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IV. Appraisal summary.

A. Economic and financial analyses

76. Project preparation involved the completion of a detailed report on the "Financing and Delivery of HIV/AIDS Prevention, Treatment, and Social Support Services in Botswana: An Economic Analysis." The report summary is attached as Annex 9. The report findings informed project preparation and formed much of the basis of the Bank's policy dialogue. The key messages of the report revolved around four areas, as follows:

77. The financing gap for the HIV/AIDS response will increase - Mapping of the available resources for HIV/AIDS response against the requirements as defined in the National Strategic Framework (NSF) indicates a significant gap, even if NSF resource requirements are revised downwards by 15 percent. By 2008/09, it is estimated that this gap would reach US$221 million. Indeed, by then if NSF were fully funded, it would account for about 5 percent of GDP and about 15 percent of government spending, a significant expenditure program that would require serious fiscal space implications. The report analyses various alternatives to increase fiscal space for the scaled-up HIV/AIDS response--including improved revenue effort, increased external grant aid, and new borrowings--and concluded that improved expenditure efficiency would be the best approach. Towards this end, the report focused on identifying means to increase the allocative and implementation efficiency of the HIV/AIDS response.

78. A thorough understanding of the nature of the epidemic should inform and define the appropriate response--Unlike the HIV/AIDS epidemics in other parts of the world which are largely concentrated and have seen falling prevalence, the southern Africa HIV/AIDS epidemic is unique in that it is generalized, i.e., it is driven primarily by the sexual behavior in the general population. A marked characteristic of the southern Africa epidemic is the high prevalence of multiple concurrent sexual partnerships which, in turn, is fueled by high population and labor mobility, high income inequality, and gender dynamics that often sees the exploitation of women. Increasing research about this type of epidemic indicates that it requires large-scale fundamental changes in social norms and sexual values and practices. In terms of appropriate interventions, such an epidemic underscores the importance of social and community change processes through more aggressive and widespread local responses. Narrow, highly medicalized technical interventions are not adequate to deal with the generalized epidemic that is now ravaging Botswana.

79. Allocative and technical efficiency of the response should be improved - Government spending on HIV/AIDS prevention is only 7 percent, compared to the 35 percent UNAIDS "norm" as gathered from various African countries. Li contrast, Government spending on treatment and care is a hefty 59 percent, compared to a 38 percent UNAIDS "norm". Optimal allocation, as demonstrated in Africa-wide HIV/AIDS modeling (Annex 9), shows that a combined response of prevention and treatment would result in the highest proportion of infections and deaths averted. For this reason, the report proposed that the Bank project be heavily oriented on prevention activities, and specifically through the local community-level response. The report also identifies several measures to improve "value-for-money" in spending, including changes in drug procurement, e.g., greater use of generics, use of fixed dose combinations, and timely payment of suppliers to prevent expensive emergency procurement; labor-saving mechanisms in antiretroviral treatment; and better integration of HIV/AIDS services with family planning and maternal and child health, and tuberculosis control; and greater emphasis on new interventions including male circumcision and a revived family planning program.

80. Stronger focus on cost-effective prevention and improved treatment adherence are

required to contain the epidemic--As the HIV/AIDS epidemic matures, and as the ART program reaches full coverage, Botswana needs to face new challenges in prevention occasioned by disinhibition behavior, i.e., the false sense of security that patients on treatment feel, leading them to resume risky sexual behavior. Thus, Botswana needs to deal with prevention for uninfected as well as infected individuals, including those on antiretroviral treatment. For those on treatment, Botswana also has to deal with the challenge of making sure that they adhere to their drug regimen; failure to do so engenders drug resistance with serious fiscal implications due to the need to provide much more expensive second-line drugs.

B. Technical

81. The BNAPS Project is built on the principles of internationally-accepted best practices for HIV/AIDS programs, taking into account the country's socioeconomic circumstances and reliable the emerging body of detailed epidemiological data becoming available. It is also built upon the experiences of the MAP program. The comparative advantage of different sectors and the community in the national response to HIV/AIDS is well established. The project also places strong emphasis on strengthening institutions, learning and innovation, and an overall performance-based approach.

C. Fiduciary

Financial Management

82. NACA will be strengthened to meet the challenges of the multi-level coordination demands of the Project. Key staff at NACA, line ministries and District Councils will be trained in World Bank financial management and disbursement procedures. The Operational Manual outlines, inter alia, the implementation, organizational, administrative, monitoring and evaluation, financial management, disbursement, and procurement arrangements for purposes of implementation of the Project and Subprojects, including the eligibility criteria and procedures for extending Subproject Grants.

83. The Project will hire two financial management specialists for a maximum period of two years at the program and project levels. Their responsibilities will include: production of financial management guidelines for donor funded project implementation; training of program and project staff in financial management, monitoring of utilization of funds and other responsibilities as provided in their terms of reference.

84. NACA's proposed financial management arrangements, as well as the arrangements at MFDP which will have the responsibility of managing the loan funds and authorizing disbursements in form of finance warrants to NACA, were reviewed in accordance with the Financial Management Practices Manual dated November 3, 2005. The overall conclusion of the financial management risk assessment is "moderate." The Project will use the Government's financial management system which was assessed to have met the minimum requirements of the Bank's OP/BP 10.02 (Annex 7).


85. The Bank has carried out a cursory assessment of the country procurement environment in October, 2007. Botswana has a Procurement Act and Regulations (2006) to regulate the procurement practice in the country. The Botswana Public Procurement and Asset Disposal Board (PPDAB) is a statutory body with functions defined in the Act. This body combines both regulatory function and operational functions (the latter by reviewing all procurement transactions above a set threshold). Standard bidding documents have been prepared and distributed electronically to user agencies in July, 2007. The Bank's assessment suggested areas for improvement in the procurement systems and shared the same with PPADB and concerned stakeholders. Procurement under the Project would be carried out in accordance with the World Bank's "Guidelines: Procurement under IBRD Loans and IDA Credits" dated May 2004, revised October 2006; and "Guidelines: Selection and Employment of Consultants by World Bank Borrowers' dated May 2004 revised October 2006, and the provisions stipulated in the Legal Agreement. The Bank's standard bidding documents shall be used for procurement of goods under International Competitive Bidding and the Bank's standard Request for Proposal (RFP) shall be used for selection of large value consultants involving international consultants.

86. National Competitive Bidding shall follow the Government of Botswana's procurement procedures, provided that the following provisions shall apply for the use of the National Competitive Bidding documents: (i) foreign bidders shall be allowed to participate in National Competitive Bidding; (ii) registration / classification of bidders shall not be used as a condition for bidding; (iii) use of preference system based on citizen degree of ownership shall not be used; (iv) use of point system and bracketing in the evaluation of bids for goods shall not be used; (v) negotiations shall not be held with successful bidder for procurement of goods; (vi) publication of invitation to bid in a national newspaper of wide circulation; (vii) bidding documents shall clearly specify bid evaluation and post qualification criteria; (viii) bidding period shall not be less than four (4) weeks and bids shall be opened publicly; and (ix) contract awards shall be published. Alternatively the Bank's standard bidding documents may be used and adapted for National competitive bidding.

87. Procurement activities under the Project will be carried out by NACA, line ministries of Education, Labour and Home Affairs, Local Government, Works and Transport, Youth, Sports and Culture and Health at central government level. At decentralized level, procurement activities will be undertaken by district councils and civil society organizations (CSOs). NACA, line Ministries and District Councils all have established Supplies Units or Divisions which are responsible for the procurement and stores function. The supplies units are managed by technicians to middle professional staff. Staff in the Supplies Units, have adequate experience in procurement through shopping procedures but have little experience in large value tendering of goods and selection of consultants. For large value goods contracts, the Supplies Units are assisted by sector specialists to prepare tender documents. Protracted delays are experienced in the adjudication of quotations and tenders above US$1,000 because of many committees that have to review the recommendations and these committees do not meet regularly.

88. At community level, procurement will be undertaken by CSO networks and grass root CSOs. CSO networks have adequate capacity to undertake procurement through shopping procedures and recruitment of individual consultants and small value consultancies for firms. The capacity of grassroot CSOs is considered weak in both project and fiduciary management of project activities. Overall, the capacity of the implementing agencies to undertake procurement is considered average and the risk is moderate. The main risks envisaged include: (a) uncompetitive procedures and provisions in the Procurement Act and bidding documents; (b) lengthy and delayed approvals due to several approval thresholds and by several committees which do not meet regularly; (c) staff not familiar with procurement under World Bank procedures in general and selection and employment of consultants in particular; (d) delays in start up activities because staff do not have experience in large value procurement and procurement under World Bank procedures; and (e) weak civil society capacity at grassroot level.

89. To mitigate against these risks, the Project will put in place the following measures: (a) have arrangements in place to streamline internal procurement review process; (b) apply exclusions to National Bidding documents to remove uncompetitive provisions, or alternatively adapt Bank bidding documents for NCB; (c) train staff in World Bank procurement procedures and selection of consultants; (d) engage and maintain procurement specialists for first 2 years of the Project; (e) engage Grant officers with prerequisite knowledge in fiduciary management to supplement the capacity of District Aids Coordinators; (f) train CSOs in procurement prior and support CSO networks to assist their affiliates in fiduciary management; and (g) prepare procurement documents for key start up activities (Annex 8).

D. Social

90. The HIV/AIDS epidemic will continue to exert severe social and economic consequences in Botswana over the coming years with increasing rates of morbidity and mortality, and increasing numbers of orphans. The BNAPS Project will pay close attention to social issues with a renewed focus on expanding coverage of HTV/AIDS-related services to vulnerable populations.

91. A major gap identified by many stakeholders, with respect to the previous national strategy, was the need to target interventions more effectively on vulnerable groups. Vulnerable groups in Botswana include, but are not limited to, adolescent women, serodiscordant couples, orphans and other vulnerable children, migrant workers, and commercial sex workers. With a growing recognition of the need to focus on vulnerability and concurrency of sexual partnerships, it was agreed that all priority areas of the NSF would explicitly address the needs of groups that are especially vulnerable to infection, or whose quality of life or social and economic well-being is most severely affected by the epidemic. The BNAPS Project would support this approach through its targeted and results-based interventions, and would additionally ensure that the results of planned additional social assessment work are reflected in the evolving program design.

92. One of the key reasons that a broader, multi-partner, multi-level response to HIV/AIDS is required is the influence of socio-cultural norms and values on the spread of the disease. Through the BNAPS Project, concerted efforts would be made to promote socio-cultural norms, values, and beliefs that are consistent with the reduction of HIV transmission, and to protect the human rights of those infected or affected by the disease. NACA-coordinated activities are expected to pursue this objective through behavior change communication campaigns, advocacy, counseling, consultation, and intensified enforcement of both customary and written laws, particularly with respect to gender-specific issues. A detailed social analysis is planned for Year One of the Project (Annex 13).

E. Environment

93. The Project has been classified as "Category C" for environmental screening purposes, which precludes the requirement for the World Bank to conduct a project-specific health sector waste management assessment. The Government's national medical waste management plan has been included in the project file, as per agreement with the World Bank's Africa Regional Safeguards unit.

F. Safeguard policies

94. No safeguard policies have been triggered by the BNAPS Project (as noted below and also in Annex 10).

G. Policy Exceptions and Readiness

95. The BNAPS Project does not require exceptions from Bank policies. The Project meets the Regional criteria for readiness for implementation. The Operations Manual has been approved.

96. NACA has indicated its willingness to pre-finance a number of key activities. As per World Bank operations policy [OP 6.0, para.2(e)], retroactive financing is permitted under the following conditions: (a) the activities financed are included in the project description; (b) the payments are for items procured in accordance with applicable Bank procurement procedures; (c) such payments do not exceed 20 percent of the loan amount; and (d) the payments were made by the borrower not more than 12 months before the expected date of Loan Agreement signing.

97. The date after which payments may be made was agreed at appraisal, confirmed during negotiations, and recorded in the Loan Agreement which provides that payments may be made up to an amount of US$500,000 from July 1, 2008 onwards. It was agreed that the Loan would allow for retroactive financing of the consultancy services associated with Component 1 (technical and fiduciary consultancy services for NACA).
Safeguard Policies Triggered by the Project Yes No

Environmental Assessment (OP/BP 4.01) [] [x]
Natural Habitats (OP/BP 4.04) [] [x]
Pest Management (0P 4.09) [] [x]
Physical Cultural Resources COP/BP 4.11) [] [x]
Involuntary Resettlement (OP/BP 4.12) [] [x]
Indigenous Peoples (OP/BP 4.10) [] [x]
Forests (OP/BP 4.36) [] [x]
Safety of Dams (OP/BP 4.37) [] [x]
Projects in Disputed Areas (OP/BP 7.60) [] [x]
Projects on International Waterways (OP/BP 7.50) [] [x]
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Publication:Botswana - National HIV/AIDS Prevention Support Project
Date:Jan 1, 2008
Previous Article:III. Implementation.
Next Article:Annex 1: Country and sector or program background.

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