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PROJECT INFORMATION DOCUMENT (PID) APPRAISAL STAGE Report No.: AB4309 Project Name Improving Health Sector Performance (Additional Financing to the Health Sector Development Project) Region Sector Project ID Borrower(s) Implementing Agency MIDDLE EAST AND NORTH AFRICA Health (100%) Environment Category Date PID Prepared Estimated Date of Appraisal Estimated Date of Board Approval P107395 (Parent: P071062) GOVERNMENT OF DJIBOUTI Project Management Unit Djibouti [ ] A [X] B [ ] C [ ] FI [ ] TBD (to be determined) November 10, 2008 March 23, 2009 April 30, 2009 1. Key development issues and rationale for Additional Financing in the amount of US$7 million Country and sector issues Despite the recent economic growth performance, Djibouti has remained locked in a trap of high unemployment and unequal income distribution. Foreign Direct Investments have grown substantially in the past years (22% of the GDP in 2006, which is a 19% increase from 2005) but have not trickled down to the poor. Only few jobs were created, much less than the authorities expected and fewer than the economy needs to absorb to alleviate the pervasive poverty. The impact of growth has been limited so far for a number of reasons. First, investments are made primarily in economic activities that produce few jobs, minimizing the backward and forward linkages to the local economy. Also, high energy costs continue to weight heavily on Djibouti’s competitiveness, giving little incentive to labor intensive manufacturing industries to settle in the country. Moreover, the labor force has remained highly under-skilled and unproductive due low education level and to the practice of chewing khat (25 percent of the population), which is a nonnegligible impediment to productivity improvements. Furthermore, high wage rates in the formal sector has created serious problems of non-competitiveness and skewed income distribution. All these factors have contributed to limited employment creation and income inequality. Despite an income per capita of US$1,040 (in purchasing power parity terms), Djibouti has experienced very high poverty rates and low human and social development indicators. While Djibouti’s per capita income places it in the ranks of low middle-income countries, Djibouti has an extremely high incidence of poverty as reflected by 42 percent absolute and 75 percent relative poverty rates, and a very low level o f human development as indicated by life expectancy of 49 years, which is among the lowest in the world. The standard of living is very low particularly in rural areas as manifested by the high incidence of informal and sub-standard housing and low rates of access to basic services such as water supply (only 53 percent of the rural population has access to potable water), sanitation and drainage (19 percent in rural areas),1 electricity, solid waste management, and access roads. Moreover, educational attainment is very low due to insufficient educational facilities, low school enrollment rates (primary 56% total and 41 percent in rural areas), and high rates of female illiteracy (52 percent total and 86 percent in rural areas), which in turn generate a growing unskilled labor force bound to be unemployed and caught in the poverty trap. 1 Despite improvements in the health status in the last few years, the health indicators remain among the lowest in the world and Djibouti may not achieve the health-related Millennium Development Goals. Despite the IMR and U5MR reduction of 35 percent and 27 percent from 2002 level, respectively, they still are among the highest in the region at an IMR of 67 and U5MR of 94 per 1000 live births in 2005. Diarrhea, acute respiratory infections, and malnutrition are among the leading causes. Maternal mortality rate is estimated at 546 per 100,000 live births, which is attributed to several factors including low rates of antenatal care and medically-assisted deliveries. Tuberculosis rate of 588 cases per 100,000 persons is among the highest rates in the world. Malaria is also on the rise with over 4,000 confirmed cases each year caused by uncontrolled urbanization with inappropriate water-supply and non existent wastewater evacuation system. HIV/AIDS prevalence is about 3 percent, however, prevalence among persons aged 20-35, that is economically productive and sexually active persons, is higher than 5 percent. Recently, HIV/AIDS prevalence among young women aged 15-24 years was reduced from 2.7 to 2.4 percent suggesting stabilization of the epidemic. Children under five who slept under an impregnated bed net increased from 13 percent in 2002 to 29 percent in 2006. In addition, despite the improvement in the availability of health service providers, increased drug availability, and the increase in management capacity, the sector is still in dire need of strengthening its health service delivery system and management capacity in order to achieve the MDGs. In 2004, Djibouti developed a Poverty Reduction Strategy Paper (PRSP) that identified an ambitious four-pronged strategy. The strategy was aiming at: (i) strengthening competitiveness for higher and sustainable growth by persevering with overall macroeconomic stability, while accelerating structural reforms to create a better investment climate for private investment; (ii) accelerating human development through improved school enrollment and quality o f education, strengthening the health care system, broadening the social safety net; and implementing the national gender strategy; (iii) promoting regional and local development to reach out to poor urban neighborhoods, nomads, and isolated rural communities; and (iv) improving governance and public sector management through greater transparency and accountability. In 2007, the President launched the “National Initiative for Social Development” (Initiative Nationale de Développement Social - INDS) in order to mitigate the social risks associated with the highly unequal economic development. The INDS defined the new broad social objectives in terms of access to basic social services, employment generation and assistance to the most vulnerable groups: provision of clean water, urban upgrading of disadvantaged neighborhoods, construction and improvements of housing, expansion of the road network, provision of facilities (school, health centers), access to micro-credit and micro-project training (agriculture, craftsmanship, services, small trade activities), and public financial contribution to the development projects supported by international donors. The INDS reflects the political will of the Government to adopt more inclusive social policies and broad-based economic development. Enquete EDIM 2006. In March 2008, the Ministry of Health completed its second National Health Development Plan “Plan National de Developpement de la Santé – PNDS II” for the period 2008 – 2012. The MOH recently completed through its own resources and in consultation with development partners a comprehensive strategic plan that builds on the achievements of the first plan and lays out the strategic directions for the next phase. The plan has five strategic pillars: (i) improving the organization, management, and operation of the health system; (ii) adapting the operation and the quality of health services to the needs of the population; (iii) adapting the financing and use of financial resources to the needs of the health system; (iv) developing the human resources according to the needs of the health system; and (v) improving the availability, access, and rational use of quality drugs. Rationale for Additional Financing The Bank has been the leading donor in the health sector through two major projects. The Health Sector Development Project (HSDP) is in the amount of US$15 million and scheduled to close in June 2009. The objective of the Project is to improve access and quality of health services through four components: (i) Improving health services particularly maternal and child health; (ii) Improving availability and quality of human resources particularly nurses and midwives; (iii) Increasing drug supply; and (iv) improving sector management. The HIV/AIDS, malaria and tuberculosis (TB) control project, in the amount of $12 million, which closed in September 2008, was supporting four components: (i) improving the response of the health sector to the HIV/AIDS, TB, and malaria including sexually transmitted infections (STIs); (ii) supporting a multisectoral response, (iii) mobilizing a social and community response, and (iv) improving the Government program management and strategic planning. The proposed Bank additional financing will draw on the lessons learned in these two projects, consolidate the implementation into one program, and support the Government’s different social programs. The Bank will use its convening power to attract other donors to participate in this program. The Government has requested the Bank to take the lead in organizing a Donor Conference “Table Ronde” to mobilize the financial and technical resources to implement the PNDS II. In this regard, the Bank is developing a multi-donor framework in support of the new program and is conducting a series of consultations with the Global Fund for HIV/AIDS, Tuberculosis, and Malaria (GFATM), the World Health Organization (WHO), the Agence Française pour le Développement (AFD), the United States Agency for International Development (USAID), the League of Arab States (LAS), and others. It is likely however that each institution would develop parallel co-financing agreements with the Government of Djibouti but all of them will operate under the multi-donor framework. The additional funds would be used to support the implementation of additional and expanded activities that will scale-up the ongoing activities being implemented under the current project for a three years period, starting on/about July 1, 2009. Building on the interventions, activities, services and results achieved under the current project supported by the Bank, this additional financing will also continue the support to the health sector program in line with the PNDS II. The Bank proposes to provide support through an additional financing grant in an amount of US$7 million for the Health Sector Development Project. The funding will be from the IDA 15 allocation to the Health Sector in Djibouti. The proposed activities will be included under the following components: (i) improving the Health Service Delivery Performance (Under Component One), and (ii) improving the Performance of Health Systems (Under Component Four). Original Health Development Project (HSDP) Performance The original project (Cr. 3650 DJI) amounted to US$15 million. The project was approved on June 4, 2002 and became effective on November 11, 2002. Six years since the HSDP was launched, implementation has progressed smoothly and results have remained consistent with the outcomes in the Project Appraisal Document. The project has achieved significant progress in maternal and child health which is contributing in achieving the Project Development Objectives (PDOs). For example, infant mortality rate was reduced by 35 percent from 103 deaths per 1000 live births in 2002 to 67 deaths per 1000 live births in 2006, child mortality rate was reduced by 27 percent from 129 deaths per 1000 live births in 2002 to 94 deaths per 1000 live births in 2006, medically assisted delivery reached 93 percent, paramedical staff increased by four fold where almost 90 percent of the health posts have at least one midwife or nurse compared to none in 2002. The rating for the HSDP has consistently been “satisfactory” for achieving Project Development Objectives (PDOs). The Ministry of Health, through its Projects Management Unit (Unité de Gestion des Projets UGP), has been managing the HSDP effectively. The UGP is staffed with competent and capable personnel, under the strong leadership of a committed Minister, which has greatly facilitated implementation and enabled stakeholders to overcome numerous challenges posed under this operation. To date, the project disbursement rate is at 89% (XDR10.67 millions equivalent to USD15.85 million). The current rating for the HSDP Implementation Progress is “satisfactory”. Throughout implementation, the HSDP has been fully compliant with the conditions and legal covenants included in the legal agreement. The project has no unresolved fiduciary or safeguards issues. Its accounts were regularly audited and the audit report covering calendar year 2007 has been received with an unqualified statement. There are no audit reports due at this time. The rating of safeguard compliance and environmental assessment is “moderately satisfactory”. 2. Proposed objective(s) The original Project Development Objective (PDO) of the HSDP is to improve the quality of health services in a sustainable manner in order to reduce maternal and child mortality. This will be achieved through (a) improvement of maternal and child health services; (b) improved availability and quality of para-medical personnel; (c) improved availability of drugs in health facilities; and (d) increased capacity of the Government to implement and execute reforms. These activities should set in place the initial conditions necessary for attaining Millennium Development Goals in maternal and child health (MDGs 4 and 5) . Moreover, an IDA project on HIV/AIDS, TB and Malaria Control in the amount of USD12 million was closed on September 30, 2008. The Government requested that the Bank continues its support to these programs aiming at combating communicable diseases, which contributes to MDG6. Accordingly, the PDO will be expanded and made specifically linked to the three health related MDGs as follows: to improve the quality of health services in a sustainable manner in order to contribute to the achievement of the health-related Millennium Development Goals (MDGs) of reducing child and maternal mortality and combating communicable diseases. 3. Preliminary description The proposed activities will be included under the following components: Improving the Health Service Delivery Performance (US$4 million) (Under Component One). The additional financing will continue supporting the delivery of: (i) child health services such as immunization, Integrated Management of Childhood Illnesses (IMCI), and treatment of malnutrition; (ii) maternal child health services such as perinatal care, family planning, skilledattended delivery, and emergency obstetric care; and will support the additional activities, originally supported under the HIV/AIDS, Malaria and Tuberculosis project, related to the delivery of: (iii) prevention and treatment services of HIV/AIDS and other prevalent communicable diseases such as Voluntary Counseling and Testing (VCT), Directly Observed Treatment Short-course (DOTS), and malaria cases. This component will finance minor civil works, limited medical equipment, office equipment, office supplies, training, and technical assistance. Improving the Performance of Health Systems (US$3 million) (Under Component Four). This component will continue financing activities aiming at strengthening the MOH management capacity and improving the performance of the different health systems in support of health services. These include different MOH Directorates such as the health regions, health promotion, human resources, drugs and medical supplies, disease surveillance, and information systems. This component will also support the UGP and the Executive Secretariat (ES) to manage the project activities and fiduciary functions including financial management, procurement, and environmental plan in addition to strengthening the program monitoring and evaluation including health facility and client satisfaction surveys. Specifically, this component would provide the necessary funds for minor civil works, limited medical equipment, office equipment, office supplies, training, technical assistance and support demand creation activities such as social mobilization and community outreach. 4. Safeguard policies The Additional Financing will invest in minor civil works, limited medical equipment, office equipment, office supplies, training, technical assistance and support demand creation activities such as social mobilization and community outreach. No new safeguard policies are envisaged to be triggered; therefore, the project rating remains as Environmental Category “B”. The same measures being applied to the current project (HSDP) are applicable to the project activities financed through the additional financing. Under the current project (HSDP) and the HIV/AIDS project, an Environmental Management Plan (EMP) – Medical Waste Management Plan - has been prepared, appraised and under implementation. The implementation of this EMP will be continued under the Additional Financing. 5. Tentative financing Source: ($m.) International Development Association (IDA) Total 6. Contact point Contact: Sameh El-Saharty Title: Sr. Health Policy Specialist Tel: + 1 (202) 458-7014 Fax: + 1 (202) 477-0036 Email: [email protected] Location: Washington DC, USA (IBRD) 7 7