Document of The World Bank FOR OFFICIAL USE ONLY Report No. 11788-COM STAFF APPRAISAL REPORT FEDERAL ISLAMIC REPUBLIC OF COMOROS POPULATION AND HUMAN RESOURCES PROJECT NOVEMBER 19, 1993 Population and Human Resources Division Operations Department III Africa Region This document has a restricted distribution and may be used by recipients only in the perfornance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS Currency unit = Comorian Franc (CF) 1990 US$1 = CF 272 1991 US$1 = CF 282 1993 US$1 = CF 273 MEASUREMENTS 1 meter = 3.28 feet 1 kilometer = 0.62 mile 1 square kilometer = 0.39 square mile 1 hectare = 2.47 acres FISCAL YEAR January 1 - December 31 This report is based on the findings of an appraisal mission which visited Comoros in March 1993. The mission members were Daniel Viens (Mission Leader), Amolo Ng'weno, Michele Lioy, Pierre Mersier, Malonga Miatudila, Cung Tran-Luu (AF3PH), and Paul Geli (consultant). The report was prepared by Lynne Sherbume-Benz and Amolo Ng'weno. The report was processed by Val6rie Vincent, Roselyne Leroy and Hilda Emeruwa. Willy De Geyndt is lead advisor and Messrs. Steen Jorgensen and Alexandre Marc were the peer reviewers. Francisco Aguirre-Sacasa and David Berk are the Department Director and Managing Division Chief respectively for the operation. FOR OFFICIAL USE ONLY ABBREVIATIONS AND ACRONYMS AfDB African Development Bank AIDS Acquired Immuno Deficiency Syndrome ASI French NGO (Association Sante International) CARE International Development NGO CARITAS International NGO of the Catholic Church CCC Central Coordination Committee CDSF Community Development Support Fund CECI Canadian NGO (Centre Canadien d'Etudes et de Cooperation Internationale) CIR Country Implementation Review CPR Contraceptive prevalence rate CTARIAP Technical Commission on Adjustment and Strengthening of the Public Administration CYP Couple-years of protection DHE Directorate of Health Education DPI Directorate of Pharmaceutical Inspection ENS National Public Health School EPI Expanded Program of Immunization FAC Aid agency of the French Government (Fonds d'Aide a la Cooperation) FIRC Federal Islamic Republic of Comoros FP Family planning GDP Gross domestic product GNP Gross national product HIV Human Immunodeficiency Virus IDA International Development Association IEC Information, Education and Communication ILO International Labor Organization (of the UN) IMF International Monetary Fund MCH Maternal and Child Health MEN Ministry of Education MERCAP Macroeconomic Reform and Capacity Building Project MIS Management Information System MOH Ministry of Health NES National Executive Secretariat NGO Non-governmental organization PC Pilot Committees PHC Primary Health Care PEP Public Expenditure Program PNAC National Autonomous Pharmacy of Comoros RC Regional Committee RES Regional Executive Secretariat RHT Regional Health Team RMO Regional Medical Officer SSA Sub-Saharan Africa STD Sexually Transmitted Disease TB Tuberculosis UNDP United Nations Development Program UNFPA United Nations Fund for Population Activities UNICEF United Nations Children's Fund WHO World Health Organization This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. TABLE OF CONTENTS Basic Data .................................... i Credit and Project Summary .................................... ii I. BACKGROUND ...........................................1 A. Recent Economic Developments ............. ............................. 1 B. Conditions in the Social Sectors .......................................... 2 C. IDA's Assistance Strategy and Lessons Learned ......................................... 5 II. HUMAN RESOURCES SECTOR ISSUES .......................................... 6 A. Health Sector .......................................... 6 B. Education Sector .......................................... 9 C. Community Development .......................................... 10 III. THE PROJECT .......................................... 11 A. Project Objectives and Approach .......................................... 11 B. Project Description .......................................... 12 IV. PROJECT COSTS AND FINANCING ................... ....................... 23 V. PROJECT IMPLEMENTATION .......................................... 26 A. Project Preparation .......................................... 26 B. Project Management .......................................... 27 C. Implementation Schedule .......................................... 31 D. Project Monitoring and Reporting .......................................... 33 E. Implementation Issues in Comoros .......................................... 34 F. Procurement .......................................... 36 G. Disbursement .......................................... 38 VI. BENEFITS AND RISKS .......................................... 39 VII. CONDITIONS AND RECOMMENDATION ..................................... ..... 40 -2- (continued) Tables in Main Text Table 4.1 Summary Project Costs by Component Table 4.2 Summary Project Costs by Category of Expenditures Table 4.3 Allocation of IDA Credit by Disbursement Category Table 5.1 Implementation Schedule Table 5.2 : Procurement Arrangements Table 5.3 : Disbursement Categories Annexes Annex I : Community Development Support Fund (list of sub-projects) Annex II Information, Education and Communication Annex III Technical Assistance and Training Annex IV Summary Project Costs and Financing Annex V : Estimated Schedule of Disbursements Annex VI Performance Indicators Annex VII : Supervision Plan Annex VIII Selected Documents in the Project File Annex IX The Pilot Experience at Mitsoudjd Health Center Annex X : Health Component: Activity Implementation Schedule Annex XI : Comoros Demography and Health Resources, 1991 - i - BASIC DATA (1990 or most recent estimate) Comoros Sub-Saharan Africa Total Area (kmi): 1,862 23,066,000 Grande Comore 1,147 Anjouan 424 Moheli 290 Total Population (millions) 0.48 495 Population growth rate (annual %) 3.1 3.0 Population per km: Grande Comore 243 Anjouan 429 Moheli 109 Crude birth rate (per thous. pop.) 44.7 45.9 Crude death rate (per thous. pop.) 13.6 15.6 Life expectancy at birth (years): Overall 54.5 50.6 Female 55.9 52.4 Male 53.0 Infant mortality rate (per thous. live births) 114.5 107.3 Under 5 mortality rate (per thous. live births) 131.2 166.8 Total fertility rate (births per woman) 6.60 6.46 Primary school enrollment (% of school-age-group) 62.4 68.8 Population per physician 8,816 Population per nursing person 621 Population per hospital bed 363 Access to health care (% of pop.) 83%g Percentage of pregnant women receiving prenatal care: 1982 24 1989 70 Per capita GNP (US$) 510 340 Daily calorie supply (calorie per person) 1,960 2,120 Contraceptive Prevalence Rate (1991) 4% - 11 - CREDIT AND PROJECT SUMMARY Borrower: Federal Islamic Republic of the Comoros Executing Agencies: Ministry of Health and Community Development Support Fund (CDSF) Credit Amount: SDR 9.2 million (US$13.0 million equivalent) Terms: Standard IDA terms, with 40 years maturity Project Objectives: The overall objective of the project is to strengthen the development of human resources in the Comoros by: (i) increasing the efficiency and effectiveness of basic health services, through the establishment of efficient health regions and other supportive services, which will be capable of providing comprehensive good quality and cost effective health care, including family planning services and Acquired Immunodeficiency Syndrome (AIDS) prevention, and will involve community participation, self-management and cost recovery; and (ii) by promoting complementary community development initiatives to develop social infrastructure and grassroots participation in small-scale productive activities, through a Community Development Support Fund (CDSF). Project Components: The project has two components: population and health, and community development. The population and health component will build upon existing successful pilot programs for self-management and cost recovery to establish services capable of ensuring cost-effective and sustainable provision of comprehensive and good quality health care, including Family Planning (FP) and AIDS control services. To that end, the component will: (i) strengthen the capacities of the three health regions to plan, implement, administer, and supervise health care services, in part through improving and expanding the training of district health personnel; (ii) equip and rehabilitate two regional hospitals and a number of health centers; and (iii) promote family planning and AIDS control services. In the second component of the project, complementary community development activities as well as activities to encourage sustainable economic development would be supported through a Community Development Support Fund (CDSF). While demand driven, the CDSF would focus primarily on: training of communities and groups in micro-project development, management, and implementation; rehabilitation of social infrastructure (especially primary schools, water supply, and health posts); activities to promote the well-being and development of women; and income generating activities. - iii - Benefits and Risks: The project is expected to enhance the development of human resources by improving the health, education, and income status of the population. Through the health and population component, available primary health care is expected to improve with the strengthening of peripheral services and closer involvement of communities in their provision; Information, Education, and Communication (IEC) and better Family Planning (FP) services should increase the contraceptive prevalence rate, reducing fertility, as well as raising awareness of the need for AIDS prevention. The CDSF would complement activities in the health component by building upon strong community involvement and aiding communities and individuals to more effectively and efficiently channel community resources and implement local development efforts, including much needed rehabilitation of primary schools, water supply and health posts. It would provide an opportunity to strengthen the capacity of local associations and NGOs, as well as encourage the creation of new NGOs, in addition to enhancing the well-being and economic role of women in society. The main risks to the implementation of the project are weak Government capacity and potential delays due to political uncertainties. To address the first, the goal of the health and population component is to strengthen community involvement, both financially and managerially, in the provision of basic health services as well as to build Government capacity and improve the efficiency of these services. More specifically, personnel would be trained, a unit within the Ministry of Health would be created under the Directorate General of Health Services for procurement and administration of implementation, and technical assistance would be provided in key areas for capacity building. To insulate the CDSF from weak Government capacity and political interference, an autonomous agency staffed by selected, contractual employees would manage the fund. In addition, community training, strong CDSF supervision, a transparent management information system, and semi-annual auditing of accounts would enhance the overall efficiency of the community development component of the project. Project Cost Estimates: (in US$ thousands) Estimated Costs Local Foreign Total Support to the Health Sector 4,931 2,056 6,987 Community Development Support Fund 5,979 911 6,890 PPF 500 300 800 Total Base Costs 11,410 3,267 14,677 Price Contingencies 1,184 175 1,359 Total Project Costs 12,594 3,442 16,036 - iv - Financing Plan: (US$ millions) Local Foreign Total IDA 9,587 3,442 13,029 Government!' 3,007 - 3,007 Total 12,594 3,442 16,036 1/ Government contribution will include US$2 million in budgetary assurances to ensure adequate funding of health facilities to be rehabilitated; and US$1 million in community counterpart contribution to the CDSF. Estimated IDA Disbursements (US$ millions) IDA's Fiscal FY94 FY95 FY96 FY97 FY98 FY99 Annual 0.8 2.5 3.5 3.1 2.2 0.9 Cunulative 0.8 3.3 6.8 9.9 12.1 13.0 FEDERAL ISLAMIC REPUBLIC OF COMOROS POPULATION AND HUMAN RESOURCES PROJECT STAFF APPRAISAL REPORT I. BACKGROUND 1.1 The Federal Islamic Republic of Comoros became independent in 1975. It had a GNP per capita of about US$510 and a population of about 480,000 in 1992. Comoros, consisting of three islands off the east coast of Africa, is predominantly rural and highly dependent on external assistance. About 40% of GDP derives from agriculture, 50% from trade and other services and the rest from manufacturing and construction. Agricultural practices are undeveloped and marketing systems inadequate. Food production is insufficient to meet local requirements and the country imports large quantities of rice and meat. The manufacturing sector comprises primarily processing of export crops and a few small factories supplying the domestic market. Tourism is still at an incipient stage. Major exports are vanilla, cloves and perfume essences. 1.2 At independence in 1975, the country found itself with little infrastructure and low education and health standards. Political turmoil marked its first fourteen years of independence, culminating in the assassination of the President in 1989 and subsequent departure of the foreign mercenaries who had been controlling the country. The elected Governments which have followed have seen frequent cabinet reshuffles and an uncertain political landscape. Since independence, with support from the international community, economic and social infrastructure has improved. The country now has a fairly well-developed road network, an international airport, and a deep-water port in Anjouan. However, economic prospects remain constrained by the very small and segmented domestic market; the geographical remoteness from major markets; and the limited natural resources. A. Recent Economic Developments 1.3 Economic growth in the early 1980s was around 7% per year, but slowed to under 1 % in the late 1980s due to a decline in the construction and public works that had led the earlier spurt. Agricultural growth has continued at over 4% per year, but services have declined due in large measure to the adverse impact of the political unrest on tourism. Export earnings have been eroded due to declining terms-of-trade for vanilla and cloves, and exports presently cover less than half import costs. The major import is rice. 1.4 Inflation has been low and steady, averaging less than 4% during 1987-91, despite a large budget deficit. The Comorian franc is pegged to the French franc at FF1 = CF50. Due to the appreciation of the French franc vis a vis the US dollar, the Comorian franc has appreciated by about 60% in nominal terms (trade-weighted) and 25% in real terms in the late 1980s with serious consequences on growth. Central Government debt totalled US$170 million in 1990. Despite the concessional nature of most lending, the debt service ratio is about 19% and likely to remain at this level for several years. Due to a steady increase in the wage bill in the late 1980s and the weakness of the revenue base, the overall budget deficit 2 (excluding grants) averaged over 20% of GDP in the late 1980s. Despite measures in 1990 and 1991 aimed at reducing the deficit, domestic arrears remain substantial. 1.5 Reform Program. Major structural reforms are being undertaken which are oriented around better management of public finances, improvements in the climate for private investment and employment, export diversification, better social sector planning and management, and environmental protection. Reforms include improvements in the tax collection system, reductions in civil service staffing and benefits, restructuring of the management and financing of parastatal enterprises and the introduction of a new accounting system for public and private enterprises. IDA's Macro-Economic Reform and Capacity Building Credit (MERCAP), which became effective in December 1992, supports this reform process. In 1991 the Government of Comoros reached an agreement with the IMF and cleared arrears to the African Development Bank, opening the way for project lending to resume. A plan for civil service reform has also been undertaken. On trade, the Government has acted to reduce export taxes on vanilla, and to remove taxes and other levies on all other export crops. Improvements in domestic competition in these markets has also been encouraged. Export diversification is to be emphasized, especially into tourism, tropical fruits and agro-processing. The resumption of relations with South Africa has improved prospects for tourism. B. Conditions in the Social Sectors 1.6 Health, Population and Nutrition. The population of Comoros is relatively young (46% under age 15) and growing at 3. 1% per year. Internal and external migration rates are high. More than 40,000 Comorians live in France and a sizeable number in neighboring African countries. The relatively underpopulated island of Moheli constitutes a strong pole of attraction for migrants mainly from Anjouan. 1.7 Life expectancy is low at 56 years for women and 53.0 for men. Infant mortality is estimated at about 90 per 1,000 live births and maternal mortality at nearly 500 per 100,000 pregnancies. Available data indicate a high incidence of preventable diseases. In children, the leading causes of death are malaria, respiratory diseases, and diarrhea. Added to intestinal parasites, skin diseases, and trauma, these diseases account for most health facility visits by children under 5. Data from hospitals indicate high rates of obstetrical complications associated with pregnancies that are too early, too closely spaced, or too late. Only a quarter of births take place in health facilities. AIDS does not presently constitute a major public health problem. HIV seroprevalence rates are below 1 per 1000 (0.07% in 1992). However, given the extremely high prevalence of syphilis (19.2% among pregnant women in and around Moroni) and other conventional sexually transmitted diseases (STDs), this picture is likely to change with the anticipated improvement in international communications and expansion of tourism. As of December 1992, 16 HIV cases have been diagnosed, mainly among foreigners. 1.8 At the national level, current population problems are characterized by a very high density of population on arable land, high dependency burden, and a high level of unemployment. Comoros is one of the most densely populated countries in Africa, with an average population density of 205 persons per km2, or 398 persons per km2 of agricultural land. Anjouan is the most densely populated island, with 429 inhabitants per km2, compared with 243 in Grande Comore and 109 in Moheli. The proportion of children under 15 years of age and adults age 60 and over (3%) suggests an age dependency ratio of 1.03 and a heavy 3 burden for the economically active population. Government efforts to raise primary school enrollment are frustrated by the growing number of children aged 6 to 15. Unemployment is serious and growing and efforts to curb it are annihilated by persistent unfavorable demographic trends. Comoros' demography also has a strong negative impact on the environment. Forest degradation, especially in Anjouan, and severe soil erosion are just some of its many adverse environmental effects. 1.9 Family Planning (FP) services are available from most public sector facilities, including health posts. Despite a doubling of the use of modern contraceptive methods during the implementation of the Bank-financed Health and Population project (completed in 1991), the contraceptive prevalence rate (CPR) remains at a low 4%. Unmet demand for contraception is thought to be significant and there is now public consensus that the country is fast becoming overpopulated. A Population Unit exists in the Planning Ministry, but it has dealt primarily with the census. 1.10 The nutritional status of the population may be poor. One regional study showed protido-caloric malnutrition to affect over 40% of children under 5 with severe malnutrition as high as 10% in children under 5. Deficiencies of specific nutrients are also common. Many pregnant women suffer from moderate to severe anemia, and iodine deficiency disorders are highly prevalent in Anjouan. A diet low in protein, and traditions in which certain foods are taboo, may contribute to high malnutrition rates in children. 1.11 Overall, coverage of the health system is dense by African standards with 83% of the population living within one hour (walking distance) of a health facility. Health, population and nutrition services are administered through the Ministry of Health and Population. Service provision is currently organized through 20 health districts (14 operational with six to become functional in the future), each covering between 25,000 and 100,000 people. The districts are comprised of one health center and a constellation of health posts, dispensaries, and rural maternities. There are 15 health centers, and nearly 60 health posts and rural maternities. Tertiary care is provided in 2 hospitals with a total bed strength of about 700. Outpatient care at the tertiary hospitals is heavily utilized. Secondary care is provided in three surgical clinics with an average capacity of about 50 beds. A system of village pharmacies provide drugs at low cost and supplements private sector pharmacies. 85% of children are fully immunized. Public expenditures on health care are about 9% of public expenditures, and about 2% of GDP, for a total of about US$7.50 per capita. The wage bill comprises three fourths of the health budget. 1.12 Government policy since independence has stressed Primary Health Care (PHC) and has accorded priority to the delivery of basic services to the rural areas. Comoros has subscribed to the 1978 Alma-Alta Declaration, which prescribed a primary health care approach with the aim of ensuring health care for all by the year 2000. With external donor assistance, the actual orientation of the health services has generally mirrored the stated plans, with recorded achievements especially in increasing vaccination rates. 1.13 Education. Although education statistics are around the sub-Saharan African average, they were declining in the late 1980s and have only recently shown some improvement. Nonetheless, adult illiteracy is high (estimated at 50%) and the absolute number of illiterates may be growing as growth in literacy is estimated to be less than the population 4 growth rate. Gross primary school enrollment ratios were estimated at close to 90% in 1991, after falling over the five preceding years. Net enrollment ratios are about 62%. Rates of repetition are very high at about 35%. Pupil to teacher ratios in primary school are about 40:1. Double and triple shift classes are the norm, resulting in pupil-teacher contacts of 12-17 hours per week. Enrollment falls off in the secondary school years. The net participation rate in lower secondary overall was only 7% in 1991/92 according to Government statistics. In upper secondary it was less than 3%. As with most sub-Saharan African countries, salary costs consume most of the budget of the Ministry of Education, with supplies and teaching materials making up less than 3% of expenditures for primary education in 1991. 1.14 The Ministry of Education (MEN) employs about 1,800 teachers and 400 administrative staff. About 40% of public education expenditures goes to primary education, and 11% to external scholarships for university education for 750 students. Education consumes 22% of all public expenditures and about 4% of GDP. 1.15 Community Development. In Comoros, communities are traditionally very active in organizing local development initiatives, in part due to weaknesses in the central Government and in part due to cultural traditions. Lineage associations are very important in the social structure. The society is generally matrilineal (group membership and status is transmitted through the mother) and matrilocal (a newly married couple resides with the wife's lineage). The exception is the island of Anjouan which is not matrilineal. 1.16 Village society is very cohesive and village associations have a long tradition of investment in civic services, especially related to religion. Most villages have mosques, village squares, and markets which have been erected by the local communities. "Notables" play an important part in village society. Comorians abroad maintain their close affiliation with their villages, and constitute an important source of investment capital for village projects. Tlhis tightly-knit village structure is enhanced by the close physical proximity of houses -- villages are small urban units rather than dispersed farms; land is owned communally by the village as well as by individuals. 1.17 Women in Comoros are in a relatively privileged position compared to other countries. They are the owners of capital, especially real estate, and most are economically active. Women's groups are active at the village level all over the country. However, women bear the brunt of the country's poverty, as they spend long hours in collecting water and fuel, have very high fertility rates with negative health consequences, leave school earlier, and make up the majority of illiterates. 1.18 There also exist a number of other forms of association, including revolving credit societies ("tontines") and mutual aid groups for particular tasks, as well as other sporting, musical, and cultural associations. In general separate associations exist for men and women. Most associations have little organizational experience and, in some cases, meager financial resources. Government procedures require that associations register themselves with the Government ("declared" organizations). Some, in particular those for education (such as the parent-teacher associations), also receive Government support. There are a number of federations of associations, in particular the Federation of Women's Associations of Comoros, which has drawn support from UNDP; the National Coordination of Associations for Development, which coordinates the activities of NGOs with local associations; ULANGA, an 5 environmental federation; and professional associations. International NGOs active in Comoros include CARE, which implements a major environmental project for USAID on the island of Anjouan as well as interventions in the health sector; CARITAS, which runs a dispensary and school on Grande Comore and intends to expand activities to the other islands; and CECI, which supports community development and environmental initiatives. Other international NGOs active in Comoros include the International Committee of the Red Cross/Red Crescent, the Boy Scouts, the Lions and Kiwanis Clubs, Handicap International, Amici Raoul Follercao, Groupe de Service Volontaire and Amis du Pere Damien. C. IDA's Assistance Strategy and Lessons Learned 1.19 Health. The World Bank-financed Health and Population Project (appraised in 1982 and completed in 1991) was designed to help the Government develop a program to slow population growth and strengthen the management and delivery of basic health services. While many elements of the project had only minimal impact, the project did register some progress towards its objectives. Among its most important achievements were: (i) contribution to the creation of a network of family planning services accessible throughout the country in almost all health facilities, helping to change the initially very negative attitudes of political, religious, and traditional leaders toward family planning, and increasing the CPR to an estimated 4% today; and (ii) establishing the National Autonomous Pharmacy of Comoros (PNAC) which is now an autonomously managed operation which successfully operates on a cost-recovery basis and has greatly increased the population's access to essential drugs through its distribution systems which include cost-recovering village pharmacies. The reasons for the adverse results of other components of the project are diverse. At the time of project design, the Government was engaged in reorganizing its administration and economic system and the Ministry of Health, which was only created in 1980, was still in the process of organizing itself. Among the important problems were: (i) the MOH was not intimately involved in early stages of project preparation and there was a lack of ownership of the project; (ii) the project was a complex operation of six separate and unintegrated health sector components, each of which was run by a separate national coordinator; (iii) the project was designed for a vertical rather than an integrated approach to its activities, resulting in poor integration of these activities into the mainstream activities of the MOH; and (iv) project preparation did not provide the technical precision needed by a very new and weak MOH, (such as precision of which health posts were to be constructed) which resulted in considerable delays and poor implementation. Project design was generally too complex with excessive technical and coordination/management expectations of the MOH given the early stages of its organizational development. 1.20 The principal lessons to be drawn from the Health and Population project are the following: (i) project preparation needs to directly involve the principal implementation agency from the start and project design should be simple; (ii) activities should be integrated in a horizontal rather than vertical manner within the operations of the MOH; (iii) technical aspects of the project should be specified in detail and agreed by credit negotiations; (iv) future projects should ensure that the implementing agencies have the capacity to develop these technical aspects and technical assistance should be secured to ensure good performance; (v) because of the Government's fiscal situation, popular participation and cost-recovery should be explored to enhance sustainability prospects in future operations; and (vi) procurement procedures should be specified and agreed during negotiations. The proposed project has 6 benefited from the above lessons by working closely with the Ministry of Health from the outset, ensuring the specification of all technical details before negotiations, promoting cost recovery and community involvement in health facilities, and establishing the CDSF as an operational institution before negotiations. 1.21 Education. IDA has supported reforms in the education sector through two Education Projects. The objective of the ongoing second project is to assist institutional development in the Ministry of Education through: (i) improvements in education administration and planning, mostly through technical assistance, training, fellowships and study trips to other African countries; (ii) improvements in the quality of education at the primary and lower secondary level, which consist of training for underqualified teachers, training of advisers and principals and development of new teaching materials and guides; and (iii) upgrading of technical/vocational training through provision of training and equipment. This project has achieved some of its training goals, although progress has been slower than anticipated due in part to the lack of a clear Government policy on the direction and form to be taken by the education sector. This has been compounded by the reluctance of the Government to redefine its support of secondary education and foreign scholarships, delaying progress on financial aspects of the reform. The project has mainly encountered problems of management and financial discipline. Frequent changes in high level officials have led to lack of knowledge of the project and weak Government commitment. However, recent progress has been achieved in the reorganization of the education sector staffing and administration under the framework of the ongoing public service reform which is supported by MERCAP. Complementary community-based efforts to increase community involvement in primary schooling, including involvement in rehabilitation, maintenance, and equipping of primary schools, would be highly beneficial to increasing the sustainability of Government and donor efforts to improve the quality of primary schooling. The important lessons learned from these two education projects include: (i) the importance of the continuity of staff working on project implementation; (ii) the necessity of realistic expectations of the Government's ability to provide financial contributions; and (iii) the importance of and need to include communities in execution and planning of education sector activities. These lessons have been particularly instructive for the development of the CDSF, which directly supports community activities. II. HUMAN RESOURCES SECTOR ISSUES A. Health Sector 2.1 Many constraints hinder the improvement of health and demographic conditions in Comoros. Chief among these obstacles are weak delivery of health services at the periphery level and weakness of population activities. Weak delivery of health services 2.2 The delivery of health services, especially at the periphery level, remains weak due to: (i) MOH inefficient organization and management; (ii) inadequate infrastructure; and (iii) weaknesses of population and AIDS activities. 7 2.3 MOH IneMcient Organization and Management. The effectiveness of MOH health activities is hindered by poor organization, lack of resources, and overcentralization of the central administration. Medical regions and districts where most health care activities should take place have only nominal power and few resources, being ill equipped in terms of human, material, and financial resources and thus being unable to ensure the planning and implementation of good quality PHC services within their boundaries. The current level of centralization of the MOH and the heavy reliance on vertical programs preclude the involvement of the health regions in the preparation, implementation, and evaluation of health activities. For instance, medical doctors in charge of health centers are involved neither in the Expanded Program of Immunization (EPI) nor in the FP program, significantly lowering the potential impact of these programs. Additionally, efficiency is reduced by the lack of referral mechanisms and a lack of clarity as to the appropriate functions of each level of the health system. There is no organized system to prevent patients from anarchically moving from one level to another level of the health care system. The tendency for patients to bypass peripheral facilities results in underutilization of an overly dense network of health posts and overcrowding and inefficient use of hospitals. Secondary and tertiary health facilities are used as PHC centers. 2.4 The curricula used by the MOH for training health personnel does not conform to the skills needed for these workers to adequately perform their jobs. Both the level and mix of their current skills are inadequate. Existing health workers, including those trained at the National Public Health School (ENS), have not been adequately exposed to PHC and community health activities. About 70% of MOH workers have no formal medical education. A sizable proportion of nursing staff is made of untrained volunteers, particularly in peripheral facilities, who often operate without adequate supervision to assure satisfactory quality. In addition to problems in the quality of health workers, another manpower constraint results from inadequate distribution of health workers throughout the country. Because of the lack of proper management or an incentive system to attract workers and retain them in poorer rural areas, there are wide disparities in the distribution of health personnel among individual facilities, as well as a relative surplus of qualified nurses and midwives in hospitals and a shortage of nurses in PHC facilities particularly in remote areas. The main hospital in Moroni, El Maarouf, is disproportionately well staffed while rural health facilities are essentially staffed by often poorly trained volunteers. 2.5 Health Inrrastructure Inadequacies. Efforts to develop population and health activities in Comoros are also frustrated by the dilapidation and underequipment of health facilities. Health facilities are often decrepit and poorly maintained, medical equipment is generally minimal, and essential commodities are sometimes in desperately short supply. Lack of maintenance and other support from the central ministry and an inadequate flow of supplies and equipment impedes the operating efficiency of health facilities, especially at the peripheral levels. There is also a tendency to design and establish health structures without proper attention being paid to the size of the population to be served. The excessive number and size of facilities contributes to high unit costs of services provided by the MOH and lowers the efficiency of the Ministry, which in fact fails to provide adequate, if any services, at many of these health facilities. 2.6 Weakness of Population and AIDS Activities. Although significantly improved during the implementation of the Health and Population Project, FP services still 8 have obvious shortcomings and suffer from not being integrated into other MCH services. While the Health and Population Project's approach was to train four well-motivated and well-equipped mid-wives to promote and supervise FP activities and to improve conditions at the facilities which provided these services, activities at which it was successful, much remains to be done. Because this approach lacked the inclusion of physicians in the provision of family planning services, the impact was less than it could have been. In addition, there is almost no follow-up to motivate users to continue using contraceptives. The monitoring of clients, supervision of services, and management of contraceptives still remain weak and supplies of contraceptives, which to date are solely financed by UNFPA, are unpredictable and subject to inventory breakdowns. These and other factors make it difficult for clients to get appropriate support and treatment for their complaints and many get discouraged, failing to return to the center for further supplies. 2.7 IEC activities in the family planning area, which have been financed by the UNFPA and which relied in part on traditional communication networks such as mosques and markets, were somewhat successful in changing the cultural and religious climate in Comoros. At present, there is little religious opposition to the use of family planning for health and socio-economic reasons. However, there is no clear understanding of the demographic need to use family planning. In fact, current research indicates that many religious and traditional leaders are in favor of family planning for health and socio-economic reasons but do not understand the demographic need to limit population growth. In the last several years, IEC activities have been diminished for family planning due to a lack of human, physical, and financial resources. 2.8 Because the AIDS virus has not been a serious problem in Comoros to date, most Government officials and the population have not begun to address the potential impact this disease could have on Comoros. Comoros has had a National AIDS Control Program since 1990 and it has carried out some IEC activities aimed mostly to reach leaders and young people. However, although the program allocates about half of its resources to IEC, it does not have enough resources to carry out the studies necessary to the development of an effective IEC strategy. Trends experienced by other countries, (e.g. Djibouti and Cote d'Ivoire), which previously had low AIDS but high STD prevalence rates as Comoros currently does and which showed dramatic increases in AIDS over short periods of time, show that it will be crucial for Comoros to intensify its IEC campaign and to extend its condom distribution program in order to prevent a rapid contamination by HIV. Ongoing Activities to Address these Issues. 2.9 In order to create a more efficient health delivery system, Comoros has implemented a pilot program of autonomous administrative and financial management at one health center, which has been highly successful. At the Mitsoudje health center, the community participated in the construction of the center and is involved in its management, financing and maintenance. Support has also been provided by UNDP, with technical support from ASI, a French NGO. The center was authorized to charge fees, manage money received, and was given greater autonomy over personnel. 2.10 At present, receipts cover not only the operating costs of the center, but also a system of bonuses for the staff (tied to performance) as well as major and minor maintenance 9 and purchase of equipment. UNDP continues to defray the costs of the doctor, whose salary is higher than that of doctors in the public service. Utilization of the center continues to rise steadily in spite of the proximity of El Maarouf Hospital and the existence of fees for services. The utilization rate has reached a level of one curative visit per year per person living in the catchment area. A report issued in 1993 reviewing the pilot experience for the Government confirms that the system is efficient from the point of view of motivation of personnel as well as financial management and quality of services. A survey taken one year after the institution of the fee for service system at Mitsoudje showed that average household spending on health care in the catchment area had fallen after the institution of cost-recovery (and associated improvements in quality and reliability). However, it notes the importance of significant investments in training and modification according to local conditions. 2.11 The Government plans to generalize the principle of co-management with communities and of cost-recovery of health facilities. It has issued a decree permitting autonomous management of receipts in hospitals (December 1992) and, under the ongoing public service reform will, in 1994, elaborate a new management, financial and administrative system for health centers based on the model of the one in operation at Mitsoudje. 2.12 The Government of Comoros has recognized the need to expand the demand for, as well as the quality and the quantity of, fertility and AIDS control services. With substantial assistance from donors, the MOH continues to make commendable efforts to ensure a steady supply of condoms, pills, injectables and other FP commodities and to improve the country's capacity to prevent, diagnose, and treat STDs. However, the impact of these efforts is limited by the advanced state of dilapidation of most MOH health facilities. To motivate Comorians to change their behavior and to adopt practices which are conducive to better health, programs addressing major public health problems each have an IEC component. However, this approach has led to a fragmentation and unequal distribution of IEC resources, as well as a lack of coordination and ineffective use of existing resources. Presently, although family planning and AIDS prevention programs have more resources allocated to IEC than the other public health programs, they still do not have enough resources individually to carry out the necessary activities. The UNFPA IEC Population project focused on three types of activities: (a) training of health personnel and community workers in family planning interpersonal communication; (b) research on obstacles to the use of family planning; and (c) material production. However, because of limited resources there were shortcomings in the project, training was carried out only in project areas (ten villages), research sampling and methodology were inadequate, and materials were not pretested. This lack of adequate resources is likely to become worse as the budget of the next UNFPA IEC project, which started in April 1993, is lower than that of the on-going project. In the AIDS area, IEC activities have been limited and somewhat haphazard. They included one poster, some radio spots and shows and some sensitization seminars aimed at opinion leaders and young people. B. Education Sector 2.13 As in the health sector, performance in the education sector has been compromised by the weakness of policy leadership and frequent personnel changes at senior levels. Although some goals have been achieved in recent years, progress has been slower than expected due in part to significant political pressures against certain aspects of the education reform program. The Government's goals are: redistribution of expenditures in 10 favor of primary education; at the primary level, retraining of teachers, provision of teaching materials and rehabilitation of school facilities; and at the lower secondary level, retraining of teachers. The plans for the Public Expenditure Program for FYs 1992-95 indicate a gradual fall in allocations to secondary level education, a real decline of 3% between 1991 and 1994. An even sharper decline is predicted for foreign scholarships, falling by two thirds as the number of new scholarships is reduced to zero by 1994. External aid is expected to make up the difference with 100 new scholarships per year. However, pressures to increase admissions into upper secondary and foreign scholarships have delayed the full implementation of a system of financial controls. In addition, frequent strikes by primary teachers have undermined the progress of reform at that level. 2.14 Because significant resources remain in the Second Education Project and implementation has been extended to June 1994, the proposed Population and Human Resources Development Project would not directly address education sector issues. Additionally, there is a follow-up project planned in the education sector once the Second Education Project is completed. The proposed Population and Human Resources Development Project would affect education, however, by promoting complementary community involvement in the rehabilitation, maintenance, and equipping of primary schools, with technical and financial support from the proposed Community Development Support Fund. C. Community Development 2.15 Local NGOs and community groups are responsive to local felt needs, but they frequently lack an interface to the formal sector. However, the environment in which they work is improving. The intolerance of former Government leaders for "modern" associations, in particular the Scouts and other youth movements, has been replaced in recent years with a more welcoming climate. Associative life has flourished and the Government now welcomes the participation of community organizations in the elaboration and implementation of development plans. 2.16 The Government believes that the development and support of community organizations should play a vital role in socio-economic development. The contribution of community organizations in assessing local needs and capabilities can form an important part of social policy. Furthermore, community organizations may be best placed to implement certain activities. In particular, the contribution of community groups can be critical to the development of education and health institutions at a local level. After contributing their ideas and financial resources to the construction/rehabilitation of a school or clinic, community groups can play a crucial role in the sustainability of the institution by organizing and maintaining a system of financial management and maintenance. This could include cost sharing, contribution for key salaries (eg. teacher or nurse), maintenance responsibilities or insurance/mutual aid. 2.17 The main outstanding issue remains the managerial and organizational weakness of community organizations. There are significant needs for training in financial and other forms of management; for technology transfer for technology-intensive projects (eg. water supply or construction); and popularization of available funding sources and assistance with project preparation. Communities in Comoros are generally in a position to provide 11 financial and in-kind contributions to projects, with increased ownership, sustainability and impact resulting from this contribution. III. THE PROJECT A. Project Objectives and Approach 3.1 Project Objectives. The overall goal of the project is to strengthen regional and community involvement in population and human resource development through improving the delivery of basic health services and stimulating complementary community activities. To achieve this goal, the main objectives of the project are to: (i) support the establishment of efficient health regions and other supportive services capable of providing comprehensive and cost effective health care, including family planning services and AIDS prevention, through community participation, self-management and cost recovery, and (ii) support complementary community development initiatives to develop social infrastructure and grassroots participation in small-scale productive activities. 3.2 Project Approach. To achieve the first objective, this project will selectively continue past efforts initiated by the Government in the health sector with assistance from the donor community. The population and health component of the project constitutes an integral and essential part of a package which will be financed in parallel by the Comorian Government, French aid (FAC), UNDP, WHO, and UNICEF. The Bank's primary role is to rationalize and improve the efficiency of the MOH services, building upon successful experiments with administrative autonomy of health facilities and community participation. To achieve the second objective, a demand-driven social fund approach will be used to support existing active community involvement in local development through a Community Development Support Fund (CDSF). This approach will require the following: that the request for support from the Human Resources Project to the community's sub-project comes from the communities themselves; that the beneficiaries are directly involved in the planning, execution, and evaluation of the sub-project; that beneficiaries contribute either in-kind or financially to the sub-project's realization to assure sustainability; and that when necessary and/or desired the community benefits from training to increase its capacity to develop sub- project proposals as well as to implement and sustain sub-projects. 3.3 Because sub-projects which will be financed under the social fund are to be demand-driven, precise and well-defined rules and criteria for sub-project selection have been designed. To this end, a Manual of Procedures to regulate and facilitate CDSF operation has been prepared and was tested by means of sub-projects financed under the PPF. The Manual of Procedures is described in paragraphs 3.36-3.38, and is available in the project files. The adoption of a Manual of Procedures satisfactory to IDA by the Central Coordinating Committee (CCC) of CDSF is a condition of effectiveness of the proposed credit (para. 7.2(b)). The design of the CDSF is based upon lessons learned throughout the Bank and in the Africa region, in particular as spelled out in the regional study, "Social Action Programs and Social Funds: a Review of Experience in Design and Implementation," and "Socio-economic Development Funds: A guideline for Design and Implementation." The project is also based on experience gained from similar projects in Senegal, Mali, Zambia, Madagascar, and Burundi among others. Principal among these lessons are the importance of promotion 12 activities; the need for a good system of management of financial data; the need for clear objectives and project selection criteria; and the importance of training as a contribution to the effectiveness of the administration of the fund as well as the success of sub-projects. B. Project Description 3.4 The project will: (i) establish appropriate services capable of ensuring cost- effective and sustainable provision of comprehensive and good quality health care, including family planning services, AIDS prevention, and community participation in both management and cost recovery, and (ii) support a social fund to finance community activities (including education sector related activities and community level health activities). Support to Improve Health Services 3.5 To improve MOH efficiency and ensure cost-effective and sustainable provision of essential health services, this component of the project will have three sub- components: (i) improving MOH management at the regional level; (ii) equipping and rehabilitating regional hospitals and health centers; and (iii) promoting family planning and AIDS control activities. 3.6 Improving Planning, Implementation, and Monitoring Capacity of Regions. To strengthen and develop program planning, implementing and monitoring capabilities at the regional level, the project will build and expand upon the experiences gained from the above-mentioned Mitsoudje pilot program (para. 2.9). Overall management of the three health regions (one for each island) will be the responsibility of Regional Health Teams (RHT). Each RHT will be headed by a Regional Medical Officer (RMO) and will be charged with supervising the implementation of health programs throughout the region, organizing on- the-job training for regional health workers, and stimulating and streamlining comrnunity participation. RHTs will have the responsibility and authority for administrative and technical matters in their area, including the supervision of activities in hospitals and health centers against established norms and monitorable performance indicators which are to be developed during preparation and the first year of project implementation. To ensure good quality and socially acceptable health and population services, special efforts will be made to stimulate community participation in the planning, implementation, monitoring and evaluation of population activities. At the health center level, the population will be encouraged to participate by creating development committees at the village level, participating in the rehabilitation of facilities and placing representatives on the management committees. The health centers will be granted greater autonomy over the administration of personnel and the levying and management of fees. This will be complemented by reforms in the regulatory environment and in health personnel through the reform of the public service which is supported by MERCAP, as well as by improvements in the allocation and funding of the health sector budget which will be monitored both through the MERCAP credit and this project. 3.7 The project will also increase the productivity of regional personnel through a series of training activities for various health workers. A list and description of the basic training courses to be provided can be found in Annex 111. Special efforts will be made to endow regions and health facilities with qualified planners and administrators capable of properly carrying out the planning and the budgeting process required to efficiently utilize 13 human, material and financial resources. Service providers will receive appropriate training to raise their skills in the delivery of preventive and curative care. The training will emphasize the role of multi-purpose workers to dispense integrated basic health services (including FP and STD management). 1/ Under the Health Region scheme, RHTs are expected to play a pivotal and dual role in the development of health programs in their jurisdiction. As physicians, they will have to spend part of their time working in health facilities to handle difficult cases, particularly those identified by the auxiliary personnel at the health posts, dispensaries and rural maternities. As managers, they will be responsible for ensuring the provision of good quality services throughout their district. RMOs will receive adequate and specific training to help them carry out the dual function. As has been done in the Mitsoudje pilot, an appropriate incentive system will be established to both attract and retain health workers, particularly into underserved areas, as well as to improve staff performance. This will include regular and adequate supervision and may include incentives such as provision of transportation and housing facilities particularly for health cadres working in remote areas. 3.8 To ensure that FP services are integrated into the overall package of services provided by the health centers and are successful, the project will provide logistical support for the incremental supervision visits which will focus on: integration of FP into the MCH package, practical application of approved service norms, and the supply and procurement of contraceptives. Mechanisms will also be established to follow up on acceptors, motivate users to continue using contraceptives and accurately record the number of acceptors, users and couple-years of protection (CYPs). To prevent shortages of FP commodities, the project will finance a contingency fund to assume the regular supply of contraceptives. 3.9 Complementary and Prerequisite Actions Required at the Central Level. In order for health regions to effectively carry out the above program, several actions need to be undertaken at the central MOH level to enable them to provide adequate technical and operational support to the regional staff who implement the vast majority of activities. To ensure proper administration of the project, a Project Office will be established within the MOH Directorate General for health facilities. Additionally, MOH's central Directorates, particularly the Directorate of Health Education (DHI) and the Directorate of Pharmaceutical Inspection (DPI) will be strengthened. The Project Office will be headed by a Unit Chief who will report to the Director General. The Project Office will be responsible for the administrative task of overseeing the implementation of the component. This unit will provide assistance to help the relevant MOH units and RHTs develop and/or improve the following: (i) appropriate sector norms, rules, regulations and standards, including PHC therapeutic protocols, a Pharmaceutical Code, and MOH administrative and financial procedures; (ii) training modules for MOH staff based on agreed standards and functions to be performed by each category of personnel, as well as organizing training for RMOs in collaboration with the ENS; and (iii) a monitoring and evaluation system for the health regions which would assess the results of efforts invested in the sector. Terms of reference for the technical assistance (most of which will be local and regional) needed to aid the MOH in establishing systems and I/ With regard to FP, programs will be developed to train and explicitly and systematicaUy involve physicians (particularly Regional Medical Officers), nurses, auxiliary nurses, and pharmacists in the provision of FP services. Training modules will be developed and implemented in the management of FP services, communication, contraceptive technology, integration of FP and MCH services, and outreach programs. 14 procedures for improving MOH efficiency at central level are listed in Annex III. Funds will also be made available to finance technical assistance to aid the Government in improving its health information system (including public expenditure programming and resource management as well as disease trends) and improving the logistics system for the procurement and flow of supplies and equipment to districts. 3.10 Equipment and Rehabilitation of Health Facilities. Given the fact that the dilapidated physical state of the public health care facilities contributes to their low performances, selected priority MOH facilities will be partially rehabilitated and equipped so as to enable them to effectively carry out their normative functions. The project will finance partial rehabilitation, including waste disposal and sanitary water supply, equipment, technical assistance and training of health personnel, for a total amount estimated at US$3.4 million. For health centers to qualify for rehabilitation, full community involvement will be required. The CDSF will work with the MOH, mobilizing communities to participate and undertake part of the rehabilitation, as well as assure community commitment to maintenance and management of these facilities. As a condition of negotiations, preliminary architectural plans, as well as time tables for rehabilitation of the designated health facilities, and a preliminary list of medical equipment, grouped by lot for bids were finalized and submitted to IDA (para.7. 1(b)). 3.11 Expanding and Improving Family Planning and AIDS Control Activities. The project will support activities to improve the availability and quality of fertility and AIDS control services, as well as the demand for these services. During preparation and the first year of the project three studies will be conducted. One study using qualitative techniques will assess the factors which influence decisions on family size and the underlying causes behind the low demand for FP services and low rate of continuity among FP users. A second study will collect data on knowledge, attitudes and practices with regard to sexuality and AIDS in Comoros. A third study will investigate what are the credible sources of health and family planning information for Comorians and what are the best channels to use for each target group. The three studies will help to provide first hand information to assist in the improvement and design of multi-media, well-targeted IEC strategies and the formulation of other population and AIDS activities. Based on the findings of these studies and on the results of the beneficiary assessment study to be undertaken during the first year of the project, appropriate IEC messages will be produced and disseminated according to the selected strategies and any corrective operational and managerial measures will be adopted. 3.12 In the field of family planning, four priority groups will be targeted by information, education and communication activities, namely, religious and political leaders; women aged 15 to 49; men who are married to women of reproductive age; and young people. Support will be given to both modern and traditional media. In stimulating the demand for FP, person-to-person education will be combined with an enlarged mass communication effort (seminars, radio programs, theater, mobile video, etc.). A similar approach will be used for AIDS IEC activities which will be targeted mostly to young people and to opinion leaders. Over the life of the project, group meetings will be held to guarantee social acceptance and support. As mobilizing religious leaders is critical in addressing these issues in Comoros, conferences for religious and other social leaders would be held annually on each island. Representatives of women's and youth groups would be invited. Leaders of community organizations will be trained in interpersonal communication and community mobilization with particular reference to FP and AIDS and will be used as "relays" to disseminate FP and AIDS 15 messages. Other "relays" who will be trained will be journalists for whom four seminars will be held. The project would also finance two study tours so that Comorians can learn from other countries' experience. Two months of technical assistance will be provided for specific tasks as required (Terms of Reference are in Annex III). Access to good quality family planning and AIDS control services will be expanded through the rehabilitation of health facilities and the adequate training and supervision of health workers. Special attention will be given to ensure regular supplies of commodities required to perform fertility and AIDS control activities, including contraceptives, antibiotics and lab reagents in all health facilities. To improve the availability and quality of fertility and AIDS control services, the project will support the following: (a) equipping 20 laboratories to improve their diagnostic capacities; (b) training and supervising service providers and lab technicians; (c) ensuring regular supply of commodities required to carry out fertility and AIDS control activities; and (d) monitoring the impact of these control activities. 3.13 Policy Measures. In addition to technical support for project implementation, the Government has provided IDA with a health policy letter which includes the policy measures described below: 3.14 The letter outlines the programs and intentions of the Government in the health sector. It recapitulates the National Health Development Plan of 1991, which identifies the priority programs, which are (a) the promotion, through information, education and communications, of healthy lifestyles and behaviors; (b) the promotion of maternal and child health, including pre- and peri-natal care, vaccinations and family planning; (c) efforts against endemic diseases, including malaria, diarrheal diseases and AIDS; and (d) the supply of essential medicines, notably through the development of village pharmacies. The letter stresses the importance of population policy and family planning goals both in the health sector and in the national economic agenda. 3.15 The letter continues by describing the reforms of the system of administration and financing of health facilities, in line with the overall reform of the public service taking place under the mantle of the Structural Adjustment Program. Specifically, the reforms envisage that the public system of health care will be simplified to focus on health centers and hospitals and these public health facilities will be endowed with new powers of financial and administrative management, including a universal principle of cost recovery. Improved central services of IEC, supervision/inspection and training will support the public health activities of these more independent facilities. The use of mobile teams for specific campaigns will be reduced and replaced with facility-level health teams with an integrated and diversified mandate and composition. The central functions of monitoring, training and program management will be decentralized to the regional level (one region per island). The staffing will be reoriented in favor of more qualified workers with a better geographical distribution. 3.16 This new arrangement will be codified in a set of new regulations and administrative procedures under development in 1993. These regulations define the involvement of communities in the management of health centers and their representation in the governing boards of hospitals. They define the parameters under which cost-recovery can take place, and the mechanisms by which the funds so generated are managed (all funds are retained at the facility level). They also define the relationships of facility management to civil servants and to the public service, including guidelines for performance-related incentives at the facility 16 level (incentives at the regional and central levels will be addressed as the system develops). Finally, they define the roles and responsibilities of the various levels (Central, Regional and facility) for maintaining public health objectives, including training, supervision and IEC. 3.17 At the same time, with the Ministry of Finance, the MOH is putting together a budgeting process which will lead to more rational funding of the health sector. By December 31, 1994, the Ministry of Health will, with the Ministry of Finance, produce a public expenditure program to cover 1995-97 and review it annually with IDA; this will be a rationalized budget responsive to program needs. The involvement of the Ministry of Finance will ensure that the program is feasible from a budgetary perspective. During negotiations assurances were given by the Government that the budget for the MOH will be credited at a level which maintains the 1992 level of real expenditure, including at least 20% of the total in non-salary funding, that the budget will be reviewed annually with IDA, and that the budget for the current and subsequent fiscal years will be reviewed annually with IDA (para. 7.1(c)), starting with the 1995 budget. 3.18 Under the project, IDA will finance the rehabilitation and equipping of three regional offices, and two hospitals (Hombo and Fomboni). The project will also provide funds for the rehabilitation and equipping of health centers, the selection and scale of which to be decided on the basis of community mobilization and participation. The project will finance the production of training modules and in-service training for health planners and administrators, regional medical officers, medical doctors, nurses and midwives, and technicians. The project will also provide for a limited number of study tours and analytical studies. Technical assistance to the Project Office in the MOH will also be provided for by the project. 3.19 Sustainability of Regional Health Program. The proposed project will lay the groundwork for the sustainability of the health system of the Governmnent of Comoros, which is weak due to the current large Government deficit and weak institutional capacity. The project aims to enhance sustainability of health activities through improvement of health sector management, human resource development, health financing, improved STD/FP services, and health facility rehabilitation. This will build upon successful pilot programs which increase beneficiary participation in both management and financing of health services. The operational sustainability of the project will be achieved by relying on the involvement of experienced private firms/NGOs and local communities to implement the various project components. 3.20 Recurrent cost implications of the health component. The reforms to be undertaken under the project are budget neutral. There will be no new facilities constructed and staffing will conform to the public sector rationalization under way for the Government overall. For the Ministry of Health, this reform implies no net change in the number of people employed, but there will be a shift towards more qualified employees. The slight rise in the wage bill will be offset by a mild reduction in public spending on non-salary items, which will be increasingly covered by cost-recovery. In order to fully reflect the Government's commitments and obligations, the project cost tables indicate the Government's contribution of staff and supplies, without which the rehabilitated facilities cannot function. The only incremental recurrent cost implication of the health component is the operating cost of the Project Office. As the Project Office's purpose is to supervise administration of project 17 activities (procurement, disbursement, etc..), it is not expected to continue after the end of the project. 3.21 A new institutional structure for the health sector has been was signed and is expected to be implemented in early 1994. This will have only a slight and progressive effect on the health sector wage bill, which is covered by reallocations from other sectors, under the overall adjustment program, and is not a consequence of this project. Non-salary costs at the health center level, while woefully inadequate, will be shifted in large measure to the communities through cost-recovery (fee for service) and community responsibilization. Some of these savings will be redeployed to the hospital level, and the hospitals will also mobilize resources through cost recovery. Cost recovery already fully pays for medications, and the operating costs of laboratories, radiology services and dentistry. It is conceivable that these adjustments would result in a decrease in the recurrent budget of the Ministry of Health. However, this does not imply a decrease in expenditures, which have historically been well below the budget. 3.22 In 1994, the Ministry of Health will issue a Public Expenditure Program (PEP) to cover the years 1995-97, the execution of which will be reviewed jointly by the Government and IDA annually and at the mid-term review as agreed during negotiations (para. 7.1(i)). The PEP will cover investment and recurrent expenditure at the facility level, and will conform to the Government's structural adjustment plan as well as serving the aims of the reform of the health sector. It will take into account recurrent cost implications of investment projects. 3.23 The goal of the PEP is to provide a realistic budget that will be followed, and in which facilities, suppliers and contractors can have faith. In the past, budget allocations have been reasonable, but actual payments have lagged far behind, with commitments being around two-thirds of allocations for non-salaries expenditures in 1989-92 and actual payments lower still. The process has begun with the development of the Public Investment Program in 1992. The PEP would analyze actual payments, reducing highly fungible categories (fuels, food) and aiming for full funding of all allocations. 3.24 The criteria for budget allocation in the health sector have been simplified by the proposed reforms of the public health system. On the investment side, no new facilities are to be built in the immediate future (before at least the year 2000). Investments are in rehabilitation, equipment and human capital, and these are limited largely by the availability of donor funds. On the recurrent side, the proposed reforms would significantly reduce non- salary expenditures at the lower levels (health centers and health posts) as these will become the responsibility of the community and the beneficiaries. At present the distribution of non- salary expenses is about 30% to central functions and 70% to hospitals, both of which are very underfunded. The new structure of the health system will require increased and improved performance by the center. At the same time, the need for increases in funding of recurrent costs for hospitals remains commanding. This distribution of allocations between administration and hospitals is therefore likely to remain much the same. The following agreements have been reached with the Government: (i) the budget executed in each year of the project will be no less than the commitments for 1992 in real terms (CF800 million); (ii) the budget executed in each year of the project will contain no less than 20% will be allocated to non-salary expenditures; (iii) medical evacuation costs, which are currently disproportionately 18 high (CF36 million in 1992), will be reduced as agreed under the MERCAP program (CF20 million in 1993); and (iv) the budgets for health facilities will be allocated on the basis of contracts between the MOH and the facilities starting in 1995. These agreements are reflected in the letter of health policy. The Community Development Support Fund 3.25 The CDSF is designed to encourage community participation in sustainable economic development, support and develop the capacity of communities and non-Government organizations, and complement sectoral development strategies, especially in the education and health sectors. It will bring additional financing and technical support to the realization of community projects. Together the activities funded by the project will have a synergistic effect on improving human resources, promoting overall economic development, and alleviating poverty. While the social fund will be demand-driven, i.e. sub-project ideas will come from the communities themselves, and the criteria which have been developed to screen and evaluate the projects will determine which sub-projects are to be funded by the CDSF (see para. 3.31), the primary focus is expected to be on the following types of activities: rehabilitation of basic infrastructure, especially primary schools and water supply; income generating activities; activities which promote the well-being and development of women; and training of communities and groups in appropriate technologies and in resource and project development and management. As mentioned above, the selection of sub-projects will be subject to a set of precise criteria in the Manual of Procedures which was drafted and discussed during project preparation, reviewed during appraisal, and was finalized during negotiations (para. 7.1(a)). 3.26 Rehabilitation of basic infrastructure. The vast majority of sub-projects to bp financed under this category are expected to be the rehabilitation of essential services (rimary schools, water supply, health posts), but could also include the rehabilitation of feeder roads, bridges, markets, and food storage facilities. In the case of rehabilitation of essential infrastructure, project support will be possible if communities express these as their priority needs, contribute to the costs of project implementation, and develop a viable maintenance scheme. Already there have been over 20 requests for sub-projects in the rehabilitation of primary schools, which are being refined, and about a dozen in water supply. (A list of sub-project requests which have been received to date and are expected to be completed during the first year of project implementation is listed in Annex I). The NGO CARITAS is also working with communities in the area of primary health care and is responding to several communities interested in submitting proposals for the rehabilitation of health posts. Although sub-projects proposals have not been submitted to date for the rehabilitation of feeder roads and bridges, the project is open to financing these infrastructures when they constitute missing links for income generating activities. Labor intensive work will be preferred whenever proven as technically and economically efficient and insofar as it generates employment opportunities. In coordination with the Ministry of Health, the CDSF will help to mobilize and train communities for their participation in the rehabilitation and management of health facilities, funds for which are provided under the health component of the project. 3.27 Income generating activities. The project will encourage the poor to launch small-scale, viable, productive activities in sectors where a demand can be identified or expected and which have durable real income gains. The project will assist implementing 19 agencies to organize groups, particularly women's groups, to undertake sub-projects. The project will finance specific vocational training and basic management, accounting, and marketing support. Because the creation and expansion of small businesses is critical to the growth of the Comorian economy, this is an important element of the project. However, the CDSF will enter this field very cautiously for the first two years of its operation because experience with cooperative enterprises is small. For this reason, for the first two years of CDSF operation, the project will work closely with a UNDP/ILO project which already has some experience in lending working capital to micro-enterprises. During the first phase of two years, the CDSF will complement the UNDP/ILO's activities by providing, where necessary, training and technical assistance in work planning, supervision, and production. Support will also be given where needed to the expected hundred small contractors who will have contracts making furniture for the CDSF-funded rehabilitation projects. The CDSF will not extend credit. After two years, an evaluation will be carried out by the CDSF to draw on the experience and make proposals to launch the second phase of the program. 3.28 Training. As the CDSF is aimed at promoting self-reliant, sustainable socio- economic development of rural communities, by increasing the local institutional capacity for development planning and implementation, training would play a crucial role in helping communities attain the proposed targets. Training is expected to be both supply and demand driven. It is foreseen that communities will need training in organizing, developing sub- projects, and managing the implementation and maintenance of them. The estimated training plan (Annex III) is expected to involve approximately 1800 members of the Community Pilot Committees which will be involved in micro-project execution (see para. 5.15), 180 book- keepers, 600 masons, 180 carpenters, 360 school furniture makers, 100 fitters and plumbers, 270 painters, and 2000 rural women in the three islands. Training activities will be coordinated by the Information and Training Unit. Staff and technical assistants would actively participate in training. Seminars in communication and training methods for technical skills in production will be organized with a view to strengthening the training corps. Training for managers at both central and local level will provided by consultants from the NGO CECI, which supports management development for the component. Training for the development of women will be carried out by CARITAS' professional staff. Basic skills training for workers will be provided on-the-job by mobile teams composed of job site supervisors, foremen, and part-time teachers hired under the project. Training will also be provided by the private sector or other implementing agencies, especially for sub-projects which request specific training. 3.29 Promotion of women. The women of Comoros are in general economically active and interested participants in the development process. This project seeks to support and further develop this participation of women. The CDSF approaches women's issues through two different means: special programs for women, and inclusion of women in all the regular activities of the CDSF. In the first instance, it offers a program of training for rural women in the areas of literacy, family planning, nutrition, mother and child health, and income generating activities. Through this program, women who are already active in their communities will also be given special coaching to assist them in project formulation and community organization, helping them to make proposals to the CDSF and other donors. The other means is through the general program of projects, where the CDSF will target activities that are mostly carried out by women (child care), provide disproportionate benefits to women (education, nutrition, water supply etc.), or include women as equal partners (all village 20 residents must be members of the community committee). Projects will be monitored and care will be taken to maintain a high percentage of projects with significant benefits to women. 3.30 Institutional Structure. The overall structure of the CDSF is a Central Coordination Committee (CCC), a National Executive Secretariat (NES), Regional Committees (RC), Regional Executive Secretariats (RES), and Pilot Committees (PC). The CCC acts as the Board of Directors for the CDSF, setting overall policies at the central level, while the Regional Committees are the oversight and policy organizations at the local level. The Executive Secretariats are the administrative/executing organizations which deal with the day- to-day operations of the CDSF. The PCs are the community groups which in most cases will be responsible for implementation of projects at the community level. Detailed division of labor between the groups is presented in Chapter V under Project Management (para. 5.9). 3.31 Sub-Project Selection Criteria. Selection of sub-projects will take into account a series of criteria, including: (i) formation of a community pilot committeel/ responsible for the overall management of the CDSF financed sub-project; (ii) assurances were obtained during negotiations that the community's contribution would be not less than 20% of the total cost of each sub-project (although in the case of communities annually identified as the poorest this could fall to 15%); (iii) an assessment of cost effectiveness as reflected in the cost per beneficiary; (iv) for sub-projects involving construction, strict observation of rules applied in environment protection (i.e. ban on the use of corals and beach sand); (v) adherence to norms established by technical ministries, and consistency with the sector strategies and programs; (vi) cost of sub-projects which are not beyond the capacity of community contribution or user charges; and (vii) provision for maintenance of infrastructure and/or sustainability of sub-project operation beyond the project period, including recovery of operating costs where appropriate; to this end, for many types of sub-projects, the CDSF would require that communities provide evidence of their ability and willingness to ensure appropriate maintenance of the sub-project beyond the period of CDSF assistance as one of the criteria of sub-project selection. In determining the costs of sub-projects, the CDSF would take into account the imputed value of the contribution (in kind and in cash) to be made by the beneficiary community, as well as all financial costs. Sub-Project Cycle 3.32 Promotion and Identification. An intensive IEC campaign has taken place on all three islands during preparation of the project and more than 70 community committees have been established with the support of the RESs. These intensive campaigns will continue periodically, although the RES on each island will continuously fulfill this promotion function, making frequent field visits to disseminate information about the opportunities offered by the project, as well as to explain to potential beneficiaries the approach, objectives, and procedures of the project. For the periodic intensive IEC campaigns innovative techniques such as media coverage and competitions will take place to encourage individuals and organized groups to formulate projects. To fulfill their function, the RESs will: (i) liaise with local constituencies and keep in contact with representatives of various organizations working at the local level in order to be ready to identify new projects and to help their designers to put them into an 1/ Or availability of an implementing agency. 21 articulated manner, and (ii) collect sub-project requests. Promotion efforts will be intensified in areas where poverty is known to be widespread and especially severe. Specialists in social marketing and information, education and communication will be called upon to help design and launch the more intensive campaigns. 3.33 Appraisal Procedures. Each initial sub-project request is to be logged in by the RES and classified according to the type of activities it belongs to. Then the following steps are taken: (i) the project is pre-sorted and declared eligible on the basis of the category of activity, the project amount, the target population, and the sponsor agency; (ii) a field visit is organized; (iii) all criteria are reviewed and the budget analyzed. If the sub-project is judged appraisable, it is then transmitted to the relevant Regional Technical Department which has up to two weeks to object to or comment upon the proposal;I/ and (iv) depending on sub-project amount, final approval of grants is decided either by the Regional sub-project committee or the NES. At each step there is a possibility to re-enter the cycle, with better, updated, or more complete information. The methodology to be used in the appraisal of each type of sub-project is described in detail in a Manual of Procedures containing detailed selection criteria for each type of sub-project. 3.34 Sub-project Execution. Once sub-projects are approved, their implementation is the responsibility of either a pilot committee or an implementing agency. Pilot committees will implement most infrastructure sub-projects and will plan and organize the work, procure goods and contracts for works, and make sure that the beneficiaries participate and contribute as planned. Procurement procedures must follow IDA guidelines and are detailed in the Manual of Procedures of the CDSF. All payments to suppliers, small contractors and artisans, however, will be made directly by the CDSF within the amounts of the grants for the sub- projects. Where needed, RES staff will assist pilot comrnittees managing the implementation of sub-projects through strong supervision. 3.35 Income-generating activities and training activities, as well as some basic infrastructure sub-projects concerning several villages (for which there is no pilot committee) will be carried out by implementing agencies (NGOs, professional associations, or other non- profit organizations and technical assistance projects), will also follow the CDSF Manual of Procedures for procurement in particular. The proceeds of the grants will be made available by the CDSF to the implementing agencies in accordance with a disbursement schedule included in the financing agreement between the CDSF and the Implementing Agency, which will be responsible for paying their own suppliers and contractors and be subject to audit by the CDSF's auditors. No credit will be given under the project. The project will work with the on-going UNDP/ILO credit project on a complementary basis. 3.36 Manual of Procedures. A detailed Manual of Procedures has been developed for the CDSF. The Manual of Procedures is for daily use by the CDSF Administration. It guides all decisions regarding the administrative and financial management of the CDSF itself as well as the selection, appraisal, supervision and evaluation of sub-projects. It defines the 1/ This is to assure that sub-projects fit within the overall sectoral strategies. If it does not, the sub-project will either be redesigned or abandoned. 22 institution and its mandates, and spells out the responsibilities and administrative arrangements for the CDSF, its three regional secretariats and its community-level interactions. 3.37 The Manual describes the general types of subprojects eligible for financing, and the criteria for selection, as explained in para 3.31. It details the administrative steps by which the CDSF would receive, evaluate, approve, supervise and post-evaluate a project, including guidelines for procurement consistent with the World Bank's guidelines. It details the financial and auditing requirements for the CDSF Administration as well as for sub- projects. It describes the recruitment and management of CDSF personnel in an appendix. 3.38 A dozen annexes are attached to the Manual of Procedures. These annexes also form an integral part of the daily routine of the CDSF, as they give the legal structure for the organization and a number of sample documents encountered frequently by CDSF staff. The first two annexes give a copy of the laws creating the CDSF and defining its organization and operation. Sample documents include an application for membership in the CDSF for a Pilot Committee; a model statute of association for a Community Development Association; model meeting minutes; a model request for official recognition of a Pilot Committee; a sub- project application form; a model convention between the CDSF and the Pilot Committee; a model protocol of agreement between the CDSF and an executing agency (such as an NGO); and a sub-project supervision form. In addition annexes include procedures for procurement of works and equipment; and standard bidding documents. 3.39 Economic Rationale of CDSF. The economic rationale for the investment (non-income-generating) activities that it funds are principally: (i) it serves identified needs which are perceived by the community rather than being centrally-planned; (ii) it raises additional local resources for self-defined and targeted grass-roots development efforts; (iii) it assures the recurrent costs of the operations, which, relative to traditional investments, presents a saving both in the Government's recurrent budget and in the cost of later rehabilitation of the dilapidated investment; (iv) in some cases, it provides investments that would be impossible otherwise (due to the remoteness of the village, for instance); (v) usually there is a cost saving over centrally planned investments, especially for labor; and (vi) community supervision and management reduces leakages, and in many cases will increase quality. Intangible benefits include the empowerment and ownership of communities; their contact with the outside world and the Government; the empowerment of youth and especially young women; and tremendous capacity building and training at the community level which could then better harness local resources in the future. 3.40 Sustainability of CDSF. There are two levels of sustainability relevant to the CDSF: sustainability of the sub-projects financed, and sustainability of the institution itself. Concerning the former, the Manual of Procedures stipulates that before any sub-project can be financed by the CDSF, its sustainability after CDSF intervention must be assured. To achieve this, each sub-project must include a plan for community participation in financing, implementing, and maintaining the activity after sub-project support is completed. The assessment of this plan is an integral part of the appraisal of the sub-project. Without acceptable plans for the sub-project's sustainability, it will not be supported by the CDSF. The question of whether the CDSF institution itself should be sustainable is one to be answered during the mid-term review of the project. If the CDSF is successful at efficiently helping communities to implement sub-projects which have a proven track record at improving the 23 living standards of the population and generating bottom-up development, then, as experience has shown, these types of funds have no problem in raising the money from external donors, organizations, and the Government to continue their work. If it is determined at mid-term review that needs still exist at the community level and operations look successful enough to merit continuation of the CDSF after the life of the project, a financing advisor will be recruited to be in charge of fund-raising for the CDSF to assure its sustainability after the end of project. If at the end of project execution it is decided to dismantle the CDSF, the benefits of the sub-projects and training undertaken during project execution will continue. 3.41 Environmental Effects of the Project. Although this is illegal, sea-sand or ground coral is often used in construction in Comoros. During project preparation, a specialist in tropical construction worked with the Comorians to develop several different prototype construction techniques which use local materials other than sand and coral (crushed volcanic rock for instance) which have been successfully shown to minimize negative environmental impact. These methods are being tested on sub-projects during preparation, for instance in the rehabilitation of school classrooms, to determine their quality, durability, cost-effectiveness, ease of use, and acceptability by local communities. If communities are found to be using any environmentally damaging materials, CDSF financing will stop immediately for that sub- project. Close supervision is facilitated by the regional offices of the CDSF. To minimize environmental risks in the health component, the project will also finance the development of appropriate waste disposal and sanitary facilities. IV. PROJECT COSTS AND FINANCING 4.1 The total cost of the project is US$16.0 million net of taxes and duties in August 1993 prices. The Health component accounts for US$7.8 million, the Community Development Support Fund for US$7.9 million and the PPF for US$0.4 million. Price contingencies have been calculated at 1.9, 2.7, 3.5, 3.5, 3.5% for foreign expenditures and at 4% for local expenditures, for the five years of project implementation starting in 1994. There are no physical contingencies, because the scale and number of health centers to be rehabilitated as well as the scale and number of sub-projects of the CDSF will be a function of the amounts allocated in the respective categories of expenditure. The project cost summary by component and by category of expenditure are in Tables 4.1 and 4.2 below. These costs are based on estimates provided by MOH and CDSF with assistance from a consulting firm. The appraisal mission reviewed these costs in collaboration with the entities which will be in charge of executing the various components. The detailed costs of the project are shown in Annex IV. 4.2 The IDA contribution is US$13.0 million, of which US$6.0 million will be allocated to the health component and $7.0 million to the CSDF. The project will be financed by IDA, the Government, and local communities. During negotiations, it was agreed that the contribution of the communities to the CDSF has been set at a minimum of 20%, except for the poorest communities in which case the contribution would fall to 15% (para. 7.1 (k)). To allow for the CDSF to put priority on the poorest communities, the cost tables reflect an average contribution by communities of 16%. The costs shown for the health component do not reflect the Government's contribution to the salaries of staff working part time on the 24 project, materials, office space and other incidental contributions. However, they do reflect the Government's commitment to provide adequate staffing and supplies to rehabilitated facilities. Table 4.1: Summary Project Costs by Component (US$ thousand) USS thousand % Foreign Total Exchange Base Costs Local | Foreign | Total A. Support to Health Sector 1. Support to Central Level 272 384 656 59 5 2. Support to Regional Level 165 275 440 63 3 3. Health Facilities Rehabilitation 3,829 996 4,825 21 33 4. Family Planning Program 106 151 257 59 2 5. STD/AIDS Program 107 182 289 63 2 6. Project Office 452 68 520 13 3 Sub-Total 4,931 2,056 6,987 29 48 B. Community Development Support Fund 1. Administration 1,075 0 1,075 0 7 2. Sub-Projects 4,904 911 5,815 16 40 Sub-Total 5,979 911 6,890 13 47 C. PPF 500 300 800 38 S TOTAL BASELINE COSTS 11,410 3,267 14,677 22 100 Price Contingencies 1,184 175 1,359 13 9 TOTAL PROJECT COSTS 12,594 3,442 16,036 21 109 4.3 The cost for rehabilitation of selected sites was estimated from 40 to 60% of the cost of new construction; depending the status of the facility this results in costs of US$220 to US$330 per m2. Training abroad was estimated at US$5,000 per person/year and for local training US$600 per person/month. Local salaries and operating expenses were estimated using UNDP standards. 4.4 Customs duties and taxes. All items imported for the purpose of executing this project as well as the major imported items purchased locally will be exempt from direct customs duties and taxes, in line with the standard practice of the Government. 25 Table 4.2: Summary Project Costs by Cateeory of Expenditures (US$ thousand) US$ US$ % Total Foreign Base Exchange Costs Local Foreign r Total - 1. INVESTMENT COSTS A. Equipment, Vchicles, Mat. 493 1,237 1,730 72 12 B. Training 449 620 1,069 58 7 C. Civil Works 1,590 0 1,590 0 11 D. Technical Assistance 199 199 398 50 3 E. PPF 500 300 800 38 5 F. CDSF Sub-Projects 4,904 911 5,815 16 40 TOTAL INVESTMENT COSTS 8,135 3,267 11,402 28 78 It. RECURRENT COSTS A. Operating Costs 2,200 0 2,200 0 15 B. CDSF Administration 1,075 0 1,075 0 7 TOTAL RECURRENT COSTS 3,175 0 3,175 0 22 TOTAL BASELINE COSTS 11,410 3,267 14,677 22 100 Price Contingencies 1,184 175 1 359 13 9 TOTAL PROJECT COSTS 12,594 3 16,036 21 109 4.5 IDA is the sole source of foreign funding for the project. The Government will cover the salaries of the civil servants involved in the project, including those on the Project Office staff, and the operating costs of the facilities which are already in the budget of the MOH for a total estimated at about US$2 million. The contribution of communities in CDSF sub-projects would be a minimum of 20% except for the poorest communities, and is calculated at 16% of the sub-projects financing for a total estimated at about US$1 million. Recurrent costs for the health component indicate the Government's commitment to provide a full complement of staff and supplies to the rehabilitated facilities; however, the reforms proposed for the health sector and supported by this project are budget neutral. The only incremental recurrent cost associated with the health component is the cost of the project office, which is a temporary cost. Maintenance of facilities rehabilitated under either component will be assured by the local communities and does not therefore have budget implications either. Table 4.3 below shows the proposed allocation of the IDA credit by disbursement category. 26 Table 4.3: Allocation of IDA Credit by Disbursement Category (in US$ thousand) Foreign Local Total Exp. Exp. Amount % A. Goods Equipment, vehicles, 1,440 446 1,886 15 furniture, supplies B. Civil Works 1,733 1,733 14 C. Consultancies 220 215 435 3 D. Training 614 551 1,165 9 E. Project Ofrice Operating Costs 590 590 4 F. CDSF Operating Costs 1,172 1,172 9 G. CDSF Sub-Projects 975 4,273 4,273 40 H. PPF 300 500 800 6 Total Disbursement 3,549 9Z480 13,029 100 V. PROJECT IMPLEMENTATION A. Project Preparation 5.1 Health Program. A team of international consultants worked out the health component with the MOH Directorate General. Very close contact has also been maintained with all donors involved--UNDP, WHO, UNICEF, UNFPA, the French Cooperation, etc.-- and most preparation missions have been joint with these donors. Under the MERCAP, the MOH is engaged in major reforms of its personnel and administration, complementary to the project's goals. Regulations redefining the roles and powers of health facilities and communities with regard to financial and administrative management are under preparation and their application to the facilities to be rehabilitated under the project is a condition of disbursement for civil works (para. 7.3(b)), as is implementation of the new organisational chart in the facilities to be rehabilitated. 5.2 Community Development Support Fund. Considerable work has been undertaken on the preparation of the CDSF. Extensive IEC campaigns have been undertaken by the National Preparation Committee on each of the three islands to sensitize communities about the CDSF. Regional preparation committees were chosen on each island to form the Regional Executive Secretariats during the preparation period. Preparation work has progressed quite well, due in large part to the Government's determination to strengthen its 27 policy of support to grassroots activities, and equally to the enthusiastic adherence of communities to the project's objectives. The Presidential Act setting up CDSF was signed on January 6, 1993, and the Presidential Decree defining its functions signed on April 13, 1993. The National Executive Director, who was selected through broad consultation, was appointed by the Chairman of the Preparation Committee. The Regional Executive Directors have also been appointed. 5.3 More than 45 sub-projects estimated at US$1,200,000 equivalent have been identified by communities and regional committees; ten totalling about US$200,000 are being implemented and nine sub-projects related to the sectors of school rehabilitation and water supply have been completed successfully with the community's contribution exceeding in some cases 20% of the total cost of the sub-project (see Annex I for a list of sub-projects to be implemented in the first year of the project). B. Project Management 5.4 To facilitate execution of the two components of the project, separate implementation structures will be used for each component. For the health component strong support will be given to the Ministry of Health to improve its capacity to implement the health program. Because of the cross-sectoral nature of the social fund, it will not be directly tied to a particular ministry but will be independent and autonomously run. Health Program 5.5 Within the Ministry of Health a small Project Office will be established under the Directorate General to aid the MOH in the administration of the IDA credit. The Project Office will be responsible for overseeing the implementation of the component. In particular, this unit will perform the following administrative tasks: (i) prepare annual work programs and corresponding budgets; (ii) coordinate the activities of the various components; (iii) maintain an accounting system for each project sub-component satisfactory to IDA and prepare quarterly and annual financial reports; (iv) prepare all bidding documents in a manner acceptable to IDA; (v) prepare quarterly and annual progress reports; (vi) ensure that audits are performed annually in a timely fashion; (vii) manage all technical assistance contracts for the project; and (viii) perform a mid-term review of the health component during the third year of project implementation. The Project Office high level staff will include a project director, an accountant, and a procurement specialist, with necessary support staff. Terms of reference for the Project Office and its staff members are included in Annex III. Assurances were given during negotiations that Project Office higher level staff at all times have qualifications and experience acceptable to IDA (para. 7. l(d)). In addition, the person responsible for procurement within the Project Office will attend a training course on Bank procurement during the first year of project implementation. 5.6 Architectural design, preparation of bidding documents, bids, and supervision of civil works financed through the project will be executed by a private firm or NGO recruited with procedures acceptable to IDA. The Project Office will be responsible for coordinating these activities as well as visiting the sites regularly. In the same way the procurement of goods, technical assistance and training will be executed by private firms or NGOs recruited with procedures acceptable to IDA. The Project Office's Director will be 28 responsible for coordination of all these activities according to the Work Plan. The recruitment of private firms and/or NGOs for the first year, the procurement of goods, the preparation of architectural design and bidding documents will be a condition of effectiveness (para. 7.2(e)). 5.7 At the regional level, project implementation will be executed by the Regional Health Teams with the assistance of the Project Office. The RHTs which are headed by the RMO will be charged with supervising the implementation of health programs throughout the region, organizing, with the assistance of the contracted private firm or NGO, on-the-job training for district health workers, and stimulating and streamlining community participation. RHTs will have the responsibility and authority for administrative and technical matters in their region, including the supervision of activities in hospitals, health centers, rural maternities, pharmacies, and health posts against established norms and monitorable performance indicators. 5.8 For IEC activities, the project will strengthen management capacities of the unit which will have the responsibility to plan, coordinate and supervise IEC activities. A consultant will assist MOH in reorganizing its IEC activities, in defining the mandate of the unit which will have the responsibility to coordinate and plan IEC health and population activities, and in establishing the coordinating mechanisms between the IEC coordinating unit and the various projects/programs, in preparing the job descriptions for the IEC central and regional staff, and establishing procedures to ensure that resources are shared between programs. This strengthening will take place before the credit becomes effective and will be done in collaboration with other concerned donors, in particular with UNDP which is preparing a development communication project. Social Fund 5.9 Because of the nature of the social fund, its management has been given to an organization, the Community Development Support Fund, which has administrative and financial autonomy from the Government. The CDSF will enter into an agreement with the Government regulating the channeling of the proceeds of the IDA credit. The signing of that agreement will be a condition of effectiveness of the proposed credit (para. 7.2(a)). During negotiations, the Government and CDSF gave assurances that this agreement and any amendment thereto will be acceptable to IDA (para. 7. 1(e)). While the headquarters of the CDSF is on the island of Grande Comore, because of geographical location, difficulty of communications, and specific characteristics of each island, each of the three islands will have a regional bureau. A bank account will be opened for each regional bureau and the deposit of US$5,000 equivalent in each account will be a condition of effectiveness (para. 7.2(f)). During negotiations, the Government and the CDSF gave assurances that the positions of National Executive Director, Regional Executive Deputy Directors, and other higher level personnel will be filled at all times with personnel whose qualifications and experience are satisfactory to IDA (para. 7.1(f)). 5.10 Central Coordination Committee. The primary task of the CCC, which meets twice a year, is to act as a Board of Directors setting the overall policies of the CDSF. As such, its responsibilities are: 29 Define and orient the general policies of the CDSF; Approve the annual budget and financial management procedures which are submitted by the National Executive Director of the CDSF; Analyze the audit reports on the management of the CDSF; Examine and adopt appropriate procedures which will enable the CDSF to support projects in the poorest areas; Approve the global objectives of each Regional Committee's annual plan; Adopt the Internal Rules and the Personnel Statute of the CDSF which are submitted by the National Executive Secretariat; - Adopt the Manual of Procedures (para. 3.36); and - Appoint the National Executive Director and the Regional Executive Deputy Directors through open competition. 5.11 The CCC will be composed of 15 members who are to be named by decree - 7 representatives of the public administration (from the Ministries of Finance, Plan, Equipment, Education, Health, and Production, and a representative from the Prime Minister's office), 8 representatives from the provinces (2 from each island) and 2 from national associations. The president of the CCC will be nominated by his peers. 5.12 National Executive Secretariat. The NES is a permanent body composed of the National Executive Director, an accountant, an administrative assistant, a procurement specialist and a secretary. Their main tasks are the following: - Assure the financial and administrative management of the CDSF, including preparing the budget of the CDSF; - Establish the financial accounts and prepare all other financial management statements; - Assure the management of the IDA special account for the CDSF under the responsibility of the National Executive Director; - Assure that all procurement follows the procurement rules stipulated in the Manual of Procedures; - Study and propose to the CCC the elements of a national policy and a financing strategy for community development; - Write and submit to CCC semi-annual evaluation reports on the activities of the CDSF and propose necessary adjustments; 30 - Define and create a data base of unit costs which are to be applicable during sub-project evaluation; and - Approve sub-project requests which are FC5 million (about US$17,000) and above, forwarding those above equivalent of FF350,000 (FC17.5 million or about US$60,000) for non-objection from IDA; 5.13 Regional Committees. For each of the three islands, there will be a RC which is composed of 8 members. The presidents are elected by their peers. The members include: a representative of the Regional Finance Directorate, a representative of the Regional Directorate of Plan (Community Development), and 6 other non-Government members chosen on the basis of their qualifications and their knowledge of communities and their problems. The primary responsibilities of the Regional Committees are the following: - Develop and propose to the NES a regional community development policy and strategy; - Review and endorse or modify the annual programs developed by the Deputy Regional Director; - Evaluate the impact of the CDSF on the development and welfare of the island and propose modifications and adjustments; - Appoint a Regional sub-projects committee which will be responsible for selecting sub-projects, approving grants of less than CF5 million (about US$17,000) and submitting to the NES for decision all sub-projects above FC5 million; and - Collaborate with the RES to assure close liaison between local communities and the CDSF to help define projects which respond to the needs of the poorest groups. 5.14 Regional Executive Secretariats. The RES is headed by the Deputy Regional Director who is the regional representative of the CDSF and has an accountantl/, a specialist in communication, and a secretary as support. The RES is responsible for: - Animating the IEC campaign of promotion of the CDSF in the communities of the island; - Preparing the annual action program for community development on the island; - Furnishing technical and financial support to communities in the preparation and execution of projects; - Appraising sub-project requests according to the criteria and procedures in the Manual of Procedures; - Assuring timely disbursements according to advancement of work; and - Submitting quarterly reports to the RC on the state of advancement of sub- project implementation. I/ This individual will also receive training in contracts and procurement to assure they fulfill this function at the regional level. 31 5.15 Pilot Committees. The PCs are community groups which work with the RESs of the CDSF to: - Identify sub-projects according to needs of the community; - Prepare with the RESs a proposed budget for the sub-project, including the contributions of the community towards the sub-project realization; - Obtain firm commitment from the community or communities on their participation in the execution and monitoring of work during project implementation; - Sign the financial contract with the CDSF; - Mobilize local human, material, and financial resources necessary for execution of the sub-project; and - Report periodically to the RES on the state of advancement of sub-project implementation. 5.16 IDA review of sub-projects. The CDSF would have the authority to approve sub-projects costing the equivalent of FF350,000 (about US$60,000) or less. Sub-projects that have a total cost of more than FF350,000 equivalent would be submitted to IDA for prior review. All sub-projects would, however, be subject to random ex-post review by IDA during project supervision. C. Implementation Schedule 5.17 Implementation Schedule. The project Implementation Schedule by category is shown in Table 5.1 below. The project is expected to be completed by December 31, 1998, and the Credit closed by June 30, 1999. 32 Table 5.1: Implementation Schedule (US$ million) Project Elkment Project Year Total 1 2 3 4 5 Payments Remarks Credit Inning Sign/Effectiveness/Close xx x Civi Works A.3 Facilities Rehabilitation 0.04 0.20 0.80 0.60 0.10 1.74 LCB A.6 Project Office 0.02 0.02 LCB xxx xx xxxx xxxx xx Goods A.l Central Level 0.05 0.10 0.15 0.10 ICB xx xxxx xxxx 0.05 Lah A.2 Regional Level 0.02 0 03 0.05 0.03 ICB xx xxxx 0.02 Lah A.3 Facilities Rehabilitation 0.90 0.43 1.33 0.92 ICB xxx xx 0.41 Lah A.4 Famnily Planning 0.03 0.03 0.06 ICB xxx xx A.5 STD/AIDS 0.07 0.05 0.04 0.16 ICB xx xxxx xxx A.6 Project Office 0.08 0.08 Lah xxx Consultancie A.1 Central Level 0.03 0.08 0.10 0.21 xx x xx A.3 Facilities Rehabilitation 0.08 0.08 (UNV) xxxx A.4 Family Planning 0.03 0.03 0.06 xxx xx A.5 STD/AIDS 0.01 0.02 0.02 0.01 0.01 0.07 x xx xx x x Tr g A.l Central Level 0.05 0.10 0.11 0.09 0.35 x x x x A.2 Regional Level 0.06 0.10 0.10 0.09 0.05 0.40 xx xx xxx x x A.3 Facilities Rehabilitation 0.04 0.04 0.04 0.02 0.14 xx xx xx x A.4 Family Planning 0.02 0.05 0.08 0.03 0.18 x xxx xxx xx A.5 STD/AIDS 0.01 0.02 0.05 0.08 x x xxx CDSF Administration B.l Administration 0.23 0.24 0.24 0.24 0 24 1.17 xxxx xxxx xxxx xxxx xxxx CDSF Sub-Projects 0.53 1.20 1.30 1.20 1.20 5.43 0.50 Lah B.2 Sub-projects xxxx xxxx xxxx xxxx xxxx 4.93 LCB Miscellaneous A.6 MOH Project Ofrice 0.09 0.09 0.09 0.09 0.09 0.45 PPF Refinancing 0.80 0.80 TOTAL (Bank Financed) 2.10 3.29 3.50 2.43 1.71 13,03 xx refer to quarters 33 D. Project Monitoring and Reporting 5.18 Health Component Monitoring. The Project Office will monitor and evaluate project implementation according to the agreed performance indicators (Annex VI). The Project Office will have an overall view of problems and issues in project implementation and be in position to recommend any corrective actions that maybe required. It was agreed that a project performance review, including management, will be carried out annually under terms of reference acceptable to IDA and that the review findings and recommendations will be discussed with IDA no later than October 31 of each year of project implementation. Because community involvement is so important to the success of this component, this annual review will also include an beneficiary assessment which looks into how beneficiaries feel health services to be improving as well as further changes and modifications which could continue to improve services. During negotiations, the Government gave assurances that, no later than July 31 of each year of project implementation, the Project Office will make available to IDA the necessary documents and evidence for a review of (i) project implementation; and (ii) the status of maintenance and operations of buildings rehabilitated with IDA credits (para. 7. 1(b)). 5.19 CDSF Sub-Project Monitoring. Strong monitoring of sub-project implementation and impact will be conducted by the RES and reviewed by the NES. The monitoring will be physical and financial, and will take into account the impact of the sub- project on beneficiaries. The physical and financial monitoring will be included in the Management and Information System (MIS). The signature of a contract with a consulting firm to put in place the MIS will be a condition of effectiveness (para. 7.2(d)). During RES supervision missions a detailed supervision report will be prepared indicating the physical advancement of the project and flagging any implementation issues. The views of the beneficiaries and the implementing agencies will also be recorded during these missions. Every disbursement by the RES will be monitored through the MIS. A summary of the findings of the supervision missions will be presented in the quarterly reports with recommendations to improve the implementation and design of sub-projects. 5.20 During project implementation improvements would be made to strengthen the MIS's capacity for the establishment and maintenance of "community profiles" - a set of social indicators on communities where CDSF financed projects have been, or will be carried out. Performances indicators would also be used to reflect the number and type of beneficiaries of each type of project, such as the number of classrooms rehabilitated, beneficiaries of water supply sub-projects, health care visits, vaccinations, trainees, in order to monitor real benefits provided under CDSF sub-projects. Based on the results for the period of project preparation, outcomes expected for the lifetime of the project could be quantified as final targets. The number of beneficiaries are expected to be approximately: (i) 50,000 for the water supply sector, involving 40 villages; (ii) 35,000 for the sewerage sector; (iii) 2,000 rural women; (iv) 15,000 students in primary schools; (v) 1,500 trainees in basic skills at the community level; and (vi) 40,000 health care visits per year (additional to 75,000 existing at present). The implementation of sub-projects will be monitored against a set of quantified performance indicators which will be adjusted