AFRICAN DEVELOPMENT BANK MEDICAL COVERAGE REFORM SUPPORT PROGRAMME - PHASE 3 (PARCOUM III) COUNTRY : Kingdom of Morocco APPRAISAL REPORT OSHD DEPARTMENT December 2013 Translated Document TABLE OF CONTENTS ACRONYMS AND ABBREVIATIONS........................................................................................... LOAN AND GRANT INFORMATION.............................................................................................. PROGRAMME EXECUTIVE SUMMARY......................................................................................... RESULTS-BASED LOGICAL FRAMEWORK................................................................................... 1. 2. ii iii iv v 1 2 2.3 2.4 PROPOSAL............................................................................................................................ COUNTRY AND PROGRAMME CONTEXT.................................................................. Government’s Overall Development Strategy and Medium-term Reform Priorities......................................................................................................................... Recent Economic and Social Developments, Outlook, Constraints and Challenges...................................................................................................................... Sector and Related National Programmes.............................................................................. Bank Group Portfolio Status................................................................................................... 3. 3.1 3.2 3.3 3.4 3.5 3.6 RATIONALE, KEY DESIGN ELEMENTS, AND SUSTAINABILITY........................ Linkage with the CSP, Country Readiness Assessment and Analytical Bases...................... Collaboration and Coordination with Other Donors............................................................... Outcomes and Lessons Learned from Similar Past and Ongoing Operations.................. Linkage with Bank Ongoing Operations............................................................................ The Bank’s Value Added and Comparative Advantage........................................................ Application of Principles of Optimal Conditionality Practices........................................... 7 7 8 8 9 9 10 4. 4.1 4.2 4.3 4.4 4.5 4.6 4.7 PROPOSED PROGRAMME....................................................................................... Programme Goal and Objective...................................................................................... Programme Components, Operational Policy Objectives and Expected Outcomes............. Implementation Status of Programme Reforms.................................................................... Financial Requirements and Financing Arrangements..................................................... Programme Beneficiaries............................................................................................... Programme Impact on Gender........................................................................................ Environment and Climate Change................................................................................. 10 10 10 15 16 17 17 17 5. 5.1 5.2 PROGRAMME IMPLEMENTATION, MONITORING AND EVALUATION.......... Implementation Arrangements....................................................................................... Monitoring and Evaluation Arrangements..................................................................... 18 18 19 6. 6.1 6.2 6.3 LEGAL DOCUMENT AND AUTHORITY............................................................... Legal Document.......................................................................................................... Conditions for Bank Intervention................................................................................ Compliance with Bank Group Policies........................................................................ 20 20 20 20 7. RISK MANAGEMENT 21 8. RECOMMENDATION 21 2.1 2.2 2 2 6 6 List of Figures Figure 1 Figure 2 Figure 3 Figure 4 Figure 5 Figure 6 Figure 7 Budget Index Trends (1997-2010) The Richest Quintile Owns About Half of the Country’s Wealth, 2007 Infant Mortality in Morocco Remains High Malnutrition (Moderate or Severe) is Higher Among Rural Children Level of Registration in RAMED Varies from One Region to Another, 2013 Direct Household Payments Account for More Than 50% of Total Health Expenditure Public Health Expenditure Account for Only One-Third of Total Health Expenditure p. 3 p. 3 p. 4 p. 4 p. 5 p. 5 p. 5 List of Tables Table 1 Table 2 Table 3 Table 4 Table 5 Table 6 Morocco: Key Macro-economic Indicators (2010-2018) p. 2 The Most Remote Regions Have the Highest Poverty Rates p. 3 Conditions Precedent to Sector Budget Support p. 7 Reform Measures that will Trigger Disbursement p.16 Estimated Budget Balance and Financing Requirements 2012-2015 (in MAD billion) p.16 Risks and Mitigation Measures p. 21 List of Appendices Appendix 1 Appendix 2 Development Policy Letter Matrix of Medical Coverage Support Programme – Phase 3 Reform Measures Appendix 3 Appendix 4 IMF Press Release Recent Key Economic Indicator Trends and Projections, 2010-18 Currency Equivalents (May 2013) UA 1 UA 1 = = MAD 12.84 EUR 1.15 Fiscal Year 1 January - 31 December Government’s preferred currency of disbursement EUR i ACRONYMS AND ABBREVIATIONS AECID ADB AFD ANAM BMC CHI CNOPS CNS CNSS CSP DHSA EIB EU FCS FDI HCP IGM IMF INDH LOF MDG MEF MIC Grant PAAFE PADESFI PARAP PARCOUM PARGEF PAS Santé PSO RAMED SGG TFP UNFPA WB WHO : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : Spanish Agency for International Development Cooperation African Development Bank French Development Agency National Health Insurance Agency Basic Medical Coverage Compulsory Health Insurance National Fund for Social Security Agencies National Health Accounts National Social Security Fund Country Strategy Paper Directorate of Hospitals and Outpatient Care European Investment Bank European Union Social Cohesion Support Fund Foreign Direct Investment High Commission for Planning General Inspectorate of Ministries International Monetary Fund National Human Development Initiative Organic Finance Law Millennium Development Goal Ministry of the Economy and Finance Middle-Income Country Grant Training-Employment Matching Support Programme Financial Sector Development Support Programme Public Administration Reform Support Programme Medical Coverage Reform Support Programme Economic and Financial Governance Support Programme Health Sector Reform Support Programme Programme Support Operation Medical Assistance Scheme for the Economically Disadvantaged Secretariat General for the Government Technical and Financial Partner United Nations Fund for Population Activities World Bank World Health Organization ii LOAN AND GRANT INFORMATION Client Information BORROWER: KINGDOM OF MOROCCO EXECUTING AGENCY: Ministry of the Economy and Finance (Department of the Budget) Financing Plan Source of Financing ADB European Union Amount EUR 115 M EUR 50 M Instrument ADB Loan Grant Information on ADB Financing Loan currency Type of interest rate Base rate (floating) Loan margin Cost of borrowing margin (CBM) Commitment charge Other charges Duration Grace period EUR Floating base rate with a fixed rate option 6 months - EURIBOR 60 basis points (bps) Half-yearly weighted average of the difference between: (i) the Bank’s refinancing rate on loans indexed on six (6) months EURIBOR, and (ii) EURIBOR. The CBM will be calculated on 1 January and 1 July. In the event of a disbursement lag with respect to the disbursement schedule specified in the loan agreement, a 25 basis point per annum charge will be applied to the undisbursed amounts. It will increase by 25 basis points every six months, up to a limit of 75 basis points per annum. None 20 years maximum 5 years maximum ___________________________________________________________________________ 1. 2. 3. 4. 5. 6. 7. 8. Activities Preparation Mission Concept Note Approval Appraisal Mission Loan Negotiation Board Presentation Effectiveness First Disbursement Second Disbursement 9. Supervision Date 28 January to 9 February 2013 4 April 2013 8 to 19 April 2013 July 2013 October 2013 November 2013 January 2014 December 2014 January 2014 May 2014 October 2014 June 2014 and June 2015 June 2015 10. Audit of Financial Flows 11. Completion Report iii PROGRAMME EXECUTIVE SUMMARY Programme Overview Programme Outcomes Needs Assessment Bank’s Value Added Institution and Knowledge Building The Medical Coverage Reform Support Programme Phase III in Morocco is a Reform Support Operation (RSO) designed as a UA 100 million sector budget support loan to the Ministry of Health, disbursable in two tranches, to improve social protection and medical coverage for Moroccan citizens. It supports the implementation of the Bank’s Strategy for 2013-2022 and the CSP by focusing on inclusive growth and supporting the implementation of social protection programmes. It will help to establish mechanisms needed to pilot and finance the reform, enhance social protection coverage for the population, and contribute to providing appropriate and quality services. This programme will be implemented within a context of political and macro-economic stability, moderate fiduciary risk and Government’s firm commitment to the implementation of the medical coverage reform and the generalization of the Medical Assistance Scheme for the Economically Disadvantaged (RAMED) in line with previous PARCOUMs. The programme was designed by the Government with the support of the European Union. In general, social protection programmes “cushion economic and social shocks, thus enabling social outcasts and vulnerable people to benefit from broad economic opportunities” (Bank’s Strategy for 2013-2022). The specific objective of this programme is to improve social protection and medical coverage for the Moroccan population, particularly the most vulnerable segments, by extending basic medical coverage and improving access to quality health services. This programme seeks to improve physical and financial access to health services and quality social services. The programme should help to increase the proportion of the population covered by a social protection scheme (from 49% to 60%), reduce the share of direct payments in health expenses (from 53% to 48%), and improve the perception of the quality of health care delivery (from 23% to 40%). The Moroccan Government has, since 2005, embarked on major social projects, including the National Human Development Initiative (INDH) which supports income-generating activities and RAMED. However, only 30% of the Moroccan population is satisfied with the manner in which the Government is providing assistance to the poor, compared to more than double this percentage in Tunisia and Jordan. In Morocco, more than half of the population (51%) does not benefit from social protection. Health expenses remain a burden for Moroccan households, exposing them to the risk of impoverishment due to illness. In fact, households bear more than half of total health expenses (53.6%). Morocco intends to improve access to basic social services for its population by developing social protection mechanisms. Indeed, RAMED and basic medical coverage are two of the nine major projects implemented by the Government. They are consistent with the Kingdom’s poverty reduction policy, as indicated in the Government’s agenda (January 2012) and in the 30 July 2012 Speech from the Throne. After establishing medical coverage mechanisms for public and private sector employees and the economically disadvantaged, the Government plans to continue its efforts by developing similar mechanisms for the so-called “self-employed workers”. PARCOUM III will support structural reforms in social protection and help to cover the Government’s agenda financing gap. This programme will enable the Government of Morocco to define a long-term social protection vision for the entire population, taking into account challenges related to the coordination and financing of the reform. The Bank has acquired expertise in providing budget support to Morocco through various operations, as well as unique knowledge about basic medical coverage reform because this is its third reform support programme. The Bank’s specific comparative advantage lies in its expertise in financing social services, social safety nets, and insurance mechanisms. PARCOUM III will contribute to Morocco’s institution building by broadening and strengthening the Inter-Ministerial Reform Committee. This will help to provide a comprehensive and unified vision of long-term reform at the highest political level. Furthermore, the programme will receive technical support to build institutional capacity and provide analytical bases and know-how for the implementation of the reform. iv RESULTS-BASED LOGICAL FRAMEWORK Country and Project Name: Morocco – Medical Coverage Reform Support Programme Phase III (PARCOUM III) Project Goal: To improve social protection and medical coverage for the Moroccan population, particularly the most vulnerable segments of the population, by extending basic medical coverage and access to quality health services. IMPACT OUTPUTS CHAIN Impact: Improvement in the health status of the population, particularly the most vulnerable segments PERFORMANCE INDICATORS Indicator Baseline Target (including ISC) Case Infant mortality 30 rate (/1 000) (2011) 20 (2020) Maternal mortality rate (/100 000) 80 (2020) OUTCOMES Ministry of Health (ENPSF) 60% (2015) ANAM (CHI Balance Sheet), Ministry of Health (CNS) Ministry of Health (CNS) Risk: Better health insurance coverage does not result in increased demand for health care HCP (Household Confidence Survey) Risk: Health care delivery cannot keep Share of direct payments in health expenses 53.6% (2010) 48% (2015) Proportion of households that feel that health services have improved Number of inhabitants per public sector physician 23% (2012) 40% (2015) 2725 (2012) 2500 (2015) Ministry of Health (health statistics) Component 1: Steering and Financing of Basic Medical Coverage 0 (2013) At least two The Prime Minister’s 1.1 The reform steering Number of meetings held meeting Office, the Interand governance by the BMC reports are Ministerial mechanism is Intersubmitted Committee (agenda) strengthened Ministerial each year Committee 0 (2013) 16 (2015) Ministry of Health 1.2 Visibility on BMC Number of programme (transmission of financing is contracts signed contracts) guaranteed with the regions OUTPUTS RISKS/ MITIGATION MEASURES 112 (2011) Outcome 1: Physical Population 49% and financial access to covered by CHI (2013) health services improved and RAMED Outcome 2: Delivery of quality health care improved MEANS OF VERIFICATION Component 2: Extension of Basic Medical Coverage % of population 63% 93% (2014) 2.1 RAMED eligible for (2013) implementation is RAMED generalized coverage 0 (2013) 200 000 2.2The coverage of self- New selfemployed (2014) employed workers workers has improved affiliated to CHI Component 3: Regulation and Delivery of Health Care 3.1 The availability and Average 61.6% 70% (2014) quality of services hospital bed (2011) have improved occupancy rate (%) 3.2 Recourse to care is % of CHI 21% 40% (2015) streamlined policyholders (2011) who enjoy the services of a family doctor v ANAM (registration monitoring balance sheet) CNSS (balance sheet) Ministry of Health (health statistics) ANAM (bi-annual publication, CHI Barometer) Mitigation measure: Sensitization campaigns carried out by ANAM and MS, visibility is ensured by the King’s commitment pace with new demand on a relatively short-term basis Mitigation measure: Health care delivery support is coordinated by donors and sustained by Morocco’s State budget Risk: Insufficient visibility regarding resources allocated for the reform Mitigation measure: Two conditions relating to the Social Cohesion Support Fund are included in the Programme Risk: Delays in identification of RAMED beneficiaries and distribution of cards Mitigation measure: Measures are adopted to improve the processing of files and the targeting system Risk: Mobilization of health care providers and pharmacists to work in disadvantaged regions falls short of expectations Mitigation measure: A series of incentives are adopted to attract them to disadvantaged regions 3.3 Citizen participation and accountability are strengthened The pilot project N.A. for citizen participation is tested in a region The pilot Validation of pilot project project by the proposed by Ministry of Health the Ministry of Health is tested Mitigation measure: Measures to ensure BMC financing visibility and improve service availability as well as implement measures relating to the LOF, programme budgets and capacity building of IGMs RESOURCES KEY ACTIVITIES COMPONENTS Component 1: Steering and Financing of BMC Component 2: Extension of BMC Component 3: Regulation and Delivery of Health Care Risk: The initial sector fiduciary risk assessed in the Ministry of Health is very high ADB: UA 100 million EU: EUR 50 million vi PROGRAMME IMPLEMENTATION SCHEDULE vii REPORT AND RECOMMENDATION BY MANAGEMENT TO THE BOARD OF DIRECTORS CONCERNING A PROPOSAL TO GRANT A LOAN TO THE KINGDOM OF MOROCCO TO FINANCE THE MEDICAL COVERAGE REFORM SUPPORT PROGRAMME - PHASE 3 (PARCOUM III) 1. PROPOSAL 1.1 Management hereby submits this report and recommendation concerning a proposal to grant a EUR 115 million loan to the Kingdom of Morocco to finance the Medical Coverage Reform Support Programme (PARCOUM III). This is the Bank’s third sector budget support programme to Morocco’s Ministry of Health. PARCOUM III was designed by the Government of Morocco with the support of the European Union, which also backs the reform through its third support programme in the form of a grant (Basic Medical Coverage or BMC III). The programme was also designed in close collaboration with key development partners, in particular the Spanish Agency for International Development Cooperation, the World Health Organization (WHO), the French Development Agency (AFD), the World Bank (WB) and the United Nations Development Programme (UNDP). Other stakeholders, including civil society organizations (CSO) and Members of Parliament, were consulted. 1.2 PARCOUM III is aligned on ADB’s CSP 2012-2016 for Morocco. In spite of the progress made, the CSP acknowledges that much remains to be done to ensure sustainable and equitable improvement in social indicators. This programme will contribute to strengthening governance and social inclusion, which is the theme of the first pillar of the CSP, by consolidating social protection mechanisms for the population. In addition, by reducing economic and social shocks, the programme will enable social outcasts and vulnerable people to benefit from broad economic opportunities, thereby contributing to achievement of the objective of inclusive growth outlined in the Bank’s Strategy for 2013–2022. Lastly, it will contribute to achieving the human capital development strategy objectives relating to the establishment of inclusive social and financial systems. 1.3 The programme is also consistent with the Government of Morocco’s agenda. Morocco seeks to improve access to basic social services for the entire population by developing social safety nets. The Medical Assistance Scheme for the Economically Disadvantaged (RAMED) and basic medical coverage are two of the nine major projects implemented by the Government. They are consistent with the Kingdom’s poverty reduction policy, as indicated in the Government’s agenda (January 2012) and in the 30 July 2012 Speech from the Throne. After establishing coverage mechanisms for public and private sector employees and the economically disadvantaged, the Government plans to continue its efforts by developing similar mechanisms for the so-called “self-employed” workers (see Technical Annex V). 1.4 PARCOUM III will support implementation of the basic medical coverage reform by guaranteeing vital social protection and health spending. The objective of this programme is to improve social protection and medical coverage for the Moroccan population, particularly the most vulnerable segments, by extending basic medical coverage and improving access to quality health services. The programme will place emphasis on: (i) the steering and financing of the reform; (ii) the extension of basic medical coverage; and (iii) the regulation and delivery of health care so as to increase social protection and improve the health status of the Moroccan population, particularly that of the vulnerable segments of the population. 1 2. COUNTRY AND PROGRAMME CONTEXT 2.1 Government’s Overall Development Strategy and Medium-term Reform Priorities 2.1.1 Recent political and social developments in Morocco highlight the importance of the social dimension in Government’s policies. In fact, the statement issued by the Government in January 2012 outlines an economic and social development programme based on the implementation of far-reaching strategic reforms and sector policies centered around major infrastructure projects. This programme, which is a follow-up to previous Government action, seeks to meet the challenge of competitiveness and maintain macro-economic viability in order to promote sustained growth capable of improving the living conditions of the population on a sustainable basis. The guideline retained is based on five priority thrusts which seek to: (i) deepen national identity and maintain the coherence and diversity of its components; (ii) establish the rule of law, advanced regionalization and good governance; (iii) create conditions for a strong, competitive and employment-generating economy; (iv) strengthen Morocco’s national sovereignty and image; and (v) institute a new social pact which entrenches solidarity between the various socio-economic groups and regions, while ensuring access to basic social services. 2.1.2 Social protection, particularly through the extension of basic medical coverage (BMC), is one of the priorities of the 2013-2016 Action Plan prepared by the Ministry of Health. The Government intends to pursue the major structural reforms initiated in 2001 in order to develop basic medical coverage. Special attention will be paid to the generalization of RAMED which became effective following the speech made His Majesty the King on 13 March 2012 and to the extension of medical coverage to self-employed workers. 2.2 Recent Economic and Social Developments, Outlook, Constraints and Challenges Recent Political, Macro-economic and Social Developments 2.2.1 The political Table 1. Morocco: Key Macro-economic Indicators (2010-2018) landscape, which is 2010 2011 2012 2013* 2014* 2015* 2016* 2017* 2018* 3.6 5 3.2 4.5 4.8 5 5.4 5.7 5.8 undergoing profound Real GDP Growth Rate (%) Non-agricultural Real GDP changes, has improved Growth Rate (%) 4.9 5 4.5 4.5 4.7 5 5.4 5.8 5.9 significantly since the 2011 Inflation (% of period average) 1 0.9 1.2 2.4 2.5 2.5 2.5 2.6 2.6 Budget Balance (% of GDP) -4.4 -6.1 -5.6 -4.7 -4.1 -3.5 -3 -2.7 -2.4 promulgation of the new Current Account Balance, Constitution which Including Official Transfers (% of GDP) -4.1 -8 -8.8 -6.3 -5.7 -5.3 -4.8 -4.5 -4.5 rehabilitates political Total External Debt (% of GDP) 24.7 23.6 26.4 27.5 27.1 26.6 25.9 24.6 23.8 parties and the new organic Foreign Exchange Reserves (in months of imports of goods and law governing them. With services in the following year) 5.7 5.1 4.1 4.1 4 4 4 4 4.1 the enshrining of elections as Note: (*) projections. Percentages express annual variations. the only means to achieve Source: Annex 4. political legitimacy and democratic culture as the key to exercise power, political parties are improving their functioning and opening up more and more to a new type of grass-roots militancy. Recently, Morocco launched a national dialogue on civil society to strengthen the new Constitution which gives civil society a prominent role in public life by controlling the action of the executive and participating in the drafting of laws. This dialogue will culminate in the diagnosis of the associations network and adoption of the rules of participatory democracy. 2 Table 2: The Most Remote Regions Have the Highest Poverty Rates 1997/98 1998/99 1999/00 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Budget indices of the Ministry of Health (MS), the State Master Budget (BGE) and PIB 2.2.2 Despite its vulnerability to exogenous shocks, the Moroccan economy remains buoyant. It has a stable macro-economic framework and a diverse productive base. The annual average economic growth rate has been 4.9% since Figure 1: Budget Index Trends (1997-2010) 2000. This performance can be attributed to reforms 300 initiated during that period by the Government to 280 BMS mitigate some “vulnerabilities”, particularly by 260 BGE reducing deficits, improving economic productivity 240 PIB and enhancing the country’s attractiveness for 220 foreign investments. Thus, after a slight slowdown 200 180 in 2012, the Moroccan economy is expected to 160 experience rapid growth in 2013. According to IMF 140 estimates, real GDP growth could range from 4.5% 120 to 5.8% between 2013 and 2018 (Table 1). This 100 assumption is based on increased agricultural production and reduced budget deficit. However, it seems to underestimate the impact of the economic downturn in Europe (which accounts for 80% of Source: MEF and Authors trade flows) and budgetary constraints which will inevitably limit public spending as evidenced by the recent freezing of MAD 15 billion of the 2013 investment budget. Although there has been an increase in public health spending in Morocco, it remains low. Over the past decade, changes in the budget index of the Ministry of Health have been more significant than those in the State budget and GDP. The 2013 budget of the Ministry of Health represents only 5% of the recurrent State budget (as against 20% for the Ministry of National Education) (Figure 1). Figure 2. The Richest Quintile Owns About Half of the Country’s Wealth, 2007 Income share held by wealth quintile (%) 100 20% les plus 80 20% richest pauvres Quintile 2 60 Quintile 3 40 Quintile 4 20 0 20% poorest 20% les plus riches Source: HCP (2007) – Survey on Household Living Conditions. Source: ADB, 2011. 2.2.3 The social environment is marked by high income inequalities compounded by regional and gender disparities. Despite an overall improvement in living standards (the relative poverty rate at national level dropped from 15.3% to 8.9% between 2001 and 2007), there are major differences between rural and urban areas and persistent social inequalities. The relative poverty rate is 4.8% in urban areas as against 14.4% in rural areas (High Commission for Planning, 2009). The poverty level varies from one region to another, with the South having the highest rates (Table 2). Lastly, there are flagrant income inequalities with 20% of the richest segment of the population controlling 48% of total income as against 7% for the poorest segments (Figure 2). In addition, gender inequalities place women in a vulnerable position: 3 about one in two women is illiterate; women make up the majority of the non-working population (according to the 2010 Employment Survey, the male/female activity ratio is 35%). However, special attention is being paid to women’s status: the revision of the Family Code and the adoption of measures to improve access to health care and education. Outlook, Constraints and Challenges 2.2.4 The population is dissatisfied with social policies, governance and the quality of public services in Morocco. Since 2005, the Moroccan Government, with donor support, has embarked on major social projects, including the National Human Development Initiative (INDH) which supports income-generating activities and the Medical Assistance Scheme for the Economically Disadvantaged (RAMED). However, Moroccans seem to be dissatisfied with the manner in which the Government is providing assistance to the poor: only 30% of the Moroccan population is satisfied, compared to more than double this percentage in Tunisia and Jordan (World Bank, 2012). 2.2.5 Improvements in health and health service use indicators fell short of expectations given the country’s GDP per capita. Infant mortality in Morocco seems to be higher than that in a number of countries with a comparable per capita income level (Figure 3). The maternal mortality rate is 112 per 100 000 live births, with a relatively low level of recourse to prenatal, postnatal and delivery care in medical establishments (HCP 2011, Ministry of Health 2011). Figure 3: Infant Mortality in Morocco Remains High Figure 4: Malnutrition (Moderate or Severe) is Higher Among Rural Children Source: Ministry of Health (2011) – National Population and Family Health Survey (NPFHS 2011). 2.2.6 There are wide disparities in access to health care based on environment (urban/rural), gender and income bracket. Poverty and living in rural areas are two key determining factors of infant and maternal mortality. Maternal mortality in rural areas in Morocco is 43% higher than in urban areas. Under-five children in the poorest quintile are three times more likely to die of often easily treatable childhood diseases or preventable injuries. The proportion of children suffering from chronic malnutrition (stunting) is much higher in rural areas than in urban areas (20.5% as against 8.6%) (Figure 4). 2.2.7 Access to health care is limited by narrow health risk coverage. Although the Moroccan Government has made significant efforts to improve access to health care, more than half of the population (51%) do not benefit from a risk protection mechanism. About 4 Figure 5: The Level of Registration in RAMED Varies from one Region to Another, 2013 Source : ANAM (2013) 34% of the population (10.7 million people) is covered by a health insurance through the Compulsory Health Insurance (CHI) scheme, internal and mutual schemes, and insurance companies. About 15% of the population was covered by RAMED at the end July 2013 (5.1 million people)1. Lastly, the group made up of “self-employed workers”, which is estimated at about 10 million people, is at the moment excluded from BMC (Technical Annex V). There are also wide disparities in medical coverage. Subscriptions to RAMED reveal wide regional disparities (Figure 5). 2.2.8 The BMC will face challenges in the future. The achievements outlined above in terms of coverage for the underprivileged should be consolidated and expanded so as generalize BMC in an equitable and sustainable manner. Like other developing countries that have opted for the development of health insurance, Morocco faces complex problems (medical coverage for self-employed workers; financing of various insurance schemes; implementation of the principle of solidarity; regulation of the drug market) which require fundamental choices that may commit the country in the long term. Figure 7. Public Health Expenditure Accounts for Only One-Third of Total Health Expenditure Figure 6: Direct Household Payments Account for More Than 50% of Total Health Expenditure 100 90 80 70 60 50 40 30 20 10 0 1998 2001 2006 2007 2008 2009 2010 Private health expenditure Source: National Health Accounts (2010). Public health expenditure Source: National Health Accounts (2010). 1 However, this rate is expected to reach 26% when the whole target population will be covered. 5 2.2.9 Health expenses in Morocco constitute a heavy burden for Moroccan households and expose them to the risk of impoverishment due to disease. Households bear more than half of total health expenditure (53.6%). Since 1998, their contribution has remained stable, but for a shift in recent years, which needs to be amplified. Health insurance contributes only 18.8%, the State 25.2% and employers and international cooperation 1% each (Figure 6). This health expenditure distribution exposes households, particularly the most vulnerable, to the risk of very high expenses. It is thus estimated that 1.9% of the Moroccan population incur extremely high expenses and that 1.4%, particularly people living in rural areas, grow poorer owing to such expenses (WHO 2007). 2.2.10 Although there has been an increase in public health spending in Morocco, it has remained low and relatively stable over the past five years. In fact, since 2007, public health spending has hovered around 34% of total health expenditure – with the remaining twothirds being financed privately, mainly through direct payments by health service users (Figure 7).2 2.3 Sector and Related National Programmes 2.3.1 Morocco seeks to improve access to basic social services for the entire population by developing basic medical coverage. After establishing medical coverage mechanisms for public and private sector employees and the economically disadvantaged, the Government plans to continue its efforts by developing similar mechanisms for the so-called “self-employed workers”. RAMED and BMC fall within the Kingdom’s poverty reduction policy. 2.3.2 The new health sector strategy for the 2013-2016 period will help to consolidate activities carried out during the preceding period. The challenges listed in the 2012-2016 Action Plan, which serves as an operational document for the implementation of the strategy, are: (i) global health security; (ii) human resources for health; (iii) primary health care reform; (iv) strengthening of health systems; (v) universal health coverage; and (vi) non-communicable diseases. The new sector strategy is being validated. 2.4 Bank Group Portfolio Status 2.4.1 The ADB is currently Morocco’s leading development partner, with a commitment volume of EUR 2.4 billion. The Bank’s active portfolio in Morocco comprises 29 operations, comprising 15 loans totalling UA 2 billion (99.6%) and 14 grants totalling UA 7.4 million (0.4%). Bank approvals increased more than six fold between 2008 and 2012, from EUR 158 million to EUR 1 076 million at the end of April 2013. To date, the portfolio has only one potentially problematic project in the transport sector. 2 Technical Annex IV presents a more detailed analysis of health financing in Morocco. 6 3. RATIONALE, KEY DESIGN ELEMENTS, AND SUSTAINABILITY 3.1 Linkage with the CSP, Country Readiness Assessment and Analytical Bases 3.1.1 Linkage with the CSP. Thanks to the establishment of a social safety net for the population, PARCOUM III will contribute to strengthening governance and social inclusion, which is the theme of the first pillar of CSP (2012-2016). In fact, despite the progress made, the CSP indicates that much remains to be done to ensure sustainable and more equitable improvement in social indicators. 3.1.2 Country readiness assessment and compliance with the Bank’s safeguards policy. Morocco fulfils all the conditions of eligibility for a budget support operation (Table 3). The country also had a Country Policy and Institutional Assessment (CPIA) rating of 4.2 in 2011 and a Standard & Poor’s Sovereign Investment Grade rating of “BBB-” in March 2010. The agency attributes this rating to a strong growth rate, low inflation and limited debt. However, Standard & Poor’s revised its rating outlook from “Stable” to “Negative” in October 2012 due to the deterioration of the country’s budget and current account balances. Despite such rating, the country successfully raised two bond loans totalling USD 1.5 billion3 in December 2012. Table 3 Conditions Precedent to Sector Budget Support Conditions Precedent Government’s commitment to poverty reduction Macro-economic stability Satisfactory fiduciary risk assessment Political stability Harmonization 3 Remarks The Government prepared a programme that was approved by Parliament in February 2012; the programme defines the various actions to be carried out in all economic and social sectors in the country for the 2013-2018 period, and is consistent with the Government’s priorities and poverty reduction policy. The Government has demonstrated its commitment to embark on structural reforms by implementing Public Administration Reform Support Programmes (PARAP I to IV), Financial Sector Development Support Programmes (PADESFI I and II), and PARCOUM I and II. Morocco has experienced sustained economic growth over the past five years with an average growth rate of about 5%, an inflation rate of 1.2% in 2012 and a relatively controlled budget and balance of payments deficit. This economic stability was achieved despite the impact of the global financial crisis, whose effects were mitigated by a series of emergency budgetary and fiscal measures adopted by the Government. At end-2012, the budget deficit was 5.6% of GDP (as against 6.1% in 2011), the current account deficit was 8.8% of GDP, and international reserves dropped to four months of exports. According to the most recent diagnosis and assessments of public finance management, procurement and the level of corruption, the country’s fiduciary risk is considered to be moderate and could be reduced to a low residual risk level. An assessment of fiduciary risks specific to the sector was carried out during the appraisal mission. The initial fiduciary risk is considered to be substantial, and the recommended mitigation measures could reduce it to a moderate level at the end of the operation (see Technical Annex II). Morocco enjoys solid political stability. Free and fair elections are organized regularly and the country amended its Constitution recently, allowing for peaceful elections and change of Government. Morocco maintains good partnership relations with the donor community that support the Kingdom through various instruments, including sector budget support. Such partnership has helped to implement major programmes. Morocco has a functional framework for aid harmonization. The first two PARCOUM were supported jointly by With an interest rate of 4.25% for the USD 1 billion tranche with a 10-year maturity and 5.5% for the USD 500 million tranche with a 30year maturity 7 the ADB and the European Union. This programme will also be supported by both institutions. 3.1.3 Analytical works and bases. The programme design is based on key economic and sector studies. Major studies, particularly studies on self-employed workers (the situation of the self-employed, benchmark, proposed scenarios and actuarial study), RAMED’s actuarial study and various CHI reports produced by ANAM4, have helped to define the programme thrusts. Other studies will be carried out during programme implementation. Thus, PARCOUM III will be supported by at least three technical assistance operations: a study on the design of a health financing strategy (in the process of being launched); support for the development of citizen participation and accountability mechanisms in the sector (financing pending confirmation) and an MIC grant for the establishment of a geographic information system to support preparation of the health map (approved by the Vice-President of OSVP on 31 July 2013). 3.2 Collaboration and Coordination with Other Donors 3.2.1 The Bank will maintain its cooperation with the European Union and strengthen ties with its key technical and financial partners (TFPs). The Bank and the European Union have jointly provided support for the BMC reform from its inception (PARCOUM I and II). The proposed programme will also enjoy joint support. The Bank will also maintain partnership relations with other TFPs such as WHO, the Spanish Agency for International Development Cooperation, AFD and the World Bank. 3.2.2 Activities of development partners in the country. Many partners provide support to the various thrusts of Morocco’s health sector strategy. WHO jointly implements programmes with the Ministry of Health and provides support for capacity building and the preparation of national health accounts. A study on social health indicators is being finalized. A multi-donor group comprising AFD, the EU Delegation, the Spanish Agency for International Development Cooperation and UNFPA has developed a health sector strategy support programme (PAS Santé). Since 2006, the European Investment Bank (EIB) has been financing a programme to renovate and modernize health care infrastructure and existing medical equipment for an amount of EUR 70 million. JICA is supporting many training and technical assistance operations, particularly in the area of maternal and child health. 3.2.3 A participatory approach was adopted during programme design to take into account the needs of each stakeholder. The key stakeholders and beneficiaries (self-employed workers, Members of Parliament, civil society, TFPs and the Government) were consulted during the preparation and appraisal missions. Discussions and comments on the matrix underscored the existence of consensus on the proposed thrusts. It was also necessary to try as much as possible to involve civil society organizations in some sensitization activities, particularly for RAMED. However, although the new Constitution recognizes the role of civil society organizations as full-fledged public policy actors, the legal framework for its application is still being prepared with the Bank’s support. 3.3 Outcomes and Lessons Learned from Similar Past and Ongoing Operations 3.3.1 The programme design takes into account the recommendations of PARCOUM I and II concerning the aspects that impeded their implementation. 4 All the economic and sector studies used to design this technical programme are presented in Technical Annex I. 8 PARCOUM I (2005-2008) supported the introduction of compulsory health insurance for formal public and private sector employees. For its part, PARCOUM II (2008-2012) supported the establishment of RAMED. PARCOUM III seeks to expand BMC by generalizing RAMED and establishing a special scheme for self-employed workers. To improve the institutional framework for coordinating the reform at the political and technical levels (recommendation of PARCOUM I completion report), thrust 1 of the new programme is devoted entirely to governance of reform. Furthermore, administrative conditions that can easily be fulfilled by technical services are preferred to legal conditions that are difficult to comply with (recommendation of PARCOUM I Completion Report). Similarly, in line with the recommendations of PARCOUM II, the disbursement conditions chosen are those that can be fulfilled and will not delay programme implementation. Lastly, to achieve the best results, thrust 3 has been designed to facilitate implementation on the ground and for the beneficiary populations. The Bank will also seek to provide more technical assistance to support this programme, in coordination with other partners (recommendations of PARCOUM II completion report). Technical Annex VI further clarifies the manner in which the lessons learned from previous programmes have been taken into account. 3.4 Linkage with Bank Ongoing Operations 3.4.1 PARCOUM III complements other Bank programmes. This programme seeks to establish a social and financial safety net for the Moroccan population so as to cover a greater proportion of the population, particularly the vulnerable segments, and ultimately ensure more inclusive growth. Accordingly, it complements PARGEF whose objective is to improve State efficiency in the provision of quality public services to promote inclusive economic growth; it also complements PAAFE that is being prepared and which will promote social inclusion by improving youth training and employability. In addition, just like PAAFE, PARCOUM III seeks to strengthen sector governance. The programme also complements the Green Morocco Plan Support Programme, which mainly seeks to reduce poverty in rural areas and create conditions for more inclusive growth by strengthening the competitiveness of the agricultural sector. 3.5 The Bank’s Value Added and Comparative Advantage 3.5.1 The Bank has acquired solid expertise in budget support to Morocco through various operations, as well as in BMC reform as this is its third reform support programme. The ADB’s specific comparative advantage for reform support lies in its expertise in financing social sectors, social safety nets and health insurance. Attention is regularly drawn to this comparative advantage by the Moroccan authorities, and it enables the Bank to maintain a high-level sector policy dialogue with them. 3.5.2 PARCOUM III will help to strengthen the Bank’s action in the governance sector by ensuring social and economic inclusion and focusing on issues related to financing, cost control, regulations and citizens’ opinions. It will therefore contribute to achieving the objective of the Bank’s Strategy for 2013-2022 to enhance inclusive growth, particularly its operational priority regarding governance and accountability. Thus, the strategy seeks to “support countries in the implementation of social protection programmes” because they contribute to the inclusion of the most vulnerable and disadvantaged groups and poverty reduction. The programme will also help to achieve the human capital strategy objectives of developing inclusive social and financial systems. 9 3.6 Application of Principles of Optimal Conditionality Practices 3.6.1 PARCOUM III has drawn on good conditionality practices (Technical Annex I). This concern justifies the limitation of the number of measures triggering disbursements, as well as efforts made to ensure their ownership. The measures focus on key realistic and feasible reform actions in the medium term which significantly impact implementation of the reform. Some measures were adopted by mutual agreement with the EU. 4. PROPOSED PROGRAMME 4.1 Programme Goal and Objective 4.1.1 The programme seeks to support the Kingdom of Morocco’s efforts to promote universal social protection coverage. It aims to improve social protection and medical coverage for Moroccans, particularly the most vulnerable people, by extending basic medical coverage and access to quality health services. To that end, the programme focuses on: (i) the steering and financing of reform; (ii) the extension of medical coverage; and (iii) regulations and delivery of health care. 4.1.2 The programme is designed as a sector budget support to the Ministry of Health to reduce health and social protection spending. The Bank’s financing will lighten the burden of implementing reforms in these areas so as to advance the efforts initiated by the Moroccan Government in 2005. 4.2 Programme Components, Operational Policy Objectives and Expected Outcomes Component 1: Steering and Financing of Basic Medical Coverage 4.2.1 The objective of this component is to support the governance of basic medical coverage reform and ensure sustainability of its financing. To that end, PARCOUM III will support the rehabilitation of the Inter-Ministerial Reform Committee chaired by the Head of Government to ensure a long-term strategic vision of reform and strengthen BMC financing and management tools. Sub-component 1: Strengthening the Steering and Governance of Basic Medical Coverage Reform 184.108.40.206 Context: Law No. 65-00 on basic medical coverage provides for access to health care for all Moroccans through universal basic medical coverage. Section 1 of this law, which came into force on 1 September 2005, provides for the financing of health care services based on the principles of solidarity and equity so as to guarantee access to health care for the entire population. The law provides for a Compulsory Health Insurance (CHI) scheme for public and private sector employees, self-employed workers, liberal professions and other selfemployed persons. It also provides for a medical assistance scheme (RAMED) and establishes the National Health Insurance Agency (ANAM) which has, since 2009, been placed under the supervisory authority of the Ministry of Health. According to the law, ANAM’s role is to ensure the technical supervision of CHI and the design of the system’s regulatory instruments (Section 59) and to manage resources allocated to RAMED. 10 220.127.116.11 Rationale: Despite the significant progress made in the implementation of the reform, Morocco is still facing difficulties in steering and governing it. So far, efforts to coordinate BMC have been focused on RAMED and its extension, while public and private sector employee management bodies have coordinated the CHI scheme. There are isolated initiatives regarding health insurance for self-employed workers, which may lead to fragmented development of health insurance. Furthermore, ANAM does not have adequate financial resources and institutional arrangements that would enable it to assume all the prerogatives provided for by the law. In this context and given the scope of the reform, there is a need to introduce mechanisms to ensure its governance and steering at the highest level. 18.104.22.168 Measures Supported: The proposed sector budget support will strengthen BMC reform steering and governance. Accordingly, PARCOUM III will support: (i) the extension and strengthening of the Inter-Ministerial Reform Committee and, the following year, the holding of bi-annual meetings whose minutes will be submitted to the Bank; (ii) the establishment of a technical committee to regularly monitor programme implementation status, carry out analyses and prepare technical documents for the Inter-Ministerial Committee; and (iii) the preparation and presentation, to the Inter-Ministerial Committee, of a plan to improve RAMED management tools and institutional arrangements which are now inadequate. 22.214.171.124 Expected Outcomes: The expected outcomes are the establishment of institutional, policy and technical mechanisms for long-term reform implementation. Reform options will also be considered. Sub-component 2: Ensuring Sustainable Financing of Basic Medical Coverage 126.96.36.199 Context: Law No. 65-00 defines guidelines for the financing and management of BMC, but its implementation is fraught with difficulties. According to this law, CHI is based on the principles of contribution and risk sharing, while RAMED is based on the principle of national solidarity for disadvantaged people. Section 73 provides for two CHI management bodies: the National Social Security Fund (CNSS) for private sector employees and the National Fund for Social Security Agencies (CNOPS) for public sector employees. For its part and according to the law, ANAM is responsible for the financial management of RAMED. The Social Cohesion Support Fund (FCS) was set up in the MEF in 2012. The Fund is mainly responsible for financing health services provided to RAMED beneficiaries. 188.8.131.52 Rationale: Given the rapid expansion of health insurance coverage, the issue of financing the reform and ensuring its financial sustainability is crucial. Indeed, Morocco is currently experiencing an unprecedented increase in the population covered by health insurance due principally to the generalization of RAMED. However, difficulties in maintaining the financial equilibrium of CHI management bodies and the absence of a RAMED management body may result in cost escalation which Morocco may be unable to cope with. It is therefore necessary and urgent to develop tools to ensure proper management and sustainable financing of the insurance system. 184.108.40.206 Measures Supported: The programme will support tools that would ensure sustainable BMC financing. PARCOUM III will support measures to ensure proper functioning of the Social Cohesion Support Fund by: (i) mobilizing resources for RAMED, and (ii) ensuring that MEF transfers resources from the Social Cohesion Support Fund to RAMED. The ADB will also back measures to improve the planning and budgeting of resources in the health sector, such as: (i) submission of the health sector financing strategy by the Ministry of Health, (ii) 11 introduction of programme budgeting in the Ministry of Health, and (iii) signing of programme contracts with health regions. 220.127.116.11 Expected Outcome: The expected outcome is the development of financial instruments to ensure better visibility in reform financing. Component 2: Extension of Basic Medical Coverage 4.2.2 The objective of this component is to support Morocco in its efforts to extend protection against health risks to the entire population. To that end, PARCOUM III will support the generalization of RAMED and establishment of a scheme for self-employed workers. Sub-component 1: Strengthening the Implementation of the Medical Assistance Scheme (RAMED) 18.104.22.168 Context: Although Law No. 65-00 provides for universal basic medical coverage, less than half of the population benefit from a health insurance scheme. On 13 March 2012, the King of Morocco announced the generalization of RAMED across the country after the pilot experiment in Tadla-Azilal Region. The target population all over the country is estimated at 8.1 million. However, some regions have already recorded a registration rate of more than 100%. In April 2013, 65% of the target population (5.5 million people) had access to health care and 48% had RAMED membership cards. As regards beneficiaries of the CHI scheme, more than 8 million people are already covered, but some have not yet switched to CNOPS or CNSS. Indeed, Section 114 of Law No. 65-00 specifies that as a transitional measure, public or private bodies providing optional medical coverage to their employees can continue to provide such coverage. 22.214.171.124 Rationale: Despite progress made in the generalization of RAMED, there are still obstacles to effective coverage. Local standing committees in charge of processing registration files have difficulty in meeting deadlines for processing applications due to the limited means at their disposal. Furthermore, in spite of improvements following assessment of the pilot test in Tadla-Azilal Region, the RAMED targeting system has some shortcomings which should be corrected to avoid errors of exclusion. Lastly, the coverage of public and private sector employees by the CHI scheme is incomplete. Although the transitional period (Section 114) has ended, about 1.2 million people in the public sector and 1.6 million in the private sector5 have not yet been included in the CHI scheme. 126.96.36.199 Measures Supported: PARCOUM III will support measures to strengthen RAMED implementation. Furthermore, the programme will ensure inclusion of the so-called Section 114 population by monitoring the increase in the CHI-affiliated population. Given the significant progress made in terms of RAMED coverage, the programme will not focus on RAMED-related quantitative aspects, but rather on qualitative aspects to improve its functioning and benefits for the Moroccan population. The programme will therefore support: (i) the interconnection of related administrative services to improve the processing of files; (ii) the use of the findings of the actuarial study on RAMED financing scenarios; and (iii) discussions within the Inter-Ministerial Committee on the possibility of reviewing the RAMED targeting system so as to establish it as a targeting system for social programmes in Morocco. 188.8.131.52 Expected Outcomes: It is expected that 93% coverage of the RAMED target population will be achieved at the end of the programme. It is also expected that the processing 5 ANAM. 2011 CHI Balance Sheet 12 of RAMED files, including the renewal of registration cards, and areas for improvement in the identification of beneficiaries, will be improved. Sub-component 2: Developing Medical Coverage for Self-Employed Socio-professional Categories 184.108.40.206 Context: To date, about one-third of the Moroccan population is excluded from CHI. According to the headcount of self-employed workers6, the total population of selfemployed workers is nearly 3.4 million, or about 10 million people with their dependents. This population is very heterogeneous (liberal professions, traders, craftsmen and itinerant workers). The best organized and most solvent already have a private health insurance coverage for their corporation (e.g. lawyers), but the most disadvantaged do not enjoy any coverage. 220.127.116.11 Rationale: Although Law No. 65-00 provides for the coverage of self-employed workers by the CHI scheme, the scenario and practical arrangements for the coverage of this population are still to be defined. Indeed, at present, there is no official stance on mechanisms for the coverage of the population concerned. The absence of a scheme for these people, who are often poor, poses a high risk of switch to RAMED. An urgent solution must be sought for this population, while avoiding the risk of fragmentation of schemes. 18.104.22.168 Measures Supported: PARCOUM III will support the development of medical coverage for self-employed socio-professional categories. It will ensure that tangible progress is made towards establishment of a scheme for self-employed workers by: (i) proposing scenarios for the coverage of self-employed workers; (ii) presenting a draft strategy for the coverage of self-employed workers to the Inter-Ministerial Reform Committee; (iii) including canoe builders in the CNSS; and (iv) presenting a bill on the coverage of students to the Council of Ministers. 22.214.171.124 Expected Outcomes: The expected outcomes are the gradual inclusion of some categories in the CHI scheme with at least 200 000 additional members at the end of the programme and the development of a long-term strategic vision for the coverage of selfemployed workers. Component 3: Regulation and Delivery of Health Care 4.2.3 This component seeks to support the extension of basic medical coverage by supporting regulation and delivery of health care. Indeed, within a context where demand for health services is supported through access to health insurance, it is important to ensure that users have access to adequate and quality health services. Sub-component 1: Improving the Availability and Quality of Services 6 General study for the proposal of compulsory health insurance scheme coverage scenarios for self-employed workers and liberal professions. 13 126.96.36.199 Context: Law No. 34-09 of July 2011 on the health system and health care delivery defines the basic principles and objectives of State action regarding health care as well as the organization of the health system. It defines the content of health care delivery, particularly with regard to human resources, health infrastructure, public-private partnerships, the health information system, the health map and regional health care delivery systems. 188.8.131.52 Rationale: In Morocco, it is necessary to improve the availability and quality of services, particularly those for public sector users (most of whom are RAMED subscribers) who are the most vulnerable. The country suffers from a huge human resource shortage and inadequate personnel training capacity. In addition, the further training programme should be strengthened and consolidated. 184.108.40.206 Measures Supported: PARCOUM III will support measures to improve the availability and quality of human resources across the country, particularly by strengthening synergy with the private sector. The programme will support measures to enhance the deployment of health personnel by: (i) adopting an instrument to deconcentrate human resource management procedures; (ii) submitting the draft decree on private sector physicians and dental surgeons to the Secretariat General of the Government (SGG) to allow for implementation of Law No. 34-09; and (iii) submitting the bill on the health map and regional health care delivery systems to the SGG. Furthermore, in order to improve the practices of the personnel in service, the programme will support: (i) the draft instrument to subject promotion to further training so as to make it more attractive, and (ii) the adoption of rules of good practice for standardized and quality treatment of patients. 220.127.116.11 Expected Outcome: The expected outcome is improved availability of quality services, particularly an increase in the average bed occupancy rate from 61.6% to 70%, at the end of the programme. Sub-component 2: Streamlining Health Care Service Utilization 18.104.22.168 Rationale: The current regulations on health care delivery in Morocco do not allow for optimal health service delivery, resulting in financial and health consequences for the population. The absence of a “gate-keeper” for access to health care and the prohibitive price of drugs, coupled with their short supply, are major impediments to the judicious utilization of health services in Morocco. Lastly, regulations on the price of medical interventions and pharmaceutical products are unsuitable and difficult to implement. Thus, the price of brand-name drugs is 30% to 189% higher than in Tunisia and 20% to 70% higher than in France. Rural and vulnerable households have limited access to drugs and bear a very heavy financial burden due to the expenses they must incur on drugs. 22.214.171.124 Rationale: With the extension of RAMED and expansion of BMC to people not yet covered, it is essential to support measures to ensure that supply satisfies demand. To control health service costs and ensure the optimal utilization of health care providers, it is necessary, like in other countries that have introduced health insurance mechanisms, to establish a standard health care delivery system that must be followed. The price of drugs should also be better regulated. 14 126.96.36.199 Measures Supported: PARCOUM III will support Government’s efforts to streamline health care service utilization. Thus, the programme will support: (i) the adoption, by ANAM Board of Directors, of a coordinated project for the medical follow-up of chronic pathologies, and (ii) submission, to the Secretariat General of the Government, of a draft decree to define the terms and conditions for fixing the prices of drugs sold to the public. 188.8.131.52 Expected Outcome: The expected outcome is the streamlining of the use of health care services, with an increase in the number of CHI policyholders with family doctors from 21% to 40% in 2014. Sub-Component 3: Strengthening Accountability 184.108.40.206 Context: The culture of accountability is not entrenched in Morocco. The existing accountability mechanisms, such as complaints to the General Inspectorate of the Ministry of Health and written complaints to health facilities, do not provide the expected answers as health service users lack information on the outcome of their complaints. The level of satisfaction with health services is very low. 220.127.116.11 Rationale: Morocco’s new Constitution recognizes the right to health services and the principle of accountability. Within this context, it is necessary to put in place mechanisms that provide feedback on users’ perception of care quality so as to make health facilities accountable, ensure the quality of service delivery, and build trust between users and service providers. 18.104.22.168 Measures Supported: To strengthen accountability, PARCOUM III will support measures to empower health service users. Thus, the programme will help to foster sector policy dialogue on: (i) the evaluation of the pilot project for the management of complaints in hospitals through complaints filed online and by phone, and (ii) publication of the RAMED Barometer. 22.214.171.124 Expected Outcomes: The expected outcomes of this sub-component are the promotion of citizens’ opinions in Morocco, and implementation of a pilot project as proposed by the Ministry of Health. 4.3 Implementation Status of Programme Reforms 4.3.1 In line with the commitments made by the Moroccan Government during the appraisal mission, the presentation of the programme to the Bank’s Board of Directors is subject to fulfilment of the conditionalities (measures 1 to 4 of the table below). The disbursement of the second tranche in 2014 will be subject to fulfilment of measures 5, 6 and 7. The measures in italics are conditionalities shared by the EU. 15 Table 4 Reform Measures that will trigger Disbursement Conditions Precedent to Board Presentation (2013) Evidence Required (2013) 1. Extension to all stakeholders and strengthening of the InterMinisterial Committee on Strategic Reform Orientations and Decisions Submission of correspondence between the Ministry of the Economy and Finance and the Head of Government on the extension and strengthening of the Inter-Ministerial Committee specifying the duties and list of committee members. Letter by the Head of Government establishing the Technical Committee and specifying its role and composition. 2. Establishment of the Programme Technical Committee chaired by the Head of Government or Minister designated for that purpose by the Head of Government 3. Mobilization of resources allocated to RAMED 4. Proposal of scenarios for the coverage of selfemployed workers 4.4 Submission of: (i) FCS’s 2013 Provisional Employment Programme; (ii) decisions to grant subsidies to CHU specifying that the resources are intended for RAMED beneficiaries; and (iii) copies of statements by the General Treasury of the Kingdom showing FCS’s account balance as at 31 December 2012 and 31 July 2013 Cover letter of proposed scenarios for the coverage of self-employed workers sent by MS to the Head of Government Conditions Precedent to Second Tranche Disbursement (2014) 5. Presentation, by the Technical Committee to the Inter-Ministerial Committee, of the plan for the improvement of institutional arrangements and tools for the management of RAMED Evidence Required (2014) 6. Transfer of resources from the Social Cohesion Support Fund to RAMED by MEF Submission of the FCS’s 2014 employment programme endorsed by the Ministry of the Economy and Finance and evidence of the transfer to RAMED of the resources indicated in the 2013 employment programme Submission of the draft decree on the status of private sector physicians and dental surgeons registered with the Ministry of Health forwarded to the Secretariat General of the Government, including a copy of the cover letter 7. Submission, to the SGG, of the draft decree on the status of private sector physicians and dental surgeons registered with MS. Submission, to the InterMinisterial Committee, of the plan for the improvement of institutional arrangements and tools for the management of RAMED Financial Requirements and Financing Arrangements 4.4.1 Morocco’s financial requirements for 2013 amount to MAD 66.5 billion, which is to EU 6 billion (Table 5). These requirements will be covered partly by the country’s own resources (EUR 5.4 billion, or 89.8%) and by external resources (EUR 0.6 billion, or 10.2%). The external resource requirements will be met partly by external drawings on loans for investment projects and reform programmes. The Bank loan amounting to EUR 115 million, which will be disbursed in two tranches, will help to cover 9.7% of external financing in 2013 and 6.2% in 2014. An equivalent amount will also be allocated under the PAAFE in 2013 and 2014. In 2011, the health budget represented 6.5% of total public expenditure and 2.1% of GDP. Table 5 Estimated Budget Balance and Financing Requirements 2012-2015 (in MAD billion) Items Total revenue (excluding Hassan II Fund and transfers to local authorities) Of which: Tax revenue Non-tax revenue (excluding privatization and Hassan II Fund) Revenue of some special Treasury accounts Net expenditure and loans (excluding Hassan II Fund) Of which: Current expenditure Capital expenditure Overall balance (commitment basis, excluding Hassan II Fund) Grants Variations in arrears Other revenue 16 2012* 188.5 2013** 215.2 2014** 239.0 2015** 259.3 TOTAL 902.0 170.7 14.6 3.2 221.1 19.1 239.0 20.6 259.3 22.3 890.1 76.6 3.2 237.1 194.1 46.0 -48.6 284.2 209.7 47.1 -69.0 300.6 220.1 50.8 -61.6 320.6 233.2 55.0 -61.3 1.142.5 857.1 198.9 -240.5 -17.0 5.0 2.5 0.0 0.0 2.5 0.0 0.0 2.5 0.0 0.0 7.5 -17.0 5.0 Overall balance (cash basis, excluding Hassan II Fund) -60.6 -66.5 -59.1 Financing (= - overall balance cash basis) 60.6 66.5 59.1 Domestic financing 47.3 59.7 52.0 External financing 13.3 6.8 7.1 Source: * Government of Morocco, August 2012. ** IMF Article IV of November 2011 4.5 -58.8 58.8 51.2 7.6 -245.0 245.0 210.2 34.8 Programme Beneficiaries 4.5.1 The entire Moroccan population will benefit from the programme. Indeed, PARCOUM III seeks to support the extension of social health coverage to the entire population, with priority given to the extension of coverage for the most vulnerable segments through RAMED (28% of the population) and the establishment of a scheme for self-employed workers (about 32% of the population). The latter will help to cover informal sector workers (85% of self-employed workers), a large majority of whom are women who have attained the limit of eligibility for RAMED. Furthermore, due to its regulation and health care delivery support, this programme will be beneficial to all health service users, particularly in the public sector and disadvantaged regions. Lastly, the programme will benefit all institutions, which will receive technical support (steering committee, technical committee, MS, etc.). 4.6 Programme Impact on Gender 4.6.1 Women will be the main beneficiaries of this programme. Indeed, women of childbearing age are the primary users of health care services for pregnancy care and childbirth and its after-effects. Women are also often responsible for children’s health. In addition, gender inequalities in Morocco place women in a vulnerable position and the female/male activity ratio is 35%. This programme, which lays special emphasis on informal sector workers and the poor, will therefore benefit women in particular. Furthermore, although health insurance coverage cannot be assessed according to sex (as membership is done on a household basis)7, special attention will be paid to improving women’s access to health care. 4.7 Environment and Climate Change 4.7.1 The Bank classifies this budget support programme in environmental category III. Given that PARCOUM III is a sector budget support operation, the reforms it is expected to support will have no direct negative impact on the environment. In addition, Morocco signed the Framework Convention on Climate Change in Rio in 1992 and ratified it on 28 December 1995. It also ratified the Kyoto Protocol on 25 January 2002. Despite its negligible contribution to overall global emissions, Morocco is making every effort to raise public awareness and develop appropriate legal and regulatory frameworks. 7 Thus, CLAR indicators cannot be disaggregated by sex, but the impact indicator concerns women 17 5. PROGRAMME IMPLEMENTATION, MONITORING AND EVALUATION 5.1 Implementation Arrangements 5.1.1 Responsible institution: The Ministry of Health will be the main institution responsible for implementation of PARCOUM III, like for the other two previous programmes. The MEF will be involved in programme management and monitoring, as well as fulfilment of some disbursement conditions related to financing of the reform. Both Ministries have high-level experts, and have in the past demonstrated their commitment to conduct sector reforms satisfactorily. Furthermore, a technical reform steering committee will be responsible for monitoring the programme. 5.1.2 Disbursement and flow of funds: The budget support will be disbursed in two tranches, each subject to fulfilment of the conditions retained. Upon Government’s requests for tranche disbursement, the Bank will deposit the agreed amounts in the foreign currency account opened in the Central Bank of Morocco (Bank Al Maghrib) by the Treasury. The Borrower will take appropriate steps to ensure that the equivalent of the funds deposited in the Central Bank account in foreign currency is transferred in local currency to the Treasury current account for the national budget. Bank disbursements will be made in 2013 and 2014. 5.1.3 Fiduciary Arrangements 126.96.36.199 Morocco’s fiduciary risk is considered to be moderate. Recent diagnoses of public finance management in Morocco (PEFA 2009 and more recent reviews under other programmes) indicate a satisfactory performance, and the planned improvements should result in a low residual risk level. Concerning the health sector and the programme, the initial fiduciary risk is considered to be high, but the mitigation measures recommended are expected to reduce it to a moderate level at the end of the operation (see Technical Annex II). 188.8.131.52 Resources will be used in accordance with national regulations on public finance. The MEF will be in charge of resource management. It will ensure that budget heads (grants, special Treasury accounts, etc.) or any other resources required for implementation of the programme are included in the 2013 and 2014 Finance Laws for the Ministry of Health, the Prime Minister’s Office, the Ministry of Interior, the Ministry of Employment, the Ministry for the Modernization of Public Administration and other subsidized public establishments (ANAM, CNOPS, CHU, SEGMA, Institutes, Centres, National Laboratories and the National Pharmacy) concerned with the implementation of PARCOUM III. The entire public expenditure chain will be used on the basis of existing conducive conditions and subject to Government’s commitment to pursue public finance management reforms. Financial sector governance will be strengthened by implementing measures relating to RAMED governance, improving access to health care, enhancing visibility regarding BMC financing, and strengthening accountability by citizens (see Technical Annex). 184.108.40.206 Procurement Arrangements: Since the loan is a sector budget support, it does not involve direct procurement. The support resources will be paid into the Public Treasury (hence fungible with the national budget) which will transfer them through the usual mechanisms to the Ministry of Health and the institutions concerned, which will in turn use them for the procurement of their requirements in accordance with the national procurement procedures in force. The review of the national public procurement system by the Bank in 18 August 2011 revealed that Moroccan procurement regulations are largely consistent with the Bank’s policy standards, except for some divergences which were the subject of dialogue between the Bank and Moroccan authorities. 5.1.4 Audit Arrangements 220.127.116.11 The internal audit of PARCOUM III will be based on the national internal expost control mechanism. The audit will be conducted on an annual basis and for the duration of PARCOUM III (2013-2014) by the General Inspectorate of the Ministry of Health and IGF on the basis of their respective mandates, and will focus on ADB support financial flows and performance regarding the implementation of programme measures for each financial year. The deadline for submitting the financial flows and performance audit report by the IGF to the Bank will be six months following the end of each financial year. 18.104.22.168 The Court of Auditors of Morocco will conduct the external audit of the use of PARCOUM III resources for 2013 and 2014 during the review of the Audited Budget Law. The Court’s reports (compliance statement) will be published on schedule, in accordance with the Organic Law. The Court may also verify the implementation status of the measures and achievement of the performance objectives and indicators of PARCOUM III. 5.2 Monitoring and Evaluation Arrangements 5.2.1 Responsible institutions: The Ministry of the Economy and Finance will be responsible for strategic coordination of PARCOUM III, while the Ministry of Health will ensure its operational coordination. However, other Ministries and agencies will be involved in the programme implementation, in particular the Prime Minister’s Office, the Ministry of Interior, the Ministry of Employment, the Ministry for the Modernization of Public Administration, ANAM, CNOPS and CNSS. These institutions will report directly to the InterMinisterial Reform Committee coordinated by the Prime Minister’s Office. 5.2.2 Monitoring System: PARCOUM III implementation will be monitored and coordinated in accordance with the Bank’s rules and on the basis of the matrix of measures adopted together with the Government. The Bank and the EU will coordinate supervision missions, which will be undertaken at least twice a year in May and October to review the PARCOUM III monitoring framework, annual progress reports, the analysis of the recommendations made during the first annual supervision mission, and the decision to make disbursements for year n +1. The Bank Office in Morocco will play a key role in programme monitoring and sector dialogue. 5.2.3 Information System and Reporting and Dissemination Mechanisms: Implementation will be monitored through annual sector strategy implementation status reports and financial reports submitted to the Bank by the Government. A completion report will be prepared together with the Government in 2015. Impact assessment should also help to test the establishment of mechanisms for assessing citizen participation, which will be financed by the ADB (trust fund). 19 6. LEGAL DOCUMENT AND AUTHORITY 6.1 Legal Document 6.1.1 A loan agreement for financing of the programme will be signed between the Kingdom of Morocco and the Bank. 6.2 Conditions for Bank Intervention 6.2.1 Conditions precedent to Board presentation: The presentation of the programme to the Bank’s Board of Directors shall be subject to fulfilment, by the Moroccan Authorities, of Measures 1 to 4 outlined in Table 4. 6.2.2 Conditions precedent to effectiveness of the Loan Agreement: Effectiveness of the Loan Agreement shall be subject to fulfilment of the conditions set forth in Section 12.01 of the General Conditions Applicable to Bank Loan Agreements and Guarantee Agreements. 6.2.3 Conditions Precedent to Disbursement 22.214.171.124 First Tranche: The disbursement of the first loan tranche (EUR 70 million) shall, in addition to effectiveness of the Loan Agreement, be subject to fulfilment, by the Borrower and to the satisfaction of the Bank, of the following condition precedent: provide the Bank with evidence of the opening of an account in foreign currency in Bank Al-Maghrib to receive the loan resources. The two-tranche option helps to sequence programme measures (particularly conditions) and better assess the impact of reforms. The amounts earmarked correspond to very short-term financing requirements for implementing the reform and, if need be, resources needed to pursue the efforts initiated. 126.96.36.199 Second Tranche: The disbursement of the second loan tranche (EUR 45 000 000) shall be subject to fulfilment, by the Borrower and to the satisfaction of the Bank, of conditions precedent 5 to 7 set forth in Table 4. 6.3 Compliance with Bank Group Policies 6.3.1 The programme is consistent with applicable Bank policies, including Bank operational guidelines for programme support operations. No exception is requested. 20 7. RISK MANAGEMENT Table 6 Risks and Mitigation Measures Risks Better health insurance coverage does not result in increased demand for health care Health care delivery cannot keep pace with new demand on a relatively short-term basis Level Moderate Mitigation Measures Sensitization campaigns carried out by ANAM and MS; visibility is ensured by the King’s commitment. Moderate Many donors are involved in the health sector, and PARCOUM III provides for measures to improve the quality of care. The Government has also allocated budgetary resources for the sector. Insufficient visibility regarding resources allocated for the reform Delays in identification of RAMED members and distribution of cards The mobilization of health care providers and pharmacists to work in disadvantaged regions falls short of expectations. The initial sector fiduciary risk assessed by the Ministry of Health is very high. Moderate Two conditions relating to the Social Cohesion Support Fund are included in the programme. Moderate Measures to improve the processing of files and the targeting system are adopted. High A series of incentives are adopted to attract them to disadvantaged regions. Very high/ Moderate However, it will be mitigated to an overall moderate level to allow for implementation of sector support, subject to consideration of mitigation measures aimed primarily at ensuring visibility regarding BMC financing and improving service availability (Measures A.1.2 and A.3.1), as well as implementing measures related to the LOF, the programme budget and capacity building of IGMs. 8. RECOMMENDATION PARCOUM III will support the establishment of social protection and contribute to improving the health status of the population. Management hereby recommends that the Board of Directors approve the proposal to grant a EUR 115 million loan to the Kingdom of Morocco for implementation of the programme in accordance with the purposes and under the conditions set forth in this report. 21 Appendix 1 Page 1/3 Appendix 1: Development Policy Letter KINGDOM OF MOROCCO The Minister To The President of the African Development Bank Group B.P. 323 – TUNIS BELVEDERE 1002 – TUNISIA - Tunis Subject: Basic Medical Coverage Reform Support Programme (PARCOUM III) Mr. President, Further to the request made by the African Development Bank mission that visited Morocco from 8 to 19 April to appraise the third phase of the Basic Medical Coverage Support Programme (PARCOUM III), I have the honour to forward herewith the Health Sector Policy Letter outlining the main thrusts of the Health Strategy for the 2012-2016 period. While counting on your support for a favourable consideration of this request, please accept, Mr President, the assurances of my highest consideration. Copy for information to: - The African Development Bank Resident Representative in Morocco - Rabat - Appendix 1 Page 2/3 Sector Policy Letter to the African Development Bank Aware of the people’s aspirations to quality health care and services, the need to entrench the right to health services as a basic principle of human rights, improve all aspects of health and redress all imbalances that have characterized the health sector, the Ministry of Health has prepared an action plan for the 2012-2016 period in efforts to rebuild the national health system. These efforts are consistent with the 2012-2016 health policy thrusts outlined in the Government’s general policy statement that was presented before Parliament in January 2012, and take into account Royal Guidelines underscoring the importance of socio-economic projects. The bases of this policy are also rooted in the Constitution as it is in line with Articles 31 and 34 of Morocco’s new Constitution which underscore good governance and accountability. Since 2002, the African Development Bank (ADB) has supported the Moroccan Government, particularly the Ministry of Health, in one of the key projects concerning the reduction of inequalities and social inclusion, that is basic medical coverage (BMC). The Bank’s support began with the first phase, which helped to establish the BMC legal framework, particularly through the preparation of Law No. 65-00 to institute the Basic Medical Coverage Code. This phase covered the 2002-2006 period and benefited from a EUR 80 million financial support. The second phase of the Bank’s support (PARCOUM II) helped to consolidate the achievements of the first phase and launch the Medical Assistance Scheme (RAMED) for the disadvantaged segment of the population. PARCOUM II spanned the 2008-2012 period and benefitted from a EUR 70 million financial support. The third phase of ADB’s support (PARCOUM III) is in harmony with the new Country Strategy Paper (CSP) for the 2012-2016 period. It is based on consensus on the need to target inclusive growth in line with Government’s priorities, while promoting synergy and complementarity with the activities carried out by other development partners. To that end, two thrust areas have been identified, namely: (1) strengthening of governance and the institutional framework; and (2) support for infrastructure development and social inclusion. For its part, the Ministry of Health has initiated a new strategy for the 2012-2016 period, which has enabled it to consolidate the achievements made so far, and address the challenges of the new health system. This new strategy focuses on eleven priority programmes: 1. 2. 3. 4. 5. 6. 7. Extension of CHI and Consolidation of the Generalization of RAMED; Implementation of the National Medical Emergency Management Plan; Consolidation of the Plan to Accelerate the Reduction of Infant and Maternal Mortality; Improvement of Access to Drugs and Pharmaceutical Products; Improvement of Health Sector Governance; Improvement of Reception and Health Service Delivery in Public Hospitals; Implementation of the Plan for the Organization of Health Care Sectors and the Introduction of Family Medicine; 8. Development of Basic Health Care, particularly in Rural Areas; 9. Consolidation of the National Health Plan for People with Special Needs; 10. Strengthening of Health Surveillance and Disease Control; and 11. Strengthening of Supervision by Qualified Human Resources. Appendix 1 Page 3/3 In this connection, PARCOUM III will serve as a link between the MS strategy and the Bank’s CSP, thus helping to mobilize the Bank’s expertise while remaining consistent with sector priorities. To that end, three support thrusts, each with specific objectives, have been identified. Provisional Programme Thrusts and Objectives Thrust 1: O1 : O2 : Thrust 2: O1 : O2 : O3 : Thrust 3: O1 : O2 : O3 : BMC steering and sustainability Strengthen reform steering and governance Ensure the adequate and sustainable financing of BMC Extension of BMC Consolidate the generalization of RAMED Extend CHI to self-employed workers Extend and consolidate CHI for salaried employees Regulation and delivery of health care Improve the availability of resources for better quality health care Stimulate and streamline demand for health care Strengthen citizen participation and accountability Corresponding Priority Programmes (PP) PP1 PP5 PP11 PP1 PP4 PP2 PP4 PP6 PP7 PP8 In addition to the PARCOUM Programme, the Ministry of Health also wishes to mobilize ADB’s support for the establishment of the Geographic Information System (GIS) which will be an important planning tool to ensure more equitable allocation of resources to the regions based on a thorough assessment of the relative needs of the people for greater equity in the distribution of health care delivery. The objectives of this project are to: improve availability and access to information related to health care delivery for health professionals, Moroccan citizens and investors in the health sector; enable health professionals to share the same health information and ensure reliability of data at all levels of the health system (public and private) so as to allow for equitable distribution of resources between urban and rural areas, between regions and within each region; provide policy makers with a rational tool for decision making (evaluation, planning and programming) based on each territorial entity, taking into account the (geographical, economic and cultural) realities on the ground; improve the skills of health professionals likely to use health care delivery planning tools. Dr. Abdelai Belgiati Alaoui Secretary-General Appendix 2 Page 1/3 Appendix 2: Matrix of Medical Coverage Reform Support Programme – Phase 3 Reform Measures NB: Triggers are in bold and measures in italics are common with the European Union. MEDIUM-TERM OBJECTIVES MEASURES AND INSTITUTIONS IN CHARGE MEASURE 2013 MEASURE 2014 INSTITUTION OUTPUT INDICATORS 2013 2014 THRUST 1: STEERING AND FINANCING OF BASIC MEDICAL COVERAGE A.1.1 Strengthen the steering and governance of basic medical coverage Prime Minister’s At least two meeting Strengthen the Submission of InterCorrespondence Extension to all Office, Interreports are submitted reform steering and Ministerial Committee between the MEF stakeholders and Ministerial governance biannual meeting reports and the Prime strengthening of the Committee mechanism Minister’s Office are Inter-Ministerial forwarded. Committee on Strategic Reform Orientations and Decisions Prime Minister’s At least three meeting Establishment of the Office, Ministry reports are submitted Programme Technical designated by the Committee chaired by Head of the Prime Minister’s Government Office or Ministry designated for that purpose by the Head of Government Improve RAMED management Presentation of the Plan for Improvement of Institutional Arrangements and Tools for RAMED Management to the Inter-Ministerial Committee by the Technical Committee A.1.2 Ensure sustainable financing of basic medical coverage Programme Steering Committee Ensure visibility regarding BMC financing MEF Mobilization of resources allocated to RAMED Transfer, by MEF, of resources from the Social Cohesion Support Fund to RAMED The resources allocated to RAMED are mobilized MEANS OF VERIFICATION OUTCOME INDICATORS 2013: Correspondence 2014: Reports 2013: Letter by the Head of Government establishing the Technical Committee and specifying its role and composition 2014: Report Submission of the Plan for Improvement of Institutional Arrangements and Tools for RAMED Management to the Inter-Ministerial Committee 2014: The Committee’s agenda and the Improvement Plan Resources are transferred to RAMED 2013: Submission: (i) of FCS’s 2013 Provisional Employment Programme; (ii) decisions granting resources to CHUs stating that they are intended for RAMED beneficiaries; and (iii) copies of statements issued by TGR showing the balance of the FCS as at 31 December 2012 and 31 July 2013 2014: Submission of FCS’s 2014 Employment Programme endorsed by the Ministry of the Economy and Finance and evidence of the transfer to RAMED of the resources indicated in the 2013 Programme Share of household expenses in total health expenditure 2014: 48% (53% in 2010). Source: CNS; MS Household Expenditure Survey Appendix 2 Page 2/3 MEDIUM-TERM OBJECTIVES MEASURES AND INSTITUTIONS IN CHARGE MEASURE 2013 Develop a mediumterm financing framework Formulation of the 2014-2016 programme budget (guidelines issued by MS) MEASURE 2014 INSTITUTION Submission of the health sector financing strategy to MEF MEF, DPRF (MS) Signing of 16 programme contracts with the health regions DPRF (MS) OUTPUT INDICATORS 2013 The guidelines are signed 2014 MEANS OF VERIFICATION The strategy is adopted by the MS and submitted to MEF Letter of transmittal to MEF and validated strategy The 16 health regions have signed programme contracts 2013: Transmission of guidelines OUTCOME INDICATORS 2014: Transmission of programme contracts THRUST 2: EXTENSION OF BACIC MEDICAL COVERAGE A.2.1 Strengthen the implementation of the Medical Assistance Scheme (RAMED) Improve the processing of registration files Interconnection of 800 related administrative services Ministry of Interior 800 related administrative services are interconnected MS Review of the targeting system included on the Inter-Ministerial agenda of the InterCommittee Ministerial committee A.2.2 Develop medical coverage for elf-employed socio-professional categories Report of the Ministry of Interior 2013: Submission of the validated actuarial study 2014: Agenda of the InterMinisterial Committee Improve the RAMED targeting system RAMED actuarial study validated by MS Define a strategy for coverage of selfemployed workers Proposal of scenarios for coverage of selfemployed workers Presentation of a draft strategy for coverage of self-employed workers to the Reform Steering Committee MS A scenario for coverage of selfemployed workers is validated The draft strategy for coverage of selfemployed workers is presented to the Steering Committee 2013: Cover letter of proposed scenarios for coverage of selfemployed workers to the Prime Minister’s Office by MS 2014: Submission of the first draft strategy for coverage of selfemployed workers Extend medical coverage for selfemployed workers Inclusion of canoe builders in the CNSS Presentation, by the Council of Ministers, of the bill on coverage of students CNSS Canoe builders are included in the CNSS The bill on coverage of students is presented to the Council of Ministers 2013: Agreement signed with the CNSS Ministry of Employment % eligible persons registered with RAMED 2013: 85% 2014: 93% Source : ANAM Self-employed workers affiliated to the CHI scheme 2014: 200 000 Source : CNSS Annual Balance Sheet 2014: Cover letter of the bill to the SGG, including the bill THRUST 3: REGULATION AND DELIVERY OF HEALTH CARE A.3.1 Improve availability and quality of services Improve availability of services Adoption of regulations governing the deconcentration of human resource management Submission, to the SGG, of the draft decree on the status of private sector physicians and dental surgeons registered with the MS DRH, DRC (MS) Submission, to the SGG, of the bill on health map DRC, DPRF The instrument relating to the deconcentration of human resource management is adopted by the MS The decree relating to physicians and dental surgeons is submitted to the SGG 2013: Submission of the instrument relating to the deconcentration of human resource management 2014: Submission, to the SGG, of the draft decree relating to the status of private sector physicians and dental surgeons registered with the MS, as well as a copy of the cover letter The delegation of signing authority to regional directors is effective The bill on health map and regional health care delivery Cover letter of the bill to the SGG and the bill Number of inhabitants per public sector physician 2012 : 2725 (2500 in 2015) Appendix 2 Page 3/3 MEDIUM-TERM OBJECTIVES Improve the quality of human resources MEASURES AND INSTITUTIONS IN CHARGE MEASURE 2013 Draft instrument subjecting promotion to further training MEASURE 2014 and regional health care delivery systems Adoption of four rules of “good practices” by the Ministry of Health INSTITUTION MS ANAM OUTPUT INDICATORS 2013 The draft instrument on further training is transmitted to the SGG 2014 systems is submitted to the SGG Four rules of good practices are adopted MEANS OF VERIFICATION OUTCOME INDICATORS Source :MS Cover letter of draft decree to the SGG and the draft decree. Documents on rules of good practices A.3. 2 Streamline the use of health care services Ensure compliance with health care procedures Adoption of the coordinated project for the medical follow-up of chronic diseases by the Board of Directors of ANAM ANAM The coordinated project for the medical follow-up of chronic diseases is adopted by the Board of Directors of ANAM Minutes of the ANAM Board of Directors’ meeting Streamline the use and facilitate access to drugs Submission, to the SGG, of the draft decree relating to the terms and conditions for fixing the prices of drugs sold to the public DRC, DMP (MS) The draft decree relating to the terms and conditions for fixing the prices of drugs sold to the public is submitted to the SGG Cover letter of draft decree to the SGG and the draft decree Publication of the RAMED barometer DHSA The RAMED barometer is published 2013: Submission of the evaluation report 2014: Submission of the RAMED barometer % of CHI policyholders enjoying the services of a family doctor 2015 : 40% Source : ANAM A.3.3 Strengthen accountability Promote citizen participation Evaluation of the pilot project for the management of complaints in hospitals ANAM The evaluation report is available % of households which think that health services have improved 2014: 40% (23% in 2012) Source: HCP Appendix 3 Page 1/1 Appendix 3: IMF Press Release The IMF Executive Board Completes the First Review Under Precautionary and Liquidity Line Arrangement for Morocco Press Release No. 13/38 February 4, 2013 The Executive Board of the International Monetary Fund (IMF) on February 1, 2013 completed the first review of Morocco’s performance under an economic program supported by a two-year Precautionary Liquidity Line (PLL) arrangement and reaffirmed Morocco’s continued qualification to access PLL resources. The PLL was approved on August 3, 2012 in an amount equivalent to SDR 4,117.4 million (about US$6.3 billion, 700 percent of quota, see Press Release No. 12/287). The access under the arrangement in the first year is equivalent to SDR 2.4 billion (about US$3.6 billion, or 400 percent of quota), rising in the second year to cumulatively SDR 4.1 billion (about US$6.3 billion). The PLL arrangement will continue to support the authorities’ home-grown reform agenda aimed at achieving higher and more inclusive economic growth by providing a useful insurance against external shocks. The PLL was introduced to meet more flexibly the liquidity needs of member countries with sound economic fundamentals and strong record of policy implementation but with some remaining vulnerabilities. The IMF’s Executive Board welcomed the authorities’ intention to continue treating the arrangement as precautionary. Following the Board’s discussion, Ms. Nemat Shafik, Deputy Managing Director and Acting Chair, issued the following statement: “Over the past decade, Morocco’s overall sound macroeconomic policies helped deliver solid growth, low inflation, and poverty reduction, despite continued high youth unemployment. This extended period of sound economic performance has been recently challenged by a worsening of the external environment and a below-average harvest, even though the non-agricultural GDP growth remained robust and inflation low. Against this backdrop, the authorities’ economic strategy is built appropriately on fiscal consolidation, structural reforms and prudent monetary and financial policies. Sustained implementation will be key to rebuilding buffers, preserving macroeconomic stability and achieving stronger and more inclusive growth. “The arrangement under the Fund’s Precautionary and Liquidity Line (PLL), which the authorities intend to continue to treat as precautionary, has provided Morocco with an insurance against external risks and supported the authorities’ economic strategy. “The authorities’ fiscal strategy, including the 2013 budget, is in line with their commitment to maintain fiscal sustainability and support external adjustment. As part of this strategy, it will be important to move ahead with the reforms of the general subsidy system and the pension system and to better target social protection. Fiscal space needs to be preserved to support higher and more inclusive growth. “Efforts to strengthen competitiveness and better equip the economy to respond to external shocks are a priority. The planned fiscal consolidation and structural reforms, such as those to improve the business climate and professional training, will help underpin external sustainability. Morocco is encouraged to move toward greater exchange rate flexibility to enhance external competitiveness and the economy’s ability to absorb shocks, in coordination with other macroeconomic and structural policies. “Over the past decade, substantial progress has been made in improving social indicators. However, sustained further efforts are still needed to increase growth and make it more inclusive, notably by boosting employment, in particular of the youth, reducing income inequalities, and increasing access to health care and education.” IMF External Affairs Department Appendix 4 Page 1/1 Appendix 4: Recent Key Economic Indicator Trends and Projections, 2010-18 2010 Production and Prices Real GDP Real Non-agricultural GDP Consumer Prices (End of Period) Consumer Prices (Period Average) Investment and Savings Gross Capital Formation Of which: Non-public Gross National Savings Of which: Non-public 2011 2012 2013 2014 2015 2016 2017 2018 (Annual Percentage Change) 3.6 5 3.2 4.9 5 4.5 2.2 0.9 2.3 1 0.9 1.3 (As a Percentage of GDP) 4.5 4.5 2.5 2.4 4.8 4.7 2.5 2.5 5 5 2.5 2.5 5.4 5.4 2.5 2.5 5.7 5.8 2.6 2.6 5.8 5.9 2.6 2.6 35 36 36.1 31.2 31.5 31.9 30.9 27.9 27.3 28.9 28.5 28.4 (As a Percentage of GDP) 36.6 31.8 30.4 29.4 37.4 31.9 31.7 29.5 37.8 32.1 32.6 29.5 38.2 32.4 33.4 29.7 38.4 32.6 33.9 29.9 38.8 32.9 34.3 29.9 Public Finance Revenue 1 / 27.5 27.8 27.7 28.2 28.3 28.2 28.2 28.1 28.2 Expenditure 31.9 34.6 33.8 32.9 32.4 31.7 31.2 30.7 30.6 Budget Balance -4.4 -6.8 -6.1 -4.7 -4.1 -3.5 -3 -2.7 -2.4 Primary Balance (Excluding Grants) -2.3 -4.7 -3.8 -3.4 -2.7 -2 -1.5 -1.1 -0.8 Total Public Debt 51.3 54.4 58.2 59 59 58.4 57 55.2 53.3 (Annual Percentage Changes, Unless Otherwise Indicated) Monetary Sector Credit to the Private Sector 2 7.5 9.9 7 8 ... ... ... ... ... Broad Money 4.8 6.5 3.3 7.9 ... ... ... ... ... Broad Money Velocity 0.9 0.8 0.9 0.8 ... ... ... ... ... 3-Month Treasury Bill Rate (Period 3.4 3.5 3.2 ... ... ... ... ... ... Average, as a Percentage) 3 / (As a Percentage of GDP, Unless Otherwise Indicated) External Sector Exports of Goods (USD, Percentage 26.7 21 -3.5 10.4 8.1 5.6 6.5 6.9 7.1 Change) Imports of Goods (USD, Percentage 7.7 25.4 -1.6 5.9 5 5.4 5.9 6.8 7.6 Change) Trade Balance -16.4 -19.6 -20 -18.8 -17.8 -18 -17 -17 -17 Current Account Balance, Excluding -4.4 -8.4 -8.9 -7.9 -6.8 -6.4 -5.8 -5.4 -5.3 Official Transfers Current Account Balance, Including -4.1 -8 -8.8 -6.3 -5.7 -5.3 -4.8 -4.5 -4.5 Official Transfers Foreign Direct Investments 0.8 2.3 2.2 2.8 2.8 2.9 3 3 3 Total External Debt 24.7 23.6 26.4 27.5 27.1 26.6 25.9 24.6 23.8 Gross Reserves (in USD billion) 23.6 20.6 17.5 18.4 18.8 19.7 21.3 22.6 24.6 In Months of Imports of Goods and Services 5.7 5.1 4.1 4.1 4 4 4 4 4.1 in the Following Year Percentage of Short-term External Debt 1 546 1 222 1 037 1 091 1 112 1 168 1 259 1 339 1 455 (Based on the Remaining Maturity) Memorandum Item: Nominal GDP (in USD billion) 90.8 99.2 97.5 105 112 120 130 141 153 Unemployment Rate (Percentage) 9.1 8.9 … ... ... ... ... ... ... Net Imports of Energy Goods (in USD -8.1 -11.2 -11.8 -11.5 -11.4 -11 -11 -11 -11 billion) Sources: Moroccan authorities and IMF estimates. 1. Including changes in the balance of other special Treasury accounts. 2. Including credit to public enterprises. 3. Latest data for 2012.