Participation of beneficiaries and social accountability will be key aspects of program implementation. Activities will be implemented with intensive participation and constant consultation of and feedback by beneficiary households. A grievance and redress mechanism will be developed and adopted 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.
-
Procurement arrangements remain the same as for the Parent Project. Clearance has been sought from the Chief Procurement Officer for the use of the Procurement and Consultants Guidelines in lieu of the Bank’s New Procurement Framework, which was granted on December 12, 2016. The procurement capacity of INAS is still adequate to implement the project and will not be impacted with the availability of additional funds from the AF as these funds will mainly be used for non-procurable activities related to providing cash transfer to affected populations.
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Financial management arrangements. The project’s FM arrangements remain adequate and in general not expected to change in the short-term; it will continue to make use of the same Designated Account (DA) in the Banco de Moçambique for receiving from IDA after which funds will be transferred to the government’s single treasury account (CUT). To facilitate disbursements and documentation of expenditures, the reporting on the use of funds will take place on a monthly basis through the submission of Statement of Expenditures. Quarterly Interim Financial Reports (IFR) will be submitted within 45 days of the end of each calendar quarter in same format being submitted for the original project. Project audit reports will be submitted to IDA within six months of the end of the year and the audits will carried out in accordance with International Standards on Auditing, by the Supreme Audit Institution, the Tribunal Administrativo, and incremental costs of the audit will need to be set aside by the project
Figure 2. The Flow of IDA Funds
World Bank
Banco de Mozambique
DA (USD)
INAS Expenditure Units (both Central and Provincial)
CUT
(MZN, USD, EUR, ZAR)
Suppliers/Service Providers
Financial Institution Agent
Direct Payment upon Request of the INAS
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Activities under Component 1 of the project will be funded directly from INAS headquarters, and INAS will make these payments from the Single Treasury Account (CUT) through the e-SISTAFE. The necessary supporting documentation of project expenditures under this component will be submitted to INAS’s Department of Audits and Finances (DAF), which will then process payments to be made directly to the providers of goods and services financed by this Credit.
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Component 2 will finance the cash benefits paid to participants in the labor-intensive public works program, as well as associated goods and services, and the training and workshops provided as complementary activities. INAS will make these funds available to its delegations and to the district administrations through e-SISTAFE
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Component 3 will finance the cash benefits paid to participants and the payments of direct cash transfers to beneficiaries will be made by a financial institution acceptable to IDA. Funds will be transferred from CUT through e-SISTAFE to a payment agent for each district and municipality of a selected financial institution on the basis of quarterly activity plans prepared by INAS. This payment agent will have overall responsibility for paying the beneficiaries and the providers of the goods to be used in the public works. The details of the duties and responsibilities of the selected payment agent will be documented in the Project implementation manual.
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Despite the decentralized and complex nature of INAS’ FM system, and although some challenges remain, particularly at district level, INAS’s FM capabilities continue to show some improvements in terms of technical quality, planning, time management and coordination with shared responsibilities among all units, from central, provincial and district.
-
Procurement arrangements remain the same as for the parent Project and will use the Procurement and Consultants Guidelines, in lieu of the Bank’s New Procurement Framework. The procurement capacity of INAS is still adequate to implement the project and will not be impacted with the availability of additional funds from the AF.
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Safeguard arrangements. The AF will finance unconditional cash transfers and no safeguards impacts are expected to be associated with this intervention. An Environmental and Social Management Framework (ESMF) and a Resettlement Policy Framework (RPF) have been developed by the Borrower that include an environmental and social checklist as well as an environmental and social screening form to be used by all local governments to screen subprojects and develop site-specific safeguards instruments (ESIA/ESMP and/or RAP14) prior to their implementation. Moreover, the ESMF provides also environmental and social clauses to be included in bidding documents as well as in contractors contracts for consideration during project implementation. The essence of both the ESMF and RPF has been captured under the Project operations manual that includes a negative list of activities, materials and inputs that could not be financed under the project. The client has recruited a full-time Safeguards specialist to provide support to safeguards monitoring and implementation for the Project. Two Government-staff focal points have been trained at the implementing agency and they are in charge of training the districts officers where the project is implemented and to monitor the proper use of the safeguards instruments developed under the project.
Annex : Revised estimate of Project Costs
Mozambique Social Protection Project –Summary of Project Costs
|
Project Component
|
Current Amount (US$ million)
|
AF (US$ million)
|
1. Institutional Strengthening
|
13.1
|
15.6
|
1.1. Systems and capacity for the ENSSB
|
4.6
|
4.6
|
1.2. Capacity building for the PASP
|
8.5
|
8.5
|
1.3 Capacity Building for Direct Cash Transfer response
|
0
|
2.5
|
2. Labor-intensive public works
|
36.2
|
36.2
|
2.1. Labor-intensive public works in rural areas
|
22.8
|
22.8
|
2.1.1 Complementarity activities rural areas
|
1.7
|
1.7
|
2.2. Labor-intensive public works in urban areas
|
11.1
|
11.1
|
2.2.1 Complementary activities in rural areas
|
0.6
|
0.6
|
3. Direct Cash Transfers
|
0
|
7.5
|
Total baseline costs
|
49.3
|
59.3
|
Contingencies
|
0.7
|
0.7
|
Total project costs
|
50
|
60
|
Annex : Simulated Impacts of Additional Financing (AF) and Restructuring15
Additional Financing
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The AF would respond to the drought through the provision of direct cash transfers in 3 districts in the southern regions of the country. The AF will target three districts, Mabalane, Massingir and Chokwe, which have been severely hit by the El Niño. Each beneficiary household will receive the direct cash transfers for 12 months starting in 2017.
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Simulations have been conducted by using different levels of benefit amount and total number of beneficiaries:
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Scenario 1: 16,500 households are targeted in these three districts and receive MZN2,000 per month for 12 consecutive months. 16,500 households represent the number of beneficiary households selected by INGC for the humanitarian response in these three districts.
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Scenario 2: 16,500 households are targeted, each receiving MZN2,500 per month for 12 consecutive months. 16,500 households represent the number of beneficiary households selected by INGC for the humanitarian response in these three districts.
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Scenario 3: 20,000 households are targeted in these three districts where each household receives MZN2,000 for 12 consecutive months. This scenario increases the number of beneficiaries to 20,000 to try to maximize the amount of the AF (US$10m).
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Scenario 4: 20,000 households are targeted in these three districts where each household receives MZN2,500 for 12 consecutive months. This scenario increases the number of beneficiaries to 20,000 to try to maximize the amount of the AF (US$10m).
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The impact of these transfers on poverty rates and poverty gap index is given in Table 1.
Table 1: Poverty Impact of Emergency Funds
|
No. of Beneficiaries
|
Poverty Rate Incidence
|
Poverty Gap Index
|
Total Budget Spent (US$)
|
Scenario 1: Benefit MZN2,000
|
16,500
|
-10.18%
|
-5.99%
|
4,950,000
|
Scenario 2: Benefit MZN2,500
|
16,500
|
-11.03%
|
-6.75%
|
6,187,500
|
Scenario 3: Benefit MZN2,000
|
20,000
|
-11.35%
|
-7.04%
|
6,000,000
|
Scenario 4: Benefit MZN2,500
|
20,000
|
-12.20%
|
-7.98%
|
7,500,000
|
-
Table 1 shows that the impact on poverty increases as we increase the benefit amount and the number of beneficiaries. In scenario 1 and 2, the number of beneficiaries is kept constant and only the benefit amount is raised from MZN2,000 to MZN2,500. The impact on poverty rate and poverty gap index increases by almost 1 percent. However, if the benefit amount increases from MZN2,000 to MZN2,500 and coverage from 16,500 households to 20,000 households, the poverty rate decreases by more than 1 percent and so does the poverty gap index as compared to the scenario with benefit amount of MZN2,000 covering 16,500 households.
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The recommended option is the fourth scenario where each household receives MZN2,500 per month for 12 consecutive months and the total coverage in the three districts is 20,000 households. Apart from the poverty impact, the amount represents 70 percent of the food basket and hence a significant support for households that need to recapitalize their productive assets after two consecutive years of severe drought.
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The fourth option is also fiscally feasible as it maximizes the 10 million budget with 25 percent of the administrative costs and a maximum impact on poverty.
Project restructuring
-
The Social Protection Project will be restructured to support the scale up of existing labor-intensive public works and activities in urban and rural areas affected by the current economic and climatic crisis. The Project will be scaled up to additional one urban municipality and 21 rural districts, reaching additional 21,000 households.
-
Two scenarios were simulated having the same geographical (districts and municipalities) and individual coverage (number of beneficiaries) and roll out plan, but different benefit amounts.
-
For both scenarios, the proposed roll out plan is the following:
Table 2. Proposed roll out plan for Project Restructuring
|
2013
|
2014
|
2015
|
2016
|
2017
|
2018
|
2019
|
Rural districts
|
0
|
0
|
37
|
37
|
70
|
70
|
70
|
Urban districts
|
0
|
0
|
3
|
3
|
6
|
6
|
6
|
Total
|
0
|
0
|
21,000
|
21,000
|
121,000
|
121,000
|
121,000
|
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Scenario 1: benefit amount equal to MZN650 per month. PASP beneficiaries receive MZN650 per month for four months in rural areas and for six months in urban areas every year. The total number of beneficiaries starts with 22,000 in 2016 but will increase to 121,000 households starting 2017.
-
Scenario 2: increased benefit amount (Proposed Scenario). Keeping the same beneficiary numbers and roll our plan as in scenario 1, PASP beneficiaries’ benefit in scenario 2 will gradually increase from MZN650 in 2016, to MZN1,000 in 2017, to MZN1,200 in 2018 and to MZN1,400 in 2019.
-
The impact on poverty rates and poverty gap index for both scenarios is given in Table 3.
Table 3: Poverty Impact of Additional Financing
Benefit amount
|
Poverty Rate Incidence
|
Poverty Gap Index
|
Poverty Rate Incidence (Beneficiaries)
|
Poverty Gap (Beneficiaries)
|
MZN650
|
-0.54%
|
-0.30%
|
-20.86%
|
-11.56%
|
Gradual Increase (1,000, 1,200 and 1,400)
|
-1.18%
|
-0.59%
|
-37.91%
|
-19.77%
|
-
As shown in Table 3, if we increase the amount of benefits gradually while keeping the number of beneficiaries constant, there is a higher impact on depth and level of poverty where poverty rate decreases by 1.18 percent as compared to 0.54 percent. Similarly, the severity of poverty represented by Poverty Gap Index, goes down by 0.59 percent as compared to 0.30 percent.
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Other than the macro impact on poverty, the higher benefit amount provides better support to households on a micro level as well. From the household survey data, the average monthly consumption of poor households is MZN2,719. The benefit amount of MZN650 only covers 24 percent of the total consumption of poor households whereas in the proposed plan, the higher benefit amount of MZN1,000, MZN1,200 and MZN1,400 covers 27, 44 and 52 percent respectively of the total household consumption of poor households. To get a deeper understanding of what that amount accounts for, it is important to look at the amount of money required to buy the minimum food basket. In this case, MZN650 is enough to buy only 18 percent of the food basket for a household with an average size of 4.5 members. In comparison, a higher benefit amount of MZN1,000 – 1,400 will cover approximately 28-39 percent of the food basket. With MZN650, the support to households is almost insignificant so the recommended option is to gradually increase the benefit by MZN200 per year starting at MZN1,000 in 2017.
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