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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.
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
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)
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