1

EN

THIS ACTION IS FUNDED BY THE EUROPEAN UNION

ANNEX

of the Commission Decision amending Commission Decision C(2013)4641 of 23.7.2013 on

the financing of the Annual Action Programme 2013 in favour of the Republic of Zambia

Action Document for Health Systems Strengthening Programme

1. Title/basic act/

CRIS number

Health Systems Strengthening Programme (HSSP)

CRIS number: ZM/FED/023-203

financed under the European Development Fund (EDF)

2. Zone benefiting

from the

action/location

Republic of Zambia

The action shall be carried out at the following location: Zambia

3. Programming

document

National Indicative Programme (NIP) 2008-2013 for Zambia

NIP 2014-2020 for Zambia

4. Sustainable

Development

Goals (SDGs)

Main: SDG 3 (Health)

5. Sector of

intervention/

thematic area

Health DEV. Assistance: YES1

6. Amounts

concerned

Total estimated cost: EUR 22 273 008.59

Total amount of EDF contribution: EUR 20 300 000.00

Of which:

11th

EDF: EUR 2 300 000.00

10th

EDF: EUR 18 000 000.00

This action is co-financed in parallel co-financing by:

- Government of Zambia for an amount of EUR 1 973 008.59

7. Aid modality

and

implementation

modalities

Project Modality

Direct management through:

- Grants

1 Official Development Assistance is administered with the promotion of the economic development and

welfare of developing countries as its main objective.

2

- Procurement

Indirect management with the Republic of Zambia

8 a) DAC code Health policy – 12110

8 b) Main Delivery

Channel

12000 – Recipient Government

9. Markers

(from CRIS DAC

form)

General policy objective Not

targeted

Significant

objective

Principal

objective

Participation development/good

governance ☐ X ☐

Aid to environment X ☐ ☐

Gender equality and Women’s and

Girl’s Empowerment X ☐ ☐

Trade Development X ☐ ☐

Reproductive, Maternal, New born

and child health ☐ X ☐

Disaster Risk Reduction X ☐ ☐ Inclusion of persons with disabilities

X ☐ ☐

Nutrition X ☐ ☐

RIO Convention markers Not

targeted

Significant

objective

Principal

objective

Biological diversity X ☐ ☐

Combat desertification X ☐ ☐

Climate change mitigation X ☐ ☐

Climate change adaptation X ☐ ☐

10. Internal markers Policy objectives Not

targeted

Significant

objective

Principal

objective

Digitalisation X ☐

Migration X ☐

COVID response ☐ ☐ X

3

1 BACKGROUND AND CONTEXT DESCRIPTION

Context and problem description 1.1

In line with the National Indicative Programme (NIP) 2014-20202, the EU’s response in

Zambia to the COVID-19 pandemic calls for an adaptation of the Health Systems

Strengthening Programme (HSSP) adopted under the NIP 2008-2013 3

.

Zambia is still facing significant challenges with regard to health outcomes and health service

provision. The country ranks 143rd

out of 189 countries according to the 2019 Human

Development Index. In 2017, maternal mortality stood at 224 per 100 000 live births (DHS

2017) and child mortality still remained high and standing at 63.4 per 1 000 live births.

The Seventh National Development Plan includes an important focus on health related

interventions. However, decreasing budget allocations (from 16.1% in 2018 to 8.8% in 2020)

and inefficient health spending remain a concern.

Improving Zambians’ access to quality health services and essential medicines remains

critical, especially in light of the COVID-19 pandemic, as is ensuring that Zambia has the

capacity to ensure that all medicines provided are of suitable quality.

To improve access to essential medicines the government has adopted the National Supply

Chain Strategy and has transferred responsibility for the procurement of medicines and

medical supplies from the Ministry of Health to Medical Stores Limited (MSL).

In addition, the Zambia Medicines Regulatory Authority (ZAMRA) has been mandated to

ensure quality assurance of medicines as laid down in the Pharmaceutical Act of 2004 and

reconfirmed in the National Health Strategic Plan 2017-21. Both organisations, as well as the

Ministry of Health, are undergoing institutional and administrative changes. Moreover,

shortages and the efficient use of human resources in the health sector are persistent problems.

The outbreak of the COVID-19 pandemic in March 2020 has already had a significant impact

on Zambia, which is likely to increase in the months ahead. The World Health Organiaation

(WHO) considers Zambia to have one of the lowest preparedness and response capacities to

the COVID-19 pandemic in the world. This results from several challenges that the Zambian

health system is facing, including a shortage of essential medicines, inadequate equipment

and infrastructure combined with a very weak government fiscal situation and unsustainable

debt levels.

The Government of the Republic of Zambia has prepared a COVID-19 Multi-sectoral

National Contingency and Response Plan which it has asked cooperating partners to support,

2 Comission Decision C(2007)6057 of 6 December 2007 on the adoption of the 10

th EDF National Indicative

Programme between the European Union and Zambia, as amended by Commission Decision C(2012)1799 of

21.2.2013 3 Commission Decision C(2014)3607 of 12.6.2014 on the adoption of the 11

th EDF National Indicative

Programme between the European Union and Zambia, as amended by Commission Decision C(2018)3723 of

14.6.2018

4

in particular pillar 2 ‘Transmission and Case Management’ in order to help address the most

immediate needs for the prevention and control of the virus.

The proposed budget increase of EUR 2 300 000 includes EUR 1 800 000 for the

procurement of essential medicines to ensure the continuity of health service provision, as

well as life-saving medical supplies in response to the COVID-19 pandemic in Zambia. In

addition, an amount of EUR 500 000 is provided to help finalise the completion of the

National Quality Medicines Testing Laboratory (NQMCL) and ZAMRA offices.

2 RISKS AND ASSUMPTIONS

Risks Risk level

(H/M/L)

Mitigating measures

For the pharmaceutical Act of 2004

to be implemented effectively,

ZAMRA needs a secure financial

basis, which assures a certain level of

independence.

H

The programme supports ZAMRA to

develop and adopt a comprehensive

and sustainable business plan. Income

from drug licencing is expected to

increase once the laboratory is fully

operational.

To sustainably improve the

availability of essential medicines

and supplies, the National Supply

Chain Strategy needs to be

efficiently implemented and MSL

needs to have the adequate capacity

for the procurement of drugs.

H

Substantial support is provided under

the programme to improve the

logistics and supply chain of

ZAMRA. Additionally, the EU

foresees continuation of technical

assistance after the end of this project

through a separate contract funded by

the Technical Cooperation Facility

VI4.

Essential medicines and life-saving

medical supplies procured in

response to the COVID-19 pandemic

will not reach the final beneficiaries.

M

MSL is in charge of the distribution of

the procured medicines and supplies.

Technical Assistance (TA) will be

provided to MSL through a separate

contract to support and oversee the

distribution of the supplies to the

provincial and district health centres.

Assumptions

- The Government will maintain the legal provisions and policies required for MSL and

ZAMRA to carry out their mandates.

- The Government is committed to ensuring the access to quality health services for the

Zambian population and mitigate the impact of the COVID-19 pandemic.

4 C(2020) 3076 final of 6.5.2020 on the financing of the Annual Action Programme 2020 in favour of the

Republic of Zambia.

5

3 COMPLEMENTARITY, SYNERGY AND DONOR COORDINATION

In the EU response to the COVID-19 pandemic, synergies are sought between this

programme and the following operations:

EU supported Millennium Development Goals initiative (MDGi): This programme has

strengthened maternal, child and nutrition services in ten districts in Zambia constituting

about one third of the population. HSSP supported this programme by improving the

access to essential medicines and strengthening information systems.

Pharmaceutical logistics systems: Support has been provided by several donors and

programmes, including Sweden, the United Kingdom, the United States of America, the

World Bank and the Global Fund. The EU support complements the support from other

cooperating partners by increasing the funds for investments in infrastructure and

equipment and by offering resources for technical assistance.

Procurement of essential medicines and life-saving supplies in response to the COVID-

19 pandemic: This action complements the support provided by Germany, Ireland,

Sweden, through the UN system as well as by USAID. All supplies to be procured

under this programme have been coordinated with these partners, the Ministry of Health

and MSL. Most of the supplies have been identified as vital and are either already out of

stock or in very limited supply and expected to run out shortly, especially at the district

and community health facilities.

4 DESCRIPTION OF THE ACTION

Results chain Indicator Source of data

IMP

AC

T

Impact

(overall

objective)

To improve the health status of

the people in Zambia in order to

contribute to socio-economic

development and to mitigate the

impact of the COVID-19 crisis

- Maternal mortality ratio

- Infant mortality rate

- Life expectancy at birth

- COVID-19 cases / deaths

per 100 000

- Regular health

status surveys, data

from the health

information system

and other reports

- 7th National

Development Plan

monitoring

OU

TC

OM

E(S

)

Outcome 1

(specific

objective)

Improved availability and

rational and correct use of

quality assured essential

medicines in public and private

health care and support to

rational and correct use of

essential medicines in Zambia

- Increase in availability:

Proportion of health

facilities with stock-out of

essential medicines

- Increase in quality:

Number of licensed

premises

- Improvement in rational

use of medicines: Tracking

of rational drug use (RDU)

established and used

regularly

- 7th

NDP indicators

and targets

- Survey reports

- Procurement

Supply Chain

Management

(PSCM) reports

- RDU reports

Outcome 2

(specific

Improved development and

implementation of national

- Number of national

policies and strategies under - Published or

approved policies,

6

Results chain Indicator Source of data

objective) health policies and strategies implementation, supported

by the programme

- Annual budgetary

allocations for the drug

supply

- Number of pharmacists

specialised personnel in the

public health sector

strategies, plans,

Joint Annual

Review (JAR)

report, mid- and end

evaluation reports

- Approved job

descriptions

- Annual budget

documents

OU

TP

UT

(S)

Output(s)

related to

Outcome 1

1.1. The Zambian Medicines

Regulatory Authority (ZAMRA)

is effectively executing its

quality control and regulatory

functions

- Status of improved

organisational capacity

- Status of the new National

Quality Control Laboratory

(NMQCL) and ZAMRA's

headquarters

- Improvement of quality

management: Number of

internal audits performed per

year, number of annual

quality management review

meetings, status of

improving quality

procedures (QP)

- Status of increased

capacity in licensing,

surveillance and

enforcement: status of

improving transport capacity

for inspectors, number of

annual inspections, status of

upgrading the expertise of

staff

- Status of improving the

Market Authorisation (MA)

capacity: number of

personnel with expertise in

Biosimilars, no of MAs

assessed annually

- Status of improving

regulations: number of

regulations updated

-Inspection reports

-MoH, ZAMRA and

MSL reports

- Programme

Estimates reports

-Technical

Assistance reports

-Tender documents

and implementation

reports

-Site meeting

minutes

- Quality reports

-Laboratory audit

reports

-ZAMRA QPs

developed and

Implemented

-Approved staff

training plan

-Training reports

-Approved

guidelines, laws and

regulations

1.2. Improved effectiveness and

cost-efficiency of the

pharmaceutical procurement and

supply management system

- Status of the Memorandum

of Understanding (MoU) for

the gradual transfer of

procurement to Medical

Stores Limited (MSL)

- The existence of and

progress on the action plan

towards certification as

procurement agent

- Status of MSL's capacity

strengthening plan (CSP)

and overall strategic plan

(SP)

- Status of MSL's central

warehouse in Lusaka

- PSCM reports

- MoU, Standard

Operating

Procedures,

Monitoring

&Evaluation, CSP,

SP and procurement

action plan

-MSL performance

reports

- Tender evaluation

reports, contract,

implementation

reports, handover

progress reports,

7

Results chain Indicator Source of data

- Number of pallets of

medicines and medical

supply handled by MSL

annually

- Availability of life-saving

commodities in response to

COVID-19 and of selected

essential medicines at health

facilities

performance report

of the new store

1.3. Progress towards rational

drug use (RDU)

- % of health facilities with

functioning Pharma-

Therapeutic Committees

(PTC)

- % of health facilities with

access to up-to-date standard

treatment guidelines

- Number of people in

PSCM whose skills and

knowledge on RDU have

improved through successful

completion of on-line

masters in a relevant field

- Evidences on rational use

improved in Zambia:

Institutional drug use study

conducted

- Students

diplomas/certificates

- Study and report

on PTCs, reports on

implementation of

RDU and PE reports

Output(s)

related to

Outcome 2

2.1. The Ministry of Health and

the Ministry of Community

Development Mother and Child

Health5 have developed the

required capacities and policies

in the areas of Health

Information System6, Financing

and other strategic areas

- Status of the Procurement

Supply Chain Management

(PSCM)

technical working group

(TWG)

- Number of health-related

policies/strategies

developed/updated with

support from HSSP

- Existence/use of a M&E

framework on PSCM

- PSCM reports

- Approved

strategies,

implementation

plans, minutes of

meetings and report

on implementation

- Joint Annual

Review reports

5 IMPLEMENTATION

Financing agreement 5.1

In order to implement this action, it is foreseen to conclude a financing agreement with the

partner country.

5 The responsibility for primary health care was in 2015 transferred from the Ministry of Community Development,

Mother and Child Health to the Ministry of Health. 6 Support for improvement of the Health Information Systems is addressed by other EU interventions than the HSS

Programme.

8

Indicative implementation period 5.2

The indicative operational implementation period of this action, during which the activities

will be carried out and the corresponding contracts and agreements implemented, is 90

months from the date of entry into force of the financing agreement.

Extensions of the implementation period may be agreed by the Commission’s responsible

authorising officer by amending this Decision and the relevant contracts and agreements.

Implementation modalities 5.3

The Commission will ensure that the EU appropriate rules and procedures for providing

financing to third parties are respected, including review procedures, where appropriate, and

compliance of the action with EU restrictive measures7.

Grants: (direct management) 5.3.1

(a) Purpose of the grant(s)

The grant will contribute to achieve part of output 1.2. It will support the expansion of MSL's

storage facilities (warehouse construction), in order to contribute to the improved

effectiveness and cost-efficiency of the pharmaceutical procurement and supply management

system in Zambia. The specific purpose of this direct grant is to support the

construction/upgrading of the MSL central warehouse in Lusaka, in accordance with the

planned phase 2 of the MSL Master Plan for Extension of the Storage and Distribution

Capacity approved in September 2015.

(b) Type of applicants targeted

Potential eligible applicants must be a legal person, non-profit making and be directly

responsible for the preparation and management of the action.

(c) Justification of a direct grant

Under the responsibility of the Commission’s authorising officer responsible, the grant may

be awarded without a call for proposals to MSL.

Under the responsibility of the Commission’s authorising officer responsible, the recourse to

an award of a grant without a call for proposals is justified in line with Article 195 (c) based

on the fact that MSL – a state owned private company limited by shares – executes storage and

distribution functions in the health sector in a de-facto monopoly situation. MSL is fully owned

by two Ministries of the Government of Zambia (Ministry of Finance and Ministry of Health).

7 www.sanctionsmap.eu Please note that the sanctions map is an IT tool for identifying the sanctions regimes. The

source of the sanctions stems from legal acts published in the Official Journal (OJ). In case of discrepancy between

the published legal acts and the updates on the website it is the OJ version that prevails.

9

Procurement (direct management) 5.3.2

The activities under output 1.2 relating to the procurement of essential medicines and life-

saving medical supplies in response to the COVID-19 outbreak in Zambia will be

implemented in direct management (EUR 1 800 000).

Subject Indicative type

(works, supplies,

services)

Indicative trimester of

launch of the procedure

Essential medicines and life-saving

medical supplies in response to the

COVID-19 outbreak

Services and

supplies

Q2 2020 onwards

Indirect management with the partner country 5.3.3

A part of this action with the objective of improving availability and rational and correct use

of quality assured essential medicines in public and private health care in Zambia ( outputs

1.1, 1.3 and the activities related to the TA under output 1.2); and improving the development

and implementation of national health policies and strategies (output 2.1) may be

implemented in indirect management with the Republic of Zambia according to the following

modalities:

The partner country will act as the contracting authority for the procurement and grant

procedures. The Commission will control ex-ante all the procurement procedures except in

cases where programme estimates are applied, under which the Commission applies ex-ante

control for procurement contracts above EUR 50 000 (or lower, based on a risk assessment)

and may apply ex-post control for procurement contracts up to that threshold. The

Commission will control ex-ante the grant procedures for all grant contracts.

Payments are executed by the Commission except in cases where programmes estimates are

applied, under which payments are executed by the partner country for direct labour and

contracts below EUR 300 000 for procurement and EUR 100 000 for grants.

The financial contribution does not cover the ordinary operating costs incurred under the

programme estimates.

The partner country shall apply the Commission’s rules on procurement and grants. These

rules will be laid down in the financing agreement to be concluded with the partner country.

Scope of geographical eligibility for procurement and grants 5.4

The geographical eligibility in terms of place of establishment for participating in

procurement and grant award procedures and in terms of origin of supplies purchased as

established in the basic act and set out in the relevant contractual documents shall apply,

subject to the following provisions.

10

The Commission’s authorising officer responsible may extend the geographical eligibility on

the basis of urgency or of unavailability of products and services in the markets of the

countries concerned, or in other duly substantiated cases where the eligibility rules would

make the realisation of this action impossible or exceedingly difficult.

Indicative budget 5.5

Interventions/Expected Results/Activities/and Indicative

Implementation Methods

EU

contribution

amount in

EUR

Beneficiary’s

contribution

in EUR

SPECIFC OBJECTIVE/OUTCOME 1 17 043 640 1 973 008.59

EXPECTED RESULT/OUTPUT 1.1

ZAMRA is effectively executing its quality control and regulatory

functions

8 661 000

1 973 008.59

Activity 1.1.1. Provide TA for ZAMRA support (Procurement – indirect

management with Zambia – services) 1 296 000

Activity 1.1.2. Construction of National Quality Control Laboratory (NQCL) and

ZAMRA premises (Procurement – indirect management with Zambia – works and

supervision)

5 000 000 1 973 008.59

Activity 1.1.3. Short Term TA, equipment and training (Procurement - indirect

management with Zambia - supplies and programme estimates) 2 365 000

EXPECTED RESULT/OUTPUT 1.2.

Improved effectiveness and cost-efficiency of the pharmaceutical

procurement and supply management system

7 582 000

Activity 1.2.1. Provide TA to Medical Stores Limited (MSL) for strengthening

pharmaceutical logistics ( Procurement - indirect management with Zambia –

services)

960 000

Activity 1.2.2. Extend storage facilities, provide short-term TA and training ( Direct

Award Grant under direct management)

4 822 000

Activity 1.2.3. Procure essential medicines and life-saving medical supplies in

response to the COVID-19 outbreak in Zambia (Procurement of supplies - direct

management).

1 800 000

EXPECTED RESULT/OUTPUT 1.3

Progress towards rational drug use (indirect management with Zambia

– programme estimates)

800 640

Activity 1.3.1. Conduct surveys on drug use (Year 1 and year 3) and the functioning

of Pharmacy Therapeutics Committees (effectively working, outputs, challenges)

Activity 1.3.2. Carry out refresher trainings on rational drug use for 500 district staff

for two days (Unit = training day);

Activity 1.3.3. Strengthen monitoring of prescription practices by setting up a

monitoring module within the Health Management Information System (HMIS)

Activity 1.3.4. Organise further education (phMPH) through distance learning for

Ministry of Health Pharmacists

Activity 1.3.5. Strengthen quality assurance mechanisms through the setting up of

quality circles at district level involving prescribers and pharmacists and monitoring

trends with regard to rational drug use at national level.

SPECIFIC OBJECTIVE/OUTCOME 2 1 100 000

11

EXPECTED RESULT/OUTPUT 2.1.

Strengthened capacities and policies in the areas of Health Information

System, financing and other strategic areas

Activity 2.1.1. TA Implementation and TA in the areas of Health Information System,

financing and other strategic areas (Procurement - indirect management

with Zambia – services)

1 100 000

Monitoring 100 000

Communication and Visibility 120 000

Evaluation and Audit 300 000

Contingencies* 1 636 360

Total 20 300 000

1 973 008.59

*The European Union's contribution to the "Contingencies" heading may be used only with prior agreement of the

Commission.”

Organisational set-up and responsibilities 5.6

The contracting authority for the project - except for expected result 1.2, activities 1.2.2 and

1.2.3 - is the National Authorising Officer, Secretary to the Treasury, Ministry of Finance.

The overall project supervisor is the Ministry of Health.

Under this overall coordination, each involved institution supervises the implementation of

the activities in its particular area of responsibility. The involved institutions are: Zambia

Medicines Regulatory Authority (ZAMRA), Medical Stores Limited (MSL) and the Ministry

of Health.

A Steering Committee has been set up to oversee and validate the overall direction and policy

of the project and to reach agreement on the assignment of responsibilities, wherever those

responsibilities are not yet defined by applicable legal or administrative rules and regulations.

A Technical Assistance (TA) team assists the Beneficiary in the implementation of the

project. The TA team works under the terms of reference agreed by both the contracting

authority and the Commission and consists of three long-term key experts (team leader, TA

for ZAMRA/output 1.1 and TA for MSL/output 1.2) and a pool of non-key experts providing

short-term expertise as required.

As part of its prerogative of budget implementation and to safeguard the financial interests of

the Union, the Commission may participate in the above governance structures set up for

governing the implementation of the action.

Performance and Results monitoring and reporting 5.7

The day-to-day technical and financial monitoring of the implementation of this action will be

a continuous process, and part of the implementing partner’s responsibilities. To this aim, the

implementing partner shall establish a permanent internal, technical and financial monitoring

system for the action and elaborate regular progress reports (not less than annual) and final

reports. Every report shall provide an accurate account of implementation of the action,

difficulties encountered, changes introduced, as well as the degree of achievement of its

12

results as measured by corresponding indicators, using as reference the simplified Logframe

matrix (for project modality) available in section 4 or the partner’s strategy.

The Commission may undertake additional project monitoring visits both through its own

staff and through independent consultants recruited directly by the Commission for

independent monitoring reviews (or recruited by the responsible agent contracted by the

Commission for implementing such reviews).

Evaluation 5.8

Having regard to the importance of the action, a final evaluation will be carried out for this

action or its components via independent consultants contracted by the Commission.

It will be carried out for accountability and learning purposes at various levels (including for

policy revision), taking into account in particular the fact that the aim is to provide an

understanding of the performance of the programme so as to inform the planning of future EU

interventions in the same or similar sectors and to measure its contribution towards the

implementation of the SDGs.

The Commission shall inform the implementing partner at least one month in advance of the

dates foreseen for the evaluation missions. The implementing partner shall collaborate

efficiently and effectively with the evaluation experts, and inter alia provide them with all

necessary information and documentation, as well as access to the project premises and

activities.

The evaluation reports shall be shared with the partner country and other key stakeholders.

The implementing partner and the Commission shall analyse the conclusions and

recommendations of the evaluations and, where appropriate, in agreement with the partner

country, jointly decide on the follow-up actions to be taken and any adjustments necessary,

including, if indicated, the reorientation of the project.

Evaluation services may be contracted under a framework contract.

Audit 5.9

Without prejudice to the obligations applicable to contracts concluded for the implementation

of this action, the Commission may, on the basis of a risk assessment, contract independent

audits or expenditure verification assignments for one or several contracts or agreements.

It is foreseen that audit services may be contracted under a framework contract.

Communication and visibility 5.10

Communication and visibility of the EU is a legal obligation for all external actions funded by

the EU.

This action shall contain communication and visibility measures which shall be based on a

specific Communication and Visibility Plan of the Action, to be elaborated at the start of

implementation.

For the purpose of enhancing the visibility of the EU and its contribution to this action, the

Commission may sign or enter into joint declarations or statements, as part of its prerogative

of budget implementation and to safeguard the financial interests of the Union.

13

In terms of legal obligations on communication and visibility, the measures shall be

implemented by the Commission, the partner country, contractors, grant beneficiaries and/or

entrusted entities. Appropriate contractual obligations shall be included in, respectively, the

financing agreement, procurement and grant contracts, and delegation agreements.

The Communication and Visibility Requirements for European Union External Action (or any

succeeding document) shall be used to establish the Communication and Visibility Plan of the

Action and the appropriate contractual obligations.