Annex 1. Identification Title/Number Total cost Support to the Health Plan and to the Road Map for Accelerating the Reduction of Maternal Morbidity and Mortality in Liberia (CRIS Ref: LR/FED/023-313) EUR 42 000 000 (EDF contribution) A Envelope Aid method / Sector Policy Support Programme: Method of - Sector budget support (direct centralised management); implementation - Project mode (partially decentralised). DAC-code 12220 Sector 13020 2. Rationale and country context 2.1. Country context and rationale for SPSP 2.1.1. Economic and social situation and poverty analysis Overall Liberian economic and social indicators show clear signs of revitalization since the economic collapse in 2003 and before. Although growth of Gross Domestic product (GDP) declined from 7.1 percent in 2008 to 4.6 percent in 2009, due to the international crisis, it rebounded to 5.6 percent in 2010 and 7 percent projected in 2011. Except for 2008, these rates are sufficient to noticeably improve general economic conditions and help reduce poverty. Historically, poverty is higher in rural areas of Liberia, especially in south-central and northwestern parts of the country; however, the urban population migration is increasing the poverty in urban areas. The household survey in 2007 found 51 percent of households considered themselves in poverty and 9.7 percent in extreme poverty. By 2010, this situation has improved to 37 percent and 8.9 percent respectively. Thus the economy improved during the Poverty Reduction Strategy -PRS I period (2008-2011), although not as fast as planners had estimated. In 2011, Liberia ranked 182 nd out of the 187 countries included in the United National Development Partners (UNDPs) Human Development Report. Average life expectancy was 56.8 years and the adult literacy rate was 59.1 percent. Progress is being made on the Millennium Development Goals (access to improved drinking water and school enrolment are both improving) but the impact of the conflict will make it difficult for Liberia to achieve most of the goals. 2.1.2. National development policy PRS-I articulated the Government s vision and strategies for moving toward rapid, inclusive and sustainable growth and development. Within this poverty reduction framework, the Ministry of Health & Social Welfare (MoHSW) developed a National Health Policy and Plan (NHPP), intending to restore basic health services destroyed during the civil crises in the Country. Accessible, affordable and quality health care services would be provided to all people of Liberia. The health policy emphasized health and social welfare as a universal human right to be ensured through equity, efficiency, sustainability and accountability. A Primary Health Care (PHC) approach encompassing decentralization, community empowerment and partnership would be adopted. Currently, the PRS-II is being developed 1
and will be finalized in 2012. The (draft) PRS-II chapter on health provides a relevant and detailed summary of current health status, achievements during 2007-2011 in terms of improved health services availability and health services outputs. Further, it includes a critical analysis of the key challenges regarding equitable and efficient expansion of primary health care. Regarding maternal and newborn health, tireless efforts are being made including development of sexual and reproductive health policy, development of the Road Map for maternal and newborn health and provision of drugs and medical supplies. Despite these achievements the maternal mortality ratio is still one of the highest in Sub-Saharan Africa. The maternal mortality ratio stands at 994/100,000 live births coupled with the high adolescent pregnancy rate and high unmet need for family planning. This implies that about 4 pregnant women die in Liberia every day from child birth or pregnancy related conditions. The PRS-II is cognizant of the importance of making progress in millennium development goal (MDG) 5. Further, the PRS-II mentions gender inequalities as an important area for attention, such as the combat against violence against women. It also includes a relevant and clear monitoring and evaluation (M&E) monitoring framework, with relevant and measurable indicators and targets. The PRS-II also stresses the importance of improving efficiency and effectiveness, e.g. by developing viable and equitable healthcare financing options, efficient use of key inputs such as human resources for health and efficient models for public-private partnerships. Finally, it underscores the importance of coordination and harmonization of external aid, in line with the Paris Agenda. To ensure that key activities to achieve public goals are better reflected in public budget(s), and to improve the predictability of national and on-budget external funding for national priorities, the Ministry of Finance (MoF) has developed a Roadmap Map for a Medium Term Expenditure Framework (MTEF). Selected line Ministries, including MoHSW, will develop a sector-specific MTEF, as of 2012-2013. 2.2. Sector context: policies and challenges 2.2.1. Policy and strategy development Congruent with PRS-I, the Government of Liberia/MoHSW developed the National Health Policy (NHP) 2007-2011. The cornerstone of this NHP was to optimise access to the Basic Package of Health Services (BPHS). The guiding principle was to focus on Primary Health Care at the County level and below, in an equitable and gender sensitive manner. Both PRS-I and NHP included a clear M&E framework for health with relevant sector-wide indicators well reflecting these policy intentions. During the Health Summit in July 2011, the new National Health and Social Welfare Policy (NHSWP) was launched, together with the 10 years National Health Strategic Plan 2011-2021. These policies and plans continue to focus on increasing access to the now called Essential Package of Basic Services (EPHS; BPHS plus additional services). Furthermore, the EPHS includes Social Welfare services that address gender inequalities and sequels of the civil war. Moreover, considering preoccupying outcome indicators, the new policy and plan focus especially on accelerating the reduction of maternal mortality. Recently, a comprehensive Road Map for Accelerating the Reduction of Maternal and Newborn Morbidity and Mortality in Liberia has been developed, to support these policy goals. 2
The new 10-years Health Plan will be translated into 2-years sector-wide Operational Plan. A Medium Term Expenditure Framework (MTEF) and a Joint Planning Cycle, specific for the health sector, will be developed by FY 2012/13, to enhance coordinated planning and predictability of all resources. In line with the National Decentralization Policy, the de-concentration of central Health and Social Welfare management responsibilities and the building of performing health management systems at County level will adapt to the County administrative structure in an incremental and pragmatic way. 2.2.2. Health Budget The Government of Liberia budget share allocated to the health sector has remained stable as a percentage of the national budget (around 10%) over the last three years, although it almost doubled in absolute terms from US$ 21.7 million (US$ 6.1 per capita) in FY 2008/09 to US$ 39.3 million (US$ 10.3 per capita) in FY 2010/11. According to the biannual MOHSW plan 2011-2013, the public budget for health in fiscal year 2011-2012 is around US$ 38 million. Total public health expenditure (i.e. expenditure from Government of Liberia budget plus external aid on budget plus external aid off budget ) increased from US$ 72.3 million (US$ 20.4 per capita) in FY 2008/09 to US$ 83.7 million (US$ 22.5 per capita) in FY 2010/11. Actual expenditure (from Government of Liberia budget only) expressed as a percentage of the public (Government of Liberia) budget decreased from 86% in FY 2008/09 to 70% in 2010/11, indicating a rather low absorptive capacity. External aid to the Health sector includes: (1) Aid on Budget (captured in the Office for Financial Management of MoHSW (OFM) Financial Statements), including the Health Sector Pool Fund; and (2) the Aid off Budget including EU and USAID funds which still represents the bulk of assistance (44% of total health expenditure [Government of Liberia + total External Aid] in FY 2010/11). A substantial share (60% to 70%) of external aid is spent on contracts (input based and performance based contracts) with NGOs to support 75% of the functioning MoHSW health facilities. The projected cost for the 10 years National Health and Social Welfare Plan evolves from US$ 66.6 million in 2012 to USD 130 million in 2021. 2.2.3. Donor Coordination After the war, the MoHSW has rapidly strengthened its stewardship role to coordinate the health sector and to establish adequate institutional and managerial mechanisms. The Health Sector Coordination Committee was re-vitalized, to steer the sector in collaboration with the external partners. Each quarter, a sector Steering Committee meets to exchange information between MoHSW and stakeholders, including other Ministries, and representatives from development partners, NGOs and Civil Society. In 2008, the Health Sector Pool Fund was established as a common management arrangement for external funds (DFID; Irish Aid; UNICEF UNHCR recently: French and Suisse Cooperation's); this Fund supports the implementation of the National Health Strategic Plan and it is also a relevant tool for donor coordination. In order to strengthen its oversight of the management of several key projects and programmes, the MoHSW will establish a single Programme Management Unit (PMU) that will ensure the oversight of all external aid to the sector. Each year, a Health Summit takes place, to present progress made and challenges, and to discuss among all stakeholders policy intentions and strategic priorities for the next year. 3
Unlike in other countries, the MoHSW has so far not organized independent health sector reviews, to complement national evaluation processes. Although a Memorandum of Understanding (MoU) exists for the Pool Fund, there is no over-arching MoU for sectorcoordination and harmonization of external aid. With the formation of County Health Social Welfare Teams (CHSWTs), sector-coordination at the County level has also improved. Each County has produced a 10-year County Health Plan. It remains, however, a challenge for the CHSWTs, to coordinate all activities within their territory, especially when there are several NGOs present, still working on their own. 2.2.4. Institutional Capacity Leadership by the MoHSW within the health sector is strong. Coordination mechanisms within the sector have been well established. During previous years, much progress has been made with policy and strategy development. Technical capacity to monitor the sector performance has steadily improved and the MoHSW is now able to estimate critical process and output indicators through its routine (Health Management Information System (HMIS) system. However, planning and management capacity at central and county levels is still deficient. So far, management and implementation of health services have to a large extent been supported by international and national NGOs. A key challenge is to shift managerial responsibilities towards central and peripheral (county/district) levels of MoHSW. So far, human resources development and management in the public sector have been guided by rather rigid norms for the staffing establishment. The new health policy stipulates that this key resource is to be used in a more efficient manner, by considering other key variables such as the size of catchment populations, utilization of health services and workload. Within the MoHSW, the Office for Financial Management (OFM), headed by the Ministry s comptroller, manages not only the Government of Liberia budget for health, but also funds for several projects and programmes, including World Bank, GAVI, Pool Fund. Supply of essential medicines and consumables have been erratic. The National Drugs Service (NDS; central medical stores) are underfunded, and do not have oversight over the medicines procurement pipeline. The national annual budget for essential drugs has been oscillating around US$ 1 m. Furthermore, the regulatory capacity of the (pharmaceutical) health sector is still grossly inadequate. Recently a National Supply Chain Master Plan has been developed. This will be supported by USAID and Global Fund. 2.2.5. Performance Monitoring; current status of health status and health care outputs The performance of the health sector is measured through a concise set of sector-wide indicators (outcome; outputs; process; input indicators); these indicators are also used for monitoring the PRS. Within MoHSW, the Department of Planning is in charge of Monitoring and Evaluation of the health sector. 2.2.6. Macro-economic context From 1987 to 1995 Liberia's gross domestic product (GDP) fell by almost 90 percent and it has not yet recovered. Liberia's 2010 estimated per capita GDP was US$ 247. The figure is down US$ 970 from its peak of US$ 1,217 in 1980. The recent global economic downturn has contributed to the slow economic recovery and will stunt future economic growth for some time to come. However, due in part to the very low economic baselines, Liberia has un- 4
mistakenly made economic progress in recent years. Caution should be exercised when projecting future public sector revenues for health and social welfare because the projected growth rate of 15 percent does not reflect the historic GDP growth. Nevertheless, Liberia recently benefitted tremendously from the completion of the Heavily Indebted Poor Countries (HPIC) process, and a total external debt burden of US$ 4.6 billion, equivalent to 800 percent of GDP, was cancelled by June 2010. Debt relief will enable Liberia to finance reconstruction of vital infrastructure that will underpin future economic growth. 2.2.7. Public Finance Management (PFM) Following the Public Expenditure Management and Financial Accountability Review (PEMFAR) / Public Expenditure and Financial Accountability (PEFA) exercise (2008) and the International Monetary Fund (IMF) comprehensive report outlining a medium term plan for PFM reforms, the Government of Liberia established a PFM Reforms Coordination Unit that has embarked on the development of an overarching Government-wide PFM reform strategy. Despite substantial progress made, the PFM systems still face significant challenges that will need to be tackled to meet the objectives of Government of Liberia in implementing the next PRS covering the period 2012/13 to 2015/16. To address these challenges and to consolidate the reforms over the medium term, the MoF has developed a new strategy and action plan intended to provide a coherent vision and programme of activities and to coordinate the fragmented donor support to Public Finance. Key areas of this new strategy and plan encompass: (1) the roll-out of Financial Management Information Systems (IFMIS); (2) the introduction of a Public Sector Investment Programme (PSIP); (3) the introduction and implementation of medium term management tools (including MTEF by FY 2012/13); (4) improved transparency and accountability in PFM and strengthened implementation of the regulatory framework and application of sanctions for non-compliance; and (5) strengthened treasury management function at MoF and Counties. 2.3. Eligibility for budget support The Liberian health sector is eligible for sector budget support (SBS): A well defined sector policy is in place and implemented (see 2.2.1); An oriented macro-economic stability policy is in place (see 2.2.6); and, A credible and relevant programme to improve Public Finance Management is in place and being strengthened (see 2.2.7). 2.4. Lessons learnt The Government of Liberia has established a clear health policy and a clear, consistent multiannual Health Plan. The bottom-line of the Liberian policies and plans is to improve the availability and accessibility of the EPHS, including gender-sensitive and evidence-based interventions to improve health status among the population, with special attention to the poor. These policies and plans are fully in line with EU policies on health system strengthening. This justifies EU support, through a Sector Policy Support Programme (SPSP), during 2013-2016. This SPSP will move away from the ongoing geographically defined EU project aid (e.g. through direct contracting of NGOs), towards sector-wide support of the health sector and of the sector s 10-years strategic plan. The ongoing EU support implemented by the NGOs as well as the Global Budget Support for the Macroeconomic Stabilization are the starting point for this new programme. The NGOs have contributed to start building management capacities 5
of the Country Health Team and the ongoing Global Budget Support programme is contributing to the dialogue between the MoHWS and the MoF on sector budget execution and control. Considering the pivotal importance of strengthening the CHSWTs for effective and efficient needs-based service delivery, the SPSP will provide technical support for capacity development at central MoHSW level and at the level of the Counties. The existing sector-wide indicators will be the main basis for the monitoring of the proposed SPSP. 2.5. Complementary actions This SPSP is entirely complementary to other external (technical and financial) support of MoF and of MoHSW. The geographical area of support of this support will take into consideration the support provided by the Government of Liberia, the Health Sector Pool Fund and USAID. Also, the SPSP builds on current technical assistance provided under the 9 th European Development Fund (EDF), in particular on decentralization (e.g. involvement in the functional analysis of MoHSW in 2011-2012) and it will be complementary to the World Health Organisation (WHO) technical assistant funded by the EU/WHO/International Health Partnership Plus programme. 2.6. Donor coordination The coordination of the health sector is under the leadership of the MoHSW. The main coordination mechanisms (Quarterly Health Sector Coordination Meetings, Health Sector Steering Committee Meetings and Annual Sector Review) are described in 2.2.3. 3. Description 3.1. Objectives The general objective of the SPSP is to contribute to improving the health status of the Liberian population in general and to reducing the maternal mortality, in particular, by improving the access to and the quality of the Essential Package of Health Services which includes obstetric care. The purpose of SPSP is to contribute to the achievement of the objectives and targets set for 2016 in the 10-years strategic health & social welfare plan and in the Road Map for the reduction of the maternal mortality. 3.2. Expected results and main activities The SPSP includes three expected results Result 1: Access and quality of health services provision increased, in particular the progressive expansion of the Essential Package of Health Services and the obstetric care. Activities linked to this expected result include rehabilitation and equipment of health facilities and training of health services providers as conditions for the achievement of annual targets defined by the National Health Plan and the Road Map for the reduction of the maternal mortality. Result 2: Managerial capacities of the County Health and Social Welfare teams, and of the MoHSW s Central Office is built. Activities linked to this expected result will be implemented with the support of the technical assistance and will focus on the improvement of capacities in terms of health planning and budgeting, health management information system, supervision skills and quality assurance management 6
Result 3: Sector wide common management arrangements and the sector policy dialogue strengthened. Activities linked to this expected result will be implemented with the support of the Technical Assistance and will include follow up on the implementation of the health MTEF, the elaboration of a comprehensive health Monitoring and Evaluation Framework including independent sector review. 3.3. Risks and assumptions The main risks to be taken into account are: Inconsistent leadership, political turnarounds or corruption cause the deterioration of the Government's credibility and push the health sector in different directions. Emergencies draw attention and resources away from the sector. Proliferating, competing priorities and resources available less than anticipated can compromise the implementation of the plan. Divergence from the national strategy for decentralization results in unforeseen implications on the sector policy and plan. Inadequate monitoring results of the plan cannot be used consistently to guide decisions. Low absorption capacity of the health system at central and county level in the context of a fragile state recovering from a conflict which destroyed the health sector Mitigation measures will be: Strengthening of the mechanisms for sector policy dialogue between the Government of Liberia and stakeholders (donors, implementing partners, civil society) at each level of the health system; Gradual transition from humanitarian aid to development programmes in line with the improvement of the CHSWT and the process of decentralization. The MoHSW and some CHTSW will continue to contract health services providers (NGOs, Community Based Organisations) in order to guarantee the access and the quality of the health services to the population. The Monitoring and Evaluation Unit of the MoHSW will improve the capacity of the CHSWT and specific external quality data audits will be implemented. The following assumptions have been made, to ensure progress in realising the expected results, and to contribute to the general objective set: i) CHSWTs will increasingly have the mandate and capacity to coordinate the health sector in their jurisdiction. The position of (inter)national NGOs will shift from contracting directly with external sources of funding to provide health care, towards engaging in contracts with CHSWTs. ii) The planned functional analysis of MoHSW will be carried out in 2012, and will lead to a clear definition of the mandate and role/tasks of MoHSW/Central Office and of the CHSWTs. iii) MoHSW will make progress with the establishment of a core team of supervisors/trainers at the level of the Central Office. The SPSP will strengthen this process. iv) Ministry of Finance (MoF) continues to implement its Road Map for MTEF development, according to plans. v) All external partners of MoHSW are increasingly motivated to engage in sector-wide approaches, including the use of common management arrangements. 7
vi) Economic recovery will continue, coupled with expansion of state revenues for health and social welfare services to compensate for gradual reductions in donors funds. 3.4. Stakeholders Main stakeholders are the MoHSW, including all County health teams, MoF (division of external aid coordination / MTEF development), NGOs, and development partners of MoHSW. The main beneficiaries are the people in Liberia, benefiting from a better-resourced Essential Package of basic health services, provided by health facilities, in all Counties. 3.5. Crosscutting Issues Addressing gender inequalities is one crucial crosscutting issue. The new 10 years health strategy is addressing these in line with the Liberian National Gender Policy. Women and girls, in particular, will participate in the planning, design and implementation of programmes that reflect the social, economic and cultural determinants of health. Furthermore, governance is also a crosscutting issue; the success of this SPSP depends to a large extent to good governance by Government of Liberia / MoF / MoHSW. The assumptions included in the paragraph reflect the good governance issue. Adequate political, financial and administrative mechanisms are needed from the Government of Liberia and all stakeholders to ensure that decision-makers are accountable for the transparent use of health and social welfare resources. 4. Implementation issues 4.1. Method of implementation A Financing Agreement will be signed with the Republic of Liberia and will include two management modalities: 1. Sector Budget Support (SBS) 2. Technical assistance component through partially decentralised management in accordance with Articles 21 to 23 of the Financial Regulation of the 10 th EDF through a service contract. With regard to point 2, in partially decentralised management, the technical assistance component will be implemented through a service contract following a call for tender with suspensive clause to allow a prompt start-up of the programme. Technical assistance will be composed by two experts: a health economist and PFM expert will assist the MoHSW in the implementation of the PFM reforms, the preparation and execution of the budget and in the technical dialogue with the MoF, whilst a public health expert will assist the MoHSW and selected CHSWTs in planning and management of health systems and services. Furthermore, a pool of short-term expertise will be available, upon demand, to complete the support provided by the long term technical assistance in some specific areas like data quality assurance. The implementing agency of the programme will be the MoHSW. A Steering Committee chaired by the Minister of Health and composed of the National Authorising Officer (The Ministry of Planning, Finances and Economic Affaires) the Secretariat (the Technical Assistance) and one observer (the EU Delegation) will ensure overall monitoring of Sector Policy Support Programme (SPSP). The contracting authority for the technical assistant component shall be the National Authorising Officer of the Republic of Liberia. Inside the context of this component the 8
Commission controls ex ante all the procurement and grant procedures. Payments are executed by the Commission. The change of management mode constitutes a substantial change except where the Commission "re-centralises" or reduces the level of tasks previously delegated to the beneficiary country, international organisation or delegatee body under, respectively, decentralised, joint or indirect centralised management. 4.2. Procurement and grant award procedures (for technical assistance component in partially decentralised management) 1) Contracts All contracts implementing the action must be awarded and implemented in accordance with the procedures and standard documents laid down and published by the Commission for the implementation of external operations, in force at the time of the launch of the procedure in question. Participation in the award of contracts for the present action shall be open to all natural and legal persons covered by EDF. Further extensions of this participation to other natural or legal persons by the concerned authorising officer shall be subject to the conditions provided for in article 20 of Annex IV of the Cotonou Agreement. No grants will be awarded and no programme estimates will be signed. 4.3. Budget and calendar The proposed EU contribution to the Liberian health sector is EUR 42 000 000. The following table summarises the EU contributions: (all amounts in EUR) Sector Budget Support 39 800 000 Technical Assistance 2 000 000 Evaluation 140 000 Audit 60 000 TOTAL 42 000 000 Indicative calendar, amount and type of tranche releases (all amounts in EUR) (FY2012/13) FY2013/14) FY2014/15) FY2015/16) Fixe tranches 9 800 000 5 000 000 5 000 000 5 000 000 Variable tranches - 5 000 000 5 000 000 5 000 000 The foreseen operational duration as from signature of the Financing Agreement of this programme is 60 months. 9
4.4. Performance monitoring and criteria for disbursement Progress and performance will be assessed on the occasion of the annual joint and independent health sector reviews based on agreed policy implementation milestones and process indicators, using the existing sector-wide indicators. Release of tranches of SBS will be conditioned by satisfactory completion of the following general and specific conditions: 4.4.1 General conditions for the disbursement of all tranches: eligibility criteria for (sector) budget support: The general conditions for budget support have to be met in order for disbursements of any tranche (fixed or variable). To allow the Commission to evaluate the fulfilment of the general conditions, the Minister of Health and Social Welfare and the Minister of Finance shall communicate information on the following in line with the disbursement schedule: i) Satisfactory progress in the implementation of the health sector policy and strategy. Indicative sources of verification: all indicators used in the M&E Framework for the 10-years strategic plan and for the PRS-II / section health (ii) Satisfactory progress in the maintenance of a stability-oriented macroeconomic policy as evidenced by IMF programme reviews. Where the review of an IMF programme is delayed or temporarily suspended or lapses, the Commission may still take the decision to disburse budget support if it judges that stability-oriented macroeconomic policy is still being implemented, following communications as appropriate with the partner country and the IMF. (iii) Satisfactory progress in the implementation of its programme to improve public financial management, as evidenced inter alia by the joint annual government-donor review held on the basis of the IMF quarterly and annual reports in the framework PFM Reform Steering Committee reports. (iv) budget transparency (i.e. the government has published either the Executive's Proposal or the Enacted Budget within the past or current budget cycle) is fulfilled and progress is demonstrated with regard to the public availability of accessible, timely, comprehensive, and sound budgetary information. The Government of Liberia shall use its best efforts to supply the Commission in a timely manner with all the necessary information needed to formulate an assessment based on (i), (ii), (iii) and (iv) above, as well as ensure dialogue around the objectives supported by this Sector Budget Support programme. On the basis of the information supplied, the Commission shall formulate a positive assessment before the disbursement of all tranches of budget support. 4.4.2 Specific conditions for disbursement of individual tranches: achievements of annual target regarding a list of selected indicators regarding sound PFM, reduction of maternal mortality, access and quality of health services and effective management of drugs. 10
4.5 Evaluation and audit External evaluations on the programme and audits of the technical assistance component will be carried out. The existing national mechanisms for annual health sector reviews, including independent reviews, will form a crucial source of information for the external M&E process. 4.6 Communication and visibility The EU will ensure visibility both through engagement with governments, donors and other partners in the context of policy dialogue and aid effectiveness, as well as through other means such as the Delegation s website. The Communication and Visibility Manual for EU External Actions will be applied by the beneficiary of the programme. MoF and MoHSW will provide ample information to other donors about SBS support by the EU in the health sector. 11