Document of The World Bank Report No: ICR2574 IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA-45780 IDA-48670 IDA-H4770 IDA-H6430 TF-12730 TF-94641 TF-95106 TF- 97830 TF-97831) ON A IDA GRANT IN THE AMOUNT OF SDR 207.5 MILLION (US$ 309.78 MILLION EQUIVALENT) AND IDA CREDIT IN THE AMOUNT OF SDR 154.3 MILLION (US$ 230.22 MILLION EQUIVALENT) AND ADDITIONAL IDA GRANT IN THE AMOUNT OF SDR 161.7 MILLION (US$246.6 MILLION EQUIVALENT) AND ADDITIONAL IDA CREDIT IN THE AMOUNT OF SDR 113.7 MILLION (US$173.4 MILLION EQUIVALENT) AND ON MULTI-DONOR TRUST FUNDS GRANTS IN THE AMOUNT OF US$ 583.9 MILLION EQUIVALENT TO THE FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA FOR A ETHIOPIA PROTECTION OF BASIC SERVICES PROGRAM PHASE II PROJECT December 20, 2013 AFTSE AFCE3 Africa Region i CURRENCY EQUIVALENTS (Exchange Rate Effective at project closing, January 7 2013)) Currency Unit = Ethiopian Birr (ETB) 1.00 = US$ 0.05469 US$ 1.00 = 18.28550 FISCAL YEAR 8 July - 7 July ABBREVIATIONS AND ACRONYMS AF Additional Financing AGP Agricultural Growth Program APR Annual Progress Report BLT Budget Literacy Training BoFED Bureau of Finance and Economic Development CAS Country Assistance Strategy CIA Cumulative Impact Assessment COPCU Channel One Programmes Coordinating Unit CPI Consumer Price Index CSA Central Statistical Agency CSO Civil Society Organizations DA Development Agents DFID Department for International Development DHS Demographic and Health Survey DO Development Objective DP Development Partners DPL Development Policy Lending DPT3 Diphtheria, Pertussis and Tetanus DQA Data Quality Assessments EC Economic Cost EDQAF Ethiopia Data Quality Assessment Framework EMCP Expenditure Management and Control Program EMIS Education Management Information System ERA Enhanced Research Analysis ESAP Ethiopia Social Accountability Program ESMF Environmental and Social Management Framework ESMF Resettlement Policy Framework ETB Ethiopian Birr EU European Union ii FBG Federal Block Grant FMOH Federal Ministry of Health FTA Financial Transparency and Accountability FTAPS Financial Transparency and Accountability Perception Survey FTC Farmer Training Centres GEQIP General Education Quality Improvement Program GOE Government of Ethiopia GPI Gender Parity Index GTP Growth and Transformation Plan HCE Household Consumption Expenditure HEP Health Extension Program HepB3 Hepatitis B HEW Health Extension Workers HICES Household Income, Consumption, and Expenditure HIV/AIDS Human Immuno-Deficiency Virus/Acquired Immune Deficiency Syndrome HMIS Health Management Information System HSDP Health Sector Development Program HSEP Health Sector Extension Program IBEX Integrated Budget and Expenditure System ICR Implementation Completion Report IDA International Development Agency IFPRI International Food Policy Research Institute IFR Interim unaudited Financial Reports IHP International Health Partnership IIA Institute of Internal Auditors IP Implementation Progress IRR Internal Rate of Return ISR Implementation Status and Results JBAR Joint Budget and Aid Reviews JRIS Joint Review and Implementation Support KFW Kreditanstalt für Wiederaufbau KPI Key Performance Indicators LIG Local Investment Grant M&E Monitoring and Evaluation MDG Millennium Development Goals MDG-PF Health MDG Performance Fund MDTF Multi-Donor Trust Fund MEFF Interim Financial Reports MIS Management Information System MOFED Ministry of Finance and Economic Development MSE Micro and Small Enterprises iii NER Net primary Enrolment Ratio ODI Overseas Development Institute OFAG Office of the Federal Auditor General OPV Oral Polio Vaccine ORAG Office of the Regional Auditor General P for R Program for Results PAD Project Appraisal Document PASDEP Plan for Accelerated and Sustained Development to End Poverty PBS II Protection of Basic Services Program Phase II PCDP Pastorals Community Development Program PDO Project Development Objectives PEFA Public Expenditure and Financial Accountability PFM Public Finance Management PFSA Pharmaceutical Fund and Supply Agency PIP Priority Investment Plan PSCAP Public Sector Capacity Building and Governance PSIA Poverty and Social Impact Assessment PSNP Productive Safety Net Program QAG Quality Assurance Group QEA Quality at Entry QER Quarterly Expenditure Reports QSA Quality of Supervision RPF Resettlement Policy Framework SA South Asia Sustainability in Additionality, Accountability and Fairness, Fiduciary SAFE Standards and Effectiveness SARPS South Asia Region Procurement Services SIL Investment Lending SNNPR Southern Nations, Nationalities, and People’s Region SPG Specific Purpose Grant SWAp Sector Wide Approach TF Trust Fund TOR Terms of Reference TTL Task Team Leader UAP Universal Access Plan ULGDP Urban and Local Governance Program UoFED Urban Office of Finance and Economic Development UOM Unit of Measurement USD United States Dollar WASH Water and Sanitation programs WCBS Woreda City Benchmarking Survey iv WMS Welfare Monitoring Survey ZoFED Zonal office of finance and economic development Vice President: Makhtar Diop Country Director: Guang Zhe Chen Sector Manager: Lynne Sherburne-Benz Project Team Leader: Camilla Holmemo ICR Team Leader: Peter Pojarski v ETHIOPIA PROTECTION OF BASIC SERVICES PROGRAM PHASE II PROJECT Contents DATA SHEET ............................................................................................................. viii A. Basic Information.................................................................................................... viii B. Key Dates ................................................................................................................ viii C. Ratings Summary ...................................................................................................... ix D. Sector and Theme Codes .......................................................................................... ix E. Bank Staff ................................................................................................................... x F. Results Framework Analysis ...................................................................................... x G. Ratings of Project Performance in ISRs .................................................................. xv H. Restructuring (if any) .............................................................................................. xvi I. Disbursement Profile ............................................................................................... xvi 1. Project Context, Development Objectives and Design ............................................... 1 1.1 Context at Appraisal .......................................................................................................... 1 1.3 Revised PDO (as approved by original approving authority) and Key Indicators, and reasons/justification ................................................................................................................. 2 1.4 Main Beneficiaries............................................................................................................. 2 1.5 Original Components (as approved) ................................................................................. 3 1.6 Revised Components ......................................................................................................... 5 1.7 Other significant changes .................................................................................................. 5 2. Key Factors Affecting Implementation and Outcomes .............................................. 6 2.1 Project Preparation, Design and Quality at Entry.............................................................. 6 2.2 Implementation .................................................................................................................. 8 2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization ................. 10 2.4 Safeguard and Fiduciary Compliance.............................................................................. 11 2.5 Post-completion Operation/Next Phase ........................................................................... 13 3. Assessment of Outcomes .......................................................................................... 13 3.1 Relevance of Objectives, Design and Implementation .................................................... 13 3.2 Achievement of Project Development Objectives (Efficacy) ......................................... 15 3.3 Efficiency ........................................................................................................................ 19 3.4 Justification of Overall Outcome Rating ......................................................................... 20 3.5 Overarching Themes, Other Outcomes and Impacts ....................................................... 21 vi 3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops................ 24 4. Assessment of Risk to Development Outcome......................................................... 24 5. Assessment of Bank and Borrower Performance ..................................................... 25 5.1 Bank Performance ........................................................................................................... 25 5.2 Borrower Performance .................................................................................................... 26 6. Lessons Learned ....................................................................................................... 27 Annex 1. Project Costs and Financing .......................................................................... 29 Annex 2. Outputs by Component ................................................................................. 32 Annex 3. Economic and Financial Analysis ................................................................. 48 Annex 4. Bank Lending and Implementation Support/Supervision Processes ............ 55 Annex 5. PBS Results – Expanded Table ..................................................................... 58 Annex 6. Revisions to the Results Framework at the Time of Additional Financing .. 66 Annex 7. Summary of Borrower’s ICR ........................................................................ 69 Annex 8. List of PBS II-supported Knowledge Products & Services .......................... 74 Annex 9. List of Supporting Documents ...................................................................... 77 MAP vii ETHIOPIA PROTECTION OF BASIC SERVICES PROGRAM PHASE II PROJECT DATA SHEET A. Basic Information Ethiopia Protection of Country: Ethiopia Project Name: Basic Services Program Phase II Project IDA-45780,IDA- 48670,IDA- H4770,IDA-H6430,TF- Project ID: P103022 L/C/TF Number(s): 12730,TF-94641,TF- 95106,TF-97830,TF- 97831 ICR Date: 12/21/2013 ICR Type: Core ICR FED DEM REPUBLIC Lending Instrument: SIL Borrower: OF ETHIOPIA Original Total USD 540.00M Disbursed Amount: USD 981.35M Commitment: Revised Amount: USD 957.83M Environmental Category: B Implementing Agencies: Central Statistical Agency Federal Ministry of Finance and Economic Development Federal Ministry of Health Cofinanciers and Other External Partners: Government of the Netherlands Irish Aid African Development Bank DFID Government of Italy The Canadian Government (CIDA) Delegation of the European Union Germany (KFW) Government of Spain Austria Development Cooperation B. Key Dates Revised / Actual Process Date Process Original Date Date(s) Concept Review: 02/28/2008 Effectiveness: 05/22/2009 05/22/2009 Appraisal: 03/10/2009 Restructuring(s): 02/22/2011 Approval: 05/14/2009 Mid-term Review: 10/18/2010 12/09/2010 viii Closing: 12/31/2011 01/07/2013 C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Satisfactory Risk to Development Outcome: Moderate Bank Performance: Satisfactory Borrower Performance: Satisfactory C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings Quality at Entry: Satisfactory Government: Satisfactory Implementing Quality of Supervision: Satisfactory Satisfactory Agency/Agencies: Overall Bank Overall Borrower Satisfactory Satisfactory Performance: Performance: C.3 Quality at Entry and Implementation Performance Indicators Implementation QAG Assessments Indicators Rating Performance (if any) Potential Problem Project Quality at Entry Yes None at any time (Yes/No): (QEA): Problem Project at any Quality of No None time (Yes/No): Supervision (QSA): DO rating before Satisfactory Closing/Inactive status: D. Sector and Theme Codes Original Actual Sector Code (as % of total Bank financing) General agriculture, fishing and forestry sector 21 21 General education sector 53 53 General transportation sector 5 5 General water, sanitation and flood protection sector 6 6 Health 15 15 Theme Code (as % of total Bank financing) Decentralization 3 3 Education for all 46 46 Health system performance 2 2 ix Public expenditure, financial management and 3 3 procurement Rural services and infrastructure 46 46 E. Bank Staff Positions At ICR At Approval Vice President: Makhtar Diop Obiageli Katryn Ezekwesili Country Director: Guang Zhe Chen Kenichi Ohashi Sector Manager: Lynne D. Sherburne-Benz Lynne D. Sherburne-Benz Project Team Leader: Camilla Holmemo Trina S. Haque ICR Team Leader: Peter Ivanov Pojarski ICR Primary Author: Peter Ivanov Pojarski Anne M. J. Bossuyt F. Results Framework Analysis Project Development Objectives (from Project Appraisal Document) The Development Objective of the Ethiopia Protection of Basic Services Program Phase II Project (PBS II) is to contribute to expanding access and improving the quality of basic services in education, health, agriculture, water supply and sanitation, and rural roads delivered by sub-national governments, while continuing to deepen transparency and local accountability in service delivery. Revised Project Development Objectives (as approved by original approving authority) (a) PDO Indicator(s) Original Target Formally Actual Value Values (from Revised Achieved at Indicator Baseline Value approval Target Completion or documents) Values Target Years 1. Primary enrolment rates Indicator 1 : a. Net enrolment rates for grade 1-8 (%) b. Gender Parity Index for grade 1-4 Value quantitative or a) 79.1 b) n/a a) 91.5 b) 94 a) 85.4 b) 90 Qualitative) Date achieved 06/01/2009 06/01/2009 12/31/2012 Comments a) Target substantially met at 93%. (incl. % b) Target met, with some fluctuations among years (met at 100% in 2011 and at achievement) 96% in 2012). x 2. Children vaccinated against a. DPT3+HepB3+Hib3 (%) Indicator 2 : b. Measles (%) c. Children immunized (number) Value a) 88 b) 86 c) a) 84.9 b) 79.5 c) quantitative or a) 76.8 b) 68 c) 1,387,351 1,900,000 2,045,747 Qualitative) Date achieved 06/01/2009 06/01/2009 12/31/2012 Comments a) Target substantially met at 96%. (incl. % b) Target substantially met at 92%. achievement) c) Target surpassed. Indicator 3 : 3. Births attended by skilled health personnel Value quantitative or 16 48 20.4 Qualitative) Date achieved 06/01/2009 06/01/2009 12/31/2012 Comments (incl. % Target not met, but latest data showing steady progress. achievement) Indicator 4 : 4. Proportion of malfunctioning water supplies Value quantitative or 20 16 24 Qualitative) Date achieved 06/01/2009 06/01/2009 12/31/2012 Comments (incl. % Target not met. achievement) Indicator 5 : 5. Farm households receiving agricultural extension services Value quantitative or 5.09 9.96 10.5 Qualitative) Date achieved 06/01/2009 06/01/2009 12/31/2012 Comments (incl. % Target surpassed. achievement) Indicator 6 : 6. Citizens who report that they have knowledge about the woreda budget Value 9 quantitative or 13 19 13 Qualitative) Date achieved 06/01/2009 06/01/2009 12/31/2012 Target surpassed. (Two values for baseline are provided and both are surpassed: Comments the Woreda City Benchmarking Survey /WCBS/ results show 13% while the (incl. % Financial Transparency and Accountability Perception Survey /FTAPS/ shows achievement) 9%.) 7. Citizens who report that woreda officials have actively sought the views of Indicator 7 : people in their Kebele on quality of basic services Value 52 58 49 quantitative or xi Qualitative) Date achieved 06/01/2009 06/01/2009 12/31/2012 Comments (incl. % Target not met. achievement) a. Direct project beneficiaries (number) Indicator 8 : b. of which female (%) Value a) 71,180,257 b) quantitative or a) 71,180,257 b) 50 a) 71,180,257 b) 50 50 Qualitative) Date achieved 06/01/2009 06/01/2009 12/31/2012 Comments (incl. % Target met. achievement) (b) Intermediate Outcome Indicator(s) Original Target Actual Value Formally Values (from Achieved at Indicator Baseline Value Revised approval Completion or Target Values documents) Target Years Indicator 1 : Proportion of qualified primary school teachers % Value (quantitative n/a 61 61.3 or Qualitative) Date achieved 06/01/2009 06/01/2009 12/31/2012 Comments (incl. % Target achieved. achievement) Indicator 2 : 2. Ratio of health extension workers to population Value (quantitative 1:4369 1:2500 1:2213 or Qualitative) Date achieved 06/01/2009 06/01/2009 12/31/2012 Comments (incl. % Target surpassed. achievement) Indicator 3 : 3. Woreda road desks with appropriate resources Value (quantitative 8 190 500 or Qualitative) Date achieved 06/01/2009 06/01/2009 12/31/2012 Comments (incl. % Target surpassed. achievement) Indicator 4 : 4. Development agents deployed Value 49,946 71,000 73000 (quantitative xii or Qualitative) Date achieved 06/01/2009 06/01/2009 12/31/2012 Comments (incl. % Target surpassed. achievement) 5. Average share of capital expenditures as share of total spending (LIG Indicator 5 : woredas) Value (quantitative 7 n/a 27 or Qualitative) Date achieved 06/01/2009 06/01/2009 01/02/2012 Comments Target surpassed. Pilot LIG did not receive additional financing, ends at the end (incl. % of CY2013 and the Government's MDG investment fund picks up. achievement) Indicator 6 : LIG projects with "satisfactory technical quality" (in %) Value (quantitative n/a n/a 90 or Qualitative) Date achieved 06/01/2009 06/01/2009 01/02/2012 Comments Target surpassed. Pilot LIG did not receive additional financing, ends at the end (incl. % of CY2013 and the Government's MDG investment fund picks up. achievement) Indicator 7 : 7. Contraceptive Prevalence Rate Value (quantitative 33 55 45 or Qualitative) Date achieved 06/01/2009 06/01/2009 12/31/2012 Comments (incl. % Tagret met at 81%. Data is from HMIS (on contraceptive acceptance rate) achievement) 8. People with access to a basic package of health, nutrition, or population Indicator 8 : services Value (quantitative n/a 77,575,308 81,775,915 or Qualitative) Date achieved 06/01/2009 06/01/2009 12/31/2012 Comments Target surpassed. HMIS tracks Primary Health Service Coverage. CSA (incl. % population figures are used to convert to numbers. achievement) 9. Long Lasting Insecticide Treated malaria nets purchased and/or distributed (in Indicator 9 : millions) Value (quantitative 0 37.8 45.7 or Qualitative) Date achieved 06/01/2009 06/01/2009 12/31/2012 Comments (incl. % Target surpassed. achievement) xiii 10. Regions where standardized audit qualification (IIA qualification) is widely Indicator 10 : disseminated Value (quantitative 0 11 11 or Qualitative) Date achieved 06/01/2009 06/01/2009 12/31/2012 Comments (incl. % Target met. achievement) 11. Public sector auditors registered and followed up for the CIA qualification Indicator 11 : training Value (quantitative 22 70 37 or Qualitative) Date achieved 06/01/2009 06/01/2009 12/31/2012 Comments (incl. % Target not met. achievement) Audits Coverage (%) Indicator 12 : a. ORAGs b. OFAG Value (quantitative a) n/a b) 32 a) 70 b) 70 a) 32.4 b) 96.1 or Qualitative) Date achieved 06/01/2009 06/01/2009 12/31/2012 Comments (incl. % a) Target not met. b) Target surpassed. achievement) Regional governments adopting and disseminating Public Procurement Indicator 13 : Proclamation, Directives and manual Value (quantitative 0 8 11 or Qualitative) Date achieved 06/01/2009 06/01/2009 12/31/2012 Comments (incl. % Target surpassed. achievement) Woredas where PBS Social Accountability Implementing Partners facilitate the Indicator 14 : use of Social Accountability tools Value (quantitative n/a 86 0 or Qualitative) Date achieved 06/01/2009 06/01/2009 12/31/2012 Comments Figures not available. More output and outcome indicators are annexed in the SA (incl. % implementation document. achievement) 15. Basic service units that have developed joint action plans for service quality Indicator 15 : improvement based on interface meetings between service users and providers xiv Value (quantitative n/a 172 0 or Qualitative) Date achieved 06/01/2009 06/01/2009 12/31/2012 Comments Figures not available. Joint action plans are expected to be prepared in at least 2 (incl. % service units of each of the woredas that implement the SA tools. achievement) Indicator 16 : Sectors in which System Quality Assessments conducted (number) Value (quantitative 0 5 3 or Qualitative) Date achieved 06/01/2009 06/01/2009 12/31/2012 Comments (incl. % Target not met. achievement) Indicator 17 : Woredas that rolled out new WASH MIS Value (quantitative 0 200 58 or Qualitative) Date achieved 06/01/2009 06/01/2009 12/31/2012 Comments (incl. % Tagret not met. achievement) Indicator 18 : CSA branch offices connected Value (quantitative 10 25 25 or Qualitative) Date achieved 06/01/2009 06/01/2009 12/31/2012 Comments (incl. % Target met. achievement) G. Ratings of Project Performance in ISRs Actual Date ISR No. DO IP Disbursements Archived (USD millions) 1 10/02/2009 Satisfactory Satisfactory 235.65 2 04/07/2010 Satisfactory Moderately Satisfactory 365.70 3 06/30/2010 Satisfactory Satisfactory 477.70 4 03/14/2011 Satisfactory Satisfactory 527.37 5 07/10/2011 Satisfactory Satisfactory 736.12 6 06/16/2012 Satisfactory Satisfactory 853.84 7 07/06/2013 Moderately Satisfactory Satisfactory 981.35 xv H. Restructuring (if any) ISR Ratings at Amount Board Restructuring Disbursed at Restructuring Reason for Restructuring & Approved Restructuring Date(s) Key Changes Made PDO Change DO IP in USD millions PBS II was approved in 2009, for a total of USD 540 million. Additional Financing of USD 420 million was approved on 02/22/2011 N S S 527.37 February 22, 2011. At this time the results framework was revised. The original PDO has not been revised. I. Disbursement Profile xvi 1. Project Context, Development Objectives and Design 1.1 Context at Appraisal At the time of appraisal, PBS had emerged as a highly relevant instrument to protect and promote decentralized service delivery and to enhance transparency and accountability, especially at subnational level. The Government considered the program to be an essential, integral element of macroeconomic development framework, most notably the Growth and Transformation Plan. The plan reaffirmed the Government's commitment towards a multisectoral approach to basic services, defined by Government to include health, education, water and sanitation, agriculture and natural resources, and rural roads. These aspirations were closely aligned with MDG targets and set a basis through which Ethiopia would soon be identified as the third top performing country in terms of absolute progress towards the MDGs (ODI, 2010) Project appraisal was anchored on a solid track record of results achieved under PBS I and predicated going forward. By 2008, the total number of students in primary schools (grades 1-8) reached 15.3 million children with a net primary enrolment ratio (NER) of 83%. The ratio of girls’ to boys’ NER, the gender parity index (GPI), surpassed 0.9 at the first cycle primary school level (grades 1-4). Grade 5 completion rates rose to 69% in 2008. . Under-5 child mortality, infant mortality, and maternal mortality rates fell from their extremely high levels at the beginning of the 1990s by almost forty percent by 2004/to 123 and 77 per 1,000 live births, and 671 maternal deaths per 100,000 live births respectively. The percentage of people living below the poverty line had declined steadily from 45.5% in 1996 to 38.5% in 2005, reflecting substantial falls in rural poverty. This trajectory of strong performance has most recently been manifested by Ethiopia reaching MDG-4 of under-5 child mortality ahead of schedule and econometric analysis explicitly confirming that PBS-financed woreda expenditures improve results in health and education. From the outset, project appraisal looked to strengthen the longer-term positioning of the program, in particular the challenge of expanding basic services for the poor. The human development improvements noted above did not change the fact that at the time of appraisal of PBS II the levels of services and development outcomes were still low and that Ethiopia was below the Sub-Saharan average for several indicators of basic human welfare. Moreover, progress was not always even, disparities persisted across gender, income groups, and Regions, and differential performance existed in different sectors. As a core part of Ethiopia’s poverty reduction strategy at the time, therefore, expansion of service delivery needed to be sustained and supplemented by improvements in the efficiency and quality of services. PBS II offered this potential by building on existing country systems. The appraisal of PBS II successfully leveraged decentralized governance arrangements supported by Government and donor partners. The government’s established decentralized system of economic governance provided timely and predictable financing to support a steady and impressive increase in basic services throughout the country. Since about 2004 several development partners (DPs) including IDA had supported this process of decentralization and local empowerment, initially via 1 direct budget support and from 2006 in a more focused manner via the multi-partner Protection of Basic Services (PBS) program. PBS II and the Additional Financing were seen as a core part of World Bank supported Country Assistance Strategy (CAS) covering FY2008 to FY201. The CAS aimed to support Ethiopia in achieving four main strategic objectives, consistent with PASDEP 1 and GTP: (i) fostering economic growth; (ii) improving access to and quality of basic service delivery; (iii) reducing Ethiopia’s vulnerability; and (iv) fostering improved governance. PBS II underpinned all of these objectives, but particularly the second and fourth. For this reason, the Bank played a vital role in establishing and overseeing the framework enabling several donors 2 to contribute in a coordinated way to PBS. Additionally, the Bank played a major role in overseeing the harmonized supervision of PBS through its role as a lead donor as well as by housing the PBS Secretariat and in facilitating the pooled funding approach used by most donors through Bank-managed Trust Funds. 1.2 Original Project Development Objectives (PDO) and Key Indicators (as approved) The Development Objective of the Ethiopia Protection of Basic Services Program Phase II Project (PBS II) is to contribute to expanding access and improving the quality of basic services in education, health, agriculture, water supply and sanitation, and rural roads delivered by sub-national governments, while continuing to deepen transparency and local accountability in service delivery. 1.3 Revised PDO (as approved by original approving authority) and Key Indicators, and reasons/justification The PDO has not been changed during the life of the project. PBS II was approved in 2009, for a total of USD 540 million. Additional Financing of USD 420 million was approved on 22 February 2011. At this time the results framework was revised. The Additional Financing did not invoke any significant changes to the PBS II design and implementation modality. The Additional Financing extended the PBS II operation by one year, from December 31, 2011 to January 7, 2013, to allow for continued progress on capacity-building sub-programs and cover the costs associated with financing gaps, both in Basic Service Block Grants and in the Health MDG Support Facility. The Results Matrix was also updated at the time of the PBS II AF. Some core indicators required by the Bank were introduced, and were included in the revised results framework where appropriate. The detailed changes of the indicators are shown in Annex 6 to this ICR 1.4 Main Beneficiaries The beneficiaries of the project are broadly defined as the population of Ethiopia, and especially the poor and those living in rural areas. The PDO itself does not explicitly name a beneficiary group because the project is a national program, and is all- 1 Plan for Accelerated and Sustained Development to End Poverty 2005/06-2009/10 (MoFED, Ethiopia) 2 Including besides IDA also DFID, AfDB, EU, Irish Aid, KFW, Austria Development Cooperation, Italy, Canada, Spain and the Netherlands 2 encompassing in its scope and is benefitting the population at large. However, given that the majority of those with access to services are in rural areas, the PAD names “the rural poor” as “the main target beneficiaries of the basic services supported by PBS” 3. Federal and regional government agencies, local governments, community organizations and local communities can also be viewed as beneficiaries of the program’s capacity-building elements. 1.5 Original Components (as approved) Program structure. At the time of Appraisal, it was agreed that given the multi-sector SWAp nature of the PBS, as well as its use of country systems for service delivery, financial management, etc., it would be regarded as a Program, which contributed to the Government’s broader GTP sector development programs in the relevant sectors. PBS II was proposed to have the program structure as indicated in Table 1 below (Table 1 from the PAD of the PBS II Additional Financing). The associated IDA financing amounts are also indicated. Table 1. PBS II Program Costs and IDA Allocation including Additional Financing (AF) as Proposed at AF Board Approval, in USD million equivalent Original Additional Additional Other Financing Revised budget GoE IDA PBS Gap Total Sub-Programs Financing Donors AF Contri- Cost bution Sub-Program A. Support to Delivery of Basic Services Part A1. Basic Services Grant 2,473.4 523.0 407.7 125.0 366.8 3895.9 Part A2. Pilot Local Investment Grant (LIG) 53.4 53.4 Sub-Program B. Health MDG Support 87.7 12.3 100.0 Facility Sub-Program C. Transparency & Accountability 50.2 50.2 Part C1. Accountability in Decentralized Finances 13.7 6.7 20.4 and Services Part C2. Social Accountability Sub-Program D. Monitoring and Evaluation 8.2 8.2 Unallocated 20.0 20.0 TOTAL : 2,706.6 523.0 420.0 131.7 366.8 4148.1 Sub-Program A—Support to Delivery of Basic Services. Two types of support were envisaged under this Sub-Program. 3 PAD, paragraph 138 3 Part A1 Basic Services Grant (IDA USD448.0 million equivalent; Anticipated donor support: DFID USD259.8 million equivalent; AFDB USD150.4 million equivalent; EC USD65.1 million equivalent; Spain USD40.7 million equivalent; KfW USD40.7 million equivalent; Ireland USD29.2 million equivalent; Austria USD10.9 million equivalent; Government USD2,086.1 million equivalent). The original PBS I had included (i) education, (ii) health, (iii) agriculture, and (iv) water supply and sanitation services delivered by sub-national governments as the basic service sectors, in PBS II, (v) rural roads were included as an additional basic service sector. As with PBS I, Sub-Program A1 was to finance recurrent expenditures (salaries, operations and maintenance) in the sub-national basic services (i.e. these are the eligible expenditures under pooled PBS IDA, donor, and Government own-revenue sources). Capital expenditures in these sectors would continue to be financed from Government sources (except in LIG woredas, see below). Government would report on both types of expenditures as part of Joint Budget and Aid Reviews (JBARs), and the policy dialogue between PBS partners and Government would focus on the expenditure mix and issues related to both recurrent as well as capital spending on basic services. The results of the SAFE 4 performance assessment of any year was planned to be reflected in decisions on disbursement levels under the Basic Services Grant for the following year. Part A2 Pilot Local Investment Grant (LIG) (IDA USD25.0 million equivalent; Anticipated Donor Support DFID USD21.6 million equivalent, KFW USD6.8 million equivalent). Part A2 continued to support the introduction, on a pilot basis, of a multi- sector Specific Purpose Grant (SPG) from the Federal Government to support capital investment and capacity building in the PBS basic service sectors. The financing for Pilot LIG would be transferred to all regions in the same proportions as the Block Grants (supported by Part A1). Sub-Program B—Health MDGs Support Facility (IDA USD10.0 million equivalent; Anticipated funding from other donors: CIDA USD56.6 million equivalent 5 ; Italy USD10.2 million equivalent; and RNE USD10.9 million equivalent). Subprogram B aimed to assist Government in its efforts to accelerate the attainment of health-related MDGs in line with the goals and objectives of the Health Sector Development Programs (HSDP). In particular it provided flexible financing for priority activities for procurement and distribution of critical health commodities as well as capacity building. The support under this component was designed to be in line with the principles and arrangements underpinning the International Health Partnership (IHP) Compact as well as the framework around the Health MDG Performance Fund (MDG-PF), which was one of Government’s preferred financing modalities for the health sector. The MDG PF aimed to harmonize donor contributions to the health sector, in accordance with the IHP Compact. While the MDG-PF was being organized, a pooled funding mechanism, which included a Bank-administered Multi-Donor Trust Fund (MDTF) as well as IDA resources for PBS II Subprogram B, would be established as a second account contributing to the 4 The “SAFE” approach—Sustainability in additionality, Accountability including fairness, Fiduciary standards, and Effectiveness. See section 3.5. for details. 5 At the time of appraisal, all contributions by other donors were still subject to approval. 4 MDG-PF’s objectives but subject to the World Bank’s rules and regulations on financial management, procurement, and environmental safeguards. Sub-Program C—Transparency and Accountability (IDA USD30.0 million equivalent for C1 only; C2 was to be financed via an MDTF with donor funds only); DFID USD13.8 million equivalent (provisional); Ireland USD3.7 million equivalent; Canada USD3.2 million equivalent; AFDB USD11.5 million equivalent; and EC USD1.7 million equivalent). Part C1: Accountability in Decentralized Finances and Services. Part 1 of Sub- program C would finance a core group of fiduciary strengthening activities related to sub- national PFM and procurement capacity. In addition, Sub-Program C Part 1 would finance the innovations and roll-out of Financial Transparency and Accountability (FTA) initiatives which the Government initiated under PBS I. Part C2: Social Accountability (USD13.7 million via an MDTF). PBS II envisaged a new phase of Social Accountability activities which would complement the C1 FTA efforts. The primary characteristic of part C2 of Sub-Program C was to continue a channel of funding to civil society that enhances the capacities of citizens to engage meaningfully with social accountability processes around service delivery. This component would continue efforts started in PBS I to roll-out successful social accountability activities and to enhance and institutionalize capacity building for social accountability. Sub-Program D—Monitoring and Evaluation (M and E) (IDA USD7.0 million equivalent; DFID USD0.7 million equivalent; EC USD0.5 million equivalent). This sub-program would enhance Government and donors’ capacity to assess the actual impact PBS was making at local levels. The sub-program would support the strengthening of existing national and sectoral M&E systems. 1.6 Revised Components Project components remained unchanged for the life of the project. Financing was added through an Additional Financing agreement, approved on February 22, 2011. Part A2 of Subprogram A (LIG) did not receive additional support through the AF, as the Government developed in the MDG fund mechanism for financing local infrastructure. 1.7 Other significant changes The Additional Financing referred to in 1.6 above extended the PBS II operation by slightly more than one year, from December 31, 2011 to January 7, 2013. As part of the effort to strengthen Monitoring and Evaluation Sub-program D, the Results Matrix was updated (see Annex 5). Indicators were modified to align them with the IDA Core Indicators for the PBS sectors. The targets, which to begin with were derived from national targets, were also aligned with the Government’s Growth and Transformation Plan. The GTP included very ambitious aspirational targets and for political economy reasons the Government insisted that the donors and PBS align with the national planning targets in its own results framework. More analysis on that is provided in section 3, Assessment of Outcomes. Some indicators were removed because of difficulties with collecting data. Some changes were also made to the Ethiopia Social Accountability 5 Program to strengthen its setup and management structure based on lessons from implementation. The AF brought about additional positive developments. As a result of the appraisal discussion around the AF and of very strong insistence from the Bank, the Government strengthened the main implementing unit, COPCU, allowing it greater authority and providing more resources. That led to a stronger implementation capacity in the Government, and to overall better performance of the project. 2. Key Factors Affecting Implementation and Outcomes 2.1 Project Preparation, Design and Quality at Entry A critical feature of project design was to build on the added value of the PBS instrument started with PBS I - i.e. not only a means to finance recurrent spending but an important vehicle to strengthen capacity for improved service delivery. In particular, three elements of PBS II – the funding of the Federal Block Grants for basic services, the focus on fiscal transparency, and the stimulation of demand-led accountability – were designed to boost the strengthening of country systems. A major innovation was the fiduciary aspects, and accountability and transparency activities under the FTA. PBS II was also designed to move towards difficult dialogue with more direct involvement in social accountability – something that would require significant shift in mindsets after a long period of top-down governance. Social Accountability continued the efforts started in PBS I and was designed flexibly to allow for further adaptation as lessons emerged, especially the external evaluation of PBS II. While this presented a cultural mind-shift and thus a longer-term effort, over time this component offered the potential to be a significant cultural game changer for Ethiopia. PBS was designed to be a framework program with a focus on access, and within which complementary sectoral operations would have a focus on the quality side. Given PBS’s multi-sector nature, the project has been complementary vis-à-vis other sectors, especially on the quality side. The PBS program design has been careful in not duplicating sector activities already undertaken by line ministries. Particularly the PFM and social accountability activities have been fully complementary and designed to strengthen other initiatives such as the Ethiopia Productive Safety Net Program (PSNP), the Expenditure Management and Control Program (EMCP), the Pastorals Community Development program (PCDP), the improved urban and local governance programs (ULGDP), the public sector capacity building and governance (PSCAP) and other governance programs. Through these activities, PBS has shown that it is a very effective forum for addressing key practical PFM issues and that it can provide targeted support to tackle specific bottlenecks (see EU evaluation, page 35f). Furthermore, the PBS also complemented and supported sectoral operations, including the General Education Quality Improvement Program (GEQIP), the Agricultural Growth Program (AGP), the Water and Sanitation programs (WASH). PBS II was designed with an explicit emphasis on the “effectiveness” of basic service delivery, in line with the “Effectiveness” principle of the “SAFE” framework. This signalled an explicit focus on appropriate financing modalities and expenditure mix, reforms, policies and actions within basic service sectors as well as of a cross-cutting 6 nature. Accordingly, PBS II revised the JRIS structure to incorporate specific sessions on the effectiveness devised to monitor the share and composition of spending at regional and woreda level on basic services. These efforts highlighted the need to strengthen data collection and assess data quality, which became a central focus on capacity building efforts. Notably, PBS II also made provisions to prioritize expenditure across a broader range of services, through the inclusion of rural roads. Rural roads were believed to contribute to the ability of communities to access social services while also improving their ability to participate in productive economic activities. It would also bring equivalency to the scope of “basic services” as defined under PBS 6 with “poverty targeted expenditures” as defined in PASDEP. PBS II also ensured strengthened protocols to focus on fiscal management and sustainability issues. In order to improve predictability of PBS resources and enable Government to plan on resource use with confidence, the results of the SAFE performance assessment of any year would be reflected in modifications to disbursements for the following year rather than in-year adjustments. This would result in full within- year predictability of disbursements. PBS II made it clear that "The results of the SAFE performance assessment of any year will be reflected in decisions on disbursement levels under the Basic Services Grant for the following year" (PBS II PAD, paragraph 69). A central element of project design was to strengthen program implementation and coordination arrangements in order to improve future implementation performance. This featured a series of prescient actions i.e.: (i) expansion of the Donor Secretariat function and capacity, with a view to the secretariat playing an enhanced role going forward; (ii) strengthened government capacity and staffing in the “PBS Unit” that would later fall under the Channel Ones Programs Coordination Unit; (iii) provision to ensure future World Bank TTLs would be based in-country. Notably, PBS II also saw the creation of a dedicated MDTF which greatly enhanced contracting and management issues. While this allowed the leverage and pooling of resources that would otherwise be difficult to collect, the various sources of financing came with different closing dates and, in the cases of TFs, with different sets of procedures. The TF regulations also added another layer of internal bureaucracy. One possible design issue, which the ICR team had to thoroughly analyze, was the setting of ambitious targets for the project’s key performance indicators. The project KPI targets at the time of the AF were aligned, at the insistence of the Government, with national policy documents like the Growth and Transformation Plan (GTP). The World Bank team unanimously recognized this issue at the time, and worked to moderate it as much as possible. It made all sense for the Government to set for itself ambitious targets, and, given the harmonization agenda adopted by the PBS program, the Government was strongly averse to choosing targets different from the national ones. Therefore, while technically the targets were recognized as ambitious, the political economy environment dictated that the PBS II and GTP targets be aligned. Ultimately, the PBS team had to choose between following the very strong government stand and the harmonization principles, and the potential ramifications of not meeting the targets. The team ultimately 6 It may be noted that this revised sector scope applies to the PBS support via the block grant. PBS support via the Local Investment Grant (LIG) was already defined to include rural roads. 7 chose the bigger goal of supporting the government in going as fast as possible towards its stretched targets. Project design paid particular attention to the manifold risks underlying PBS II, and the possible mitigation measures to offset these including arrangements for enhanced levels of policy dialogue. A thorough risk assessment was conducted and mitigation measures were agreed at PBS II appraisal. During PBS II preparation, several concerns emerged that had the potential to affect the design of continued PBS programming. These were related to the then-fragile macroeconomic environment and the environment for function of CSO activities in the country. An enhanced level of dialogue was built into PBS II to ensure donors’ concerns in these areas were adequately addressed. Considering the focus on the health sector under subprogram B, a detailed assessment of risks within the health sector was also undertaken. 2.2 Implementation During supervision, extensive efforts were made to monitor progress in all substantive aspects of the project against the targets, development objectives, and performance monitoring indicators set out in the PAD and PIP. PBS II progress and implementation status were reviewed through semi-annual JRIS missions, with participation from all Development Partners, Government officials at federal, regional and woreda levels, civil society organization, and other stakeholders. Between 100 and 250 participants from all levels of government participated in the JRIS reviews, which included field trips and discussions at the regional level as well as all 200 participants in the federal review. Each JRIS assessed whether the performance requirements had been met. In addition, several review missions were conducted throughout the year, together with a number of studies and assessments and the regular meetings between donors and Government in the working groups and at senior management levels. All JRIS Aide Memories report satisfactory overall review under PBS II. A hallmark of supervision was the effective level of donor partnership and coordination that enabled a comprehensive approach to supporting and strengthening decentralized service delivery. To implement its interventions, PBS II was supported through a partnership between the GOE, IDA and 10 other Development Partners (DPs) 7 . Of these partners seven contributed through the Bank-administered Multi-Donor Trust Funds, while three partners (AFDB, KFW and Austria) provided parallel financing directly to the Government. Through PBS II, DPs have contributed more than US$ 2 billion. The comprehensive partnership approach underlying PBS required complex implementation mechanisms. To manage this complexity, the PBS program involves extensive implementation support from partners. The World Bank has played a leading role in managing PBS and the multi-donor trust funds (MDTFs) and has served as the permanent donor chair of the program. The details of the donor coordination mechanisms are described in sections 2.2, 2.3 and 3.5. It should be noted that the scale and intensity of PBS partnership is unique across the broad Africa social protection portfolio and should be considered a best practice in this regard. 7 Including besides IDA also DFID, AfDB, EU, Irish Aid, KFW, Austria Development Cooperation, Italy, Canada, Spain and the Netherlands 8 PBS partners were especially proactive in ensuring fiduciary probity around the project. Strong effort was required to manage procurement implementation and disbursement and there was particular success in strengthening timely financial reporting under the project. During PBS II, there was a substantial improvement in the quality and timely reporting of IFR and QER by COPCU and FMOH. COPCU reported their continuing efforts in ongoing training of regional accountants, Channel One Coordinators, and sector personnel, as well as their efforts in awareness training to higher-level officials at the regional level. A range of implementation issues were successfully tackled during PBS II, highlighting the World Bank task team’s ability to assess risks to project implementation, operations and sustainability. For example, the Ethiopia Social Accountability Program (ESAP) was originally planned to be implemented during PBS II. ESAP is an integral part of the PBS program, though for logistical reasons (creating an MDTF) it was set up as a separate project linked to PBS II. As the MDTF was meant to be operational through the end of PBS III, it was delinked from PBS II and linked to PBS III at the end of FY12. This procedure took significant amount of coordination and was finalized on June 20, 2013 8 . Another example concerned the management of the MDTF. The Bank was managing the MDTF, through which most partners channelled their support for PBS II. Considering the high transactions costs of administering the constant additional contributions to the MDTFs, at a June 28, 2010 meeting the Implementation Support Operations Committee recommended the Task Team consider options to simplify trust fund processing. In response to this advice, the Task Team has moved away from co- financing MDTFs linked to the timing of World Bank operations and towards programmatic MDTFs as existing trust funds expire. In the course of implementation, a growing acceptance on the potential of PBS emerged – especially seeing it as an effective forum for sensitive policy dialogue. For example, in the absence of other fora, PBS became an important vehicle for discussions of monetary policy, especially in light of stark inflation levels. Persistently high levels of inflation and low levels of foreign reserves had to be continuously watched to ensure that the objective of maintaining high economic growth in the longer term was achieved. While this was an undoubted success of PBS, it also raised a central challenge that PBS could become an overburdened instrument and project. To this end, a challenge throughout PBS II was to make careful judgements about what issues should the instrument be used to address and which should be handled through other sectoral operations or other modes of dialog. The health component was especially challenging to implement. During implementation, there was less funding available to the MDTF for Health Facility than was anticipated in the design (donor budget disbursement was USD 36.9 million versus a committed 77.7 million USD). Following this reduction of pledged donor commitments, a financing gap emerged, which resulted in reprogramming of needs and delays in procurement of health commodities. The IDA PBS II additional credit/grant helped 8 Until ESAP was de-linked from PBS II, the PBS II project was technically open. This process also delayed the submission of the last ISR for the project, which was filed on December 14, 2012, but could only be completed at the end of June 2013. 9 covering the costs associated with this financing gap, and provided also 12.3 million USD for the procurement of bed-nets. Outstanding auditing issues delayed extension of the Health Facility MDTF. Following a miscomprehension that the Health Facility MDTF would automatically be extended together with the PBS II, PFSA had launched several procurements. However, outstanding health related audit issues under PBS I and II delayed this extension. The closing date of the MDTF was finally retroactively extended in November 2012 by six months, from June 30, 2012 to December 30 of the same year, which allowed to pay for the already-procured items. Other factors affecting implementation: • On September 25, 2012, a request for Inspection of PBS III was submitted to the Inspection Panel. The Panel registered the complaint on October 9, 2012 and an inspection review is ongoing. While the review refers to PBS III, it was filed during the last months of implementation of PBS II. • Two interventions from PBS I were carried over to PSPII, including the Pilot Local Investment Grant and some procurement for health. The latter was possible by extending the original closing date of a PBS I TF56942 from December 31, 2009 to December 31, 2010, complementing thus the procurement of the Health MDG Facility component under PBS II. LIG was a continuation of a pilot that was already approved under PBS I Additional Financing, but its actual implementation of activities at the local-level had only commenced shortly before the PBS II appraisal. • The implementation arrangements of Sub-program D were revised throughout the program, shifting some responsibilities from MOFED to the Central Statistical Agency (CSA). This created instability and complicated the procurement carried out by CSA 2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization Monitoring and Evaluation had two aspects: M&E built into the project (subprogram D); and M&E built into the implementation support efforts of the World Bank and the development partners. The built-in M&E was designed to strengthen the capacity to collect and use improved decentralized data and to introduce data quality assessment frameworks in the various sectors. More information on that is available in section 3.2 on Efficacy. The other aspect of M&E was the implementation support and supervision. PBS II was monitored through intensive implementation support, including semi-annual, Government and DPs’ Joint Review and Implementation Support (JRIS) missions, following well defined structures. The JRIS missions determine whether government continues to meet its responsibilities under the SAFE principles ("Sustainability in Additionality", "Accountability and Fairness", "Fiduciary Standards", and "Effectiveness") and allow for implementing agencies to provide an update on all aspects of implementation. Pre-JRIS field visits were often organized in complementarity with field visits of the major sector related programs. They involved active participation of regional and woredas level administration. The pre-JRIS, JRIS and other specific missions were linked to the more technical work of JBARs (Joint Budget and Aid Reviews), which included assessments against the agreed tests. The JBAR reviews allow informed discussions of the 10 Government and Development Partners’ contributions to the PBS program through its fiscal system. In March-May 2012 the project also underwent an extensive independent evaluation 9 of PBS I and 2 by an outside consultant financed by the EU. An external evaluation of the Pilot LIG experiences under PBS I and II was finalized in November 2011. In addition to these and the six-month in-depth JRIS reviews, PBS monitoring and supervision also involved regular financial reporting through interim unaudited financial reports (IFRs), quarterly expenditure reports (QERs) and yearly and quarterly program audits. Donors linked their contributions to the outcomes of the JRIS missions. 2.4 Safeguard and Fiduciary Compliance Financial Management Regular fiduciary reviews conducted by the Bank concluded that the financial management systems in place provided the assurance that IDA proceeds were being used for the intended purposes. Capacity at both MOFED and FMOH was enhanced continuously and monthly FM meetings between MoFED and DPs allowed to identify timely bottlenecks and to follow up closely of agreed actions. As part of the AF, the fiduciary performance was again reviewed, new agreements made to reach the outdated covenants whereas a Financial Management Improvement Plan was also agreed upon. Still, challenges remained with audit issues not being addressed in a timely manner, and with remedial actions remaining open for long periods of time. COPCU played a positive role in taking over the ownership of any open audit actions and working towards their resolution. The PBS Secretariat also hired a full-time FM specialist to support this work. Procurement While specific procurements were noted by DP’s, Government and Bank staff as problematic, the evidence points that overall procurement was satisfactory. Most of the procurement activities under PBS II were completed by the closing date of the IDA grants. The PBS Secretariat also hired a full-time procurement specialist to carry out training at all levels and help build government capacity in procurement. Extension of the Trust Funds for sub-programs C1 and D allowed other procurement packages to be finalized by June 30, 2013. Procurement for Sub-program A2 (Local Investment Grant) was highly decentralized with 99 woreda procurement offices responsible for capital investments at the local level. The LIG component was designed to address local capacity issues and provide capacity building and experience for local administrations in procurement. While an Independent Procurement Audit found that the majority of contracts were deemed to be high risk, an assessment of the overall LIG sub-program found that civil works were mostly of sound technical quality and based on participatory community input. For Sub-program B (Health MDG Support Facility) the Pharmaceutical Funding and Supply Agency was the sole implementing agency. The procurement process of all planned medical equipment and pharmaceuticals with the exception of ACT were completed. All procurements under this subproject were undertaken through the Bank’s prior review process and PFSA has performed satisfactorily. However, a large 9 Ethiopia: Multi-Annual Review of PBS Programme (May 2012), report by ECORYS MACRO Consortium under contract to the EU Delegation to Ethiopia 11 procurement of contraceptives took an overly long time. By common agreement of many people interviewed, the delay was to some extent due to the World Bank’s internal procurement review process. Sub-program C (Transparency and Accountability) had some initial delays, but then COPCU in MOFED was able to accelerate procurements. COPCU capacity has been improving throughout the project life and most planned goods procurement activities were completed successfully. Subprogram D (Monitoring and Evaluation) experienced some procurement delays, but the last year and a half of the project period saw strong improvement. The last ISR rates overall procurement performance under PBS II as Moderately Satisfactory Environmental and social safeguards Under the implementation of the Sub-program A2, LIG, the Safeguard Policies for Environmental Assessment OP/BP 4.01 and Involuntary Resettlement OP/BP 4.12 were triggered in the context of the construction of small-scale civil works. The key safeguard provisions were developed under PBS I but remained operational under PBS II, particularly the Environmental and Social Management Framework (ESMF) and the Resettlement Policy Framework (RPF). A study on environmental sustainability on LIG activities – a legal covenant – was to be completed by October 2010, whereas a monitoring report on the status of compliance with the ESMF and RPF would be submitted three months after effectiveness and annually thereafter. After some delays, the Environmental and Social Sustainability Study was completed by November 2011 and concluded that most of the 20 sample LIG woredas used at least some version of the ESMF screening form to screen projects, and there were indications that the culture of appraising a given project for its environmental and social sustainability is slowly taking root. Follow up of safeguards compliance was carried out by JRIS missions. An Environment and Natural Resources Working Group was established by the donors to support on-going actions to identify designated focal areas for attention. For the subprogram B, the safeguard Policy for Pest Management (OP4.09) was triggered because of the likelihood of continuing indoor use of insecticides in the health component. At appraisal, it was assessed that the FMOH had developed the necessary national guidelines but that the status of its implementation needed to be assessed by Mid Term Review. After some delays, this assessment was finalized in December 2011. The PBS series has also been closely scrutinized in light of the GoE’s villagization program, and the subsequent related Inspection Panel case on PBS III. With regards to PBS II, the Bank, after initially becoming aware of the villagization program in October 2010, exercised due diligence and along with other Development Partners followed up with the GoE to learn more about the objectives and modalities of the Government villagization program. During the Board presentation of the PBS II AF the Bank team informed the Board about its efforts to review the facts about villagization. Further, the Bank and the other partners sought more information and dialogue with the Government on the environmental and social development impacts of the program. The efforts included undertaking meetings with federal ministers and regional officials, providing advice to the GoE on good practice guidelines and principles for resettlement, undertaking field visits to learn how the program is being implemented on the ground, 12 etc. Based on the available information, this report concludes that the Bank was not financing the villagization program through the project, and the safeguards and policies deployed and implemented were adequately selected for PBS II. 2.5 Post-completion Operation/Next Phase On September 25, 2012 a follow-up operation, Promoting Basic Services (PBS III), was approved by the World Bank Board of Directors. PBS III became effective on December 20, 2012. According to the PBS III PAD, PBS III will contribute to the continued promotion of better services in Ethiopia, including ensuring sustained and further gains in access paired with an increased focus on quality of services. The launch of PBS III strengthens and guarantees the success of the PBS II achievements. PBS III will deepen its support for local system strengthening by supporting improved transparency and accountability systems at the woreda level. The Pilot Local Investment Grant (LIG) capacity helped give insights into woredas' strengths and weaknesses in having capital resources available to them. In light of the Government significant increase in investment resources at the regional level, as well as the interest of streamlining implementation arrangements and simplifying program structure, the PBS program would no longer include a health component or the LIG pilot. However, working with the Federal Ministry of Health, the World Bank has developed a dedicated program to support health MDGs: the Health MDG support operation, using the program-for-results approach. Further, though the LIG pilot program was evaluated as successful, it was conducted on a pilot basis in 99 woredas. With the introduction of the Government's MDG fund, which provides for capital expenditures on basic services, especially roads and water, at the woreda level, the LIG was deemed no longer needed and is phasing out. 3. Assessment of Outcomes 3.1 Relevance of Objectives, Design and Implementation While the PDO remained unchanged during the life of the project, changes were made to outcome indicators during the Additional Financing and the ICR team looks at project performance before and after the AF. According to the Bank system, the project had disbursed USD 527 million from IDA at the time of the AF approval. This is roughly half of the total project disbursement as of the closing date. Therefore, further in this section, the ICR shall look at the period before and after the Additional Financing, and shall use roughly equal weight for the ratings before and after. A special weighted averages table will therefore not be applied for the final assessment. Relevance of Objectives. PBS II objectives remained high through the design and implementation phases. PBS (I-II-III) is the major aid instrument supporting improved and more accountable decentralized basic services in Ethiopia. While significant gains were made under the PBS I period, at the time of PBS II preparation there were still remaining gaps in service delivery and it was very important to protect the expenditures for service delivery and the development progress. In addition, disparities persisted across gender, income groups, and regions. PBS II set out to sustain the momentum built under PBS I and to support the expansion of service delivery and supplement it by improvements in the efficiency and quality of services. The PDO for PBS II is similar to 13 that for PBS I, but with more emphasis on improving both access and quality of basic service delivery, in recognition that decentralized service delivery under PBS I and before had been very successful in enhancing coverage and access, but should work more with complementary sectoral operations and get deeper into quality issues. The objectives of the operation were consistent with the Bank country assistance strategy and with the development priorities of the Government. Design. According to the independent review conducted in 2012 (see footnote 8), “PBS has a particularly effective design because of its focus on shared objectives, its use of country systems, its focus on recurrent costs and, not least, its ability to reinforce Ethiopia's unique system of decentralisation. Rather than “buying reforms”, the shared focus has been on implementation. Consistent high-quality analysis is essential to effective dialogue.” A key challenge in design was the government insistence at harmonizing the program’s targets with national goals. The ICR team concluded that the World Bank at the time clearly recognized the issue, undertook the appropriate analysis and discussions, and eventually went ahead with what was the optimum solution under the circumstances. The set of ambitious targets therefore cannot be held as a design Box 1: The Lending Instrument. At the time of project appraisal flaw, but should rather be there was a discussion on the added value of a Sector Investment considered a compromise Loan (SIL) vis-à-vis straightforward budget support. The choice of solution under complex a SIL reflected a very deliberate effort to continue PBS as a medium-term instrument in Ethiopia’s aid architecture. The SIL as circumstances. Another deployed under PBS I prioritized capacity building efforts as design challenge was related central to the program and enabled PBS to become an effective to the choice of the SIL vehicle to highlight bottlenecks and policy issues related to instrument. It is explained in decentralization, local level governance and service delivery in Box 1. Ethiopia. It also allowed significant flexibility to the Bank and its co-financiers in terms of providing a financing vehicle where the There have been times when level of disbursements can be adjusted subject to performance on PBS, because of its size and agreed criteria. There was a question on whether a transition from SIL to DPL should be made for PBS II. However, it was decided breadth was asked to be a that the choice of a SIL was critical to supporting capacity building vehicle for broader dialogue. at the sub-national government (especially woreda) level, Examples include tough particularly on PFM and transparency/accountability aspects. It issues from sectoral dialogue also allowed strengthening the M&E systems and the use of to macreconomic stability. associated Bank fiduciary safeguards, which facilitated co- financing from donors, most of whom strongly supported the use of In this challenging a SIL for PBS II. Further, a multi-sector SWAp was adopted, environment, though, the whereby existing sector coordination mechanisms and policy teams of the Bank and the frameworks defined the sub-programs supported under PBS II, Government did well in with activities and expenditures focused at sub-national levels. The maintaining the course PBS in many ways effectively takes on key features of the Bank’s new Program for Results (P for R) that links disbursements to towards the planned defined results. As the Bank gains experience in the design and outcomes. The Government, implementation of the P for R this instrument may have strong at the outset skeptical of the appeal in future iterations of the PBS. PBS instrument, and all the fiduciary requirements that the SIL implied, over time came to be very involved and convinced in the instruments qualities. At the same time the Government was well aware of the potential of the PBS to 14 be overburdened, and maintained a solid position against turning it into a “Christmas tree”. PBS II was designed as a pro-poor intervention. The project supplemented the block grant with other high-impact pro-poor activities, including expansion of contraceptives for women and intensification of the fight against malaria through the provision of critical health commodities to front-line service providers. To enhance citizen engagement and oversight, PBS II focused on both the supply-side and demand-side of accountability around public budgets and services, catalyzing new levels of openness in the public budget system and engagement between local councils and citizens. After weighing all of the above factors, the Relevance of Design is assessed as substantial before and after the restructuring. Implementation. The PBS program had an environment of active evaluation and learning lessons while it was ongoing. It produced a number of analytical studies (see Annex 8 for a list of activities), was supported by the federal and regional work during the JRIS missions and other periodic missions and advanced the work on financial transparency and accountability and social accountability. The independent Review Team, which reviewed the project in 2012, concluded that management had been improving significantly over time due to: i) the creation and subsequent strengthening of COPCU; ii) the strengthened role of the PBS Secretariat; and iii) the quality of resident donor staff. The PBS secretariat has been key for the coordination of implementation and donor cooperation under PBS. Its role and function was set out in the TORs, developed by the PBS donors in 2009 and its importance has grown over the years. Relevance of Implementation is rated as high both before and after the restructuring. The overall relevance of objectives, design and implementation is assessed as high. 3.2 Achievement of Project Development Objectives (Efficacy) Progress of the results indicators was notable both before and after the results framework was revised for the Additional Financing in 2011. The appraisal mission for PBS II Additional Financing undertook a comprehensive review of the PBS program performance and in terms of progress towards Development Objectives and Implementation Progress, PBS II was rated Satisfactory. Measured in terms of meeting its results indicators before the Additional Financing, the PBS Program, while not exceptional, was progressing relatively well. This was evidenced by data in the project ISR before the AF, and the accompanying mission documentation. For example, in education the Net Enrollment Rate for children in primary school increased from 79 percent to 87.9 percent between FY07 and FY10, which represents an increase of almost 1.5 million additional children attending school. The ratio of primary health workers to population at the time (beginning of 2011) reached 1:2,500 from 1:4,369 three years earlier. Similarly, in agriculture, the number of development agents providing technical advice to small-scale farmers has risen from about 50,000 in FY08 to 63,000 in FY10, an increase of 26 percent. For water, 65.8 percent of the rural population had access to potable water in FY10, which represented a substantial improvement over the baseline in FY07, where 46 percent had access. Finally, there was improved 15 transparency and accountability across all regions and 90 percent of local governments posted budgets in public places, and quarterly audits took place for 95 percent of local governments nationwide (730 out of 770). Still, while 8 of the 13 indicators were clearly close to being achieved (3 are fully achieved), the remaining 5 were either not measured or were not achieved. The PBS II results after the restructuring are better measured, show good progress and high achievements. As of the end of the project the revised indicators looked as follows: Baseline Progress To Date Target COMMENT (Achievements) Values 11 Original Project (FY11) End PDO Level Results Indicators UOM 10 project Start (EFY03) FY12 (FY07) FY12 EFY04 (EFY99) EFY04 Target met 1. Primary enrolment rates at 93% % 79.1 85.3 85.4 91.5 a. Net enrolment rates for grade 1-8 (%) Target met b. Gender Parity Index for grade 1-4 % na 94 90 94 but fluctuating 2. Children vaccinated against Target met % 76.8 84.7 84.9 88 at 96% a. DPT3+HepB3+Hib3 Target met b. Measles % 68 81.5 79.5 86 at 92% Target surpassed c. Children immunized Number 1,387,351 2,073,624 2,045,747 1,900,000 3. Births attended by skilled health Target not % 16 16.6 20.4 48 personnel met 4. Proportion of malfunctioning water Target not % 20 20 24.0 16 supplies met 5. Farm households receiving Number Target agricultural extension services 12 (in 5.09 9.04 10.5 9.96 surpassed millions) 6. Citizens who report that they have 9 Target knowledge about the woreda budget 13 % 19 19 13 surpassed 13 14 10 UOM = Unit of Measurement. 11 Target values are entered for the years data will be available, not necessarily annually. When targets refer to annual values, it is indicated in the “frequency” column. Otherwise, notes are provided in the “Comments” column. Targets are in line with the GTP results matrix. 12 Agricultural extension services include services on natural resources/environmental conservation, crop and animal production. Extension services will provided to pastoralist, semi-pastoralists and agrarian farm households. 13 These indicators will be reported under Woreda City Benchmarking Survey (WCBS). The Transparency and Accountability Group will follow up implementation of the WCBS. 14 WCBS results show 13% while FTAPS shows 9% 16 7. Citizens who report that woreda Target not officials have actively sought the views met % 52 48 49 58 of people in their Kebele on quality of basic services 8. a. Direct project beneficiaries 15 Target met Number 71,180,257 71,180,257 71,180,257 71,180,257 b. of which female % 50 50 50 50 Target met As explained by the Poverty and Social Impact Assessment (PSIA) analysis 16, protecting the spending and ensuring the flow of inputs into the PBS sectors are directly linked to outcome results. In education, PBS financing has helped to hire more than 100,000 additional primary school teachers, which has been accompanied by impressive results. Although not all PBS end targets were reached, the 2013 UN MDG's progress report indicated that Ethiopia has made important strides in achieving universal primary education. In agriculture, PBS has supported the agriculture sector through the hiring of more than 45,000 Development Agents (DAs), whose role is to provide agricultural extension services for crops, livestock, and natural resources management, animal health professionals and cooperative promoters at the woreda and kebele levels. The targets set for PBS II for households receiving agricultural extension services were surpassed by more than half a million. In the water and sanitation sectors, access to potable water supply has increased considerably and the increased number of staff has also allowed to reinforce further awareness creation. Accordingly, the number households with latrine has increased overtime from 75% to 84% (respectively between 2009/10 and 2011/12). In roads, through provision of recurrent budgets for local staff costs, the PBS program has supported the establishment of 500 woreda road desks that provide a platform for these improved rural transport services. Overall, the average travel time taken to all- weather roads has progressively declined from 3.7 hours in 2009/10 to 2.9 hours in 2011/12. In health, the PBS’s specific contribution to the progress in reaching the Health MDG cannot be separated from the combined efforts of other programs and institutions, but it is clear that the PBS interventions have all contributed to the improvements in the maternal and child health and Malaria MDGs: the 2013 UN MDG Progress Report suggests that Ethiopia is making good progress in reaching the targets for child health, HIV/AIDS, and malaria, while it was announced in mid-2013 that Ethiopia had reached the MDG4. The 2011 Ethiopia Demographic and Health Survey showed remarkable achievements in the under-5 mortality rate, which declined from 123 (per 1000 live births) in 2005 to 88 in 2010. Contraceptive use also nearly doubled over this time period (from 15% to 29%), 15 Figures represent total population census results, which is conducted every 10 years. PBS benefits people of all of the regions except Addis Ababa. 16 See end of this section for more details. PSIA results became available in October 2013, at the time this ICR was being finalized. 17 contributing to a reduction in total fertility rate. The number of children immunized jumped by almost 50% to 2.1million. The expansion of HEW to almost all kebeles in the country has significantly contributed to these impacts. In 2010, over 63% of household had received basic health training from HEWs. ). Although not all of the health related targets were met, the trend towards the achievement of the end targets was positive, and some targets were even surpassed. According to the new PSIA, indicators that pose some questions – like the maternal mortality ratio and the births attended by skilled health personnel – are already showing steady progress. In addition, some positive trends in proxy indicators for maternal mortality were observed and the use of ante-natal care increased from 28% to 34 % (respectively 2005 and 2011 DHS), while the postnatal service coverage has also increased from 36.2 % to 44.5% between the same period. The proportion of births attended by skilled providers has increased from 6% to 10% between 2005 and 2011. Under the Pilot Local Investment Grant’s (LIG’s), analysis of the expenditure data of the sample woredas, conducted as part of the LIG Evaluation in July 2011, showed that the share of capital expenditure in the total expenditure of the woredas increased significantly from pre-LIG period to post-LIG period for all woredas. The capacity development aspects of the program have also delivered significant results. The Financial Transparency and Accountability (FTA) tools designed under PBS I were rolled out, and all regional governments have customized the FTA templates. More than 95% of woredas have disclosed their budget and expenditure information for the public using the customized templates; 50% service delivery units like schools, health centers veterinary services have disclosed their services delivery information for citizens using the customized templates. 43% of citizens confirmed that woreda officials have sought the views of the people concerning the quality public basic services 17. Overall, FTA work has been institutionalized in the Government public finance system all over the country during PBS II. The Ethiopia Social Accountability Program (ESAP) was to be implemented during PBS II with follow on activities in PBS III. ESAP is an integral part of the PBS program, and for logistical reasons a programmatic MDTF was designed that was first linked to PBS II, and at the end of PBS II was linked to PBS III. While implementation has been slower than anticipated, over fifty Ethiopian Civil Society Organizations, reflecting a good mix of PBS-supported sectors and representing nine regions, were short-listed to receive funding under ESAP-2. With the funds available at that time, agreements were signed with 30 CSOs for social accountability work in 143 woredas. Overall, PBS II has successfully delivered results and contributed to the strong progress in the basic services sectors in Ethiopia. Initial analysis from the PSIA for PBS clearly shows that PBS is contributing strongly to Ethiopia’s progress towards the MDGs. This is most recently manifested by Ethiopia reaching MDG-4 ahead of schedule earlier this year. Econometric analysis shows that PBS-financed woreda expenditures improved the results in the health and education sectors. Agriculture spending on extension workers has helped increase productivity, as shown in the results from IFPRI’s research. 17 Ibid, p94 18 According to PSIA, health and education spending account for 60% of the woreda-level spending financed by PBS. Health spending pays for health extension workers while education spending pays for teachers. The econometric results show that a US$1 increase in woreda health spending per capita increases the contraceptive prevalence rate by 0.9%, and the percentage of births delivered by skilled birth attendants by 1.90% within that woreda. This means a $10 spending increase can result in a 19% improvement in the proportion of births assisted by skilled attendants. Both of these contribute sharply to reducing maternal mortality, as global evidence shows. Similarly, an increase of US$1 per capita of woreda level health spending increases the coverage of Penta-3 vaccination by 0.19%, which can significantly help reduce infant and child mortality. With regard to education, a US$1 per capita increase in woreda level education spending results in a 0.76% increase in the net enrollment rate within that woreda. These results demonstrate the power of the PBS-financed decentralized approach to improve access to social services. Based on the above analysis and on the fact that a follow up operation is picking up to continue and support the achievements reached 18, it can be concluded that on average between the before and after the restructuring periods, the project’s overall efficacy is substantial. 3.3 Efficiency Concerning efficiency and value for money, the project reflects strong compliance with aid effectiveness principles and is assessed by the GoE and partners as more efficient and effective than the plausible alternatives, with significant transaction cost savings for the Government. While there are substantial coordination and supervision costs, they are not disproportionate given the Project’s financial size, complexity, and national scale. Although it is difficult to bring any quantified assessments of efficiency and value for money, the highlights from the 2012 independent review provide a strong presumption that PBS is both efficient and good value for money. As part of preparation for the Promoting Basic Service Phase III project, DFID performed a benefit cost analysis of its potential contribution to sub-national basic service component of the PBS III project. The study examined the potential benefits in each of the five sectors of the project along different dimensions. For example, in the health sector, it extrapolated monetized benefits from additional productive years due to increased life expectancy and decreased amount of time spent ill to determine an overall benefit in the health sector. Taking into account all of the discounted benefits and costs, the study found PBS to have a benefit cost ration of 1.43 and an IRR of 23%. This amount is about three-quarters higher than the IRR estimate derived by a team of the PBS Secretariat. Still both approaches give positive and significant values for the IRR of PBS 19. 18 As per the World Bank ICR Guidelines and Harmonized Criteria (August 2006, as amended October 2011), the project’s outcomes are assessed based on analysis showing that the operation's major relevant objectives were achieved, or are expected to be achieved, efficiently. 19 The approach used by the PBS Secretariat is for PBS I, while the approach undertaken by DFID was for PBS III. There are two possible reasons for the higher estimate of IRR in DFID’s calculations. First, DFID includes the roads sector in their calculations, 19 To add to this analysis, the support to the health sector through a common financing mechanism for several donors (MDTF and IDA) has offered management and fiduciary advantages. Besides savings linked to the advantages of bulk international procurement, both DPs and FMOH were able to cut down their management costs as the Sub-Program B expenditures were integrated in the rolling procurement plan of the Health MDG-PF. The efficiency of the project is therefore assessed as overall substantial. 3.4 Justification of Overall Outcome Rating Rating before the Restructuring/Additional Financing: Moderately Satisfactory Rating after the Restructuring/Additional Financing: Highly Satisfactory Overall rating: Satisfactory Overall, nine of the twelve PDO-level indicators in the revised Results Framework were either surpassed, fully met or reached above 90% of their target levels, and only three fell short 20. Even for the ones that fell short, the new PSIA analysis suggests a path of good and sustainable progress. The last project ISR 21 rates the overall outcome as Moderately Satisfactory. However, the ISR does that based on 18 months old data from 2011, while the ICR rates the project based on the latest data available from end 2012, and the new PSIA analysis. Given that the project did not fully meet all the targets in the results framework, the ICR team carefully considered the overall project rating. The team recommends a Satisfactory rating given the following considerations, in additions to the summary of results provided above: (i) The decision to include the Government’s ambitious national targets in the program’s results framework was taken based on careful consideration and discussion within the Bank, and with Development Partners and with GOE. The GoE’s firm position was that including less ambitious targets was not politically tenable as it would suggest that the Government was not intending to meet its own public commitments. The decision taken to align the PBS targets with these Government targets was consistent with the high level of country ownership that characterized the PBS series, the high degree of alignment with national systems, while avoiding the potential confusion and conflicting incentives that could have emerged from having two different sets of targets in the public domain. (ii) During the life of PBS II, Ethiopia made important and impressive developmental gains. An important example is the announcement in September 2013 that Ethiopia has achieved MDG-4 on under-5 child mortality two years early. Important contributing factors to this success include the expansion of supporting basic services (such as child immunization) as well as the public sector network of which was not included in PBS I project and which has a relatively high return. Second, the analysis of the Secretariat includes components which were assigned a zero per cent return, which is not the case under DFID’s assessment. 20 Births attended by skilled personnel increased from 16% to 21%, but fell well short of its target of 48%. The number of malfunctioning water supplies decreased, but was not able to reach target. The number of citizens who report that Woreda officials have actively sought the views of people in their Kebele on quality of basic services was also lower than the target. 21 The ICR refers to the ISR approved on June 24, 2013 as last ISR, although it was approved after the closing date for administrative reasons. Originally the ISR had been submitted on December 14, 2012. For more information see section 2.2, Other Factors Affecting Implementation, bullet 7. 20 Health Extension Workers. It is worth noting that this achievement --- supported by a number of underlying investments to which the PBS program contributed --- placed Ethiopia in a small, select group of seven low-income countries 22 that had achieved a reduction of two-thirds between 1990 and 2012. (iii) Also of significance is the accelerated implementation seen under PBS II of the program’s components on financial transparency and social accountability, which included a pronounced role for local civil society organizations. While these components encountered delays under PBS I and the beginning of PBS II, their implementation was accelerated during the life of PBS II and PBS II AF. Evaluations of both components show that progress was made in expanding citizens’ understanding of and participation in the budget process as well as their ability to hold local service providers possible. These are important achievements given Ethiopia’s highly-centralized political and institutional arrangements, entrenched mindsets, the limited space afforded civil society, as well as the program’s difficult origins following the 2005 national elections. The accelerated implementation of these components set the stage for the nationwide work on Grievance Redress Mechanisms that is now being pursued under PBS III. The shift in political and community culture this entailed cannot be underestimated. Therefore the ICR concludes that PBS II has largely achieved its objectives, with only minor shortcomings in the relevance of the results framework design (with the acceptance of some overambitious targets) and in its efficacy (not fully achieving a small number of its results indicators). Relevance of the objectives was high and the objectives remain highly relevant to Ethiopia’s development agenda. Efficacy and Efficiency, evidenced by the results and supported by the assumption of stable progress enforced by the follow up operation, are substantial. The institutional development impact, including improved information systems and strengthened management capacity, was also significant. The achievements of PBS II have effectively set the stage for the next phase of the program, which came into place in a timely manner and is a guarantee of maintaining and further improving the programs outcomes. 3.5 Overarching Themes, Other Outcomes and Impacts Ethiopia’s Drive to Reach MDGs. PBS II reflected this overarching goal for Ethiopia by supporting transfers to local governments, which were given responsibility for the agriculture extension, basic health services, basic education (grades 1-8), water supply and rural roads maintenance. These sectors are key to driving the MDGs. Results from the DHS surveys of 2006 and 2011 show improvements increase in net primary enrolment, access to ante-natal care, access to assisted childbirths and vaccination rates for all five wealth quintiles. The poorest quintile net enrolment rates increased by 84%, measles vaccination increased by 82%, access to assisted childbirths increased by 192%, access to antenatal care increased 91% and child mortality decreased by 31% (these changes amount to 58%, 58%, 115%, 63% and -31% respectively for the population as a whole . Regression results from the ongoing poverty and social impact assessment of PBS shows a direct linkage between access to health services and per capita local 22 In addition to Ethiopia, this group includes: Bangladesh; Malawi; Nepal, Liberia; Tanzania, and Timor L’Este. 21 expenditures on health and similarly increase in enrolments are directly linked to per capita local expenditures in education. These expenditures are supported by the intergovernmental fiscal transfers to woredas which receive most of PBS resources with health and education together accounting for over 60% of such expenditures. Ethiopia reached MDG-4 (Child Mortality) in mid-2013 ahead of schedule and is on track to reach the others. The results here show that PBS is helping drive this particularly for those at the bottom of the income distribution. Donor Harmonization. The PBS has been supported by 12 donors, with the World Bank taking the lead role, and a substantial amount of money being channeled through a World Bank managed Multi Donor Trust Fund (MDTF). A well-articulated system of dialogue and supervision, based on Joint Budget and Aid Reviews (JBARs) and JRIS missions was established, with joint missions every 6 months. This organized system of joint donor support and dialogue was very positive and was effective in its support to a Government driven agenda and program. Quality of supervision was this significantly improved over time. Coherence. PBS II is overall a very coherent program. The three elements – the funding of the Federal Block Grants for basic services, the focus on fiscal transparency, and the stimulation of demand-led accountability – were designed to boost the strengthening of country systems (see EU report, page 33). They also provided fiduciary and governance assurances for the highest levels of Government and development partners which was complemented by the newly introduced focus on monitoring and evaluation under Sub- Program D. Importance of the SAFE principles. The introduction of the SAFE principles (Sustainability in Additionality, Accountability and Fairness, Fiduciary Standards and Effectiveness, which was a new principle introduced by PBS II to focus on basic service sectors) was a key instrument towards a results based approach as it provided an overarching framework to assess progress for all Sub-Programs which was then linked to disbursements. Instituting the SAFE framework as a program management tool was a major achievement of PBS I and further developed by PBS II, balancing, for example, the discussions around recurrent (PBS financed) and capital costs within sectors. Decentralization process. PBS II has contributed some essential elements to the increasingly strong decentralization process in the country. Through the block grants as well as through capacity building for and promotion of participatory budget planning at the local level and publishing of expenditure and implementation progress, it substantially improved transparency and accountability at the local level. In addition, by fostering social accountability it provided citizens with the possibility of providing direct feedback to service providers and local administrations, a crucial element in building democratic decentralized structures and procedures as mandated by the country’s constitution. (a) Poverty Impacts, Gender Aspects, and Social Development Poverty Impacts. Since 2006 the PBS program has been the main multi-donor channel for aid to support poverty reduction in Ethiopia. The country has a strong pro-poor record 22 of expanding basic services and has made exceptional progress towards the 2015 MDGs 23 . Aid has been an important source of financing of PBS (around 40%). According to national survey data, the percentage of the population in Ethiopia living below the poverty line decreased between 2010/11 and 2011/12 (estimate) from 29.6 to 27.6. In addition, an increase in agricultural productivity and production was registered. The production of major food crops increased from 202 million quintals in 2009/10 to 235 million quintals in 2011/12, a rapid growth by any measurement. The Government clearly attributes some of this progress to the existence of the PBS program. Gender Aspects: As explained in the Relevance of Objectives section, disparities persisted across gender. PBS II supported the expansion of service delivery and supplement it by improvements in the efficiency and quality of services. Important gender aspects were tackled in the education and health sectors. PBS project has also mainstreamed gender in its FTA budget literacy training by monitoring the participation of female in the massive budget literacy training that was conducted under PBS II and under which over 171,000 citizens in all woredas were trained. Regional states and woredas were required to mainstream gender in their annual plans to improve female participation in this training and report on the progress during the JRIS as well as on annual FTA review meetings. As a result, female participation which initially was below 20% has increased to 31% in the budget literacy training under PBS II 24. Social Development: In the Social Accountability sub-program, over fifty Ethiopian Civil Society Organizations, reflecting a good mix of PBS-supported sectors and representing nine regions, were short-listed to receive funding under ESAP-2. With the funds available at this time, agreements have been signed with 30 CSOs for social accountability work in 143 woredas. (b) Institutional Change/Strengthening This topic has largely been covered in the preceding sections. Government and ministries showed significantly Improved Fiduciary Capacity. This included MoH and COPCU. Strengthening of CSA was significant. This was the first time it received this kind of support, and they are highly motivated to continue sectoral analysis. (c) Other Unintended Outcomes and Impacts Significant analytical and advisory work took place under the umbrella of the project. The project also served as a forum for development of Ethiopia. Development Partner Funding complements Government resources for the program, and PBS provides a forum and mechanism to bring together several donors' financial contributions to support overall program goals. The PBS was used by development partners discuss with Government macroeconomic issues, particularly on inflation. The provision of accurate data improved considerably due to these discussions, thus also enhancing transparency of the country’s macro situation, as well as the quality of the policy dialogue. PBS II started also collecting and providing more regional data analysis. The PBS III supervision also created a capacity-building effect. The strong and donor-supported supervision strengthened the central and local capacity to manage and supervise large programs. The 23 See section 3.5 above. 24 MOFED, Financial Transparency and Accountability Implementation Assessment Report, September 2013, p. 92. 23 JRIS process and the Social Accountability and FTA work provided valuable learning opportunities for federal and BOFED levels. 3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops Meetings with various stakegolders were conducted as part of the process of accumulating information for this ICR. The meetings with the Government representatives largely confirm the findings of the ICR, and an executive summary of the Government’s own completion report is attached as Annex 7. A meeting was also conducted with representatives of CSOs, local authorities and beneficiaries. All of those broadly share the conclusion of the ICR. Completion reports by other Development Partners (like the African Development Bank and DFID) which were issued before this ICR for reasons of earlier disbursement, rate the project as fully meeting or exceeding expectations on the main rating aspects, including outcomes 25. 4. Assessment of Risk to Development Outcome Rating: Moderate The risk rating for PBS II was considered to be Substantial at the time it was originally approved in 2009, and remained with a Medium risk rating for the Additional Financing operation. The substantial to high risks identified initially included (i) the twin macro- economic risks of payment pressures and inflation (H/S), (ii) political and democratic governance aspects (S/S), (iii) other risks (drought, tensions with neighboring countries, upcoming elections) (S/S), (iv) sector targets (affected by macroeconomic situation) (S/S), (v) the new CSO law as well as CSO capacity (H/S), (vi) woreda participatory budgeting (H/S), (vii) timely submission of FMRs, audit reports and respective comments (H/S), as well as (viii) delays in procurement (H/S). The PBS II program did well in managing most of these risks. First, the Government paid close attention to the overall macroeconomic situation and managed to keep key macro risks in check (e.g. inflation, fiscal) while the DPs used the PBS II forum to intensify their collaboration with the IMF and with Government to intensively monitor and discuss the situation. As relates to the political and democratic governance risks, PBS II supported successfully the strengthening of local capacities and enhanced social accountability and transparency. On the CSO law, the government had provided written assurances that this law would not impede the implementation of social accountability activities. While the establishment of the Social Accountability office as well as the contracting process of the CSOs took more time than expected, the participatory processes at the woreda level were carried out as planned and thus this risk was not as strong as expected. Finally, risks related to Financial Management decreased over time – an important achievement acknowledged by all DPs. Finally, the delays in procurement were perceived by all stakeholders as substantial and mitigating measures were seen as not as effective as desired. However, only minimal portion of procurements remained incomplete, and all large procurements were completed by the project closing. An implicit political risk for the PBS II outcome has emerged with the questions surrounding the villagization program. However, as noted in section 2.4 above, there is 25 DFID PBS II Project Completion Review (April 2012); AfDB PBS II Programme Completion Report (December 29, 2011) 24 no evidence that PBS II has in any way negatively impacted any groups among its beneficiaries or among the general population. Overall, the risk assessment as documented in the original PAD and its update in the AF seems realistic and confirmed by the evidence of the overall smooth implementation of PBS II. The Risk to Development Outcome as assessed by this ICR is Moderate. 5. Assessment of Bank and Borrower Performance 5.1 Bank Performance (a) Bank Performance in Ensuring Quality at Entry Rating: Satisfactory During the PBS II preparation period the Bank ensured that all lessons learned from PBS I and experience from other projects and countries were taken into account. The Bank maintained a very strong field-based team and also played an important role in donor coordination. While some of the results targets may have been optimistically set at the design phase, the ICR team concludes that this was not a design fault but rather solution for a complex political economy situation. This is discussed in more detail in section 3.1 above. (b) Quality of Supervision (including of fiduciary and safeguards policies) Rating: Satisfactory The Bank team consisted of a Task Team Leader, based in Addis, and supported by a co- Task Team Leader, also based in Addis since 2010. Furthermore, for each of the sub- programs, a senior level, field-based staff took responsibility as a focal point or Sub- program Task Team Leader. Further, the donor-financed PBS Secretariat, housed in the World Bank, provided a significant amount of the data and analysis used to inform PBS dialogue, coordinated activities between all DPs and Government agencies involved in the program, as well as arranged the semi-annual regional supervision missions and JRIS discussions. This extensive implementation support was financed by a combination of World Bank budget resources and donor-financed Enhanced Supervision Trust Funds. The World Bank was a permanent co-chair of the donor PBS group, the other co-chair rotating among other PBS donors. There were a series of technical working groups. In addition, monthly FM meeting were organized between MOFED, DPs and the Bank’s fiduciary team. Fiduciary reviews and JRIS show that the World Bank has continuously extended its fiduciary standards and oversight to the use of both IDA’s own contributions and those donor resources channelled via the MDTFs, and provided the necessary implementation support with particular attention to ensuring that financial management and procurement was undertaken in an efficient, transparent, and effective manner. While some of the procurement decisions of the Bank were seen as taking too long, the issue is not significant enough to affect the Satisfactory rating for Supervision. (c) Justification of Rating for Overall Bank Performance Rating: Satisfactory 25 Based on the evidence and analysis of the Quality at Entry and Supervision, overall Bank performance is rated Satisfactory. 5.2 Borrower Performance (a) Government Performance Rating: Satisfactory The PBS program is fully owned by the Government of Ethiopia, and is actually financed largely by its own resources, and uses to a large extent country systems. For the second phase of the program, Government planned to spend approximately US$1.8 billion in regional-level recurrent expenditure in the basic service sectors, bringing its total commitment to almost US$4 billion. Development Partner Funding complemented Government resources for the program, and PBS provides a forum and mechanism to bring together several donors' financial contributions to support overall program goals. Further, because Government and DPs agree on the overall PBS objectives and jointly support them, PBS has provided a productive forum to discuss challenges and constraints to meeting those objectives. Because most of the major donors to Ethiopia are PBS partners, PBS discussions are taken very seriously by DPs and the Government. PBS II has further demonstrated harmonization through dedicated resources for coordination and streamlined donor processes through the PBS Secretariat. Beyond the Government and IDA, 10 other DPs have contributed to PBS II. (b) Implementing Agency or Agencies Performance Rating: Satisfactory Overall, Government has made good progress in its efforts to restructure the Channel One Programs Coordinating Unit, which has resulted in improvements in the timeliness and quality in the submission of government financial reports. Furthermore, Channel One Coordinators were appointed in all regions, which led to improved reporting for Channel One programs. During PBS II, MOFED restructured COPCU to make it more effective in program implementation, assigning a Deputy Coordinator, bringing in additional accountants to facilitate financial reports and hiring in each region staff that report to COPCU, improving the communication between federal and regional levels. Finally, COPCU has hired dedicated staff working on PBS procurement, safeguards and social accountability. Improvements in COPCU staffing and management have demonstrated Government's willingness to tackle implementation challenges. COPCU was holding monthly coordinating meetings with the PBS Secretariat and PBS donors. The Federal Ministry of Health was the implementing agency for Sub-program B. Its Planning and Programming Department ensured the day-to-day implementation of activities and its Finance Department carried out financial management, reporting and disbursements. The Pharmaceutical Fund and Agency Supply Agency (PFSA) managed the procurement and distribution of health commodities. Notwithstanding some e initial delays in procurement, by the end of the project practically all planned procurement was completed and goods delivered, due to strong efforts on the part of the FMOH and PFSA. Reporting of implementation progress was carried out regularly by FMOH during sector related meetings of PBS as well as the broader annual health progress reviews. Agreed JRIS actions were complied with, although some were delayed. Financial reporting 26 improved over time, though challenges remained related to internal control and settlement of advances 26. The Management Agency (MA) for the Ethiopia Social Accountability Program Phase 2 (ESAP-2), has worked under the oversight of the tripartite CSO-Donor-Government Social Accountability Steering Committee and has been performing satisfactoritly. (c) Justification of Rating for Overall Borrower Performance Rating: Satisfactory Throughout PBS II, the Government has shown commitment and support for the objectives of the program. The implementing agencies have performed well, and the Government, jointly with the Bank and development partners, continuously analyzed the implementing agencies’ performance and made adjustments and changes as necessary. The program has enjoyed strong country ownership and alignment by supporting an existing and credible government program. 6. Lessons Learned As a result of the Lessons Learned from PBS II, the PBS III design included certain modifications, whose spirit is demonstrated by a change of the formal name of the third phase of the program: from "Protection of Basic Services" to "Promoting Basic Services". This name change reflects commitment of the Government, the World Bank and DPs to protect basic services, even when political and economic factors are uncertain, and the willingness of all partners to take this commitment further. The Lessons are also reflected in a Results Enhancement Fund for capacity-building; simplified structure; linking Social Accountability and Financial Transparency and Accountability; and Maintaining a Strong PBS Secretariat. This ICR groups the lessons from PBS II under the following broad themes: Supporting National Goals and Targets Designing project outcome goals that are supporting a national program is challenging, but beneficial. Using Government goals and targets is beneficial for the overall consistency and harmonization. However, it makes final evaluation more difficult. The PBS is a strong demonstration of development effectiveness principles, in that there is a high-degree of Government ownership of the program, and Development Partners (DPs) align behind the key objectives of that program. The PBS has been important to promote multi-sectoral coordination, which is critical if MDG and GTP targets are to be achieved. At the same time, the use of national goals made it more difficult to assess PBS against what the World Bank thought were more realistic targets. Use of Country Systems in Strengthening Decentralized Services The PBS has successfully promoted decentralized service delivery through the use of country systems. While this requires significant implementation support and capacity development, it is crucial for strengthening decentralized service delivery. Strengthening woreda-level capacity for transparency and accountability represents a key element for 26 Details on agencies’ performance are provided in Annex 3. 27 ensuring better services by improving the ways services are managed and delivered. Strengthening the economic governance systems of woredas lightens the burden on sector-specific interventions to ensure these cross-cutting systems in woredas are working effectively. Financing of Recurrent Expenditures The financing of recurrent expenditures has raised an interesting question, as posed by the inspection panel, of how far the Bank can be held responsible for indirect or outside-of-program actions by government employees that are partially financed by World Bank and donor funding. Complex Development Areas Some areas of change require more time and are difficult to predict. Areas like social accountability and financial transparency need time for “changing mindsets” and this factor is difficult to predict when setting targets and evaluating a program. The PBS has emerged as a long term aid instrument to enhance service delivery, social accountability and transparency in Ethiopia, providing a productive forum to discuss challenges and constraints to meeting those objectives. Very significant progress has been made on FTA and the Government is now fully committed and moving forward on SA. While the change in mindset has taken longer than expected, it is now deeply accepted at the central government level and is making headway at local levels. Importance of Hands-on Implementation PBS’s strengthened implementation further enhanced aid effectiveness. PBS II provided dedicated resources to strengthen program monitoring, national data collection and M&E systems. The dedicated MDTF for the PBS-Secretariat enhanced harmonization between partners. The PBS Secretariat has been an integral mechanism for ensuring donor and Government harmonization and coordination. It has played a vital role to bring together DPs and Government with analysis targeted on decentralized basic service delivery and capacity building of Government implementing agencies through hands-on implementation support. 28 Annex 1. Project Costs and Financing a) Disbursement by Source of Financing Rev. Approv Loan No. Closing Original Revised Cancelled Disbursed Undisbursed al Date Date 14- 07-Jan- IDA-H4770 May- 309,776,119.00 308,351,604.50 1,424,514.50 317,655,461.17 0.00 2013 2009 03-Sep- 31-Dec- TF-95106 36,996,764.00 34,399,425.92 2,597,338.08 34,399,425.92 0.00 2009 2012 14- 07-Jan- IDA-45780 May- 230,223,881.00 230,223,881.00 0.00 235,191,089.37 0.00 2013 2009 19-Jun- 31-Dec- TF-94641 472,201,596.60 472,201,596.60 0.00 472,201,596.60 0.00 2009 2011 22-Feb- 07-Jan- IDA-48670 173,400,000.00 173,400,000.00 0.00 175,005,939.68 0.00 2011 2013 22-Feb- 07-Jan- IDA-H6430 246,600,000.00 245,854,575.78 745,424.22 253,502,165.00 0.00 2011 2013 23-Jul- 31-Dec- TF-12730 67,582,623.00 67,582,623.00 0.00 67,582,623.00 0.00 2012 2012 05-Apr- 30-Jun- TF-97831 6,262,129.00 6,262,129.00 0.00 6,262,128.81 0.00 2012 2013 05-Apr- 30-Jun- TF-97830 863,742.00 863,742.00 0.00 544,532.94 319,209.06 2012 2013 Total 1,543,906,854.60 1,539,139,577.80 4,767,276.80 1,562,344,962.49 319,209.06 29 b) Project Cost by Component and Financing Development Partner (in USD Million equivalent) Appraisal (by component, million USD) Total Disbursement (by component, million USD) A1 A2 B C1 C2 D Total A1 A2 B C1 C2 D Total IDA 448.0 25.0 10.0 30.0 - 7.0 520.0 868.0 43.3 21.1 32.1 0.0 1.9 966.4 DfID 259.8 21.6 - 8.7 5.1 0.7 295.9 421.4 0.0 0.0 6.3 8.0 0.9 436.6 AfDB 150.4 - - 11.5 - - 161.9 280.5 0.0 0.0 11.0 0.0 0.0 291.5 EC 65.1 - - - 1.7 0.5 67.3 116.0 0.0 0.0 0.0 0.0 0.0 116.0 Germany 40.7 2.7 - - - - 43.4 54.3 2.7 0.0 0.0 10.4 0.0 67.4 Irish Aid 29.2 - - - 3.7 - 32.9 47.2 0.0 0.0 0.0 1.3 0.0 48.5 Spain 40.7 - - - - - 40.7 33.9 0.0 0.0 0.0 0.0 0.0 33.9 Austria 10.9 - - - - - 10.9 9.9 0.0 0.0 0.0 0.0 0.0 9.9 CIDA - - 56.6 - 3.2 - 59.8 0.0 0.0 19.1 0.0 0.0 0.0 19.1 Netherlands - - 10.9 - - - 10.9 0.0 0.0 12.0 0.0 0.0 0.0 12.0 Italy - - 10.2 - - - 10.2 0.0 0.0 10.7 0.0 0.0 0.0 10.7 Total 1,044.8 49.3 87.7 50.2 13.7 8.2 1,253.9 1,831.2 46.0 62.9 49.4 19.7 2.8 2,012.0 30 c) DPs Commitments against Actual Disbursements for PBS II by Component A1 A2 B C1 C2 D Total by DP % original Committed Committed Committed Committed Committed Committed Committed Disbursed Disbursed Disbursed Disbursed Disbursed Disbursed Disbursed Development Partners commitment IDA 858.3 868.0 42.3 43.3 22.3 21.1 30.1 32.1 - - 7.0 1.9 960.0 966.4 101% DfID 274.8 421.4 21.6 - - - 8.7 6.3 8.1 8.0 0.7 0.9 313.9 436.6 139% AfDB 260.4 280.5 - - - - 12.0 11.0 - - - - 272.4 291.5 107% EC 65.1 116.0 - - - - - - 1.7 - 0.5 - 67.3 116.0 172% Germany 60.8 54.3 2.7 2.7 - - - - 3.7 10.4 - - 67.2 67.4 100% Irish Aid 29.2 47.2 - - - - - - 3.7 1.3 - - 32.9 48.5 147% Spain 40.7 33.9 - - - - - - - - - - 40.7 33.9 83% Austria 10.9 9.9 - - - - - - - - - - 10.9 9.9 91% CIDA - - - - 56.6 19.1 - - 3.2 - - - 59.8 19.1 32% Netherlands - - - - 10.9 12.0 - - - - - - 10.9 12.0 110% Italy - - - - 10.2 10.7 - - - - - - 10.2 10.7 105% Total by Subprogram 1,600.2 1,831.2 66.6 46.0 100.0 62.9 50.8 49.4 20.4 19.7 8.2 2.8 1,846.2 2,012.0 109% 31 Annex 2. Outputs by Component This section describes the outputs (and pertaining results) of each of the five components included in PBS II. I. Summary In education, PBS financing has helped to hire more than 100,000 additional primary school teachers, which has been accompanied by impressive results. Although not all PBS end targets were reached, the 2013 UN MDG's progress report indicated that Ethiopia has made important strides in achieving universal primary education. In agriculture, PBS has supported the agriculture sector through the hiring of more than 45,000 Development Agents (DAs), whose role is to provide agricultural extension services for crops, livestock, and natural resources management, animal health professionals and cooperative promoters at the woreda and kebele levels. The targets set for PBS II for households receiving agricultural extension services were bypassed with more than half a million. In the water and sanitation sectors, and as a complement to sector specific operations, PBS has supported an increase in the number of woreda-level water supply, sanitation and hygiene staff to oversee local access and quality of water supply. Access to potable water supply has increased considerably and the increased number of staff has also allowed to reinforce further awareness creation. Accordingly, the number households with latrine has increased overtime from 75% to 84% (respectively between 2009/10 and 2011/12). In roads, through provision of recurrent budgets for local staff costs, the PBS program has supported the establishment of 500 woreda road desks that provide a platform for these improved rural transport services. Overall, the average travel time taken to all-weather roads has progressively declined from 3.7 hours in 2009/10 to 2.9 hours in 2011/12. In health, through the block grants, the program provided for about one-third of the salary costs of the Health Extension Workers (HEW). Sub-program B provided for procurement and distribution of several health commodities and some critical health strengthening activities. Health support also focused on improving fiduciary capacity of the FMOH, supporting the important community-based health insurance pilot program and the implementation of the Human Resource Policy and Learning Management Plan. Although PBS’s specific contribution to the progress in reaching the Health MDG cannot be separated from the combined efforts of other programs and institutions, the PBS interventions have all contributed to the improvements in the maternal and child health and Malaria MDGs: the 2013 UN MDG Progress Report suggests that Ethiopia is making good progress in reaching the targets for child health, HIV/AIDS, and malaria, while it was announced in mid-2013 that Ethiopia had reached the MDG4. The 2011 Ethiopia Demographic and Health Survey already showed remarkable achievements in the under-5 mortality rate, which declined from 123 (per 1000 live births) in 2005 to 88 in 2010. Contraceptive use also nearly doubled over this time period (from 15% to 29%), contributing to a reduction in total fertility rate. The number of children immunized jumped by almost 50% to 2.1million. The expansion of HEW to almost all kebeles in the country has significantly contributed to these impacts. In 2010, over 63% of household had received basic health training from HEWs. ). Although not all of the health related targets were met, the trend towards the achievement of the end targets was positive, and some targets were even surpassed. According to the new PSIA, 32 indicators that pose some questions – like the maternal mortality ratio and the births attended by skilled health personnel – are already showing steady progress. In addition, some positive trends in proxy indicators for maternal mortality were observed the use of ante-natal care increased from 28% to 34 % (respectively 2005 and 2011 DHS), while the postnatal service coverage has also increased from 36.2 % to 44.5% between the same period. The proportion of births attended by skilled providers has increased from 6% to 10% between 2005 and 2011. The Pilot Local Investment Grant’s (LIG’s) was implemented in 99 woredas (51 in Phase I and 48 in Phase II) in the nine regions between 2008/09 and 2010/11. Through the Pilot, new national systems for local-level participatory planning and budgeting, financial management and procurement, environmental and social impact screening, and monitoring and evaluation of capital projects were developed and tested. Analysis of the expenditure data of the sample woredas, conducted as part of the LIG Evaluation in July 2011, showed that the share of capital expenditure in the total expenditure of the woredas increased significantly from pre-LIG period to post-LIG period for all woredas. The capacity development aspects of the program have also delivered significant results. The Financial Transparency and Accountability (FTA) component of the Project showed strong progress under PBS II. The FTA tools designed under PBS 1 were rolled out, and all regional governments have customized the FTA templates. More than 95% of woredas have disclosed their budget and expenditure information for the public using the customized templates; 50% service delivery units like schools, health centers veterinary services have disclosed their services delivery information for citizens using the customized templates. In addition to the regular posting of information, budget and expenditure information dissemination as well as awareness creation work was conducted by MOFED and the regional governments using the mass media (including radio and TV, newspapers, brochures, fliers) and other innovative and cultural ways. Budget literacy training was provided for over 171,000 citizens in all woredas. Among those who took the budget literacy training 37% had conducted discussion with their woreda officials after having seen the budget and citizens have started providing feedbacks and comments on the prioritization of budget allocation and quality of services delivery at the local level. As a result, 43% of citizens confirmed that woreda officials have sought the views of the people concerning the quality public basic services 27. Overall, FTA work has been institutionalized in the Government public finance system all over the country during PBS II. Accomplishments in improving the quality of local public financial management systems have been significant. PBS II has supported a set of activities to strengthen local level fiduciary and oversight capacity, rolling out of automated financial management software from regions to woredas, and financed activities to strengthen internal and external auditing, cash management, budget and account reforms, federal and regional procurement system strengthening. A few examples of the system strengthening achieved by this component is the following: simple and easy to use accounting and budgeting system is now running in over 1500 locations (up from less than 200 at the start of PBS II), over 41,000 government officials have been trained in various aspects of financial management against a target of 17,000 and hardware has been upgraded in all regions and in all 1000 woredas. 27 Ibid, p94 33 The Ethiopia Social Accountability Program (ESAP) was to be implemented during PBS II with follow on activities in PBS III. ESAP is an integral part of the PBS program, and for logistical reasons a programmatic MDTF was designed that was first linked to PBS II, and at the end of PBS II was linked to PBS III. While implementation has been slower than anticipated, over fifty Ethiopian Civil Society Organizations, reflecting a good mix of PBS-supported sectors and representing nine regions, were short-listed to receive funding under ESAP-2. With the funds available at that time, agreements were signed with 30 CSOs for social accountability work in 143 woredas 28. Overall, PBS II has successfully delivered results and contributed to the strong progress in the basic services sectors in Ethiopia. Initial analysis from the PSIA for PBS clearly shows that PBS is contributing strongly to Ethiopia’s progress towards the MDGs. This is most recently manifested by Ethiopia reaching MDG-4 ahead of schedule earlier this year. Econometric analysis shows that PBS-financed woreda expenditures improved the results in the health and education sectors. Agriculture spending on extension workers has helped increase productivity, as shown in the results from IFPRI’s research. According to PSIA, health and education spending account for 60% of the woreda-level spending financed by PBS. Health spending pays for health extension workers while education spending pays for teachers. The econometric results show that a US$1 increase in woreda health spending per capita increases the contraceptive prevalence rate by 0.9%, and the percentage of births delivered by skilled birth attendants by 1.90% within that woreda. This means a $10 spending increase can result in a 19% improvement in the proportion of births assisted by skilled attendants. Both of these contribute sharply to reducing maternal mortality, as global evidence shows. Similarly, an increase of US$1 per capita of woreda level health spending increases the coverage of Penta-3 vaccination by 0.19%, which can significantly help reduce infant and child mortality. With regard to education, a US$1 per capita increase in woreda level education spending results in a 0.76% increase in the net enrollment rate within that woreda. These results demonstrate the power of the PBS- financed decentralized approach to improve access to social services. II. Sub-program A1 - Basic Service Block Grants The Sub-program A1, Basic Service Block Grants Sub-program A1 financed recurrent expenditures (salary, operation and maintenance) in five sub-national basic services, including education, health, agriculture, water supply and sanitation services and rural roads. IDA and DP funds were combined with Government’s own resources and distributed to regional and local governments through Federal Block Grant transfers. Local level expenditures were then recorded using the country’s financial management reporting system. The Basic Block Grant supplemented the GOE’s transfers for capital investments. The subprogram A1 received the largest proportion of financing for PBS II. During the project preparations, the expenditures of this component were estimated at the equivalent of about US$ 2,473 million of which 1,428.6 would be provide by the Government and the rest from IDA and other donors . During the PBS II appraisal, it was decided that the Project would support two years of block grant financing and that the decision on Additional Financing to fill up the possible gap for the third year’s funds would be made contingent on satisfactory implementation 28 Until ESAP was de-linked from PBS II, the PBS II project was technically open. This process also delayed the submission of the last ISR for the project, which was filed on December 14, 2012, but could only be completed at the end of June 2013. 34 progress. Additional Financing was processed after two years of implementation in 2011 allowing also to extend the PBS II operation with one year (from December 31, 2011 to January 7, 2013) and to expand the program size up to 3,985 USD million. To provide a metric for measuring progress towards shared objectives and agreements, the Program employed a matrix based on shared principles that would guide program implementation, the SAFE principles - "Sustainability in Additionality", "Accountability and Fairness", "Fiduciary Standards" and "Effectiveness". The results of the SAFE performance assessment of any year was reflected in decisions on disbursement levels under the Basic Services Grant for the following year, which led to improved aid predictability and enabled Government to program PBS resource use for the following year with increased confidence. The results of the SAFE assessments were discussed in the JRIS. Throughout the project, the SAFE criteria related to the Basic Service Block Grants were substantially met. As a sign of Government’s commitment to decentralization, PBS II monitored increases in the overall, medium-term financing for Federal Block Grants and the SAFE framework measured the share of total discretionary expenditures dedicated to the Federal Block Grant. JRIS show that the sustainability with additionally was met while rigorous analysis of public spending data confirmed that Federal Block Grant disbursements from federal to regional and from regional to woreda levels were adhering to objective intergovernmental fiscal formulas. To pass the test, the regional subsidy noted in the MEFF should be reflected in the Federal budget, at least 95 percent of the budgeted regional subsidy should be disbursed, and regional spending on basic services should continue to increase as a percentage of total spending. The fairness test engaged the federal government and regional governments to transfer 90 percent of overall budgeted resources to the regions and woredas, respectively. Any discrepancies above 10 percent required explanation. The fairness test, which under PBS 1 was focused only on the four large regions, was enlarged under PBS II to include all regions. During the JRIS, the development partners found that allocations from federal to region and from region to woredas consistently followed objective formulae, and disbursements very closely matched these planned amounts. Financial management. Fiduciary assessments concluded that the financial systems and practices related to the Subprogram A1 were adequate to support the implementation of PBS II and complied with financial management covenants. Quality and timelessness of Interim Financial Reports (IFR) raised continuous attention but improved clearly over time. Efforts were done by COPCU to improve financial reporting, including the provision of training to regional accountants, Channel One Coordinators, and sector personnel; and awareness training to higher- level officials at the regional level on the importance of sound financial management and reporting. By the end of the project, improvements were also noted in the timely conducting of continuous audits and related follow-up activities. The Continuous Audits revealed a number of internal control weaknesses which were followed up closely and resulted in efforts to increase audit coverage, enhance capacity of the auditors and triggered reforms. A program of internal audit conferences and training sessions were organized to strengthen internal audit and control shortcomings. Sector efficiency under Subprogram A1 was discussed in each JRIS, including discussions related to the public expenditure trends and updates on results for the basic sectors. Agriculture 35 PBS II resources contributed to the impressive expansion of agricultural extension services by providing for the salaries of the Development Agent (DA). Areas for continuous policy dialogue for the Agricultural sector as identified in the PAD of PBS II were (i) Making the agricultural extension system at woreda level more responsive to local farmers’ needs (ii) Widening the scope/breadth of local services for agriculture/farmers (extension services, land administration services, small-scale irrigation schemes and other watershed management interventions). By the end of the project, 71,000 DA were deployed (target 71,000) while the total number of extension service users reached 10.5 million by the end of the project, which exceeded largely the target of 9.96 million people. In addition, the GOE also invested in the building and maintenance of the Farmer Training Centres (FTC). Although it was not possible to identify how the PBS program’s support for recurrent (mostly salary) spending is affected by complementary capital investments in FTCs, it is acknowledged that DAs and FTCs together play an important role in the access to and quality of agricultural extension services. Agriculture productivity for the major food crops (cereals, pluses and oil seeds) have increased from 15 quintal per hectare at the start of the project to 17 by the end. This is slightly under the target of 18 quintal per hectare. Government spending on agriculture has expanded significantly (in nominal terms) over the last 10 years, from ETB 1.7 billion in 2002/03 to ETB 8.2 billion in 2010/11. The bulk of sector spending is done by the federal government, which in 2010/11 accounted for approximately 63 percent; all of this was for capital spending with regions and woredas assuming responsibility for the bulk of recurrent spending. Despite great improvements in the use of IBEX, the sector faced challenges in securing the quality of data captured in IBEX .Inconsistent organization and categorization of agricultural data captured in IBEX, made it complicated to understand the links between sector financing and results and to determine which forms of spending yielded the highest returns and value for money. These issues are now further taken up by the MoA under PBS III. Water supply and sanitation The GTP aims to achieve universal access to water supply at the end of its implementation period in 2015. As a complement to sector specific operations, the PBS program has supported an increase in the number of woreda-level water supply, sanitation and hygiene (WASH) staff to oversee local access and quality of water supply. Further, health extension workers have supported WaSH goals, including household access to latrines, so there are now more "open defecation free" communities. The agreed continuous policy dialogue under PBS II for the WaSH sector focused on the preparation and Implementation of integrated WaSH plans including the new M&E framework at woreda levels with support and follow-up of the regional WaSH structure. By the end of the project, 78.8 percent of the urban population and 55.2 percent of the rural population had access to potable water (respective targets: 95 percent and 80percent). The pproportion of malfunctioning water supplies altered from 20 percent at the start of the program to 24 percent at the end (against a target of 16percent). The number households with latrine has increased overtime from 75 percent in 2009/10 to 84.1 percent in 2011/12 Rural water supply schemes carried out by the MoWE included a broad range of investments, such as the construction of deep wells, shallow wells, cisterns, and rain water harvesting schemes. The Universal Access Plan (UAP) defined yearly targets, but implementation proved more challenging than anticipated and showed variations in across the regions. As such, in 2011/12 for 36 example Oromia exceeded its target by almost 3,400 rural schemes, Amhara and several other regions fell short. Some of the challenges were related to the need for coordinated management across relevant stakeholders, high staff turnover at regional and woreda-level water teams/committees, and the unpredictability of ground water supplies. Roads As for the other basic service sectors, in its GTP and Road Sector Development Plan Program 4, the Government makes a strong commitment to improving access to rural roads, along with improvement and maintenance of the main and rural road networks. The average distance to an all-weather road decreased over the lifespan of the project to 2.9 from 4.5 hours (target was 2.3 hours) while the share of kebeles connected by all-weather roads had risen from 39 to 52 percent between 2009/10 and 2011/12. By 2012, through provision of recurrent budgets for local staff costs, the PBS program has supported the establishment of 500 woreda roads desks that provide a platform for improved rural transport services. Education Within the GTP and with IDA support, the Government has promoted an Education Sector Development Plan to reach the education-related MDGs. The PBS program has contributed to the basic financing necessary to complement education specific programs, primarily the General Education Quality Improvement Program (GEQIP), by allowing woredas to hire more than 30,000 additional primary school teachers. Over the span of the program, education sector indicators have shown good progress, although the project education targets were not totally met. Between FY07 and FY12, the Net Enrolment rate for grade 1-8 had increased from 79.1 to 85.3 percent (target 91.5) and the primary school completion rate (grade 8) increased from 49.4 to 52.1 percent during this period (target 58 ). Gender parity for grade 1-4 reached 90 percent (target 94). The total number of primary schools reached 29,643 in 2011/12 (28,349 in 2010/11), while the number of primary school teachers increased from 292,100 to 321,900 between 2009/10 and 2011/12. Besides enrolment expansion, indicators of education quality also show progress: with the hiring of new teachers, the student- teacher ratio fell from 66:1 in 2004/05 to 51:1 in 2010/11 for primary education, and the ratio for secondary education fell from 51:1 to 33:1. The proportion of primary school teachers with diploma has risen from 38.4 to 55.6 percent over the same period. As noted in the 2011 Welfare Monitoring Survey (WMS), literacy rates have risen since 2004 from 37.9 to 46.8 percent. In spite of the positive sector results, challenges remain. In 2010/11, the primary dropout rate stood at 13.1 percent and the primary repetition rate at 8.5 percent. Completion rates at grade 5 and 8 were 69.1 percent and 49.4 percent respectively. National learning assessments conducted at grades 4, 8, 10 and 12 also showed low learning achievements at all levels. Government spending on education has been rising in absolute terms over the past five years. However, it has shown a slight decline as a share of GDP, falling from 5 percent in 2006/07 to around 4.6 percent in 2010/11. Education spending accounted for about a quarter of total general government expenditure in 2010/11, with its share recovering in recent years after a decrease to 22.8 percent in 2007/08. Further, in some regions and woredas (e.g., Tigray and SNNPR for the last five years), education spending as a percentage of overall spending has been declining. There is a concern that this would constrain regions from increasing access and enhancing quality in both primary and secondary education. In almost all regions, school grants provided 37 through GEQIP were considered as complementary quality tools to the federal/regional block grant and community contributions. In some regions (e.g., Afar, Tigray, Oromia), the portion of non-salary recurrent spending has increased partly because of the provision of these school grants. Health See section IV of this Annex. III. Sub-Program A2 - Pilot Local Investment Grant (LIG) (IDA USD25.0 million equivalent; Anticipated partner contributions: DFID USD21.6 million equivalent, KFW USD6.8 million equivalent). The LIG component supported the introduction, on a pilot basis, of a multi-sector, Specific Purpose Grant from the Federal Government for capital investment at the woreda level in health, education, agriculture and natural resources, water and sanitation, and rural roads. The Pilot LIG capacity helped give insights into woredas' strengths and weaknesses in having capital resources available to them. The pilot LIG was implemented in 99 woredas (51 in Phase I and 48 in Phase II) in the nine regions. Through the Pilot, new national systems for local-level participatory planning and budgeting, financial management and procurement, environmental and social impact screening, and monitoring and evaluation of capital projects were developed and tested. As a new mechanism LIG implementation met certain challenges related to long times for procurement decisions and some delayed financial transfers from donors because of late Interim Financial Reports (IFRs). Some quality issues and staff turnover were also observed in some locations. However, an independent evaluation was conducted in July 2011 for the LIG pilot, which highlighted that the LIG component was successful in meeting its objectives of identifying constraints to woreda management of discretionary capital resources and building capacity for them to do so. Through extensive training LIG has supported strengthening of local investment planning, procurement, safeguards and implementation systems and provides information to the Government’s local investment planning guidelines. Analysis of the expenditure data of the sample woredas, conducted as part of the LIG Evaluation showed that the share of capital expenditure in the total expenditure of the woredas increased significantly from pre-LIG period to post-LIG period for all woredas. According to an assessment by a qualified engineer during the quarterly LIG implementation supervision missions in 15 woredas, the technical quality of the LIG sub-projects was deemed to be satisfactory with an average rate of more than 80 percent. Following on the promising results shown by the Pilot LIG, the Government decided to extend the LIG program for one year until December 2013. This one year extension would allow to reinforce the capacity and systems built to date in the pilot LIG woredas and to fill gaps/weaknesses identified thus far, including woreda-level procurement. Furthermore, it will support building a platform for a possible ‘national LIG’ program. Under the LIG extension USD 5.3 million ($3.9 million from Spain; $1.4 million from Ireland) would be allocated to 11 existing LIG woredas from the four emerging regions and Harar. Remaining funds will then be allocated to LIG woredas in the four advanced regions. LIG was assessed positively, but because of the creation of the Government’s MDG Fund, LIG is phased out and not carried over to PBS III. It was decided that the newly-set Government 38 MDG fund, while managed at the regional level, would be able to provide for capital expenditures on basic services, especially roads and water, at the woreda level. Safeguard compliance. Due to the inclusion of the LIG component, the World Bank safeguards policies, including Environmental Assessment OP/BP 4.01 and Involuntary Resettlement (OP/BP 4.12) were triggered because of the small infrastructure construction activities. The key safeguard provisions were developed under PBS I but remained operational under PBS II, particularly the Environmental and Social Management Framework (ESMF) and the Resettlement Policy Framework (RPF). According to the legal covenants, a study on environmental sustainability on LIG activities was to be completed by October 2010, whereas a monitoring report on the status of compliance with the ESMF and RPF would be submitted three months after effectiveness and annually thereafter. Follow up of safeguards compliance was carried out by JRIS missions. An Environmental and Social Sustainability Study was completed by November 2011 and concluded that most of the 20 sample LIG woredas used at least an abridged version of the ESMF screening form to screen projects, and there were indications that the culture of vetting a given project for its environmental and social sustainability is taking root, albeit at varying pace. This was considered by the JRIS as a considerable achievement given the limited understanding of and capacity for environmental and social assessments at local levels. Procurement. Procurement guidelines for LIG turned out to be quite complicated for woredas, who initially were directly contracting Micro and Small Enterprises (MSEs) that are under development to implement LIG civil works. COPCU followed this up closely through close supervision, while it revised the procurement section of the PBS II POM to make it more user friendly IV. Sub-Program B—Health MDGs Support Facility (IDA USD10.0 million equivalent; Anticipated partner contribution: CIDA USD56.6 million equivalent12; Italy USD10.2 million equivalent; and RNE USD10.9 million equivalent). This subprogram aims to assist Government in its efforts to accelerate the attainment of health- related MDGs in line with the goals and objectives of HSDP3, and with the principles and arrangements underpinning the International Health Partnership (IHP) Compact, as well as the framework around the Health MDG Fund. PBS II supported the health sector through various components, but larger focus was on the Sub- Program B, which supported the health sector directly. This sub-program aimed to assist the Government in its efforts to accelerate the attainment of health-related MDGs in line with the goals and objectives of health sector development programs (HSDP) , and with the principles and arrangements underpinning the International Health Partnership Compact, as well as the framework around the Health MDG-Performance Fund (MDG-PF). As the MDG-PF established its procedures, performance, and reputation, it was agreed that financing of Sub- Program B would be channelled through a pooled funding mechanism. A special account was established to include a Bank-administered Multi-Donor Trust Fund (MDTF) as well as IDA resources. As such, PBS II would be contributing to the MDG-PF’s objectives but subject to the World Bank’s rules and regulations on financial management, procurement, and environmental safeguards. This allowed DPs who were not yet able to harmonize fully or to channel their funding directly to the MDG-PF to provide support to the health sector. During project implementation, fiduciary capacity of the FMOH to manage MDG-PF would be enhanced. 39 The FMOH was the key implementing agency for sub-program B, and had the overall responsibility for the oversight, coordination, monitoring and evaluation. The FMOH’s planning and Programming Department managed the day-to-day implementation of activities and its Finance Department had the responsibility for matters related to financial management, reporting and disbursements. The Pharmaceutical Fund and Agency Supply Agency (PFSA) managed the procurement and distribution of health commodities. Implementation Support to the Health sector under the Sub-program B focused on the provision of key health delivery services aimed to improve the health MDGs, including provision of health commodities and health strengthening activities. After an initially slow start, the pace of the interventions accelerated in 2011, and the firm commitment of the FMOH and PFSA allowed for most of the planned activities to be carried out by the end of the project. The support to the Revolving Drug Fund did not materialize due to reduced MDTF funding and delays in the finalization of the Commodity Survey. By the end of the project, the PBS II had provided crucial support to: (1) the Malaria Program: through the procurement of 4.2 million long-lasting insecticide treated bed nets; adult combination therapy (ACT), 1600 spray pumps and others; (2) Child health through the procurement of BCG, OPV and Measles Vaccines as well as AD syringes; (3) Maternal health through the procurement of 19.8 million doses of contraceptives and the equipment and supply for Emergency Obstetrics Care including 50 types of items; (4) Health facility development with the procurement, packing and distribution of equipment for 295 health centres; and finally (5) Support to the Health Extension Program through the procurement of the essential health commodities, including 60 types of drugs. Provision under Sub-program B for health system strengthening contained (1) Woreda-budget planning in 11 regions for FY 2012-13 (USD 2 million); (2) Scale up of the updated Health Management Information System (HMIS) in six major regions. (USD 1 million); (3) Strengthening logistics and PFSA capacity , including the distribution of health commodities, covering the expenditures linked to the distribution and logistical expenditures of the procured goods through the national system (USD 3 million). Disbursement of the Health Facility MDTF (TF 95106) picked up by June 2011, when almost 40% was disbursed. The donor contribution to the MDTF was less than anticipated (USD 36.9 million versus a projected USD 77.7 million in PAD). The financing gap was partially covered by USD 12.3 million from the additional IDA credit/grant to PBS II, processed in January 2011. A retroactive extension of the closing date of the MDTF until December 31, 2012 was processed in November 2012. At project closure, only USD 2.5 million remained undisbursed. Consistent with the provisions under the IHP Compact and MDG-PF, interventions implemented under Sub-program B were aligned with MDG-PF and HSDP. In order to provide flexible funding to cover possible financing gaps, the project’s health procurement plan was in line with the three-year rolling HSDP procurement plan, while priorities were defined during the JRIS. Following PBS agreements, IDA also reviewed the IFRs and audits of the MDG-PF whereas the FMOH reported on its funding status during subsequent JRIS. Sub-program B did not go without implementation challenges. These, however, were addressed as much as possible by the Government and the World Bank. The specific activities are listed below: 40 • Training was provided to PSFA staff at national and international level to address capacity constraints at PFSA to meet the WB’s procurement standards. It took time for the training schedule to catch up because of the turnover of senior staff. Eventually, vacant positions were filled and the PFSA Board started meeting in 2012. • Cost and procurement reprogramming took place to reflect some reduced DP contributions to the MDTF. There were also delays in developing a final list of items needed in paediatric and maternity centres, which required a reprogramming of procurement packages in November 2010. Differences between the initial estimated costs (PAD) and the actual costs for some of these packages also had to be handled. • The first 18-month procurement plan integrated in the PAD anticipated the use of ICB for vaccines and contraceptives, which had previously been procured by direct contracting. During implementation, it became clear that direct contracting with UNICEF and another provider would again be necessary – which in turn required additional clearances. A last- moment request for procurement method of paediatric ACT resulted in an undisbursed amount of USD 1million. • Internal Bank and FMOH procedures took longer than anticipated to process the submission of the draft bidding documents for the procurement of contraceptives. • Outstanding audit issues delayed the extension of the project and thus the finalization of the procurement process for the contraceptives and the mosquito sprays. However, although with some delay, an extension request was processed in November 2012, and funds were released, which allowed the successful completion of the activities. Capacity by regions to use system strengthening funds varied. Whereas Tigray and Gambella managed to use almost all funds transferred for woreda planning, budget utilisation of other regions such as Amhara, Benshangul Gumuz and Somali ranged around 65%. Oromiya was only able to use 17% of the funds transferred for HMIS strengthening. Regions had further problems settling advances. Despite those challenges, however, the project managed to disburse almost fully and to contribute to the outlined results in the sector. Fiduciary and safeguard implementation There have been some challenges regarding the quality of financial management and reporting in the health sector, but significant progress was observed over the last years. Although the quality and timely reporting of IFR remained on the agenda, there was clear improvement over time. Budget monitoring and control aspects were not always up to standards, but efforts were increasingly made to compare budgets with actual expenditures. Settlement of outstanding advances remained flagged as an issue. Several capacity enhancements were carried out, whereas the FMOH started working more closely with MoFED/COPCU and DPs to improve quality health sector expenditure and budget data provision and analysis. Some dated covenants and mitigation measures responding to the perceived financial management and procurement risks were only met after delays. However, ensuring adequate staffing for FM and PFSA, were complied with during the last year of the project. The PAD highlighted the importance of putting in place adequate controls for inventories and assets procured under Sub Program B. The FMOH would address inventory control issues and weaknesses, whereas a detailed assessment or Commodity Tracking Report was due by October 2009, but distributed with a significant delay. However, while the results of the assessment were 41 being discussed, some key findings of the survey were already been addressed in the 2011-2012 HSDP annual action plans. The “Quantitative Service Delivery Survey” was commissioned by MOFED under Sub-program D. Under subprogram B, the safeguard Policy for Pest Management (OP4.09) was triggered given the likelihood of continuing indoor use of insecticides. At appraisal, it was assessed that the FMOH had developed the necessary national guidelines but that the status of its implementation would be reviewed by Mid Term Review. The study was procured through subcomponent D. The Environmental and Social Safeguard Assessment was finalized, but both FMOH and DPs saw the need for additional work in that direction. Health Sector support under other sub-programs of PBS II Sub-program A aimed to improve the availability of qualified staff and infrastructure for the decentralized delivery of basic services, including Health. Under the subprogram A1, PBS II provided funding for recurrent expenditures of the Health Extension Program (HEP), including 30% of salaries of the Health Extension Workers (HEW). By December 2012, every HEW covered about 2137 people, performing outreach services, conducting safe and clean deliveries, diagnosing and treating malaria, diarrhea, intestinal parasites and pneumonia; and providing basic services at the health posts, including immunizations, injectable contraceptives and first aid. Under Sub-program A2, the project funded on a pilot basis Local Investments Grant (LIG) for small scale capital investments at woreda level, including health centers and health posts. A detailed LIG evaluation carried out in 2011, indicates that out of 264 LIG projects, 55 projects were for Health centres. Of these, 53 projects where completed, representing 96% completion rate and funds utilization of 94%. In line with the “Effectiveness” principle of the “SAFE” framework, specific discussions on health were built into each JRIS, focusing mainly on the on-going results of the HSDP and MDG-PF, progress on key sectorial performance indicators and targets, covering also areas for quality improvements. The SAFE principles allowed to discuss important policy issues which were not directly financed by PBS II and might thus not have been on the agenda, including sector financing. Health sector support under Sub-Program D was defined during JIRS consultations and based on recommendation from various M&E surveys. Focus stood on new approaches for health financing, including the study related to the progressive implementation of the ‘One Plan, One Budget, One Report Reform” and the important community-based health insurance pilot, which was implemented in 13 woredas in 4 major regions and had 125,142 households registered, generating a total of 23.8 million birr in insurance premiums. The FMOH also reported on progress related to the development of a comprehensive “Human Resources Strategy”. As mentioned earlier, difficulties in multisectoral coordination and procurement procedures delayed the delivery of some other planned studies .The “Data Quality Assessment” and “Facility Surveys” for health were carried over to PBS III and the Health PforR operation. Monitoring progress The original results framework contained 12 health related indicators. During AF, indicators were modified to align them with the IDA Core Indicators for health, as well as the newly released GTP and the HSDP4. During this process, five health indicators were dropped, two revised and two new indicators added. Progress on the health indicators was reported by FMOH during each JRIS as well as the ministry’s annual HSDP implementation reviews. Reporting was mainly based on routine data, collected through the HMIS but for some indicators, collection was 42 supported by CSA through specific surveys (Demographic and Health Survey and Welfare surveys). The use of different data sources and data collection methods led to difficulties in comparing values of DHS and administrative data, especially for the service indicators. Whereas discrepancies in the actual estimation of service indicators between the two sources were observed, the overall patterns and trends seem similar. Over time, the FMOH also reported more on regional disparities in health results. Quality of data and timely submission of information through the HMIS became increasingly a focus area for the FMOH, and HMIS upgrade was also supported by Sub-Program B. ICR mission discussants suggested that it would have been useful if the planned Data Assessment for Health under Sub-Program D had been conducted. Outcomes for health Sustainability and increased health financing. PBS II played a significant role in increasing trends in health financing and spending It was able to support increasing recurrent expenditures linked to the payment of HEW, and reviewed health financing as part of the SAFE principles. The FMOH has increasingly addressed reported fiduciary capacity and weaknesses for both PBS II funds and MDG-PF. By the end of the project, the FMOH had clearly gained experience in managing the MDG-PF, which had become the preferred financing model for donors who had provided it with USD300 million by October 2012. Over 80% of these funds were committed by January 2013. Moreover, the integrated assessment of fiduciary systems of the MDG-PF, carried out in preparation of IDA’s Health PforR operation concluded that the systems were adequate, while some corrective actions could be taken up the new operation. Although PBS’s specific contribution to the progress in reaching the Health MDG cannot be separated from the combined efforts of other programs and institutions, the PBS interventions have all contributed to the improvements in the maternal and child health and Malaria MDGs: the 2013 UN MDG Progress Report suggests that Ethiopia is making good progress in reaching the targets for child health, HIV/AIDS, and malaria. Mid 2013, it was announced that Ethiopia had even reached MDG-4, ahead of schedule. The 2011 Ethiopia Demographic and Health Survey showed remarkable achievements in the under-5 mortality rate, which declined from 123 (per 1000 live births) in 2005 to 88 in 2010. Contraceptive use also nearly doubled over this time period (from 15% to 29%), contributing to a reduction in total fertility rate. The number of children immunized jumped by almost 50% to 2.1million. The expansion of HEW to almost all kebeles in the country has significantly contributed to these impacts. In 2010, over 63% of household had received basic health training from HEWs. Although not all of the health related targets were met, the trend towards the achievement of the end targets was positive, and some targets were even surpassed. According to the new PSIA, indicators that pose some questions – like the maternal mortality ratio and the births attended by skilled health personnel – are already showing steady progress. In addition, some positive trends in proxy indicators for maternal mortality were observed the use of ante-natal care increased from 28% to 34 % (respectively 2005 and 2011 DHS), while the postnatal service coverage has also increased from 36.2 % to 44.5% between the same period. The proportion of births attended by skilled providers is a measure of the health system’s effectiveness, accessibility, and quality of care. Furthermore, delivery assisted by skilled providers is the most important proven intervention in reducing maternal mortality and one of the MDG indicators to track national 43 effort towards safe motherhood. Although still having a way to go, skilled assistance at delivery has increased from 6% to 10% between 2005 and 2011. V. Sub-Program C—Transparency and Accountability (IDA USD30.0 million equivalent for C1 only; C2 will be financed via an MDTF with donor funds only); DFID USD13.8 million equivalent (provisional); Ireland USD3.7 million equivalent; Canada USD3.2 million equivalent; AFDB USD11.5 million equivalent; and EC USD1.7 million equivalent). The Transparency and Accountability Sub-program C is composed of two sub-programs, Accountability in Decentralized Finances and Services (Sub-program C1) and Social Accountability (Sub-program C2). Accountability in Decentralized Finances and Services Sub-program C1 This program supports a set of activities designed to strengthen local-level fiduciary and oversight capacity as well as deepen the engagement of citizens around public budgeting procedures. To strengthen Public Financial Management, the Program supported the rolling out of the existing automated financial management software from region to woreda levels and financed activities to strengthen the internal and external auditing capacity, cash management, budget and account reforms and the PBS Continuous Audit process. The sub-program aimed to build woreda procurement capacity by publishing and disseminating revised public procurement manuals, directives and proclamations; as well as providing technical assistance and training for the Federal and Regional Public Procurement and Property Administration Agencies. PBS would continue to work through the country program and PBS to broaden the space available for citizen engagement, specifically by promoting improved local transparency and Accountability mechanisms. During the MTR it was assessed that several of the activities under Sup-program C1 were slower than anticipated. The MTR found that one of the impediments to smooth implementation of C1 is the complexity of the Project Operation Manual, particularly with regards to overall costs, responsibilities, and accountabilities for listed activities. It was agreed that C1 would be restructured and the POM updated. The revised POM included a clear set of activities to be undertaken, clear designation of what agency is responsible for them, and the budget allocated. Further, the POM revision included careful accounting of what had been already spent for Sub- program activities to date, to ensure careful financial reporting across several agencies. Implemented under Sub-program C1, Financial Transparency and Accountability (FTA) activities aimed to increase the ability of citizens to meaningfully engage in public budgeting procedures. This component showed strong progress. MoFED has posted detailed fiscal information on its website (http://www.mofed.gov.et/) such as the annual budget appropriation to the federal institutions, to regional governments and to city administrations. Amhara and Oromia regions started posting on their websites respective budget appropriations to woredas. FTA tools have been rolled out to all regions, been customized to regional languages and local conditions, and disseminated to woredas . By the end of the project, approximately 94 percent of woredas were posting budget and expenditure data using the customized templates, with an average of 53 percent of service facilities using the service delivery templates (targets were 75 and 50 percent respectively). Most regions report using the budget and expenditure templates in all woredas, with the exception of Gambella (77 percent) and Somali Region (where the templates were still being printed in November 2012). 44 Regional TV and radio stations are used for FTA work in all the regions. Mass media (radio and TV) was actually the main mechanisms for disseminating information on budgets, expenditures, and service delivery as well as creating awareness among citizens. Innovative FTA dissemination took place in the regions and woredas and includes the use of amateur theatre clubs, leaflets, t-shirts, brochures, and traditional ways of information sharing. During the course of implementation, several best practices have emerged, including: involving the region’s most senior regional officials in following the implementation of FTA activities at the woreda level; the creation of cluster support teams to work with woredas on an ongoing basis; and regional government using their own funds to exceed minimum BLT targets. Since the beginning of PBS II, 171,017 citizens and community leaders received Budget Literacy Training, of which approximately 25 percent were women. The percentage of citizens who reported that they have knowledge about the woreda budget increased from 13 percent in 2008 to 20 percent in 2011. The disclosure of budget information supported by training in budget literacy has enabled citizen feedback in Amhara, Harari, Oromia, and SNNPR. This initiative represents a key part of a system that can help services be delivered to local users in a manner that is increasingly transparent, responsive and accountable. The other part of such a system is the demand side opportunities provided through PBS' Social Accountability Program (ESAP): implemented by 45 CSO partners in 86 woredas in its first phase (see later). While progress was clear, some challenges were also observed. Staff turnover remained a concern requiring repeated efforts to train and persuade local officials. Procurement of vehicles and computers progressed slowly due to capacity issues. Efforts had to be made to ensure the representation of women in the training in some regions. More remains to be done to further enhance the transparency of audit reports, to stimulate the proactivity of the PFM teams, and to fully engage all sector offices at the woreda level in the FTA agenda. Despite a slow start, this sub-program made good progress in the roll out of the project, the computerized Integrated Budget and Expenditure (IBEX) accounting system, which was operational at the federal level and most regions by the end of the project and continued to be rolled out where absent. In most woredas where IBEX was not yet installed, a manual accounting system is in place. Furthermore, pilot testing for IBEX 2 had taken place at the federal level and in two regions (Afar and Amhara). The test revealed some remaining challenges, which were consequently been addressed. In order to facilitate the complete roll-out of IBEX, MoFED had completed the necessary action plan, contributing to the planned expansion of IBEX to 571 woredas, 103 UoFEDs, 41 ZoFEDs, and 11 BoFEDs. As this was not yet achieved under PBS II, it was agreed to carry this over as part of the PBS III. The expansion of the IBEX has helped to strengthen the quality of in-year budget execution reports. In procurement, most of the procurement under C1 has been finalized within project time. Only one contract, which needed additional waivers, was not finalized by the end of the project. This contract has been transferred to PBS III. Part C2: Social Accountability Social accountability activities under PBS aimed to institutionalize capacity building and mechanisms for social accountability, improving service delivery by allowing citizens to evaluate service provision. This was done through channelling funds to local civil society organizations which in turn enhanced the ability of citizens to provide feedback on the quality and priorities of basic services. The scaled-up PBS II Social Accountability Sub-program C2 was 45 designed based on the findings of an independent evaluation of the PBS 1 pilot phase. A key conclusion of the evaluation was that the use of appropriate social accountability mechanisms can work in Ethiopia and have beneficial outcomes for the actors involved as well as for the quality of basic services. The Social Accountability activities were implemented after long delays, as it awaited the outcome of the independent evaluation examining the first phase, which was only completed in July 2010. The Social Accountability Steering Committee subsequently endorsed an action plan for social accountability expansion and enhancement of activities. It was planned that the program would be rolled out to some 170 participating woredas in collaboration with 50 to 60 CSOs. The program was steered by a Management Agency (MA) for the Ethiopia Social Accountability Program Phase 2 (ESAP-2), which worked under the oversight of the tripartite CSO-Donor- Government Social Accountability Steering Committee. Based on experiences from ESAP-1, a Grant Manual and support tools for grantees were prepared. A key difference between ESAP-1 and ESAP-2 was the shift from individual service facilities to taking a sectoral approach that engages institutions and actors in a more comprehensive strategy. The MA also provided Capacity Development and Training (CDT) to strengthen the use of SA tools, approaches and mechanisms by citizens, citizens groups, civil society organizations, service providers and woreda officials. The Social Accountability Program provided the training, tools and mechanisms that can allow citizens and communities to assess service delivery and budget use and develop joint action plans with service users to improve the quality of the services. Combined, FTA and ESAP provide a wide-ranging system for constructive citizens-state collaboration to improve public services in Ethiopia. The social accountability component piloted Community Score Cards, Citizen Report Cards and Participatory Budgeting. It also promoted interface meetings between citizens and local authorities to provide feedback on service delivery. During the PBS II program, Social accountability activities were piloted in 86 woredas, in collaboration with 45 CSO partners. ESAP was originally planned as a continuous activity and at the end of PBS II it transitioned to PBS III. V. Sub-Program D—Monitoring and Evaluation (M and E) (IDA USD7.0 million equivalent; Anticipated DP contribution: DFID USD0.7 million equivalent; EC USD0.5 million equivalent). The Sub-program D supported efforts to improve the quality of basic service data collection, so that there was more reliable and transparent information about progress to improve basic service results. To that end, the sub-program worked to (i) strengthen existing national and sectoral M&E systems, and (ii) support the Central Statistical Agency to improve surveys and data quality that will better link the inputs of PBS II to its results. It was implemented by both MOFED and the CSA. The sub-program involved assessments of the quality and reliability of administrative and financial data which would design and implement activities to strengthen data collection and reporting processes at all levels. Activities under the Monitoring and Evaluation Sub-program D accelerated by mid-2010. With respect to M&E systems-strengthening, there was progress on several important activities, including: the development of a new Management Information System (MIS) for the agriculture 46 sector and the collection of agricultural output and outcome data from four major regions; the design of a new web-based monitoring and evaluation system for ERA; and the designing of modules for the EMIS curriculum. PBS II has provided CSA with a broad range of support to strengthen national systems for data collection, analysis, and strengthening data quality. This has included support for networking CSA branch offices, training for CSA staff at federal and regional levels, as well as financial and technical support to develop data quality and standardization tools. The completion of the first ever Ethiopia Data Quality Assessment Framework (EDQAF) was an important achievement under PBS II. The EDQAF was approved by the National Statistics Council. In addition, Data Quality Assessments (DQAs) were undertaken in two sectors, education and roads. Assessments planned in the remaining PBS sectors did not take place and were rolled forward into the early months of PBS 3. The support from the PBS program had also contributed to the completion of two essential surveys, the Household Consumption Expenditure (HCE) Survey and the Welfare Monitoring Survey (WMS). The completion of these two surveys has improved the methodology and empirical basis for poverty analysis and future policy setting. In addition, the results of the HCE Survey will be used to recalibrate the composition of the CPI as well as contribute to improved poverty mapping. Some surveys like the Teacher Absenteeism Study, the Socio-Economic surveys, the Facility Surveys for education and health could not be conducted. Other studies were to be carried out by CSA but still need to be completed such as the remaining DQAs for health, agriculture, water/sanitation. Still, having in mind the huge inter-agency coordination necessary for the work of sub-program D, the programs results are deemed a success. Focus on Results, and M&E. Noticeably in the documentation of PBS II, the focus on results and consequently on monitoring and evaluation has substantially improved over time. The JRIS for example, increasingly started explicitly with the documentation of annual progress on high level results indicators such as population below the national poverty line agricultural productivity of major food crops, access to potable water supply, and maternal mortality ratio, even beyond the PBS II results matrix. By the end of the program, more focus was given to regional disparities of results, and the quality of data was discussed at length during JRIS. 47 Annex 3. Economic and Financial Analysis This annex provides findings from two exercises exercise undertaken to estimate the Internal Rate of Return (IRR) of the Ethiopia Protection of Basic Services Project: one of these exercises was undertaken by the PBS Secretariat during the life of PBS II, but using data from PBS I. The other exercise was undertaken by DFID as part of the preparation for PBS III. I. Internal Rate of Return (IRR) based on PBS I data (PBS Secretariat) Though this IRR analysis was undertaken mostly on PBS I data, its results are believed to be valid for the PBS program as a whole. The IRR concept used is the discount rate at which the stream of benefits resulting from the project produces a net present value of zero. As such, if the IRR is greater than the actual discount rate, the project is a profitable investment. As inputs for the analysis Ethiopia-specific IRRs in sectors financed under PBS (the basic services sectors) – calculated in detail for each sector. For the component financing block grants for basic services critical commodities for health, IRR estimates are used, covering the four sectors of basic service delivery. Reliable Ethiopia-specific point estimates for IRRs in other components are not readily available, and their return is thus assumed to be zero for the sake of the present calculations, resulting in an estimated lower bound for the overall IRR. The estimates provided here should be viewed as an underestimation (a lower bound) of the Project’s actual IRR. This is because of two factors. First, within each sector, the IRR typically does not capture all of the beneficial impacts. In the health sector, for example, the IRR is calculated only along the dimension of reduced under-five mortality rate, while in actuality there exist a variety of benefits that would accrue due to the same health spending, beyond a reduced U5MR, such as reducing low birth weight (and lower productivity) due to improved nutritional status of mothers and decreased incidence of malaria (and corresponding lower morbidity) due to increased distribution of bednets. Second, for three of the components - Local Investment Grants, Financial Transparency and Accountability and Social Accountability - there are no readily available estimates of economic impact. As such, the impacts from the Project’s expenditures in these components have been assumed to be zero, despite the very likely occurrence of high beneficial impacts. The expenditures for these components have been included in the calculation of the costs, however, to derive a minimum bound for an overall PBS IRR. The following section of this paper provides the IRR for each of the PBS sectors along with an explanation behind why it was used. This is followed by an estimate of the overall project IRR, which is also provided by source of financing, i.e. government plus donor or just donor financing. Last, an alternative approach with similar findings is presented. Internal Rates of Return by Sector Education As sub-national governments are responsible for financing primary and secondary education in Ethiopia, the PBS has provided a substantial amount of funds to this sector through component 1. The rates of return in this sector in Ethiopia were examined in a World Bank sector report in 2005 “Education in Ethiopia: Strengthening the Foundation for Sustainable Progress”. Table 1 below shows the returns. 48 Table 1. Returns to Education in Ethiopia Urban Rural Level of Return Proportion of students Return Proportion of students Educational in 2008* in 2008* Attainment Grades 1-4 12 9 20 52 Grades 5-8 11 5 8 26 Grades 9-12 13 1 9 8 Average rate of Return – 14.8% *Note: proportion of pupils in each grade division were taken from the National Statistical Abstract, 2008. The proportion of students belonging to each grade division was obtained through the National Statistical Abstract from 2008. This gave an average rate of return in the education sector of 14.8%. This rate is on par with other analyses done on returns to education in Ethiopia (DFID, 2012) and on the low side of other estimates of social returns in primary education in developing countries (Mingat and Tan, 1996). Health A World Bank study into the health sector was conducted in 2005 “Ethiopia: A Country Status Report on Health and Poverty”. Using the detailed predictive analysis provided by the Marginal Budgeting for Bottlenecks tool, the report analyzed the impact of increased public spending on primary and clinical care with a focus on the accompanying reduction on under five mortality, although health spending benefits extend beyond these. The impact was assessed under three different scenarios, representing different assumptions regarding the percentage increase in financing for the Health Sector Extension Program (HSEP) versus other primary care delivery mechanisms. When the value of a child’s life was assumed to be equal to the national real per-capita GDP and productive years of life were assumed to start from age 20 onwards, the annual rates of return from reducing child mortality range from an annual return of 11.2% to 13.4% 29. Table 2. Returns to increasing spending on primary and clinical health care in Ethiopia Scenario Description Reduction in Cost per Annual rate of under-5 death return of mortality rate averted investment 1 70% of increase in public 36.8 704 11.2% spending going to HSEP, and rest to clinical individual care 2 80% of increase in public 40.3 640 12.3% spending going to HSEP, 29 This assumed a discount rate of 5% and a real per capita GDP growth of 2.5%. 49 and rest to clinical individual care 3 90% of increase in public 44.5 582 13.4% spending going to HSEP, and rest to clinical individual care Since its inception, the HSEP has dramatically expanded health care coverage, especially in rural Ethiopia. It has been the main driver for the increase in public spending in the health sector during the lifetime of PBS. As this calculation tries to be conservative in its estimation of the overall IRR of the project, it assumes the most modest of the above rates of return at its IRR in the health sector, despite the fact that the actual increase in expenditure going towards the HSEP is most likely higher than 70%. In addition to being conservative in this respect, it is important to remember that these benefits are ascribed only to reductions in under-five mortality, even though there are a variety of benefits in other areas as well. For example, the utilization of mosquito bednets, which is one of the Health Extension Workers’ tasks to promote, reduces both under- five mortality and the incidence of low birth weight babies. The latter of these effects increases economic productivity later in life and results in a benefit cost ratio much higher than that of just reducing under-five mortality (Ter Kuile et al., 2003). In these calculations, however, we take only the former’s effect. Agriculture Investments in agriculture and natural resources in Ethiopia provide benefits along a wide variety of dimensions. One of the most pertinent to the scope of the PBS project is the impact of the agricultural extension agents. These are individuals trained in agriculture techniques and tasked with disseminating their knowledge among farmers in their community. These activities have been shown to increase farmers’ household consumption. Dercon et al. 2008 have shown that if a farmer has received at least one visit by an agriculture extension worker in Ethiopia, their income consumption increased 7.1% faster than those that did not receive a visit. During the life of PBS 1, 6.97 million farmers were trained in the minimum agriculture extension package. In order to calculate the IRR, we assume a consumption of USD196 per capita (Ethiopia HICES 2005) and that growth in consumption is equal to the increase in per capita GDP, which we assume to be 3%, and estimate that the benefits accrue over a twenty year period. In this case, the IRR for the stream of benefits is 9.98%. These results are derived only from the benefits of the extension agents and assume that all of the other expenditures in this sector result in zero benefit. This estimate comes in below other studies that shown impressive results due to agricultural extension activities, including Altston et al. 2000 who showed returns of up to 85%, indicating very conservative assumptions. Water and sanitation Work into the economic returns of investments in the water and sanitation sector was performed in preparation of the World Bank’s Water and Sanitation Project (approved in 2004). This analysis modeled investments over a 10 year period for point source systems and 15 years for piped systems and looked at benefits in terms of opportunity cost of time spent fetching water and decreased time spent ill due to waterborne diseases. It did not factor in the costs and benefits 50 associated with the building capacity of public sector staff and other who supported the development of the sector, which if they were factored in, would make the overall economic benefits much higher. The result of the analysis is shown in table 3 below and indicate an IRR of over 20%. Table 3. Economic analysis of investment in the water sector in Ethiopia Value Benefits: Value of time saved; 96.83 incremental water consumed; less days spent ill Costs: Entire project costs 72.63 Net benefits 24.19 IRR 20.6% Overall Internal Rate of Return for the Project When we apply the above IRR for the four sectors to the amount of PBS (referring here to PBS I amounts) expenditure by sector, we see that the IRR of PBS is about 13%. This indicates that the investments under PBS I are a profitable undertaking as long as the discount rate remains below that level. This result does not change much when looking at 3 different scenarios: (i) calculation of the IRR based on funding from Government and all donor sources included in the project (table 4); (ii) calculation of the IRR based on funding from donor contributions only (table 5); or (iii) calculation of the IRR based on IDA contributions only (table 6). Table 4. PBS I IRR: Government and Donor Contributions IRR PBS 1 Government and donor (percent) expenditures (millions USD) Component 1 – Sub-national basic services 3765 Education 14.8 1951 Health 11.2 621 Agriculture and natural resources 10 983 Water supply and sanitation 20.6 210 Component 1b – Local Investment Grants 0 (assumed) 20 Component 2 – Health MDG Support 11.2 125 Facility Component 3 – Financial Transparency and 0 (assumed) 11 Accountability Component 4 – Social Accountability 0 (assumed) 7 Overall Economic IRR 13.1% 51 Table 5. PBS 1 IRR: Donor Contributions IRR Donor expenditures (millions (percent) USD) Component 1 – Sub-national basic services 1091 Education 14.8 547 Health 11.2 209 Agriculture and natural resources 10 276 Water supply and sanitation 20.6 59 Component 1b – Local Investment Grants 0 (assumed) 20 Component 2 – Health MDG Support 11.2 125 Facility Component 3 – Financial Transparency and 0 (assumed) 11 Accountability Component 4 – Social Accountability 0 (assumed) 7 Overall Economic IRR 12.8% Table 6. PBS 1 IRR: IDA Contribution IRR Donor expenditures (millions (percent) USD) Component 1 – Sub-national basic services 376 Education 14.8 189 Health 11.2 72 Agriculture and natural resources 10 95 Water supply and sanitation 20.6 20 Component 1b – Local Investment Grants 0 (assumed) 20 Component 2 – Health MDG Support 11.2 47 Facility Component 3 – Financial Transparency and 0 (assumed) 2 Accountability Component 4 – Social Accountability 0 (assumed) 0 Overall Economic IRR 12.5% These results only attempt to provide a lower bound to the estimate of the IRR. They assume no benefits for components where readily available estimates for IRRs could not be 52 calculated/obtained and consciously underestimate the returns in the sectors where an IRR could be calculated. While donor funds for PBS financed solely sub-national expenditures for basic service delivery, the overall financing program was a combination of government and donor financing. These sources combined to create the overall basket of sub-national financing in basic services sectors, including both capital and recurrent, that led to an optimal distribution of resources. Thus the economic impact due to the increased financing made available by donors was felt in the sectors with respect to both capital and recurrent expenditure. II. Alternative Approach: Benefit-Cost Analysis As part of its business case for Protection of Basic Service Phase III project, DFID performed a benefit cost analysis of its potential contribution to sub-national basic service component of the third phase of the PBS project. The study examined the potential benefits in each of the five sectors of the project along different dimensions. For example, in the health sector, it extrapolated monetized benefits from additional productive years due to increased life expectancy and decreased amount of time spent ill to determine an overall benefit in the health sector. Taking into account all of the discounted benefits and costs, the study found PBS 3 to have a benefit cost ration of 1.43 and an IRR of 23%. This amount is about three-quarters higher than the IRR estimate derived above. Thus both approaches give highly positive and significant values for the IRR of PBS. (The approach we have used above is for PBS 1, while the approach just described, undertaken by DFID, was for PBS 3.) There are two possible reasons for the higher estimate of IRR in DFID’s calculations. First, DFID includes the roads sector in their calculations, which was not included in PBS 1 project and which has a relatively high return. Second, the analysis above includes components which were assigned a zero percent return, which is not the case under DFID’s assessment. The fact that other analyses using different methods than the one employed here also provide firm results for a strongly positive IRR strengthens the findings of the above analysis. References for Annex 3 Alston, J.M., C. Chan-Kang, M.C. Marra, P.G. Pardey and TF Wyatt. “A Meta Analysis of Rates of Return to Agricultural R&D” International Food Policy Research Institute. Washington (2000). Dercon, S. Gilligan, D.O. Hoddinott, J. and Woldehanna, T. “The impact of agricultural extension and roads on poverty and consumption growth in fifteen Ethiopian villages” American Journal of Agricultural Economics 91(4): 1007-1021 (2009). Department for International Development. 2012. “Business case for the Promotion of Basic Services in Ethiopia: 2012-2017”. Ethiopia Central Statistical Agency. Number of regular students in schools by grade: 2002/03-2007/08. In: Statistical Abstract of Ethiopia: 2008. Addis Ababa, Ethiopia Central Statistical Agency; 2008. Mingat, Alain, and Jee-Peng Tan. "The Full Social Returns to Education." Estimates based on Countries Economic Growth Performance, Human Capital Development Papers. Washington: World Bank (1996). Ter Kuile, Feiko O., et al. "Reduction of malaria during pregnancy by permethrin-treated bed nets in an area of intense perennial malaria transmission in western Kenya." The American journal of tropical medicine and hygiene 68.4 suppl (2003): 50-60. World Bank (Washington, USA). Education in Ethiopia: Strengthening the Foundation for Sustainable Progress. World Bank, 2005. 53 World Bank (Washington, USA).“Ethiopia: a country status report on health and poverty, volume 2, main report”. World Bank, 2005. World Bank (Washington, USA). Project Appraisal Document for a Water Supply and Sanitation Project. Report No. 28604. World Bank, 2004. 54 Annex 4. Bank Lending and Implementation Support/Supervision Processes The World Bank provided strong implementation support and invested significant human and financial resources into supporting and supervising implementation. These aspects are already reviewed in detail in the main text of the ICR. This annex provides some details on team composition and cost. Task Team Members Name of Team Member Title Unit Location Abebaw Alemayehu Senior Urban Development Specialist AFTU1 Addis Ababa, Ethiopia Abiy Demissie Belay Sr Financial Management Specialist AFTME Addis Ababa, Ethiopia Abiy Demissie Belay Financial Management Sr Financial Management Specialist AFTME Addis Ababa, Ethiopia Specialist Andrew Sunil Rajkumar Sr Economist (Health) LCSHH Washington, DC, United States Bekele Chaka Consultant HDNHE Addis Ababa, Ethiopia Berhanu Legesse Ayane Sr Public Sector Mgmt. Spec. AFTP2 Addis Ababa, Ethiopia Binyam Bedelu Senior Procurement Specialist AFTPE Addis Ababa, Ethiopia Camilla Holmemo Senior Economist AFTSE Addis Ababa, Ethiopia Team Leader Cassandra De Souza E T Consultant AFTHE Washington, DC, United States Christopher Gaukler Consultant AFTSE Washington, DC, United States Deepak K. Mishra Lead Economist EASPR Washington, DC, United States Demelash Demssie Operations Officer AFTSE Addis Ababa, Ethiopia Donald Herrings Mphande Lead Financial Management Specialist AFTMW Nairobi, Kenya Eshetu Yimer Financial Management Sr Financial Management Specialist AFTME Addis Ababa, Ethiopia Specialist Eyerusalem Fasika Research Analyst AFTP2 Addis Ababa, Ethiopia Feng Zhao Senior Health Specialist AFTHE Washington, DC, United States Fikru Tesfaye Consultant AFTSE Addis Ababa, Ethiopia Girma Earo Kumbi E T Consultant AFTSE Addis Ababa, Ethiopia Ian Leslie Campbell Consultant AFTSE Addis Ababa, Ethiopia, United States Janelle Plummer Senior Governance Specialist EASTS Phnom Penh, Cambodia Jean Charles Amon Kra Kinshasa, Congo Democratic Republic, Financial Management Sr Financial Management Specialist AFTMW Congo, Democratic Republic of Specialist Jemal Mohammed Omer Senior Economist AFTP2 Addis Ababa, Ethiopia 55 Josiane M. S. Luchmun Program Assistant AFTSW Washington, DC, United States Lemma Argaw Findusse Consultant AFTSE Addis Ababa, Ethiopia Maniza B. Naqvi Sr Social Protection Specialist AFTSE Washington, DC, United States Team Member Maniza B. Naqvi Sr Social Protection Specialist AFTSE Washington, DC, United States Marylou R. Bradley Senior Operations Officer WBIHS Washington, DC, United States Mirafe Marcos Economist AFTP2 Addis Ababa, Ethiopia Mukesh Chawla Head HDNVP Washington, DC, United States Team Leader Parminder P. S. Brar Lead Financial Management Specialist AFTME Addis Ababa, Ethiopia Per Wam Sr Social Scientist SDV Washington, DC, United States Richard Olowo Lead Procurement Specialist AFTPE Nairobi, Kenya Procurement Specialist Richard Olowo Lead Procurement Specialist AFTPE Nairobi, Kenya Robert S. Chase Lead Human Development Economist SASHD New Delhi, India Team Leader Samuel Haile Selassie Senior Procurement Specialist SARPS New Delhi, India Procurement Specialist Shimelis Woldehawariat Senior Procurement Specialist AFTPE Addis Ababa, Ethiopia Badisso Siddharth Sharma Economist ECSF1 Washington, DC, United States Simon B. Chenjerani Chirwa Senior Procurement Specialist AFTPE Addis Ababa, Ethiopia Tafesse Freminatos Abrham Consultant AFTME Addis Ababa, Ethiopia Financial Management Specialist Tamene Tiruneh Consultant AFTSE Addis Ababa, Ethiopia Tesfaye Ayele Senior Procurement Specialist AFTPE Addis Ababa, Ethiopia Trina S. Haque Sector Manager, Health, Nutrition and AFTHW Washington, DC, United States Team Leader Population Wendmsyamregne Mekasha Sr Social Protection Specialist AFTSE Addis Ababa, Ethiopia William David Wiseman Sector Leader ECSH3 Ankara, Turkey Yoseph Abdissa Deressa Sr Social Protection Specialist AFTSE Addis Ababa, Ethiopia 56 Staff Time and Cost Sum of Staff Fiscal Year Weeks Sum of Total (USD) 2007 19.77 44,424.46 2008 40.56 137,736.99 2009 97.12 468,588.39 2010 114.15 392,151.52 2011 362.89 1,845,216.01 2012 511.30 2,238,574.65 2013 221.51 1,012,001.73 2014 2.95 27,443.73 Grand Total 1,370.25 6,166,137.48 57 Annex 5. PBS Results – Expanded Table Baseline Target Achievements Values Original Project (FY11) 31 FY12 FY12 Data Source/ Responsibility Additional Higher Level Results Indicators UOM 30 Frequency for Data Start (EFY03) EFY04 EFY04 Methodology Clarifications Collection (FY07) Core (EFY99) Completion rates % 44.9 49.4 52.1 58 Annual EMIS MoE a. Primary Completion Rate (Grade 8) b. Male/Female % 51/37 52.5/46.2 52.4/ 51.9 57/59 Annual EMIS MoE 673 Data is collected every Maternal Mortality Ratio (MMR) (2005, 676 676 430 DHS, WMS MoH/CSA five years. The plan is to Number DHS) reach 267 by 2015. Data for FY12 is Population below the national poverty line % 33.8 29.6 27.8 26.2 Annual WMS MOFED MoFED’s estimate. Population with access to potable water Indicator represents % 82 92.5 78.7 95 Annual MoWE reports MoWE Access within 0.5KM a. Urban radius Indicator represents b. Rural % 46 71.3 55.2 80 Annual MoWE reports MoWE Access within 1.5KM radius Quintal Agriculture productivity (major food APR/AMIS/ Ag per 15 16.5 17 18 Annual MoA/CSA crop) 32 Sample Survey Hectare Average distance to nearest all-weather Reports from Hours 4.5 3.5 2.9 2.3 Annual ERA/MOFED road RSDP 30 UOM = Unit of Measurement. 31 For new indicators introduced as part of the Additional Financing, the progress to date column is used to reflect the baseline value. 32 Major crops include Cereals, Pulses and oil seeds. 58 Project Development Objective (PDO): Expand access and improve the quality of basic services in education, health, agriculture, water supply and sanitation and rural roads delivered by sub-national governments, while continuing to deepen transparency and local accountability. Baseline Progress To Date Target (Achievements) Values 34 Original Project (FY11) Data Source/ Responsible PDO Level Results Indicators UOM 33 Frequency for Data Comments Start (EFY03) FY12 FY12 Methodology Collection (FY07) EFY04 EFY04 Core (EFY99) 1. Primary enrolment rates % 79.1 85.3 85.4 91.5 Annual EMIS MoE a. Net enrolment rates for grade 1-8 (%) b. Gender Parity Index for grade 1-4 % na 94 90 94 Annual EMIS MoE 2. Children vaccinated against % 76.8 84.7 84.9 88 Annual HMIS MoH a. DPT3+HepB3+Hib3 b. Measles % 68 81.5 79.5 86 Annual HMIS MoH Indicator measures children fully c. Children immunized Annual HMIS MoH immunized, Number 1,387,351 2,073,624 2,045,747 1,900,000 and refers to annual value 33 UOM = Unit of Measurement. 34 Target values are entered for the years data will be available, not necessarily annually. When targets refer to annual values, it is indicated in the “frequency” column. Otherwise, notes are provided in the “Comments” column. Targets are in line with the GTP results matrix. 59 3. Births attended by skilled health % 16 16.6 20.4 48 Annual HMIS MoH personnel 4. Proportion of malfunctioning water % 20 20 24.0 16 Annual Annual MoWE supplies Baseline Progress To Date (Achievements) Target Original Values Project Data Source/ Responsible PDO Level Results Indicators UOM Frequency for Data Comments Start Methodology (FY11) FY12 FY12 Collection (FY07) Core (EFY03) EFY04 EFY04 (EFY99) 5. Farm households receiving Number agricultural extension services 35 (in 5.09 9.04 10.5 9.96 Annual MoA Reports MoA millions) 6. Citizens who report that they have 9 knowledge about the woreda budget 36 % 19 19 13 Annual Survey, WCBS MoCS, TAG 13 37 7. Citizens who report that woreda officials have actively sought the views % 52 48 49 58 Annual Survey, WCBS MoCS, TAG of people in their Kebele on quality of basic services 8. a. Direct project beneficiaries 38 Baseline refers to Number 71,180,257 71,180,257 71,180,257 71,180,257 Census and CSA beneficiaries Estimates of PBS1. 50% of the total b. of which female population is % 50 50 50 50 Census CSA female (census 2007) 35 Agricultural extension services include services on natural resources/environmental conservation, crop and animal production. Extension services will provided to pastoralist, semi-pastoralists and agrarian farm households. 36 These indicators will be reported under Woreda City Benchmarking Survey (WCBS). The Transparency and Accountability Group will follow up implementation of the WCBS. 37 WCBS results show 13% while the Financial Transparency and Accountability Perception Survey (FTAPS) shows 9% 38 Figures represent total population census results, which is conducted every 10 years. PBS benefits people of all of the regions except Addis Ababa. 60 Intermediate Results and Indicators Baseline Progress To Date Target Original (Achievements) Values Project Data Source/ Responsible Intermediate Results Indicators UOM Frequency for Data Comments Start (FY11) FY12 FY12 Methodology Collection (FY07) (EFY03) EFY04 EFY04 Core (EFY99) Intermediate Result 1: Improved availability of qualified staff and infrastructure for the decentralized delivery of basic services at the local levels 1. Proportion of qualified primary school % na 47.2 61.3 61.0 Annual EMIS MOE teachers 2. Ratio of health extension workers to Ratio 1:4369 1:2647 1:2213 1:2500 Annual HMIS MoH population 3. Woreda road desks with appropriate Number 8 500 500 190 Annual RSDP Reports RSDP/PBS resources 4. Development agents deployed Number 49,946 66,000 73000 71,000 Annual MoA reports MOA 5. Average share of capital expenditures LIG pilot Pilot LIG as share of total spending (LIG % 7 27 na na Annual expenditure MOFED anticipated to woredas) reports end FY13 LIG Technical Pilot LIG 6. LIG projects with “satisfactory % na 90 na na Annual Output MOFED anticipated to technical quality” Assessment end FY13 Criteria 61 Baseline Progress To Date Original (Achievements) Target Values Project Data Source/ Responsible Intermediate Results Indicators UOM Frequency for Data Comments Start Methodology FY12 FY12 Collection FY11 (FY07) Core EFY04 EFY04 (EFY03) (EFY99) Intermediate Result 2: Improved efforts to accelerate the attainment of health MDGs Data is from HMIS (on 7. Contraceptive Prevalence Rate % 33 29 45 55 Annual HMIS, DHS MoH contraceptive acceptance rate) 8. People with access to a basic package of health, nutrition, or population services 39 HMIS tracks Primary Health Service Coverage. Number na Annual HMIS, DHS MoH CSA population figures are used to convert to 78,504,878 81,775,915 77,575,308 numbers. 9. Long Lasting Insecticide Treated malaria nets purchased and/or Number 0 37 41 45.7 37.8 Annual HMIS, DHS MoH distributed (in millions) 40 Intermediate Result 3: Improved fiduciary assurance regarding the use of public funds 39 The Indicator represents proportion of population living within walking distance (10 km) from a health facility that provides primary health services. Primary Health Service includes, among others, access to basic health, nutrition, immunizations, and population services. 40 Figures represent the cumulative number of Long Lasting Insecticides Treated malaria nets purchased and distributed through PBS II AF only. 41 PBS had a plan to purchase 1.3mln replacement nets every year. Last year, 1.8mln nets were purchased and distributed. The achievement and target numbers are cumulative. 62 Baseline Progress To Date Original (Achievements) Target Values Project Data Source/ Responsible Intermediate Results Indicators UOM Frequency for Data Comments Start Methodology FY12 FY12 Collection FY11 (FY07) Core EFY04 EFY04 (EFY03) (EFY99) 10. Regions where standardized audit PEFA, OFAG MOFED, qualification (IIA qualification) is Number 0 0 11 11 Annual reports OFAG widely disseminated 11. Public sector auditors registered and PEFA, OFAG MOFED, followed up for the CIA Number 22 40 37 70 Annual reports OFAG qualification training 12. Audits Coverage (%) OFAG report, MOFED, 42 % na 30 32.4 70 Annual Continuous a. ORAG s OFAG Audit report b. OFAG 43 OFAG report, % 32 90 96.1 70 Annual Continuous OFAG Audit report 13. Regional governments adopting and Procurement disseminating Public Procurement publications Number 0 11 44 11 8 Annual PPPAAs Proclamation, Directives and and audit manual reports 14. Woredas that post ‘laypersons’ budget and expenditure templates EMCP, PBS Field visits, EMCP, % 0 75 94 75 Annual Benchmarking MOFED Surveys 42 Office of the Regional Auditor General 43 Office of the Federal Auditor General 44 All regions have issued the procurement proclamation and directives, except Afar region, which has got the proclamation approved by its parliament but note yet issued and Oromia region, which is in a process of issuing the directive. Manual is issued only by the federal PPA, while four regions are expected to adopt the manual in the EFY04. 63 Baseline Progress To Date Original (Achievements) Target Values Project Data Source/ Responsible Intermediate Results Indicators UOM Frequency for Data Comments Start Methodology FY12 FY12 Collection FY11 (FY07) Core EFY04 EFY04 (EFY03) (EFY99) 15.Basic service units that post the Basic Service standardized service delivery EMCP FTA Units include template with completed Implementation schools, health information on budget, resource Unit Reports, EMCP, % 0 35 53 50 Annual facilities, inputs, and service standards Continuous MOFED agriculture audits, PBS training centers, Secretariat etc Intermediate Result 4: Improved citizen engagement in accountability mechanisms in service delivery 14. Woredas where PBS Social More output and Accountability Implementing outcome indicators Partners facilitate the use of Social Reports from are annexed in the Number na na 45 0 86 Annual MA Accountability tools MA and SC SA implementation document. 15. Basic service units that have Joint action plans developed joint action plans for are expected to be service quality improvement based prepared in at least on interface meetings between Reports from 2 service units of Number na na 46 0 172 Annual MA service users and providers MA and SC each of the woredas that implement the SA tools. Intermediate Result 5: Strengthened sectoral M&E systems 45 Figures not available - i) The contract extension for the management agency of the Ethiopian Social Accountability Program 2 (ESAP2) is not yet finalized ii) Social Accountability Implementing Civil Society Organizations (CSOs) have not yet signed contractual agreement with the management agency. 46 Same as above 64 Baseline Progress To Date Original (Achievements) Target Values Project Data Source/ Responsible Intermediate Results Indicators UOM Frequency for Data Comments Start Methodology FY12 FY12 Collection FY11 (FY07) Core EFY04 EFY04 (EFY03) (EFY99) 16. Sectors in which System Quality Project Assessments conducted (number) Cumulative Completion 0 3 47 3 5 Annual CSA Number Reports, Surveys 17. Woredas that rolled out new WASH Survey Project MIS 48 Number 0 53 49 58 200 Annual Completion MOWE Reports Project Number 10 25 50 25 25 Annual Completion CSA 18. CSA branch offices connected Reports 47 Health, Education and Rural Road sectors 48 Woredas that roll out the new WASH MIS under PBS support only. 49 MIS software development isn’t completed 50 Out of which, the connection of 15 offices was supported by PBS in the fiscal year 65 Annex 6. Revisions to the Results Framework at the Time of Additional Financing Revisions to the Results Framework Comments/ Rationale for Change HIGHER LEVEL OBJECTIVES Current (PAD)Indicators Proposed change* Gender Parity Index for Revised: Male/Female figure helps to grades 8 completion disaggregate the indicator by Male/Female for grade 8 rate. gender. completion rate. Under-5 mortality rate (out of Dropped. The indicator is monitored 1,000 live births). every five years, no recent baseline. PDO indicators Current (PAD)Indicators Proposed change New: Bank Core sector indicator added. Children immunized (number). Reduced lab-confirmed Dropped. The indicator is no longer new malaria cases. monitored through HMIS. Proportion of rural and Revised: Revised the water related urban population with indicator to more closely Proportion of malfunctioning water access to potable water. monitor changes due to supplies. increased recurrent expenditures on water sector. Cumulative number of Revised: The former indicator is no farmers (in millions) longer monitored through Farm households receiving trained in agricultural government system; focus agricultural extension services. minimum package. changed from training to provision of services. New: Core indicator added. Direct Project Beneficiaries (number) of which female (%). Kebele centers connected Dropped. All capital investment related by all-weather road/s (%) indicators dropped as Additional Financing provides limited resources under LIG. Intermediate Results indicators 66 Revisions to the Results Framework Comments/ Rationale for Change Current (PAD) Proposed change Total Federal block grant Dropped. Additionality test indicator (including PBS funds) as a changed for the Additional share of total Federal discretionary expenditure Financing project. (including the block grant and PBS funds). Transfers of block grants to Dropped. Fairness test indicator local governments made in changed for the Additional accordance with intergovernmental fiscal rules. Financing project. Revised: Growth and Transformation Proportion of qualified primary plan of the country proposed Proportion of qualified revisions to the indicator. teachers at second cycle school teachers. primary school (%). Targets are provided only for the revised indicator. Proportion of schools with Dropped. This indicator has been proper sanitation facilities difficult to correctly measure (water and latrines) in the past. i) % of schools with water; ii) % of schools with latrines. Number of health facilities Dropped. PBS II provides no resources functional (i.e. constructed, for construction of facilities. renovated or equipped) (Cumulative number) i) Health posts ii) Health centers . Dropped. This indicator has been Availability of essential drugs at health facilities (%) difficult to correctly measure in the past/no HMIS data. New: Bank core sector indicator People with access to basic package added. of health, nutrition, and population services (number) Percentage of households in Revised: Bank core sector indicator. malarious areas with two ITNs (%) Long Lasting Insecticide Treated malaria nets distributed/purchased 67 Revisions to the Results Framework Comments/ Rationale for Change (Number) Revised: The Revised indicator Number of Certified Internal relates more to the PBS Public sector auditors registered Auditors inputs. and followed up for the CIA qualification training (number) Dropped. This indicator has been Kebeles where membership difficult to monitor, the based CSOs participate in Local Council Meetings responsibility for data collection dissolved. Rephrased: The indicator is rephrased to respond more to the Woredas that introduce Basic service units that have objective of Social minimum standard service developed joint action plans for accountability in PBS. indicator (number) service quality improvement based on interface meetings between service users and providers 68 Annex 7. Summary of Borrower’s ICR 51 51 This ICR includes the title page, the contents and the Executive Summary of the said Borrower’s ICR. The full Borrower ICR is not attached here because of volume limitations. 69 70 71 72 73 Annex 8. List of PBS II-supported Knowledge Products & Services (FY 2011 to FY 2013) Type of FY 2011 FY 2012 FY 2013 Product Notes and • Woreda block grant • PBS III Design – • Some Observations Studies transfers: Current Preliminary Ideas and on the GoE’s Practices and Guidance from the PBS Macroeconomic Challenges Secretariat Update • Ethiopia’s Federal • From Aid Effectiveness • Final Report for Budget for EFY 2004: to Development Independent A brief analysis Effectiveness in Ethiopia Procurement • Evaluation and Design (input to HLF-4) Audit/Review of the Social • Ethiopia: Multi-Annual Accountability Review of PBS Program Component of the • A short note on PBS Protection of Basic Commitments vs. Services Project, Disbursements Ethiopia • Ethiopia’s Federal • Protection of Basic Budget for EFY 2005: A Services II brief analysis Macroeconomic • Macroeconomic Update Update for 2010/11 • Regional Government • Evaluation of Pilot Local PEFA Assessment Investment Grant – Final Reports (5) – SNNPR, Report Amhara, Benishangul- • Independent Gumuz, Harari, and Procurement Audit of Oromia PBS I Additional • Integrated Regional Financing and PBS II – Government PEFA Final Report Assessment Report • Strengthening Grievance • Health Commodity Redress Mechanisms for Tracking Study the Protection of Basic • Environment and Services (PBS) Program Social Sustainability in Ethiopia Study • Political Economy of Decentralization and Service Delivery in Ethiopia: Understanding Incentives and Strengthening Accountability (October 2011) Supervision • Briefing Package – • Briefing Package – PBS • Briefing Package – mission PBS Health Health Supervision PBS Water/WaSH briefing books Supervision Mission Mission to SNNPR Supervision Mission and reports to Amhara (October (October 2011) (joint PBS and 2010) • Briefing Package and WaSH JTR) to • Briefing Package and Report – PBS Amhara (October Report – PBS Rural Water/WaSH 2012) 74 Roads Supervision Supervision Mission to • Briefing Package and Mission to Amhara Oromia (October 2011) Report – PBS Cross- (April 2011) • Briefing Package– PBS cutting Issues • Briefing Package and Agriculture Supervision Supervision Mission Report – PBS Mission to SNNPR to Tigray (October Agriculture (April 2012) 2012) Supervision Mission • Briefing Packages and • Briefing Package and to SNNPR (April Reports – PBS Report – PBS Cross- 2011) Education Supervision cutting Issues • Briefing Packages and Missions (joint PBS and Supervision Mission Reports (3) – Woreda ESDP) to SNNPR and to Benishangul- Basic Service Afar (April 2012) Gumuz (October Spending Review • Report – Procurement 2012) Missions (SNNPR, supervision mission to • Briefing Package and Tigray, & Somali SNNPR Report – PBS Cross- Regions) - April 2011 cutting Issues • Report - Procurement Supervision Mission supervision mission to to Gambella (April Amhara 2013) • Briefing Package – PBS Rural Roads Supervision Mission to SNNPR (April 2013) • Procurement capacity assessment – input to PBS 3 design • Report – Procurement supervision mission (Tigray) Just-in-Time • TA to support the • Technical support to the • Technical TA quality and timeliness Teacher Absenteeism input/support to the of MoFED’s IFRs and Study, EMIS development of the QERs PBS 3 Performance development, the • Technical support to Enhancement Fund agriculture output/ (PEF) ensure quality follow- up of financial outcome tracking • Technical support to management action system, and the rural Data Quality plans as well as roads MIS. Assessments in continuous and • Technical support to education and health external audit reports. ensure quality follow-up (based on EDQAF in • TA for LIG, BoFED of financial management FY 2012). and MoFED action plans as well as accountants. continuous and external • Technical support to audit reports. line agency • Technical support to line procurement staff. agency procurement staff. • TA to the GoE to establish a national joint forum on procurement. • Technical support to create the Ethiopia Data Quality Assessment 75 Framework (EDQAF). Convening • JRIS meetings - • JRIS meetings – • JRIS meetings – Services October 2010 and November 2011 & May November 2012 and May 2011 2012 May 2013 • Workshop on woreda • Workshop 1 –PBS 3 • Workshop on (regional) block grant Design findings of the formulas. • Workshop 2 –PBS 3 Independent Design Procurement Audit • Dissemination workshop Report on the Multi-Annual Review of the PBS Program • Workshop on findings of the Independent Procurement Audit Report 76 Annex 9. List of Supporting Documents Reports and Studies Aneesa Arur, Rianna FMOHammed, Eduard Bos. Setting Targets in Health, Nutrition, and Population Projects, WB 2011, HNP series , “ January 2011.” Bilal N., et al Health Extension Workers in Ethiopia: Improved Access and Coverage for the Rural Poor Dom C.; Lister S., Antoninis M. An Analysis of Decentralisation in Ethiopia. June 2010. Mokora Taddesse S., Swain B. , Afeta M. , Gadissa Bultosa, Evaluation Report Evaluation and Design of Social Accountability Component of the Protection of Basic Services Project, Ethiopia . June , 2010 IPE Global Workie N., Ramana GNV. The Health Extension Program in Ethiopia . Universal Health Coverage Studies Series (UNICO) UNICO Studies Series No. 10 World Bank and Other Documents AfDB PBS II Programme Completion Report (December 29, 2011) Central Statistical Agency [Ethiopia ] Ethiopian Welfare Monitoring Survey 2004 Central Statistical Agency [Ethiopia ] Ethiopian Welfare Monitoring Survey 2011 Central Statistical Agency [Ethiopia] and ICF International. 2012. Ethiopia Demographic and Health Survey 2011. Addis Ababa, Ethiopia and Calverton, Maryland, USA: Central Statistical Agency and ICF International. Central Statistical Agency [Ethiopia] and ORC Macro. 2006. Ethiopia Demographic and Health Survey 2005. Addis Ababa, Ethiopia, and Calverton, Maryland, USA: Central Statistical Agency and ORC Macro. DFID PBS II Project Completion Review (April 2012); DFID, Business Case for Promotion of Basic Services In Ethiopia 2012 – 2017 ; 7 November 2012 Environmental and Social Sustainability Study of Protection of Basic Services (PBS II). Green Vision PLC, 2011 Ethiopia: WHO and UNICEF estimates of immunization coverage: 2011 revision EVALUATION OF PILOT LOCAL INVESTMENT GRANT PBS. Final Report, November 2011. IPE Global Federal Democratic Republic of Ethiopia. Ministry of Finance and Economic Development, Financial Transparency and Accountability Implementation Assessment Report, September 2013. 77 Federal Democratic Republic of Ethiopia.. Ministry of Health. Health Sector Development Program. Annual Performance Report EFY 2004 (2011/12) Federal Democratic Republic of Ethiopia.. Ministry of Health. Ministry of Health. Commodity Tracking and stock management study report. May 2011 Federal Democratic Republic of Ethiopia.Ministry of Finance and Economic Development (MOFED) [Ethiopia]. 2010. Growth and Transformation Plan, 20110/11- 2014/15. Addis Ababa, Ethiopia: Ministry of Finance and Economic Development. Federal Democratic Republic of Ethiopia.Ministry of Health (MoH) [Ethiopia]. November 2010. Health Sector Development Programme IV, 2010/11-2014/15. Addis Ababa, Ethiopia: Federal Democratic Republic of Ethiopia.Ministry of Health 2011, Malaria Indicator Survey Federal Democratic Republic of Ethiopia.Ministry of Health MDGF. An Assessment of the financial Management, Procurement and Supply Chain Management of the MDGF. November 2011 Federal Democratic Republic of Ethiopia.Ministry of Health. Health and Health Related Indicators 2003/2011G.C. Addis Ababa Federal Democratic Republic of Ethiopia.Ministry of Health. Health and Health Related Indicators 2002/2010G.C. Addis Ababa Health Facility Governance in the Ethiopian Health System. USAID. Health Systems 2010 IPE 2011, Evaluation of the Pilot Local Investement Grant. Joint Review and Implementation Support Missions – Aide Memoires World Bank, Project Appraisal Document PAD AF World Bank. January 2013 . Project Appraisal Document. Health MDG program for results, Ethiopia. World Bank. Project Appraisal Document PBS I World Bank. Project Appraisal Document PBS II World Bank. Project Appraisal Document PBS III 78 32°E 36°E 40°E 42°E 44°E SUDAN ERITREA To Keren R REP. ETHIOPIA e OF SELECTED CITIES AND TOWNS d ETHIOPIA To Humera Adigrat YEMEN REGION CAPITALS S Gedaref ek eze Axum T 14°N 14°N NATIONAL CAPITAL D e T I G R AY en RIVERS a Mekele ak Ras Dashen Terara (4620 m) MAIN ROADS Atb il ara RAILROADS Gonder De REGION BOUNDARIES AMHARA A FA R Lake INTERNATIONAL BOUNDARIES se Dinder Tana 12°N Debra 12°N Tabor Weldiya DJIB DJIBOUTI rt Bahir Dar Asayita ue 46°E 48°E Bl Nile n Dese o f A d e G u l f Abay BENSHANGUL Debre Awa er Markos ng Asosa sh Ethiopian Ha 10°N 10°N Plateau DIRE DAWA Dire Dawa Didesa To Harer Hargeysa Gimbi Nekemte ADDIS ABABA ADDIS HARARI Jijiga ABABA Awash SOMALIA Nazret R Baro Aware am Welkite Degeh Bur Gore O R O M I YA is Gambela 8°N Domo 8°N GAMBELA y Asela e Ak SOUTH abe Shebele l l o Jima Hosaina O g a d e n W bo a Bonga SUDAN SOMALI V Shashemene Goba Warder Sodo Awasa Dodola Kebri Dehar f t SOUTHERN NATIONS, Wendo W Imi R i NATIONALITES ab e Ge t sr Wa 6°N AND PEOPLES o be Shebe 6°N t le e a 0 50 100 150 200 Kilometers Genale G r Negele 0 50 100 150 Miles Ferfer To Yavello Dawa Mogadishu Dolo Odo This map was produced by the Map Design Unit of The World Bank. IBRD 33405 R2 4°N Lake Mega The boundaries, colors, denominations and any other information 4°N shown on this map do not imply, on the part of The World Bank Turkana Group, any judgment on the legal status of any territory, or any INDIAN endorsement or acceptance of such boundaries. KENYA Moyale JULY 2011 OCEAN 32°E UGANDA 34°E 36°E 38°E To 40°E To Wajir 42°E To Mogadishu 44°E 46°E 48°E Marsabit