centre and 21% in the north, and higher rates of infection in the urban areas. Females in the 15 to 24 age bracket are four times more likely to be HIV positive than males due certain cultural practices. HIV/AIDS related conditions are reported to account for over 40% of all inpatient admissions and are increasingly overwhelming the health services. The HIV/AIDS pandemic is fuelling the TB epidemic. Since the start of the HIV/AIDS epidemic in Malawi, there has been a five-fold increase in TB cases. In 2001 there were 27,672 new cases. A countrywide survey showed an overall HIV sero-prevalence amongst TB patients of 77%. 2.2 Policy and Organisation of the Health Sector A. Health Policy The Government's overall development objective is poverty reduction. The draft Malawi Growth and Development Strategy (2006) which replaces the Malawi Poverty Reduction Strategy Paper (2002), emphasizes human capital development as one of the main strategies to enhance poverty reduction. The Government s overall goal for the health sector, is to establish through a SWAp arrangement, an effective and efficient health care delivery system that is responsive to the needs of the people of Malawi, especially the vulnerable groups, the poor, women and children The primary health strategy for the MOH is the implementation of an Essential Health Package (EHP). The EHP explicitly rations resources in order to prioritize cost-effective interventions to reduce poverty. It addresses the major causes of morbidity and mortality among the general population and focuses particularly on medical conditions and service gaps that disproportionately affect the rural poor. Its objectives are to improve technical and allocative efficiency in the delivery of health care; to ensure universal coverage of health services; and to provide cost-effective interventions that can control the main causes of disease burden in Malawi The EHP consists of a cluster of cost-effective interventions delivered together in order to reduce the total cost of the interventions by reducing the cost to patients obtaining the services as well as the costs of providing services. These form the basis for an integrated delivery strategy for the EHP interventions. The EHP brings together interventions that can be delivered with the same level of technological sophistication and through the same facility or level of the health delivery system and using multi-skilled health workers. The decision to select the interventions constituting an essential health package is based upon the costeffectiveness of each of the interventions and on the basis of their being able to be controlled at less than US$100 per Disability-Adjusted Life Year (DALY) gained The Malawi EHP consists broadly of the following eleven intervention areas: Prevention and Treatment of vaccine preventable diseases, Malaria Prevention and Treatment, Reproductive Health Interventions including Safe Motherhood Initiatives, Essential Obstetric Care and PMTCT, Prevention, control and treatment of Tuberculosis and related complications, Prevention and treatment of Schistosomiasis and related complications, Management of Acute Respiratory Infections and related complications,

17 5 Prevention, treatment and care for Acute Diarrhoeal Diseases (including cholera), Prevention and management of HIV/AIDS, Sexually Transmitted Infections and related complications including VCT and the provision of ARVT, Prevention and management of Malnutrition, Nutrition deficiencies - (iodine, Vitamin A, Iron) and related complications, especially those associated with HIV/AIDS, Management of eye, ear and skin infections and related complications, and Treatment of common injuries including emergency care for accidents and trauma and their complications The overarching strategy for the implementation of the 6-Year Program of Work (POW) for the period is based on the Sector Wide Approach (SWAp) to health development and the reorganization of the health sector based on the principle of decentralization of health services to District Assemblies. Operational strategies will be based on the delivery of public health programs, institution-based clinical interventions and enhancing management and support systems throughout the MOH. In broad terms this will involve putting in place the following: Provision of up-to-date service delivery standards for all EHP and non-ehp interventions. Training of an adequate number of health personnel to deliver the EHP through the implementation of the 6 Year Emergency Pre-Service Training Plan. Providing adequate supplies of Essential Drugs, Medical Supplies and Laboratory Consumables. Provision of adequate and appropriate Medical and Non-Medical Equipment to support the delivery of the EHP. Rehabilitation of existing infrastructure. Providing Water, Electricity and Radio Communications to health facilities. Providing Budget Support and strengthening systems for accountability at the District level. Commissioning of new/improved EHP or non-ehp interventions. Strengthening management and support systems at the District level In terms of its purpose, content and the preparation process, the POW is effectively the equivalent of the National Health Plan (NHP) for the planning period. The MOH and collaborating partners concluded that the development of a separate and discrete fifth NHP was not necessary. The analysis of the resource implications of the Plan as well as the projection of resource inflows was not as detailed as the one in the POW. Similarly, the analysis of the activities in the NHP is not as detailed as the one in the POW. B. Organization of Health Services The Government is the main provider of health care in Malawi. It has overall responsibility for developing policies, planning strategies and programmes, and also ensuring that quality of services are provided to the population. It carries out its functions under the overall responsibility of the Ministry of Health and Population, which has a Secretary for Health and Population, assisted by an Under Secretary who is responsible for the financial and administrative affairs of the MOH. The MOH has six technical divisions (Clinical and Population Services, Nursing, Preventive Health, Technical Support, Planning, Financing and Administration). The current functions of the MOH range from policy formulation and planning to delivery of health services.

18 Below the central level, the MOH is divided into 27 districts. Each district has a District Health Officer (DHO) who is accountable to the Principal Secretary. The DHO and his/her team run the District Hospital and the peripheral health units (health centres, dispensaries and mobile clinics). A new government policy on national decentralization has been approved in order to devolve administrative authority to the district level. The DHO will have the responsibility for the management of all health services in the district. The GOM has made a policy direction to decentralize health services to District Assemblies as the local governance structures. This will necessitate direct budgetary allocation to the districts thus making District Health Management Teams (DHMTs) in turn to be accountable to the District Assemblies for decisions on financial planning and expenditures A 1998 functional review led to the abolition of the three regional health offices, with monitoring and supervision responsibility shifting back to the centre. This proved unsuccessful, with the result that the MOH has decided to establish zonal offices, each providing support to five to six districts, but not having management responsibility. Their function will include technical advice and facilitation support of decentralization, EHP implementation, and inter-district collaboration In Malawi, as in other low-income countries, the health sector is characterized by a plurality of health service providers. Nearly all-formal health care services in Malawi are provided by two main agencies. The Ministry of Health and Population provides about 60% and the Christian Health Association of Malawi (CHAM) provides 37%. The Ministry of Local Government provides about 1% of health services. Private practitioners, commercial companies, army and police, provide 2% of health services. Traditional Birth Attendants deliver approximately 25% of the pregnant women and most communities have a traditional healer. Other sources of care include grocery stores and pharmacies, and to a lesser extent Community-Based Distribution Agent for family planning commodities, Drug Revolving Funds provided by community volunteers, Home Based Care volunteers and Faith Healing groups. Human Resources The workforce in the health sector as a whole is estimated at 15,700 (Human Resource Plan, ). This does not include an estimated 3,600 traditional birth attendants and 2,300 community-based distributor agents for contraceptives. Sixty eight percent (68%) of the workforce are employees of the MOH. The CHAM employs some 26% with the remaining 6% divided among local government, police, army and non-governmental organizations (NGOs) In terms of staff, numbers of health personnel per head of population show large differences from the WHO-recommended norms. According to the MOH, the total number of physicians in the country is 219, being one doctor per 45,662 Malawians, well below the WHO average ratio of 1 to 10,000. For Malawi to reach this ratio, 800 additional doctors are required. The MOH has 108 general practitioners and specialists, while CHAM, the College of Medicine and the private sector have 34, 21 and 56 medical officers respectively. The College of Medicine produces about 20 doctors per year. Considering its population, this figure is extremely low and this has resulted in heavy reliance on other categories of health professionals such as clinical officers and nurses to carryout some of the work for doctors.

19 The distribution pattern of staff favours urban areas at the expense of rural areas, where 87% of the population reside. This is due to the unattractive working environment in the rural areas, i.e. lack of social amenities and accommodation According to the draft human resource strategic plan for , the current major concern of the MOH is to address the critical shortage of human resources resulting from inadequate capacity of training institutions to produce the numbers of human resources required to deliver the EHP. This strategy revolves around the sound implementation of the 6-year Emergency Pre-Service Training Plan for the sector which gives priority to financing adequate numbers of trained and skilled personnel for all health facilities (including CHAM); filling vacant posts; strengthening human resources retention; and providing in-service training The civil service has a general policy on training that applies to all civil servants including MOH personnel. In the health sector two types of training are provided basic and post-basic (which incorporates external and in-service training). Basic training is delivered through an array of institutions primarily within the Ministry of Education, MOH and CHAM. Health Infrastructure Health services are provided at three levels: primary, secondary and tertiary. At the primary level, services are delivered through health centres, health posts, and outreach clinics. District hospitals and CHAM hospitals, although some have specialist functions, provide secondary level health care services. The secondary level provides mainly back up services to those provided at the primary level including surgical services, mostly obstetric emergencies, and general medical and paediatric in-patient care for common acute conditions. At present, tertiary level hospitals provide services similar to those at the secondary level, along with a small range of specialist surgical interventions Table 2.3 shows the distribution of health facilities by type and ownership (MOH, CHAM and Ministry Local Government). In all, there are 617 health facilities of which 392 (63.5%) are operated by MOH and 161 (26.09%) by the Christian Association of Malawi (CHAM). The remaining facilities are operated by NGOs such as Banjala Mutsugolo and by the Local Government. Table 2.3 Distribution of Health Facilities by Owner and Type, 2000 Type BLM CHAM LG MOH NGO Total Central Hospital 4 4 Hospital Mental Hospital Clinic Dispensary District Hospital Health Centre Maternity Rehabilitation Centre 1 1 Voluntary Counselling 3 3 Total Source: (MOH/JICA, Malawi Health Facility Survey 2002 Report)

20 CHAM is made up of independent church-related and other private voluntary agency facilities. It operates autonomously about 160 health units in the rural areas. Though primarily curative in orientation, most units also provide primary health care services. Most of these health institutions provide training for nurses and other health personnel. While MOH services are free, CHAM services are chargeable at small rate. The quality of services provided at CHAM facilities is considered to be better than those at MOH facilities. The government assists CHAM by providing it with an annual grant. About 40% of their operating funds come from government mainly covering staff salaries, 30% from donors and 30% from user fees. The agreement between the GOM and CHAM includes provision of health services to the rural population in return for payment of an annual grant Accessibility to health facilities in Malawi is generally good, with up to 84% of the population within 5 to 8 km of a health facility. Nevertheless, accessibility in some districts is poorer than in others. The current total number of hospital beds is 14,128 (707 persons/hospital bed) of which 60% are in government health facilities while 37% belong to CHAM and 3% belong to local authorities and other providers A recent assessment of health facilities indicated that a significant number of them need rehabilitation and upgrading in order to be able to provide the full Essential Health Package (EHP). Most of these facilities have serious shortages of essential drugs as well as essential medical diagnostic equipment and surgical supplies. This is hampering Government s effort to minimize morbidity from treatable diseases such as malaria, tuberculosis, etc. While many improvements have been made to the pharmaceutical system, additional steps should be taken to strengthen it. In this regard, the World Bank is assisting the MOH in the establishment of a drug revolving fund, to ensure the supply of drugs through a cost-sharing scheme at the tertiary level. 2.3 Health Care Financing Health care financing in Malawi is composed of (i) Government financing through voted expenditure and subventions to other providers; (ii) donor support through Government s development budget, commodity aid and direct support to programs and support to other providers; and (iii) private sector expenditure on health care, and out of pocket expenditure of household members According to the National Health Accounts for 1998/99 (the only year for which such an analysis has been undertaken), total health expenditure was roughly $12.4 per capita, of which government accounted for 25%, and donors for around 30%. Putting Malawi Government and donor sources together, public funds accounted for 55% of health expenditure, the total of which was estimated at US$123.9m or 7% of GDP. Private sources accounted for the remaining 45%, of which more than half came from out-of-pocket expenditures by households. A full breakdown of health financing by source is given in Table 2.4 below.

21 Table 2.4 Health Financing by Source Source US $ m % Ministry of Finance Ministry of Local Govt Donors Employers Households Total Source: MOH, 2001 (figures rounded) The Government is the main source of recurrent health care expenditure in Malawi. Although the budgetary allocation to the MOH approved by Parliament has been rising, this has not met the increasing needs of the health sector. In the past decade, economic difficulties (devaluation and inflation) have led to a decline in the real value of health expenditure, both from the recurrent budget and the GOM contribution to the development budget. Thus, the expansion of the health infrastructure could no longer be maintained with adequate recurrent spending and the budget is no longer sufficient for covering the needs of an ever-increasing population The MOH budget for FY 2002/03 was MK4.5bn, or 12.3% of total voted recurrent and capital funding (Table 2.5). This compares with a figure of MK5.3 billion (15.1%) in FY 2001/02, and therefore represents both a decrease of 14% in nominal terms, and a reduced share of the overall (voted) recurrent and capital budget. This is largely due to a fall in the development budget, and in particular, the externally funded component, which was a result of some donors that temporarily withdraw their support because of corruption and misappropriation of public funds. Table 2.5 MOH Budget ( ), Billion MWK Approved Approved MOH National % MOH National % Recurrent Capital Total Source : MOH, The GOM has recognized that the MOH's finances are being increasingly stretched by a continuing expansion in the demand for health services, associated primarily with population growth, and the inability of the Treasury to support and sustain the needs of the health sector. In response the Government adopted in the development plan ( ) several broad strategies as well as adopting a Programme of Work to be implemented on the basis of a SWAp for financing an EHP to be made accessible to the population The Government made a policy decision that all services within the Essential Health Package will be delivered free-of-charge. User fees are currently charged in CHAM facilities, local government facilities, private facilities, and in paying outpatient departments (known as OPD1) and wards in government hospitals (both district and central). Debate continues as to how to handle the current policy of CHAM to charge for health services within the EHP.

22 2.4 Major Problems of the Health Sector The health system throughout the country needs strengthening at all levels, in terms of rehabilitation of infrastructure, providing essential drugs and medical supplies as well as in reorienting the skills and knowledge of health workers to address the challenges. In some instances a significant proportion of the medical equipment is either in a state of disrepair or not available at all for the delivery of essential health care. A number of health facilities need rehabilitation and upgrading in order to be able to provide the full EHP. The introduction of a SWAp is seen as a viable option to improve the health systems and services within finite resources, and as the most appropriate way to cover the health needs of the poor With vacancies of the established posts up to 50% at some institutions, the health sector is faced with a collapsing human resource capacity. Current training outputs in Malawi are at levels too low to fill the large number of vacant posts for skilled health workers. Most of the skilled health workers are leaving the public services mainly due to poor salaries and working conditions. The HIV epidemic is also taking its toll on caregivers and administrators alike, exacerbating an already chronic shortage of appropriately trained personnel. There is, therefore, an urgent need to address the issue of human resources through recruitment of more health workers, filling the vacant posts, and ensuring retention of all trained health workers Poor implementation and management capacity both at the central and district levels has hampered MOH s effort to improve efficiency and effectiveness in the use of the limited available resources. Government agrees with Development Partners that the principles underpinning public procurement within the health SWAp are: transparency, efficiency and economy, accountability, fair opportunity to all bidders, prevention of fraud, corruption and other malpractices, however, procurement and financial systems in the MOH and at district levels are generally weak and the capacity is low. This will require technical and financial assistance to help Government develop implementation systems and capacity of the MOH in areas such as budgeting, procurement, financial and human resources management Sectoral analyses of poverty show that social, human capital and income indicators in Malawi are very poor with the country ranking 161 out of 174 on Human Development Index in 2000 (UNDP 2001). All these are significant determinants of health status. The poor health status of the population is worsened by the high prevalence and incidence of infectious and parasitic diseases, insufficient health care for women during pregnancy and labour and inadequate family planning services. As reflected in paragraph 2.1.1, Malawi has one of the highest numbers of women who die as a result of pregnancy and childbirth. The risk of maternal death in Malawi is 1 in 15 compared to 1 in 3,800 in developed countries. Studies have also shown that for every woman who dies as a result of maternal complications over 25 more suffer short and long-term disabilities thus reducing their capacity to work, generate income and grow out of poverty In Malawi girls marry young and by the age of 19 years, 66% have begun childbearing. A survey conducted in 2000 reported that 64% of rural pregnant women do not have money for transport to get them to the nearest health facility compared to 37% of the urban women. There is, therefore, need for concerted effort to address poor maternal health services in Malawi.

23 Activities of ADB and Other Donors The Fund has to-date financed five interventions in the health sector in Malawi. The Rural Health Care Project I was approved in 1981 for a loan of UA 7.37 million to finance construction of two district hospitals (Salima and Mchinji) and two health centres (Kaigwazanga and Mikundi) in the two districts. Rural Health Care Project II, was approved in 1984 for a loan of UA million to assist GOM to improve delivery of health care in rural areas through construction of Ntchisi District Hospital and the BSON/MATS and support to on-going communicable diseases programmes. The Health Sector Requirement study (approved in 1997) assessed the health sector and proposed priority areas for the Bank s intervention in five districts (Salima, Ntchisi, Mchinji, Nkotakota and Phalombe). The Rural Health Care Project III was approved in 2000 for a loan of UA million to assist in health facilities development, control of HIV/AIDS and capacity building. Implementation of the first three interventions is successfully completed and the fourth one is on going and progressing satisfactorily. Furthermore, the Support to the National HIV/AIDS Control Programme, approved in December 1999 for a grant of UA 1.00 million, is close to completion The GOM receives assistance, for the health sector, from several international agencies. As government resources devoted to health continued to remain stagnant on a real per capita basis in the early 1990s, donors played an important role in the financing capital development and increasingly the delivery of health services. Table 2.6 shows that there is now a sizable infusion of external assistance in the health sector following the temporary withdrawal of support by some bilateral and multilateral donor agencies during the financial year.

24 12 Table 2.6 Summary of Donors Supporting the Health Sector Organisation Activity Amount World Bank Multinational AIDS Program (MAP) Support to the USD million Malawi National AIDS Strategic Framework. (2003) Health Sector Support Programme USD million ( ) Global Fund Control of HIV/AIDS Control of malaria. USD million (2003) DFID Malawi Health SWAp Support GBP million NORD/SIDA Malawi Health SWAp Support USD 60 million European Malawi National Blood Transfusion USD million Union UNICEF WHO USAID GTZ, CIM KFW, Funds programmes such as Water and Sanitation; Family Planning; Safe pregnancy; Expanded Programme of Immunisation; and Communication; and AIDS control Co-ordinates and directs health activities including health systems, human resources, reproductive health, control of communicable diseases Involved in maternal health, support systems, donor coordination, health information system, capacity building, logistic support, and control of HIV/AIDS Involved mainly in Central Operations, Policy and Systems Development Programme covering physical assets management and maintenance programme. USD million (estimation for ) USD 7.34 million ( ) USD million ( ) USD 4.51 million JICA MCH equipment and supplies, training, and long-term USD 1.57 million technical assistants ( ) UNFPA Reproductive health and maternal health USD 2.6 million )

25 13 3. THE SECTOR PROGRAMME 3.1 Sector -Wide Approach (SWAp) As a means of seeking ways to substantially improve the overall management of the health sector, the MOH decided in 1999 to move away from a project approach to health development towards a Sector-Wide Approach (SWAp). The SWAp was initiated in response to persistent problems with project based development co-operation such as lack of co-ordination, lack of ownership and low sustainability. The proposed SWAp will rationalize scarce resources and maximize the efficient use of these resources in investing in the health sector. It also commits Government and its Development Partners to undertake local capacity building and systems development. The SWAp developed by the MOH is anchored on the Essential Health Package as derived from the National Health Plan to improve health service delivery in Malawi. Its aim is to improve both the efficiency and equity of available resources, and to mobilize additional resources Furthermore, MOH decided to move away from the traditional project approach in order to reduce the significant management time incurred by government in trying to meet the individual demands of various stand alone projects. The required, but different reporting, financial and procurement systems add to Government s management burden. A number of key steps have since been taken by the MOH (and several of its development partners), which have been of importance in laying the foundation for the SWAp. A list of key documents (Annex VII) was prepared and a number of stakeholder workshops were held to present and discuss the reports for the design of the SWAp The operational tool of the SWAp is the Programme of Work (POW) covering It includes major areas of intervention under the SWAp. The implementation of the activities will be based on Annual Work Plans (AWP) proposed by the districts and outlined in the District Implementation Plans (DIP). The agreed content of DIPs consists of seven objectives: (i) expand the range and quality of health services focused on maternal health and children under the age of 5 years; (ii) improve the general status of the population by strengthening, expanding and integrating relevant health services; (iii) increase access to health care services; (iv) increase, retain and improve quality of trained human resources and distribute them efficiently and equitably; (v) provide better quality health care in all facilities; (vi) improve efficiency and equity in resource allocation; and (vii) strengthen collaboration. 3.2 Programme Objective The programme objective is to establish through a SWAp arrangement, an effective and efficient health care delivery system that is responsive to the needs of the people of Malawi, especially the poor vulnerable groups, women and children. 3.3 Programme of Work (POW) The POW is based on a prioritized but limited package of services that should be available to every individual in Malawi. It comprises an EHP of eleven key components and these cover those health services that address the major causes of death and diseases in Malawi, together with the essential supporting structures and systems to enable delivery. In addition, the POW has also been formulated taking into account various policy and planning documents that guide the operations of the Ministry of Health and Population and the entire

26 14 sector. It will provide a basis for harmonization of departmental activities and work plans. The POW shows how MOH activities are, and will be organized on a phase-in basis for the coming six years. It will be implemented on the basis of the SWAp arrangement guided and governed by a code of conduct and Memorandum of Understanding amongst the stakeholders The POW is divided into the six major programmes whose objectives and outputs are described hereunder. Program I : Human Resources Programme The objective of this programme is to address the critical shortage of human resources resulting from inadequate capacity of training institutions to produce the numbers of human resources required to deliver the EHP. The proposed strategy revolves around the sound implementation of the 6 year Emergency Pre-Service Training Plan for the sector, which entails undertaken the following activities: i) Financing adequate numbers of trained and skilled personnel for all health facilities (including CHAM); ii) Filling human resources vacancies, this will include the following: Implementing the 6 year emergency pre-service training plan; Financing the filling of human resources posts in line with the established posts in GOM District and CHAM institutions; Financing a flexible Technical Assistance Fund for specialists to cover nonestablished staff needs at the district level; and Financing filling of posts at central hospital level in line with the establishment. iii) Strengthening human resources retention through payment of top up salaries and paying salaries and allowances on time in GOM and CHAM health institutions; and iv) Providing in-service training to health workers. Program II : Pharmaceutical and Medical Supplies Programme The objective of this program is to improve the quality of the EHP services through strengthening national procurement, distribution and stock management systems for medical and non-medical consumables. It will finance an adequate volume of pharmaceutical and medical supplies at service delivery points (including CHAM). The outputs include procurement of adequate pharmaceutical, medical and laboratory supplies for the EHP and related services; strengthening delivery and storage of drugs and medical supplies at district level, central hospitals and CHAM facilities; and providing storage and distribution costs at all levels. Program III : Essential Basic Equipment Programme This program aims at ensuring that the health delivery system is appropriately equipped with the necessary basic equipment according to the agreed standard list in support of the delivery of the EHP at all levels of the health system. The program further provides for the establishment of a preventive maintenance programme for equipment. Emphasis will be on the provision of adequate funds for the procurement, maintenance and replacement of equipment for district, health centre, central hospitals and CHAM institutions. The program will cover financing functional essential medical equipment (including CHAM); maintaining equipment for EHP and related services in a functional state; and providing a capital budget for equipment for EHP and related services at district, CHAM and central hospitals.

27 15 Program IV : Facilities Development Programme The main objective of this program is to improve physical access to quality EHP services through the rehabilitation and upgrading of health facilities, and training institutions. Activities in this area will also include the rehabilitation and provision of additional units of accommodation for staff at the various health facilities and the installation of plant equipment. This will include upgrading of existing maternity units and dispensaries to health center level, and rehabilitation of existing health facilities at GOM district level, CHAM, tertiary and central hospitals in order to support the delivery of the full EHP services. Program V : Routine Operations at Service Delivery Level Programme The objective of this program is to ensure that there are adequate financial and material resources to support the routine operations for delivering EHP and non-ehp services within the MOH and CHAM institutions. Under this section financial provisions will be made for transport services; other services at district level (food and other provisions for patients; consumables; routine supervision and support at sub-district level; strengthening planning, budgeting and monitoring activities; outreach, Information, Education and Communications and Behaviour Change Communication; support for DHMT activities management and community participation, and other routine activities for MOH and central hospitals. Program VI : Central Operations, Policy and Systems Development Programme The aim of this programme is to enhance the MOH s capacity to formulate policy, regulate the sector, coordinate the implementation of the Program of Work, monitor progress and support the delivery of district level health services. The implementation of a SWAp will require the institutionalization of new ways of conducting MOH business and to strengthen the analytic capacity of staff at headquarters to be able to effectively support a devolved district health system. It is crucial to develop an appropriate service delivery system, which includes technical support and supervision from the DHO to lower levels, referrals, and enhanced integration of service delivery, procurement and financial management Central operations will, therefore, strengthen the role and ability of central institutions to support implementation of the SWAp in delivering a full range of EHP and the decentralization process in the health sector. The sub-component on policy and systems development will focus on a number of activities including the following: Developing human resources managements system and standards; Establishing pharmaceutical and medical supplies management and development systems; Putting in place policies and systems to ensure continuous availability of functional essential equipment and infrastructure for the delivery of EHP; Developing and strengthening an effective and efficient financial management system; Strengthening central and district level planning systems; and Implementing a sector wide health information system.

28 Programme Costs Funding of the programmes under the POW will cost USD million and will be jointly financed by the Government and its Development Partners. Table 3.1 indicates an overview of resource allocation for these programmes: Table 3.1 Cost of the POW Annual Programme Cost (million USD) 04/05 05/06 06/07 07/08 08/09 09/10 Total Prog. Cost (USD Mill) % Total POW Programme I Programme II Programme III Programme IV Programme V Programme VI Total Financing the POW Financing of the POW takes into account availability of potential resources and absorptive capacity of the MOHP. Approximately USD 735 million will be required to implement the POW over a period of 6 years or about an average of USD 10.3 per capita per year. This amount includes the cost of EHP and non EHP tertiary services. The majority of finance for the POW will need to come from donors, and the proportion of donor finance in the POW is expected to rise over time since fewer donors are likely to participate in the early stages of the programme. Table 3.2 indicates the sources of financing for the programme. It should be noted, however, that there is a possibility of making more than one financing pledge during the POW period. Table 3.2 Sources of Financing the POW (Million USD) SOURCE TOTAL % ADF World Bank DFID NORAD OPEC Fund UNFPA Government Other development partners* TOTAL % * This amount includes unpooled funds budgeted for in the POW The Bank Group will contribute a grant of UA million (USD million to support implementation of the POW. The total ADF contribution represents about 3% of the total funding for the implementation of the six programmes. The resources will be available for financing goods, works, services and operating costs of the said programmes.

29 At present, private finances are not included but efforts are underway to try to integrate them into future POWs. Regulatory, licensing, supervisory and inspectorate functions of the MOHP are still in development and these will be important if private sources of finance are to contribute towards minimum standards of service quality. Other private financing arrangements such as various insurance models are also underdeveloped. 3.6 Annual Work Plans As indicated in paragraph 3.1.3, the district health activities will be based on district implementation plans. The planning process will be a bottom-up approach where communities, health centers, district staff and other stake holders will be involved in the preparation of Annual Work Plans (AWP). At the central level, Annual Work Programmes will be prepared by the MOH Departments. This process will involve the preparation of detailed work plans, which will initially cover the financial year of the Programme of Work ( ). AWPs will be presented annually to the collaborating partners for review and approval as well as ensuring commitment of resources to the funding of the programmes. 3.7 Implementation Arrangements The objective of the SWAp is to improve the efficiency and effectiveness of the health services. To this end, the implementation of the SWAp will strengthen and rationalize existing systems rather than establish new or parallel systems. No Project Implementation Unit will be established for the SWAp program. However, to help the MOH s Department of Planning, which is taking the lead on SWAp-related work, a SWAp Secretariat is in the process of being established to work under the leadership of the Director of Planning. The SWAp Secretariat will be responsible for all the day-to-day SWAp related work. The government and donors have agreed on the membership of the Secretariat and its responsibilities as reflected in Annex III Day to day implementation of the program will be through the regular departments of the MOH, CHAM, and other private health care providers, including Banja La Mtsogolo. Oversight and coordination of the program will rest with the Principal Secretary of the MOH, working through two proposed Assistant Secretaries for Health, heads of technical departments, finance, administration, etc. Similarly, CHAM activities will be implemented through their existing structure of committees, which in turn work directly with the various church organizations and health facilities. The provisions of the 2003 MOU between the MOH and CHAM will continue to apply The coordination of the implementation of the POW will be undertaken at two fora, namely the Health Sector Review Group (HSRG) and donor sub-group on health. The HSRG forum will meet quarterly and consist of directors of departments, heads of central hospitals, collaborating Partners working in the health field, representatives of NGOs, private sector providers of health, representatives of training institutions and civil society groups. 3.8 Funding Modalities The POW for the SWAp stipulates funding of USD 735 million to be contributed by the Government and the donors for the period The six-year POW will be implemented adopting various funding modalities that will be mutually agreed upon. The

30 18 modalities intend to capture as many funding sources as possible and shall neither exclude nor restrict contributions to the implementation of the POW by Development Partners that have different funding mechanisms. It is anticipated that all support will come under one or more of the funding modalities. The MOU provides the following modes of funding in order to accommodate specific financing requirements of different donors: Mode I (Pool/Basket Funding) - Under Mode I, contributions from Collaborating Partners will also be channelled directly to the MOH and deposited in a common bank account. These funds will be controlled by the MOH and they will be available for the entire sector. (This is the preferred mode by the MOH). Mode II - Under Mode II, contributions from Collaborating Partners will be channelled directly to the MOH. These funds will be controlled by the MOH and they will be available for the entire sector. Unlike Mode I, funds will be deposited in separate individual accounts, not in a common account. Mode III - Under Mode III, contributions from Collaborating Partners will be channelled directly to the MOH. These funds will be controlled by the MOH. Whilst these funds will be deposited in separate individual bank accounts as in Mode II, they are only for specific activity/ies. Mode IV - Under Mode IV, these funds will be channelled directly to either an activity implementation team or a relevant entity and are not controlled by the MOH. They will be available only for a specific activity under the Sub-Programme of POW. They will be deposited in separate individual accounts as appropriate Agreement has been made between the MOH and a core group of partners pooling all or at least a part of their resources in the basket fund (DFID, NORAD, World Bank and UNFPA) to use common implementation arrangements for planning and budgeting including procurement, financial management and technical assistance. Other Development Partners are expected to join the core group in the near future. The Bank Group will contribute its resources under Mode III until after the amendment of the article of the Fund Agreement which restricts usage of ADF resources to goods and services originating from the member countries of the ADB. As indicated above, the USD 735 includes unpooled funds, which Government is looking forward to being reprogrammed to basket funding. In the meantime, it is possible for a donor in the pool to also fund outside the pool and for other donors outside the pool to fund the programme using separate projects and earmarked funds (that is currently the case for WHO, UNICEF, USAID, JICA, GTZ). 3.9 Mechanisms for Monitoring and Evaluation (M&E) of the POW The Programme of Work shall be monitored through the Annual Joint Reviews involving all stakeholders and Joint Implementation Plan subcommittees. The MOH will take the lead in reviewing health sector performance on a regular basis. This forum will help both the MOH and Development Partners to assess how effectively the Programme of Work is being implemented, what progress is being made towards agreed outputs and how efficiently the inputs provided are being utilized. Much of the work of the review will be conducted in two committees: Joint Implementation Plan Committee of SWAp and Financing Committee Sector performance will be monitored and reviewed against milestones and targets established on the basis of availability of data to monitor the progress in the implementation of the POW. Indicators will facilitate the monitoring of inputs, the processes, the outputs and impact on the POW. To the extent possible, baseline data for indicators and monitoring will be made available. Where this baseline information is not available studies will either be conducted or planned as early as possible in the initial phase of the POW.

31 A set of indicators has been put in place for measuring the performance of the health sector (ANNEX IV). It will, of course, be important to specify baseline values and targets for achievement and, where possible, targets for under-served populations (such as those living in rural areas or specific geographical areas, or by gender or socio-economic status). While acknowledging MOH's central role in determining priorities and resource allocations, the setting of targets should be a collaborative exercise involving MOH, development partners, non-government providers and civil society organizations. By achieving consensus on the aims of the POW, there will be greater prospects of genuine commitment from all partners to making the POW a success The MOH has made substantial progress in establishing information systems across several areas including health service activities, morbidity and mortality, drugs and medical supplies, facilities and equipment (inventory of health facilities), finances and human resources. However, many of these systems are embryonic and they will need continued development and support. For example, the HMIS was only introduced in January 2002 and, while it is furnishing useful information, there is scope to strengthen data management procedures (including training of health facility staff, follow up of missing reports, data quality control), analysis, dissemination and use. In this regard further technical assistance; supervision and training will be required before systems are fully embedded. Malawi also has recourse to periodic household surveys notably the Demographic Health Survey (DHS). The DHS, which is in progress should provide a baseline for several indicators of relevance to the POW as well as a means to verify the accuracy of HMIS data Road Map for Accelerating Reduction of Maternal and Newborn Mortality Government s proposed efforts to reduce maternal and newborn mortality rates within the SWAp arrangement will be guided by the Road Map. Specific activities of the Road Map will be covered under the six programmes described in paragraph 3.3. The Road Map was developed following an Emergency Obstetric Care (EmOC) assessment and in response to the call by the African Union to its member states to accelerate the attainment of the MDGs related to maternal mortality and new born health. Results from the EmOC study (2004) involving GOM/CHAM health facilities showed that less than 3% of health centers are able to offer basic obstetric care services; only 13% of health facilities have 24 hour coverage by qualified midwife; less than 40% of pregnant women deliver in health facilities, and less than 20% of expected obstetric complications deliver in health facilities The National EmCO Assessment underlined the following factors as contributing to the high maternal mortality rates: Shortage and weak human resource management; Limited availability and utilisation of maternal health care services; Low quality maternal health care services; Weak procurement and logistics system for drugs, supplies and equipment; Problems of infrastructure; Weak referral systems; Weak monitoring, supervision and evaluation; Inadequate coordination mechanisms among partners and stakeholders; Weak community participation and involvement; and Harmful social and cultural beliefs and practices.

32 In order to address these challenges, there is need to support the Road Map for Accelerating Reduction of Maternal Mortality whose main objectives are: (i) to increase the availability, accessibility, utilization and quality of skilled obstetric care during pregnancy, childbirth and postnatal period at all levels of the health care delivery system; and (ii) to strengthen the capacity of individuals, families, communities, civil society organizations and government to improve maternal and neonatal health. Government of Malawi has proposed several strategies to be mainstreamed in the POW. 4. ADF SUPPORT TO THE PROGRAMME 4.1 Concept and Rationale ADF Support to the health sector programme will focus on addressing issues contributing to the high maternal mortality in Malawi. The Support was designed within the context of SWAp in collaboration with other development partners and stakeholders to enable the Government of Malawi to achieve the MDGs related to maternal and newborn health. Over the years, the Ministry of Health with support from various development partners, notably DFID, UNICEF, UNFPA, WHO, USAID, EU, JICA and the World Bank has implemented several safe motherhood programmes. In spite of all these efforts Malawi s maternal mortality rate has continued to worsen from 620 per 100,000 live births in 1996 to 1,120 per 100,000 in According to the UNDP Human Development Report (2004), the adjusted rate for maternal mortality in Malawi is 1,800 for the year 2003, which is the second worst rate in the world In an effort to reverse the increasing trend of high maternal mortality rate, a multisectoral group consisting of government, stakeholders and development partners developed the Road Map for accelerating the attainment of MDGs related to the maternal and newborn health. The Road Map provides within a SWAp arrangement, a framework for building strategic partnership for increased investments on two levels where the health sector can make a difference, namely, the health service delivery and the community. Focusing investments on health service delivery will enhance availability of emergency obstetric and neonatal care, skilled attendance during pregnancy and childbirth, and essential equipment and supplies that will save the lives of women and newborns at all levels. Whereas, focusing on the community level will empower communities to ensure a continuum of care between the household and health care facility In this regard, the Bank Group in conjunction with the SWAp Secretariat shall on an annual basis review and select for funding specific Road Map activities from the Annual Work Plans intended to reduce the high maternal mortality rate. The design of ADF Support has addressed government s concerns for improving the overall efficiency of investment in the health sector, by moving away from the traditional project approach to a SWAp with the view to harmonizing donor support and ensuring a more targeted and equitable delivery of health services. This approach is intended to improve efficiency and equity in available resources. Furthermore, the Local Government Act, which was recently passed, provides the necessary legal framework for the decentralization policy, which will facilitate community participation in health planning and decision making i.e. democratic structures for poor people to participate in their own development.

33 The proposed intervention conforms with the Guidelines for Bank Group Operations using Sector-Wide Approaches (2004), the Bank Group's Health Sector Policy which seeks to improve access to quality health care and the Bank Group s harmonization efforts to reduce transaction costs of development assistance, improve the effectiveness, and efficiency of aid delivery and management. It is also in line with the lending strategy for Malawi, which seeks to alleviate poverty through strong and more equitable growth and improved health status of the population. The poorest and those living in the most remote areas contribute disproportionately to the burden of disease. Consequently, to reduce the burden of disease the programme is designed to strengthen the provision of health care to benefit the poorest and most marginalized people The programme is also in line with the Government s Poverty Alleviation Programme in which the health sector has been identified as one of the key sectors for the reduction of poverty. It has a focus on poverty reduction as it seeks to reduce morbidity and mortality risks associated largely with poorer Malawian households. The programme will contribute to Government s overall policy goal of the health sector, as stated in the National Health Plan ( ), which has been extended through the POW to cover the period The programme also supports the thrusts of the Bank Group s Country Strategy for Malawi and focuses on improving access to quality primary health care for the rural populations The design of the proposed ADF Support has taken into account a number of major lessons learned from the previous five Bank Group interventions in the health sector. This includes delays in project implementation due to the low capacity of the executing agency, the lack of government ownership in the traditional project approach, the need to align expansion of health infrastructure with the required staffing levels and drugs, and lack of capacity to monitor and evaluate project outcomes. As indicated above, the design of the POW and SWAp is based on a government led strategy intended to strengthen local capacity at both central and district levels. GOM and the Development Partners acknowledge the need for clear leadership by the MOH in the provision of health services. The POW and SWAp will ensure availability of adequate drugs and staff in the health facilities. It will also enable the MOH to move away from the individual reviews by various donors to a more coordinated way of monitoring and evaluating performance based on an agreed set of indicators. 4.2 Area and Beneficiaries Malawi is a landlocked country with a total population of about 12 million of which 86% are rural and 14% are urban dwellers. The total median age is 16.4 years whilst it is 16.1 years and 16.7 years for males and females respectively. The POW covers the whole nation and the main beneficiaries will be people living in the rural areas. Five of the six programmes of the POW will cover services offered throughout the 27 districts of Malawi. Whilst the 6 th programme, namely, the Central Operations, Policy and Systems Development is aimed at strengthening the central MOH s capacity to support implementation of the SWAp in delivering the EHP and decentralization of the health sector. The provision of EHP will address the important health needs of the vulnerable groups, the poor, women and children, a greater proportion of them being in the rural areas Surveys into the impact of poverty in Malawi have shown that women and femaleheaded households are the poorest. Although the Government recognizes the need for equal participation by both men and women in economic and social development; this has not been put into practice at the household level due to a number of social and cultural factors that

34 22 continue to perpetuate gender disparities. Culturally, men are assigned leadership roles and women are expected to play a subordinate role. Women are under represented at political, policy and decision-making levels. Out of the twenty-five cabinet ministers twenty-four are men and one is a woman. Gross enrolment ratio between girls and boys at primary level is about 1 1, but the dropout rate is much higher for girls than boys in upper grades. Girls constitute 25% of the students in the final year of primary school Poor maternal health, sexually transmitted diseases and limited access to family planning services are putting a sizable burden of ill health on poor women. The HIV/AIDS prevalence rate among the age group is also estimated to be 5 times higher in women than in men. The death rate of women in the age group is three times more than that of men in the same age group. The subordinate role played by women in decision-making and control of financial resources is one of the major contributing factors putting a sizable burden of ill health women since they have no direct control over issues affecting their own health. GOM has started addressing the issue gender disparities by developing guidelines on gender mainstreaming, implementing a programme against violence on women and changing rules on inheritance to protect adequately the interest of women. 4.3 Strategic Context The proposed ADF support conforms to the selected priorities of the Bank s Country Strategy Paper for Malawi ( ) and is in line with the pillar for human capital development. Focus of ADF support on maternal and newborn health will contribute in reducing the incidence of illness and occurrence of premature deaths. Maternal and newborn health is part of the eleven interventions that constitute the Essential Health Package which in turn forms the basis upon which the six components of the Programme of Work (POW) has been developed. As described in paragraph 3.5, implementation of the POW will be guided by the Annual Work Plans which are based on activities outlined in the District Implementation Plans. The programme will address major problems identified in the sector, namely poor distribution of resources, scarcity of human resources, poor management capacity, and high prevalence and incidence of diseases ADF s support will also contribute to GOM efforts to reach the related MDGs by providing more resources to reduce child mortality and maternal mortality. Current assessments carried out by the World Bank indicate that Malawi is unlikely to meet the MDGs of (i) eradicating extreme poverty, (ii) reducing child mortality, (iii) improving maternal health, (iv) combating HIV/AIDS, malaria and other diseases, (v) ensuring environmental sustainability by However, Malawi will likely achieve the MDG of universal primary education by 2015 and may also possibly meet the goal of achieving gender equality in education by Progress towards meeting the MDGs hinges on effective implementation of the Malawi Growth and Development Strategy, a process to which the Government is committed. 4.4 Objective The objective of ADF s contribution is to support activities of the programme that are aimed at accelerating reduction of maternal and newborn morbidity and mortality rates. A Road Map for Accelerating Reduction of Maternal and Newborn Mortality comprising the following nine strategies has been adopted by the Government of Malawi to achieve this objective:

35 23 Improving the availability of, access to and utilization of quality Maternal and Neonatal Health (MNH) care including family planning services; Strengthening human resources to provide quality skilled care; Strengthening the referral system; Strengthening national and district health planning and management of MNH care including Family Planning services; Advocating for increased commitment and resources for MNH care including FP services; Fostering partnerships; Empowering communities to ensure continuum of care between household and health facility; Strengthening services that address adolescents sexual and reproductive health; and Strengthening monitoring and evaluation mechanisms to facilitate decision-making and service delivery of MNH care. 4.5 Description The Road Map for Accelerating Reduction of Maternal and Newborn Mortality includes the following activities across the six programmes of the POW. Human Resources This programme aims at ensuring adequate staffing at health facilities to provide essential health care package for maternal and neonatal health and building the capacity of training institutions to provide competency based training. This will involve training of tutors and lectures to be able to train more midwives and clinical officers. Training institutions will also be provided with teaching and learning materials to provide competency based training. Pharmaceutical and Medical Supplies This programme aims at procuring pharmaceuticals, medical and laboratory supplies to cover essential health care package for maternal and neonatal health. Essential Basic Equipment This programme will aim at procurement and maintenance of essential basic equipment to provide emergency obstetric care services. Infrastructure and Facilities Development This programme aims at upgrading and rehabilitating existing health facilities to provide adequate geographic coverage of emergency obstetric care services. This will involve establishing or strengthening communication system between health centres and hospitals through installation or repairing radio communication and telephones. Routine Operations at Service Delivery Level This programme aims at establishing and strengthening referral system through provision of motorized ambulances, providing supportive supervision to enhance quality of care, training village health committees in maternal health issues including birth preparedness, danger signs and collection of maternal death data. It will also include developing and distribution of IEC materials on birth preparedness and danger signs.

36 24 Central Operations, Policy Development and Systems Development This programme involves reviewing and updating HMIS in line with the Road Map; reviewing, defining and adopting minimum standards and protocols of care for maternal and newborn health. Advocacy packages on maternal and newborn including family planning services will also be developed. Attention will be paid on exploring more active involvement of the private sector in maternal newborn health issues The above activities will be defined in Annual Work Plans and will be submitted to the Fund for approval. 4.6 Environmental Impact As the programme includes rehabilitation of existing health infrastructures, it has been classified in Category II according to the Bank s environmental guidelines. The programme will have a minimal negative impact on the environment since most of the construction work to be done will consist of one-storey buildings. Principles of environmental protection will be observed in the civil works in terms of preserving existing trees and planting new ones. Where there is no existing water supply, the construction of boreholes has been proposed to ensure the availability of good quality water required for the regular cleaning of the facility. With regards to the disposal of human waste, the ventilated improved pit latrines (VIP) will replace the existing foul smelling pit latrines. Hand wash facilities and bucket showers will be provided to enhance the personal hygiene of patients and health centre personnel. Awareness lessons on the implementation of the proposed mitigative measures will be provided to the medical staff and laboratory technicians. 4.7 Costs of the Road Map Funding of the Road Map for Accelerating Reduction of Maternal and Newborn Mortality will cost approximately USD million and will be jointly financed by the Government and its Development Partners. Table 4.1 indicates an overview of resource allocation for the programmes under the Road Map.: Table 4.1 Cost of the Road Map (USD/UA Million) Programme Areas Total Road Map Cost (USD Mill) Total Road Map Cost (UA Mill) % Total Road Map Human Resources Pharmaceutical & Medical Supplies Essential Basic Equipment Infrastructure & Facilities Develop Routine Operation at Service Develop Central Operations, Policy Develop Total Financing the Road Map Approximately USD 128 million will be required to implement the proposed strategies under the Road Map for Accelerating Reduction of Maternal and Newborn Mortality up to year The majority of finance for the Road Map will need to come from donors. Table 4.2 indicates the sources of financing the Road Map.

37 25 Table 4.2 Sources of Financing the Road Map (USD/UA Millions) Source Total USD Mill Total UA Mill % of Total ADF* Government* Other development partners* TOTAL * These amounts are part of the overall contribution to the funds budgeted for in the POW The Bank Group will contribute a grant of UA million (USD million to support implementation of the Road Map. The total ADF contribution represents about 17.07% of the total funding for the implementation of the Road Map. The ADF resources will be available for financing goods, works, services and operating costs of the said Road Map. 5. IMPLEMENTATION The implementation of the POW will be based on Annual Work Plans, to be submitted in May every year, based on activities outlined in the District Implementation Plans (DIPs) and Annual Work Programs for central MOH Departments. This process will involve the preparation of detailed work plans, which will initially cover the first financial year of the Programme of Work ( ). Subsequently, annual work plans will roll over and follow the financial year and the planning cycle of the MOH. The content of the annual work plans will, amongst other things, include detailed activities to be implemented as part of the six main components of the POW; indicators for inputs and the achievement of outputs and objectives; assignment of responsibilities for implementation of activities; and detailed budgets indicating inputs from national partner(s). 5.1 Executing Agency The MOH will be the executing agency for the programme. As indicated in paragraph 3.7.1, no Project Implementation Unit will be established. The SWAp Secretariat in the Department of Planning of the MOH will deal mainly with the donors, monitoring and evaluation as well as facilitating implementation of all the activities under the POW. The MOH does not have adequate capacity to implement or coordinate and supervise the proposed activities. It is for this reason that the MOH and SWAp Secretariat in particular, have been strengthened through recruitment of four technical assistants namely, experts in monitoring and evaluation, procurement, financial management and human resources development. Day to day implementation of programme activities shall be the responsibility of the technical departments and units of the Ministry of Health. 5.2 Institutional Arrangements The Principal Secretary in the MOH is responsible for the overall implementation of the POW through the SWAp arrangement. Implementation of the SWAp will be coordinated through various committees with management and advisory responsibilities as outlined in Annex II. The roles and responsibilities of the various committees including the Top Management Committee, Senior Management Committee, Health Sector Review Group, Technical Working Group etc. are detailed in Annex III

38 The heads of the different departments of the MOH will be directly responsible for the implementation of the activities under the programmes. The SWAp Secretariat located in the planning department will coordinate the tracking and monitoring of progress in line with agreed indicators; financial monitoring and reporting for the POW; the activities of and support by all stakeholders; and adherence to the provisions of the MOU and Code of Conduct. It will make the necessary preparations for the Joint Review Process in conjunction with the proposed Joint Review Committee, and coordinate the production of the Annual Sector Review Report for the Sector The monitoring and evaluation of programme activities, including implementation progress and expenditure will be the responsibility of the MOH as a regular management function through the SWAp Secretariat. The SWAp Secretariat will submit mid-year Program Review Reports on the accounts and activities of the POW by 15 March each year. The mid-year Program Review Reports will be submitted to the TMC, the Senior Management Committee and the HSRG, and will contain information on programmes/subprogrammes by: objective, activities, targets, budget, source of funding, planned versus actual outputs, expenditure, and variance on expenditure using a format to be developed and agreed to by all partners. The main focus of the mid-year Program Review will be on overall SWAp progress, more and especially on technical matters. The Fund will closely monitor the implementation of the POW through participation in these reviews. 5.3 Implementation and Supervision Schedules The activities under the programme will be implemented over 3.5 years (42 months) from effectiveness of the grant. Joint review missions will be undertaken twice a year. The implementation schedule is presented in Annex VIII. 5.4 Procurement Arrangements Procurement arrangements are summarized in Table 5.1 below. All procurement of civil works, goods and acquisition of consulting services financed by the Bank will be in accordance with the Bank's Rules of Procedure for Procurement of Goods and Works or, as appropriate, Rules of Procedure for the Use of Consultants, using the relevant Bank Standard Bidding Documents. These procedures are harmonised with those adopted by Development Partners. Expenditure Category 1. WORKS 2. GOODS Table 5.1 Procurement Arrangements Contract Value Threshold (US$) Procurement Method Contracts Subject to Prior Review >= 1 million ICB All contracts >=50,000 <1,000,000** NCB None All Values* Direct Purchase All contracts >= 250,000 ICB/LIC/UN All contracts >= 30,000 < 250,000** NCB/LIC/UN None < 30,000 Shopping/UN None All Values Direct Purchase All contracts Medical Equipment >= 150,000 ICB/LIC/UN >250,000

39 Expenditure Category 3. CONSULTING SERVICES Contract Value Threshold (US$) >= 30,000 < 150, Procurement Method NCB/LIC/UN Contracts Subject to Prior Review None < 30,000 Shopping/UN None All Values Direct Purchase All contracts >= 100,000, firms Short List of Firms All contracts < 100,000, firms Short List of Firms None >= 50,000 individuals Short List of individuals All contracts < 50,000, individuals Short List of individuals None All Values Single Source Selection >= 1,000 * All contracts under direct purchase will be subject to prior review **ADF funded contracts the maximum value shall be USD 150, For all procurements requiring post review, the Bank in collaboration with other Development Partners and/ or independent auditors will carry out Procurement Post Reviews (PPRs) annually. Based on the findings of the reviews, the prior review thresholds will be reviewed by the Bank with Collaborating Partners in consultation with the Directorate of Public Procurement. National Procedures and Regulations Malawi s national procurement laws have been reviewed and determined to be acceptable. Executing Agency The MOH will be responsible for procurement of goods, works and acquisition of consulting services financed under the programme. A procurement unit will be established in the MOH, comprising a long-term advisor and two members of staff from the MOH, which is a requirement under the agreement reached with collaborating partners. The key responsibilities of the procurement unit are: (1) development of procurement plans, (2) conduct procurement activities, (3) procurement monitoring including preparation of procurement monitoring reports, (4) manage procurement audits, (5) manage procurement training In order to strengthen the procurement capacity of the MOH, a Procurement Improvement Action Plan has been agreed between GOM and the Development Partners. The Procurement Improvement Action Plan includes the following key activities: Establishment of specialised procurement units at all cost centres in line with the requirements of the Public Procurement Act of 2003; Ensuring that established procurement posts are prioritised and progressively filled in the ministry and at district level; Identifying training needs and developing a time bound training strategy; Developing health sector procurement systems and procedures, annual procurement plans and sector specific standard bidding documents; Developing and implementing a drugs and medical supplies procurement, distribution and management improvement plan at central, district and local levels;

40 28 Developing and supporting the implementation of the Procurement Improvement Action Plan including monitoring, mentoring and capacity building responsibilities of procurement staff of the MOH through long term Technical Assistants Ensuring independent external procurement auditing; and Establishing a financial management and procurement improvement monitoring working group to oversee the implementation of the Procurement Improvement Action Plan. Review Procedures By May 15 each year, the MOH will submit to the ADF and Collaborating Partners for review and agreement Annual Procurement Plan. This plan will include contracts with cost estimates, method of procurement, prior review thresholds, key milestone dates. The Procurement Plan will be agreed between Government and collaborating partners by June 30 of each year. During implementation of the Procurement Plan, the Government will provide the Bank with quarterly procurement monitoring reports concerning progress in implementation of the Procurement Plan. The Government will provide information to the Bank concerning the award of contracts and appointment of consultants, and any material modifications of the terms and conditions of such contracts after their award. Any subsequent revisions to the Annual Procurement Plan will require concurrence of the Bank By June 30 of each year, the Government will appoint an independent procurement agent to review the procurement that took place during the preceding year. The Bank and collaborating partners will agree upon the scope and Terms of Reference of this Procurement Audit and criteria for selection of agents. The procurement audit will be completed and a report submitted to Government by December 31st of each year. While procurement audits would normally be conducted annually, should particular concerns be identified, the Bank may request that a special procurement audit be conducted, or may send additional procurement missions to the field for further post reviews or investigations. The conclusions of any such missions will be shared with the Government and collaborating partners The findings of the annual procurement audit will be provided to all collaborating partners and the Government by January 30 of each year. The Development Partners will provide their comments by February 28. The Government will by March 31 provide the Development Partners with a proposed plan of action to correct any anomalies and errors identified in the procurement audit or review. Taking comments of the Development Partners into account, the Government will implement its plan of action in accordance with a schedule agreed with the Development Partners. Should cases of mis-procurement occur, the Bank will take actions in accordance with its Rules of Procedures. 5.5 Disbursement Arrangements The Borrower will submit for approval by the Bank Annual Work Plans with detailed estimated budget for the proposed activities. A direct payment method and the special account method will be used. The Borrower will open a Special Accounts at the Central Bank of Malawi into which part of the ADF grant resources will be deposited. It will also open a Local Currency Account (LCA) in a commercial bank acceptable to the ADF. Thereafter funds will be withdrawn from the SA to be deposited in the LCA to finance eligible expenses. The ADF will replenish the SA after the executing agency has provided valid justifications for the use of at least 50% of the previous deposit. All supporting documents will be initiated and

41 29 kept by the SWAp Secretariat for review by the auditors and the joint review missions. The opening of a Special Account and a Local Currency Account will be a condition precedent to first disbursement. 5.6 Monitoring and Evaluation As indicated in paragraph 3.9, the monitoring and evaluation framework for the POW will be based on the SWAp principle of annual joint reviews involving all the stakeholders. Also, as elaborated in paragraph 5.1, the MOH does not have adequate capacity in monitoring and evaluation, therefore a Monitoring and Evaluation Specialist has been recruited. The premise of the monitoring framework is that there is consensus between development partners and the government on targets, choice of indicators and systems to monitor progress. A set of indicators has been put in place for measuring the performance of the health sector (ANNEX IV). The strategy emphasizes the use of indicators already being collected by the routine health statistics and complemented, in some instances, by the collection of additional information. Critical at the beginning of the SWAp process will be the use of process indicators to measure whether actions set out in the work program have been completed on time and possibly whether completed within the budget. As outcome indicators respond rather slowly to health sector improvement, reliance will be placed on service quality and output indicators as proxies for whether the objective of the programme is achieved. In addition, the MOH with the assistance of Development Partners including the Bank will make efforts so that the monitoring and evaluation system is results oriented When the grant is fully disbursed and the programme has come to an end, the Secretariat will prepare and send to the Fund, a Programme Completion Report (PCR) indicating costs, benefits, achievements, and lessons learned. A PCR would also be prepared by ADF after the programme ends so as to evaluate the potential impact of the programme and the lessons learned from its implementation. 5.7 Financial Reports and Auditing The Executing Agency will maintain the accounts by programme outputs and source of funding and put in place a system of internal control to ensure prompt recording of transactions, timely production of accounts and reports and safeguard the MOH assets. Financial records will be maintained in accordance with internationally acceptable accounting procedures. The Secretariat will prepare monthly financial statements that will be consolidated by them into mid-year Program Review Reports to be included as a section of the mid-year Program Review Report The Auditor General has the mandate under the Public Audit Act 2003 to independently audit all financial statements, records and books of accounts under the SWAp. Where the Auditor General experiences capacity constraints, he may direct the engagement of a private firm to audit any financial records, books of accounts and financial statements of the MOH. Audited accounts will be submitted to all donors within six months after the end of the financial year. 5.8 Aid Co-ordination The preparation of the POW was a joint effort of the MOH and collaborating partners. The report on ADF s support to the implementation of the POW is based on the outcome of

42 30 joint identification, preparation appraisal and post-appraisal missions undertaken with the World Bank and other collaborating partners. The ADF took part in these missions and shared with other development partners the design and proposed implementation arrangements of the programme As indicated in paragraph coordination of the implementation of the POW will be undertaken at two fora, namely the Health Sector Review Group (HSRG) and donor subgroup on health. The terms of reference of the HSRG include reviewing progress in the implementation of the Program of Work, sector priorities, and budget considerations in order to support and reach a consensus; undertake advocacy for the sector; and resolve the disagreements between the partners within 30 (thirty) days. The donor sub-group will include partners represented in Malawi and will undertake monthly consultation meetings in order to monitor the progress in the implementation of the POW The SWAp Secretariat will ensure coordination of all the activities under the SWAp. Annual joint reviews will be undertaken by the Government and contributing partners to the implementation of the POW. Annual Work Programmes will be determined jointly. The Bank will ensure to take part in the joint reviews with the other partners. 6. PROGRAMME SUSTAINABILITY AND RISKS 6.1 Recurrent Cost ADF s support is an integral part of the POW that will be implemented through a SWAp arrangement and jointly financed with GOM and other development partners. The Government and the collaborating partners, with the view to keeping the recurrent cost implications to a minimum, endorsed all the interventions in the POW. The main activity in the POW that will require substantial recurrent costs is recruitment of health workers to fill the large numbers of established vacant posts and the added benefits to retain staff. The cost for recruitment and measures to reduce long-term financial implications by engaging those who left the civil service on short-term basis were taken into account in the design of POW Annual Work Plans to be approved by collaborating partners will equally include recurrent costs. This effectively ensures that the recurrent costs are taken into account. In addition to the above measures for curtailing recurrent costs, the programme suggests that at least for the near future, civil works will be confined to renovations and small upgrading of existing facilities. In this regard, the major activities of the programme will involve provision of drugs and supplies, development of infrastructure, and strengthening of health systems, which are catered for under the current budget. Malawi also receives Heavily Indebted Poor Country funds that are in part channelled to the MOH. 6.2 Programme Sustainability The sustainability of the POW will be determined by two key elements, ownership and the availability of financial resources (including donor funds). Moving away from the project approach to SWAp will in itself enhance sustainability through efficient and effective use of human and financial resources. The key to ensure sustainability of the programme also lies in the ability of the Government to engender ownership by the communities (i.e. districts) where the activities will be implemented. The districts will include their proposals in the district plans, which will be incorporated in the Annual Work Plan. All the activities under the programme will be closely implemented in collaboration with the District Health Officer as

43 31 well as with the communities in the catchment area. The DHO will ensure mobilisation of the communities and facilitate their involvement in the planning, management of the services. This will encourage the community members to use the facilities in a responsible manner, help to make the health workers more accountable to the community and contribute to sustainability of the programme The POW emphasizes the need to strengthen management capacity of district health offices. Periodic supervision and monitoring by the DHO will ensure sustainability in the provision of quality services. The skills of the staff at both district level and health centres will be enhanced. This will enable them to facilitate sustainability in the management, prevention and control of priority public health problems. All the activities for the POW were jointly agreed (partners and GOM) and similarly Annual Work Plans will be jointly approved. More effective planning and management of health resources and services will increase technical efficiency and cost-effectiveness which will result in the containment of recurrent costs since the activities will be approved in the Annual Work Plan. Routinely maintained health infrastructure, medical and communication equipment will be another key determinant to sustainability of the programme Availability of resources, both Government and donor, will contribute to the sustainability of the POW. Donor support represents about 70% to the financing of the POW. This mainly depends on the willingness and capacity of the MOH to maintain and further improve the financial management system and the policy dialogue mechanisms that have been put in place in SWAp. 6.3 Assumptions and Critical Risks It is assumed that GOM will maintain its commitment to the POW for SWAp and that the donor community continues to support the SWAp at the same level for the near future. Over the years, the share of the budgetary allocations for health has been rising in nominal terms but the growth has been marginal in real terms. Furthermore, the annual average growth of the Government s contribution to the sector in absolute terms is a reflection of its commitment towards supporting the implementation of the POW. Government has also embarked on aggressive mobilization of financial resources with development partners. Moreover, Government has committed itself to increasing public financing of the health sector. Hence, it is very likely that GOM will be able to meet its counterpart funding obligations and to provide for the recurrent health care for preventive and curative services. The donor community equally having been part of the development of the SWAp arrangements has shown commitment to financing and sustaining the POW It is also assumed that health personnel will use training to improve the quality of health care delivery. Of course, failure of the health workers to appropriately utilize their newly acquired skills or disseminate correct health information and messages may jeopardize the outcome of the programme. In order to minimize this risk, the planning and management capability at the district is a continuous process in the POW, which will also be complemented under the proposed programme. This will equip the DHO with appropriate supervision and monitoring skills to ensure quality control, compliance and effective utilization of upgraded skills. This will be supported with monitoring activities of the zonal offices and national programme officers. Similarly, adequate communication, equipment and supplies combined with periodic joint supervisions, SWAP secretariat, national and zonal level will ensure that DHOs effectively serve outreach areas and disseminate information on EHP.

44 There are risks associated with the weak implementation capacity of the MOH at national and district levels, and timely implementation of the programme, delivery of goods on schedule and according to budgetary provision. In order to mitigate these risks, a SWAp Secretariat will be established to support and facilitate the implementation of the POW. SWAp offers an opportunity to undertake massive training efforts to provide procurement and financial management skills to responsible staff at national and district levels. Recruitment of technical assistants in financial management, procurement, human resources development, and monitoring and evaluation to strengthen implementation of POW is also in progress. Furthermore, DFID has signed a separate 100 million grant for salary top-ups as a means to ensure retention of health workers Political instability due to the strong anti-corruption drive by the current President of Malawi may affect implementation of the POW. It should be noted, however, that since the President resigned from the ruling party due to his anti-corruption stand, a number of cabinet ministers and MPs have pledged their loyalty to working with him. SWAp will mitigate corruption by putting in place efficient and transparent financial management and procurement systems. Recruitment of long-term technical assistants to set up such systems is in progress. Furthermore, Terms of Reference for ADF staff attending Joint Review meetings will include an assessment of transparency and accountability in the use of programme funds. It is also anticipated that the opening of a Bank Group Country Office in 2006 and the recently approved Support for Good Governance Project will help in improving fiduciary standards. 7. PROGRAMME BENEFITS Technical Benefits 7.1 While there are a number of possible risks in the implementation of the POW, Malawi has the potential for making progress towards achieving the health MDGs with support from its Development Partners. Advances in health status will contribute towards poverty reduction, and therefore, the programme benefits outweigh potential risks. Implementation of the POW through a SWAp arrangement will stimulate participation of users and civil society in planning, decision-making and monitoring of health facilities. The SWAp offers the opportunity for strengthening institutions to improve targeting and focus of resource allocation and activities, accessibility and relevance of health services delivery to the needs of the vulnerable groups, the poor, women and children, a greater proportion of whom are in rural areas. The provision of targeted EHP will lead to an improved health status of the poor population, which in turn will improve their productivity. 7.2 Death and disability related to maternal causes account for a large percentage of the burden of disease among women of reproductive age in Malawi. The reduction of maternal and newborn morbidity and mortality requires effective and immediate access to skilled assistance in childbirth and easy access to referral facilities for complications, such as those requiring caesarean sections. In Malawi, it is estimated that about 45% of deliveries are taking place outside the health facilities. With improved access and utilization of these services by pregnant women, it is expected that this proportion would be reduced and infant and maternal mortality would be reduced as well. It is anticipated that the current maternal mortality rate of 1,120 deaths per 100,000 live births will be reduced significantly to 600 deaths per 100,000 live births by At least 40% of infant deaths are a result of poor care

45 33 during pregnancy and delivery, these deaths will be avoided through improved maternal health. Utilization rate of contraception is likely to increase, thereby, improving child spacing and reducing fertility rates. 7.3 Ensuring that EHP interventions reach women will strengthen the possibility of meeting poverty reduction objectives and MDG targets. For example, HIV/AIDS has reversed decades of improvements in life expectancy to the current 39 years; left thousands of children orphaned and eroded the quality of health services by straining the limited resources in the MOH. However, sufficiently empowering women to improve their health through implementation of EHP will contribute in reversing this trend. The POW also covers provision of drugs and equipment, infrastructure development, and strengthening the health systems all of which are bound to have a positive social impact. 7.4 Furthermore, the EHP provides a limited but effective range of priority services that will be given to all individual Malawians free of charge at the point of delivery. Removal of financial barriers to the provision of health services will ensure accessibility to quality health care for all. This will also have a significant social impact on the health status of the disadvantaged population. Decentralization and community participation in planning and delivery of health interventions will also enhance the capacity of the health sector to reach the poor and vulnerable populations. Economic Impact 7.5 The programme is complementary to the Malawi Growth and Development Strategy, which gives utmost attention to needs of the poor. Provision of training and procurement of medical equipment and supplies under the programme will strengthen the skills of the staff, improve diagnostic procedures and treatment, and strengthen the IEC activities with respect to cost-effective interventions that will have major impact on the reduction of disability and absenteeism due to the major diseases in rural remote areas. Reduction of the high morbidity rate due to easily preventable diseases will result in higher productivity. The programme will have a positive impact on the economic well-being of families living in rural areas by lowering costs of treatment and demands on family members to provide support to the sick. 7.6 The strengthening of the management capacity of the districts and the establishment of health information system for monitoring activities will result in the effective utilization of the limited available resources. There will be gains in efficiency due to better coordination through SWAp. The programme will ensure supply of drugs to the health facilities instead of the patients purchasing these items elsewhere. During the period of construction and procurement of the supplies, the programme is anticipated to create employment opportunities to the communities in the surrounding areas. 7.7 In Malawi women constitute a significant proportion of the work force particularly in the agricultural sector, where they are often major producers of both the subsistence and cash crops. The deaths of women therefore results in loss of to productive contribution to the workforce. The economic impact of women who are disabled due to pregnancy related problems is equally high. The death of mothers also has negative impact on children. The probability of children dying rises with the mother s death. The death of mothers also increases the probability of children s absenteeism from school.

46 34 8. CONCLUSION AND RECOMMENDATIONS 8.1 Conclusion The proposed ADF s contribution will be directed towards reduction of the maternal mortality rate in Malawi. Maternal mortality rate has worsened from 620 per 100,000 live births in 1996 to 1,120 per 100,000 in Initial results from the on-going demographic health survey seem to suggest a further increase in maternal mortality rate. Financial resources from ADF will be channelled to the Ministry of Health and deposited in a special bank account and its rules of procedure for procurement will be used to procure goods, works and services. The proposed ADF s contribution will be used to finance some of the strategies outlined in the National Road Map for accelerating the reduction of maternal and newborn mortality and morbidity in Malawi. Strategies in the National Road Map cut across all the six programmes of the POW, namely, (i) Human Resources; (ii) Pharmaceutical and Medical Supplies; (iii) Essential Basic Equipment; (iv) Facilities Development; (v) Routine Operations at Service Delivery Level; and (vi) Central Operations, Policy and Systems Development Programme. 8.2 Recommendations and conditions for grant approval It is recommended that the Fund consider extending an ADF grant not exceeding the sum of UA million to the Government of Malawi as described in this proposal, subject to the following conditions: A. Conditions Precedent to Entry into Force of the Grant Agreement The Protocol of Agreement shall enter into force on the date of signature by the Recipient and by the Fund. B. Conditions Precedent to First Disbursement of the Grant Prior to first disbursement of the Grant, the Recipient shall have: i) Provide evidence of opening of a Special Account depositing the proceeds of ADF Grant and a Local Currency Account (para.5.5.1); C. Other Conditions Recipient shall: i) In May every year, submit an Annual Work Plan for the POW (paragraph 5). ii) In May every year, submit an Annual Procurement Plan (paragraph 5.4.6)

47 MAP OF MALAWI ANNEX I This map was provided by the African Development Bank exclusively for the use of the readers of the report to which it is attached. The names used and the borders shown do not imply on the part of the Bank and its members any judgement concerning the legal status of a territory nor any approval or acceptance of these borders. The scale is for illustrative purposes only and should not be considered completely accurate.