The proposed AF will provide direct (unconditional) cash transfers to about 20,000 households in three districts of Mozambique severely affected by the drought caused by El Niño phenomenon.
In addition, the Parent Project will be restructured to (i) expand labor-intensive public works to urban and rural areas affected by the current economic and climatic crisis; (ii) revise the results framework to adjust targets and indicators added at the PDO and intermediate outcome level to reflect the results expected from the proposed AF and the restructuring; and (iii) extend the closing date of the project to enable a timely implementation of the labor-intensive public works activities and the new activities under the AF.
The PDO will remain the same. The results framework has been updated to reflect the additional beneficiaries and new indicators have been added at PDO and intermediate levels to reflect the objectives of the AF. Finally, project costs, disbursement estimates and FM arrangements have been adjusted accordingly.
Change in Implementing Agency
Yes [ ] No [ X ]
Change in Project's Development Objectives
Yes [ ] No [ X ]
Change in Results Framework
Yes [ X ] No [ ]
Change in Safeguard Policies Triggered
Yes [ ] No [ X ]
Change of EA category
Yes [ ] No [ X ]
Other Changes to Safeguards
Yes [ ] No [ X ]
Change in Legal Covenants
Yes [ ] No [ X ]
Change in Loan Closing Date(s)
Yes [ X ] No [ ]
Cancellations Proposed
Yes [ ] No [ X ]
Change in Disbursement Arrangements
Yes [ ] No [ X ]
Reallocation between Disbursement Categories
Yes [ ] No [ X ]
Change in Disbursement Estimates
Yes [ X ] No [ ]
Change to Components and Cost
Yes [ X ] No [ ]
Change in Institutional Arrangements
Yes [ ] No [ X ]
Change in Financial Management
Yes [ ] No [ X ]
Change in Procurement
Yes [ ] No [ X ]
Change in Implementation Schedule
Yes [ X ] No [ ]
Other Change(s)
Yes [ ] No [ X ]
Development Objective/Results
PHHHDO
Project’s Development Objectives
Original PDO
The objective of the project is to provide temporary income support to extremely poor households and to put in place the building blocks of a social safety net system.
Change in Results Framework
PHHCRF
Explanation:
The additional beneficiaries and new activities supported by the AF are reflected in the results framework. A set of PDO-level and intermediate indicators have been added to monitor the progress of the main activities proposed under the AF. See annex I for details.
The Recipient shall, not later than 60 days after the Effective Date, develop and adopt, in form and substance acceptable to the Association and following the guidelines set forth in the Project Implementation Manual, a grievance redress mechanism that encompasses transparent, timely and fair procedures that will allow people potentially affected by the Project to peacefully settle any possible grievance and will ensure that all complaints received from beneficiaries and other interested stakeholders related to any activity under the Project, are properly and timely addressed.
August 10, 2017
Once
Conditions
PHCondTbl
Source Of Fund
Name
Type
IDAW
Implementation manual
Effectiveness
Description of Condition
The Additional Conditions of Effectiveness consist of the following, namely that the Direct Cash Transfers Manual have been adopted by the Recipient in a manner satisfactory to the Association.
Source Of Fund
Name
Type
IDAW
Payment Agent
Disbursement
Description of Condition
No withdrawal shall be made for under Categories (2) with respect of each selected District, until the pertaining Payment Agent referred to under Section I.C.2 of Schedule 2 of the Financial Agreement for each such District shall have been hired in a manner satisfactory to the Association.
Risk
PHHHRISKS
Risk Category
Rating (H, S, M, L)
1. Political and Governance
Moderate
2. Macroeconomic
Substantial
3. Sector Strategies and Policies
Moderate
4. Technical Design of Project or Program
Substantial
5. Institutional Capacity for Implementation and Sustainability
Substantial
6. Fiduciary
Substantial
7. Environment and Social
Moderate
8. Stakeholders
Substantial
9. Other
Low
OVERALL
Substantial
Finance
PHHHFin
Loan Closing Date - Additional Financing ( Social Protection Project - Additional Financing - P161351 )
The Social Protection Project (P129524) closing date would be extended from June 30, 2018 to December 31, 2020 to enable implementation of all activities under the Social Protection Project and the new component on Direct Cash Transfers in response to El Niño phenomenon.
Ln/Cr/TF
Status
Original Closing Date
Current Closing Date
Proposed Closing Date
Previous Closing Date(s)
IDA-5992
Effective
30-Jun-2018
30-Jun-2018
31-Dec-2020
Change in Disbursement Estimates
(including all sources of Financing)PHHCDE
Explanation:
The US$10 million will be disbursed over a period of 18 months and as reflected in the following table
Expected Disbursements (in USD Million)(including all Sources of Financing)
The main adjustments to the Project components would be to add a third component to the Project focusing on implementation of direct cash transfers in selected provinces and districts affected by El Niño phenomenon.
The majority of the funds from the AF would be dedicated to direct (unconditional) cash transfers in response to El Niño. Under a new Component 3: Direct Cash Transfers (US$7.5 million) essential support would be provided to households affected by the drought through direct cash transfers. Cash transfers would be made every two months for a period of 12 months to approximately 20,000 households. Monthly benefits would amount to MZN2,500 (approximately US$35). Beneficiary households will receive the cash transfers, to progressively recover their levels of income and productivity prior to the crisis. During the intervention, beneficiaries will be registered in the social registry of beneficiaries and after the period of 12 months of Direct Cash Transfers, households could then be directed to other programs (PASP, PASDPSSB or PSSAS) according to those programs own entry criteria.
However, implementing an unconditional cash transfers operation on a large scale will also require consolidating and adapting some of the delivery systems (registry of beneficiaries, payment system, Management Information System (MIS), etc.) and strengthening INAS’ institutional capacity through the recruitment of additional experts at central and local level. Therefore, US$2.5 million of the AF funds would also be used for Component 1 (institutional strengthening), alongside some funds from the parent Project, with the objective of continuing to support the development and roll out of basic delivery systems including: (i) a social registry of beneficiaries; (ii) a Management Information System; (iii) a payment system; and (iv) a grievance and redress mechanism. The additional funds to be allocated to Component 1 will also be dedicated to capacity building of INAS’ staff at central and local level and to strengthen the PIU through the recruitment of additional consultants that would enhance INAS’ implementation capacity.
In addition, the Project will be restructured to expand Component 2 activities (labor-intensive public works) to additional urban and rural areas. The expansion will be financed through existing Project funds (not the AF) and will be done through an expansion of the Project roll out plan to an additional one urban municipality and 21 rural districts, reaching an additional 21,000 households. The 21 rural districts and one urban municipality to which the Project will be expanded are currently supported through Government funds, and the project will just top-up the current benefit amounts to compensate for annual inflation.
The benefit amount for Component 2 (MZN650 per beneficiary per month) will be gradually increased every year. In 2017, the benefit amount will be set at MZN1,000 per month and each year it will be increased by additional MZN200 (MZN1,200 in 2018 and MZN1,400 in 2019). The Government is currently financing the implementation of labor-intensive public works activities in 21 districts and one urban municipality using Government funds. As, due to the financial crisis, the budget for social assistance has been frozen, the Government has no financial capacity to increase the benefit amount for the program in these 21 districts and one municipality. Through the restructuring, the Project will assume the difference between the MZN650 currently paid by the Government and the new benefit amounts.
Current Component Name
Proposed Component Name
Current Cost (US$M)
Proposed Cost (US$M)
Action
Institutional strengthening and capacity building to support the consolidation of the National Basic Social Security Strategy
Institutional strengthening and capacity building to support the consolidation of the National Basic Social Security Strategy
13.05
15.55
Revised
Labor-intensive Public Works
Labor-intensive Public Works
36.95
36.95
No Change
Direct Cash Transfers
0.00
7.50
New
Total:
50.00
60.00
Other Change(s)
PHHHOthC
PHImplemeDel
Implementing Agency Name
Type
Action
Change in Implementation Schedule
PHHCISch
Explanation:
Due to the Additional Financing and the extension of the closing date for the project, the roll out plan for the implementation of the Labor-Intensive Public Works component was modified.
Appraisal Summary
PHHHAppS
Economic and Financial Analysis
PHHASEFA
Explanation:
The nature of the project makes it difficult to conduct traditional cost-benefit analysis. In particular, valuing the benefits a poor household accrues from increased and stabilized consumption is not a straightforward exercise. For this reason, we chose to conduct an ex ante analysis that can provide some rough estimates of the expected impacts on poverty and inequality and help fine-tune specific design aspects that can enhance these impacts.
Simulations were done to implement the AF in three drought-affected districts: Mabalane, Massingir and Chokwe. In these three districts, the duration of the intervention would be 12 months and each household would be enrolled for only one year. Each household would receive MZN2,500 per month during the 12 months of the intervention. Based on these parameters the expected impact would be the following:
Table 2: Estimated impact of AF
Benefit amount
No. of Beneficiaries
Poverty Rate Incidence
Poverty Gap Index
Total Budget Spent in US$
MZN2,500
20,000
-12.20%
-7.98%
7,500,000
Similar simulations were carried out for the restructuring of the project. Taking into account the new roll out plan described in Table 1 (paragraph 33).
Households in rural areas would participate for four months per year in public works, while households in urban areas participate for six months per year and all would stay for three years in the program. The benefit amount would be gradually increased starting from 1,000 MZN in 2017, 1,200 MZN in 2018 and 1,400 MZN in 2019. The poverty impact is given in Table 3 below.
Table 3: Estimated impact of Component 2
Benefit amount
Number of beneficiaries
Poverty Rate Incidence
Poverty Gap Index
Poverty Rate Incidence (Beneficiaries)
Poverty Gap (Beneficiaries)
Gradual Increase (MZN1,000; 1,200 and 1,400)
121,000
-1.18%
-0.59%
-37.91%
-19.77%
Rationale for public sector financing: The Project has the potential to (i) respond to the prolonged drought caused by the El Niño phenomenon in various parts of the country and (ii) strengthen the social protection system by linking the emergency response with a more resilience-oriented approach. In addition, the AF complements World Bank engagement with the Government of Mozambique to increase the resilience of communities to natural disasters by complementing activities implemented under the Social Protection Project (P129524) and the Emergency Resilient Recovery Project (P156559). Public financing is crucial to cover the financing gap for the emergency response to El Niño phenomenon that has affected over 1.5 million people in several provinces of the country. Public financing would also strengthen the social protection system through the development of adequate delivery systems that would allow in the future to rapidly scaling up social protection interventions in the event of a crisis. Private sector is only expected to be engaged in supporting the development of delivery systems (payment system for instance), and therefore cash transfers to respond to urgent needs of people affected by the drought, and not covered by other humanitarian or development actors, will need to be financed by the public sector.
Value added of Bank's support. The World Bank is funding the Social Protection Project (P129524) currently under implementation to put in place the building blocks of a social safety net system. The AF will partially build on the achievements of this Project. Furthermore, the World Bank has gained a large experience in Mozambique and other countries in the Region supporting vulnerable populations to recover from droughts and other climatic events and to increase their resilience, including the Social Safety Net Project (P160554) in Madagascar or the Drought Recovery and Resilience Project in Malawi (P161392).
The unprecedented scale of unmet needs requires an additional financial and institutional support as the financial crisis and El Niño event have clearly overwhelmed national response capacities in Mozambique. World Bank’s global expertise in this type of project gives the Government of Mozambique assurance that the activities being planned are comprehensive, pragmatic and will yield results in terms of responding to the urgent needs of populations affected by the drought and building an adaptive social protection system.
Technical Analysis
PHHASTA
Explanation:
The following technical aspects are noteworthy related to the proposed AF:
Geographical targeting. The “Direct Cash Transfer” component would be implemented in three districts, selected among the districts most affected by the drought caused by the El Niño phenomenon: Mabalane, Chokwe and Massingir, all of them in Gaza province. The geographical areas for the AF have been selected jointly between the MGCAS, INAS, INGC and the World Bank because (i) they were among the priority districts targeted for assistance by the INGC, and (ii) they all belong to the same province and are relatively close to each other, thus facilitating the expeditious implementation of the direct cash transfer program.
Household targeting. The INGC has determined, for the purpose of distributing food and first necessity items during the humanitarian phase, the number of households in each district that would be eligible for assistance. All beneficiaries selected by INGC for the humanitarian response in the selected districts will be eligible for the project and for the Direct Cash Transfers. The actual list of households in each district was established by local authorities, under the overall supervision and approval of the district administrator (the higher government representative at the district level). Those lists of households will be made available by the INGC to INAS, together with the digitalized lists of the same households established by the NGOs in charge of food distribution. The enlisted households will then be enrolled under the direct cash transfer component at the start of the program. In each of the three districts, all the households previously targeted by the district authorities for assistance by INGC will be selected to receive the cash transfers. The total number of households in the three districts amounts to 20,000. The three selected districts have very high poverty rates (Mabalane: 40 percent; Massingir 92 percent and Chokwe 44 percent), so it is expected that a large number of beneficiary households of the direct cash transfer intervention could be eligible as well for social assistance programs after this intervention.
Beneficiary enrollment. Beneficiary households would be registered at INAS social registry of beneficiaries and enrolled in the program by the local representatives of INAS based at the INAS delegation in Chokwe. For the registration of households in the social registry of beneficiaries, socio-economic data will be collected for all of them. Beneficiaries will be given a beneficiary card or similar instrument (SIM card, etc.) that they will need to present to verify their identity on the payment day. INAS staff will also be present on payment day, and help with complaints and updates in family situations (e.g. if a beneficiary household leaves the area, etc.). After the intervention, those beneficiaries eligible for PSSB, PASP, PASD or PSSAS could be enrolled in these programs.
Cash payments will be made bi-monthly to the selected household (whenever possible to women) through a payment agency. Payments would be made at a location close enough to the residence of the beneficiary households (not more than one hour on foot). A payment agency will be contracted through a limited bidding process and is expected to sign a contract with INAS at the start of the program.
Communication and beneficiary outreach would be a key activity. They would aim at not only informing the general public and the beneficiaries of the program and its social accountability so that beneficiaries and other stakeholders know their rights and responsibilities in participating in the program. The outreach would also transmit basic messages regarding human development (nutrition, school attendance, parenting, health/vaccination etc.), financial planning, and productive investments. These communication activities are an important part of project implementation as they will ensure that the program produces a value added beyond the smoothing of consumption through the cash transfers. INAS will develop a specific communication strategy and will motivate and empower the beneficiaries to become active agents of their well-being.
Controls and Accountability. A simple complaint and grievance redress mechanism will be developed to ensure that the beneficiaries have channels for any eventual grievances, particularly on payment day.
Social Analysis
PHHASSA
Explanation:
The project is designed to address various social issues faced by poor Mozambican households, including: (i) insufficient capacity to cope with idiosyncratic climate or economic shocks; (ii) gender inequality; (iii) little access to basic social services such as education, sanitation, health, water and energy; and (iv) lack of access to financial resources and credit facilities. The AF is expected to provide eligible households with timely and predictable cash transfers that would allow them to smooth their consumption and invest in productive assets that are likely to have been lost during the emergency period.
Initial social and environmental screening of AF activities shows that the project is not expected to generate significant adverse social impacts, but rather enhance positive social benefits to the beneficiary districts, including to targeted local and poor communities and families.
The AF will invest in social responsibility and participation by putting in place a grievance redress mechanism for the AF to ensure that the beneficiaries have channels for any complaints, particularly on the targeting of the project and on payment day. In addition, INAS would ensure intensive communication and information about the program implementation features so that beneficiaries and other stakeholders know their rights and responsibilities in participating in the program and know the way forward after the response.
The parent Project is classified as a category-B project. Land appropriation and restriction of access to resources or livelihoods is not expected, as the small-scale public works under Component 2 are likely to take place on existing roads or within existing infrastructure, hence leading to little-to-no physical resettlement in rural and urban areas. However, to ensure proper handling of land acquisition and/or loss of assets or access to assets due to project related activities, the World Bank operational policy on Involuntary Resettlement (OP/BP 4.12) is triggered. Moreover, because details of the public works activities are unknown at this stage, and to ensure viable mitigation measures are adopted for a timely and effective management of any such impacts, the Borrower prepared a Resettlement Policy Framework (RPF) that sets forth the principles the Borrower will follow to ensure compliance with OP 4.12. The RPF, was elaborated based on extensive public consultation and a fully participatory approach that ensure that all key stakeholders, at central, provincial and local levels were duly consulted and their concerns considered in the design of the RPF. The restructuring of the Project does not change this part of the appraisal summary.
Beyond safeguards, the project, through Components 1, 2 and 3, aims at mainstreaming gender dimensions to ensure that fair and transparent mechanisms are put in place to select and compensate the beneficiary districts, poor households and individuals (common targeting system, single registry of beneficiaries, systematic payment system, communication campaign to ensure effective outreach, etc.).
According to the census data, the share of female population in the three targeted districts for the additional financing is 57 percent, which suggests that an important share of the project beneficiaries will be women. This is due to the fact that a large number of men in these three districts migrate to South Africa to work in the mining sector. From the lists already obtained by INAS (provided by INGC) for the humanitarian response, 56 percent of the selected households are headed by women. As the main objective of the cash transfer is to smooth consumption and to invest in the recovery of productive assets, the Project will deliver the cash, when possible, to the women in the households as there is evidence that women tend to manage food resources at household level better than men and prioritize spending on children welfare.
The first years of implementation of the labor-intensive public works component have shown it to be an effective mechanism to reduce gender inequalities in rural and especially urban areas. The share of female headed household supported by the project is 54 percent considering urban and rural areas as a whole, but it reaches 76 percent in urban areas. The adoption of a new modality of public works (inclusive public works, funded by a Rapid Social Response-Trust Fund) substituting infrastructure-oriented public works by the implementation of community services has given very good results in terms of female participation (over 90 percent of beneficiaries were women) and services directly benefiting vulnerable women (community daycare centers, nutrition and vaccination campaigns, family planning and birth delivery in clinics, etc.). The Government and the World Bank agreed to integrate this modality of inclusive public works under the restructuring, which is likely to reduce gender inequalities further.
Environmental Analysis
PHHASEnvA
Explanation:
The Social Protection Project has been categorized as B in relation to social and environmental safeguards and has triggered two safeguard categories: Environmental Assessment (OP/BP 4.01) and the Involuntary Resettlement Policy (OP/BP 4.12). Considering the expected positive impacts of the project on the environment and gender, as well as its potentially minor negative impacts through, for example, small scale infrastructure rehabilitation, the risk rating for safeguards is rated as moderate.
The Additional Financing does not change this part of the Appraisal Summary. The proposed AF is modest in scope and the safeguards category B rating will remain unchanged. No new environmental risks are expected to arise and the AF is not foreseen to trigger any new safeguard policies. The project’s ESMF and was revised and re-disclosed to cover this AF.
The restructuring of the Project will not bring any changes to social and environmental safeguards as the restructuring will only scale up activities in new districts, but the menu of public works will remain unchanged. During the first years of implementation of the parent project, safeguards implementation has gradually improved. Currently, a full time safeguards specialist is dedicated to the project and gets assistance from two additional INAS staff in charge of monitoring safeguards implementation at the local level.
Risk
PHHASRisk
Explanation:
The overall risk remains Substantial. The Fiduciary risk is Substantial as INAS has still not outsourced the payment of cash transfers to beneficiaries. As a mitigation measure, Government and the World Bank agreed that a payment agency will be contracted through a limited bidding process and is expected to sign a contract with INAS at the start of the program. As a complementary mitigation measure, INAS and the World Bank agreed that the project will hire an internal auditor to be based at central level and a financial management specialist and an accountant to be based at INAS’ delegation level to make sure that payments and project related expenses are properly executed and accounted for. The risk related to the Technical design of the Project is substantial, because even though the AF only introduces a component of direct cash transfers, it adds an additional layer to the tasks to be carried out by the implementing agency. As a mitigation measure, a group of consultants including FM and procurement specialists, payments specialists, communication specialists and social workers will be recruited to help with implementation of activities.
Macroeconomic, Institutional Capacity for Implementation and Sustainability and Stakeholders risks remain Substantial. The Macroeconomic risk relates to the country still emerging from the recent political and economic crisis that has put to the test many of its institutions for good governance and accountability. Institutional capacity remains weak as has been experienced through the implementation of the parent Project. Delivery systems are still not fully operational, implementation processes are poorly decentralized and INAS’ human resources at the central level lack support in specific areas like M&E. Mitigation measures to this risk will be (i) allocate additional funds to the institutional strengthening component; (ii) define and recruit a team of specialists to support the implementation of the AF; (iii) concentrate the direct cash transfer intervention in only three districts; and (iv) keep the technical design of the direct cash transfer component as simple as possible. The risk for Stakeholders relates to funding being provided by other donors (DFID and WFP) that could result in fragmented interventions that in turn would entail a risk of duplication. To mitigate that risk, INAS and the World Bank are carrying out coordination meetings with other actors involved in the emergency and the post-emergency response including INGC, DFID, WFP, World Vision and CARE.
