Development Cooperation Ireland public expenditure review report

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1 Development Cooperation Ireland public expenditure review report

2 Front cover: Queuing for water, Massinga Village, Inhambane Province Alfredo Binda

3 Public Expenditure Review Report on the Inhambane Provincial Development Programme Republic of Mozambique Government of Inhambane Province Development Cooperation Ireland July page 1

4 page 2 public expenditure review report

5 CONTENTS PART A) REPORT OF THE INDEPENDENT CONSULTANTS 1. Executive Summary 1 2. Introduction 4 3. National Framework for Development Political Context Economic Context Reduction of Absolute Poverty Ireland Aid Strategy for Co-operation with Mozambique 7 4. The Area Based Programme (ABP) Approach Approach for the Expenditure Review Methodology Findings Overall Findings Overall Set-up of the Programme Relevance of Programme Objectives Effectiveness, Efficiency and Sustainability of Programme Activities Public Administration Agriculture Health Education Roads Water and Sanitation De-mining Credit Involvement of Cross-Cutting Issues Management Issues with Ireland Aid in Mozambique Management Issues with the Provincial Government System Lessons Learned Recommendations 29 PART B) MANAGEMENT RESPONSE FROM IRELAND AID TO THE REPORT OF THE INDEPENDENT CONSULTANTS Overall Response Additional Financial Information Recommendation 35 PART C) ANNEXES TO THE REPORT OF THE INDEPENDENT CONSULTANT 38 ANNEX 1 Terms of Reference for Public Expenditure Review 39 ANNEX 2 Itinerary 42 ANNEX 3 List of Persons Met 44 ANNEX 4 List of Documents Consulted 46 ANNEX 5 Key Sector Objectives 48 page 3

6 TABLE OF ACRONYMS ABP Area Based Programme ADP Accelerated De-mining Programme AMODER Mozambican Association for Rural Development CIRESP Inter-ministerial Committee for Public Sector Reform DPAC Provincial Directorate for Support and Control DPADR Provincial Directorate for Agriculture and Rural Development DPE Provincial Directorate for Education DPOPH Provincial Directorate for Public Services and Housing DPPF Provincial Directorate for Planning and Finance DPS Provincial Directorate for Health Euro FRELIMO Ruling Political Party in Mozambique GoM Government of Mozambique GTZ German Agency for Technical Development Co-operation IA Ireland Aid. Please note that since July 2003 Ireland Aid has been renamed Development Cooperation Ireland MADER Ministry of Agriculture and Rural Development MAE Ministry of State Administration MICOA Ministry of Environment and Coordination MISAU Ministry of Health M&E Monitoring and Evaluation NGO Non Governmental Organisation PAEG Projects Appraisal and Evaluation Group PARPA Absolute Poverty Reduction Action Plan PROAGRI Agricultural Sector Public Expenditure Programme PRSP Poverty Reduction Strategy Paper RENAMO Major Opposition Party in Mozambique SDC Swiss Development Co-operation SIFAP Training System for Public Administration SWAp Sector Wide Approach UNADP Nationally executed de-mining programme, supported by UN technical assistance UNICEF United Nations Children s' Fund UTRESP Technical Unit for the Reform of the Public Sector VETAID International NGO ZIP Zona de Influencia Pedagogica page 4 public expenditure review report

7 TANZANIA ZAMBIA Lake Nyasa GAZA INHAMBANE MALAWI Lichinga Pemba Nacala ZIMBABWE Tete Nampula Quelimane MAPUTU Chimoio Beira Mozambique Channel Chicualacuala Inhambane SWAZILAND MAPUTO SOUTH AFRICA Indian Ocean page 5

8 page 6 public expenditure review report

9 Public Expenditure Review Report PART A) REPORT OF THE INDEPENDENT CONSULTANTS Republic of Mozambique Government of Inhambane Province Development Cooperation Ireland March page 7

10 Sunset over the Bay, from Inhambane Town to Maxixe Town, Inhambane Province Photographer: Alfreda Binda page 8 public expenditure review report

11 PART A) REPORT OF THE INDEPENDENT CONSULTANTS 1. EXECUTIVE SUMMARY Put very briefly the objective for a Public Expenditure Review is perceived to be an assessment of whether the outcome of the actual programme represents "value for money" when compared to the objectives defined and whether the objectives defined are consistent with Ireland Aid 1 policy. The overall conclusions of this Expenditure Review are: That Programme design is highly relevant, in respect of the general and specific objectives for the programme (which are consistent with Ireland Aid policy), and in respect of the Area Based Programme approach used to achieve these objectives That programme implementation has been very effective in achieving major parts of the formulated objectives (particularly for the period of which is the focus for this review); That programme implementation has been fairly efficient taking into consideration that the point of departure for development of human resources and institutional capacity in Mozambique is very weak, particularly at local (provincial and district) level; That the long-term sustainability of the programme achievements is endangered by the substantial increase in the annual budgets for the second phase of the programme. In the long term financial sustainability will depend on the Government s ability to raise adequate revenue to finance all activities and services at provincial and district level. To date revenue collection in Mozambique has been weak. The actual high level of financial support to Inhambane implies higher levels of recurrent costs to maintain the increasing level of services. In addition, the infrastructure facilities established by the support from the programme will need maintenance, which will incur increased running costs; That the cross cutting issue of HIV/AIDS is well integrated and prioritised in the programme while the issues of gender and environment are still very weak; That the management arrangements for the programme are generally highly satisfactorily. This is particularly so in respect of handing over systematically and gradually the responsibility for programme management to the relevant existing provincial institutions in Inhambane province. This is done in such a way that ensures that the transfer of responsibilities corresponds to increased capacities in the provincial institutions. In stating this very positive picture of the programme it should, however, also be mentioned that there are four areas of concern for the future development of the programme: That poverty alleviation has not yet been established as the overall guiding principle throughout programme implementation even though it is reflected to a considerable extent in programme objectives That budgets for the second phase (2002 to 2005 inclusive) are very substantial (around Euro 7 million per year). On average this is a four fold increase compared to the first phase of 1997 to This substantial increase in budgets and the high level of financial support to Inhambane might cast doubt on the future sustainability of the programme achievements; 1 With effect from the 3 July 2003 "Ireland Aid" has been Renamed "Development Cooperation Ireland" page 9

12 That it seems activities in some of the sectors (notably agriculture and roads) have so far been less relevant than the rest of the programme activities; That the objective of strengthening local administration at district level is still very difficult to implement. The contribution from the districts to provincial development and growth should be considered a long and slow process which might complicate the spending of the planned budgets in accordance with the programme objectives for the period 2002 to The overall target for the Inhambane Provincial Development Programme is clear and well defined: "To develop institutional and human capacity in local government structures in Inhambane Province, which will stimulate equitable social and economic development". This is clearly in line with the overall Ireland Aid policy objectives of poverty alleviation, good governance and local empowerment. In addition the three Ireland Aid objectives are almost identical to the Mozambican targets for the Plan for Alleviation of Absolute Poverty in Mozambique, the PARPA. The Inhambane programme focuses specifically on the six priority sectors defined in this PARPA. Around 40 specific objectives are formulated for the Inhambane programme in addition to the above overall aim. These are listed in Annex 5. The specific objectives are all sector-specific. Only three out of these 40 objectives have been questioned by the review team in respect of their relevance. Thus, the programme is solidly based on sound and relevant objectives, for example in the agricultural sector: HR capacity building in Ministry of Agriculture Improvement of agricultural productivity Diversification of production strategies for food security Increase small and medium-sized farmers' incomes and livelihood options Encouragement of private sector investments in agricultural processing Promotion of sustainable use of land, wildlife, water and bio-diversity Promotion of and improved conditions for cash crops. As to the effectiveness of the programme, major achievements have been made in the area of capacity building. These activities have to a very high extent focused on individual education and training, while a systematic effort for institutional capacity building has not been prioritised. Complementing the existing programme approach with such a systematic institutional effort would considerably improve institutional sustainability as well as the efficiency of the achievements. Particularly it should be stressed that the Area Based Approach to local capacity building in the form used in Inhambane has proved highly useful, effective and efficient. The programme is working with and through the existing public sector institutions thus strengthening these and the co-operation is based on and in line with the overall national policy as well as the national sector policies. It seems that the inclusion in this ABP approach of a number of pilot test approaches to solve specific development problems has not so far been used sufficiently. It is one of the advantages of the ABP- Approach that it can test alternative ways of development (for instance for support to the agricultural family sector) and, if successful, introduce such experience to the national policy level. The elaboration of Strategic Sector Development Plans at provincial level has been an important element in improving the efficiency of programme implementation. An overall Strategic Development Plan for the whole province has also been drawn up and approved by the Governor of Inhambane Province. Even though this plan should be more forwardlooking and more specific it is, nevertheless, a very important advance in respect of ensuring coherence and coordination among sector activities for the development of the province. page 10 public expenditure review report

13 2. INTRODUCTION Ireland Aid (IA) initiated assistance to Mozambique in Between 1993 and 1996, IA supported activities through Irish companies, Irish NGOs and UNICEF. An Embassy was established in 1996, and after a request from the Government of Mozambique pilot projects were initiated in 1997, which set parameters for a three-year plan ( ). The essentials for this plan were: Area Based Programmes in the provinces of Niassa and Inhambane, support for the development of Health and Education sectoral programmes at national level and support for Multilateral Debt relief. A review of Ireland's Country Programme took place in 1999 and a comprehensive review of the Area Based Programme approach was undertaken in A recommendation from these reviews was to continue the programme for at least another three years. Based upon the experience of programme implementation during and informed by a number of reviews and studies, a Country Strategy Paper for Mozambique was developed and approved in The overall objective for this programme is to: "Contribute to the reduction in Poverty in accordance with the Government of Mozambique's own National Development Strategy". The Inhambane Provincial Development Programme was started in 1997 and from 1997 to 2001 this programme primarily supported activities relating to capacity building, institutional support, and de-mining. The main sectors supported were: planning and finance, agriculture, health, education, roads, water and sanitation, HIV/AIDS, and community development. During this period the annual support grew from 1.0 to 2.8 million. Support totalled approximately 7.8 million over the four-year period. It has been decided to continue this programme and a programme document has been drawn up and approved for the period of 2002 to 2005 inclusive. The annual budget for this programme is planned to increase from 6.35 in 2002 to 7.3 in , totalling over the four-year period, implying a more than fourfold increase in the size of the programme compared to the first four-year period of However due to budget constraints the actual expenditure for 2002 was revised down to 4.9 million and the 2003 budget has been reduced to 5.67million. page 11

14 3. NATIONAL FRAMEWORK FOR DEVELOPMENT 3.1 Political context Mozambique achieved its independence from Portugal in 1975 and in 1977 the ruling party, FRELIMO, declared itself to be a Marxist-Leninist party. Covert assistance from the white minority regime in Rhodesia and others was stepped up and channelled to a group which came to be known as RENAMO. It adopted tactics designed to inflict damage on the economic and social infrastructure of Mozambique. After the independence of Zimbabwe in 1980 support for RENAMO came mainly from South Africa and from some western countries, it grew rapidly in size and military effectiveness. In 1987 the Government decided to introduce farreaching reforms in favour of political liberalisation and a more market-oriented approach. In 1990 the principle of a multi-party political system and other reforms were enshrined in a new constitution. Peace consultations were initiated in 1990 and they led to a peace accord signed in Rome in October 1992 by the leaders of FRELIMO and RENAMO. In 1994 the first multi-party elections were held, in which FRELIMO secured an overall majority. Since 1994 Mozambique has seen impressive macro-economic growth and political stability under the leadership of President Joaquim Chissano, but the national elections in 1999 resulted in a very close race between the two parties. Out of a total of 250 seats in the National Assembly, FRELIMO won 133 and RENAMO and its allies won 117. In the presidential elections the opposition candidate, Afonso Dhlakama, secured 48% compared to President Chissano's 52%. Although these results were validated by a decision of the Supreme Court the opposition has not officially accepted the outcome on the basis that the counting process was flawed. A major challenge for the Government is to ensure a more even countrywide distribution of the economic gains that have been made over the past 10 years. The new wealth and progress seems primarily to be concentrated in and around the capital Maputo. The Inhambane ABP is focusing on the Province of Inhambane, working with and through the public sector institutions and NGOs in the province. Inhambane Province has a surface area of 68,615 Km2 and a population of 1,291,000. The Provincial Government is the counterpart institution for the programme. It is headed by the Governor, who is appointed by the elected national President and consists of all the provincial directors, each of them appointed by the responsible sector Minister. For administrative purposes the Governor is supported by a small secretariat (office), and in addition a personal councillor is attached to the Governor in Inhambane province. All publicly employed personnel have a "double subordination", which means that they are referring both to the Minister (Ministry) in Maputo and to the Governor in the province. These two lines of reference are by definition of the same importance. page 12 public expenditure review report

15 3.2 Economic Context Mozambique is one of the poorest countries in the world with a GNP per capita of $230. It ranks 170 out of 173 in the UNDP Human Development Index for Two out of three Mozambicans live in absolute poverty, mainly in rural areas, and life expectancy at birth is 46 years. Only four in ten adults can read and write. At least one in seven Mozambicans are infected with HIV. Since independence in 1975 the economy has endured a number of setbacks. The scarcity of human resources after the Portuguese exodus was a critical factor combined with the introduction of a socialist economy (based on centralised planning) and the civil war left the economy in tatters. Since 1992 major achievements have been made and impressive annual growth levels (close to 10% per year) were achieved since the mid 1990s. Tight monetary policy has brought inflation under control but the economic impact of HIV/AIDS will almost certainly be devastating, undermining the capacity built up during the last decade. Since the late 1980s the Government has pursued open economy policies with an emphasis on private sector led growth. Among other policies, it is about to implement a comprehensive structural reform programme. The privatisation programme, which began in 1991, has also seen the privatisation of some 90 large enterprises and a further 1,200 small and medium-sized enterprises by page 13

16 Women collecting water, Murruri, Vilanculos District, Inhambane Province Photographer: Alfredo Binda 3.3 Reduction of Absolute Poverty The Ministry of Planning and Finance in Mozambique, define the concept of poverty as "the ability of individuals to ensure for themselves and their dependants a set of minimum basic conditions for their subsistence." Years of civil unrest and conflict have left the country without much social infrastructure to cater for the basic needs of the population. The rural population is also adversely affected by lack of support for economic development, for instance the lack of infrastructure facilities for trading of agricultural products. Poverty is more widespread in rural areas than in towns, with the north of the country and the provinces of the central region generally being the poorest. Poverty and limited access to social services affect women and children more than men, both in rural and urban areas. The poorer families are typically larger with a lower education standard and a dependence on one income. HIV/AIDS will increase poverty especially among young people and women who are the most vulnerable groups. page 14 public expenditure review report

17 In April 1999 the Government of Mozambique launched its Action Guidelines for the Eradication of Absolute Poverty. The aim is to reduce the incidence of absolute poverty from the current level of around 70% to 50% in the next ten years. The Action Plan to implement the PARPA, for 2000 to 2004 is now being developed aiming at a target of reducing the incidence of absolute poverty from 70% to 60% by The PARPA underlines the need to maintain the necessary macro-economic framework and social conditions for sustainable economic growth with a view to promoting development in rural areas, women's socio-economic status, social equity, and food security. "In order to achieve the reduction in absolute poverty the Action Guidelines emphasise the need To maintain rapid and sustainable economic growth by stimulating the development of industry, construction and by increasing productivity in agriculture; To give priority to the development of human capital through public investments in education, health, access to clean water and environmental sanitation; To increase agricultural productivity in the family sector, particularly in areas with high agro-ecological potential; To develop infrastructure in rural areas; To protect the most vulnerable groups through social security and assistance programmes; To promote employment and self-employment in both rural and urban areas through vocational training and the promotion of income generating micro-projects and enterprises, with particular attention to women, unemployed and socially excluded young people; To improve technical and institutional capacity to monitor and evaluate poverty and analyse research in the poverty field in order to improve knowledge of the phenomenon and select the appropriate strategies to fight it." The following six sectors have for the period of been identified as priority sectors for the alleviation of absolute poverty: Education Health Social Action Agriculture and Rural Development Employment Infrastructure. 3.4 Ireland Aid Strategy for Co-operation with Mozambique A Country Strategy Paper for Mozambique for the period of was approved in The overall objective for the programme is to: "Contribute to the reduction in Poverty in accordance with the Government of Mozambique's own National Development Strategy". In addition to this overall programme objective, the following key issues were set out in the programme strategy: To increase the programme each year, corresponding to the Mozambican absorptive and management capacity; To give support within the GoM policy framework and focus on the Poverty Reduction Strategy; To increase the level of support to the economic and productive sectors; To continue support to provincial governments of Niassa and Inhambane, ensuring that the impact on poverty remains a key focus, and promoting participatory processes at all levels; To consider providing financial assistance in the area of macro-economic support; To have a strong focus on capacity building at national and provincial levels; To ensure a strong focus on HIV/AIDS, Gender and the Environment; To establish adequate management capacity for Ireland Aid in Mozambique; To collaborate closely with other donors and agencies. page 15

18 The following five focal areas were identified for the programme: Support to the Provincial Governments of Niassa and Inhambane and their lower levels of administration, concentrating on building local human and institutional capacity; Support to the implementation of programmes which address the basic needs of the Mozambican population, in particular improvement of quality of Health and Education services; Support to the enhancement of incomes for poorer people through increased agricultural production and access to markets; Support to processes of democratisation, human rights, transparency, accountability, good and efficient governance, and participation at all levels; Support to the general budget so as to enhance the revenue available to the GoM to carry out its programmes on poverty reduction and development. In relation to the Inhambane Provincial Development Programme the Ireland Aid Strategy for for Mozambique set the following framework as a guideline and management tool for development: Support to the province will continue over the period of , maintaining the number of sectors at funding levels in line with the Governments ability to absorb and sustain investments; Development of district programmes should continue, placing increased emphasis on the building of district administrations' own capacity to carry out its functions and to work with communities; Capacity building at provincial level is seen as key to the overall success of the programme. Special support will be given to complement the support given by the GTZ programme of capacity building and to HIV/AIDS prevention and mitigating efforts; Support to the development and implementation of the Provincial Strategic Health Plan will be continued and effected through a tripartite management arrangement between the Provincial Government, SDC and UNICEF; Experiences from Ireland Aid engagement with MISAU at central level should be channelled through to the province and vice versa; Support to the Education sector will strengthen the directorate's ability to plan, manage and monitor its education programme. Collaboration and co-ordination among donors, agencies and NGOs should be encouraged, and the share of support for school construction should be decreased; Support to Rural Water and Sanitation programmes will continue, focusing on a co-ordinated approach to these sectors with other actors and stakeholders and on building the capacity of a local water department (directorate) to take the leadership of the sector; De-mining will continue, with support being provided through UNADP, reviewing this support at the end of the period, in the light of the future institutional status of ADP; A budget line will be retained for support of pilot projects at both provincial and national level to provide for flexibility to react to opportunities that arise, particularly in the productive sector. The other donor to have major programmes or projects in the Province of Inhambane is GTZ. It supports a programme which is focusing on capacity building, the education sector, and on specific support to Vilanculo Municipality 3. It also supports a major rural development programme, and KfW are planning to support infrastructure projects. A major support to the water and sanitation sector is being planned by the World Bank and Canadian CIDA. In addition a considerable number of international and national NGOs (including projects funded by Ireland Aid through the provincial government and directly from Ireland Aid) are active with minor projects. Examples include German Agro Action, CARE, Save the Children, GOAL, Handicap International, PSI and Us Alive. Apart from this, support to the province is mainly channelled through the sector programmes implemented by the national ministries. With an annual budget of approximately 7 million (for the period of 2002 to 2005, inclusive) the Ireland Aid Provincial Development Programme is a huge input to capacity building and implementation in Inhambane Province and it plays a very important role for the development of the province. 3 Vilanculo is a major town in Inhambane Province with its own Local Town government. page 16 public expenditure review report

19 Remarkably few donors are involved in Inhambane province development (mainly IA, GTZ and NGOs). There might be historic reasons for this, but at present it seems that the IA support for the provincial government is so big that there is hardly a need (or even room) for other major donors. The capacity of the administrative provincial staff is stretched to the limit, and the "reasonable basic needs" of the province might be well covered by the IA support at least until there is reliable administrative capacity within a number of districts in the province. Additional donor inputs might even further endanger the sustainability of the achievements as Mozambican revenue collection can hardly, within a number of years, be expected to approach the level needed to maintain the actual budget size of Inhambane province without additional donor support. For the provincial Government, the limited number of donors is a major advantage in the sense that co-ordination is easy, and maintaining the current dialogue with the donor(s) is simple. But it also implies a strong dependency on a few donors, implying major risk should the donor(s) suddenly decide to withdraw support. For the donor, a strong dominance in one or two provinces implies strong commitment/responsibility towards the development of this province and thus limited flexibility as concerns changes in development co-operation policy. From an efficiency point of view it seems that donor concentration would be an advantage and that the consequent increased commitment from both co-operating partners would strengthen development outcomes. page 17

20 4. THE AREA BASED PROGRAMME (ABP) APPROACH As part of the Ireland Aid approach to development co-operation the Area Based Programmes (ABPs) are seen as complementary to and not an alternative to the Sector Wide Programme approaches (SWAps) used as the principal approach by most other donors. It is argued that the ABPs and the SWAps (for instance compared to the traditional project approach) have basic similarities such as General acceptance of the need for Government ownership; Partnership approach in terms of identification, planning, implementation and monitoring; Appropriate financing arrangements. Though there are obvious differences, such as the fact that the ABPs are multi-sectoral and operate at local level only, contrary to SWAps, there is no contradiction in principle between SWAps and ABPs, and nothing in principle to prevent IA from supporting both approaches at the same time. In fact, ABPs and SWAps should be seen as complementary, building capacity at different levels and this way strengthening the potential for successful development. Supporting both approaches is a contribution to a constructive dialogue between national and local levels, supplying valuable experiences from local level as policy-inputs to national level. Generally, a SWAp approach will only be effective if there are sound processes for implementation at lower levels, and the ABPs are one means of developing such processes. Furthermore, the cross-sector planning and coherent priority setting among sectors at local level can make an important contribution to co-ordination among activities driven by different Mozambique central ministries, based on SWAp support. Creating an overview over such coherent planning and priority setting is much easier at local than at national level. Normally it will lead to priorities which are more directly targeted at the specific local bottlenecks and development needs. The trend towards greater decentralisation strengthens the case for Ireland Aid to support both SWAps and (especially) the ABPs. In this way IA can be involved both in the policy dialogues at national level and in implementation at local level. Specifically, the ABPs will in this way support the development of pilot experiences and strengthen the local capacity needed for the implementation of the national sector programmes. To adequately fulfil this role, ABPs should follow most of the following basic principles: They should have a multi-sectoral approach; Identification of activities should be made through co-operation with local authorities and stakeholders; Priorities should be in line with priorities of the local development plans; The focus should be on support for basic needs sectors and local-level capacity building; Planning and implementation should follow a partnership approach and programme management structures should be kept "lean"; A strong emphasis should be placed on community-based approaches and participatory planning; Innovative approaches should be used, based on piloting and experimentation; Emphasis should be on "extensive", low-cost approaches, judged to be sustainable. The ABP objectives must be in line with the partner government policies in all sectors. page 18 public expenditure review report

21 In addition to a high number of positive assessments of the ABPs in Inhambane and Niassa in Mozambique the ABP review of 2000 ("Evaluation of the Provincial Programmes, Inhambane and Niassa, June 2000", Department of Foreign Affairs, Republic of Ireland, Annex III, Page i to vi) concluded that The programmes have been focused at the provincial level so far. The first efforts to widen the scope to district and community levels have only been partly successful; Programme planning and monitoring of IA funded activities are not (yet) fully integrated into the Provincial Government structure. This is mainly due to the weak performance of the Provincial Directorate for Planning and Finance (DPPF), which is the main responsible institution for the planning. The performance of this Directorate should consequently improve substantially; Because of the nature of planning by the Provincial Government, the sectoral activities are dispersed over the province, resulting in a low efficiency and little integration between the activities. Consequently, the impact on poverty alleviation is small. However, the development of strategic plans is considered to be a significant improvement as compared to the former "ad hoc" planning; There is a risk that district programmes will run independently from provincial level activities. It was recommended that district programmes should be well established within the government structure and that funds for district level activities are channelled through the normal government structures. A forum should be established at provincial level, which regularly discusses and reviews the strategies and policies as applied in the district programmes. Later in this report, we will assess the recommendations of the 2000 review mission and the progress of the Inhambane Provincial Development programme in relation to each of these recommendations. So far other donors are watching with interest how the IA Area Based Programme approach is developing, but none of them have yet embarked on similar, major programmes in Mozambique. It is recognised, however, amongst almost all donors that too little of the development co-operation resources are reaching the primary target groups at local level (provincial and district levels), and that the ABP approach is one possible response to this problem. Another possible response is, for example, the allocation of sector programme support directly to the local level. A number of donors have for years concentrated a major part of their support for Mozambique on one or more provinces (for instance: the Netherlands in Nampula and the Danes in Tete and Zambezia). However support from these agencies has been focused on only one or very few sectors, and has come in the form of sector programme assistance. Thus, they have not targeted the overall capacity-development of the provincial government or the set-up of a coherent planning and development process for the province. In this way the IA s ABPs in Inhambane and Niassa are still unique in Mozambique. Conversations with the Swedish and German development co-operation agencies confirmed that they have so far not embarked on a true ABP-approach in Mozambique. 17 The high age profile of Irish missionaries will at any rate result in a diminishing number of applications from this community in the coming years. page 19

22 5. APPROACH FOR THE EXPENDITURE REVIEW This Public Expenditure Review exercise is part of a process introduced by the Irish Department of Finance in 1997 with the intent to assess efficiency and effectiveness of all Irish Government expenditure. The review covers the Inhambane Area Based Programme for the period of The overall issue for the expenditure review is to assess whether the Area Based Programme is developing in such a way that it will achieve the objectives set up for the programme. The key document defining these objectives (generally and at sector level) is the Programme Document "PAEG, Inhambane Provincial Development Programme, ". Thus, the review is assessing to what extent the programme activities during set out an adequate approach for achieving the defined programme objectives during the period of Specifically the public expenditure review has the following focus areas: Relevance of the programme objectives; Effectiveness of the programme in achieving its objectives; Cost efficiency of the programme; Sustainability of the programme achievements. In addition the review should Examine the extent to which the cross-cutting issues of gender, environment and HIV/AIDS have been addressed by the programme; Examine the management arrangements within Ireland Aid in Mozambique and within the Provincial Government system, including the operation of the Steering Committee, and assess the adequacy of planning, monitoring and reporting systems, including financial and audit systems. 5.1 Methodology For the review a triangulation of methods has been used: a comprehensive list of literature has been consulted (please see Annex 4), interviews have been held with key persons available (please see Annex 3), and visits have been paid to the programme sites to see for ourselves and compare with other sources of information (please see itinerary, Annex 2). A major part of the visit to Mozambique was spent in Inhambane, but discussions were also held with relevant persons in Maputo, especially with persons at the Ireland Embassy. Throughout this process the focus of discussions was on the overall objectives of the Public Expenditure Review, trying to concentrate on overall achievements and problems. At the same time it is recognised that there are probably some valuable details missing concerning programme implementation. Nevertheless, the review team feels that sufficient time was set aside for the work in Mozambique and that the review report has drawn on a solid basis of information. page 20 public expenditure review report

23 6. FINDINGS 6.1 Overall findings The overall findings by the review team can briefly be concluded as follows: The programme objectives are strictly in line with Ireland Aid policy and with the objectives and sectors highlighted in the Mozambican PARPA (Programme for Alleviation of Absolute Poverty). As such the Inhambane Province Development Programme is highly relevant both to Ireland and to Mozambique. The Area Based Programme approach used as a basis for the planning and implementation of the programme has proved highly successful. It demonstrates that major capacity building and development can be achieved at local level through a cross-sectoral co-ordinated effort, oriented by an overall Strategic Development Plan for the whole province and supported by Strategic Sector Plans elaborated for each of the key sectors. The resulting programme implementation has to a high degree proved effective and efficient. To some extent there is the possibility for sustainability being achieved. It might however, be a major challenge to increase the budget for the programme as foreseen in the PAEG-document for the period of 2002 to 2005, as this will imply major new investments. So far it has proved very difficult to involve the districts in the planning and development process as active players. Without such involvement there seems to be a major risk that the increased budget might primarily be used for major new infrastructure constructions, thus undermining the objective of a clear focus on poverty alleviation. Both Ireland Aid policy and the PARPA focus strictly on poverty alleviation, and the objectives for the programme clearly reflect these priorities. The priority-settings of the province (as reflected, for instance, in the approved development plan), also places major emphasis on economic development. This potentially implies conflicting interests, for instance, concerning priority-setting for which areas of the province to develop: the rural areas (thus focusing on poverty alleviation) or the densely populated urban or semi-urban areas (which have much more potential for economic development and where investments might benefit more people). Poverty alleviation is to a considerable extent reflected in the programme set-up and objectives, but so far it has not been established as the overall guiding principle for programme implementation. Considering that a very large proportion of the financial resources available to the provincial government originates from the IA programme, it should be realised that a very strict enforcement of the principle of poverty alleviation throughout the programme will considerably constrain the provincial government's efforts to focus also on the economic development of the province. Unless poverty alleviation is considered from a longer-term perspective which will allow for the argument that economic development leads to long-term poverty alleviation, there is a risk that resources will not be absorbed efficiently. The activities in some of the sectors (especially agriculture and roads) have so far been less relevant in respect of addressing the objectives of the programme. A special effort should be made to reorient the focus for these sectors. So far, the issues of environment and gender have been very weakly addressed throughout the implementation of the programme. This should be rectified as soon as possible. At the time of this Review a consultant had commenced work on a detailed gender analysis, a gender policy for Ireland Aid Mozambique and a review of the capacity needs of the Ireland Aid Programme in Mozambique. page 21

24 The weakness and lack of capacity of the DPPF was raised by the 2000 review as a crucial issue for the development of the programme. It is the assessment of this review mission that this strengthening of DPPF has to a very high extent been successfully implemented. The Inhambane programme has (as stated in the objectives for the programme) focused on the development of the government institutions and structures, while very little effort has been made to support the development of local organisations, such as local NGOs or local associations. A special effort should be made to stimulate the formation and development of such local organisations. The following detailed assessments of the programme focus on specific issues, which came to the attention of the review team. These issues are highlighted to indicate possible areas for further improvement of the programme. This way Chapter 6 might be perceived as a multifaceted critique of the programme. This, however, is by no means intended and the following comments should not disturb the overall conclusion of the Expenditure Review: that the Inhambane Area Based Programme is a highly successful programme, which to a very large extent has demonstrated that it, through the use of the ABP approach, has been able to fulfil major parts of the highly relevant objectives set up for the programme. 6.2 Overall set-up of the programme The programme is set up within the existing institutional structure of the Provincial Government in the province of Inhambane, focusing on the six sectors/areas, which are prioritised in the GoM's Action Plan for Reduction of Absolute Poverty (PARPA). The programme is well settled within the provincial Government structure, and it is well rooted within the existing structure. It relies fully on the Mozambican structure to implement the programme - with targeted technical support where needed. The programme is contributing substantially to the funding of the provincial development activities, including massive support for capacity building. One important outcome of this institutional set-up has been the successful elaboration by the key provincial directorates of Strategic Sector Plans reflecting long-term development perspectives and priorities for each sector. This has created a first and very important basis for establishing an overview of development ideas and potential in the province, leading the provincial government to elaboration of a ("first generation") overall Strategic Development Plan for the Province of Inhambane (November 2000). The plan is important because it, for the first time, sets out and describes common objectives for the provincial development across sector-priorities and because it has been drawn up and approved by the provincial government, with technical support. This "first generation" development plan forms an important framework for provincial development and thus for the support of the Ireland Aid Area Based Programme. For the "second generation" of such Strategic Provincial Development Plans it is crucial that it should be forwardlooking, focusing particularly on new areas of development within the province (such as, for example, the areas of gas exploitation) and that it should be much more specific in respect of political targets for development. Only this way will the plan be an instrument for overall co-ordination and collaboration among the many sector-specific development initiatives. page 22 public expenditure review report

25 6.3 Relevance of programme objectives The document "Inhambane Provincial Development Programme " forms the basis for the implementation of the programme. The document is clear and well structured, striking a fair balance between quite specific objectives and outputs on one hand and leaving the necessary flexibility for programme implementation on the other. Almost all of the stated programme objectives are highly relevant, both when compared to Mozambican and Ireland Aid s overall objectives and targets. This is an indication that the programme has been based on sound objectives and that it is targeting a number of relevant issues. Out of some 40 stated objectives only three have been questioned: "To explore irrigation possibilities" (very few irrigation projects have proved sustainable in Mozambique and particularly the rehabilitation of major plants has been unsuccessful); "To promote quality seed production" (without further indication of criteria this might not respond to farmers needs or demands); "To improve the transport network to the interior of the province" (further criteria and specifications of the objective should be given, for instance concerning cost efficiency of investments). Apart from this, some overall aspects could have been strengthened in the programme document: Specific programme objectives should have been set up to strengthen the overall focus of the programme on poverty alleviation, clarifying, amongst others, how to prioritise the conflicting interests of poverty alleviation versus economic provincial growth and cost efficiency; Indications should have been given as to how to improve agricultural productivity; Operational objectives should have been set up for rehabilitation of roads. 6.4 Effectiveness, efficiency and sustainability of programme activities The effectiveness of the programme is an indication of the extent to which the stated objectives have been or can be expected to be fulfilled during the defined programme period. In the Area Based Programme in Inhambane effectiveness varies highly from one programme component to another. Among the most successful are the programme components on Public Administration, Water, Education, and to some extent Health. The cost efficiency of the programme is a rough assessment of the achievements made by the programme within a specific area of intervention compared to the costs spent to achieve these results. In the following paragraphs the effectiveness, efficiency and sustainability of the main components of the programme will be assessed sector by sector. page 23

26 6.4.1 Public administration The support for public administration focuses on financial management of funds through the Provincial Directorate of Planning and Finance (DPPF) and on human resources management through the Directorate for Support and Control (DPAC). DPPF plays a very important role in the decentralisation process, as it is the directorate responsible for the transfer and control of money at provincial level. From the very start of the programme DPPF has been a key directorate for programme co-operation and support. Amongst other activities the support has included Equipment and systems (primarily software) for financial management; Training in use of such equipment and systems; Management support; Support to set up and develop a system for Monitoring & Evaluation of activities; Support to develop the quality of the Provincial internal auditing system; Major improvements have been achieved from this support with a well functioning financial management system established within the Provincial Government, technically well equipped and with substantially improved capacity. The outcome has been improved quality of financial reports (to Ireland Aid and to the Governor s Office), smooth financial transactions for the programme, rapidly decreasing financial problems in daily management, and preparedness for change (needed due to a planned restructuring of the national financial management system in Mozambique). Having been achieved over a period of less than 5 years this increase of capacity seems to have been both effective and efficient. Thus, the programme seems to have been able to adequately address one of the four principal concerns expressed by the comprehensive 2000 ABP review (see section 4 above). The ABP accountant in Inhambane supports the DPPF on a daily basis and the programme accountant, who is based in Maputo, maintains a close collaboration with the DPPF, working with the directorate in the province on a quarterly basis. This technical assistance has been an important support to the capacity building process and it is gradually changing from proactive interventions towards technical back up and quality control, thus contributing to the sustainability of the achievements on financial management capacity building in DPPF. DPAC is responsible for human resources development and capacity building. As such the directorate is important for the long-term achievements of the programme. However, the capacity of DPAC is weak and it has only been receiving support from the programme for one year since the start of phase 2. Thus, it is still too early to assess the effectiveness and efficiency of the capacity building of this directorate, but there is no doubt that it is relevant and needed. page 24 public expenditure review report

27 6.4.2 Agriculture The support for agricultural development includes the co-operation with both the Provincial Directorate for Rural Development (DPADR) and VETAID (an NGO aiming at restocking of household animals). DPADR is responsible for agricultural and rural development, targeting support to some of the poorest groups in Inhambane. DPADR is supported in a number of ways, mainly through funding for multiplication of seeds and other plant materials to be distributed to the farmers with the aim of increasing and improving the agricultural production. Priority is given to three districts within Inhambane Province, namely Massinga, Funhalouro and Mabote. The activities of the programme are fully in line with the national policy of MADER. It can, however, be questioned whether DPADR activities within the ABP have so far contributed substantially to sustainable increase of production and living conditions for the family sector farmers in Inhambane. The support to the farmers almost exclusively focuses on distribution of goods (improved plant materials) for free or at highly subsidised prizes to some of the farmers. This distribution is distorting the market and undermining the possible set-up of private initiatives for producing and selling seedlings. It further strengthens the perception that it is the role of MADER to distribute goods for free, even though this implies high costs and a lack of sustainability. Finally, it diverts MADER and DPADR from fulfilling their principal role as policy-makers, ensuring a conductive environment for production and trade of agricultural products, thus contributing to rural poverty alleviation. While production of the improved plant materials implies major costs for MADER and/or the province it is, in fact, unclear whether these goods are useful to and demanded by the farmers. Promotion of income generating activities, such as cultivation of pineapples, and distribution of drought-resistant plant materials, such as cassava-sticks, are strictly in line with national policies for support to farmers in dry areas. It is unclear whether the production of pineapples is profitable to the farmers and whether there is a real demand among farmers for a new cassava variety. It should be added that both pineapples and cassava produced in Mabote district were produced by a private commercial farmer, this way making the multiplication of plant materials more cost-efficient, as compared to if they had been produced by DPADR. It is likely that there will be a high demand for the seedlings of coco-palm hybrids being produced, but it is not anticipated that these seedlings will be sold by MADER at anything near to the real cost of production. It would evidently be much more efficient to sell or distribute the nuts, as local farmers know perfectly well how to geminate and develop the plants. On this basis it is concluded that the effectiveness, efficiency and sustainability of the DPADR activities is doubtful and that a special effort should be made to reassess the outcome achieved by the DPADR programme component and to adjust the programme support to this component accordingly. This possibly should take the form of pilot activities, aiming particularly at support to the poor. The identification of an appropriate approach for support to family sector farmers in order to increase agricultural production is a general national problem for MADER. VETAID is an international NGO. It forms rural organisations (livestock committees) for the restocking of household animals, mainly cattle and goats. It aims to support animal traction and thus to allow for increased cultivation of land, to increase household's income through selling of animals, and to improve animal health through the set-up of basic animal health care service and training. VETAID has co-operated with the Inhambane Area Based Programme since the start of the programme in Funds for VETAID flow directly from IA to VETAID, but negotiations are on going with VETAID to channel funds via DPADR from page 25

28 Restocking of household animals is a long process, but important improvements have been made in that the stock in Inhambane (due to VETAID and other institutions) during the last years has been growing at a rate of 12-15% per year. At present VETAID is co-operating with some 125 families in Inhambane. Animals are supplied at far below the cost price on the condition that the first newborn female animal is redistributed to poor families without animals, this way spreading animal availability to other households. The initial costs of the approach chosen are high compared to the increasing number of animals, and only through a long-term commitment will major results be achieved. Until the private economy has improved considerably the approach seems however to be one of the few which is able to target poor households concerning supply of animals. Once the process is properly institutionalised and the livestock committees are established and rooted in the local society there is a fair prospect for the long-term continuation and sustainability of the project, even with little external technical assistance. Bridge of Health, Restoring the main access road to Maxixe Hospital Inhambane Province, destroyed by the Major Floods of 2000 Photographer: Gerry Cunningham Health The Provincial Directorate for Health (DPS) is supported by the programme within three areas: Investments in infrastructure and others Empowerment of communities to participate in dialogue with the sector services in relation to health issues Institutional and individual capacity building. In addition the programme has supported the DPS to prepare a Strategic Development Plan. page 26 public expenditure review report

29 Based on the support received from the programme substantial improvements have taken place concerning the infrastructure available at provincial level. This includes the availability of vehicles and transportation as well as health post facilities. A major planned provincial investment is the construction of a district hospital with operating facilities in Massinga. It was, however, demanded by MISAU (which is the responsible central government institution for the hospital), that the new construction should be a rural hospital. This would double the construction and equipment costs, and would also increase the running costs. Arguments for basing this hospital in Massinga are convincing. Also, there is a general demand for further support to the district level health posts. Capacity building is increasingly oriented towards in-service training. The capacity development has included "broader" training within areas such as management (also for district managers) and English language training. Apart from the elaboration and approval of the Strategic Development Plan little capacity building has been oriented towards institutional capacity development. Particularly in the sense of focusing on the issues of improved (and documented) structures and systems for the health institutions and for useful incentives for the staff to become involved in the task. Major improvements have taken place concerning quality of services delivered at district level, primarily due to improved equipment, staffing and availability of medicines. Until now individual training has to a large extent been provided in the form of workshops and seminars, which are considered to be less relevant and efficient than in-service training. Sustainability of the results achieved is, to a very high extent, dependent on continued access to the needed funding for recurrent costs Education The education sector strategic plan covers the principal problems for the Provincial Directorate of Education (DPE) which are (in rank of priority) The access of the children to schools (number of classes and distance to the school) The quality of the teaching (education and capacity of teachers, availability of teaching materials) The institutional capacity of the school system (including school furniture and staff training). The co-operation between DPE and the Area Based Programme has addressed these three issues, most of them in a multiple way. Support includes 53 new classrooms that have been constructed since the programme started in 1997, and major areas of the Centre for Training (Education) (Centro de Formacao) in Chicuque as well as for the Resource Centre (Centro de Recursos) have been rehabilitated. In addition major capacity building efforts have been made, mainly in form of individual training of teachers. The focus for this training has been on pedagogical training for teachers who have never before received such training. Another focal point has been the training of adult literacy teachers. Support has been supplied to the DPE concerning the elaboration of a Strategic Development Plan for Education in the province. As to the effectiveness and efficiency of achieving the primary objective of giving improved access to schooling, the critical issue for Mozambique, especially in the short term, is the number and quality of available teachers rather than the construction of new classrooms. This is recognised by the Ministry of Education, for instance in the Education Sector Strategic Plan : "In all but the very long term, however, the IMAP will not be able to produce enough teachers to accommodate the planned increase in enrolments. The CFPPs will therefore continue to recruit candidates with seven years of schooling, and to provide them with a somewhat more extensive pre-service training program in order to equip them for teaching positions.... Until all of the IMAPs are fully on-stream, the Ministry will also continue recruiting new teachers with ten years of schooling and no professional training. Most of these teachers receive some brief professional orientation before they enter the classroom and subsequent in-service training in both residential and distance programs." (Section V, A, 7: Pre-service and in-service training for teachers) page 27

30 Unqualified and under qualified teachers recruited in the past will remain in the classroom for the foreseeable future, and significant improvements in educational quality in all but the very long term therefore require additional training for them. Initiatives that will provide training for this group include the expansion of IAP's current distance education program to include all "Level E" teachers, the introduction of systematic in-service training for newly-recruited teachers with ten years of schooling and no professional training, the establishment of training and resource centres (NUFORPES) in CFFPs and IMAPs, the strengthening of capacity for inspection and instructional supervision at provincial and district levels, the revitalisation of ZIPs, and closer co-ordination between ZIPs and IAP's núcleos pedagógicos." (Section V, B, 2: Provide training for teachers). The ZIP-centres (Zonas de Influencia Pedagogica) are centres with suitable facilities established at the principal school out of a cluster of schools. Their purpose is to allow for teachers with insufficient education from the whole cluster to meet and discuss with and to be trained or guided by more experienced teachers, normally teachers from the school where the ZIP-centre is based. As indicated, one efficient short-term solution to increasing the number of qualified teachers is to focus on the development and functioning of ZIP-centres (Zonas de Influencia Pedagogica) which aim at "in-service" support for teachers with limited pedagogical experience. This will allow for the use of less experienced teachers quickly after they finished basic education. It seems that construction and development of ZIP-centres has not so far received attention or support from the ABP in Inhambane, while the GTZ education project has supported ZIP s in the Province. As seen from the above quotations, development of ZIP-centres is one (and probably the most adequate and efficient) MINED policy approach to solving the crucial problem of lack of sufficiently qualified teachers. This approach is specifically well suited to initiatives at provincial level. The long awaited National Teacher Education Strategy should be ready by August This will clarify a number of issues related to the ZIPs. page 28 public expenditure review report

31 The Cross Roads near Tome, the main road between the districts of Funalhoura and Mobote, Inhambane Province Photograper: Gerry Cunningham Roads The Provincial Directorate for Public Services and Housing (DPOPH) is responsible for the construction and maintenance of minor feeder roads in the provinces. These activities only appeared in the second phase of the Area Based Programme. A consultative forum was held last year with the participation of more than 100 stakeholders to discuss and prioritise which roads to rehabilitate. The forum concluded that priority should be given to the construction of three feeder roads, all three connecting to Funhalouro town. Since then a number of external consultants have been involved in providing technical assistance concerning the relevance of and appropriate design for these roads. The outcome has been that two roads, according to the provincial priority-setting, have been or are about to be tendered for reconstruction: between Funhalouro and Mabote towns (151 km), and between Mabote and Jofane (106 km) towns. For the first of these roads a tender process has been carried out, the best proposal has been selected, but the contract has so far not been signed. For the second road tender documents have been drawn up, but the tendering process has not yet been carried through. For both roads a full rehabilitation has been or will be tendered for, even though the main conclusion from the technical reports of the external consultants is that these roads (because of the costs, their very sparse use and vulnerability to damages caused by new floods) should be only partially rehabilitated. An additional and very crucial aspect of the proposed rehabilitation is that the costs of maintenance for these roads are estimated at between 15% and 20% of the budgeted provincial funds for feeder road maintenance. It is estimated by one of the previous studies that only some 3 cars per day are passing each of these roads and very few people live in the areas serviced by the roads. As to the proposed (and tendered) technology for the road construction it is important that the contracts to be signed with the construction companies specify the construction methods. These methods, to the extent that it is possible, are in line with the Ireland Aid policy on poverty alleviation and involvement of women (the gender issue). The construction of these roads could first of all bring to the local population of the area financial resources earned through labourintensive construction methods. page 29

32 Water on demand Massinga, Inhambane Province Photographer: Alfredo BInda Water and Sanitation DPOPH is also responsible for programme activities in the water and sanitation sector. These activities have focused on supply of drilled boreholes supplied with hand pumps for the rural areas, where the level of water table is often low and existing pumping facilities insufficient. Also water tanks for collection of rainwater have been set up to collect water for domestic use. In addition training has been supplied to technicians and for the mobilisation of the population to maintain the pumps and ensure that proper health precautions are taken when using the pumps. Mobilisation and organisation of the work is subcontracted to the international NGO CARE for part of the province, while DPOPH is responsible for similar activities in the rest of the province. From the quality of the work of one pump visited in the northern part of the province (the area of responsibility of DPOPH) it was concluded that quality of work and mobilisation of the community was high, giving a perspective for long-term sustainability. But no visits were made to the part of the province where CARE is responsible. It might however be questioned whether the construction of boreholes and pumps could have been cheaper and more likely to be sustainable if they had formed part of one of the major programmes for supply of hand pumps to the province. Few activities seem to have taken place within the programme concerning sanitation. page 30 public expenditure review report

33 Warning Sign for Mines Carol Lee De-mining De-mining is presented in the programme document as an integral part of the Area Based Programme (ABP), and there is no doubt that existing minefields affect the development of the province. In practical terms the de-mining programme is managed and implemented by a national entity and is distinct from the provincial government. All other sectors of the ABP are characterised by integration of implementation with the provincial structures. The de-mining campaign does not attempt to clear all mines but (as specified in the ABP's objectives) it opens up access routes to land, rivers, social services, and it clears specified areas for development. It follows priorities set at national and provincial levels. The ADP does not have adequate means or methods to ensure that potential minefields which have been identified but not cleared are clearly and permanently demarcated in the field. This creates the risk that people will, for many years suffer from threat of explosions. De-mining is a slow process but it is slowly achieving major parts of its objective. It is also extremely costly and basing cost efficiency assessments on the land area or number of mines cleared would show a poor return. However, if measured in terms of the disability and deaths that could be incurred without de-mining, the programme might be rated as highly cost efficient. Multiple donors fund the de-mining programme bilaterally and multilaterally via equipment and cash donations. By its nature the programme is not sustainable. The benefits accrued by clearing are generally permanent. However the floods in 2000 caused an unknown quantity of mines to shift and possibly infect new areas of land. page 31

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