Document o f The World Bank

FOR OFFICIAL USE ONLY

Report No: 33861-ZM

PROJECT APPR [SAL DOCUMENT

ON A

PROPOSED CREDIT

IN THE AMOUNT OF SDR 13.7 MILLION (US$20 MILLION EQUIVALENT)

TO THE

REPUBLIC OF ZAMBIA

FOR A

MALARIA BOOSTER PROJECT

OCTOBER 20,2005

Human Development 1 Country Department 3 Africa Region

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.

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CURRENCY EQUIVALENTS

Exchange Rate Effective September 29, 2005

A C T AED AG AIDS AJPR A N C APL ASPEN AQ CAS CBMPCP CBOs CBOH C C M CDR C F A A CFR C H A Z CHWs C M H C M U COMBOR CPS CQ CRAIDS csos DALE DALY DATF DCPP DDCC D D T DFID DFTs

Currency Unit = Zambian Kwacha US$1 = 4,300

FISCAL YEAR January 1 - December 31

ABBREVIATIONS AND ACRONYMS

Artemisinine-based Combination Therapy Agency for Educational Development Auditor General Acquired Immune Deficiency Syndrome Annual Joint Program Review Antenatal Clinics Adaptable Program Loan Afr ica Safeguards Policy Enhancement Amodiaquine Country Assistance Strategy Community-Based Malaria Cohtrol Program Community Based Organizations Central Board o f Health Country Coordinating Mechanism Case Disability Rates Country Financial Accountability Assessment Case Fatality Ratio Churches Health Association o f Zambia Community Health Workers Commission on Macro-economics and Health CRAIDS Management Unit Community Malaria Booster Response Cooper at ing Partners Chloroquine Community Response to HIV/AIDS Central Statistics Offices Disability Adjusted L i f e Expectancy Disability-adjusted L i f e Years District AIDS Task Force Disease Control Priorities Project District Development Coordination Committee 4,4’-(2,2,2-trichloroethane- 1,l -diyl) bis (chlorobenzene) Department for International Development District Facilitation Teams

FOR OFFI(sLAL USE ONLY D H S DHCCs DHMT DFT DOT ECZ GDP GEF GFATM GOZ GNP GRZFMS GRZ FMRs FMPM F M S F P M HeaLY H P C HIV H M I S HNP HR HSSP ICB I C R IDA I E C I F A C IFMIS IMR IPSAS IPT IR(H)S ISR ITNs IVM JICA KAP KCM LIB LLINS M A C E P A M A P M B P FMS MBP

Demographic and Health Survey Distr ict Health Center Committees Distr ict Health Management Team Distr ict Facilitation Team Direct ly Observed Therapy Environmental Council o f Zambia Gross Domestic Product Global Environmental Fund Global Fund to Fight AIDS, Tuberculosis and Malaria Government o f Zambia Gross National Product Government o f Republic o f Zambia Financial Management System Government o f Republic o f Zambia Financial Monitoring Reports Financial Management Procedures Manual Financial Management System Financial Procedures Manual Healthy Life-Years Highly Indebted Poor Countries Human Immunodeficiency Virus Health Management Information System Health, Nutr i t ion and Population Human Resources Health Sector Support Program International Competitive Bidding Implementation Completion Report International Development Association Infomation, Education and Communication International Federation o f Accountants Integrated Financial Management Information System Infant Mortal i ty Rate International Public Sector Accounting Standards Intermittent Presumptive Treatment Indoor Residual (House) Spraying Implementation Status Report Insecticide Treated Nets Integrated Vector Management Japanese International Cooperation Agency Knowledge, Attitude and Practice Konkola Copper Mines Limited International Bidding Long Lasting Insecticide-Treated Ne ts Malaria Control Evaluation Program for Africa Multi-Country HIV/AIDS Program Malaria Booster Program Financial Management System Malaria Booster Project

Th is document has a restr icted d is t r ibut ion and may be used by recipients o n l y in the performance of the i r official duties. I t s contents may n o t b e otherwise 'disclosed wi thout FVorld Bank authorization.

M D G s M&E M I C S M I S MMR M O F M O H M O U M S L M T C T MTEF N C B NDP NGOs N H C NHSP N M C C NMSP PAD PATH PEPFAR PEMFA PEMFAR P D O PHO PW PRSP PSI PTAs RBM RDTs R F S SA SADC SBD SFH S H N SOE PTAs SEED S IL S I M SOE SP SSA SWAP

Millennium Development Goals Monitoring and Evaluation Multi-Indicator Cluster Survey Malaria Information System Maternal Mortal i ty Ratio Ministry o f Finance Ministry o f Health Memorandum o f Understanding Medical Store Limited Mother-To-Child Transmission Medium-Tenn Expenditure Framework National Competitive Bidding National Development Plan Non-Governmental Organizations Neighborhood Health Committees National Health Strategic Plan National Malaria Control Centre National Malaria Strategic Plan Project Appraisal Document Partnership for Appropriate Technologies in Health President’s Emergency Program for AIDS Rel ief Public Expenditure Management and Financial Accountability Public Expenditure Management and Financial Accountability Review Project Development Objective Provincial Health Offices Project Implementation Unit Poverty Reduction Strategy Paper Population Service International Parent Teachers Associations R o l l Back Malaria Rapid Diagnostic Tests Regional Facilitators Special Account Southern African Development Community Standard Bidding Document Society for Family Health School Health and Nutr i t ion Statements o f Expenditures Parent Teachers Associations Support for Economic Expansion and Diversification Specific Investment Loan Sector Investment and Maintenance Loan Statements o f Expenditures Sulphadoxine-P yrimethamine Sub-Saharan Afr ica Sector-wide Approach

TB TDRC TOR TOT TEVET TWGs USMR U N D P UNICEF UNZA U S A I D VHW WHO ZAMSIF ZANARA Z M B P

Tuberculosis Tropical Disease Research Center Terms o f Reference Training o f Trainers Technical Education Vocational & Entrepreneurship Training Technical Working Groups Under-Five Mortal i ty Rate United Nations Development Program United Nations International Children’s Fund University o f Zambia United States Agency for International Development Village Health Worker Wor ld Health Organization Zambia Social Investment Fund Zambia National Response to HIV/AIDS Zambia Malaria Booster Project

Vice President: Gobind Nankani Country ManagerDirector: Hartwig Schafer

Sector Manager: Dzingai Mutumbuka Muhammad Ali Pate Task Team Leader:

ZAMBIA Zambia Malaria Booster Project

CONTENTS

Page

STRATEGIC CONTEXT AND RATIONALE ................................................................. 4 A . 1 . 2 . 3 .

Country and sector issues .................................................................................................... 4

Higher level objectives to which the project contributes .................................................... 5

PROJECT DESCRIPTION ................................................................................................. 6

Program objective ............................................................................................................... 6

Rationale for Bank involvement ......................................................................................... 5

B . ............................................................................................................ 1 . Lending instrument- 6

2 . 3 . Project development objective and key indicators 6

4 . Project components 6

5 . 6 .

.............................................................. .............................................................................................................

Lessons learned and reflected in the project design ............................................................ 8

Alternatives considered ....................................................................................................... 9

Partnership arrangements .................................................................................................... 9 2 . Institutional and implementation arrangements 11

3 . Monitoring and evaluation o f outcomeshesults 13

4 . Sustainability 14 Critical r i sks and possible controversial aspects ............................................................... 15

APPRAISAL SUMMARY ................................................................................................. 17

C . IMPLEMENTATION .......................................................................................................... 9

1 . ................................................................ ................................................................

. . . ..................................................................................................................... 5 . 6 . Loadcredit conditions and covenants 16 ...............................................................................

D . 1 . 2 . 3 . 4 . 5 . 6 .

Economic and financial analyses ...................................................................................... 17

Technical ........................................................................................................................... 18

Social ................................................................................................................................. 21

Safeguard policies ............................................................................................................. 23

Policy Exceptions .............................................................................................................. 23

........................................................................................................................... Fiduciary 18

1

Annex 1: Country and Sector or Program Background ......................................................... 24

Annex 2: M a j o r Related Projects Financed by the Bank and/or other Agencies ................. 26

Annex 3: Results Framework and Monitoring ........................................................................ 28

Annex 4: Detailed Project Description ...................................................................................... 33

Annex 5: Estimated Project Costs ............................................................................................. 38

Annex 6: Institutional and Implementation Arrangements ................................................... 39

Annex 7: Financial Management and Disbursement Arrangements ..................................... 47

Annex 8: Procurement Arrangements ...................................................................................... 58

Annex 9: Economic and Financial Analysis ............................................................................. 61

Annex 10: Safeguard Policy Issues ............................................................................................ 79

Annex 11: Project Preparation and Supervision ..................................................................... 81

Annex 12: Documents in the Project F i l e ................................................................................. 82

Annex 13: Statement o f Loans and Credits .............................................................................. 83

Annex 14: Country at a Glance ................................................................................................. 84

Annex 15: Maps (No . IBRD 33514) ........................................................................................... 86

.. 11

ZAMBIA

INTERNATIONAL DEVELOPMENT 20.00 AS SOCIATION

ZAMBIA MALARIA BOOSTER PROJECT

0.00 20.00

PROJECT APPRAISAL DOCUMENT

Total:

AFRICA

20.00 20.00 0.00

AFTH1

Date: October 20,2005 Team Leader: Muhammad Ali Pate Country Director: Hartwig Schafer Sectors: Health (100%) Sector ManagedDirector: Dzingai B. Themes: Other communicable diseases Mutumbuka (P);Child health ( S ) Project ID: PO96131 Environmental screening category: Partial

Assessment Lending Instrument: Specific Investment Loan Safeguard screening category: B

[ ] Loan [XI Credit [ ] Grant [ ] Guarantee [ ] Other:

For Loans/Credits/Others: Total Bank financing (US$m.): 20.00 ProPosed terms:

Responsible Agency: Ministry o f Health Ndeke House Lusaka Zambia

1

?Y 6 b u a l 5.00 hmu la t i ve 5.00

Expected closing date: January 31, 2010

7 8 9 0 0 0 0 0 5.00 5.00 5.00 0.00 0.00 0.00 0.00 0.00

10.00 15.00 20.00 20.00 20.00 20.00 20.00 20.00

[ ]Yes [XINO Does the project depart from the CAS in content or other significant respects? Re$ PAD A.3 Does the project require any exceptions from Bank policies? Re$ PAD D. 7

I s approval for any policy exception sought from the Board? Does the project include any critical r isks rated “substantial” or “high”? Re$ PAD C.5 Does the project meet the Regional criteria for readiness for implementation? Re$ PAD D. 7 Project development objective Re$ PAD B.2, Technical Annex 3 The overall project development objective i s to increase access to, and use of, interventions for malaria prevention and treatment by the target population. The target population i s the population o f Zambians living in al l the 72 malarious districts o f the country. However the priority groups among this target population wil l be children under the age o f five years, pregnant women and al l those infected with malaria.

years o f age who sleep under a treated bed net f rom 30% to 40% by 2008; (ii) increase the percentage o f pregnant women who receive a complete course o f intermittent presumptive treatment for malaria from 45% to 55% by 2008; (iii) increase the percentage o f people in I R S - eligible districts areas who sleep in appropriately sprayed structures from 40% to 60% by 2008. These objectives are derived from the overall objectives o f the National Malaria Program, to which the project contributes. Project description [one-sentence summary of each component] Re$ PAD B.3.a, Technical Annex 4 The project’s contribution to the national malaria program will be organized in three components, which comprise elements derived from the malaria strategic plan.

[ ]Yes [XINO

[ ]Yes [XINO

[XIYes [ ] N o

[XIYes [ ] N o

Have these been approved by Bank management? [ ]Yes [ IN0

The specific objectives o f the project are to: (i) increase the percentage o f children under 5

Component 1 (a): Strengthening the health system to improve service delivery: This component wil l support health system strengthening activities through the district basket pooled funding arrangement whereby al l 72 district health management teams wil l receive additional fund allocation to improve their malaria service delivery. The project wi l l finance the supply and distribution o f insecticide treated bednets (ITNs), increase the coverage o f indoor residual spraying (IRS) in eligible areas led by the District Health teams, provision o f the rapid diagnostic tests (RDTs) and microscopes to improve diagnostic accuracy, and case management and support for intermittent presumptive treatment o f pregnant women (IPT). Component 1 (b): Improved environmental health management: This sub-component o f the

project wil l finance activities aimed at improving the management o f health care waste associated with malaria control and the environmental monitoring for impact o f insecticide use.

2

Component 2: Community Malaria Booster Response (COMBOR): This component wil l provide support to strengthen local capacities to effectively prevent, control and treat malaria and mitigate some o f the demand-side constraints to effective malaria control programming.

Component 3 : Program Management: This component will support strengthening the capacity o f the National Malaria Control Centre to provide technical leadership and coordination o f the implementation o f the national program. Which safeguard policies are triggered, if any? Re$ PAD D. 6, Technical Annex 10 Two safeguard policies are triggered by this project: Environment Assessment (OPIBPIGP 4.01) and Pest Management (OP 4.09).

Significant, non-standard conditions, if any, for: Re$ PAD C. 7 Board presentation:

Loadcredit effectiveness: MOH Operations Guidelines developed or modified, that wil l specify the operational guidelines and policies that wil l be used during implementation. The Operations Guidelines wil l cover financial management, procurement, institutional framework and implementation modalities, monitoring and evaluation, and environmental safeguards. Covenants applicable to project implementation: Disbursement conditions:

according to agreed procedures as from September 30,2005.

establishment o f a performance monitoring system and based upon eligibility criteria and terms identified in the M O H Operations Guidelines that wil l be approved prior to effectiveness. For Community sub grants, disbursements wil l be based upon agreed procedures in the M O H Operations Guidelines.

There wil l be provision for retroactive financing, up to $200,000 for expenditures incurred

Disbursement to the Category 2 District Basket Sub-Grant wi l l be contingent upon

Legal Covenants: Maintain within M O H the following specialists whose qualifications and experience shall at a l l

times be satisfactory to the Association: (i) Chief Accountant, (ii) Chief Procurement Officer, and (iii) Principal Accountant. Establish and maintain: (i) a procurement record management system for contract progress and

expenditures at MOH; (ii) employ a procurement technical advisor for at least one year to assist the MOH in streamlining i t s procurement processes.

Maintain within the MOH a functioning: (i) H M I S Unit; (ii) Donor Coordination Unit for the health SWAp.

Maintain within the M O H a functioning and adequately staffed National Malaria Control Centre and a Coordinator o f the National Malaria Control Centre. The MOH shall organize an Annual Joint Malaria Program Review (AJPR) as part o f the Joint

Annual Health Sector (SWAp) Review no later November 30 o f each year to review the progress of implementation o f the sector program and agree o n the implementation plan and budget for the subsequent year. Implement the health waste management plan and vector management action plan.

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A. STRATEGIC CONTEXT AND RATIONALE 1. Country and sector issues

Poverty has been persistent and worsening in Zambia. In 2002-03, the Central Statistical Office reported 67.0 percent o f the Zambian population as poor. Although poverty remains centered in rural areas, with as much as 83.1 percent o f rural households poor, the incidence o f urban poverty has increased from 48.6 percent in 1991 to 56.0 percent in 1998. The worsening situation in Zambia i s captured in the decline o f the UNDP Human Development Index from 0.48 in 1985 to 0.43 in 2000.

Social services have not grown commensurate with need, mainly because the Zambian macroeconomic situation remains very fragile. The Zambian health sector i s facing numerous problems principally caused by the double burden o f declining resources in real terms and an escalating disease burden. Total expenditures on health as percent o f GDP have fallen somewhat from 6.0 percent in 1997 to 5.7 percent in 2001. But, per capita total expenditures on health have fallen significantly from US$24 in 1997 to US$19 in 2001 (WHO Wor ld Health Report 2004).

Few health indicators have improved in Zambia over the last ten years and some have deteriorated. L i f e expectancy at birth has dropped to 37 years, the under-five mortality rate has increased to 168 in 2001/ 02 and the infant mortality rate has remained high at 95 per 1000. The maternal mortality rate was 729 per 100,000 in 2001/02. Zambia i s the fifth worst affected country in HIV/AIDS, with an infection rate o f 16 percent in the 15-45 age groups.

Combating malaria, the third o f the Millennium Development Goals (MDG) in health, i s a large challenge in Zambia, where i t i s the leading cause o f morbidity and the second highest cause o f mortality, especially among children and women (World Bank, 2005). Malaria accounts for 50,000 deaths a year in the country, and 37 percent o f all outpatient hospital visits (CSO DHS, 2003). Malaria incidence rates have tripled in the past three decades from 121 cases per 1,000 in 1976 to 376 cases per 1,000 in 2004 (HMIS).

The Government o f Zambia has given high priority to dealing with the high morbidity and mortality associated with malaria. A 5-year national Ro l l Back Malaria (RBM) strategic plan has been developed by the National Malaria Control Centre (NMCC), focusing on expanding the coverage and utilization o f effective prevention and treatment interventions for malaria. There are several challenges in improving malaria control in Zambia that wil l need to be addressed:

0 Integrated vector management: addressing the l ow coverage and l o w use o f insecticide treated bed nets especially among the poor, and also the l ow coverage o f indoor residual spraying interventions.

0 Scaling up o f prompt and effective case-management, including Intermittent Presumptive Treatment (IPT) o f malaria in pregnancy and improved malaria diagnosis, referral and treatment.

0 Addressing the human resource capacity constraints in the health sector, especially at the front-line service delivery where malaria places a high burden.

The Government has put in place a number o f measures to address the governance issues, which plagued the Zambian health sector during the late 1990s. The Government has adopted a policy o f zero tolerance to cormption. A number o f cases o f cormption during the late 1990s are now being prosecuted in the courts. A new Public Finance Act has been

4

enacted, which wil l hold the controlling officer in a govemment institution accountable for any misuse o f public funds. The institutional and organizational arrangements in the health sector have matured with more transparency between the Govemment and i t s partners through the sector-wide approach and harmonization efforts.

2. Rationale for Bank involvement

The compelling reason for the Bank’s involvement in malaria control i s the impact o f the disease on economic development and poverty. Malaria accounts for a high proportion o f burden o f disease and preventable mortality, thereby impairing human development. I t i s estimated that malaria accounts for a reduction in Zambia’s GDP by 1.5 percent annually. The economic burden o f malaria, being a major cause o f absenteeism from work and school and the costs associated with seeking care, mean that successful malaria control will provide positive returns for economic development. The link between the malaria disease burden and poverty i s close. The cost to households to access effective malaria prevention interventions i s not affordable by the poor, who live on less than $1 per day. Also, when infected, the poor are less l ikely to seek effective care and suffer more from wages lost as a result o f i l lness and care seeking. The Wor ld Bank funding will fill critical gaps left by the Global Fund and other financiers in the national malaria program and ensure achievement o f the program’s desired outcomes and impact.

The Bank’s involvement in malaria control brings clear comparative advantages. The Bank: (i) i s well positioned to forge the linkages between the macroeconomic context, health sector and the malaria program; (ii) can play a convening role for both the traditional and non- traditional partners involvement; (iii) has global and regional experience with health system development, health sector budgeting and planning, dealing with cross-cutting issues such as the human resource crisis and the implementation o f multi-sector operations; and (iv) has strategic access, and support, for the process o f developing the national development plan and the medium-term expenditure framework, which will improve prospects for long term program sustainability.

3. Higher level objectives to which the project contributes

The Govemment o f Zambia i s determined to intensify i t s efforts on malaria control during the next 6-year planning cycle covered by the National Development Plan (NDP) 2006-20 1 1. The stated vision o f the Government i s a “Malaria-free Zambia”. The National Health Strategic Plan, which i s synchronized with the NDP, has as i t s main theme “Working towards achieving the MDGs”. The reduction o f malaria morbidity and mortality i s one o f the key MDGs for reducing the burden o f communicable diseases. In response to the magnitude o f the malaria problem in Zambia, the country’s Poverty Reduction Strategy Paper (PRSP) for 2002-2004, which was published in March 2002 and preceded the NDP, highlighted the importance o f addressing malaria as a priority area within the framework o f an integrated approach to health care and as part o f the Rol l Back Malaria Initiative.

The proposed project i s directly supportive o f the Bank’s results-based Zambia Country Assistance Strategy (CAS) for 2004-2007. The project i s aligned with the CAS strategic pillar 2, which i s focused on improving lives and protection o f the vulnerable. The project wil l contribute towards achieving the MDG goals o f reducing infant and child mortality, maternal mortality and control o f communicable diseases.

5

B. PROJECT DESCRIPTION 1. Lending instrument-

The project will be financed using a specific investment loan (SIL) as the lending instrument. The rationale for choosing this instrument i s to provide a means for boosting the current level of malaria control expenditures and to allow for adequate flexibility in supporting the priorities o f the National Malaria Control Program, as articulated in the National Malaria Strategic Plan for 2006-1 1. The SIL will enable the Bank to support strengthening o f the existing health sector mechanisms while improving malaria specific outcomes. As a donor of last resort, choice o f the S I L will allow the flexibility o f allocating funds based on approved annual work programs so that adjustments can be made to cover critical gaps when they emerge.

2. Program objective

The Govemment of Zambia’s national malaria program has three main objectives to be achieved by 201 1 : (i) 75 % reduction in the incidence rate o f malaria and 50% reduction in malaria case fatality rate (mortality); (ii) 20 % reduction in all-cause under-five child mortality; and (iii) provide economic pay offs at household and national levels as a result o f malaria control. The proposed project wil l contribute to government efforts to accelerate and intensify malaria interventions by supporting the rapid expansion in coverage and utilization o f effective prevention and treatment. I t will also strengthen the institutional capacity o f the health sector and communities to respond to the malaria epidemic.

3. Project development objective and key indicators

The project i s designed to operate within the national program context. The development objectives o f the project are therefore the specific objectives o f the program that wil l be achieved in the four years coinciding with the project implementation period.

The overall project development objective i s to increase access to, and use of, interventions for malaria prevention and treatment by the target population. The target population i s the population o f Zambians living in al l the 72 malarious districts o f the country. However the priority groups among this target population will be children under the age o f five years, pregnant women and al l those infected with malaria.

The specific objectives o f the project are to: (i) increase the percentage o f children under 5 years o f age who sleep under a treated bed net from 30% to 40% by 2008; (ii) increase the percentage o f pregnant women who receive a complete course o f intermittent presumptive treatment for malaria from 45% to 55% by 2008; (iii) increase the percentage o f people in IRS-eligible districts areas who sleep in appropriately sprayed structures from 40% to 60% by 2008. These objectives are derived from the overall objectives o f the National Malaria Program, to which the project contributes. The baselines for these objectives have been established. The existing monitoring and evaluation tools, such as the Health Management Information System, and other tools that would be developed for the program, would provide the basis for monitoring and evaluation during implementation o f the project.

4. Project components

The project’s contribution to the national malaria program will be organized in three components, which comprise elements derived from the malaria strategic plan.

6

Component 1 (a): Strengthening the health system to improve service delivery: T h i s component will support health system strengthening activities through the district basket pooled funding arrangement whereby all 72 district health management teams will receive additional fund allocation to improve their malaria service delivery. The project will finance the supply and distribution o f insecticide treated bed nets (ITNs), increase the coverage o f indoor residual spraying (IRS) in eligible areas led by the District Health teams, provision o f the rapid diagnostic tests (RDTs) and microscopes to improve diagnostic accuracy, and case management and support for intermittent presumptive treatment o f pregnant women (IPT). The district basket sub-grant mechanism will be used to pool with the other partners to finance operating costs o f implementing the program for scaling up THE malaria response integrated within the district work plans.

The init ial disbursement o f funds to the district basket will be made after a satisfactory performance monitoring system i s developed to track performance o f the District Health Management Teams (DHMTs), consistent with the results-focus o f the project. Large ticket items such as I T N s , IRS equipment and supplies, and laboratory supplies wi l l be centrally procured and distributed to the DHMTs as contributions to the basket “in kind”. The project wil l also support expansion o f the Community-Based Malaria Control Program (CBMPCP) linked to the DHMTs. The project wil l provide support to address that part o f the human resource crisis in the health sector that i s directly relevant for malaria control in the front-line service delivery, i.e. district level staffing. To complement the public health service delivery systems, core prevention and control activities wil l be implemented in collaboration with the private sector, civil society and other public sector l ine ministries based on their comparative advantage and expertise.

Component 1 (b): Improved environmental health management: T h i s sub-component o f the project will finance activities aimed at improving the management o f health care waste associated with malaria control and the environmental monitoring for impact o f insecticide use. The project wil l support activities to address the weaknesses identified by the WHO assessment o f the vector management program in Zambia and outlined in the Vector Management action plan agreed during project appraisal. The activities to be financed include training o f environmental health technicians, equipment and vector susceptibility studies.

Component 2: Community Malaria Booster Response (COMBOR): This component wil l provide support to strengthen local capacities to effectively prevent, control and treat malaria and mitigate some o f the demand-side constraints to effective malaria control programming. For example, while ITN ownership by households i s rising, actual use i s lagging. T h i s project component will support community demand-driven interventions: (i) directly through financing o f sub-projects by community based organizations; and (ii) through the facilitation o f interventions by communities and local leaders to strengthen the malaria control activities o f other implementers. The community malaria booster response to malaria will help to both extend the geographic coverage o f core malaria control interventions, particularly in the rural communities, and increase the use o f the interventions, I t wil l involve the communities to promote the behavior change that i s necessary for malaria interventions to be effective within the community. The design o f this component was informed by the social assessment carried out during project preparation, which used qualitative methods to explore knowledge, attitudes and practices o f communities on malaria control. The COMBOR component will be piggy-backed on the brand name and network infrastructure of the Community Response to HIV/AIDS (CRAIDS) demand-driven fight against HIV/AIDS. The community driven component (COMBOR) wil l be an extension o f the more supply-oriented CBMPCP, which i s under Component 1. The activities to be

7

supported under the COMBOR wi l l focus particularly on encouraging behavior change, advocacy on the appropriate usage o f malaria prevention interventions, and capacity building at the community and district level.

Component 3 (a): Program Management: T h i s component wil l support strengthening the capacity o f the National Malaria Control Centre to provide technical leadership and coordination o f the implementation o f the national program. The component wil l support strengthening o f the human resource capacity o f the NMCC, monitoring and evaluation o f the malaria control program, with all inputs complementary to the support from other partners, including the conduct o f data gathering activities, analysis, and dissemination o f operation research findings. The project will finance the institutional capacity strengthening o f the M O H in procurement and financial management.

5. Lessons learned and reflected in the project design

a) Institutional development and human resource management: The intensive learning Implementation Completion Report (ICR) for the last Wor ld Bank financed health project in Zambia, the Health Sector Support Project (IDA Credit No. 2660-ZA, 1994), highlighted decentralization o f health services delivery by the establishment o f functional district health teams funded through a novel “basket” arrangement as an important achievement. However, the ICR identified key lessons for the Bank, including: (i) weak institutional capacity for procurement and financial management within the Ministry o f Health (MOH), which led to delays in project implementation; (ii) the need to emphasize human resource development so that staff in the health sector have proper incentives, have access to continued professional development, and are retained in the health system in a productive manner; and (iii) the importance o f establishing base-line indicators and a system for monitoring progress towards goals, The experience from the Zambia Project o f the Wor ld Bank’s Multi-Country HIV/AIDS Program (MAP) in Africa (IDA Grant H017-0-ZA approved in December 2002) has shown that i t i s vital that viable existing institutions are strengthened, rather than creating completely new untested institutions. The Malaria Booster Project w i l l strengthen and use the existing MOH systems for procurement, financial management, and monitoring and evaluation based on the fiduciary capacity assessment completed during project preparation, and intensiJjr focus on improving service delivery.

b) Coordination: In the context where there i s already a multitude o f partners, and new ones are coming in, it i s critical that a sound partnership framework i s developed and agreements on joint programming, procedures and monitoring systems developed. T h i s wil l ensure that duplications are minimized and that activities are prioritized.

The Malar ia Booster Project chose to operate within a sector-wide approach framework so that I D A contribution as donor of last resort is tailored towardsJillingpriority gaps, The National Malaria Strategic Plan w i l l be the basis for IDAJinancing. Annual jo in t malaria program reviews and workplanning w i l l be carried out in September of each year, together with the bi-annual health sector reviews.

c) Specific lessons from malaria control in Zambia: (i) cost sharing in the distribution o f I T N s i s a barrier to access by poor households; (ii) limitation o f inputs has constrained scale- up efforts; (iii) there i s need to improve infrastructure for diagnosis; (iv) more attention should be given to financial sustainability o f new interventions, (vi) there i s an urgent need to address human resource constraints; and (vii) additional operations research i s needed to examine what works, when and why.

8

The Malar ia Booster Project has integrated these lessons in the design of the three project components. OnJinancial sustainability, the economic analysis of the project evaluated the sustainability of the use of the more expensive combination anti-malarial treatment.

6. Alternatives considered

“No project” vs. ”with If project: The “no project” alternative i s not acceptable, given the very high mortality and morbidity arising from malaria. There i s inadequate external, government, and household resources to finance the necessary prevention and treatment intervention.

Health vs. Multi-sector investment: The wide range o f interventions for controlling malaria and reducing i t s disease burden includes environmental interventions (large-scale spraying with insecticides, or more restricted indoor residual spraying, household prevention (through the use o f insecticide-treated nets)), and treatment with appropriate drugs. Investments in malaria control involve multi-sector efforts led by the health sector. The project i s designed to be led by the health sector, but i t s implementation will be multi-sectoral.

Sector-wide approach vs. intervention-speciJic vertical investments: In view o f Zambia’s needs, the project provides flexible financing that will complement funding from other donors in order to support a common malaria program that i s being scaled up. While the project i s focused to support specific technical interventions to control malaria, the project also takes into account that unless it provides support for broader investments in human resources (HR) and systems strengthening, the impact o f the specific technical inputs will be limited in reducing the malaria burden. Thus, the project will support specific interventions within the context o f Zambia’s well-established sector-wide program rather than acting as a stand-alone vertical malaria project.

Supply only vs. balanced supply and demand interventions: A model where only supply side interventions are financed was rejected because improving malaria-related outcomes requires both the supplies and behavior change to use the interventions provided. Empirical data from the DHS Survey, 2001, suggests that an effective malaria control program will need to combine both supply and demand side interventions to ensure increased coverage o f prevention and treatment activities, but also increased and consistent utilization o f these interventions.

Nationwide geographic focus: Malaria i s endemic throughout Zambia which jus t i f ies support to a national level strategy with interventions in a l l districts. The option o f focusing only on few districts was considered and rejected on epidemiologic grounds. However, for practical reasons, the project wil l begin by supporting IRS 10 eligible districts, while ITN distribution will in al l districts. The IRS eligibility o f districts was determined based on population pattern, malaria incidence and spray-eligible structures.

C. IMPLEMENTATION

1. Partnership arrangements

Since the launch o f the Ro l l Back Malaria (RBM) Initiative in 1998, the Government o f Zambia has been working closely with i t s RBM partners in the implementation o f the malaria control program through the Zambia RBM Strategy 2000-2005. In-country partnerships and multi-sectoral coordination mechanisms have been developed at various levels o f the health care system and have supported coordination and implementation o f the national program.

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National Level:

The following partnerships and organizational structures exist at the national level:

1.

2.

3.

Sector Advisory Group/Health Sector Committee: comprising the M O H and i t s cooperating partners, including IDA, in the health SWAP. T h i s partnership provides coordination o f resources and support implementation for the National Health Strategic Plan and the National Malaria Strategic Plan, coordinates resource allocation, approves disbursement of resources to hospitals and districts, and monitors and evaluates the National Malaria Control Program.

T h e National Malaria Task Force: Membership comprises deputy ministers from all line ministries concerned, WHO and UNICEF, and i s chaired by the Deputy Minister o f Health. The Task force reports to the Vice-president and to Cabinet through the Minister o f Health. The Task force provides a platform reflecting higher political commitment and monitors the implementation o f the National Malaria Strategic Plan. The N M C C facilitates and provides the secretariat to the bi-annual meetings o f the National Malaria Task Force.

National M a l a r i a Control Centre Technical Work ing Groups: The technical working groups meet monthly to provide guidance in the implementation o f program activities, monitor progress and assist the development o f guidelines. Membership includes N M C C staff and national RBM partners from c iv i l society, public and private institutions. The chair o f each TWG i s appointed for the members. The TWGs include Vector Control, Case Management, IEC and Monitoring and evaluation.

The N M C C facilitates the reporting on progress o f implementation o f malaria activities to the Health Sector Committee, the Implementation Review Sub-committee and the Health Sector Advisory Group.

Provincial Level:

Although there i s a provision for Provincial Malaria Task Forces, these have not been established in all provinces; where they exist, they are not fully functional. At this level, the provincial health offices and staff are responsible for providing technical support, oversight and monitoring malaria interventions.

District Level:

There i s a District Malaria Task Force in each o f the 72 districts, functioning as part o f the District Health Management Team. The Distr ict Malaria Task Forces oversee and monitor the implementation o f malaria activities at the district level, as part o f the District Health Management Team. Membership includes al l government departments and NGOs. The Task Force i s chaired by the Director o f the District Health Management Team. The Distr ict Health Management Team (DHMT) has the full responsibility for the implementation o f malaria prevention and control programs as part o f their annual work plans. The DHMT i s led by the District Director o f Health and includes officers in Environmental Health, Health Information, Maternal and Child Health, Tuberculosis, Sexually Transmitted Infections/HIV/AIDS and malaria. Hospital Advisory Committees, Health Center Advisory Committees, and Neighborhood Health Committees--which operate around hospitals, health centers and neighborhood health posts--are the formal link between the health delivery system and the population within a district. These popular participatory structures include

10

representatives from communities and c iv i l society in each catchment’s area. They also contribute to resource mobilization, planning and implementation o f plans for each catchment’s area and facilitate information dissemination to communities on public health issues.

Community Level:

Neighborhood Health Committees consist o f community representatives from (on average) three villages and facilitate links with the health sector staff, information dissemination on key public health issues, and mobilization o f communities if and when necessary. At the community level, Community Health Workers (CHWs) are key agents who guide, sensitize and assist community members on basic health care interventions including malaria. These are volunteers who are trained on basic identification, prevention and referral methods for common illnesses. Ministry o f Health provides them with training, means o f transportation and f i rst aid kits, but the communities are expected to provide them with in-kind contributions for their services. In addition, community project committees, with assistance from the CHWs and Traditional Birth Attendants (TBAs), wil l be responsible for the implementation of demand driven malaria prevention and control activities.

Other Partners:

There are non-traditional partners to the health sector, who will complement existing resources with their support. Such partners include large international NGOs, for example Rotary International and Gates Foundation, who may enter into agreements with the government to assist in scaling-up the national response to malaria.

2. Institutional and implementation arrangements

Project implementation wil l be embedded within the implementation o f the National Malaria Control Program. The program wil l build on the existing institutional capacity and systems within the Ministry o f Health, as well as work with implementing agencies (governmental and non-governmental) or partners with complementary expertise. There wil l be no stand- alone project implementation unit. The M O H structures for implementation will be used for the project as will other partners in the sector-wide approach. for procurement and financial management support, and provide oversight to the various implementing agencies within the project. Within the MOH, the malaria program coordination and management functions are delegated to the National Malaria Control Centre (NMCC) .

The MOH will be responsible

As currently constituted, N M C C has responsibility for provision o f technical guidelines on malaria control, and the coordination o f malaria control activities o f the various national RBM partners. The N M C C serves as the Secretariat for FU3M activities and links the service delivery points with the national RBM partners. Hence, the NMCC will coordinate the implementation o f project components within the context o f the National Malaria Control Program and provide strategic direction, technical support and quality control.

Specific technical functions o f the N M C C will include: policy formulation and resource mobilization; development o f district and national strategic plans; development o f guidelines on malaria programmatic areas; preparation, and dissemination o f IEC materials; updates to the Country Coordinating Mechanism and RBM partners on program implementation; assistance to DHMTs in implementation o f malaria control activities and conducting monitoring and evaluation, including operational research. N M C C will provide semiannual

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reports to the MOH, HSC and to IDA on implementation progress o f the national malaria program and the IDA supported Malaria Booster Program.

N M C C will submit for approval Annual Work Plans and Budgets to the Permanent Secretary MOH after which they wil l be submitted to IDA for no-objection. N M C C will report bi- annually to the Health Sector Committee, comprised o f the M O H and cooperating partners. On a bi-annual basis, N M C C will also report to the National Malaria Task Force on the National Malaria Control Program implementation progress.

The implementation o f Component 1 -Strengthening the national health system- will be primarily through the pooled district basket funding mechanism, whereby IDA funds are pooled with other donor funds to finance incremental operating costs for malaria related interventions by the Distr ict Health Management Teams (DHMTs). The DHMTs will be responsible for the implementation o f malaria related interventions included in their Annual Work-Plans/Budgets, which are approved through the Sector Advisory Group. Existing major malaria prevention and control programs such as ITN distribution through various mechanisms including mass distribution and distribution through ante-natal clinics, Indoor Residual Household Spraying, case management, intermittent presumptive treatment, and improving diagnostic capacity wil l be scaled up. The MOH will carry out the central procurement o f key goods, equipment and supplies. Storage and transportation o f the goods to districts and further delivery points will be handled by either the Medical Stores andor private sector, NGO contractors, or other partners, whichever i s appropriate based on capacity and delivery requirements. Similarly, IEC, training activities and monitoring and evaluation o f the program will be implemented through the existing structures o f the health care system at the provincial, district and community level using the provincial health offices, DHMTs, Health Centre Committees, Neighborhood Committees, Community Health Workers and Traditional Birth Attendants.

Component 1 (b)-improved environmental health management--will be implemented by MOH, N M C C and DHMTs depending on the nature o f the activities. The majority o f the activities will be incorporated into district annual work planshudgets and financing will be directly channeled to the DHMTs. Institutional level interventions and national IEC campaigns will be coordinated by MOH and N M C C and implemented by the DHMTs with the support o f the Provincial Health Offices (PHOs). N M C C in collaboration with the Environmental Health Unit in the MOH will ensure that W H O guidelines on vector control, specifically on pesticide and DDT use, are adhered to. DHMTs will be provided, as part o f their malaria program management, with resources for (i) appropriate training, documentation, and information dissemination; (ii) adequate equipment and supplies including protective gear; (iii) disposal o f waste; and (iv) program monitoring.

Component 2, the Community Malaria Booster Response (COMBOR), wil l provide support to strengthen local capacities to effectively prevent, control and treat malaria at the community level. I t wil l be implemented by community based organizations and administered by CRAIDS, the unit responsible for implementation o f the HIV/AIDS community response under the ZANARA program. CRAIDS will be sub-contracted by N M C C to administer Component 2 given i t s existing staff capacity and decentralized organizational structure to mobilize communities, generate, appraise, approve and supervise core community based interventions (sub-projects). Details o f the working arrangements will be outlined in a Memorandum o f Understanding between CRAIDS and N M C C / M O H and in the revised M O H Operations Guidelines, which will be developed and approved prior to project effectiveness.

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Component 3 will support institutional capacity development in N M C C and the M O H for the coordination, implementation, and monitoring and evaluation o f the program. Eligible activities wil l be financed through annual work plans o f each entity. M O H and N M C C may form partnerships with other public sector institutions, private sector or c iv i l society organizations based on areas o f expertise in support o f these functions.

There will be one Special Account which will be administered by the MOH. The disbursement o f all funds through the Special Account wil l be based on authorized expenditures within Annual Work plans. Funds for interventions to be implemented by DHMTs will be directly transferred to district accounts in tranches following the district basket fund guidelines and timetable. Disbursements for centrally managed activities will be based on agreed plans contractual arrangements. Disbursement o f funds for the Community Malaria Booster Response activities will be against approved sub-projects and will be transferred directly from the Special Account held by the M O H to the community project accounts. The details o f each o f the various disbursement mechanisms will be provided in the M O H Operations Guidelines that will be approved by IDA as a condition prior to the Credit effectiveness.

3. Monitoring and evaluation of outcomedresults

The Project’s support to M&E i s guided by the following criteria: (i) support for the National Malaria Strategic Plan (NMSP) development o f a single national malaria M&E system that all stakeholders buy into; (ii) support for decentralized M&E systems, that enable districts to monitor and thereby improve their performance; (iii) support for institutional, human resource and systems development; (iv) support for monitoring and evaluation activities which are not being financed by other development partners; and (V) reliance as far as possible on joint review processes under the NMSP.

The Malaria Booster Project (MBP) emphasizes ongoing program improvement and leaming- by-doing. This requires an effective monitoring and evaluation system, to guide continuous project adjustments. The following activities would be undertaken to support the development of a robust system to monitor and evaluate the response to malaria in Zambia o f which the M B P i s a part:

The project will support the N M C C to operationalize the recently developed M & E framework for the National Malaria Strategic Plan. In collaboration with the Gates Foundation-funded Malaria Control and Evaluation Program for Africa (MACEPA), the M B P will support existing and new data sources that need to be developed to fully operationalize the framework. As the M B P will support the malaria response in al l 72 districts in Zambia, the project will assist the N M C C to develop decentralized M&E systems to enable districts to improve their performance. The project will specifically assist districts to develop district M&E systems that align to the national M&E framework for malaria. In order for a sound M&E system for the NMSP to be in place, the N M C C needs to have adequate institutional and human resource systems in place. The M B P w i l l finance the recruitment o f short-term and long-term technical assistance to strengthen the N M C C M&E systems. The Global Fund, WHO, and MACEPA are making a significant contribution to supporting the development o f a robust M&E system for the NMSP. The MBP will complement these efforts by providing technical and financial support for M&E activities which are not being financed by these and other development

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partners. Training courses for local NGOs and CBOs implementing malaria interventions through the community response component would be developed and conducted in the first year and repeated annually, which would equip staff within these organizations with the requisite ski l ls required to discharge their M&E responsibilities in relation to ZMBP. The M B P wil l assist the N M C C in financing key M & E activities including the f i f th RBM baseline survey in 2007 and an annual qualitative social impact survey, depending upon the funding gaps that exist. The qualitative social impact survey will be building upon the base provided by the rapid social assessment carried out during project preparation. The MBP would assist NMCC to develop a program activity monitoring system for all implementers o f malaria interventions in Zambia. Finally, M B P wil l assist the N M C C in establishing regular M&E Dissemination and Data U s e Mechanisms, including website, electronic and print distribution and annual M&E dissemination meetings (Annual Joint Program Review) at national and provincial levels.

4. Sustainability

The Govemment’s commitment to the malaria program has been sustained through the f i rs t phase o f the RBM partnership program 2000-2005. Evidence for the government’s ownership o f the malaria control strategy include the enactment o f legislation to waive taxes and tariffs o n impregnated bed nets and insecticides and a change o f anti-malarial treatment policy to use more effective but costly drugs. The project’s support for the district basket wil l enable health system issues such as human resources, and monitoring and evaluation relating to the district health system to be addressed with a long-term goal o f strengthening the overall health care system.

District level planning for malaria activities will be integrated with the district MTEF planning process to ensure that future funding flows through the Government will finance recurrent costs to sustain program activities at the district level. The recurrent cost required for the program has been estimated using the costing tool developed by the RBM partnership. The government commitment to the implementation o f the National Malaria Strategic Plan and the National Malaria Control Program wil l be tracked through i t s making adequate allocation o f the resources gained from reaching the HIPC completion point and the debt re l i e f by the G8 countries.

The change o f the malaria drug-policy in Zambia to the first-line use o f Artemisinine-based combination therapy (ACT) comes at a significantly increased cost. ACT’S are financed through the Global Fund and are now widely available in the public sector. In the short and medium term the financing o f ACTS i s therefore not expected to be a problem. In the long- term the price o f A C T i s expected to decrease considerably making them more affordable and a sustainable choice for the treatment o f malaria.

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Risks

Overall Rating

Risk Mitigation Measures

Institutional and implementation capacity constraints result in bottle-necking o f program and project implementation. Reorganization o f the M O H results in deteriorating staff morale and exodus from the sector. Human resources crisis limits capacity to deliver services.

Poor coordination among various partners in the program results in inefficiency and duplication o f efforts.

Lack o f a robust financial management system to track expenditure to the Districts and to monitor that funds are used for their intended purpose.

De-motivated c iv i l servants are in charge o f the financial management system. Poor governance culture, corruption, lack o f accountability and poor compliance with existing regulations/ procedures and lack o f sanctions for offenders, that funds may not be used for intended purposes in an efficient and economic way.

Procurement planning capacity weakness and poor logistics arrangements result in commodities being delayed or wasted.

The project wil l finance capacity strengthening through training, to include development o f systems and procedures and resource mobilization for sustained program development and implementation The Government i s very aware o f the risk and pledged to manage the reorganization so that technical staff i s retained under the new structure.

Prioritization o f support for human resources l inked to malaria control at district level. The project wil l mobilize latent human resources through already mobilized c iv i l society for H IV /A IDS and the private sector. The project wil l also explore innovative incentive schemes. The project wil l be developed around coordination arrangements o f the national program. Annual program review wil l be conducted together with al l financing partners. T h e project will also be firmly anchored within the health SWAP coordination mechanisms. Installation o f Navision accounting system package fully integrated with the GRZ FMS, able to produce timely and relevant monitoring reports. The system wil l be installed in the central MOH and expanded to cover provinces and districts.

IDA to support human resource development issues in the health sector jo int ly with other CPs.

The new Public Finance Ac t enacted by Parliament and Financial Regulations produced, i f enforced, i s a step in the right direction and can mitigate the risk. Review o f FMRs by the Health Sector Committee (HSC) and timely fo l low up o f accountability issues.

A financial procedures section o f the MOH Operations Guidelines will be produced that wil l document al l internal control procedures to be strictly enforced. Institute a system o f sanctions for non compliance. The series o f cases being prosecuted in the courts o f law for abuse o f public office may be sending a positive message.

The widely publicized zero tolerance for corruption at the highest political level may serve as a deterrent. Increased frequency of financial management supervision missions. Procurement technical assistance wil l be provided to the MOH, based o n the procurement capacity assessment carried out; a consultant logistics expert for the malaria program wil l be recruited to harmonize arrangements for delivery o f commodities taking into account storage and distribution systems; and a procurement manual wil l be prepared and included in the MOH Operations Guidelines prior to project effectiveness.

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tisk tating >

H

S

I Risks I Risk Mitigation Measures 1 Risk

Program i s financially unsustainable. There i s a risk that the Government o f Zambia may not be able to sustain i t s budget allocation to the health sector and short-term efforts on malaria control become unsustainable in the long-run, especially with ACT

This risk i s modest, and can be mitigated by the integration o f malaria control within the health SWAP and district basket, development o f medium term expenditure framework and gradual move towards comprehensive budget financing by all partners including adequate allocation of resources to the health from the resources gained from reaching the HIPC completion points and the debt relief. In the medium term, it i s likely that donor financing wil l be sustained.

Rating M

1 6. Loadc red i t conditions and covenants

Conditions o f effectiveness:

0 Existing M O H Operations Guidelines developed or modified to specify the operational procedures, processes and policies that will be used during implementation. The M O H Operations Guidelines will cover financial management, procurement, institutional framework and implementation modalities, monitoring and evaluation, and environmental safeguards. Opening o f Bank Accounts: (i) US dollar Special Account, (ii) Advance Account in Kwacha (local currency).

0

Disbursement conditions:

0

0

There wil l be provision for retroactive financing, up to $200,000 for expenditures incurred according to agreed procedures as from September 30,2005. Disbursement to the Category 2 Distr ict Basket Sub-Grant wil l be contingent upon establishment o f a performance monitoring system and based upon eligibility criteria and terms identified in the MOH Operations Guidelines that will be approved prior to effectiveness. For Community sub-grants, disbursements will be based upon agreed procedures in the M O H Operations Guidelines.

Legal Covenants:

0 Maintain within M O H the following specialists whose qualifications and experience shall at al l times be satisfactory to the Association: (i) Chief Accountant, (ii) Chief Procurement Officer, and (iii) Principal Accountant. Establish and maintain: (i) a procurement record management system for contract progress and expenditures at MOH; (ii) employ a procurement technical advisor for at least one year to assist the MOH in streamlining i t s procurement processes. Maintain within the M O H a functioning: (i) HMIS Unit; (ii) Donor Coordination Unit for the health SWAp. Maintain within the M O H a functioning and adequately staffed National Malaria Control Centre and a Coordinator o f the National Malaria Control Centre. The M O H shall organize an Annual Joint Malaria Program Review (AJPR) as part o f the Joint Annual Health Sector (SWAp) Review no later than November 30 o f each year to review the progress o f implementation o f the sector program and agree on the implementation plan and budget for the subsequent year. Implement the health waste management plan and vector management action plan.

0

0

0

0

0

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Financial Covenants:

0 The project shall maintain a financial management system that will allow the production o f financial statements, using acceptable accounting standards that reflect the operations, sources and uses o f funds for the project. The financial statements including the SAs should be audited by a technically competent and independent auditor. The audited financial statements and the auditor’s opinion are to be submitted to IDA and the CPs not later than six months following the end o f the fiscal year. Semi-annual FMRs will be prepared and submitted to IDA not later than 45 days after the end o f the quarter.

D. APPRAISAL SUMMARY

1. Economic and financial analyses The rationale for greater investment in malaria control in Zambia i s strong: the burden o f the disease and the adverse economic impact o f the disease i s large and i s fe l t at all levels. The impact on poverty i s also considerable. Malaria i s a multi-sector development issue, being a major cause o f morbidity and mortality, school absenteeism, work absenteeism and productivity losses. The project aims to mitigate these consequences by providing resources for prevention and treatment.

The project i s expected to have positive effects on the country’s economic growth, poverty alleviation and cost-effective use of resources. I t i s estimated that malaria in Zambia reduces GDP by 1.5 percent per year. The accumulated loss from the economic growth penalty o f malaria endemicity in Zambia between 1980 and 1995 was about US$1.4 bil l ion. T h i s translates to a per capita loss o f US$15 1, or about 18 percent o f actual 1995 income. The large burden o f disease due to malaria places a disproportionate burden on the poor population. Poor people are at increased r isk both o f becoming infected with malaria and o f becoming infected more frequently. Significant disparities have also been demonstrated in both the consequences o f malaria and in the utilization o f malaria prevention and treatment services. Estimates o f the total economic cost o f malaria show a disproportionate burden on the poor.

Cost-effectiveness: Investing in malaria prevention and treatment i s proven to be highly cost- effective. The project benefits were analyzed, using Healthy L i f e Years lost per 1000 population per year (HeaLY), a composite measure that combines the amount o f healthy l i fe lost due to morbidity with that attributable to premature mortality. In Zambia, an impressive 738 HeaLY’s are lost due to malaria. Reaching the Program Development Objectives o f 75% decrease in malaria incidence and 50% decrease in case fatality translates into a gain o f 580 HeaLY’s. The project investments are highly cost-effective; with a cost effectiveness ratio o f 1.23 HeaLY for every project dollar spent.

The change o f the malaria drug-policy in Zambia to the f irst- l ine use o f Artemisinine-based combination therapy (ACT) comes at a significantly increased cost. ACT’S are financed through the Global Fund and are now widely available in the public sector. In the short and medium term the financing o f ACTS i s therefore not expected to be a problem. In the long- term the price o f A C T i s expected to decrease considerably making them more affordable and a sustainable choice for the treatment o f malaria.

The project contributes towards the implementation o f the National Malaria Program Strategy (2006-201 1) that was recently launched. The estimated total program costs are 205,404,530 US$ for the implementation period o f the National Malaria Strategy from 2006 to 20 1 1. The

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Donor contributions to the Malaria Program total 106,708,790 US$, which leaves a financing gap o f 98,695,740 US$. The fifth application round for the Global Fund includes a request for additional resources to support the Malaria Program. Currently it i s also unclear what the additional donor contributions wil l be for 20 10 and 20 1 1.

2. Technical

The project will assist the government to implement the priorities set in the National Malaria Strategic Plan (MNSP) for 2006-201 1 which have been shown to be both cost-effective and affordable under the Zambian economic and fiscal situation. The policy and institutional environment i s ripe in Zambia for successful implementation o f the scale-up effort. The project will provide resources that will complement other partners’ support and reduce the financing gap in the national program.

The project will finance the expansion o f ITN coverage and use, integrated vector management using insecticides in appropriate structures, improve availability o f intermittent presumptive treatment for pregnant women attending ante-natal clinics and provide support community involvement to deal with malaria and use the interventions provided by the project and other partners. The project will provide support for dealing with the cross-cutting issue o f human resource capacity needs in the health sector.

The interventions that the project will support, as part o f the national malaria program, are based on sound scientific and technical evidence on their effectiveness in dealing with malaria. The development o f the malaria program involved specialized entities and partners, who joint ly endorsed the program content. As part o f the program, the N M C C will cany out further operational research to gather empirical evidence as needed. The project wil l support such research efforts.

With regard to the intended use o f DDT in the program, adequate safeguards are in place to ensure safe handling, spraying and disposal o f the waste associated with the insecticide. The Government i s committed to phasing out DDT in the long term. Meanwhile, alternative insecticides are also being used in some areas. During supervision o f the project, the Bank team and the Government wil l continually evaluate the safeguards that are in place.

3. Fiduciary

3.1 Accountability Assessment’ (CFAA) on Zambia dated November 2003 was that “there still remain substantial weaknesses and risks within the public financial management system of Zambia. ” “Considerable weaknesses in the areas of budget management; financial reporting, audit, and procurement. ” “Many of Zambia’s public finance laws and regulations are not enforced. This has led to a breakdown of administrative systems and procedures for the control of expenditure. Audit systems that are in place to detect improprieties have been rendered ineffective due to the lack of follow-up and enforcement of the Auditor General’s recommendations. Unfortunately, the lack of sanctions may have only served to embolden those who have been engaged in improper activities. ” “The challenges faced by Zambia in public expenditure management have been longstanding and w i l l require targeted efforts as

Financial Management. The overall conclusion o f the Country Financial

’ The CFAA was part o f a comprehensive Public Expenditure Management and Financial Accountability Review (PEMFAR) carried out by the Govemment o f the Republic o f Zambia with the support o f Cooperating Partners and the World Bank in November 2003.

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well as a strong degree ofpolitical wi l l to address. ” The IDA projects in Zambia operate in this poor financial control environment. In the ongoing consultations with the Wor ld Bank and Cooperating Partners (CPs), the Government has indicated that the implementation o f the Public Expenditure Management and Financial Accountability Review (PEMFAR) recommendations i s top priority. In this regard, the World Bank with the CPs i s joint ly funding the Government PEMFA Project at the MOF.

The Ministry of Health (MOH), which i s the subject o f this assessment, was responsible for the implementation o f a Health Sector Support Program (HSSP) between February 1995 and June 2002. The overall borrower performance under HSSP was unsatisfactory. The ICR’s conclusion i s that “the borrower’s performance duringproject preparation andfirst years of implementation was very encouraging, with a high level of commitment and demonstrated ownership of the health reform process. However, toward the latter part of project implementation, weakened commitment to implementing policy changes, delayed resolution of procurement issues, ineligible expenditures and an overall climate of poor governance undermined further progress. The external audit reports and management letters which were not submitted on a timely basis further confirmed existence o f significant accountability issues. Moreover, IDA supervision missions and statement o f expenditure (SOE) reviews discovered blatant disregard o f procedures which resulted in misprocurements and ineligible expenditures, and perceptions o f corruption. Lack o f supervision by senior management coupled with the lack o f any internal monitoring system meant that there was no accountability and transparency. In light o f this background, installation o f the Financial Management System recommended under the Malaria Booster Project (MBP) will address Zambia’s public financial management risk assessed by the CFAA and the fiduciary short comings experienced under HSSP.

I ,2

The Chief Accountant at MOH will have overall responsibility for the Financial Management Systems (FMS) of the MBP. Reporting to the MOH Permanent Secretary as Controlling Officer, the Chief Accountant will ensure that the financial management and reporting procedures to be put in place will be acceptable to the borrower, IDA and the CPs involved in the Health sector. The M B P FMS will be developed in accordance with the Financial Management Action Plan in Annex 7. T h i s includes the integration o f M B P accounting into the existing GRZ FMS at the MOH. The Navision Accounting Package (Microsoft Business Solution) has been identified and agreed to be used for financial management o f the MBP. Navision wil l interface with the current GRZ FMS and i s compatible with the IFMIS that the MOF has adopted for al l Government accounting, being financed under the PEMFA project. Navision i s capable o f supporting the utilization o f the Health Sector resources in an economic, efficient and effective way to achieve the stated project development objective of increasing access to, and use oJ interventions for malaria prevention and treatment by the population of Zambians living in al l the 72 malarious districts of the country.

A consultant has been contracted to design and install the Navision accounting package at MOH, building on the system that existed at CBOH3 which has been’absorbed by the Ministry. The Navision FMS being installed has more dimensional reporting flexibil i ty features which allow production o f timely, understandable, relevant and reliable financial information that wil l allow al l stakeholders to plan and implement the Health Sector Program, monitor compliance with agreed procedures, and appraise the project’s overall progress towards the achievement o f i t s objectives. The existing M O H Operations guidelines that

* Implementation Completion Report (TF-20967; IDA-26600 ) for the Health Sector Support Project, Report

CBOH was a statutory body created and given responsibility for the implementation o f the Health Sector No. 24936. December 30,2002 page 2.

activities under the MOH. CBOH has since been abolished and all activities have reverted back to MOH.

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will be compiled or developed prior to project effectiveness wil l include a Financial Procedures Manual (FPM). The reporting format required by the IDA will be annexed to the FPM, which will include a new chart o f accounts based on the Government’s budget (yellow book) and information requirements by IDA and the CPs. The F P M will be part o f the overall MOH Operations Guidelines that wil l be approved prior to project effectiveness. MOH will request from the MOFNP a separate budget l ine in the yellow book for the Malaria Booster Project. With regard to staffing, dedicated, appropriately qualified and experienced accounting staff within the accounting department o f the MOH, will be allocated responsibility for managing the day to day financial affairs o f the project at the central level, under the direction o f the M O H Chief Accountant, Training will be provided to al l relevant staff in the operation o f the Navision accounting package and IDA procedures.

The project activities wil l be subject to Internal Audit by the office o f the Controller o f Internal Audit based at MOH. Due to the decentralized nature o f the operations and the proposed pooling o f funds arrangements, the role o f internal audit in maintaining the pre- audit controls on expenditure, as well as in assessing the overall adequacy o f the financial management systems and procedures in place, wil l be critical. It i s important that the internal audit bottlenecks that led to the PEMFAR concluding that “ in Zambia, the internal auditors have been effective in diagnosing problems in theJinancia1 management procedures, but their potential impact is still severely limited by the lack of adequate human and financial resources to carry out their work and insufficient follow-up on their recommendation by the Controlling Officers ”, are addressed in the Health sector. The internal audit should come up with comprehensive and agreed work programs for the Health Sector, and make a case for funding out o f the pooled funds. Moreover, internal audit should work in close collaboration with the external auditors and produce regular reports with actionable recommendations, whose implementation must be monitored.

An annual external audit wil l be undertaken by the Office o f the Auditor General on acceptable terms o f reference to IDA and the CPs, and a report submitted not later than 6 months after the end o f the fiscal year. In Zambia the Constitution gives the responsibility to audit al l Government resources to the Auditor General (AG), though in practice, due to capacity constraints, private auditors are contracted by the AG.

The overall conclusion o f the financial management assessment i s that the M O H operates in a weak financial management control environment. However, the M B P financial management specific r isks can be mitigated to satisfy the Bank’s OP/BP 10.02 minimum requirements, if the Health Sector Financial Management System i s well implemented and the various mitigation measures proposed in the action plan are addressed satisfactorily.

3.2 Procurement: The legal framework for public procurement in Zambia consists o f the Zambia National Tender Board Act (ZTBA), Chapter 394 o f the Laws o f the Republic o f Zambia, the Tender Regulations (TR), and the Procurement Guidelines. The ZTBA provides for the establishment o f the Zambia National Tender Board (ZNTB) and the Central Tender Committee (CTC) in the ZNTB. The tender regulations provide for the establishment o f tender committees and procurement and supply units (PSUs) in ministries, provinces and agencies, Some aspects o f the regulations are supplemented by procurement guidelines.

The Country Procurement Assessment Report (CPAR) for Zambia was conducted by the Bank in 2002, with close collaboration o f the government and Cooperating Partners. T h i s assessment provided inputs to the Public Expenditure and Financial Accountability Report, which in turn i s the basis for the Public Sector Management Program (PSMP- PEMFA).

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The CPAR identified a number o f weaknesses in the country’s procurement legal and regulatory framework, institutional set-up and procedures. This formed the basis for the procurement reform action plan under the Public Expenditure Management and Financial Accountability (PSMP- PEMFA), currently under preparation. Some o f the measures to be undertaken under the PSMP- PEMFA include:

replacing the legal framework with a new Act based on the UNCITRAL Model L a w and current international best practice (the Procurement Ac t i s currently in Draft stage and the Bank has provided detailed comments); excluding executive procurement from the oversight responsibilities o f ZNTB and decentralize procurement fully to the procuring entities over a period; creating an independent appeals body/mechanism within a new Zambia National Procurement Authority (ZNPA); introducing procurement planning and procurement fi l ing systems; re-designing the registration l i s t system; and Establish a Professional Procurement Cadre with competitive salaries.

0

The procurement arrangements for the Malaria Booster have been prepared based on “Guidelines for Procurement under IBRD Loans and IDA Credits” and “Guidelines for Selection and Employment of Consultants by Wor ld Bank Borrowers”, both o f M a y 2004, and taking the specifics of the Malaria Booster program, the procurement capacity assessment and procurement plan into consideration. Please refer to Annex 8 for details.

4. Social

In order to understand better the social context o f malaria control in Zambia and to improve the design o f the interventions, a rapid social assessment was camed out by a medical anthropologist during project preparation. The assessment was camed out at the various levels o f the district malaria control network and then moved to the community/village level (predominately fishing village north o f Mwense to conduct focus groups with women, men, and children, including a few expert interviews with informal village leaders, Le., the headman, the local healer, midwife, etc) to understand the local beliefs, norms and culture related to malaria, explore the root causes of the discrepancy between ITN coverage and ITN usage and ways to improve it, and how culturally appropriate interventions could be designed to stimulate the right behaviors on malaria control. The social assessment showed that in order to achieve the goal o f malaria control and eradication, i t i s essential that clinical and administrative malaria experts collaborate with traditional practitioners, leaders and communities. Most people expressed a strong willingness to use ITN ’s , but were unable to pay the full price. In rural areas participants in the assessment revealed that free distribution or at a maximum price o f 2,000 Kwacha ($0.40) per net will be acceptable. The assessment also showed that there i s need to allocate multiple 1 T ” s to each family due to differing household structure and family size, and to educate people on the steps to re-treat the 1 T ” s as needed. The social assessment also identified more general health system challenges, including lack o f human resources at health facilities, shortage o f laboratory facilities and periodic shortages o f drugs and transportation problems. The social assessment report i s attached as Annex 12. Some o f the key findings include:

Gender The burden o f malaria morbidity and mortality i s heavy on females. The social assessment identified a number o f gender related issues that can be addressed in the design o f the program, but clearly more research i s needed. The assessment found that males (husbands) control the cash in the household and determine if and when a woman can go to the clinic or

21

take a child to the clinic. The majority o f men in the areas studied during the social assessment had multiple wives and cannot afford to buy bed nets for each o f them. Many women reported that if there was only one bed net in the household, i t would be used by the man and his favorite wife. As a result o f these findings, an effort should be made to involve men in malaria awareness campaigns so that behavior change can occur. Another relevant recommendation from the social assessment was that the traditional birth attendants should be included in malaria education as they could be important promoters o f Intermittent Presumptive Treatment o f pregnant women and the timely treatment o f fevers in children and pregnant women. Older women were found to play an important role in orphan care as many of them have adopted 3 to 10 related and unrelated orphans. It wil l be important to target these households for free net distribution and improved access to malaria treatment.

Povertv In Zambia as elsewhere, the poor are more likely to get malaria and more likely to die from malaria once they have it. Ongoing ITN social marketing and distribution programs in SSA have been criticized for reaching the second or third quintile, rather than the bottom quintile which represents the poorest o f the poor and those most at r i s k for malaria morbidity and mortality. The malaria program and project will support scaling up ITN distribution through free mass distribution campaigns, especially in the rural areas, and private distribution in urban areas for those who can afford. All those who cannot afford the I T N s through the private sector should be able to access the freely distributed ITNs.

Civi l Society Civ i l society i s currently engaged in Bank funded projects in Zambia and wil l participate both in the planning and the community level implementation o f the project.

Environment

The project has been classified as category B given the r isks associated with indoor residual spraying (IRS) o f DDT and other pesticides and with the handling and disposal o f health care waste.

DDT DDT use for IRS as part o f an integrated malaria vector management plan i s allowed by W H O and the Stockholm Convention and the Bank safeguards allow for purchase o f DDT if safeguard policies are complied with. Zambia i s currently using DDT for IRS as part o f i t s integrated vector management approach to malaria control. The vector control program has been reviewed by the W H O and found to be implemented well and with adequate safeguards. The W H O assessment o f the Zambia vector control program has been reviewed by ASPEN and been found adequate.

Medical Waste The M O H i s currently successfully carrying out a medical waste management plan for the Bank funded ZANARA H N / A I D S project. The MOH has added malaria-specific elements to this plan, updated it, and disclosed it on September 14,2005. The additional medical waste expected to be generated i s that related to the diagnosis and treatment o f malaria but i s not exclusive to malaria: needles and syringes, gloves, and glass slides. Although it i s highly unlikely for malaria to be transmitted via unsafe handling o f medical waste, the material may be co-infected with HIV, viral hepatitis, etc, so needs to be handled with care. Both the ZANARA Medical Waste Management Plan and the malaria addendum are attached in the annexes.

22

Implementation and supervision Both the Vector Management Action Plan and the revised Medical Waste Management Plan wil l be implemented by the National Malaria Control Center and the Environmental Health specialists in the Ministry of Health, in collaboration with the Environmental Council o f Zambia. The Bank supervision team wil l be monitoring the implementation.

5. Safeguard policies

Two safeguards are triggered by this project: Environment Assessment (OP/BP/GP 4.01) and Pest Management (OP 4.09). Please see Section 5 and Annex 10 for information on the Vector Management Action Plan and Medical Waste Management Plan. The Vector Management Action Plan was publicly disclosed in-country on September 7,2005 and sent to the Bank with approval to disclose it in the Infoshop on the same day. The Bank's disclosure at the Info shop was done on September 15,2005.

Safeguard Policies Triggered b y the Project Yes No Environmental Assessment (OP/BP/GP 4.01) [XI [I Natural Habitats (OP/BP 4.04) [I XI Pest Management (OP 4.09) [XI [I Cultural Property (OPN 11.03, being revised as OP 4.1 1) [X 1 Involuntary Resettlement (OP/BP 4.12) 11 [X 1 Indigenous Peoples (OD 4.20, being revised as OP 4.10) [X 1 Forests (OP/BP 4.36) [I [X 1 Safety o f Dams (OP/BP 4.37) [I [XI Projects in Disputed Areas (OP/BP/GP 7.60)* [I [X 1 Projects on International Waterways (OP/BP/GP 7.50) [I [X 1

[I

[I

6. Policy Exceptions

There i s no policy exception sought. The project complies with a l l applicable Bank policies.

Readiness: The project implementation framework i s in place. The M O H Operations Guidelines, which exist, will be reviewed and modified as necessary for approval by the Bank prior to the project effectiveness. The procurement plan for the f i r s t 18 months o f project implementation has been approved. A General Procurement Notice for the procurements to be made under the project has been prepared.

' By supporting the proposedproject, the Bank does not intend to prejudice the final determination of the parties ' c l a i m on the disputed areas

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Annex 1: Country and Sector or Program Background ZAMBIA: Zambia Malaria Booster Project

Poverty has been persistent and worsening in Zambia. In 2002-03, the Central Statistical Office reported 67.0 percent o f the Zambian population as poor. Although this i s an improvement over the 72.9 percent poverty rate in 1998, it i s only marginally better than the 69.7 percent rate in 1991 (CSO 1998). Although poverty remains centered in rural areas, with as much as 83.1 percent o f rural households poor, the incidence o f urban poverty has increased from 48.6 percent in 1991 to 56.0 percent in 1998. Poverty i s particularly extreme among female-headed households, and particularly from November to March, the farming season. The worsening situation in Zambia i s captured in the decline o f the UNDP Human Development Index from 0.48 in 1985 to 0.43 in 2000. Zambia’s disability-adjusted l i f e expectancy (DALE), at 30.3 years, i s the fourth worst in the world, eclipsed only by Malawi, Niger, and Sierra Leone.

Much o f the poverty and poor health i s due to the changing fortunes o f the Zambian economy from the collapse o f the copper industry, made worse by the ever-widening impact o f the HIV/AIDS epidemic. Social services have not grown commensurate with need, mainly because the Zambian macroeconomic situation remains very fragile. The Government’s austerity budgets in 2004 and 2005 focused on restoring fiscal discipline, reducing inflation, limiting domestic borrowing, increasing international reserves and maintaining positive real GDP growth. With regards to debt relief, after being unable to reach i t s completion point in December 2003 due to a budget over-run, Zambia finally qualified for the Highly Indebted Poor countries (HIPC) program in early 2005. With this, it i s expected to benefit from a reduction o f US$3.8 bi l l ion in i t s extemal debt.

The Zambian health sector i s facing numerous problems principally caused by the double burden o f declining resources in real terms and an escalating disease burden. In contrast to the outward visibility o f the Zambian health sector reforms starting in the early 1990s, total and per capita health expenditures have actually gone down in the late 1990s and early 2000s, in relative terms. According to the WHO’S Wor ld Health Report (2004), total expenditures on health as percent o f GDP have fallen from 6.0 percent in 1997 to 5.7 percent in 2001, Similarly, per capita total expenditures on health have fallen from US$24 in 1997 to US$19 in 2001.

Few health indicators have improved in Zambia over the last ten years and some have even deteriorated. L i f e expectancy at birth has dropped to 37 years, the under-five mortality rate (USMR) has increased to 168 in 20011 02 and the infant mortality rate i s high at 95 per 1000. The rural USMR i s very high at 182, compared to 143 for the urban U5MR. The matemal mortality rate i s 729 per 100,000 in 2001/02. Zambia i s the fifth worst affected country in HIV/AIDS. HIV sero-prevalence seems to have stabilized over the past 3-4 years, 29 percent in urban and 14 percent in rural areas, with a national average o f 16 percent in the 15-49 age groups.

Combating malaria, the third o f the Millennium Development Goals (MDG) in health, i s a large challenge in Zambia, where it i s the leading cause o f morbidity and the second highest cause o f mortality, especially among children and women (World Bank, 2005). According to the 200 1/02 Demographic and Health Survey (DHS), some 43.3 percent o f under-five children had fever and/or convulsion symptomatic o f malaria in the two weeks preceding the survey. Malaria accounts for 50,000 deaths a year in the country, and 37 percent o f al l

24

outpatient hospital visits (CSO DHS, 2003). Malaria incidence rates have tripled in the past three decades from 121 cases per 1,000 in 1976 to 376 cases per 1,000 in 2004 (HMIS).

Malaria i s implicated in both child and maternal mortality. Because o f the very high rates o f malaria incidence, both child and maternal mortality rates in Zambia have not gone down sufficiently for the country to confidently achieve i t s MDG goals in child and maternal mortality reduction. Malaria co-morbidity i s currently under-appreciated, but it i s increasing. HIV+ individuals are more vulnerable to malaria. People living with AIDS are also more l ikely to be more susceptible to treatment failure o f anti-malaria drugs. Acute malaria i s also associated with an increase in the HIV viral load and with mother-to-child transmission (MTCT). Studies in Malawi, a neighboring country, showed that acute malaria was associated with a 7-fold increase in HIV viral load in co-infected patients, a change that carries a r isk o f increased disease progression and greater potential o f HIV transmission (World Bank, 2005).

The Government o f Zambia has given high priority to dealing with the high morbidity and mortality associated with malaria. With the launch o f the RBM initiative in 1998, the Government started implementing the f i rs t phase o f RBM from 2000 to 2005, which has laid a foundation consisting o f policies, strategies and guidelines that wil l now guide the nationwide scaling up o f implementation o f malaria control interventions. A 5-year national Ro l l Back Malaria strategic plan has been developed by the NMCC. The focus i s to expanding the coverage and utilization o f effective prevention and treatment interventions for malaria.

The Zambian National Malaria Program i s supported by the RBM partnership, to which the Wor ld Bank i s a founding member. The Ministry o f Health has worked with the RBM partnership secretariat and Global Fund, US AID, and JICA, in the design, implementation and review o f the National Malaria Program. Other partners, including the Netherlands and DFID, provide support to district health services, including malaria control, through the district basket mechanism in the SWAP. The Global Fund has committed funds for malaria interventions, which are channeled through the M O H and the Churches Health Association o f Zambia. The Gates Foundation funded N G O P A T H has expressed interest in supporting elements o f the national malaria program through i ts MACEPA project.

There are several challenges in improving malaria control in Zambia that wil l need to be addressed:

e Integrated vector management: l ow coverage and use o f insecticide treated bed nets especially among the poor and l o w coverage o f indoor residual sprayifig interventions.

e Scaling up o f prompt and effective case-management, including Intermittent Presumptive Treatment (IPT) o f malaria in pregnancy and improved malaria diagnosis, referral and treatment

e Addressing the human resource capacity constraints in the health sector.

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Annex 2: Major Related Projects Financed by the Bank and/or other Agencies

ZAMBIA: Zambia Malaria Booster Project

Project ~ Sector Issue

Latest Supervision (PSR) Ratings (Bank-financed Droiects onlv)

Bank-financed Zambia National Response to

Development Objective (DO)

HIV/AIDS Zambia Health Sector Support

Implementation Progress (IP)

improved, expanded and sustainable use o f services, provided in a governance system whereby local governments and communities would become mutually accountable; to decentralize and empower local authorities to improve governance and efficiency in service delivery; and to increase access to basic social services through direct poverty interventions has a component to support the joint GRZ/World Bank initiative on HIV/AIDS; second component w i l l provide support to employees o f AHC-MMS and their families, and increase the awareness o f HIV/AIDS throughout the community

Z A N A R 4 - Cr. HO 170 HSSP - IDA 26600

Other development agencies Support to Integrated Management o f Childhood Illness programme run by WHO-AFRO, and to East Africa Network for Monitoring Anti-Malarial Treatment Broad malaria control activities

S S

U (closed 06/2002) U (closed 0612002)

halve burden o f malaria by 20 10 ~

I TNs , total malaria control, especially M&E ITN discount voucher program to reduce morbidity and mortality among pregnant women and provide subsidy for I T N s o f choice; public-private partnership To reduce malaria-related morbidity and mortality through effective treatment and affordable

33550

M ine Township Services Project - Cr. 33860

DFID, WHO, U S A I D

Boston University, JICA, USAID, WHO DFID, WHO, Norway, Wor ld Bank, UNICEF MACEPA, UNICEF, WHO UNICEF, AED, Netmark,. U S AID, UNICEF.

Global Fund -- C H A Z (Round 1 & 4 - total $82.77

26

Sector Issue

and pregnant women, and to scale up equitable and sustainable malaria prevention and control interventions PSUZambia (Society for Family Health) - nationwide social marketing o f long-lasting ITNs , and implementing malaria in pregnancy program in 9 provinces

Race against Malaria - Medical Research Council o f South Africa IP/DO Ratings: HS (Highly Satisfactor)

Project 1 Latest Supervision (PSR) Ratings 1 (Bank-financec

million) CBOH (Round 1 & 4 - total $82.77 million)

DFID, GFATM, KfW Entwicklungsbank, JICA, UNICEF, USAID and PEPFAR smc S (Satisfactory), U (Unsatisfactory), HU (Highly

ro'ects on1 Y

I isatisfactory)

27

Annex 3: Results Framework and Monitoring ZAMBIA: Zambia Malaria Booster Project

Zambia i s committed to rapidly strengthening i t s capacity in monitoring and evaluation o f the malaria epidemic. T h e ZMBP’s support to M&E i s guided by the following criteria: (i) support for the NMSP and the development o f a single national malaria M&E framework and implementation plan (ii) support for institutional, human resource and systems development; (iii) support for monitoring and evaluation activities which are not being financed by other development partners; and (iv) reliance as far as possible on joint review processes under the NMSP. Whi le fully acknowledging that the aim o f the NMSP i s to reduce malaria associated morbidity and mortality in Zambia, the specific PDO o f the ZMBP i s to increase access to quality and effective malaria prevention and treatment interventions and, as such, the ZMBP wil l seek to monitor progress towards the achievement o f outcomes relating to this objective.

levelopment objective i s to .ncrease access to, and use if, interventions for malaria xevention and treatment by ;he target population.

Component 1: support to the national health system

Outcome 1: Prevention (ITN, IPT, IRS)

Project Outcome Indicators

Increase the percentage o f children under 5 years o f age who sleep under a treated bed net from 30% to 40% by 2008, Increase the percentage o f pregnant women who receive a complete course o f intermittent presumptive treatment for malaria from 45% to 55% by 2008, Increase the percentage o f people in IRS-eligible districts areas who sleep in appropriately sprayed structure from 40% to 60% by 2008,

Intermediate Outcome Indicators

Outcome 1: 40% o f households with at least three insecticide-treated net.

40% o f children <5 years old sleeping under an ITN

60% o f pregnant women sleeping under an ITN

55% o f pregnant women receive a complete course o f IPT for malaria

YR1-YR4: Feed into the :valuation o f the ZMBP md design o f Phase two 3 f the ZMBP

Use o f Intermediate

Outcome 1: YR1-YR4: High coverage would decrease the burden o f disease and the pressures on health services. L o w coverage will flag need to intensify prevention interventions

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Outcome 2: Prompt effective malaria treatment

Outcome 3: Laboratory and diagnostics

Outcome 4: Anti-malarial drug procurement, supply and logistic systems

Component 2: community response to Malaria

Outcome 1: Improved awareness o f malaria risk, transmission and prevention modes

Outcome 2: Utilization o f ITNs at the rural level

60% o f people in IRS eligible districts sleep in appropriately smaved structures Outcome 2: 60 % o f malaria patients have access to appropriate treatment within 24 hours o f onset o f symptoms

60 % o f children under 5 years o f age with fever in the previous 2 weeks who received anti- malarial treatment according to national policy within 24 hours o f onset o f fever

60 % o f health care providers correctly diagnosing and treating malaria Outcome 3: 80 % o f health facilities with functioning malaria diagnostic system

Outcome 4: 80 % o f health facilities with no reported stock outs o f nationally recommended anti-malarial drugs continuously for one week during the last 3 months

Outcome 1: 80% o f respondents surveyed

with appropriate malaria knowledge

80% o f people exposed to malaria education messages

800 community volunteers trained in malaria control and prevention

Outcome 2: 60% o f households at the rural level with at least one insecticide-treated net.

3utcome 2: YR 1-YR4: Given high mortality rates where malaria patients do not have early and effective treatment, l ow percentage flag for ineffectiveness o f treatment strategies

Outcome 3:

Outcome 4:

percentage flags need to strengthen procurement and distribution systems

YR1-YR4: LOW

Outcome 1: YR1-YR4

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3utcome 3: Storage and distribution o f malaria commodities at :ommunity level

3utcome 4: increased access to :ommunity sub-project funding for malaria activities

Component 3: Program management

Outcome 1: Strengthened capacity o f the National Malaria Control Centre to provide technical leadership for the malaria program

60% o f children <5 years old at the rural level sleeping under an ITN

60% o f pregnant women at the rural level sleeping under an ITN

800 community volunteers trained to distribute and promote ITN utilization within communities

800 community volunteers trained in techniques for treating nets

500,000 I T N s retreated through community initiatives

90% o f malaria prone districts have at least 1 CBONGO receiving grant to implement malaria control activities in communities

Coordination mechanism in place for technical and operational issues

Disbursements, withdrawals and central procurement are done according to established standards and schedule

Performance monitoring at district level in place

Overall Effective M & E system in place

Outcome 1: Yr l -Yr4 : Presence o f coordination mechanism would increase active participation o f key partners in a l l program activities and would ensure that implementation follows standard and schedules

N o n adherence to established standards and schedule for disbursements, withdrawals and procurement hinder the implementation and flag need to strengthen N M C C capacity to do so

30

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Annex 4: Detailed Project Description

ZAMBIA: Zambia Malaria Booster Project

The Zambia malaria Booster Project i s designed within the health sector with a multi-sectoral involvement of key sectors such as private sector, communities and key public institutions that addresses malaria epidemic within a very broad context. The project wil l support the GRZ to implement an expanded response to malaria through supporting community-based initiatives, and also by strengthening malaria activities in key line ministries and government departments including the private sector.

The project will focus on expanding malaria coverage o f control interventions through the following key elements:

district basket funding to district health management teams, support for human resource capacity, filling gaps in procurement o f malaria commodities, community-based response to malaria prevention and treatment, strengthening the national malaria control centre to coordinate multi-sector efforts, monitoring and evaluation, and Support for operational research.

Project Components:

Component 1 (a): Strengthening the health system to improve service delivery: T h i s component will deal primarily with health system strengthening activities through the district basket pooled funding arrangement whereby all 72 district health management teams will receive incremental fund allocation to improve their malaria service delivery. The component wil l deal with the supply-side constraints for expanding coverage o f malaria interventions, such as Insecticide Treated Nets (IRS), Indoor Residual Spraying (IRS) with insecticide, Rapid Diagnostic Tests (RDTs) and other laboratory equipment, and contribute to alleviating the dire human resource situation in the health sector. The project will finance the expansion o f supply and distribution o f insecticide treated bed nets, increase the coverage o f Indoor Residual Spraying led by the Dis t r ic t Health teams, provision o f the rapid diagnostic tests (RDTs) and microscopes, and the training o f microscopists and other front-line health workers in the use o f RDTs. The implementation o f this component wil l be primarily through the district basket mechanism, whereby funds will be pooled with other partners to finance incremental operating costs for the districts. Large ticket items such as I T N s , IRS equipment and supplies, and laboratory supplies will be centrally procured and distributed to the DHMTs as contributions to the basket “in kind”. The project will also support expansion o f the Community-Based Malaria Control Program (CBMCP) through this window, linked to the DHMTs.

(0 Support to the District Basket Mechanism: This will provide additional financing to improve service delivery and support malaria related interventions to district health teams for their contractual action plans. The work plans will be developed as part o f the district health work plan process in the sector-wide approach, and approved by the health sector committee. Resource allocation will be based on formula agreed within the SWAP framework, which wil l ultimately reward good performance on malaria outcomes. The disbursement o f funds to the district basket mechanism i s contingent upon there being a satisfactory performance monitoring system, which i s consistent with the results-focus o f the project. Funds allocated in the district basket wil l be expended on non-salary recurrent expenditures o f the DHMTs.

33

(ii) Expansion of Supply and Distribution of Insecticide Treated Bed Nets

According to the ZDHS 2001/2, 14 percent o f households own an ITN with only 7 percent o f children and 8 percent o f pregnant women reported use o f I T N s . Strategic ITN implementation has been identified as one o f the principal methods o f malaria prevention. The main objective i s to increase the national ITN coverage to 90 percent to cover at least 3 I T N s per household by 2008. The criterion to be used i s to cover at least 60% o f Zambian population with I T N s . To achieve this rapid scale up, the government has proposed to conducts mass ITN distribution campaigns that will focus on ensuring three nets per household in al l ITN eligible areas. The scale up seeks to remove barriers to utilization and sustain quality assurance o f I T N s for increased impact on the disease burden. The I T N s to be procured by the project will be determined on yearly basis at the joint reviews based on what other partners are providing to the program.

(iii) Increase Coverage of Indoor Residual Spraying

IRS remains the main thrust among the various vector control interventions. Activities targeted at enhancing vector control through I R S wil l be integrated with activities tailored to address the environmental problems that may arise from implementation o f IRS. An overall disposal plan will be developed to ensure sound disposal o f wastes. The objective i s to have 90% o f eligible households covered under the IRS program by 2008 and maintained by 20 1 1 in accordance with National Malaria Strategic Plan 2006-201 1. According to the Central Statistics Office there are approximately two mi l l ion households out o f which 850,000 households are eligible for IRS. 25.5 percent (21 7,000 households) have been covered under the current IRS program with a gap o f 74.5 percent (647,000 households). The project will support the scaling up o f IRS to eligible areas through sensitization campaigns, IEC, development o f guidelines, training o f staff including procurement o f insecticides and equipment. The project wil l also incorporate a strategy aimed at phasing out the use o f DDT and consequently move towards more effective and safer alternatives. I R S will be implemented by the DHMTs in collaboration with the Ministry o f Local Government and Housing, Nkokola and Mopani Copper Mines and the Environmental Council o f Zambia

(iv) Scaling up of laboratory diagnostic capacity

Laboratory diagnosis i s essential in providing sound scientific basis for accurate malaria diagnosis and case management. There are only 16% o f Health Facilities offering laboratory diagnosis o f malaria in Zambia. Current estimates indicate that there are 226 laboratories in the country o f which about 15 1 are functional, but are also constrained by inadequate laboratory personnel with only 34% o f suspected malaria cases are diagnosed through laboratory services (CSO 2000). The objective i s to increase coverage o f laboratory diagnostic services from the current 16 percent to 80 percent at health facilities. The target i s to increase the diagnosis o f suspected malaria cases from the current 34% to 90% 2008 and maintain to 201 1. With the current support available form other partners the project will support procurement o f rapid diagnostic tests (RDTs) and microscopes where they do not exist, improve the planning, procurement and distribution o f essential diagnostic kits, development o f standard protocols, and training health care provider in laboratory diagnosis and support to rehabilitation o f laboratory infrastructure through district basket. With scale up o f RDTs, the reported incidence o f malaria may decline as the accuracy o f the diagnosis improves.

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(v) Strengthen the Intermittent Presumptive Treatment (IPT)

Zambia introduced intermittent presumptive therapy (IPT) for pregnant women in 2003Three doses o f Sulphadoxine-Pyrimethamine (SP) i s taken one month apart in the 2"d and 3'd trimesters o f pregnancy as directly observed therapy (DOT) in antenatal clinics (ANC). About 90 percent o f pregnant mothers in Zambia have at least one antenatal visit during their pregnancy. The current coverage i s 65 percent o f women take a dose o f IPT during a single pregnancy and less than 15 percent take all three doses. The national target i s to reach 90 percent o f the pregnant women taking all the three doses o f Sulphadoxine-Pyremethamine (SP) prescribed under IPT within a single pregnancy. The project will support the scaling up o f IPT through the focused antenatal care. This will include, Conducting needs assessment survey, improving patient and provider compliance, develop guidelines to ro l l out focused ANC, develop and training guidelines including training o f communities in IPT

(vi) Strengthening of the Human Resource Capacity

Support to human resource capacity within the health sector to deal with the increased demand as a result o f the malaria epidemic and scaled up malaria activities. Specifically, the support will focus on retention o f the frontline health worker at district level (Nurses, Clinical Officers and Environmental Technicians) most likely to impact on malaria control. I t will include support to revision o f the pre-service curriculum and training o f tutors, and in-kind provision o f transport (bicycles, motorbikes) and communication equipment.

(vii) Multi-sector activities

T h i s wil l involve the support for mainstreaming o f malaria-related activities into the work programs o f key, strategic l ine ministries and government departments, the private sector and large local or international NGOs, depending on their comparative advantages. The areas for support will be limited to ITN distribution and IRS.

Component 1 Cb): Improved environmental health management. T h i s sub-component o f the project will finance activities aimed at improving the management o f health care waste associated with malaria control and the environmental monitoring for impact o f insecticide use, The project will support activities to address the weaknesses identified in the WHO assessment o f the vector management program in Zambia as identified in the vector management action plan developed during project preparation. Specifically, the project wil l support training on environmental vector management, safety in use o f insecticides, adequate spray equipment and transport, through purchase o f three light trucks. The project will also finance renovation o f the insectaries in the malaria centre and the Tropical Disease Research Centre. Periodic environmental impact assessments and vector susceptibility surveys will also be supported by the project. The Government i s committed to phasing out the use o f DDT in the long-term.

Component 2: Community Malaria Booster Response (COMBOR). The support for community-based initiatives wil l involve malaria prevention programs through a community demand-driven approach. The implementation will be through an integrated community- based package o f malaria interventions, including among others, cause o f malaria and i t s transmission, IEC including public education, improving the health seeking behavior patterns in relation to malaria, home management o f malaria, referral for severe forms o f malaria from community level to health facilities, environmental management and vector control.

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Recent evidence o f usage and applicability o f malaria interventions shows that availability o f I T N s alone i s insufficient to prevent malaria (widespread provision o f ITNs through Global Fund-supported organizations has s t i l l indicated l ow usage o f I T N s for malaria prevention) without the necessary awareness by the community o f the appropriate use and benefits o f ITN usage within the household. The community response to malaria can contribute towards achieving several o f the strategic objectives o f the Zambia National Malaria Strategic Plan (2006-20 10). Mechanisms that empower beneficiary communities to use interventions appropriately will be critical to stimulating demand, not only for individuals to take preventive action but also for the success o f health sector interventions such as repeat ANC visits by pregnant women and completion o f the full malaria treatment package when prevention fails, and to increase awareness on the benefits o f IRS in areas that are eligible for spraying.

T h i s component wil l deal with the demand-side constraints to effective malaria control programming. T h i s component wil l support community demand-driven interventions: (i) directly through financing o f sub-projects by community based organizations, and (ii) through the facilitation o f interventions by communities and local leaders to strengthen the malaria control activities o f other implementers. The community response to malaria wil l help to both extend the geographic coverage o f core malaria control interventions, particularly in the rural communities, and increase the use o f the interventions. The findings o f the rapid social assessment carried out during project preparation wil l continually inform the refinement o f the methods and targeting o f community approaches to improve access and use o f the interventions.

Component 3: Program Management. T h i s component wil l support strengthening the National Malaria Control Centre to provide technical leadership and coordination for the malaria program implementation. The project will support human resource capacity strengthening, monitoring and evaluation, including support to establishment o f M&E systems and conduct operational research. The technical functions o f the N M C C include: (i) contributing to policy formulation and resource mobilization, (ii) support the development o f national strategic plans and guidelines including the district plans, (iii) development and dissemination o f IEC materials, (iv) providing guidance to the country coordinating mechanism (CCM) for the global fund and RBM partners on program policies, strategies and implementation, (v) support to DHMTs in planning, implementation and monitoring o f malaria control activities, (vi) technical support to community based programs, (vii) conducting monitoring and evaluation, (viii) conduct operational research. N M C C will maintain these functions following the re-organization o f the MOH.

National Malaria Control Center: The project wil l support the following activities: Capacity Building; The program will support capacity building activities within the N M C C to provide national leadership on malaria control, especially i t s role to guide a coordinated national strategy, to overcome social and cultural barriers to malaria, and to mobilize the key l ine ministries, private sector, c iv i l society and community and other stakeholders to face the challenge o f malaria epidemic in Zambia. The project will finance activities to help the N M C C to conduct i t s mandated activities and support for the establishment and harmonization o f a viable M&E system including annual reviews o f the malaria control program. Similarly, the decentralized entities for the coordination o f malaria related activities at provincial and district level will be supported where it relates to capacity building, partnership strengthening, appraisal o f proposals, coordination o f the community response to malaria o f both the community demand driven and the health delivery approaches.

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Development of standard guidelines: Through i t s technical working groups, N M C C will develop and disseminate technical and operational guidelines on malaria prevention and treatment and ensure adherence to protocols and guidelines, develop generic district planning guidelines using an evidence based approach for the implementation o f the core malaria activities, provide technical support to the district planning cycle by building capacity o f the Provincial Health Offices (PHO) and the DHMTs and assist in development o f generic supportive supervision tools for the PHO and DHMTs. The N M C C will facilitate the quantification, provision o f specifications and triggering procurements o f malaria commodities and facilitate the distribution o f malaria commodities and link with the central storage facil i ty - medical stores limited. Local best practices wil l be identified and shared with the stakeholders through malaria periodicals, newsletters and mass media where appropriate.

National Malar ia Control Program Monitoring and Evaluation: the N M C C in performing i t s vital M&E role for the project, as well as to contribute to the overall national program. As a major challenge within the context o f a multi-sector program with multiple, and very diverse implementing partners, the monitoring o f al l malaria related activities by the MOH i s a crucial issue, and the project wil l finance activities that will enable capacity to be built in this area. The collection, analysis, reporting and dissemination o f the data on inputs, outputs, outcomes and impact, as well as the conduct o f specific studies for data gathering i f necessary, will form the core o f the activities to be supported. Specifically, N M C C will strengthen the Malaria Information System (MIS) and link it to the HMIS and the surveillance system conduct health facility surveys and build capaciv for M&E at provincial and district levels. The support wil l be based on the identified gaps and complementary to M&E support from other partners.

The project wil l support

Operational Research and Knowledge Management: The N M C C will identify and work with leading research institutions in the country such as TDRC, UNZA, etc to conduct quality operational research for policy guidance and knowledge management. The N M C C will strive to strengthen existing research systems aimed at improving the quality o f studies. The project wil l provide support; 0 to build capacity for qualitative research and strengthen coordination o f research at all

levels o f the health care system, 0 strengthen N M C C capacity to provide evidence base malaria information to support

policy decision and program implementation, 0 conduct malaria impact studies and surveys on program implementation, routine in vivo,

compliance and vector susceptibility testing, research for weaning o f f the DDT use and bioassay and vector susceptibility testing, knowledge, attitude and practice ( U P ) surveys, Strengthen information dissemination and use o f research findings for programmatic planning and support publications o f research results.

0

MOH institutional capacity: Financial management, procurement and disbursement functions o f the project will be integrated within the M O H departmentdunits responsible for these functions. Reports from al l stakeholders on resources and their use, implementation progress and procurement plans and progress will be consolidated by N M C C in collaboration with responsible departments and units within MOH. The capacity o f the appropriate M O H staff wil l be strengthened to ensure they can manage the implementation o f the program. The institutional capacity o f M O H in procurement, supply and logistics, financial management, monitoring and evaluation will be strengthened. The project will support training o f staff, strengthening o f systems and development where they do not exist. The project support wil l complement support from other partners in health SWAP.

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' Annex 5: Estimated Project Costs ZAMBIA: Zambia Malaria Booster Project

1. (a) Goods, Equipment, Supplies

(b) Vehicles

(c) Minor Works

(d) Consultancy, Training

1, (e) Operating Costs

2. Distr ict Basket Grants

Local Foreign Total U S %million U S %million U S $million Project Cost By Component and/or Activity

5.0 100%

0.5

0.5

0.5

0.5 100%

3 .O 100%

1. Support to Health Sector Systems District Basket Human Resources contribution ITN, IRS, Case Management IEC, Training

3. Community sub-grants

4. Unallocated

13.42 4.00 0.00 4.00 0.50 2.50 3.00 0.27 5.81 6.08 0.34 0.00 0.34

3 .O 100%

7.0

2. Program Management 1.33 0.77 2.10

Total Project Costs

Total

3. Community Booster Response to Malaria 2.95 0.05 3.00

20.00

20.00

Total Baseline Cost 9.39 9.13 18.52 Physical Contingencies 0.38 0.20 0.58 Price Contingencies 0.65 0.25 0.90

Total Project Costs' 10.42 9.58 20.00

Total Financing Required 10.42 9.58 20.00 'Identifiable taxes and duties are US$Om, and the total project cost, net o f taxes, i s US$20m. Therefore, the share o f project cost net o f taxes i s 100%.

Allocation of Credit Proceeds

7- I I

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Annex 6: Institutional and Implementation Arrangements

ZAMBIA: Zambia Malaria Booster Project

National Coordination and Program Management

Project implementation wil l be embedded within the implementation o f the National Malaria Control Program. The program will build on existing institutional capacity within the MOH, both at national and district levels, as well as implementing agencies (governmental and non- governmental) or partners with complementary expertise. There will be no stand-alone project implementation unit. The M O H Operations Guidelines, which will be developed and approved prior to project effectiveness, i s expected to stipulate more o f the details on the materials presented in this Annex

At the national level, the project will be housed under the MOH, which will be responsible for overall implementation, monitoring and evaluation. The MOH will also provide procurement and financial management support, and oversight to various implementing agencies within the project. Within the MOH, the malaria program coordination and management functions are delegated to a specialized unit in the public health directorate o f the CBoH, namely the National Malaria Control Centre (NMCC).

As currently constituted, N M C C has responsibility for provision o f technical guidelines on malaria control, and coordination o f malaria control activities o f the various RBM partners. The N M C C serves as the Secretariat for activities for RBM and links the service delivery points with the RBM partners. Hence, the N M C C will coordinate the implementation o f components o f the project within the context o f the national malaria control program and provide strategic direction, technical support and quality control.

Specific technical functions o f the N M C C will include: policy formulation and resource mobilization, development o f district and national strategic plans; development o f guidelines on malaria programmatic areas; preparation, and dissemination o f IEC materials; guidance to the C C M and RBM partners on program implementation; assistance to DHMTs in implementation o f malaria control activities and conducting monitoring and evaluation, including operational research. N M C C will provide quarterly reports to the MOH and to IDA on implementation progress o f the national malaria program and the IDA supported Malaria Booster Programme.

N M C C will submit for approval Annual Work Plans and Budgets to the Permanent Secretary M O H after which they will be submitted to IDA for a no-objection. N M C C will report bi- annually to the Health Sector Committee, comprised o f the MOH and cooperating partners. On a bi-annual basis, N M C C will also report to the National Malaria Task Force on the National Malaria Control Program implementation progress. The Task Force comprises o f deputy ministers from al l l ine ministries, W H O and UNICEF and i s chaired by the Deputy Minister o f Health.

Technical Working Groups (TWGs) - on vector control, case management, IEC and M&E- whose membership includes NMCC, RBM partners from civil society, public and private sector will provide technical guidance and implementation support to the program. TWGs meet monthly.

The M O H i s currently undergoing reorganization. The proposed restructuring aims to integrate the CBoH, and i t s subsidiaries, into the MOH, which would assume both program

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and fiduciary responsibilities. Under the new organization, the N M C C would continue to perform i t s mandate o f technical leadership for the malaria program. In light o f the discussions with the MOH, any substantial change i s not expected to affect or disrupt project implementation.

Under the direction o f the NMCC, project components will be implemented as detailed below:

Component I -Suppor t to National Health Systems.

The ITN distribution will be handled through a three pronged approach: mass distribution campaign through the public sector-via DHMTs, health clinics and community distribution points, distribution targeting pregnant mothers and children under five via ante-natal clinics implemented by NGOs, and through community implemented sub-projects.

The mass distribution campaign wil l target highest incidence provinces and districts initially and will be rolled out nationally. The program wil l target rural and poorer populations and i s expected to start in the following provinces: Northern, Luapula, Eastern and Western (in the order o f intervention) selected based on higher malaria incidence rates, and geographic isolation. The remaining five provinces will be covered in the second and third years. The procurement of the I T N s will be handled by the M O W N M C C and will fol low the Government and Bank procurement procedures. N M C C will contract either Medical Stores Limited (MSL) and/or other private sector service provider to handle storage, warehousing and distribution o f I T N s to DHMTs or distribution points. Transportation and storage costs up to desired delivery points in can be included in goods contracts to be tendered out. I f N M C C decides to use MSL, they wil l have to be provided in advance with a 6 month distribution schedule with l i s t o f districts and quantities. Distribution o f I T N s to selected community distribution points (which may be central social and economic structures such as markets, schools, community centers, etc) wil l be the responsibility o f the DHMTs. Beneficiaries for the free ITN distribution program will be mobilized through Health Center Committees, Neighborhood Health Committees (NHC), Community Health Workers, Traditional Birth Attendants and traditional leaders4. N H C members, CHWs, TBAs and traditional leaders wil l verify beneficiaries and assist with the distribution at the distribution points. Funds for transportation and distribution o f the I T N s will be provided to DHMTs as part o f the district basket fund and will be budgeted for within the district annual work plans.

ITN program related capacity development activities will be coordinated by the N M C C and will be contracted out to partner organizations with expertise i f necessary. The capacity development activities will follow a cascade training model and involve provincial health staff, district health staff, and the health center and neighborhood health committees5. At the community level, the community health workers (CH Ws) and Traditional Birth Attendants (TBAs))~ will be reinstated and/or capacitated where in existence on malaria control and prevention activities. CHWs and TBAs will be the liaison between the formal health service delivery system and the communities in addition to the neighborhood and health center committees. The health service delivery staff at provincial and district levels will be the

NHC (which are made up o f representatives from about three villages) registers w i l l be used to identify numbers o f households per village and numbers o f people per household. .

NHC includes community representatives from three villages which i s approximately equivalent to 1,000 households. A district health center committee has representation from ten neighborhood health committees.

Community Health Workers are trained in basic prevention activities (malaria and other diseases?), are expected to make referrals and can dispense basic medication. One CHW i s responsible for 3 villages=one NHC.

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backbone o f the continuous education and behavior change campaigns providing information to the neighborhood and community level with inputs from the M O H and NMCC.

DHMTs will be responsible for the supervision o f the program and wil l report on the ITN program implementation quarterly as part o f their regular reporting on the annual work plans. The District Director o f Health will be the focal point for the program. The reports will be submitted to the N M C C as well as the health sector committee. Monthly reports will be required f rom the participating DHMTs on key input/output indicators. N M C C will provide standard formats for the information to be collected and entered to a simple database to be kept at the district level. The monthly reports will also be submitted to the N M C C either electronically or in hard copies through the Provincial Health Offices. District Health Information Officers will be responsible for the collection, analysis and submission o f data to the PHO and NMCC. The program will provide funds to districts to facilitate monitoring and supervision functions including technical support, equipment and materials. These costs will be included in the annual work plans and budgets for each DHMT and will be funded through the district basket fund mechanism.

A complementary ITN distribution program targeting pregnant women and children under five will be implemented via ante-natal c l in ics (ANCs) and under five clinics. Th is intervention will be rolled out in the same geographic localities as the mass distribution. ITN distribution through ANCs and under-five clinics wil l be implemented by specialized NGOs contracted by MOH/NMCC. A number o f NGOs wil l be selected based on expertise and successful track record in social marketing and distribution o f I T N s through ANCs. The selected NGOs will be responsible for the transportation, storage and distribution o f the ITNs and implementing an outreach, IEC campaign. The NGOs will provide quarterly reports to the N M C C on implementation progress on key input/output indicators.

IRHSprogram implementation will cover 10 districts7 in Copperbelt, Central and Southern province over the three year project implementation period). 8 out o f 10 districts had existing I R H S programs'; hence they wil l be expanded to cover al l eligible structures/areas with the addition o f two more districts. The I R H S program wil l be implemented in eligible urban and peri-urban high malaria incidence provinces/districts. Beneficiary areaddistricts have been selected by the N M C C in collaboration with Provincial Health Offices using a set o f eligibility criteria. Prior to the spraying, a needs assessment and a mapping exercise with regards to human resource capacity, storage facilities and other pertinent factors will be carried out in selected beneficiary districts. N M C C through Provincial Health Offices will provide standard guidelines to DHMTs on program implementation and monitoring. N M C C will also conduct a TOT training for provincial and district environmental health technologists as program coordinators/supervisors who in turn will train NHCs, CHWs and other community members as spray operators, team leaders, etc. Private sector companies such as the KCM, Mopani Copper Mines, chemical supplies companies, City/Municipal Councils and WHO are parts o f district IRHS core groups who conduct the TOT training. DHMTs through the I R H S program manager wil l be responsible for program implementation in collaboration with the private sector. Private sector companies in kind or cash contributions towards program implementation. IRHS equipment such as insecticides, pumps and other accessories will be procured centrally. MOH/NMCC will coordinate the procurement and delivery o f the commodities. Transportation, storage and distribution o f

' Out o f 22 eligible districts. Eligibility i s determined based on rate of urbanization (above 50 percent), malaria incidence, population density, easy access with regards to transportation and communication, and number o f spray able structures within a district * 8 districts currently have 40 percent coverage; objective i s to reach 85 percent coverage in 10 districts over the three year implementation period.

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equipment to DHMTs will either be handled by MSL, the supplier or other private sector service provider. Disposal o f insecticides and sachets will be responsibility o f the manufacturer and the supplier and wil l be stipulated as part o f the supply contracts. DHMTs will submit quarterly activity progress reports to Provincial Health Offices and NMCC. The Environmental Health Specialist at the Provincial Health Offices wil l provide continuous supervision and quality control to the project. Post-spray meetings will be organized by each DHMT to include c iv i l society, private sector, neighborhood health committee representatives, and traditional leaders to evaluate the process. A national meeting with all stakeholders will be held to discuss findings. DHMTs and PHOs will have funds available to facilitate the implementation and supervision o f the program. Resources will be transferred to districts as part o f the district basket fund.

As part o f the effort to strengthen IPT coverage, the program will support training on ante- natal care with focus on malaria in pregnancy for health workers to include staff o f district hospitals and clinics and training on IPT for private physicians. The training will be organized per province and wil l last five days. The N M C C will agree with the MOH Reproductive Health Unit to organize and conduct the training. MOH Reproductive Health Unit capacity and experience for this training wil l be supplemented by private sector or NGO service providers if necessary. The program will also support an awareness campaign targeting pregnant mothers through ANCs and district and community level health committees including community health workers, traditional birth attendants, traditional leaders and healers.

As part o f the effort to scale up laboratory diagnostic capacity in health facilities, the program wil l fund procurement and distribution o f equipment such as microscopes and rapid diagnostic tests (RDTs). N M C C has drawn up a l i s t o f health centers and equipment requirements based on a recent inventory assessment conducted last year. The Medical Stores Limited (MSL) will be responsible for the distribution o f equipment to DHMTs. T h i s will be done within their monthly distribution schedule. N M C C will provide MSL with a 6 month distribution schedule with the names o f districts and quantities to be distributed. DHMTs will distribute the equipment to health centers. Funds to cover intra-district transportation costs wil l be included and transferred to the district accounts as part o f the district basket fund. DHMTs will provide MSL and N M C C with monthly reports on actual deliveries to health centers. MSL will also provide N M C C with monthly reports and distribution l i s t s on deliveries to districts. Al l reports will be to the M O H Directorate o f Public Health.

As part o f the effort to strengthen case management and early identification and treatment o f malaria, the program will capacitate the community health workers (CHW) and traditional birth attendants (TBAs), who are expected to interface with communities on a continuous basis. CHWs will undergo a malaria control and prevention training and will be equipped with bicycles, bags and f i rs t aid kits’ to enable them to move around communities and provide guidance and support on malaria prevention and treatment. The training for the CHWs and TBAs will be administered by the MOH-Child Health Unit which i s an existing program for training CHWs and TBAs. NMCC, if necessary, may contract out other service providers with expertise to supplement MOH capacity. T h i s training will be coordinated and harmonized with the training provided by C H A Z on a pi lot basis in some districts. The program will absorb and rely on the “malaria agents” trained by Church Health Association o f Zambia (CHAZ) to act as community health workers. Support for CHWs where ITN

’ Whilst IDA will fund bicycles and bags, MOH and Global Fund wil l fund training and first aid kits.

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distribution and Community Response activities will be rolled out will have priority. Prior to the training, an inventory o f existing CHWs in program areas will be carried out.

DHMTs will be responsible for the implementation o f the malaria related interventions (ITN distribution, IRS, etc. as outlined above) included in their Annual Work plans. They will receive, on a quarterly basis, incremental funding for recurrent costs such as transportation, supervision, technical support among others through the pooled basket funding mechanism. DHMTs will provide quarterly reports on financial and physical progress to the Provincial Health Offices who will in turn provide bi-annual reports to the Health Sector Committee as part o f their regular reporting. N M C C will play a key role in assisting in the district planning cycle and provision o f technical guidance in implementation. N M C C will provide guidelines to DHMTs on cost estimates for malaria related program management costs such as transportation and other recurrent costs and ensure that these are included in Annual Workplans and budgets. DHMTs will be expected to provide customized monthly reports to N M C C on key input, output and outcome indicators related to malaria interventions. A performance monitoring system for DHMTs i s currently under discussion within the Health Sector Committee. IDA will disburse funds to the district basket once the performance monitoring system i s agreed upon.

Certain malaria prevention and control activities will be supported through existing ministry programs where each ministry wil l be responsible for the implementation and funds that wil l be transferred based on a work plan and a budget approved by respective Permanent Secretary o f each ministry. Through this window, the N M C C will support core activities to improve health seeking behavior and distribution o f I T N s . Funds will be available and disbursed on a f i rst come first serve basis.

The program will support human resource capacity needs at the district level through the district basket funding mechanism to provide the DHMTs with flexible funds for non- monetary incentives to retain critical health staff. Priority rural and urban districts in which the program will become operational will receive a grant to be used towards in kind benefits to essential health staff. There will be physical incentives, such as the provision o f transportation and communication equipment, which will be distributed to each beneficiary district based on an allocation formula or their particular demands. N M C C will provide guidelines to the districts on the use o f these resources.

Component 1 (b)-Environmental Management

The program will support appropriate handling o f healthcare waste and other environmental safety measures associated with malaria control and prevention interventions. These activities will be implemented by MOH, N M C C and DHMTs as appropriate depending on the nature o f the activities. The majority o f the activities will be incorporated into district annual work planshudgets and financing wil l be directly channeled to DHMTs. N M C C in collaboration with the Ministry o f Health wil l ensure that WHO guidelines on vector control, specifically on pesticide and DDT use are adhered to. DHMTs will be provided, as part o f their malaria program management costs, with resources for (i) appropriate training, documentation, information dissemination; (ii) adequate equipment and supplies including protective gear; (iii) updating o f the insectaries, (iv) disposal o f waste including DDT sachets; and (iv) vector control program monitoring.

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Component 2-Community Malaria Booster Response (COMBOR)

N M C C will provide oversight and technical guidance to the implementation o f the component. The administration o f this component wil l be sub-contracted to the agency which i s currently implementing the community response to HIV/AIDS (CRAIDS) program under the National HIV/AIDS Program". Implementation i s planning and program monitoring will jointly carried out by the CRAIDS and NMCC. The program i s expected to commence in the high incidence provinces (Northem, Luapula, Eastern and Westem), and subsequently expand coverage as appropriate based on annual work plans agreed to with NMCC. Areas o f intervention with ITN distribution, case management and P T programs and Community Response will need to be synchronized with the COMBOR. Before the onset o f the activities on the ground, CRAIDS staff and District Facilitation Teams (DFTs), comprising DHMT and District AIDS Task Force members, will undergo orientatiodtraining on the national malaria program.

CRAIDS has an already established structure --offices and staff-- in Lusaka as well as in all the nine provinces. CRAIDS Management Unit (CMU) based in Lusaka will have a dedicated programme officer to oversee the malaria control program who wil l be supported by the existing administrative staff, Regional Facilitators (RFs) and Regional Technical Assistants. Where it i s deemed necessary, additional technical assistants wil l be recruited to support the increased workflow within the CRAIDS regional offices. The implementation wil l follow a demand driven model and wil l rely on existing institutional structures at the district and community level.

The majority o f the sub-projects are expected to be implemented directly by communities although communities may choose to partner with NGOs. NGOs will also be able to apply for grant funds for community based malaria control and prevention activities covering multiple communities or districts. Each sub-project wil l have a community project committee which will be in charge o f implementation. Sensitization and mobilization will be carried out by District Facilitation Teams (DFTs) which will consist o f members o f the DHMT and members o f the District AIDS Task Forces, with support from the CRAIDS Regional Facilitators and Technical Assistants. All members o f the DFTs and select members o f the DDCC will receive training on malaria prevention and control, and participatory appraisal/facilitation and refresher training where necessary on the demand driven approach and project supervision and monitoring.

Community Health Workers and Traditional Birth Attendants will act as resource persons and wil l provide support to the District Facilitation Teams in mobilizing the communities and supporting them with sub-project proposal preparation. CHWs and TBAs will also assist the District Facilitation Team with monitoring o f sub-project implementation and submission o f reports. The DFTs will appraise and approve sub-project proposals. The sub-projects wil l be presented to the District Development Coordinating Committee (DDCC) for ratification. The DFTs will submit approved sub-projects to the CRAIDS regional office for the development o f a financing agreement and funding by the CMU. Once approved, CRAIDS will send instruction to banks to transfer funds to respective community project accounts.

Prior to project launch, community project management committees will receive training in malaria prevention and control basic intervention package and project management. DFTs, with support from CRAIDS regional staff, will be responsible for project supervision and

lo As part o f the national program IDA supports the US$42 million Zambia National Response to HIV/AIDS (ZANARA). The community response component o f ZANARA i s administered by a project administration unit within the MOFNP, identified as the CRAIDS Management Unit.

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technical support to communities. Community project management committees will provide monthly progress reports and a completion report to the DFT. DFT will compile monthly reports and submit to the DDCC and the CRAIDS regional office. Monthly progress reports will be collated on a provincial basis and submitted quarterly to the CRAIDS Management Unit (CMU). C M U will be responsible for submitting quarterly comprehensive reports to N M C C on the community response to malaria.

The COMBOR will follow a similar project cycle to that identified for the CRAIDS HIV/AIDS activities, but specifically adapted to malaria. The CRAIDS Operations Manual will be adapted for use by this component and incorporated into the M O H Operations Guidelines that will be agreed prior to project effectiveness. The linkage o f the community activities with the Distr ict Health Management Teams will be emphasized under the COMBOR component. The sub-project proposals will have maximum ceilings o f US$2,500 for communities; US$5,000 for an NGO covering more than one community and $10,000 for more than one district. Once approved, CRAIDS will send instructions to the MOH to transfer funds to respective community project accounts. Prior to project launch, community project management committees will receive training in malaria prevention and control basic intervention package and project management.

Implementation plans and program monitoring will be done jointly by CRAIDS and NMCC. The COMBOR program i s expected to commence in the malaria high incidence provinces (Northern, Luapula, Eastern and Western), and subsequently expand coverage as appropriate based on annual work plans agreed with NMCC. Rollout o f activities in the target provinces and districts for ITN distribution, case management and IPT programs and Community Response wi l l need to be synchronized with the COMBOR. Before the onset o f the activities on the ground, CRAIDS staff and DFTs will undergo orientatiodtraining on the national malaria program.

The majority o f the sub-projects are expected to be implemented directly by communities although communities may choose to partner with NGOs. NGOs will also be able to applj for grant funds for community based malaria control and prevention activities covering multiple communities or districts. Each sub-project will have a community project committee which wil l be in charge o f implementation. Sensitization and mobilization wil l carried out by DFTs, with support from the CRAIDS Regional Facilitators and Technical Assistants. All members o f the DFTs and select members o f the DDCC will receive training on malaria prevention and control, and participatory appraisal/facilitation and refresher training where necessary on the demand driven approach and project supervision and monitoring.

DFTs, with support from CRAIDS regional staff and Provincial Health Offices (PHOs), will be responsible for project supervision and technical support to communities. Community project management committees will provide monthly progress reports and a completion report to the DTF. The DTF will compile monthly reports on COMBOR activities within their district and submit them to the DDCC and the CRAIDS regional office which will collate information from the province and submit a quarterly report to the CRAIDS Management unit. CRAIDS Management unit wil l be responsible for submitting quarterly comprehensive reports to N M C C on the community response to malaria.

The current MIS system in use at N M C C will be replicated at the CRAIDS regional and Lusaka offices and relevant staff wil l be trained on i t s use. A module to capture progress on community response will be developed and incorporated to this system. Monthly report fonnats wil l be provided to all DFTs and community project management committees.

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Component 3-Program Management will provide finds for institutional support to NMCC, and M O H provincial and district level entities in the coordination, implementation, and monitoring and evaluation o f the program. Eligible activities will be financed through annual workplans o f each entity. M O H and N M C C may form partnerships with other public sector institutions, private sector or c iv i l society organizations based on areas o f expertise in support o f these functions.

Project Implementation Framework

The project will be implemented within a sector-wide approach framework, whereby there are multiple other partners financing the health sector and the malaria program, and consistent with the donor harmonization initiative. However, the project will focus intensely on achieving results in the malaria program within such a context. The project implementation framework will comprise the following parameters: the National Health Strategic Plan 2006-200 1 1, National Malaria Strategic Plan 2006-201 1, National Malaria Implementation Plan 2005-2008, M O H Operations Guidelines (to be approved prior to effectiveness), Monitoring and Evaluation Strategic Framework, National Health Care Waste Management Plan 2004-2006, and the Vector Management Action Plan.

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Annex 7: Financial Management and Disbursement Arrangements

Background 1. financial management arrangements for the Malaria Booster Project. The objective o f the assessment was to determine whether the project has in place an adequate financial management system as required by the Bank’s OP/BP 10.02. The assessment was conducted using the guidelines” issued by the Bank’s Financial Management Sector Board on October 15,2003. For projects financed by the Bank, the borrower and the project implementing agencies are required to maintain financial management systems, including accounting, financial reporting, and auditing systems adequate to ensure that they can provide accurate and timely information regarding project resources and expenditures.

The report i s a record of the outcome o f the assessment o f the existing and proposed

Country Issues

2. The Country Financial Accountability AssessmentI2 (CFAA) on Zambia dated November 2003 overall conclusion was that “there sti l l remain substantial weaknesses and risks within the public financial management system of Zambia. ” ‘Considerable weaknesses in the areas of budget management; financial reporting & audit, and procurement. ’ “Many of Zambia’s public finance laws and regulations are not enforced. This has led to a breakdown of administrative systems and procedures for the control of expenditure. Audit systems that are in place to detect improprieties have been rendered ineffective due to the lack of follow-up and enforcement of the Auditor General’s recommendations, Unfortunately, the lack of sanctions may have only served to embolden those who have been engaged in improper activities. ” The challenges faced by Zambia in public expenditure management have been longstanding and w i l l require targeted efforts as well as a strong degree ofpolitical wi l l to address. ” The IDA projects in Zambia operate in these poor control environment. In the on going consultations with the Wor ld Bank and the Cooperating Partners (CPs) the Government has indicated that the implementation o f the Public Expenditure Management and Financial Accountability Review (PEMFAR) recommendations i s top priority. In this regard, the Wor ld Bank, with the CPs, i s joint ly funding the Govemment PEMFA Project at the MOFNP to implement the recommendations o f the PEMFAR.

Strengths and Weaknesses

3. The M B P financial management i s strengthened by the installation and scaling up the use o f Navision accounting package by the MOH. The M B P system will be integrated with the existing Government FMS and will have an expanded chart o f accounts based on the GRZ budget heads and the CPs reporting requirements. The package has dimensional reporting flexibil i ty features which will allow for t imely production o f reliable, relevant and understandable FMRs for all stakeholders. Besides, there i s adequately qualified and experienced staff to operate the system.

4. existing regulations and internal controls are not fully enforced. This i s compounded by the existence o f a poorly remuneratedmotivated staff and inadequately resourced (human and

The financial management i s weakened by the poor control environment where

‘I Assessment o f Financial Management Arrangements in World Bank-Financed Projects: Guidelines

I’ The CFAA was part of a comprehensive Public Expenditure Management and Financial Accountability to Staff, Financial Management Sector Board, October 15,2003.

Review (PEMFAR) carried out by the Govemment o f the Republic o f Zambia with the support o f cooperating partners and the World Bank in November 2003.

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financial) internal and external audit and the lack o f follow-up on their recommendations by the Controlling Officers. The measures to mitigate the impact o f these weaknesses are described in the risk analysis in Section C.5 above and the implementation o f measures as per agreed action plan below.

Implementing Entity

5. Activities wil l be implemented at three levels, Central, District and Community. At the central level the M O H will have overall responsibility for implementation o f the MBP, through a specialized unit, the National Malaria Control Centre (NMCC). At the District level DHMTs will be responsible for the implementation o f the malaria related interventions. At the Community, NMCC will subcontract the implementation to CRAIDS, a component under ZANARA another IDA project, which has established the necessary infrastructure at that level, dealing with Community Response to HIV/AIDS. At both levels the NMCC will provide oversight and technical guidance. DHMTs and CRAIDS wil l submit quarterly financial and progress reports to NMCC. In turn N M C C will submit semi-annual FMRs to the MOH, IDA and other CPs on implementation progress o f the National Malaria Program and the IDA supported MBP.

Funds Flow

6. Funds will f low from IDA to MOH through an earmarked Special Account. Funds wil l be used from the Special Account for the central level and community based activities. Authorized disbursements wil l also be made from the Credit Account to the common District Basket (Pool) Account according to agreed work plans. The funds f low i s depicted in the chart on the next page, which should be read in the context o f the disbursement arrangements described further on below.

48

FLOW OF FUNDS CHART

1 T

Component 1,2,3

improve service delivery m Strengthen Health System to

Program Management Community Booster Response to Malaria

R

P

r t 1 n

6 a

k

- 0

c

Common District Basket (Pool) Account In U S $ in a Commercial

Bank (Already in existence at MOW.

1 m Strengthen Health System to

improve service delivery

49

Staffing

7. Currently, there i s no accounting staff in the MOH for the project. After the dissolution o f CBOH which was responsible for Health sector implementation, the plan i s to integrate the CBOH staff into the Ministry and this i s yet to happen. The M O H accounting department wil l rearrange duties and responsibilities and assign staff to handle M B P accounting functions. A fully qualified accountant holding the position o f Principal Accountant will head the unit to be responsible for donor funds accounting. All the staff to be retained from CBOH will be part o f this unit. The MOH Chief Accountant will have overall financial management responsibility for the project. Training at various levels wil l be required in financial management, disbursement and information systems. The Ministry i s staffed with professionally qualified accountants starting with the Chief Accountant whose expertise the project can benefit from. I t will be critical that M O H retains adequate staff in the accounting department throughout the duration o f the Project.

Accounting Policies and Procedures

8. transactions. The project in l ine with Government accounting policy will comply with International Public Sector Accounting Standards (IPSAS) under the cash basis o f accounting, as promulgated by IFAC. The accounting policies and procedures wil l be documented in the Financial Procedures section o f the MOH Operations Guidelines to be joint ly agreed by al l stakeholders.

The project will adopt a cash basis o f accounting method to record financial

Internal Audit

9. Pursuant to the Public Finance Ac t Number 15 o f 2004, internal auditing in Government i s the responsibility o f the Controller o f Internal Audit based at the MOFNP. The Controller seconds the staff to Government ministries who report to the Controlling officers in the respective ministries. However, the staffing levels and operational funding are inadequate for the internal audit to be effective. For example at the MOH headquarters there are only 2 staff in the internal audit dept. out o f an approved establishment o f 5. Realizing the weaknesses in the internal audit functions, a strong management control environment i s recommended through the day to day supervision o f the accounting functions. The M O H Operations Guidelines to be modified or produced prior to effectiveness wil l prescribe supervisory accounting procedures that will mitigate the internal audit weaknesses. In addition, the Intemal Audit department should develop a comprehensive annual work program for the health sector, and make a case to the HSC for funding from the pool. The Internal Auditor i s expected to work collaboratively with the external auditors and the M&E units o f the MOH.

External Audit

10. In Zambia, the Office o f the Auditor General (AG), as outlined in the Constitution o f Zambia Act, Chapter 1 o f the Laws o f the Republic o f Zambia, i s responsible for the external auditing o f all Government Funds13. Therefore, an external audit will be carried out annually by the AG. The audit will cover the fbnds for the whole Health Sector and not only IDA

3 In practice, because o f capacity constraints, the AG frequently contracts relevantly qualified, experienced and independent private sector auditors as agents on agreed terms o f reference. In such cases, the private sector auditor reports directly to the AG who retains the overall responsibility for the audit opinion.

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funds. The auditor w i l l conduct the audit according to Auditing Standards issued by the INTOSAI on terms o f reference (TOR) acceptable to the borrower and al l co-financiers. The audit work wil l follow closely the “Guidelines: Annual Financial Reporting and Auditing for World Bank - Financed Activities” issued by the Bank on June 30,2003. In line with the new audit pol icy IDA will allow reasonable audit costs to be financed from the Credit, on request from the borrower. The IDA Credit Agreement will require the submission o f audited annual consolidated financial statements to IDA within six months after the year-end. The financial statements should be prepared in accordance with acceptable accounting standards. The formats and c ~ n t e n t s ’ ~ to be adopted for the annual financial statements will be agreed with the borrower and all co-financiers and will be documented in the M O H Operations Guidelines.

1 1, In addition to the audit report, the auditor will be required to prepare a separate report to Management, giving significant weaknesses that the auditor came across during the course of the audit that are not reflected in the audit opinion. These may include weaknesses in the internal control systems, inappropriate accounting policies and practices, issues regarding general compliance with broad covenants such as implementing the project with economy and efficiency and any other matters the auditor considers should be brought to the attention o f the borrower. The auditor should provide recommendations for improvements.

Reporting and Monitoring

12. The project wil l report on the basis o f agreed performance indicators as in annex 3- Results framework and monitoring o f the P A D to al l the stakeholders. Formats o f the various reports, internal and external to be produced from the financial management system will be agreed with al l the stakeholders and these will be included as part o f the MOH Operations Guidelines and the Memorandum o f Understanding. M O H Navision FMS will be designed and configured to allow clear linkages between the Chart o f Accounts and the information in these reports. The financial reports will be designed to produce relevant, understandable and reliable information on a timely basis to al l stakeholders.

13. Program monitoring will take the following forms: National Malaria Task Force oversight o f N M C C on the National Malaria Control Program implementation progress; National Health Sector Committee (MOH and CPs jointly) on Ro l l Back Malaria ; N M C C Technical Working Groups monthly discussions o f technical aspects o f the program; Joint CPs supervision missions; Annual external audit o f the Health Sector activities.

14. MOH/NMCC on a semi-annual basis and submitted to the National Malaria Task Force, National Health Sector Committee, MOH, Ro l l Back Malaria, N M C C Technical Working Groups, World Bank and CPs. The FMR will encompass the total Health sector as described in the PAD, and not only the use o f Bank funds. The FMR will reflect al l Health sector activities, financing, and expenditures, including funds from other donors:

The following financial monitoring reportsI5 (FMRs) wil l be produced by the

l4 The bank does not mandate a format of annual financial statements. However, where borrowers prepare financial statements on a cash basis, the Bank encourages the adoption of formats laid out in Cash Basis IPSAS, Financial reporting under the cash basis o f Accounting - Guidelines: Annual Financial Reporting and Auditing for World Bank - Financed Activities, June 30, 2003.

The booklet, Financial Monitoring Reports: Guidelines to borrowers, World Bank, November 30, 2001 with sample formats was made available to the borrower’s project preparation team.

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. Financial Reports At a minimum, financial reports must include a statement showing for the period and cumulatively (project l i f e or year to date) cash receipts by sources and expenditures by main expenditure classifications (categories/components/activities); beginning and ending cash balances o f the project; and supporting schedules comparing actual and planned expenditures; Cash forecast for the next two quarters. . Physical Progress Physical progress reports include narrative information and output indicators (agreed during project preparation) linking financial information with physical progress, and highlight issues that require attention. . Procurement Monitoring Reports provide information on the procurement o f goods, work, and related services, and the selection o f consultants, and on compliance with agreed procurement methods. The reports compare procurement performance against the plan agreed at negotiations and/or subsequently updated, and highlight key procurement issues such as staffing and building borrower capacity. In addition to procurement progress, the reports include information on all authorized contract variations. Information on complaints by bidders, unsatisfactory performance by contractors, and any major contractual disputes may also be included.

15. Financial Statements in accordance with International Public Sector Accounting Standards (IPSAS) cash basis o f accounting, for audit purposes. These Financial Statements (outline o f the expected contents to be included in the MOH Operations Guidelines to be joint ly agreed by al l stakeholders) wil l at the minimum comprise o f l6

Besides the semi-annual FMRs, M O H will prepare annual Health Sector

a) A Consolidated Statement o f Sources and Uses o f FunddCash Receipts and Payments (cash receipts by sources and expenditures by main expenditure classifications(categories/components/activities), which recognizes all cash receipts, cash payments and cash balances controlled by the entity; and separately identifies payments made on behalf o f the entity by third parties;

b) Significant Accounting Policies Adopted and Explanatory Notes. The explanatory notes should be presented in a systematic manner with items on the Statement o f Cash Receipts and Payments being cross referenced to any related information in the notes.

c) A Management Assertion that Bank funds have been expended in accordance with the intended purposes as specified in the DCA.

d) Any supplementary information or explanations that may be deemed appropriate by management to enhance the presentation o f a "true and fair view."

Information Systems

16. The system will be capable o f producing FMRs in a timely manner. The financial information that will be produced wil l assist al l stakeholders to plan and implement the

M O H i s installing a computer based FMS using the Navision accounting package.

l6 Guidelines: Annual Financial Reporting and Auditing For World Bank -Financed Activities, World Bank, 30 June 2003.

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project, monitor compliance with agreed procedures, and appraise the project’s overall progress towards the achievement o f i t s objectives.

Disbursement Arrangements

17. Disbursements to the MBP wil l be by the Transaction-based method and the Report- based methods. IDA has agreed to the pooling o f funds through the District Basket Account funding mechanism under the National Health Strategic Plan (NHSP). Replenishment o f the District Basket Account will be by the Report-based Disbursement method. I t should be pointed out that since October1 999 the M O H signed an M O U with 16 Cooperating partners, including IDA, adopting a Sector Wide Approach pooling o f funds to support the NHSP. The M O U i s being revised and it has been circulated to al l stakeholders for comments. The f low o f funds to the District Basket Account wil l follow approval by the Health Sector Committee” o f the annual work plan and budget prepared by NMCC. Partners to the pooling arrangement will transfer funds to the common District Basket Bank Account (in US dollars) semi-annually, their share o f the approved work plan and budget. Init ial deposit into the District Basket Account will be for the first 6 months o f activities o f the approved annual work plan and budget.

18. The release o f funds by IDA into the District Basket Account wi l l be based on consolidated FMRs for 6 months activities o f the approved annual work pladbudget and a request for disbursements by fi l l ing in Form 1903B, Application for Withdrawal. Subsequent disbursements into the District Basket Account wi l l be based on the semi-annual FMRs justification o f the expenditure, which must be submitted to IDA within 45 days after the end o f each reporting period. The FMRs will be accompanied by the following reports: Distr ict Basket Account Activi ty Statement supported by a copy o f the Bank statement; Summary Statement o f expenditure for contracts above the prior review threshold; and Summary Statement o f expenditure for contracts below the prior review threshold.

19. The MOH will transfer the funds to the Districts on a monthly basis. The Districts will be required to report back to the M O H on a quarterly basis on the sources and uses o f funds. The Health Sector Committee (HSC) will review progress against the approved work plan semi-annually and approve the funding for the next quarter. The HSC review wil l be based on the semi-annual FMRs and any other progress reports f iom the districts which are summarized at M O H headquarters with recommendations for approval to release the next funding. Disbursement to the Distr ict Basket Account wi l l be contingent upon the M O H having in place an acceptable performance monitoring system for the districts that includes malaria.

20. Transaction-based method means disbursements will be made on the basis o f incurred eligible expenditures. The MOH will open a Special Account at a commercial bank that will receive funds transferred the f iom IDA Credit account. The Transaction-based disbursement mechanisms will include Direct Payment, Special Commitments, Reimbursements and use o f SOE. Direct Payment involves full documentation payment request by the Borrower to a third party for works, goods and services. Payments can also be made to a Commercial Bank against expenditures under a letter o f credit by IDA giving a special commitment to pay after satisfying agreed conditions. To qualify for the Direct Payment and Special

” The committee i s chaired by the Permanent Secretary MOH and comprises representatives o f CPs, the CBOH and the M O H .

53

Commitment disbursement methods the minimum Withdrawal Application size i s 20 % o f the advance in the Special Account. When the Borrower pays IDA'S share o f eligible expenditure from i t s own resources, the Borrower qualifies to seek reimbursement o f this expenditure from the proceeds o f the Credit.

2 1. based disbursement.

The following table outlines the supporting documentation required for Transaction-

1. Reimbursement a). For contracts above the prior review threshold:

0 Summary Sheet and full supporting documentation J Invoice from the supplier J Evidence o f payment to the supplier J Proof o f shipment o f goods or delivery o f services

b). F o r contracts below the prior review threshold: 3 Statement o f Expenditure (SOE)

J supporting documentation as noted above i s retained by the MOH for inspection by the Bank, upon request

J Copy o f SA bank statement

J For goods: Invoice from the supplier and proof o f shipment o f goods

J For services: Payment certificate and proof o f delivery o f services

J SA reconciliation statement J SA bank statement

2. Direct Payment

3. Special Account (SA) Replenishment

Replenishment documentation (as noted in 1 and 2 above)

22. Handbook and the Financial Monitoring Reports: Guidelines to Borrowers. All disbursements wil l be governed by the conditions in the Financing Agreement and the procedures defined in the Disbursement Letter that wil l be sent to the borrower upon signing of the Financing Agreement. T h i s will include the remedies available to IDA in cases o f ineligible expenditures made from the SA, the SA account remaining inactive, and when the reporting requirements are not complied with.

23. individual donors (including IDA) will finance specific contracts for goods and works procured through ICB, as well as contracts for the services that are advertised internationally. Disbursements for I C B procurements cannot be made from the pooled District Basket Account. All procurements below the I C B threshold can be financed from the pooled funds using national procurement and consultant selection procedures acceptable to the partners and the borrower. '

Disbursement and withdrawal procedures are detailed in the Bank Disbursement

Disbursements for ICB and Below ICB Procurements. It has been agreed that

24. Borrower's request at regular intervals, preferably monthly or any shorter period as circumstances dictate. This involves submitting a Withdrawal Application on a prescribed Form 1903 to be signed by designated signatories at the MOFNP. The application i s to be supported by documentation evidencing the expenditure, except for contracts, each costing

Use of SOEs. Replenishment to the SA for expenditures incurred will be made on the

54

less than: (i) US $500,000 for works; (ii) US $250,000 for goods; (iii) US $100,000 for consulting f i rms ; and (iv) U S $50,000 for individual consultants, which may be claimed on the basis o f SOE. The implementing units will retain the documentation supporting expenditures claimed under SOEs and IDA reserves the right to examine these documents during supervision missions and SOE reviews when considered necessary. The documents should also be made available to the independent auditors for auditing purposes. The use o f SOE procedures however should be restricted for at least the f i rs t 6 months after credit effectiveness. The M O H should be required to submit full documentation for al l SOEs until after 6 months when a determination wil l be made by IDA about the application o f adequate internal controls. Th is restriction i s considered necessary as a lesson learnt under the last HSSP where this disbursement procedure was abused and resulted in huge amounts o f ineligible expenditures.

B a n k Accounts

25. Bank accounts as follows:

To facilitate disbursement o f eligible expenditures, M O H will open and maintain four

a) Account No. 1 - A Special Account with a Commercial Bank under terms and conditions acceptable to IDA in US Dollars. The Account wil l show: Dollar advances from the IDA Credit Account; Dollar cost o f payments for eligible expenditures as per Section IV o f the Financing Agreement; Dollar/Kwacha equivalent cost o f transfers based on actual liabilities to Account No. 2; Opening and Closing Balances.

b) Account No. 2 - Advance Account in Kwacha with a Commercial Bank under terms and conditions acceptable to IDA into which draw-downs from the Special Account wil l be credited once per month (towards the end o f the month) to meet eligible expenditures payable in Kwacha. Following the immediate payment o f those liabilities, the balance on this account should be zero at the end o f each month. Th is will be done to ensure the program does not incur exchange losses. Detailed operating procedures will be documented in the Financial Procedures Manual.

After credit effectiveness IDA will, at the borrower’s request by submitting an Application For Withdrawal on Form 1903, advance the Borrower from the proceeds o f the Credit the agreed amount (Authorized Allocation). The Special Account (SA) wi l l be used to finance the IDA’S share of the program expenditures.

c) The Common District Basket Account maintained at Zambia National Commercial Bank in United States Dollars i s managed by MOH, into which contributions in foreign currency will be made.

d) The Common District Basket Account maintained at Zambia National Commercial Bank in Zambian Kwacha i s managed by MOH, into which the borrower’s contribution and any other contribution in local currency by some CPs will be deposited.

Deposits into the common District Basket Accounts will be made by al l partners and the Borrower on a semi-annual basis in their agreed share o f contributions as per the MOU.

55

Transfers from the two Bank accounts to the Distr icts wil l be on a monthly basis following funding approval by the HSC.

Action Operationalize the Navision accounting package

26. In addition, IDA will maintain a Loan Ledger Account in SDR and U S Dollar equivalent. The Account wil l show: Cost o f transfers to the Special Account and the District Basket Account; Cost o f direct payments to suppliers and Reimbursements, and Opening and Closing Balances.

By When By Who 30 Sovember 2005 I MOH Chief Accountant

27. Cheque signing arrangements will follow the two panel system. Details o f this wil l be included in the financial procedures manual to be produced by programme effectiveness. All Bank accounts wil l be reconciled monthly by MOH. The Bank reconciliation statement will be reviewed by designated officials on a timely basis, and al l identified unusual differences will be investigated expeditiously. Control procedures over al l bank transactions (e.g. cheque signatories, transfers, advances etc.) wil l be documented in the financial section o f the M O H Operations Guidelines.

&d agree on FMRs and Annual Financial Statement formats and content.

Demonstrate the ability of the Navision FMS to

Financial Management Action Plan

30 November 2005 MOH Chief Accountant

28. management risk, the following actions should be taken by the indicated due dates.

In order to strengthen the control environment and to mitigate the project financial

incorporate all activities for the Malaria Program Provide training in the operation o f the Navision 30 November 2005 MOH Chief AccountanVIT accounting system Produce Internal Audit work program for the first year o f operation

Recruitment o f external auditor . . . .

Short l i s t and TOR submitted Short list and TOR cleared

Special Account in U S dollar Advance Account in Kwacha local currency.

Opening o f accounts

produce agreed FMb-and financial statements I Review andor modify the Production o f a MOH I Credit Effectiveness I MOH Chief Accountant

Consultant Controller of Internal Audit (MOFNP)/MOH Principal Internal Auditor

Within 3 months after Auditor General Credit Effectiveness World Bank/CPs

Credit Effectiveness MOH Chief Accountant

3 1 December 2005

Operations Guidelines on processes and procedures as necessary to strengthen them and

Supervision Plan

29. Financial Management supervision will be carried out joint ly by IDA and CPs as part o f the overall supervision for the Health Sector Program. At least 2 supervision missions are expected in a year. The objective o f the financial management supervision i s to ensure, the continued adequacy o f the borrowers’ FMS, compliance with relevant legal covenants o f the

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DCA, and that the proceeds o f the credit are used only for the purposes for which the Grant was intended, with due regard to economy and efficiency and also to build the financial management capacity o f the borrower implementing agency. The actual work will include the checking o f conditions o f effectivenesddisbursements, review o f the financial component o f the FMRs and the Audit ReportdManagement Letters from the external auditors and following up with the M O H on all significant accountability related issues, carrying out o f SOE reviews and suggesting ways o f building the MOH capacity to deal with the weaknesses identified.

Annex 8: Procurement Arrangements

ZAMBIA: Zambia Malaria Booster Project A. General

Procurement for the proposed project would be camed out in accordance with the Wor ld Bank’s “Guidelines: Procurement under IBRD Loans and IDA Credits” dated M a y 2004; and “Guidelines: Selection and Employment o f Consultants by Wor ld Bank Borrowers” dated M a y 2004, and the provisions stipulated in the Legal Agreement. The general description o f various items under different expenditure categories are described below. For each contract to be financed by the Loadcredit, the different procurement methods or consultant selection methods, the need for prequalification, estimated costs, prior review requirements, and time frame are agreed between the Borrower and the Bank project team in the Procurement Plan. The Procurement Plan will be updated at least annually or as required to reflect the actual project implementation needs and improvements in institutional capacity. During the appraisal mission it was agreed that there will be a provision for retroactive financing o f eligible expenditures procured according to IDA procedures and guidelines.

Procurement o f Works: Works procured under this project, would include: Minor refurbishment and extension o f existing offices and storage facilities. The procurement will be done using the Bank’s Standard Bidding Documents (SBD) for al l I C B and NCB. Procurement under the Community Malaria Booster shall be carried out in accordance with the Bank’s Procurement Guidelines for community demand driven projects as per agreed procedures based on the ZANARA CRAIDS.

Procurement of Goods: Goods procured under this project would include: insecticides & chemicals, insecticide treated nets, diagnostic instruments, indoor residual spraying pumps, accessories and spare parts, vehicles, office equipment &furniture. The procurement will be done using Bank’s SBD for al l I C B (LIB) and NCB. Procurement o f Bundled nets shall be done through LIB, as there are very l imited manufacturers on the market and there i s need to have the f i rs t deliveries during the upcoming malaria period. The insecticides and chemicals, and spraying equipment and accessories shall be procured through a pre-qualification process to be started immediately.

Procurement o f non-consulting services: Services l inked to the implementation o f the program such as transportation, storage and distribution costs, development & dissemination of guidelines, support to community level interventions. These will be done using tailor-made simplified bidding documents currently under preparation, to be agreed with the Bank prior to use.

Selection o f Consultants: Services such as annual survey on utilization, operationalization of M&E framework, operational research/studies, coordination of components, coordination of working groups and support to district action planning shall be undertaken. Short l i s t s o f consultants for services estimated to cost less than $100,000.00 equivalent per contract may be composed entirely o f national consultants in accordance with the provisions o f paragraph 2.7 o f the Consultant Guidelines. Support to implementation o f certain national malaria prevention and control interventions may be contracted to specialized NGOs with expertise. This wil l be done through a competitive process using appropriate procurement methods. Strengthening o f existing research systems aimed at improving the quality o f studies shall be carried out through identified in-country research institutions, such as the National Tropical Diseases Research Center and Universities.

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Operational Costs: which would be financed by the project would be procured using Government standard procedures which wil l further be defined in the Annual Work plan and Budget, which shall be reviewed and approved by the Bank. Operational costs under the community component will be outlined as part o f the Annual Program Work plan and wil l be subject to Bank review and approval.

B. Assessment of the agency’s capacity to implement procurement

Procurement activities wil l mainly be carried out by the Ministry o f Health, Procurement Unit with technical input from the National Malaria Control Center. A procurement capacity assessment o f the Ministry o f Health has been carried out. Overall, the assessment indicates an Average Risk rating for the Ministry. However, substantial risks remain as a result o f poor selection and quantification o f requirements, inadequate procurement planning and monitoring, poor procurement records management, insufficient contract management and CBoH staff uncertainty surrounding the integration o f M O H K B o H .

During appraisal, a need has been recognized for a logistics specialist who will assist the MOH carry out the following specific activities which compliment procurement (i) based on strategic and annual work plans, facilitate forecasting and quantification process (ii) with input from technical specialists o f the M O H build technical specifications needed for procurement, (iii) advise on packaging, labeling and determine logistics requirements for drugs, equipment and supplies, (iv) review and suggest enhancement o f in-country logistics warehousing and distribution management system and capacities (v) advise on equipment and drugs quality issues working in conjunction with the drug regulatory authority and the Pharmacy Unit of the MOH, and (vi) advise on realistic lead time requirements for the supply chain so that this i s incorporated in the procurement plans, (vii) identify capacity gaps, develop training plan, carry out training or recommend appropriate training to build the MOH’s capacity in logistics and supply chain management and (ix) advise or develop monitoring and evaluation systems for supply chain management .

The following actions are suggested to mitigate the procurement risk and facilitate the implementation o f the programme. (i) Earmarking a dedicated chief procurement officer in the MOH to handle the Malaria Booster Project by November 15,2005; (ii) Employment o f a qualified procurement consultant for a period o f at least one year to assist MOH in streamlining i t s procurement processes, in executing the procurement functions and building procurement capacity in MOH - by December 3 1,2005; (iii) establish record management systems; (iv) immediately launch the prequalification process - as part o f the preparatory work - for the essential procurements o f a 2-year supply (with staggered) delivery; (v) prepare procurement monitoring and contract progress and expenditure report systems; and (vi) prepare or modify existing MOH Operations Guidelines that includes procurement procedures and guidelines - prior to Effectiveness. To enhance the efficiency o f logistics and supply chain management the M O H will recruit a Logistics Specialist for at least 1 year to be supported by the project.

C. Procurement Plan

The Borrower, at appraisal, developed a draft Procurement Plan for project implementation which provides the basis for the procurement methods. This plan has been agreed between the Borrower and the Bank on September 29, 2005 and i s available at National Malaria Control Centre, Chainama Hills Hospital, Lusaka. The plan will also be available in the Project’s database and in the Bank’s external website. The Procurement Plan wil l be updated

59

in agreement with the Project Team annually or as required to reflect the actual project implementation needs and improvements in institutional capacity.

Frequency o f Procurement Supervision

In addition to the prior review supervision to be carried out from Bank offices, the capacity assessment o f the Implementing Agency has recommended two (2) supervision missions per annum to visit the field to carry out post review o f procurement actions.

ATTACHMENT 1: DETAILS OF PROCUREMENT THROUGH INTERNATIONAL ~

COMPETITION

1. Goods and Works and non consulting services.

(a) L i s t o f contract Packages which wil l be procured following ICB and direct contracting:

(b) I C B Contracts estimated to cost above US$250,000 for goods and estimated to cost US$500,000 for works per contract and al l direct contracting will be subject to prior review by the Bank.

2. Consulting Services.

(a) L i s t o f Consulting Assignments with short-list o f international f i r m s . (none envisaged)

(b) Consultancy services estimated to cost above US$lOO,OOO for consultants f i rms and US$50,000 for individual consultants per contract and all Single Source selection o f consultants ( f i rms) will be subject to prior review by the Bank.

(c) Short lists composed entirely of national consultants: Short l i s t s o f consultants for services estimated to cost less than US$lOO,OOOequivalent per contract may be composed entirely o f national consultants in accordance with the provisions o f paragraph 2.7 o f the Consultant Guidelines.

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Annex 9: Economic and Financial Analysis ZAMBIA: Zambia Malaria Booster Project

Economic Analysis of the Project

The Government o f Zambia has proposed a four year multi-sector project to address Malaria. The rationale for greater investment in malaria control in Zambia i s strong: the burden o f the disease and the adverse economic impact o f the disease i s large and i s fe l t at al l levels. The impact on poverty i s also considerable. Malaria i s a multi-sectoral development problem, playing a role as major cause o f morbidity and mortality, school absenteeism, work absenteeism and productivity losses. The project aims to mitigate these consequences o f malaria by providing resources for i t s prevention and treatment. The economic analysis o f the Zambia Malaria Booster project will examine the following issues:

1, Project rationale 2. Challenges to improving malaria control in Zambia 3. Relationship o f the project to the government’s and the Bank’s strategy for the sector 4. Project alternatives considered 5. Readiness of the country for the project 6. Project benefits 7. Sustainability o f project investments 8. Costing and financial analysis o f the project

1. Project rationale Large burden o f disease: Combating malaria, the third o f the Millennium Development Goals (MDG) in health, i s a daunting challenge in Zambia, where it i s the leading cause o f morbidity and the second highest cause o f mortality, especially among children and women (World Bank, 2005). According to the 2001/02 Demographic and Health Survey (DHS), some 43.3 percent o f under-five children had fever andor convulsion symptomatic o f malaria in the two weeks preceding the survey. Malaria accounts for 50,000 deaths a year in the country, and 46 percent o f al l outpatient hospital visits (WHO 2003). Malaria incidence rates have tripled in the past three decades from 12 1 cases per 1,000 in 1976 to 376 cases per 1,000 in 2004. (HMIS data)

Malaria i s implicated in both child and maternal mortality. Because o f the very high rates o f malaria incidence, both child and maternal mortality rates in Zambia have not gone down sufficiently for the country to confidently achieve i t s MDG goals in child and maternal mortality reduction. Thus, although the MDG for chi ld health calls for the under-five mortality rate (USMR) to decline from 191 in the early 1990s, i t actually rose to 197 in 1996, though i t has since declined slightly to 168 in 200 1/02. The rural IMR continues to be very high at 182, compared to 143 for urban IMR. Zambian performance in reducing the infant mortality rate (IMR) has been similarly checkered. The IMR was 107 per 1,000 live births in 1992; i t rose to 109 in 1996 but has since declined to 95 in 2001/02. However, rural IMR continues to be very high at 103, compared to 77 for urban IMR.

Similarly, maternal mortality reduction has deteriorated due, in part, to malaria. This MDG calls for the maternal mortality ratio (MMR) to decline by three-quarters from 1990 to 20 15. Sadly, Zambian MMR has increased from 649 per 100,000 l ive births in 1996 to 729 in 2001/02, making this MDG unlikely to be met. In fact, what needs to be done now i s to avert hrther erosion in MMR, including widespread efforts to reduce malaria in pregnancy.

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Malaria co-morbidity i s currently under-appreciated, but it i s increasing. HIV prevalence in Zambia i s 16%. HIV+ individuals are more vulnerable to malaria. People living with AIDS are also more l ikely to be more susceptible to treatment failure o f anti-malaria drugs. Acute malaria i s also associated with an increase in the HIV viral load and with mother-to-child transmission (MTCT). Studies in Malawi, a neighboring country, showed that acute malaria was associated with a 7-fold increase in HIV viral load in co-infected patients, a change that carries a r isk o f increased disease progression and greater potential o f HIV transmission (World Bank, 2005).

Aggregate Loss

Adjusted 1987 US$) Country (Millions of PPP-

Malawi 1,072 Zambia 1,359 Zimbabwe 4,214 Total Africa (3 1 73,638 countries)

Macro-economic impact: Malaria's economic impact in Zambia i s l ikely to be substantial, with regional estimates suggesting a deficit o f 1.5 percent o f GDP (World Bank, 2005). Statistical analysis done by Gallup and Sachs, 200 1 shows that during the period 1965 to 1990, highly malarious countries suffered a growth penalty o f more than 1 percentage point per year compared with countries without malaria, even after taking into account the effects o f economic policy and other factors that also influence economic growth. If this loss i s compounded for 15 years, the GNP level in the 15th year i s reduced by nearly a fifth, and the tol l continues to mount with time. In the specific case o f Zambia, Table 1 shows that the accumulated loss (1 980- 1995) from economic growth penalty o f malaria endemicity was about US$1.4 bil l ion. T h i s translates to a per capita loss o f US$15 1, or about 18 percent o f actual 1995 income.

Per Person Loss (PPP-Adjusted Actual 1995

1987 US$) Income

As a Fraction of

110 18% 151 18% 3 83 18% 185 10%

Malaria andpoverty: Poverty has been persistent and worsening in Zambia. In 2002-03, the Central Statistical Office reported 67.0 percent o f the Zambian population as poor (World Bank, 2005). Although this i s an improvement over the 72.9 percent poverty rate in 1998, i t i s only marginally better than the 69.7 percent rate in 1991 (CSO 1998). The proportion o f extremely poor Zambians has virtually unchanged, from 58.2 percent in 1991 to 57.9 percent in 1998. Although poverty remains centered in rural areas, with as much as 83.1 percent o f rural households poor, the incidence o f urban poverty has increased from 48.6 percent in 1991 to 56.0 percent in 1998. Poverty i s particularly extreme among female-headed households, and particularly from November to March, the farming season. The worsening situation in Zambia i s captured in the decline o f the UNDP Human Development Index from 0.48 in 1985 to 0.43 in 2000; Zambia i s the only country that has suffered this kind o f decline. Zambia's disability-adjusted l i fe expectancy (DALE), at 30.3 years, i s the fourth worst in the world, eclipsed only by Malawi, Niger, and Sierra Leone.

In surveys o f households o f 22 African countries, Sachs (2002) found no correlation between the incidence o f childhood fever in households and their relative wealth, and concludes that malaria i s not a simple consequence o f poverty. Malaria i s very geographically specific; the ecological conditions that support more efficient malaria mosquito vectors primarily

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determine the distribution and intensity o f the disease.(Gallup, Sachs) However, other studies show that poor people are at increased risk both o f becoming infected with malaria and o f becoming infected more frequently. A survey in Zambia found a three times higher prevalence o f malaria infection among under-fives from poorer families as compared to under-fives f rom rich families. (WHO 2003)

Significant disparities have also been demonstrated in both the consequences o f malaria and in the utilization o f malaria prevention and treatment services. (Worrall2003) The wealth o f the household for example plays a substantial role in determining whether a child receives treatment for fever and influences the kind o f treatment. Poor families often lack the resources to obtain proper treatment o f the disease even in complicated and life-threatening cases. In Zambia for example the percentage o f children under five years o ld that slept under a mosquito net during the night preceding the survey by wealth quintile i s 3.9% in the poorest quintile versus 11.5% in the richest quintile. (MICS 1999) A similar disparity i s seen in the percentage o f febrile children under five years o ld that received treatment with any anti- malarial by wealth quintile: 52.6% in the poorest quintile and 65.5% in the richest. (MICS 1999) The poor also bear a disproportionate financial burden o f malaria. A survey in Malawi showed that the average total cost burden o f malaria was 7.2 percent o f household income in r i ch households versus 32 percent o f annual income in very poor households. (Ettling 1994)

Impact on households: Many studies have shown that malaria places significant burdens on households that have a sick family member. These include work time lost by the sick individual, care-giving time spent by other family members, lost productivity, costs o f seeking treatment including transportation and medical care and premature mortality. (Chima 2003) The direct costs o f malaria preventive methods in studies from different African countries range from $0.24 to $15 per household per month, depending on income level, epidemiological factors and accessibility. (Chima 2003) Household expenditure on malaria- related treatment ranges from $1 -88 to $26 per household per month. The aggregate productivity losses can be o f great significance for households and for the economy as a whole, In Malawi the indirect costs o f malaria amounted to 2.6% o f annual household income. The total annual value o f malaria-related production loss was 2-6% o f GDP in Kenya and 1-5% in Nigeria. Estimates o f the total economic cost o f malaria show a disproportionate burden on the poor. In Malawi for example the total annual cost per household was $40.02 or 7.2% o f household income. For very low income households the total cost was $24.89, equivalent to 32% o f income.

A study by Laxminarayan (2004) shows that living in malaria-endemic regions places an economic burden on households even if they do not actually suffer from an episode o f malaria. Households living with endemic malaria are less l ikely to have access to economic opportunities and may have to modify agricultural practices and other household behavior to adapt to their disease environment. Data from Vietnam demonstrate that reductions in malaria incidence through government-financed malaria control programs can contribute to higher household income for all households living in endemic areas. Empirically, a 10 percent decrease in malaria cases at the national level translates to roughly US$30 mi l l ion economic benefit in the form o f improved living standards. (Gallup and Sachs 2001)

Impact on the health system: Malaria places a large burden on the health sector in Zambia. 46% of all outpatient v is i ts are due to malaria and 70% o f hospital admissions in Zambia are due to malaria (WHO 2000). Malaria i s responsible for a high proportion o f public health expenditure on curative treatment. Reductions in malaria incidence would free up available health resources and facilities to deal with other health problems.

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Impact on education: There i s strong evidence that malaria has an impact on the health and cognition o f schoolchildren that adversely affects their education (World Bank 2005). In schoolchildren malaria represents 3 4 % o f all cause school absenteeism, equivalent to 50% o f al l preventable absenteeism. O f all mortality in schoolchildren, 15-20% i s attributable to malaria. School performance o f 6-14 year-olds has been related to the number o f previous clinical malaria attacks. These effects appear to be caused by anemia and the neurological consequences of cerebral malaria. Malaria also i s reported to have an impact on education supply through absenteeism o f teachers.

% o f households who own ITN % o f children who slept under an ITN prior night % o f pregnant women who slept under an

Public vs. private sectorfocus: The economic justifications for government involvement in malaria control are well-established (Hanson, Goodman, Lines, Meek, Bradley, and Mills, 2004). First there i s the issue o f equity: the lack o f purchasing power i s a fundamental constraint to effective malaria control interventions for much o f the population. The second justification i s the range o f market failures in the production and utilization o f malaria interventions. From society’s point o f view, purely private delivery and financing o f these interventions would lead to lower-than-optimal levels o f supply and demand and inefficient outcomes. The three main sources o f market failure in malaria control are: (a) Public goods - Malaria interventions such as environmental management at the community level, indoor residual spraying, epidemic surveillance, and information and education a l l have benefits which cannot be easily be provided to some and withheld from others. (b) Externalities - Many malaria interventions confer benefits to the community as a whole beyond those enjoyed by the individual. For instance, rational drug use confers positive externalities to future patients in the form o f reduced rate o f drug resistance, and I T N s reduce malaria transmission within and outside the households that use them. (c) Information - Patients lacking good information may purchase inappropriate drugs or consume sub-therapeutic doses o f anti-malarial.

6 35 2 17

4 14

2. Challenges to Improving Malaria Control in Zambia

L o w ownership and use o f I T N s ; Over the last years there has been a large increase in bed net and ITN ownership and in the number o f ITN per net-owning household in Zambia. (Table 2) The percent o f households owning at least one net has doubled from 27% in 2000 to 50% in 2004. In the same period the percent o f households owning an ITN increased six- fold from 6% to 35%. More aggressive social marketing and free distribution o f nets (“Equity” bed nets) occurred over the past couple o f years, resulting in lower malaria cases being reported in more recent Health Monitoring and Information System (HMIS) data. Awareness o f treated nets in Zambia has also increased significantly from 5 1 % in 2000 to 88% in 2004.

Table 2. Household Knowledge and Behavior about Malaria, 2000-04

Indicators 2000 2004 27 50

1 ITN prior night Source: NetMark 2000/ 2004

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N e t ownership i s higher in urban areas; 69% vs. 37% and in higher socio-economic segments; 22% in lowest quintile and 83% in highest quintile. Among non-owners the top reason given for not owning a net was lack o f money. Many households do not use them on a regular basis: only 17 percent o f children and 14 percent o f pregnant women slept under an ITN net the prior night. This i s even lower in poorer income groups as compared to higher income groups. (Table 3) Other challenges that remain are: many households that have nets do not own enough to cover al l family members, nets are washed frequently which can diminish the effectiveness o f the insecticide and information on ITN via mass media i s often times not reaching poor people

Afi ica

Table 3. Percentage of Children Under-Five Who Slept Under a Mosquito Net, by Wealth Quintiles, by Countries, 1999-2001

Various Any 15.9 16.2 18.3 20.6 30.0 ITN 1.9 2.3 2.5 3.3 7.3

Source Net Burundi 2000 0.2 0.7 0.8 1.9 8.8

Household use of malaria drugs: Table 4 shows the percentage o f women with a birth in the five years preceding the survey who took any drug for prevention o f malaria during pregnancy. W h i l e intermittent presumptive treatment o f malaria for mothers has been a policy in Zambia, only 3 5.8 percent o f pregnant women took anti-malarial drugs during pregnancy. Rural women are more likely to take anti-malarial drugs during pregnancy than urban women. The use o f Sulfadoxine Pyrimethamine (SP), which i s the recommended f i r s t l ine drug for pregnant women, i s s t i l l l ow in Zambia; 0.5% / 0.8% in urban areas and 0.4% o f women in rural areas used SP at least once. (DHS 2002-03)

Forty-three percent o f children under-five years were reported as having suffered from fever and or convulsions in the two weeks prior to the survey. O f these, 52% were reported to have taken anti-malarial drugs. Chloroquine i s the most common drug given for fever (50%) in both urban (46%) and rural areas (51%). Fansidar i s given more in urban areas (5%) than in rural areas (2%). The fact that almost ha l f o f children with fever are given chloroquine i s o f concern because o f the high incidence o f chloroquine resistant malaria in Zambia.

65

Table 4. Household Use o f Antimalarial Drugs, by Socioeconomic Characteristics, 2002-03

ice Rural I Indicators I

Mother's or Woman's Education None I Primary I Sec.or

% o f children with fever/convulsions who took anti-

51.9

1 women who took 1 malarial drugs % o f pregnant

I anti-malarial Source: 2002-03 Zambia DHS

35.8

Resid

38.6

Urban

27.8 34.7 43.4

49.3

30.5

Indoor Residual House Spraying (IRHS) has been introduced in 8 districts in Zambia with an average 40% coverage o f hotspots. Currently, 25.5% o f the population in al l IRS-eligible districts areas sleeps in an appropriately sprayed structure. The planned ro l l out o f the spraying campaign to 12 additional districts has been constrained due to limited finds.

3. Relationship of the Project to the Government's and the Bank's Strategy for the Sector

Link to the Poverty Reduction Strategy Paper: In response to the magnitude o f the malaria problem in Zambia, the country's Poverty Reduction Strategy Paper (PRSP) highlights the importance o f addressing malaria as a priority area within the framework o f an integrated approach to health care and as part o f the Ro l l Back Malaria Initiative. The increasing attention on malaria i s also reflected in the country's National Health Sector Strategic Plan (2001 to 2005).

Link to the Country Assistance Strategy; The Bank's Country Assistance Strategy (CAS) The proposed project i s directly supportive o f the Bank's results-based Zambia Country Assistance Strategy 2004. The project i s aligned with the CAS strategic pillar 2, which i s focused on Improving Lives and Protection o f the Vulnerable. The project wil l contribute towards achieving the MDG goals o f reducing infant and child mortality, maternal mortality and control o f communicable diseases.

4. Project Alternatives Considered

"No project" vs. "with"project: The "no project" alternative i s not acceptable, given the very high mortality and morbidity arising from malaria. There i s inadequate external, government, and household resources to finance the necessary prevention and treatment intervention.

Health vs. non-health investment: The wide range o f interventions for controlling malaria and reducing i t s disease burden includes environmental interventions (large-scale spraying with insecticides, or more restricted indoor residual spraying, household prevention (through the use o f insecticide-treated nets), and treatment with appropriate drugs. Because o f this, a strong case can be made that investments in malaria involve multi-sector effort led by the health sector.

66

Sector-wide program vs. intervention-specijk investments: Given Zambia's needs, the proposed project provides flexible, not overly rigid, financing that can be blended with those coming from other donors in order to support a common malaria program that the country i s developing. W h i l e the project i s focused to support specific technical interventions to control malaria and treat cases o f it, it i s also cognizant o f the fact that unless it provides broader investments in human resources (HR) and systems strengthening, the specific technical inputs will not go far in reducing the malaria burden. T h i s particularly makes sense given the high percentage o f outpatient and hospitals admissions that are due to malaria, requiring a strong health sector response. Thus, the project will support specific malaria interventions within the context o f Zambia's well-established sector-wide program. Disbursements will take place against district plans and wil l be dependent upon the implementation o f an effective system for district performance monitoring.

Provinces

Supply-side focused intervention: A model where only supply side interventions are financed whereas no support to the key systems o f the health sector i s provided has been rejected due to the institutional and technical weaknesses o f this model. The option o f not combining a community based approach with traditional health sector interventions was also rejected. Recent empirical data (from the DHS Survey, 2001) suggests that an effective malaria control program wil l need to combine both supply and demand side interventions to ensure increased coverage o f prevention and treatment activities, but also increased and consistent utilization o f these techniques by populations. Hence, the project design supports elements o f the National Strategic Plan which channel assistance through existing central and district level health sector mechanisms as well as community based methods relying on CBOs, NGOs and private sector organizations.

Proportion o f Persons Proportion of Children Reporting Fever/Malaria, with Fever/Convulsions,

Geographic focus: Malaria i s endemic throughout Zambia which just i f ies support to a national level strategy with intervention in different districts:

Central

Table 5. Percentage o f Children with Fever/Convulsions, by Province, 2000-01

2002-03 LCMS 2000-01 DHS 34.8 45.1

Copperbelt Eastern Luapula Lusaka Northern Northwestern Southern Western Total

44.6 36.6 35.6 43.9 27.6 57.0 38.9 35.0 35.3 46.5 32.4 38.7 48.3 41.2 30.6 50.6 36.9 43.3

5. Readiness of the Country for the Project

The Government's commitment to the malaria program has been sustained through the f i rs t phase o f the RBM partnership program 2000-2005. The evidence for the government's ownership o f the malaria control strategy include the enactment o f a legislation to waive

67

taxes and tariffs on impregnated bed nets and insecticides, a change o f anti-malarial treatment policy to use more effective drugs, high-level participation o f Zambia in national, regional and global malaria forums and the increased allocation o f government resources through the district basket mechanism for malaria control.

The Government o f Zambia recently launched the 2006-20 1 1 National Malaria Strategy that has the following long te rm objectives: (i) achieve 75 % reduction in the incidence rate o f malaria, (ii) 20 % reduction in all-cause under-five child mortality, and (iii) provide economic pay offs at household and national levels as a result o f malaria control. The proposed project wil l contribute to the government efforts to accelerate and intensify malaria interventions by supporting the rapid expansion in coverage and utilization o f effective prevention and treatment and strengthening the institutional capacity o f the health sector and communities to respond during the next four years within the national program.

6. Project Benefits

The HeaLY, Healthy Life-Years lost per 1000 population per year, i s a composite measure that combines the amount o f healthy l i fe lost due to morbidity with that attributable to premature mortality. (Hyder 1998) I t can be applied to individuals to determine the impact o f a certain disease, to work out the effects o f an intervention or to compare areas, populations or socioeconomic groups.

The formula developed by Hyder et al. was applied to incidence data from Zambia. With an incidence rate of 377 per 1000 population per year and a case fatality rate o f 0.013 (50.000 deaths in 4 mi l l ion cases) a total o f 738.49 HeaLY’s per 1000 population per year are lost due to malaria. Assuming that the current trend continues, the total loss o f HeaLY due to malaria for the total population over the project period i s 3 1,3 1 1,976 HeaLY’s. (Population 10.6 million/ 4 year project)

Table 6. Healthy Life-Years lost per 1000 population per year due to malaria in Zambia

Variable Incidence Rate per 1000

Average age at onset (Ao) Average age at death (Af) Expectation of life at age of onset E( Ao) Case Fatality Ratio (CFR) Case disability ratio (CDR) Extent of disability (De) Average duration of disability (Dt)

POP (1)

Ghana

40 1 1

81.84 0.020 1 0.9

I .48

Zambia

377 I 1

50 0.01 3 1 0.9

1.48

Project Target Simulation High Case Low Case

Per 1000 94 264 per year I 1 years I 1 years

50 50 years 0.007 0.01 0 1 1 0.9 0.9

1.48 1.48 years

HeaLY 118.75 738.49 158.53 483.92 HeaLY: I x [[CFR x {E(Ao) - { A f - Ao]}} + {CDR x De x D t } } Data source: Measuring the Burden o f Disease: Healthy Life-Years Hyder, A Rotllant, G Morrow, R HMIS Zambia

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W e consequently calculated the HeaLY for a high case and low case scenario o f possible outcomes reached by the project, based on the Program Development Objectives. In the high case scenario the malaria morbidity decreases by 75% and the case fatality ratio i s decreased by 50%. The HeaLY in this case i s 158.53, a gain o f 579.96 HeaLY’s. In the high case scenario o f the total loss o f 3 1,3 11,976 HeaLY’s the project wil l save a total o f 24,590,304 HeaLY’s. In the low case scenario the incidence rate o f malaria decreases by 30%, with a case fatality ratio o f 0.01, This results in a HeaLY o f 483.92 per 1000 population per year, a gain o f 254.57 HeaLY’s. In the low case scenario the project will save a total o f 10,793,768 HeaLY ’s.

The Cost-effectiveness ratio i s the total HeaLY loss saved by the project dollars. In the high case scenario the project cost o f US$20 mil l ion saves a total o f 24,590,304 HeaLY’s. Per 1 U S $ the gain i s 1.23 HeaLY. In the low case scenario the project cost o f US$20 mi l l ion saves a total o f 10,793,768 HeaLY’s. Per 1 US$ the gain i s 0.54 HeaLY.

7. Sustainability o f Project Investments

Zambia i s one o f a small number o f countries in Africa that has recently changed their national malaria treatment policies, which included adopting Artemisinine-based combination therapy (ACTs) as their f i rs t l ine therapy. Specifically, the policy decisions based on available efficacy trials were (World Bank 2003):

0

0

0

0

Chloroquine phased out as the first-line treatment Artemether-lumefantrine (Coartem@) combination therapy was adopted as new first-line treatment Sulphadoxine-pyrimethamine (SP) to be used in the transition phase Intermittent presumptive treatment (IPT) using SP to be introduced for pregnant women

The use o f ACT’S as f i rst l ine malaria treatment comes at a significantly increased cost, as much as a 20-fold increase per course o f treatment compared to current first-line treatments. The majority o f the burden o f moving to more costly drugs will be bome by consumers, as approximately 60% o f al l malaria treatments in Zambia are purchased in the formal and informal private sector.

Estimations o f A C T financing resource needs are determined by several factors; malaria episodes, number o f episodes treated with modem drugs, evolution o f the prices o f ACTS and speed o f A C T uptake or utilization. (Derrienic) In a 2003 study Derrienic developed a model to provide a range o f estimates o f the incremental costs resulting from the introduction o f ACTs in Zambia. The model assumes a quick uptake o f A C T treatment o f 30% in the f i rst year, 60% in the second and 90% in the third year. The malaria incidence used for the model i s 24 mi l l ion episodes, based on 2001 public sector data.

Table 7 shows the financial impact o f year 1 A C T use in terms o f public sector health expenditures for 2002, the actual 2002 public sector drug procurements and the ‘need-based’ drug procurement. I t i s clear that switching to A C T wil l have a significant impact on public health expenditures: using A Q + ASU would have increased public expenditures by 45 percent while Coartem almost doubles it. In terms o f overall public sector expenditures this results in an additional funding o f 6 percent for A Q + A S U and 12 percent o f Coartem.

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Table 7. Zambia Impact o f Incremental Cost o f ACT, Year 1

AQ + ASU $5.08

45%

28%

5.78%

Incremental cost year 1 (million)

In % o f public sector drug expenditures (actual 2002)" ($1 1.2 million)

In % o f public sector drug expenditures- need based ** (1 8 million)

Coartem $10.42

93%

58%

12% In % o f total public health sector expenditures* ($87.8 million)

Incremental cost year 3 (million)

Ministry o f Health, Zambia 2003 ** Ministry o f Health Zambia 2000 Source: Denienic, Y h! Based combination antimalarial drug treatment 2003

AQ + ASU Coartem

$12.86 $3 1.26

In % o f public sector drug expenditures (actual 2002)" ($1 1.2 million)

In % o f public sector drug expenditures- need based ** (1 8 million)

In % o f total public health sector expenditures* ($87.8 million)

Table 8 shows the impact o f the use o f ACTS on expenditures by the end o f the third year with A C T use in 90 percent o f drug treatments. A Q + ASU would more than double drug expenditures, increasing the need-based expenditures by 7 1 percent and public sector spending by 15 percent. Coartem alone would take almost triple the actual drug expenditures, almost double the need-based estimates and increase public sector expenditures by 35 percent.

1 15% 279%

71% 174%

14.6% 3 5%

Table 8. Zambia Impact o f Incremental Cost of ACT, Year 3

The above analysis raises concerns about the long-term financial sustainability o f the use o f A C T as the first line treatment o f malaria in Zambia. The Global Fund i s currently the main financing agency for Coartem in Zambia. The current commitment o f 66 mi l l ion for 2006- 20 1 1 has a large share reserved for the procurement o f Coartem. Over the longer term a sustainable solution needs to be developed for the financing o f Coartem.

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8. Costing and Financial Analysis of the Project

Expenditure Category

1. (a) Distr ict Basket Grants

(b) Human Resources

A. Project Costs

Amount (US% million) Financing Percentage

2.0 100%

1 .o

Project Cost By Component and/or Activity

2. (a) Goods, Equipment, Supplies

(b) Vehicles

(c) Minor Works

(d) Consultancy, Training

3, Community sub-grants

4. Operating Costs

5. Unallocated

1. Support to Health Sector Systems District Basket Human Resources contribution ITN, IRS, Case Management IEC, Training

5 .O 100%

0.5 0.5

0.5

3 .O 100%

0.5 100%

7.0 100%

2. Program Management

Total Project Costs

Total

3, Community Booster Response to Malaria

20.00 100%

20.00 100%

Total Baseline Cost Physical Contingencies Price Contingencies

Total Project Costs'

Total Financing Required

Local U S %million

4.00 0.50 0.27 0.34

1.33

2.95

9.39 0.38 0.65

10.42

10.42

Foreign US $million

0.00 2.50 5.81 0.00

0.77

0.05

9.13 0.20 0.25 9.58

9.58 'Identifiable taxes and duties are US$Om, and the total project cost, net o f taxes, Therefore, the share o f project cost net o f taxes i s 100%.

Allocation of Credit Proceeds

Total U S %million

13.42 4.00 3.00 6.08 0.34

2.10

3.00

18.52 0.58 0.90

20.00

20.00 s US$20m.

I I I

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B. Cost-effectiveness

Value for money and cost-effectiveness of malaria interventions; Malaria control gives good value for money. For example in Vietnam, at a cost to the government o f US 1 1 for a clinic visit plus drug treatment, the direct costs saved were US$9.5 million, about twice the amount spent on malaria control each year. Health care costs to households also reduced by US$14 mill ion. (Laxminarayan 2004) Research shows that cost-effective interventions to control malaria are available. The cost-effectiveness range for malaria intervention in sub-Saharan Africa varied f iom US$4-10 per DALY averted for insecticide treatment, $19-85 for provision o f bednets, $32-58 for residual spraying, $3-12 for chemoprophylaxis for children and $4-29 for intermittent treatment o f pregnant women. (Goodman 1999) A cost effective analysis o f a Malaria Control Program in the Amazon Basin in Brazil showed that the overall cost-effectiveness was an impressive US$2672 per l i fe saved or US$69 per DALY, which compares favorably to many other disease control interventions. (Akhavan 1999)

In the former Northern Rhodesia (now Zambia) the economic effects o f integrated malaria control implemented during the colonial period in four copper mining communities was analyzed. Integrated malaria control was characterized by strong emphasis on environmental management, while part o f the mining communities also benefited from rapid diagnosis and treatment and use o f bednets. The programs were highly successful as an estimated 14,122 deaths, 5 17,284 malaria attacks, and 942,347 work shift losses were averted. Overall, 127,226 disability-adjusted l i f e years (DALYs) were averted per 3-year incremental period. The cumulative costs o f malaria control interventions were USSl l .2 mi l l ion (in 1995 U.S. dollars). I t i s estimated that the programs averted US$796,622 dollars in direct treatment costs and US$5.7 mi l l ion in indirect costs as a result o f reduced work absenteeism" (Utzinger, Tojan, Doumani, and Singer, 2002).

Table 9 shows the ranges and means o f cost per DALY averted using various malaria interventions in low-income Sub-Saharan African countries with moderate to high malaria transmission. All interventions are an attractive use o f resources since the cost-effectiveness range i s less than $150 in each case. Although some interventions are inexpensive, achieving high coverage for a package o f interventions i s not affordable for most Sub-Saharan African countries without assistance from external donors.

72

Malaria Interventions Minimum

nets Nets and insecticide 19 Insecticide-treated Insecticide treatment only 4

Mean Maximum 6 10

44 85

Source: Hanson, Goodman, Lines, Meek, Bradley, and Mills (2004).

Residual spraying

Chemoprophylaxis

C. Sector Financing

treatment 1 round per year 16 22 29 2 rounds per year 32 43 58 With existing village health 3 6 12

Health sector financing in Zambia has seen changing fortunes. In contrast to the outward visibility o f the Zambian health sector reforms starting in the early 1 9 9 0 ~ ~ total and per capita health expenditures have actually gone down in the late 1990s and early 2000s, in relative terms. According to WHO’S World Health Report (2004), total expenditures on health as percent o f GDP have fallen from 6.0 percent in 1997 to 5.7 percent in 2001. Similarly, per capita total expenditures on health (average exchange rate to the US$) have fallen from US$24 in 1997 to US$19 in 200 1. To be sure, global health initiatives have begun to provide significant additional resources for the sector after 2003, but as will be shown shortly, these initiatives are highly restricted in application.

More seriously, government health financing i s declining. General government expenditures on health as percent o f total expenditure on health have fallen from 55.1 percent in 1997 to 53.1 percent in 200 1. Per capita govemment expenditures on health (average exchange rate to the US$) have also fallen from US$13 in 1997 to US$10 in 2001. The share o f the M O H to the total government budget has declined to 10 percent (Miti, 2004). In response to the declining government allocation to the MOH, cooperating donors-partners in the common basket funds for health are threatening to cut back their funding unless government funding i s increased. C iv i l society organizations are also actively arguing for a “substantial increase in spending per person on basic government services” including health (Mpepo, 2004).

Although there i s an increasing f low o f external health financing, it i s also increasingly being fragmented. External resources for health as percent o f total expenditure on health have risen from 23.5 percent in 1997 to 48.7 in 2001. There appears to be no expressed concerns at increasing the inflows of external aid, either as budget or project support. Although there i s an increasing flow of external resources especially since 2003, much o f these are project- dominated and are outside the budget. There i s very l i t t l e leeway for reallocation to critical health interventions not included in the scope o f these new projects. Most o f these new external resources primarily focus on the provision o f drugs but provide very l i t t le resource for other complementary requirements o f the health system, e.g., the large-scale human- resource requirements needed to dispense these drugs and to supervise frontline workers

73

dispensing them. For instance, both the Global Fund and PEPFAR are heavily engaged in the financing o f antiretroviral drugs and use o f Nevirapine to prevent o f mother-to-child transmission (MTCT) o f HIV/AIDS, but provide only modest support for the required workers.

A lo t o f the external resources, including those from the Wor ld Bank’s ZANARA Project, are going to community-based organizations, nongovernmental organizations, and non-health ministries; very l i t t le i s going to established but ill-funded government district health systems. The frenzy o f activities in the National AIDS Commission, CBOs, and NGOs masks the under funding that the government health system i s experiencing. Contrary to common perception, none o f the current global initiatives deal directly with matemal and child health, which are the cornerstones o f the MDGs. In fact, child and maternal health are the forgotten interventions in these global initiatives. DFID and USAID do provide some resources for reproductive health, but i s not commensurate with the daunting challenge o f reducing IMR and MMR.

Perhaps most insidious i s the increasing tendency o f these new global funding mechanisms to re-centralize and fragment resource planning. Health priorities are being pushed by central programs through project funding, rather than being determined “bottom-up” from the districts through established participatory approaches and systems, which the MOH and basket-funding cooperating partners have assiduously tried to institutionalize through the years. This trend i s emerging in the case o f donor-funded ITN projects, M T C T interventions, and elements o f the TB program.

In view o f the declining government financing o f health services, private expenditure on health as percent o f total expenditure on health has increased from 44.9 percent in 1997 to 46.9 percent in 2001. More specifically, households have begun to play a major role: out-of- pocket expenditure as percent o f total expenditure on health has increased from 70.9 percent in 1997 to 7 1.8 percent in 2001. To be sure, much o f the private-sector health spending probably occurs in and around Lusaka and the Copperbelt provinces where most o f the private health sector i s located. Although household spending i s a noteworthy for many reasons - as a sign o f active household participation and as a method to enhance overall sustainability o f the health system - excessive user fees and other forms o f participation do have adverse equity effects. Thus, the government should see to it that it does not shirk i t s health-financing responsibilities and place an increasing financing burden on households.

D. Project Financing

The project contributes towards the implementation o f the National Malaria Program Strategy (2006-201 1) that was recently launched. The estimated total program costs are 205,404,530 US$ for the implementation period o f the National Malaria Strategy from 2006 to 201 1. Table 10 demonstrates the different program components and the cost estimates for capital and recurrent costs.

Zambia has more partners in malaria control than any other country except Tanzania. T h i s includes the Global Fund, JICA, USAID, WHO, UNICEF, DFID, the Netherlands and the Gates Foundation. Table 10 shows the donor contributions to the Malaria Program for capital and recurrent costs. The total o f 106,708,790 US$ leaves a financing gap o f 98,695,740 US$. The fifth application round for the Global Fund includes a request for additional resources to support the Malaria Program. Currently it i s also unclear what the additional donor contributions wil l be for 20 10 and 20 1 1.

74

References

Abdullah, Salim (n.d.). Epidemiology of Malaria Endemicity and Control Efforts in Africa. Ifakara Health Research and Development. Slide presentation.

Akhavan, D Musgrove, P Abrantes, A Gusmao, R Cost-effective malaria control in Brazil. Cost-effectiveness o f a Malaria Control Program in the Amazon Basin o f Brazi l 1988- 1996. Social Science & Medicine 49 (1999) 1385-1399

Barat, Lawrence, Natasha Palmer, Suprotik Basu, Eve Worral, Kara Hanson, and Anne Mills (July 2003). Do Malaria Control Interventions Reach the Poor? A View Through the Equity Lens. DCPP Working Paper No. 6. Disease Control Priorities Project.

Berenbaum, M a y (2005). IfMalaria's the Problem, DDT's Not the Only Answer. The Washington Post. Outlook Section, p. B3. June 5.

Board on Global Health (BGH) (2004). Saving Lives, Buying Time: Economics of Malar ia Drugs in an Age o f Resistance. National Academies Press.

Bosman, Andrea and Peter Olumese (March 2004). Current Trends in Malar ia Treatment: Artemisinin-Based Combination Therapy. World Health Organization, Ro l l Back Malaria Division.

Bundy, D Lwin, S Osika, J McLaughlin, J Pannenborg, 0 What should schools do about malaria? Parasitology Today , vol. 16 no. 5 2000

Central Statistical Office (1998). L iv ing Conditions in Zambia.

Central Statistical Office (2003). Zambia Demographic and Health Survey 2001/02. Done in cooperation with the Central Board o f Health and ORC/Macro.

Central Board o f Health (May 2004). Implementation Plan of the Antimalarial D r u g Policy in Zambia. Lusaka.

Central Statistical Office (2003). L iv ing Conditions Monitoring Survey Report 2002- 2003. Lusaka.

Chima, Reginald Goodman, Catherine Mills, Anne The Economic Impact of Malar ia in Africa: a Critical Review of the Evidence. Health Policy 63 (2003) 17-36

Coleman, Paul G., Chantal Morel, Sam Shillcutt, Catherine Goodman, and Anne J. M i l l s (2004). A Threshold Analysis of the Cost-Effectiveness of Artemisinin-Based Combination Therapies in Sub-Saharan Africa. American Journal o f Tropical Medicine and Hygiene, No. 71 (Supplement 2), pp. 196-204.

Derrienic, Yann and Beaura Mensah (Sept. 2003). Financing o f Artemisinin-Based Combination Antimalarial Drug Treatment. Partners for Health Reform plus. Abt Associates.

76

Dlamini, Qhing Qhing, Louisiana Lush, Martin Auton, and Patricia Nkandu (Sept. 2004). Impact of Public-Private Partnerships Addressing Access to Pharmaceuticals in Low and Middle Income Countries - Zambia. Partnerships for Health Ettling, M McFarland, D Schultz, L Chitsulo, L 1994 Economic Impact o f Malar ia on Malawian Households. Annuals o f Tropical Medicine and Parasitology 42 (3)2 14-21 8

Gallup, John Luke and Jeffrey D. Sachs (Feb. 2001). The Economic Burden of Malaria. C M H Working Paper Series No. 10. Commission on Macroeconomics and Health.

Goodman, C Coleman, P Mills, A Cost-effectiveness of Malaria Control in sub-Saharan Africa, The Lancet Vo l354 July 31 1999

Hyder, A Rotllant, G Morrow, R Measuring the Burden of Disease: Health Life-Years American Journal of Public Health 1998;88: 196-202

Laximanaryan, Ramanan Does Reducing Malaria Improve Household Living Standards? Tropical Medicine and Intemational Health. Volume 9 no 2 pp 267-272 February 2004

Hanson, Kara, Catherine Goodman, Jo Lines, Sylvia Meek, David Bradley, and Anne Mills (2004). The Economics o f Malaria Control Interventions. Global Forum for Health Research. London School o f Hygiene and Tropical Medicine.

Harvard University Center for Intemational Development and London School o f Hygiene and Tropical Medicine (n.d.). Economics of Malaria. Executive Summary.

Mensah, Beaura and Yann Derriennic (November 8,2004). Modeling Financial Requirements of ACTS in Sub-Saharan Africa, Partnership for Health Reform plus Project. Paper prepared for the American Public Health Association Conference.

Ministry o f Health (May 18,2005). Request for Funding for the Multi-Sectoral Approach to Fight Malar ia - W o r l d Bank Malaria Booster Program.

Ministry o f Health (2000). Analysis o f the Health Sector, Volume 2. Lusaka.

Murphy, Colleen, Jimmy Volmink, and Sara Waldehanna (Dec. 2003). Reducing Malaria's Burden: Evidence of Malaria's Effectiveness for Decision Makers. Technical Report. Global Health Council

Mwikisa, C.N., L. Mwansa, P. Nankamba, D. Chimfwembwe, M. Goma, B. Chitah, and R. Maswenyeho (2000). Zambia National Health Accounts 1995-1998. Ministry o f Health and Central Board o f Health.

Phiri, Felix and Marie Tien (Sept. 2004). Zambia National Health Accounts 2002 : M a i n Findings. Ministry o f Health and PHRplus Project.

NetMark Project (Spring 2004). Working Toward Abuja Targets on Malaria: Reducing Taxes and Tariffs on ITNs. NetMark News. Academy for Educational Development.

Ro l l Back Malaria program (2003). Afr ica Malar ia Report.

77

Russel, Steven (Aug. 2003). The Economic Burden of Illness for Households: A Review of Cost of Il lness and Coping Strategy Studies Focusing on Malaria, Tuberculosis, and HIV/AIDS. DCPP Working Paper 15. Disease Control Priorities Project.

Sachs, Jeffrey and Pia Malaney (2002). The Economic and Social Burden of Malaria. Nature, vol. 415.

Sharp, Brian, Pieter Van Wyck, Janet B. Sikasote, Paul Banda, and Immo Kleinschmidt (2002). Malar ia Control by Residual Insecticide Spraying in Chigola and Chililabombwe, Copperbeltprovince, Zambia. Tropical Medicine and International Health, 7 (9): 732-736.

Shilcutt, Sam, Paul Coleman, Chantal Morel, Catherine Goodman, and Anne Mills (2004). The Cost-Effectiveness of New Antimalarial Diagnostic and Treatment Strategies. Health Economics and Financing Exchange, No. 29. London School o f Hygiene and Tropical Medicine.

Spielman, Andrew, Siromi Weerasuriya, Pia Malaney, Anthony Kiszewski, Derek Willis, Richard Pollack, and Awash Teklehaimanot (n.d.). Industrial Anti-Malaria Policies. Harvard University Center for International Development.

Utzinger, J., Y. Tozan, F. Doumani, and B.H. Singer (2002). The Economic Payoffs of Integrated Malar ia Control in the Zambian Copperbelt Between 1930 and 1950. Tropical Medicine and International Health, 7 (8): 657-677.

Wor ld Bank (2005). Zambia Poverty and Vulnerability Assessment. Human Development 1, Africa Region.

Wor ld Health Organization/ UNICEF The Africa Malaria Report 2003

Worral, Eve, Suprotik Basu, and Kara Hanson (2003). The Relationship Between Socio- economic Status and Malaria: A Review of the Literature. Health Economics and Financing Working Paper 01/03. London School o f Hygiene and Tropical Medicine.

Yeung, Shunmay (2004). A Bio-economic Model of Anti Malarial Drug Resistance. Health Economics and Financing Exchange. No. 29, Summer. London School o f Hygiene and Tropical Medicine.

78

Annex 10: Safeguard Policy Issues ZAMBIA: Zambia Malaria Booster Project

Summary o f Key Safeguard Issues

A. Incremental Health Care Waste: The project wil l finance supply and use o f commodities that are already being used in the health sector. The National Health Waste Management Plan was reviewed during project preparation, and the conclusion o f the review i s that there are no additional categories o f health care waste that wil l be generated by the project. The existing health waste management plan wil l continue to be implemented, including dealing with handling, segregation, disposal and monitoring o f health waste. The Ministry o f Health i s responsible for the implementation o f the plan.

B. Insecticide use: Zambia has been using insecticides for malaria control according to the guidelines provided by WHO, including the use o f DDT. The country i s intending to phase out the use o f DDT. The scaling up o f malaria control will lead to increased use o f insecticides for in door residual spraying. In door residual spraying wil l only be carried out in eligible districts. The eligible districts wil l be the ones with: (i) high malaria incidence, (ii) presence o f indoor resting malaria vectors, (iii) access to spraying sites, and, (iv) morbidity and mortality rates. The vector control activities o f the Government have been subjected to detailed assessment by specialized agencies, such as the WHO, and found acceptable. The Government i s committed to phasing out the use o f DDT for malaria control in the long term.

Due to the complexities o f IRS with DDT, the issue i s further addressed in this Annex:

Regulations Malaria control i s addressed in Zambian law under multiple laws and acts such as the Public Health Act Cap 295 and the Extermination o f Mosquitoes Act. Zambia has environmental health units at the national, provincial, district and sub-district level under the MOWCentral Board o f Health. At the local level, the environmental health units exist within the Public Health Departments in city and municipal councils. The GOZ works closely with and regulates private mines involved in IRS and these mines have been included in the preparation o f the project so that their malaria control efforts can be coordinated with those o f the government.

DDTLRS Zambia has signed but not ratified the Stockholm Convention and “agrees with the concept o f phasing out the 12 POPS including DDT but usually applies for exemption for a specific period until an alternative i s found.”’* DDT i s permitted for mosquito control in Zambia, but banned for al l other uses, especially agriculture. IRS i s done every 6 months with DDT 75% wet-able powder and the handling o f all DDT in the country i s done under the supervision o f the Environment Council o f Zambia. In 2002 the “DDT Indoor Residual Spraying: Guidelines for Health Workers” (see project documents) was co-developed by the MOH, Central Health Board, National Malaria Control Program, Environmental Council o f Zambia, University o f Zambia, UN Environmental Program, Ro l l Back Malaria, W H O (WHO Pesticide Evaluation Scheme) and various c iv i l society organizations.

’* Central Board o f Health Statement on DDT, 4/20/05

79

DDT was introduced in Zambia in the 1950s and used extensively in agriculture and IRS for malaria control. I t was banned completely from the early 1980s to 2000. As malaria spread with the cessation of DDT I R S and the critical role that DDT played in I R S as part o f effective IVM was realized, DDT was re-introduced solely for IRS in 2000 by both the government and the privately held Konkola Copper Mines. With the success o f renewed spraying in reducing malaria, IRS with DDT, deltamethrin, Icon, and Fendona has been steadily expanded to a current level o f almost 70,000 structures in twelve districts throughout the spraying cycle o f November through January. The DDT guidelines address issues o f safe purchase, transport, storage, training, handing, community education and cooperation, application, and equipment cleaning.

The W H O reviewed Zambia’s Integrated Vector Management (IVM) in M a y 2005 and called it “a remarkable success”. According to the report:

“Zambia implements integrated vector management including IRS, I T N s , larviciding and EM with a strong partnership, DDT and pyrethroids are used for IRS with remarkable success. Malaria vector control policy, guidelines, protocol and a malaria taskforce are available. There i s a clear decentralized decision-making procedure to manage IVM for vector control. Human, financial, and logistic resourceshapacity to implement, monitor and evaluate IVM are adequate. Human resource development plans are implemented and there has been negligible trained staff turnover in the program.”

The needs identified by the W H O assessment will all be addressed by the Booster Project; in particular:

1. Human, financial and technical resources are needed to implement IVM 2. Guidelines and protocols for IVM implementation are required 3. Entomological facilities at TDRC and N M C C need to be improved 4. Technicians at the district level need to be trained in IVM 5. Stakeholders coordination needs to be improved

In addition to addressing the needs identified by WHO, the Bank funding will be used to hire, train and equip more professional sprayers, purchase DDT and other approved pesticides, purchase more efficient spray guns (WHO approved Hudson Xpert Sprayers), and expand the geographic areas covered by IRS. The vector implementation o f the vector management plan has been integrated within the proposed project (component lb) and will be carried out by the Environmental Unit o f the MOH and N M C C under the regulatory supervision o f the Environmental Council o f Zambia.

80

Annex 11: Project Preparation and Supervision

ZAMBIA: Zambia Malaria Booster Project

PCN review Init ial P ID to PIC Init ial ISDS to PIC Appraisal Negotiations BoardRVP approval Planned date o f effectiveness Planned date of mid-term review Planned closing date

Core Task team included:

Name Muhammad Ali Pate

Chris Walker

Rosemary Sunkutu Mirey Ovadiya Monique Vledder Kate Tulenko

Cassandra D e Souza Richard Matikanya

Hermine De Soto Oscar Picazo Serigne Omar Fye

Modupe Adebowale Wedex Ilunga Tesfaalem Gebreiyesus Fenwick Chitalu

Jonathan David Pavluk Neta Walima Helen Taddese

Planned 06/23/05

0 812910 5 09/26/05 11/15/05 121 1 5/05

0 1/3 1/10

Title Team Leader/ Senior Public Health Specialist Lead Specialist/Cluster Leader Senior HNP Specialist Senior Operations Officer Young Professional Public Health Specialist/ Environmental Health Operations Analyst Monitoring and Evaluation Specialist Social Anthropologist Senior Health Economist Senior Environmental Specialist Senior Finance Officer Procurement Specialist Senior Procurement Specialist Financial Management Specialist Senior Counsel Task Assistant Task Assistant

Actual 06/23/05 0 612 910 5 07/07/05 09/09/05 09/27/05 11/15/05

Unit AFTH 1

AFTH 1

AFTHl AFTH 1 AFTH 1

EWDWP

AFHV HDNGA

Consultant ECSSD AFTHl ASPEN

LOAG2 AFTPC AFTPC AFTFM

LEGAF AFMZM

* Richard Seifman (ACT Africa) and Suprotik Basu (HDNHE) participated during project identification. Bank funds specifically allocated for the project preparation.

1. Bank sources: $0 2. Trustfunds: $0 3. Total: $0

81

Annex 12: Documents in the Project File ZAMBIA: Zambia Malaria Booster Project

Documents in Project File

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15.

16. 17. 18.

National Malaria Strategic Plan 2006-201 1 and Business Plan Health Care Waste Management Plan WHO Vector Control Assessment in Zambia M a y 2005 Final DDT Guidelines Guidelines for Indoor Residual Spraying Guidelines for Vector Control Guidelines for Indoor Residual Household Spraying (IRHS) Reporting Format Integrated Vector Management Stakeholders Meeting Integrated Vector Management Program o f Action I R H S Operational Design I R H S Program Guidelines Malaria Control Procedures Post-spraying workshop summary N e t Dipping Procedures Rapid Social Assessment o f Malaria Control in Zambia (2005) by Hermine De Soto, et a1 The Behavioral and Social Aspects o f Malaria and i t s Control (TDR document) The Wor ld Bank Global Strategy for Malaria 2005 Financial Management Assessment Report by Fenwick Chitalu, October 2005

82

Annex 13: Statement of Loans and Credits ZAMBIA: Zambia Malaria Booster Project

Difference between expected and actual

disbursements Original Amount in US$ Millions

Project ID FY Purpose IBRD IDA SF GEF Cancel. Undisb. Orig. Frm. Rev’d

PO71407 2005 SEED 0.00 28.15 0.00 0.00 0.00 24.97 -2.62 0.00

PO74258 2005 PO40631 2005 PO71985 2004 PO03248 2003

PO70962 2003 PO70122 2001

PO57167 2001 PO63584 2000 PO64064 2000

PO03249 1999 PO35076 1998 PO40642 1996

ZM-GEF SEED Biodiversity S I L (FY05) ZM-Econ Mgmt & Growth SAC (FY05)

ZM-Road Rehab Maintenance P i (FY04) ZM-Zanara HIV/AIDS APL (FY03) Copperbelt Environment Regional Trade Fac. Proj. - Zambia ZM-TEVET SIM (FYOI)

Social Investment Fund (ZAMSIF) Z M -MINE TOWNSHIP SERVICES PROJECT ZM-Basic Education APL (FY99) ZM POWER REHABILITATION ERIPTA

Total:

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

0.00 0.00 0.00

0.00 40.00 50.00 0.00

19.00 15.00 25.00 64.70 37.70

40.00 75.00 23.00

0.00 4.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

0.00 0.00 0.00 0.00

0.00 0.00 0.00 0.00 0.00 0.00

0.00 0.00 0.00 0.00 0.00 0.00

0.00 0.00 0.00

0.00 0.00 0.00

3.75 0.25 21.10 1.11

43.44 6.93 32.64 -16.51 38.53 5.96 8,75 7.31

17.51 1.32

2.57 -1.31 8.43 6.28

10.25 10.86 3.72 3.68 5.40 -12.22

0.00 0.00 0.00

-9.03

0.00 0.00 0.00

0.00 3.43

0.59

3.68 -12.22

0.00 417.55 0.00 4.00 0.00 221.06 11.04 - 13.55

ZAMBIA STATEMENT OF IFC’s

Held and Disbursed Portfolio In Millions o f US Dollars

Committed Disbursed

IFC IFC

FY Approval Company Loan Equity Quasi Partic. Loan Equity Quasi Partic

1998 200 1 1998 1999

1997 2001 2000 2000 1999/00/04

AEF Amaka Cotton 1.30 0.00 0.00 0.00 1.30 0.00 0.00 0.00

AEF Chingola Htl 0.62 0.00 0.00 0.00 0.62 0.00 0.00 0.00

AEF Drilltech 0.12 0.00 0.00 0.00 0.12 0.00 0.00 0.00

AEF Esquire 0.09 0.00 0.00 0.00 0.09 0.00 0.00 0.00 AEF JY Estates 0.89 0.00 0.00 0.00 0.89 0.00 0.00 0.00

AEF Michelangelo 0.13 0.00 0.00 0.00 0.13 0.00 0.00 0.00

APC Ltd. 0.57 0.00 0.00 0.00 0.57 0.00 0.00 0.00

Marasa Holdings 3.40 0.00 0.00 0.00 3.40 0.00 0.00 0.00

Zamcell 0.00 0.25 0.00 0.00 0.00 0.25 0.00 0.00

Total portfolio: 7.12 0.25 0.00 0.00 7.12 0.25 0.00 0.00

Approvals Pending Commitment

FY Approval Company Loan Equity Quasi Partic.

Total aendine commitment: 0.00 0.00 0.00 0.00

83

Annex 14: Country at a Glance ZAMBIA: Zambia Malaria Booster Project

POVERTY and S O C I A L

2003

GNI per capita (Atlas method, US$) 380 GNIfAtlas method, US$ billions) 4.0

Average annual growth, 1997.03

Population (%) 1.9 Laborforce (%) 2.4

M o s t recen t e s t i m a t e ( latest year avallable, 1997.03)

73 Urban population (%of totalpopulation) 36

Zambla

Population, mid-year (millions) n.4

Poverty (%of population belo wnational poverty line)

Life expectancyat birth (years) 37 Infant mortality(per %00Olive births) 02 Child malnutrition (%of children under 5) 28

64 Illiteracy(%ofpopulation age #+J 20 Gross primary enro liment (%of school-age population) 79

Male 81 Female 76

Access to an improved watersource (%ofpopulation)

KEY ECONOMIC RATIOS and LONG-TERM TRENDS

1983 1993

GDP (US$ biilions) 3.3 3.3 Gross domestic investmentlGDP 0.8 15.0 Exports of goods and services1GDP 32.9 33.6 Gross domestic savingsiGDP 152 8 2 Gross national savings1GDP 7.3 -02

Current account balanceiGDP -5.9 4 3 Interest paynents1GDP 2 2 2.8 Total debtiGDP 10.1 88.1 Total debt servicelexports 27.1 33.0 Present valueof debt1GDP Present valueof debtfexports

1983.93 1993-03 2002 (average annualgrowth) GDP 1.3 2.0 3.3 GDP percapita -16 -0.1 1.6

Sub- Saharan Low.

A f r i ca Income

703 490 347

2.3 2.4

36 46

213

58 35 87 94 80

2002

3.7 17 .4

28.6 4.1 0.1

-17.6 2.8

131.5 27.8 115.9

386.5

2.31) 450

1038

1.9 2.3

30 58 82 44 75 39 92 99 85

2003

4.3 15.0 30.6 4.9 0.8

-14.6

2003 2003-07

5.1 3.7 3.5 1.8

STRUCTURE o f t he ECONOMY

(%of GDP) Agriculture Industry

Services

Private consumption General government consumption Imports of goods and services

Manufacturing

(average annualgrowth) Agriculture Industry

Services

Private consumption General government consumption Gross domestic investment Imports o f goods andservices

M anufacturing

1983 1993

16.7 34.1 472 41.9 23.4 27.9 36.1 24.0

60.7 73.4 24.1 8.4 31.5 40.4

1983.93 1993-03

16 2 2 2.1 4 .9 5.9 3.0 0.8 4.4

1.9 0.3 -0.1 -2.8 -18 7.7 -2.3 2.8

2002 2003

222 19.3 26.1 29.7 11.6 11.3

51.7 51.1

84.3 83.8 11.6 11.3

42.0 41.8

2002 2003

-1.7 6.0 9.7 4.3 5.7 4.0 3.9 4.6

4.8 2 2 -11.9 1.3 -7.6 1.8 3.5 4.1

Deve loumen t diamond*

Life expectancy

GNI Gross

capita enrollment per primary

L

Access to improvedwatersource

-Zambia

Lowincome group

E c o n o m i c ratios.

Trade

Indebtedness

-Zambia Lowincome g r o w

Growth of i nves tmen t and GDP (Oh) 20 T

10

0

.10

-GDI -GDP

Growth of expor t s a n d Impor t s ( O h )

40 T

20

0

-20

-40

84

Zambia PRICES a n d GOVERNMENT FINANCE

D o m e s t i c p r i ces (%change) Consumer prices Implicit GDP deflator 18.6

Governmen t f i nance (%of GDP, includes current grants) Current revenue Current budget balance Overall surplus/deficit

1983

T R A D E

(US$ millions) Total exports (fob)

Copper Cobalt Manufactures

Total imports (cif) Food Fuel and energy Capital goods

Export price index (?395=x70) Import price index (?395=.00) Terms of trade (S95=00)

B A L A N C E of P A Y M E N T S

(US$ millions) Exports of goods and services Imports of goods and Services Resource balance

Net income Net current transfers

1983

992 864

n 2 7 8

64

1983

1n1 951 150

-337 -n

Current account balance -197

Financing items (net) Changes in net reserves

P 8 69

M e m o : Reserves including gold (US$ mii/ions) Conversion rate (DEC,iocal/US$) 13

E X T E R N A L D E B T and RESOURCE FLOWS

(US$ millions) 1983

3,755 IBRD 345 IDA 21

Total debt outstanding and disburred

Total debt service IB RD IDA

Composition of net resourceflows Official grants Official creditors Pnvate creditors Foreign direct investment Portfolio equity

World Bank program Commitments Disbursements Pnncipal repaynents

299 48

0

76 96 32 26 0

20 28 22

1993

188.1 143.7

15.9 4 . 4 -U.6

1993

994 734 n 8 n 3

1019 50 47

328

70

1993

1091 1 3 0 -222

-226 -19

-467

484 -7

452.8

1993

6,465 240 8 7

364 72

6

478 u 9 -40 314

0

189 174 52

2002

22.2 19.9

7.9 -1.5

-u.9

2002

9% 520

39 2x3

1,204 11

247 325

62 88 70

2002

1081 1,585 -504

-155 7

-652

881 -229

306 4,396.6

2002

5,969 11

2,145

309 8 5

348 44 -P 197

0

44 141

7

2003

202 19.0

18.3 .15

-a.0

2003

1,17 599 66

3 P 1633

15 230 579

67 81 83

2003

1314 1791 -477

-146 -2

-628

702 -74

245 4,733.3

2003

I n f l a t i on (Oh)

40 T I 98 99 00 01 02

-GDP deflator -CPI

Export and Import levels (US$ mlll.)

12.000, I l1.500 4 I I

I I 97 98 99 00 01 02 03

exports mlnporls

Current accoun t balance t o GDP (%)

0

5

.10

- 15

-20

-25

I 1 C o m p o s l t l o n of 2002 debt (US$ mlll.)

I 2 145

E 1.956

c 1,015 D 595

A . IBRD E- Bilateral B - IDA D - O t k mdtilateral F - Private C-IMF G - Start-lei

85

Mafinga HillsMafinga Hills(2301 m)(2301 m)

KaulishishiKaulishishi(1420 m)(1420 m)

MachecheteMachechete(1488 m)(1488 m)

MMuulloonnggaaPPllaaiinn

BBuussaannggaaSSwwaammpp

LLuukkaannggaaSSwwaammpp

MMuucchhiinnggaa

MMttss

..

MumbwaMumbwa

MutandaMutanda

MwinilungaMwinilunga

NamwalaNamwalaKafueKafueMazabukaMazabuka

KaemaKaema

PokumaPokumaSenkoboSenkobo

KalomoKalomo

ChomaChoma

BowwoodBowwood

PembaPemba

ChirunduChirundu

KaribaKaribaShangomboShangombo

KasempaKasempa

ChisasaChisasa

ChingolaChingola

Kapiri MposhiKapiri Mposhi

RufunsaRufunsa

Old MkushiOld Mkushi

MkushiMkushi

NyimbaNyimba

PetaukePetauke

MfuweMfuwe

MpikaMpika

ChambeshiChambeshi

KopeKope

ChembeChembe

SamfyaSamfya

LuwinguLuwingu

MpulunguMpulungu

MbalaMbala

SumbuSumbu

MwenzoMwenzoNchelengeNchelenge

KaputaKaputa

KawambwaKawambwa

MporokosoMporokoso

MufuliraMufuliraMwanyaMwanya

ChisomoChisomo

KateteKatete

SerenjeSerenje

LubunguLubungu

KawanaKawana

MavuaMavua

LuampaLuampaKalaboKalabo

SenangaSenanga

KabompoKabompo

ManyingaManyinga

LukuluLukulu

ZambeziZambezi

ChavumaChavuma

MulobeziMulobezi

KatabaKataba

MalundanoMalundano

SeshekeSesheke

SitotiSitoti S O U T H E R NS O U T H E R N

C E N T R A LC E N T R A L

N O RN O R T H E R NT H E R N

E A S T E R NE A S T E R N

W E S T E R NW E S T E R N

N O RN O R T H -T H -W E S T E R NW E S T E R N

C O P P E R -C O P P E R -B E LB E L TT

LLUUAA

PP UU LL AA

LL UU SS AA KK AA

KabweKabwe

LivingstoneLivingstone

MonguMongu

SolweziSolwezi

NdolaNdola

ChipataChipata

MansaMansa

KasamaKasama

LUSAKALUSAKA

ANGOLA

DEMOCRATIC REPUBLICOF CONGO

TANZANIA

MALAWI

ZIMBABWE

NAMIBIA

BOTSWANA

MOZAMBIQUE

MO

ZAM

BIQ

UE

To Caianda

To Lumbala

To Lutembo

To Chiume

To Ngoma

To Mpandamatenga

To Matetsi

To Harare

To Cahora Bassa

To Lubumbashi

To Mokambo

To Sumbawanga

To Mbeya

To Karonga

To Mzuzu

To Lilongwe

To Furancungo

S O U T H E R N

C E N T R A L

N O R T H E R N

E A S T E R N

W E S T E R N

N O R T H -W E S T E R N

C O P P E R -B E L T

LUA

P U L A

L U S A K A

Mumbwa

Mutanda

Mwinilunga

NamwalaKafueMazabuka

Kaema

PokumaSenkobo

Kalomo

Choma

Bowwood

Pemba

Chirundu

KaribaShangombo

Kasempa

Chisasa

Chingola

Kapiri Mposhi

Rufunsa

Old Mkushi

Mkushi

Nyimba

Petauke

Mfuwe

Mpika

Chambeshi

Kope

Chembe

Samfya

Luwingu

Mpulungu

Mbala

Sumbu

MwenzoNchelenge

Kaputa

Kawambwa

Mporokoso

MufuliraMwanya

Chisomo

Katete

Serenje

Luangwa

Lubungu

Kawana

Mavua

LuampaKalabo

Senanga

Kabompo

Manyinga

Lukulu

Zambezi

Chavuma

Mulobezi

Kataba

Malundano

Sesheke

Sitoti

Kabwe

Livingstone

Mongu

Solwezi

Ndola

Chipata

Mansa

Kasama

LUSAKA

ANGOLA

DEMOCRATIC REPUBLICOF CONGO

TANZANIA

MALAWI

ZIMBABWE

NAMIBIA

BOTSWANA

MOZAMBIQUE

MO

ZAM

BIQ

UE

Zam

bezi

Lung

a

Luns

emfw

a

Luan

gwa

Kafue

Cuando

Lungwebungu

Kafue

LakeBangwelu

LakeMweru

Wantipa

LakeMweru

Lake Tanganyika

LakeKariba

LakeMalawiTo

Caianda

To Lumbala

To Lutembo

To Chiume

To Ngoma

To Mpandamatenga

To Matetsi

To Harare

To Cahora Bassa

To Lubumbashi

To Mokambo

To Sumbawanga

To Mbeya

To Karonga

To Mzuzu

To Lilongwe

To Furancungo

MulongaPlain

BusangaSwamp

LukangaSwamp

Muchinga

Mts

.

Mafinga Hills(2301 m)

Kaulishishi(1420 m)

Machechete(1488 m)

22°E 26°E 30°E

22°E 26°E 30°E

12°S

16°S

8°S

12°S

ZAMBIA

0 15010050

0 50 100 150 Miles

200 Kilometers IBRD 33514

OC

TOBER 2004

ZAMBIASELECTED CITIES AND TOWNS

PROVINCE CAPITALS

NATIONAL CAPITAL

RIVERS

MAIN ROADS

RAILROADS

PROVINCE BOUNDARIES

INTERNATIONAL BOUNDARIES

This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of The World Bank Group, any judgment on the legal status of any territory, o r any endorsemen t or a c c e p t a n c e o f s u c h boundaries.