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Report N
o. 85290-SCProgram
matic Public Expenditure R
eview Policy N
otes - Health Education &
Investment M
anagement
March 2014
Document of the World Bank
Report No. 85290-SC
SeychellesProgrammatic Public Expenditure Review Policy Notes -Health Education & Investment Management
Poverty Reduction and Economic Management 1Africa Region
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GOVERNMENT FISCAL YEARJanuary 1 – December 31
CURRENCY UNIT
(Exchange Rate Effective as of February 25, 2013)
Currency Unit = Seychelles Rupee (SR)US$1.0 = SR 12.99
WEIGHTS AND MEASURES
METRIC SYSTEM
ABREVIATIONS AND ACRONYMS
COFOG Classification of the Functions of GovernmentGDP Gross Domestic ProductGNI Gross National IncomeHIV-AIDS Human Immunodeficiency Virus – Acquired Immunodeficiency
SyndromeHNPi Health, Nutrition, and Population indexHRH Human Resources for HealthIMF International Monetary FundIDU Injectable Drug UsersIGCSE International General Certificate of Secondary EducationMDG Millennium Development GoalMEFP Memorandum of Economic and Financial PoliciesMoFTI Ministry of Finance, Trade and InvestmentMoLUH Ministry of Land Use and HousingMSM Men having sex with menMTS Medium Term StrategyNTB National Tender BoardOECD Economic Co-operation and DevelopmentPBB Program-Based BudgetingPEFA Public Expenditure and Financial AccountabilityPEMD Public Enterprise Monitoring DivisionPER Public expenditure reviewPFM Public Financial ManagementPIM Public Investment ManagementPISA Programme for International Student AssessmentPOU Procurement Oversight UnitPPP Public Private PartnershipsPUC Public Utilities CorporationPSIP Public Sector Investment ProgramPTR Public-Teacher RatiosSACMEQ Southern and Eastern Africa Consortium for Monitoring Educational QualitySEYPEC Seychelles Petroleum Company
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SR Seychelles RupeesTFR Total Fertility RateUNDP United Nations Development ProgrammeUNESCO United Nations Educational Scientific and Cultural OrganizationSES Socioeconomic status
Vice President : Makhtar DiopCountry Director : Haleh Bridi/ Mark R. Lundell
Sector Director : Marcelo GiugaleSector Manager : John Panzer
Task Team Leader : Sawkut Rojid
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This Public Expenditure Review Policy Note Series was jointly produced by the Government of Seychelles and the World Bank. The team was led by Sawkut Rojid, Economist at the World Bank. The Policy Notes were prepared under the guidance of His Excellency, Danny Faure, Vice President of the Republic of Seychelles, Honorable Pierre Laporte, Minister of Finance, Trade, and Investment of the Republic of Seychelles, Honorable Mitcy Larue, Minister for Health of the Republic of Seychelles, Honorable Mavsuzy Mondon of the Republic of Seychelles, Minister for Education, Mr. John Panzer, Sector Manager at the World Bank and Haleh Bridi, Country Director for Seychelles at the World Bank.
The team consisted of staffs and consultants from the World Bank and public officers of the Government of Seychelles. From the World Bank, the team consisted of: Sawkut Rojid (Economist), Tuan Minh Le (Senior Economist), Julio Revilla (Lead Economist), Sean Lothrop (consultant), Catherine O’Farell (Principal Investment Officer), Stephanie Lynn Sweet (Consultant), Khurshid Noorwalla (Team Assistant), Netsanet Workie (Senior Economist, Health), Abdo Yazbeck (Lead Economist, Health), Chris Herbst (Health Specialist) Sylvestre Gaudin (Consultant), Nirmala Ravishankar (Consultant), Fadila Caillaud (Senior Education Economist), Nelly Rakoto-Tiana (Consultant), and Madeleine Chungkong (Sr. Program Assistant). From the Government of Seychelles, the team consisted of: Patrick Payet (Principal Secretary, Ministry of Finance, Trade and Investment), Peggy Vidot (Principal Secretary, Ministry of Health), Merida Delcy (Principal Secretary, Ministry of Education), Damien Thesee (Comptroller General, MoFTI), Elizabeth Charles (Director, MoFTI), Jude Gedeon (Commissioner, Public Health), Sandra Crewe (Director, HR Health), Jean Malbrook Senior Economist, Health), Terence Morel (Ministry of Health), and Dido Philo (Ministry of Health).
The team be benefited from the many constructive comments received during numerous workshops and the team gratefully acknowledge the comments received which have helped improved the quality of the document and resulted in lively debates. In particular, the team would like to mention the following workshops: senior staff of the Ministry of Health, Members of the National Assembly, public dissemination, financial comptrollers of various ministries, and the Public Enterprise Monitoring Unit.
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TABLE OF CONTENTS
STRENGTHENING PUBLIC INVESTMENT MANAGEMENT ........................................... 1 CHAPTER 1.
EXECUTIVE SUMMARY ............................................................................................................................................... 1 1.1. INTRODUCTION ............................................................................................................................................. 4 1.2. THE IMPORTANCE OF PUBLIC INVESTMENT MANAGEMENT ANALYSIS ......................................................... 4 1.3. OBJECTIVES AND SCOPE ............................................................................................................................... 5 1.4. RECENT TRENDS IN PUBLIC INVESTMENT ..................................................................................................... 5 1.5. SOURCES AND COMPOSITION OF THE CAPITAL BUDGET ............................................................................... 6 1.6. CAPITAL BUDGET ALLOCATIONS .................................................................................................................. 7 1.7. BUDGET-EXECUTION DEFICIT ....................................................................................................................... 9 1.8. MODALITIES OF PUBLIC INVESTMENT ........................................................................................................... 9 1.9. REGULATORY FRAMEWORK ........................................................................................................................ 10 1.10. OVERVIEW OF KEY INSTITUTIONS .............................................................................................................. 12 1.11. PROJECT GUIDANCE AND PRE-SCREENING ................................................................................................. 14 1.12. FORMAL PROJECT APPRAISAL..................................................................................................................... 15 1.13. INDEPENDENT REVIEW OF APPRAISAL ........................................................................................................ 16 1.14. PROJECT SELECTION AND BUDGETING ........................................................................................................ 16 1.15. PROJECT IMPLEMENTATION ........................................................................................................................ 17 1.16. PROJECT MONITORING AND ADJUSTMENT .................................................................................................. 18 1.17. FACILITY OPERATION ................................................................................................................................. 18 1.18. PROJECT EVALUATION ................................................................................................................................ 19 1.19. REFINING THE PSIP GUIDANCE DOCUMENT ............................................................................................... 22 1.20. PROPOSED PUBLIC INVESTMENT MANAGEMENT REFORMS IN THE SHORT AND MEDIUM TERM ................. 24
ADAPTING THE HEALTH SECTOR TO EMERGING CHALLENGES .......................... 28 CHAPTER 2.
EXECUTIVE SUMMARY ............................................................................................................................................. 28 2.1. INTRODUCTION ........................................................................................................................................... 31 2.2. MORTALITY AND DISEASE BURDEN ............................................................................................................. 34 2.3. DEMOGRAPHIC TRANSITION ........................................................................................................................ 37 2.4. SERVICE UTILIZATION ................................................................................................................................. 38 2.5. HEALTH EXPENDITURE ANALYSIS ............................................................................................................... 40 2.6. ASSESSMENT OF REFORMS INTRODUCED SINCE 2009 .................................................................................. 45 2.7. FINDINGS FROM THE PATIENT EXIT SURVEY ................................................................................................ 46 2.8. FINDINGS FROM THE HEALTH WORKER SURVEY .......................................................................................... 47 2.9. DESIGNING AND IMPLEMENTING A MODERN INFORMATION SYSTEM ........................................................... 50 2.10. DEVELOPING A PACKAGE OF BENEFITS AND SERVICES ................................................................................ 51 2.11. DEVELOP AN INCENTIVE-COMPATIBLE HEALTH SYSTEM ............................................................................. 52 2.12. DEVELOP A NEW, BROAD-BASED PUBLIC HEALTH AGENDA ......................................................................... 52 2.13. MANAGING COST DRIVERS ......................................................................................................................... 53
IMPROVING QUALITY EDUCATION AND ADDRESSING INEQUALITY .................. 55 CHAPTER 3.
EXECUTIVE SUMMARY ............................................................................................................................................. 55 3.1. INTRODUCTION ........................................................................................................................................... 58 3.2. ACCESS TO EDUCATION .............................................................................................................................. 59 3.3. QUALITY OF EDUCATION ............................................................................................................................ 63 3.4. EQUALITY ANALYSIS .................................................................................................................................. 64
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3.5. FINDINGS OF THE PATIENT EXIT SURVEY.................................................................................................... 83 3.6. FINDINGS FROM THE HEALTH WORKER SURVEY ........................................................................................ 87 CONCLUSIONS .......................................................................................................................................................... 96
List of Annexes
ANNEX 1: HEALTH FACILITIES IN MAHÉ (MAIN ISLAND), PRASLIN, AND LA DIGUE ..................................................... 82 ANNEX 2: FINDINGS FROM A PATIENT EXIT SURVEY AND HEALTH WORKER SURVEY ................................................. 83 ANNEX 3: RESULTS OF THE ECONOMETRIC ANALYSIS OF THE DETERMINANTS OF LEARNING ACHIEVEMENT ............. 97 ANNEX 4: ESTIMATION OF HOUSEHOLD WEALTH INDEX ........................................................................................... 100
List of Tables
TABLE 1: BUDGET EXECUTION RATES ............................................................................................................................ 9 TABLE 2: PROCUREMENT AUTHORITIES AND THRESHOLDS ........................................................................................... 12 TABLE 3: HEALTH INDICATORS: SEYCHELLES AND SELECTED COUNTRIES, 2010 ......................................................... 32 TABLE 4: MALE AND FEMALE LIFE EXPECTANCY AT BIRTH: BOTTOM 15 COUNTRIES ................................................... 33 TABLE 5: SACMEQ II AND III RESULTS, MAURITIUS AND SEYCHELLES ...................................................................... 64 TABLE 6: LEARNING ACHIEVEMENT, BY GENDER AND DISTRICT (SACMEQ 2007 DATA) ............................................ 65 TABLE 7: LEARNING ACHIEVEMENT AND EXTRA PRIVATE LESSONS ............................................................................. 66 TABLE 8: SUMMARY OF KEY FINDINGS AND RECOMMENDATIONS FROM THE PUBLIC EXPENDITURE ANALYSIS ............ 80
TABLE A2.1: NUMBER OF HEALTH WORKERS IN RELATION TO THE GENERAL POPULATION, SEYCHELLES .................... 87 TABLE A2.2: DISTRIBUTION OF PERSONNEL BY TYPE AND FACILITY (PERCENTAGE) .................................................... 88 TABLE A2.3: STAFF TURNOVER (% OF ALL STAFF) IN PAST FISCAL YEAR AND REASONS FOR LEAVING (REPORTED BY
FACILITY MANAGERS) .......................................................................................................................................... 89 TABLE A2.4: PERCENTAGE OF HRH PLANNING TO MIGRATE/LEAVE SEYCHELLES WITHIN 1–4 YEARS ........................ 89 TABLE A2.5: HEALTH WORKERS’ PERCEPTIONS OF HOW THEIR OWN SALARIES COMPARE WITH THE SALARIES OF
INDIVIDUALS WITH SIMILAR LEVELS OF EDUCATION AND EXPERIENCE WHO WORK IN OTHER PROFESSIONS (ESTIMATE) .......................................................................................................................................................... 90
TABLE A2.6: AGE DISTRIBUTION: PERCENTAGE IN EACH CATEGORY (YEARS OF AGE) ................................................. 90 TABLE A2.7: PERCEPTIONS AMONG HEALTH WORKERS OF MANAGER/SUPERVISOR COMPETENCE AND CAPACITY TO
MOTIVATE STAFF (%) ........................................................................................................................................... 91 TABLE A2.8: AVERAGE HOURS PER WEEK SPENT ON DIFFERENT TASKS ....................................................................... 91 TABLE A2.9: AVERAGE NUMBER OF OVERTIME (PAID, UNPAID) REPORTED TO BE WORKED EACH WEEK (HOURS) ........ 92 TABLE A2.10: MANAGERS’ RATINGS OF STAFF ON COMPETENCE (1–5 SCALE) ............................................................. 93 TABLE A2.11: HEALTH WORKERS’ SELF-REPORTED LEVELS OF MOTIVATION (1–6 SCALE) .......................................... 94 TABLE A2.12: HEALTH WORKERS’ RANKING OF FACTORS THAT CURRENTLY MOTIVATE THEM (AVERAGE) (1–5 SCALE)
............................................................................................................................................................................ 94 TABLE A2.13: MANAGER SURVEY: REPORTED ABSENTEEISM AT TIME OF SURVEY ...................................................... 95
List of Figures
FIGURE 1: STAGES OF PUBLIC INVESTMENT MANAGEMENT ............................................................................................ 5 FIGURE 2: PUBLIC AND PRIVATE INVESTMENT AS A PERCENTAGE OF GDP ..................................................................... 8 FIGURE 3: SEYCHELLES AND COMPARATORS: PUBLIC INVESTMENT AS A PERCENTAGE OF GDP .................................... 8 FIGURE 4: EXPENDITURE COMPOSITION AS A PERCENTAGE OF GDP ............................................................................... 8
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FIGURE 5: EXPENDITURE TRENDS AS A PERCENTAGE OF GDP ........................................................................................ 8 FIGURE 6: RESOURCE ALLOCATIONS FOR CAPITAL EXPENDITURES, 2011 ....................................................................... 9 FIGURE 7: SOURCES OF CAPITAL EXPENDITURE FINANCING, 2011 ................................................................................ 10 FIGURE 8: LIFE EXPECTANCY AT BIRTH IN SEYCHELLES, OTHER AFRICAN COUNTRIES (2011), AND CHINA (1960–2011)
............................................................................................................................................................................ 31 FIGURE 9: TOTAL FERTILITY RATE IN SEYCHELLES, OTHER AFRICAN COUNTRIES (2011), AND BRAZIL (1960–2011) .. 32 FIGURE 10: CAUSES OF DEATH AS A PERCENTAGE OF ALL DEATHS ............................................................................... 34 FIGURE 11: AGE-STANDARDIZED MORTALITY RATES BY CAUSE OF DEATH (5-YEAR AVERAGES, COUNTRIES SORTED BY
PER CAPITA INCOME)............................................................................................................................................ 35 FIGURE 12: SHARE OF "AMENABLE" CANCER TYPES AMONG ALL CANCER DEATHS ...................................................... 36 FIGURE 13: MALE AND FEMALE PREMATURE MORTALITY RATES BY CAUSE OF DEATH, AVERAGE 2005–11 ................. 36 FIGURE 14: SEYCHELLES POPULATION PYRAMIDS FROM THE 1994, 2002, AND 2010 CENSUSES ................................... 37 FIGURE 15: ABORTIONS BY AGE GROUP OF MOTHER, 2007–11 ..................................................................................... 38 FIGURE 16: NUMBER OF HOSPITAL BEDS, 2002–11 ....................................................................................................... 39 FIGURE 17: TRENDS IN OUTPATIENT VISITS, 2001–11................................................................................................... 39 FIGURE 18: NUMBERS OF OUTPATIENT VISITS, BY TYPE OF FACILITY AND HEALTH WORKER, 2011 .............................. 40 FIGURE 19: HEALTH EXPENDITURE BY FUNCTION, 2009 ............................................................................................... 41 FIGURE 20: TOTAL PUBLIC HEALTH EXPENDITURE (NOMINAL AND REAL, 2005–11) .................................................... 42 FIGURE 21: CHANGES IN THE COMPONENTS OF PUBLIC HEALTH EXPENDITURE, 2009–11 ............................................. 43 FIGURE 22: DISTRIBUTION OF PUBLIC HEALTH EXPENDITURE, 2011 ............................................................................. 44 FIGURE 23: CHANGES IN SHARES OF PUBLIC HEALTH EXPENDITURE BY FUNCTION, 2009–11 ....................................... 45 FIGURE 24: AVERAGE NUMBER OF HOURS WORKED PER DAY BY HEALTH WORKERS .................................................... 48 FIGURE 25: PATIENT LOAD PER DAY BY TYPE OF HEALTH WORKER: MEAN AND MEDIAN NUMBERS ............................. 49 FIGURE 26: STRUCTURE OF THE EDUCATION SYSTEM ................................................................................................... 60 FIGURE 27: TOTAL ENROLMENTS, 2008–13 .................................................................................................................. 61 FIGURE 28: GROSS ENROLMENT RATIO IN SELECTED MIDDLE- AND HIGH-INCOME COUNTRIES, 2008–11 ..................... 62 FIGURE 29: SHARE OF PRIVATE ENROLMENT IN TOTAL ENROLMENT AT THE CRÈCHE, PRIMARY, SECONDARY, AND
POST-SECONDARY LEVELS, 2011–13 ................................................................................................................... 63 FIGURE 30: PERCENTAGE OF P6 PUPILS SCORING C OR ABOVE ON NATIONAL EXAMINATIONS, 2010–12 ..................... 63 FIGURE 31: ATTENDANCE RATE BY AGE AND QUINTILE, 2010 ...................................................................................... 64 FIGURE 32: LEARNING ACHIEVEMENTS BY LEVEL OF MOTHER’S EDUCATION (LEFT) AND WEALTH QUINTILE (RIGHT),
2007 .................................................................................................................................................................... 66 FIGURE 33: SHARE OF PUPILS ATTENDING EXTRA LESSONS BY REGION (LEFT) AND BY LEVEL OF FATHER’S EDUCATION
(RIGHT), 2007 ...................................................................................................................................................... 67 FIGURE 34: PUBLIC EXPENDITURE ON EDUCATION, 2004–11 (IN 2011 CONSTANT PRICES) ........................................... 67 FIGURE 35: PUBLIC EXPENDITURE ON EDUCATION AS A PERCENTAGE OF GDP AND AS A PERCENTAGE OF TOTAL
GOVERNMENT EXPENDITURE, SELECTED COUNTRIES, 2008–11 AVERAGE ........................................................... 68 FIGURE 36: PUBLIC EXPENDITURE PER PUPIL AT EACH LEVEL OF THE EDUCATION SYSTEM, 2011 ................................ 69 FIGURE 37: PUBLIC EXPENDITURE PER PUPIL AS A PERCENTAGE OF GDP PER CAPITA IN PRIMARY AND SECONDARY
EDUCATION, 2008–11 AVERAGE .......................................................................................................................... 70 FIGURE 38: DISTRIBUTION OF PUBLIC RECURRENT SPENDING ON EDUCATION BY LEVEL (SPENDING ALLOCATED BY
LEVEL), SEYCHELLES (RIGHT) AND COMPARABLE COUNTRIES (LEFT) .................................................................. 71 FIGURE 39: SHARE OF TEACHERS’ SALARIES IN TOTAL EXPENDITURE IN PRIMARY AND SECONDARY ........................... 72 FIGURE 40: DISTRIBUTION OF STAFF SALARY COSTS BY AREA OF SPECIALIZATION, PRIMARY (LEFT) AND SECONDARY
(RIGHT) SCHOOLS, 2004–11 ................................................................................................................................. 72 FIGURE 41: PUPIL-TEACHER RATIOS IN SELECTED COUNTRIES AND SEYCHELLES, 2008–11 ......................................... 73 FIGURE 42: PUPIL-TEACHER RATIO IN PRIMARY SCHOOLS, 2011 .................................................................................. 73 FIGURE 43: TEACHER ATTRITION IN PRIMARY AND SECONDARY SCHOOLS ................................................................... 74 FIGURE 44: BUDGET EXECUTION RATE BY CATEGORY, RECURRENT SPENDING, 2011 ................................................... 74
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FIGURE 45: SCHOOL SIZE AND UNIT COST FOR PRIMARY AND SECONDARY SCHOOLS ................................................... 75 FIGURE 46: SCHOOL SIZE AND EXAM RESULTS, 2009–11 AVERAGE .............................................................................. 75 FIGURE 47: UNIT COSTS IN PRIMARY EDUCATION AND AVERAGE DISTRICT HOUSEHOLD INCOME ................................. 76 FIGURE 48: READING SCORES AND PERCENTAGES OF PUPILS SHARING TEXTBOOKS WITH TWO OR MORE OTHER
CHILDREN, BY REGION ......................................................................................................................................... 77
FIGURE A2.1: REASONS FOR CHOOSING PUBLIC AND A PRIVATE FACILITY ................................................................... 83 FIGURE A2.2: TRAVEL TIME AND MODE OF TRANSPORT TO REACH A HEALTH FACILITY ............................................... 84 FIGURE A2.3: PURPOSE OF VISIT TO A HEALTH FACILITY.............................................................................................. 84 FIGURE A2.4: TIME SPENT WAITING TO SEE A HEALTH WORKER................................................................................... 85 FIGURE A2.5: PATIENTS’ SATISFACTION WITH KEY SERVICE DELIVERY VARIABLES ..................................................... 86 FIGURE A2.6: MANAGER SURVEY: TIME NEEDED TO FILL A HEALTH WORKER VACANCY (MONTHS) ............................ 88 FIGURE A2.7: PERCENTAGE OF HEALTH WORKERS PLANNING TO MOVE TO THE PRIVATE SECTOR IN THE NEXT FIVE
YEARS .................................................................................................................................................................. 89 FIGURE A2.8: AVERAGE NUMBER OF HOURS WORKED PER DAY ................................................................................... 92 FIGURE A2.9: DAILY PATIENT LOAD BY TYPE OF HEALTH WORKER (MEAN AND MEDIAN) ............................................ 92 FIGURE A2.10: HEALTH WORKERS WHO STATE THAT EQUIPMENT AND SUPPLIES ARE SUFFICIENT TO CARRY OUT
QUALITY SERVICES .............................................................................................................................................. 93 FIGURE A2.11: TIME SPENT WITH THE MAIN HEALTH WORKER (PATIENT SURVEY) ...................................................... 96
List of Boxes
BOX 1: INSTRUCTIONS IN THE ANNUAL BUDGET CIRCULAR ......................................................................................... 11 BOX 2: PROPOSED DEVELOPMENT COMMITTEE: ROLES AND FUNCTIONS ................................................................... 21 BOX 3: ELEMENTS OF PUBLIC INVESTMENT MANAGEMENT IN SOUTH AFRICA .............................................................23 BOX 4: GOOD PRACTICES FOR STRUCTURING AND GOVERNING PUBLIC SECTOR INVESTMENT PROGRAMS .................... 24 BOX 5: SEYCHELLES PUBLIC INVESTMENT MANAGEMENT: POLICY ACTION BRIEF ..................................................... 27
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Strengthening Public Investment Management Chapter 1.
Executive Summary In recent years, the Government of Seychelles has made significant progress in reforming the public sector, yet much more remains to be done to strengthen public investment management (PIM), one of the most critical areas of good governance. Key challenges in PIM include: (1) persistence and incentives by sectors/spending agencies to inject into the budget as many as possible project proposals which creates an ever increasing backlog of projects under construction; (2) the low absorption capacity of many implementing agencies, which leads to chronic under-execution of the investment budget; and (3) the absence of a systematic approach to capital budgeting, the disconnect between capital and current budgeting, and a general lack of effective reporting, oversight and control mechanisms, which generate significant technical inefficiency in the project cycle. The following report analyzes the current state of the Seychelles PIM system and identifies critical weaknesses in each of the following areas:
• Investment Guidance and Preliminary Screening: The lack of a concrete national investment plan prevents ministries and other public agencies from effectively aligning their project portfolios, limiting opportunities for complementarity between sectors.
• Formal Project Appraisal: The use of separate procedures for assessing government-funded and donor-funded projects increases the administrative burden on line ministries and encourages off-budget expenditures; the system for assessing government-funded projects is insufficiently rigorous and project documentation is frequently inadequate.
• Independent Review of Appraisal: In principle the Cabinet and/or Ministry of Finance,
Trade and Investment (MoFTI) review projects submitted by the line ministries, but in practice there is no independent review of proposed projects.
• Project Selection and Budgeting: Estimated project costs typically reflect only the initial
capital investment, not the recurrent cost of operations and maintenance; this, combined with ambiguities in budget classification, creates considerable uncertainty regarding the long-term budgetary implications and sustainability of proposed projects.
• Project Implementation: The contracting and procurement processes are characterized
by weak reporting requirements, inadequate oversight by the MoFTI and limited competition, which results in inefficient project implementation.
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• Project Monitoring and Adjustment: There is no public agency tasked with monitoring project implementation, and as a result continued project financing is not linked to implementation performance.
• Facility Operation: Inadequate reporting prevents line ministries from accurately
estimating the resources required to operate completed projects, with negative consequences for service delivery.
• Project Evaluation: The project cycle for government-financed investments includes no
ex post evaluation requirements; as a result, lessons learned from past experience do not inform the design of future projects or contribute to the reform of the PIM system.
Inadequate expenditure controls and limited oversight result in substantial cost overruns and frequent implementation delays, while a systematic bias in favor of investment over maintenance reduces the operational quality of completed projects and generates significant budgetary instability. Taken together, these factors persistently diminish the social and economic impact of investment spending. Many of these deficiencies have already been recognized by policymakers, and the government has initiated a number of crucial reforms designed to reinforce the efficiency and integrity of the PIM system. The development of a Public Sector Investment Program (PSIP) and complementary Action Plan, currently underway, is a particularly important measure. The PSIP could greatly facilitate the coordination of investment decisions by anchoring line ministries to an overarching national strategy. Going forward, the government will need to focus on defining an effective management structure for the PSIP supported by a strong legal framework. The PSIP calls for the establishment of a Development Committee to oversee its implementation and fill several gaps in the current PIM system. The government should ensure that its responsibilities are well articulated and that it has the necessary authority to execute them. The Action Plan for the PSIP is now in its final stages. It will serve as the guiding document for the PIM reform process, and its efficacy is critical to the success of the government’s program. In finalizing the Action Plan the government should actively seek the support of line ministries and other key public-sector stakeholders and work to build consensus regarding the timing of the PSIP’s implementation and its management structure. The PSIP should include a template for all project proposals developed in coordination with the Cabinet and line ministries; it should specify that all projects that do not conform to the template will be returned by MoFTI. Similarly, the PSIP should include a single, uniform set of guidelines for project appraisal designed to ensure a basic degree of methodological consistency. The Development Committee should have a clearly defined role in the project appraisal process, and it should conduct its own independent appraisals of large projects. The PSIP should establish a dedicated monitoring unit at the MoFTI tasked with overseeing key aspects of the project cycle. The Action Plan should provide for extensive staff training at MoFTI and in the project-related departments of the Cabinet, the line ministries and other relevant agencies to
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build the institutional capacity necessary to effectively execute the project proposal, appraisal and monitoring functions specified in the PSIP. Over the medium term the government should develop a comprehensive PIM manual covering all stages of the project cycle. Finally, the government should continuously work to strengthen reporting, oversight and control mechanisms throughout the PIM system and codify these functions in its legal framework. Ensuring that public investment projects are appropriately selected, efficiently implemented, effectively operated and thoroughly evaluated is an ongoing process, and strong monitoring functions are crucial to ensuring value for money in investment spending.
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1.1. Introduction
1. Since 2008, the Government of Seychelles has successfully undertaken major reforms to secure macroeconomic stability and create conditions for sustainable, private sector-led growth. Alongside a comprehensive public debt restructuring, the government’s economic program focused on fundamental liberalization of the exchange regime, reform of the monetary policy framework to focus on liquidity management, significant and sustained tightening of fiscal policy (largely supported by a decrease in public employment), and a reduction in the state’s role in the economy to boost private sector development. The restoration of macroeconomic balances paved the way for a strong supply response, leading to renewed confidence in the economy. Despite the effects of a difficult international economic environment on tourism in 2012, real GDP growth for the year is estimated at 2.7 percent. The economic outlook is broadly positive, although Seychelles remains vulnerable to external shocks. Real GDP growth for 2013 is estimated to have risen to 3.5 percent. 2. The continuous strengthening of Seychelles’ public financial management (PFM) system plays a central role in facilitating fiscal consolidation and improving the delivery of government services. Over the past few years, the government has implemented a series of reforms to address public sector governance, including: (i) modernizing the public sector and improving the alignment of institutions with their policy/service delivery mandates; (ii) rolling back the government’s role in commercial activities by reducing the large number of parastatals, improving their management, and introducing a new wage bill together with the private sector; and (iii) redefining the accountability structure between the government agencies responsible for service delivery. A number of governance indicators reflect the very positive effects of these reforms.1 3. The preparation and execution of a recurrent budget have been strengthened. Measures have included preparing a medium-term macroeconomic framework, setting detailed expenditure ceilings for each ministry and public agency, distinguishing between baseline and new expenditures in budget submissions, and establishing a cash management system and a single treasury account. The government began preparing the ‘2012–14 Action Plan’ to accelerate reforms and address PFM weaknesses, especially those identified in the 2011 Public Expenditure and Financial Accountability (PEFA) report. Key reforms include: (i) revising the Public Finance Act to enhance fiscal policies, make resource allocation more efficient, and improve service delivery and (ii) revising the Chart of Accounts to incorporate functional and programmatic classifications.
1.2. The Importance of Public Investment Management Analysis
4. Despite the government’s ambitious macroeconomic reform program and its efforts to strengthen the PFM system, measures to improve the efficiency of public investment management (PIM) have received only limited consideration. Challenges to the efficient use of public resources hamper the government’s ability to meet urgent social needs and improve 1 For example, of 212 countries surveyed in 2011 for the World Bank’s Worldwide Governance Indicators (WGI), Seychelles ranked above the 50th percentile for most dimensions of governance, including political stability, government effectiveness, and control of corruption. Although the WGI for regulatory quality remains quite low (about the 25th percentile), it is improving.
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access to basic services. One such challenge includes low absorption capacity. During 2011, only an estimated 87 percent of capital appropriations were executed, and spending significantly accelerated in the last quarter (rising 40 percent). A second challenge is the weak institutional capacity for development planning and project implementation, mainly in relation to managing complex projects. A third challenge is the lack of a systematic approach to capital budgeting, as evidenced by the discretionary and residual nature of capital expenditures in the country’s budgeting. Procedures for commitment control in capital projects are not integrated into the Local Purchase Order system, and issues with financial reporting remain.2 The limited efficiency of public investment is manifested in project delays, incomplete projects, and the failure to maintain and use assets developed through public investment to deliver services at the intended levels of quality and cost.
1.3. Objectives and Scope
5. This note aims to provide an objective assessment of the strengths and weaknesses of Seychelles’ PIM system and to recommend measures for improving the quality of capital spending. The analysis uses the diagnostic tools developed by Rajaram et al. (2010) to examine the distinct but interconnected stages of "upstream" PIM (such as screening, appraisal, and selection; see Figure 1) as well as transparency and value for money in identifying, pre-evaluating, and prioritizing investments.3 Specific areas in “downstream” PIM—including procurement, contracting, and financial management—are addressed in detail in a companion policy note. Because issues related to good governance are central to PIM, they are covered in both the "upstream" and "downstream" PIM assessments.
Figure 1: Stages of public investment management
Source: Rajaram, A., T. Minh Le, J. Brumby, and N. Biletska (2010)
1.4. Recent Trends in Public Investment
6. Although public investment in Seychelles has been unstable in the last decade, the country has seen a steady and substantial increase in more recent years. This increase reflects the government’s emphasis on developing core infrastructure, as evidenced by the increased share of
2 Seychelles PEFA Report, 2011. 3 Rajaram, A., T. Minh Le, J. Brumby, and N. Biletska (2010), “A Diagnostic Framework for Assessing Public Investment Management,” World Bank Policy Research Working Paper No. 5397, Washington, DC.
1Guidance
& Screening
2Formal
Project Appraisal
3Appraisal Review
4Project Selection
& Budgeting
7FacilityOperation
6Project
Changes
5Implementation
8Project
Evaluation
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capital expenditures compared to total expenditures and the relative growth of public investment compared to private investment. 7. This section reviews the structure of public investment in the Seychelles,4 examining recent trends in the ratios of public and private investment to GDP, public investment in relation to overall government expenditures, international comparisons, the functional allocation of public investment, and nominal trends in public investment budgets and outturns.
1.5. Sources and Composition of the Capital Budget
8. Over the years, gross investment has trended upward; periodic declines have been linked mainly to cyclical economic slowdowns. Both public and private investment has risen; public investment, while lower than private investment, has experienced a larger relative increase. In the six-year period leading up to 2011, gross investment in the Seychelles averaged 31 percent of GDP, of which only 6.2 percent was government investment. In 2005, private investment in capital expenditure accounted for around 29 percent of GDP, while public investment was approximately 5.3 percent. Between 2006 and 2009, as private investment declined or grew, public investment would increase or fall in tandem to fill the gap. Public investment hit one of its lowest levels in 2008, when the country faced simultaneous balance-of-payments and debt crises. Since then, however, it has increased steadily to exceed 8 percent of GDP in 2010 and is expected to remain at slightly above 7 percent in the medium term (Figure 2). 9. Compared to other emerging markets and small island countries, Seychelles has experienced high volatility in its public investment over the last seven years (Figure 3).5 While Seychelles was adversely affected by the global financial crisis in 2008, the volatility also reflects the discretionary and residual nature of capital expenditures in the country’s budgeting. In fact, capital expenditure as a share of GDP has ranged from just 2 percent in 2008 to more than 8 percent in 2006 and 2012. 10. In more recent years, capital investment has increased substantially in relation to recurrent expenditure. Capital expenditures have continuously increased from 6.5 percent of expenditures in 2008 to over 23 percent in 2012. As a share of GDP, capital investment has increased from 2 percent to over 8 percent (Figure 4). Current expenditures, on the other hand, have remained relatively stable at just below 30 percent of GDP, a much lower rate compared to earlier years, when they exceeded 40 percent of GDP (Figure 5).6 These trends reflect the government’s effort to develop and maintain core infrastructure (for example, roads and electricity, water, and telecommunications facilities) to bolster private sector development and build the necessary skills, effective institutions, and structures for sustainable growth.
4 In this document, “public investment” refers to capital expenditures as reported by the International Monetary Fund (IMF), unless noted otherwise, and includes: (i) all budget lines included in the development budget; (ii) some budget line items classified as “Non-Financial Assets” in the recurrent budget (mostly minor capital expenditures such as equipment purchases or the refurbishing of buildings); (iii) some items in the recurrent budget that have been reclassified as “Financial Assets” (which includes the recapitalization of some parastatals or bailouts) from “Subsidies,” as reported by the Treasury; and (iv) some in-kind contributions not registered in the Treasury system but collected and reported separately by MoFTI as part of the national budget. 5 Mauritius, Solomon Islands, and Togo. 6 Current expenditure as a percentage of GDP was above 40 percent until 2006, when it fell to 39.4. It continued to fall to 36.3 in 2007 and 28.6 in 2008.
7
1.6. Capital Budget Allocations
11. The total allocation of capital outlays in 2011 was 1,060 million Seychelles rupees (SR), representing 22.6 percent of total expenditure. The allocation to ministries and departments amounted to SR 865 million or 6.9 percent of GDP.7 The main recipients (as in previous years) were the administrative bodies for the housing, environment/transport, health, education, and defense sectors. As indicated in Figure 6, in 2011 the Ministry of Land Use and Housing received the highest allocation (28 percent of the total capital budget), followed by the Ministry of Home Affairs, Environment, and Transport (14 percent), Ministry of Health (7 percent), Ministry of Education, Employment, and Human Resources (5 percent), and the Department of Defense (5 percent). The other 13 government bodies together received 13 percent. 12. The remaining SR 200 million, or 22 percent of capital expenditures, consisted of development funds channeled to public companies.8 Owing to the volatility of fuel prices, several public entities impose huge burdens on the national budget and represent significant risks to the health of the economy, including the Public Utilities Corporation (PUC) and Air Seychelles. In recent years, the government has allocated an increasingly large share of resources to these loss-making public entities to shore up their budgets. This support has come at the expense of other ministries and departments. In 2008, for example, the government allocated SR 22 million (5 percent of capital expenditures) to PUC, but in 2009 PUC received SR 107 million (16 percent of capital expenditures) and in 2010 more than SR 285 million (over 27 percent of capital expenditures).
7 The central government consists of 18 bodies (offices, ministries, and departments). Seychelles has no subnational government administration. 8 The budget contains inconsistencies in the classification of transfers made to public entities. Transfers to public entities or budget-dependent bodies are classified either as “Subsidies” or “Other Goods and Services” within the recurrent budget under the Treasury system. In cases where the government has acquired a company’s equity or debt, “Subsidies” are reclassified as “Financial Assets” and reported as a capital expenditure by the IMF and BOOST. In some case, however, funds were channeled in the form of loans or working capital, but the items remained in the recurrent budget as “Transfers to Public Sector” (funds allocated to Air Seychelles are one example).
8
Figure 2: Public and private investment as a percentage of GDP
Source: IMF 2012.
Figure 3: Seychelles and comparators: Public investment as a percentage of GDP
Source: IMF reports.
Figure 4: Expenditure composition as a percentage of GDP
Source: IMF 2012.
Figure 5: Expenditure trends as a percentage of GDP
Source: IMF 2012.
13. According to the new Public Sector Investment Program (PSIP) for 2012–16, total capital allocations are estimated at SR 8.4 billion. The Minister of Finance announced in the 2013 budget speech that 55 percent of those investments would be allocated to social spending on health, education, housing and community, and social protection. This allocation reflects the government’s continued commitment in recent years to investing in these high-priority sectors.
05
101520253035
Private PublicLinear (Private) Linear (Public)
02468
10
Seychelles MauritiusSolomon Islands Togo
05
101520253035
PrivatePublic
01020304050
Current Capital
9
Figure 6: Resource allocations for capital expenditures, 2011
Source: BOOST, IMF, MoFTI Budget, and author’s calculations Note: SR 161 million in in-kind contributions was removed; see below for more information.
1.7. Budget-Execution Deficit
14. Budget-execution deficits have been a major bottleneck in PIM in Seychelles. On average over the past five years, only an estimated 87 percent of capital appropriations have been spent (Table 1). Execution rates for capital expenditures between 2007 and 2011 ranged from 79 to 93 percent of the budget. As mentioned, in 2011 the government spent 85 percent of its budget, with much of that spending concentrated in the last quarter (40 percent). This pattern reflects relatively low capacity for absorbing public capital investments, mostly because of poor planning, capacity challenges, and weak procurement processes (see Section IV).
Table 1: Budget execution rates 2007 79% 2008 93% 2009 89% 2010 90% 2011 85%
Source: MoFTI, CAPEX files. Note: Includes only “Non-Financial Assets” recorded in the development budget.
Institutional Mapping 15. In the Seychelles, public investment management is governed under the legal framework for public financial management. The various regulations described below stipulate the roles and responsibilities of the institutions and stakeholders involved in planning and managing public investments.
1.8. Modalities of Public Investment
16. Public investment projects are financed from five major sources: government financing, domestic grants, foreign loans, foreign grants, and in-kind assistance. The majority of capital
28%
14%
7% 5% 5%
19%
22%
Land Use and Housing
Home Affairs, Environment, &Transport
Health
Education, Employment, &Human Resources
Defence
Other Ministries, Departments, &Agencies
Equity Acquisition of PE
10
expenditures are funded through government financing, as demonstrated in Figure 7, with key sectors assisted by donor support.9 The increase in foreign loans and grants has occasioned a reduction in domestic loans over the years. 17. Since 2010, at the request of the IMF, a number of in-kind donations have not been registered in the Treasury system but recorded manually by MoFTI. Examples of “off-Treasury” in-kind assistance include items from the United Arab Emirates and China, such as a Coast Guard building, a plane for the Ministry of Defense, and a hospital, among others. Such assistance amounted to 2 percent of GDP in 2010 and 5 percent in 2011.10 18. A new investment modality, public-private partnerships (PPPs), is emerging in Seychelles. The government is engaged in discussions with the World Bank Group to receive support for building capacity to give the authorities a better understanding of PPPs and for developing guidelines for risk-sharing and financing arrangements.
Figure 7: Sources of capital expenditure financing, 2011
Source: BOOST
1.9. Regulatory Framework
19. The legal framework for PIM in Seychelles is set out in a number of regulations, including the Public Finance Management Bill of 2012, the Public Finances Act of 1996, the annual Budget Circular, the Public Procurement Act of 2008, and the Public Enterprises Act of 2009. The Public Finance Act currently governs the foundations of PFM in the Seychelles. This act stipulates the roles and responsibilities of the Ministry of Finance, including those of the Minister, Principal Secretary, and relevant accounting officers. In regard to public investment, the act sets out the procedures for procurement, control of assets, and management of the budget.
9 This figure should be used with caution, as the Seychellois do not clearly distinguish the source of funding when a project is financed by a loan. This practice means that the expenditures classified under “Government of Seychelles” can include projects financed through loans from the World Bank or the African Development Bank. In fact, the only loans that are classified separately as foreign loans are those from the Arab Bank for Economic Development in Africa and the OPEC Fund for International Development. 10 The “off-Treasury” in-kind contributions may not reflect actual costs, as they are estimated and recorded manually, which could account for some of the small discrepancies between BOOST and IMF figures.
69% 0% 8%
8%
15% Government ofSeychellesDomestic Grants
Foreign Grants
Foreign Loans
In-Kind
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20. The Cabinet recently approved the Public Finance Management Bill of 2012, which aims at harmonizing budget processes, improving efficiency, and ensuring discipline and accountability, as described in the 2011 Memorandum of Economic and Financial Policies (MEFP). It incorporates legal requirements to improve information sharing and strengthen planning and budgeting. For example, it provides for mid-year execution reports and technical justifications for projects. Among a number of other reforms included in the bill, capital expenditures are to be integrated into the budget law and therefore will be subject to approval and oversight by the National Assembly. The new bill also requires the integration of the development fund—used to fund capital projects of some public entities involved with public infrastructure—into the budget (IMF 2012). 21. The Financial Planning and Control Division of MoFTI issues the annual Budget Circular to line ministries and other spending agencies based on the macroeconomic framework for the current year and three years forward. It provides instructions on the preparation and submission of draft budget estimates as well as parameters for the content and documentation requirements of new and ongoing capital expenditure project proposals (Box 1). The budget calendar is clearly stated and sets out timelines for each stage of budget preparation, including the submission deadline and budget discussion timeframe. Line ministries’ draft budget proposals should be submitted to MoFTI within four weeks, although delays often occur (PEFA 2011).
Box 1: Instructions in the annual Budget Circular
New projects. (i) Approved copy of the project memorandum; (ii) Estimated cost of the project and implementation schedule indicating the funding requirements for each year until completion; (iii) Copies of approvals obtained from relevant Ministries (i.e., Environment, Planning Authority, Title to property, etc.); (iv) Justification for funding to implement the project; (v) If approved, a Financial Warrant obtained from the MoFTI. Ongoing projects. (i) Brief status report on the project; (ii) Project funding requirement; (iii) Original and Revised Contract Price (with variation/additional works authorized and approved less omission and disbursement to date, if any) and Balance of funds required (indicate for each year); (iv) If continuation approved, a Financial Warrant obtained from the MoFTI. Source: Government of Seychelles Budget Manual 22. The Public Procurement Act of 2008 and the Public Procurement Regulations of 2011 regulate government procurement of goods and services. The act and its regulations delineate the institutional structures and responsibilities involved in public procurement, including the Procurement Oversight Unit (POU), the National Tender Board (NTB), Procurement Committees, and Procuring Entities. The NTB independently reviews and approves the award of tenders when the estimated value of projects exceeds a certain threshold. For smaller projects, line ministries or departments are allowed to conduct their own procurement via Procurement Committees or Procuring Entities. This structure ensures that the NTB serves as the “gatekeeper” for large capital expenditures and that appropriate checks and balances operate in public procurement. Table 2 lists the authorities in charge of approving contract awards and the thresholds for the three categories of procurement.
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Table 2: Procurement authorities and thresholds Goods and services Civil works Consultancies National Tender Board > SR 500,000 > SR 750,000 > SR 150,000 Procurement Committees SR 100,000–500,000 SR 150,000–750,000 SR 50,000–150,000 Procuring Entities ≤ SR 100,000 ≤ SR 150,000 ≤ SR 50,000
Source: Public Procurement Act 2008. 23. The Public Enterprise Monitoring and Control Act mandates the reporting arrangements for public entities and sets uniform governance rules, such as the appointment of the Chief Executive Officer and the establishment of the Board of Directors. After an assessment by MoFTI found that the financial accounts of about 13 public entities and government agencies were not in order, the National Assembly passed the Public Enterprise Monitoring Bill in 2009. This framework established a new Public Enterprise Monitoring Division within MoFTI to further strengthen the management and monitoring of public enterprises that engage in large public investment projects. Furthermore, given the high risks to the national budget from losses incurred by several public enterprises—as highlighted by recent developments at Air Seychelles, PUC, and the Seychelles Petroleum Company (SEYPEC)—the government is currently working to improve legal disclosure requirements for public entities.
1.10. Overview of Key Institutions
Ministry of Finance, Trade, and Investment 24. MoFTI is mandated to ensure a sound strategic financial policy for the Government of Seychelles to monitor and manage financial resources effectively. The ministry is responsible for advising, designing, and implementing quality financial services and ensuring that the government pursues fiscal and economic policies that are in line with the needs and well-being of all citizens. MoFTI is the central ministry in charge of liaising with donors, primarily the World Bank and IMF, providing strategic guidance to implementing agencies, and overseeing the financing of all capital projects. 25. Currently, the Financial Planning and Control Division of MoFTI is the subordinate department directly involved in the PIM process. This division not only prepares the annual Budget Circulars and budget statements but oversees the entire capital budgeting process by working with line ministries in preparing, implementing, and monitoring projects. While MoFTI does play a role in appraising projects, the ministry has no clearly mandated responsibilities or authority over other ministries and agencies in the appraisal process. Specific guidelines for the evaluation of project proposals are also lacking. No single dedicated unit at MoFTI is charged with project monitoring at the central level. Line Ministries, Departments, and Agencies 26. Line ministries, departments, and agencies are involved in the entire project cycle. In particular, they are tasked with preparing project proposals and providing documentation to MoFTI for both new and ongoing projects on an annual basis at the onset of the budget formulation phase. Many ministries, however, lack strategic plans to guide their internal project screening and selection process, and they often select projects on an ad hoc basis. In addition, very few ministries have technical departments to properly design or cost projects, nor do they
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undertake feasibility assessments or environmental and social impact assessments. Consequently, all administrative units across the government urgently need to develop the technical capacity to design, cost, appraise, monitor, and evaluate capital projects. Project Implementation Unit 27. Given their limited in-house capacity, some ministries use private companies to implement projects. A Project Implementation Unit, which is being piloted within the Ministry of Land Use and Housing (MoLUH), is tasked with providing civil engineering consultancy, technical support, and advisory services for the government’s social housing projects, as well all other public sector projects involving physical infrastructure and building development. The Ministries of Education and Health have engaged MoLUH’s Project Implementation Unit to carry out detailed design and management of several projects with construction components, because the ministries lack their own technical capacity to do so. The unit’s design and contract management sections help with initial appraisals for proposed projects, contract administration, detailed technical designs of projects, and project management and supervision. Public Oversight Unit 28. The POU, which serves as a procurement policy-making and monitoring body, reports directly to MoFTI. The POU is responsible for supervising the public procurement process and legal framework to ensure that public procurement proceedings comply with laws and guidelines, but in no way is it involved in the review of bids or the decisions on contract awards. National Tender Board 29. The NTB, established under the Public Procurement Act of 2008, receives and opens public bids, reviews the recommendations made by a Bid Evaluation Committee, and approves contract awards for all tenders that fall within the threshold (see Table 2). As an independent and autonomous body, the NTB ensures that the administration of public tendering is conducted in a fair and equitable manner. 30. The NTB’s annual report summarizes the public procurement, expenditures, and contract awards approved by the board during the fiscal year. The report also presents statistical data covering bid openings in relation to contract awards (the number and estimated value of contracts awarded). State-Owned Enterprises 31. The Public Enterprise Monitoring Division (PEMD), established under the Public Enterprises Act in 2009, oversees the fiscal affairs of all public enterprises. In particular it sets performance targets, monitors operational and fiscal performance, and arranges for technical assistance as needed. The major public enterprises in the Seychelles are PUC, the Seychelles Petroleum Company, the Seychelles Civil Aviation Authority, Air Seychelles Ltd., Island Development Company, Seychelles Public Transport Corporation, and Seychelles Port Authority. The PEMD is also responsible for oversight of some budget-dependent bodies, including the Seychelles Land Transport Agency, Seychelles Fishing Authority, Seychelles Tourism Authority, and the Seychelles Broadcasting Corporation, among others. As indicated, a number of public corporations impose huge burdens on the national budget and represent
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significant risks to the country’s economic health; the government has made large transfers in the form of development grants to those entities in recent years. Assessment of the Performance of the PIM System 32. This section provides a comprehensive analysis of how the public investment system in Seychelles is functioning in relation to the eight “must-have” features and diagnostic indicators of a well-functioning system. This assessment provides a sense of the trajectory of PIM reform over the past decade and identifies current binding constraints on the performance of the PIM system. The gap analysis is organized sequentially by each of the eight features: (i) investment guidance, project development and preliminary screening; (ii) formal investment appraisal; (iii) independent review of appraisal; (iv) project selection and budgeting; (v) project implementation; (vi) project adjustment and monitoring during construction; (vii) service delivery; and (viii) project evaluation. Before providing the details of the PIM assessment, the analysis briefly describes best practices as outlined by Rajaram (2010).
1.11. Project Guidance and Pre-Screening
33. Public investment project proposals should be linked to national development priorities, yet Seychelles lacks a national plan that anchors the government’s priorities and guides sector-level decisions on public investment. In the last several years, the government has maintained only a multi-year fiscal strategy, which is outlined in the MEFP. 34. While the government did launch the “Seychelles Strategy 2017” in 2007, that process only broadly defined the nation’s development strategies and provided little guidance for sectors other than tourism, fisheries, and the financial market. Furthermore, the 2017 Strategy was not fully implemented because the macroeconomic reform program adopted during the 2008 crisis reduced its legitimacy. While several line ministries did develop sector strategies based on the document, they were not updated for many years and their costs were often not fully calculated (PEFA 2011). 35. In more recent years, some line ministries have initiated their own medium-term plans (for example, the Ministry of Education, Ministry of Health, and Ministry of Social Affairs, Community Development, and Sports). Those macroeconomic and fiscal frameworks have provided internal guidance for preparing project proposals, and the ministries involved have prepared more detailed projects justified by clear links with sectoral priorities. Other sectors, lacking such a basic framework, have not aligned project development with strategic guidance, which has ultimately undermined the quality of guidance and pre-screening related to public investments. It is worth noting that the few existing sector strategies or investment plans are deemed to be overly ambitious and in many cases to be only a formality, given that a medium-term resource envelope is not available. 36. The Government of the Seychelles has reassessed the 2017 Strategy and is currently drafting a more conventional Medium-Term National Development Strategy for 2013-2017, based on a participatory approach that establishes development priorities at the highest national decision-making levels. It is assumed that sectors will now link their project priorities to objectives set out in the national development strategy.
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1.12. Formal Project Appraisal
37. A formal project appraisal is critical to ensure that only projects that are in line with government priorities and the budget envelope can pass the test for financing, and that all approved projects are assessed in terms of their expected economic and social impact. 38. Seychelles has separate procedures for donor-funded and government-funded projects. This inefficient parallel structure handicaps MoFTI in its role of ensuring allocative and technical efficiency of development expenditures, and it places an additional burden on the line ministries, which must comply with a range of complex rules for capital budgeting. Except for World Bank budget support, which follows the government procedures, line ministries and departments must follow donor-specific rules for the preparation, appraisal, monitoring, and evaluation of donor-funded projects. In addition, many donor-financed development expenditures are outside the national budget, and thus line ministries do not often submit this budget information to MoFTI. Another inefficiency of this parallel structure is that it adds to the complexity of harmonizing capital expenditures and recurrent expenditures ex post. 39. Although government-financed projects are appraised, the appraisals are subpar. To help guide planning and budgeting for public investment projects, MoFTI issues its annual Budget Circular, which specifies the documentation required for new and ongoing projects (as indicated in Box 1, above). These provisions lack real guidance on the technical aspects of project evaluation techniques or the criteria to be used in an appraisal, partly because the government has no overarching formal process to appraise projects’ economic feasibility or the technical capacity of line ministries to implement them. In fact, MoFTI reviews project proposals with regard to only two criteria: (i) budget availability and (ii) the absorption capacity of the line ministries (taking into account their backlogs of incomplete or ongoing projects). It is worth noting the MoFTI’s notion of absorption capacity relates to the number of incomplete or on-going projects within a specific line ministry and to the judgment (subject to direct discussion with the particular line ministry) on whether the delay in implementation of the existing portfolio would affect its ability to start new projects. In certain cases, MoFTI invites representatives of the line ministries to discuss and negotiate projects with the purpose of harmonizing proposals within the constraints of the government's overall resource envelope. The current practice is that feasibility study is not formally mandated as a precondition for review of project proposals and selection for financing. The dual challenges exhibit in the lacked capacity to conduct formal appraisal on the MoFTI part and the absence of incentives within the line ministries to ‘voluntarily’ subject their project proposals to stringent appraisal process. The latter is often justified by the lack of capacity within the MoFTI and as such directly challenges the central ‘gate-keeping’ role of the MoFTI. 40. While proper documentation requirements are stipulated in the Budget Circular, many line ministries or agencies submit inadequate or low-quality documentation because the provisions are neither strictly enforced nor related to financing decisions. In fact, for large-scale projects, line ministries often submit their project proposals for approval directly to the Cabinet of Ministers in an ad hoc fashion to bypass MoFTI. No regulation requires such a process, but the Cabinet typically reviews the projects and issues a list of approved projects to MoFTI to prepare the national budget.
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MoFTI is leading the development of a PSIP to streamline and institutionalize project submission and appraisal processes. A Guidance Document for managing the PSIP has been drafted and submitted for consultative review by other stakeholders, including the Cabinet and spending agencies.
1.13. Independent Review of Appraisal
41. It is sound practice to subject project appraisals to an independent review to ensure objectivity and value for money. Independent review is a requirement for PIM systems such as the one in Seychelles, where project proposals and screening are conducted at the level of sector and spending agencies. 42. As highlighted above, the Cabinet and/or MoFTI ostensibly serve as “gatekeepers,” reviewing the projects submitted by line ministries, but in practice the independent review function does not exist. Projects are selected largely in an ad hoc manner based on negotiation.
1.14. Project Selection and Budgeting
43. The appraisal and selection of public investment projects must be linked appropriately to the budget if a public sector investment program is to be efficient and sustainable. The medium-term macroeconomic framework and annual budget must therefore provide an envelope for public investment on either an aggregate or sectoral basis. Efficient investment requires active management of the asset portfolio and a budgetary process that provides recurrent funding to operate and maintain those assets. 44. According to the annual Budget Circular, line ministries are requested to estimate all capital expenditures proposed for the upcoming fiscal year as well as the three subsequent years (Circular No. 3 of 2012, Section B, Paragraph 1.2). Until 2012, however, MoFTI’s Budget Circular provided a ceiling only for recurrent expenditures, not capital expenditures. Line ministries are also requested to include estimates of the recurrent costs of capital projects for the future year’s recurrent budget. In practice, line ministries do not yet take into account the implications of capital projects (such as their projected operation and maintenance costs) on their recurrent budgets. 45. Capital expenditures are classified in the budget by ministry/department and by project. There is no sub-functional or programmatic classification. Furthermore, all budget lines included in the development budget are classified as “Acquisition of Non-Financial Assets” (that is, public investment), even if it is not clear whether they are actually capital expenditures. For example, the development budget includes projects such as "Elaboration of Creole-French dictionary financed by UNESCO," “Capacity Building for UNDP/GEF,” and “Celebration of the 90th Anniversary of the International Labor Organization.” It is not certain how much of the total budget for such projects/programs can be legitimately classified as capital expenditures. To address some of these limitations, the government started adopting GFS 200111 for the entire budget in 2013, and it aims to implement COFOG12 for the Development Budget by 2014. 11 Government Finance Statistics. 12 Classification of the Functions of Government.
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46. In addition, the government has laid the groundwork for implementing Program-Based Budgeting (PBB), which is intended to better align the government’s medium-term strategic objectives with budgeting decisions. PBB allows policy makers to prioritize resource allocations and compare costs and benefits when making funding decisions. The government has developed a policy paper for the Cabinet, Parliament, and other public officials on PBB and its implications for public finance in Seychelles. The government is also developing a guideline and implementation strategy for PBB, which will set out the specific steps to follow during implementation. The new Chart of Accounts is designed to incorporate PBB as well. The Ministry of Health and Ministry of Education have been migrating toward this type of budgeting during an initial pilot phase; the goal is for all ministries and departments to phase in PBB gradually by 2015 (MEFP 2011).13
1.15. Project Implementation
47. Once a project is selected for funding, the implementing agency must ensure that the project is implemented according to plan. Project design and implementation should therefore include a realistic timetable and clear institutional arrangements. It is important to establish procurement plans and other guidelines to ensure that the project is delivered on time and within budget estimates. Multi-year budgeting facilitates this outcome by allocating funds for project implementation over its life-cycle. 48. Most line ministries organize their own project management. As mentioned above, the Ministries of Education and Health are piloting the use of MoLUH’s Project Implementation Unit to manage projects with construction components. The unit’s staff of 28, including support staff, is already stretched to manage projects for the two ministries, however. A plan is being prepared to increase investment into MoLUH to improve their dedicated project management technical capacity and human resources with a longer view of extending its reach to support more ministries and spending agencies. 49. Procurement is centralized at the NTB, which oversees and approves all procurement of goods and services greater than SR 500,000 or civil works exceeding SR 750,000. If the cost of works is below the thresholds outlined in the Public Procurement Act, the line ministry or agency selects the contractor. In 2011, NTB procured 35 percent of capital expenditure allocations. Procurement committees or procuring entities procured the other 65 percent (NTB 2011 Annual Report). 50. Procurement, by default, is conducted on a competitive basis in the Seychelles. Projects tendered by NTB or the Procurement Committees are published in the national newspaper (the Nation) on a weekly basis. They are also advertised on NTB’s website for public information. In the case of international tenders, projects are posted on both the government’s website and the website of the Common Market for Eastern and Southern Africa. 51. The government has come a long way in providing transparent information on procurement to the public, yet proper procurement and contracting are still hampered by binding constraints. According to the 2011 PEFA report, not all ministries or agencies have procurement 13 See http://www.imf.org/external/np/loi/2011/syc/122311.pdf.
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plans, and those plans often are not comprehensive. Ministries and agencies do not keep a log of contracts awarded, value assigned, or procurement method used. The law contains no sanction for failing to deliver procurement plans to the POU. Furthermore, the availability and quality of contractors in the Seychelles is limited. Private contractors are few, and the capacity (financial and technical) of those that are available is notoriously weak. In particular, they often have gaps in their capacity to execute, adjust, and supply contracts.
1.16. Project Monitoring and Adjustment
52. Monitoring the implementation of projects should, at a minimum, involve comparing actual progress with the original implementation plan to detect, in a timely manner, any implementation gaps, determine why they have occurred, and decide how to correct them. Disbursements to implementing agencies should depend on regularly submitted progress reports and updated project documents as necessary. Funds should be disbursed in installments, with each installment relating to a phase of the project. Estimates of project costs should build in flexibility to allow for changes in the project’s circumstances. 53. Seychelles does not monitor projects at the central level (MoFTI). MoFTI lacks a dedicated unit to perform this critical function and has not yet developed monitoring guidelines. Monitoring therefore rests completely with the line ministries, mainly to serve their own project management purposes. The project or planning section at the line ministry conducts site visits to monitor implementation. The Ministries of Education and Health have outsourced project management to MoLUH and thus rely on MoLUH to monitor their construction projects. NTB is also mandated to conduct random checks but acknowledges that its limited resources prevent it from doing so. 54. In brief, there is no link between the financing and monitoring of ongoing projects. Although line ministries prepare quarterly reports on large projects to share with the Cabinet, those reports have no bearing on MoFTI’s decision to release quarterly financing for projects. 55. The process for adjusting a project’s design during construction is relatively strict. Contracts typically have a contingency provision specifying that some percentage of a project’s costs will be available to deal with unexpected cost overruns. Contractors can amend the design to adjust for unexpectedly higher construction costs within the limit specified, if they can justify the additional expenditure to the satisfaction of the line ministry. If the overrun is higher, the request has to be approved by MoFTI and may trigger retendering. On the one hand, this rigidity serves the fiduciary objective, but on the other, it may compromise the quality of a project or even its entire purpose—particularly when changes in external circumstances force a reduction or increase in a project’s scale.
1.17. Facility Operation
56. Once a project is completed, a process should be in place to ensure that the facility is ready for operation. An effective mechanism is needed to hand over responsibility for managing the asset, accompanied by sufficient funding for its operation and maintenance. Project proposals, especially for large infrastructure projects, should specify the arrangements for such a mechanism.
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57. Seychelles must overcome serious challenges in asset management. As mentioned, future operating needs are not reflected in capital budgets. Line ministries are supposed to register and track their assets, detailing their original cost values, depreciation, and residual values. The Budget Circular requests that ministries, departments, and agencies submit the latest version of their asset registry by July each year to MoFTI so that the government can maintain a central asset registry. This instruction is not followed. No comprehensive database of government-owned assets exists. The Ministries of Education and Health, in coordination with MoLUH, are piloting a new asset management system.
1.18. Project Evaluation
58. Project evaluations ensure that feedback and learning from projects can be used to improve the quality of PIM in the next cycle. Ex post evaluation does not occur for government-financed public investments, however. Policy Implications 59. The Government of Seychelles has embarked on a number of PFM reforms over the last few years, notably in budget preparation, accounting procedures, and budget execution. The result has been improved performance in the 2011 PEFA assessment compared to the assessment of 2008. Since 2008, the government has prioritized PFM reform and prepared three-year PFM Action Plans (2009–11 and 2012–14). Reforms in the latest Action Plan include a new Public Finance Management Act, the introduction of a new Chart of Accounts, improving multi-year budgeting, and steps toward PBB. With donor support, these reforms have improved fiscal consolidation and fiscal sustainability in PIM. 60. The government has made clear progress but still requires a systematic approach to capital budgeting and a strong PIM system. The low efficiency of Seychelles’ public investments is manifested in a number of ways. Projects are delayed or not completed; when they are finished, the assets are not operated or maintained to deliver services at the intended level of quality. Strengthening institutions and removing capacity constraints could help improve PIM and thereby improve access to basic services and meet urgent social needs. 61. Drawing on both the technical PIM system analysis and the institutional mapping of the PIM system, it appears that almost every component assessed in this diagnostic exercise is either missing or nonperforming. The main weaknesses include:
• Poor project selection. Capital projects are selected on an ad hoc basis because they are not explicitly linked to sector objectives or national priorities. The linkages are absent because most sectors do not yet have strategies, and Seychelles has no national development plan.
• Lack of a rigorous gatekeeping function. The process for project appraisal is inadequate. Roles and responsibilities are not clearly divided among line ministries, MoFTI, and the Cabinet of Ministers during the appraisal process. No formal guidelines for formulating capital proposals describe the techniques of evaluation.
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• Failure to harmonize capital and future operating costs. This longstanding issue highlights the disconnect between investments to create assets and the provision of sufficient resources to ensure that those assets are maintained and can operate as intended.
• Weak budgeting that reduces the overall quality of PIM. The Budget Circular requests line ministries to estimate costs for all capital expenditures for three additional years, yet Seychelles has no medium-term expenditure framework to guide the process. In addition, MoFTI does not provide line ministries with budget ceilings for capital expenditures. The Chart of Accounts is also inadequate; a number of items are incorrectly classified.
• Capacity constraints. Insufficient technical capacity in line ministries and departments affects all stages of PIM, including project design, appraisal, implementation, and monitoring. Most ministries lack a project management unit altogether.
• Project implementation is not centrally monitored. No centralized mechanism or dedicated unit for monitoring or control of project implementation exists. Line ministries do not have to provide progress reports to MoFTI to receive project funding.
62. Given that numerous functions are either missing or have been inadequately instituted in the current PIM system, incompleteness and delayed implementation of projects with construction component are not uncommon. While the authorities acknowledge problems with data collection, interviews at both the MoFTI and line ministries indicate extensive cost and time overruns in many projects. Reviewing the institutional and procedural setting of the project design, screening, appraisal and monitoring process helps clarify the complex set of causes behind inefficient project implementation, ranging from poor design, unrealistically low bid by contractors being under pressure to win the bids and then followed by incremental increase in both annual and total costs incurred throughout investment phase. The need for comprehensive PIM reform is clear. Both political and technical reforms are required. Specific measures must also be commensurate with the institutional context and capacity; for this reason, it is imperative for MoFTI to make an informed decision on the priorities for reform and the sequence of reforms. 63. It is important to emphasize that in parallel with this diagnostic work and policy note, MoFTI is already initiating and leading a number of critical reforms to address the problems in PIM. First and foremost is the development of the PSIP. A comprehensive document to guide the PSIP’s development is currently being produced. It will cover all projects financed from different sources and will specify an overarching institutional arrangement—specifically, a Development Committee—to screen, appraise, and select projects (Box 2). The establishment of the DC envisioned by the MoFTI originates from the Ministry’s acknowledgement of the in-house capacity and from its perspective to enhance the quality of appraisal and capital budgeting through wider stakeholder participation.
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Box 2: Proposed Development Committee: Roles and Functions
The draft Guidance Document for the Development of the Public Sector Investment Program (PSIP) calls for the establishment of a Development Committee to execute the following functions. 1. Regularly reviewing the policies and systems necessary to ensure efficient and effective management of the PSIP and advising the responsible authorities on changes where appropriate. 2. Systematically and formally screening all new investment proposals including those that result from substantial changes in cost or scope to already approved investment projects. 3. Maintaining a comprehensive and up-to-date record of proposals that have successfully met screening requirements. 4. During the development of the upcoming budget, prioritization of all screened proposals in accordance with Government policy and priorities and value for money criteria. 5. Within budget expenditure limits, recommend to the Cabinet, through the Minister of Finance, Trade and Investment screened proposals and existing projects that should be included in the upcoming Budget. 6. The budget recommendations to the Cabinet are to be accompanied by a list of successfully screened proposals that were not included in the recommended programme. 7. Comprehensive quarterly review of the performance of all approved projects including identifying potential cost over runs, delays and reallocations between projects. 64. Second, concurrent with the drafting of this policy note, MoFTI is drafting an Action Plan for PIM reforms. The plan covers a wide range of PIM reforms and contains six major sections: (i) the overall institutional and procedural requirements for a functioning PIM system; (ii) preliminary screening and project appraisal; (iii) project selection and budgeting; (iv) project implementation and monitoring; (v) asset registry/asset management; and (vi) ex post evaluation. The Action Plan is based on the principles set out in the draft Guidance Document for the PSIP. 65. Activities under the forthcoming Action Plan should be designed to “wrap around” the planned PSIP, to ensure that the process is successful. This approach implies that the government will need to focus on: (i) articulating the PSIP management structure (namely, the Development Committee); (ii) developing guidelines to manage the PSIP; (iii) staffing and training of key personnel for the Development Committee and line ministries; and (iv) instituting the monitoring function at the central government level (at MoFTI). 66. The sections that follow discuss the main policy recommendations focusing on (i) revision of the PSIP Guidance Document and (ii) proposed PIM reform actions in the short and medium term.
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1.19. Refining the PSIP Guidance Document
67. The Draft Guidance Document for the Development of Public Investment Proposal Submissions clearly outlines and identifies the core institutional setting and specific processes for ensuring uniform submission of project proposals, pre-screening, appraisal, and budgeting. This document will form the backbone of the PIM reforms. For that reason, the document must be finalized and instituted with care, with particular attention to the budgetary process and the structure for managing the PSIP. Coverage of the PSIP and Links with Budget Preparation 68. Box 3 describes some elements of PIM in South Africa. It gives an indication of how Seychelles PIM system—from upstream project appraisal and financing to downstream project implementation and asset management—could be strengthened if its institutional arrangements and procedures were clearly defined and tied to budgetary and monitoring processes. With these points in mind, Seychelles’ should refine its Guidance Document and very clearly set forth the coverage of the PISP and the linkages between the PSIP and budget preparation, execution, and monitoring. Coverage. The PSIP should be an integrated, consistent instrument governing a comprehensive range of public investment projects with different sources of financing (government, domestic and external debt, grants, and concessional loans). Linkages to budget preparation, execution, and monitoring. As the basis for annual budgeting for capital expenditures, the PSIP is to be updated annually. The Guidance Document must clearly stipulate that only projects included in the PSIP are eligible to be considered for financing. The PSIP is a living document, not a shopping wish list. The proposed projects in the PSIP must be reviewed periodically with attention to the absorption capacity and lessons learned from projects under implementation, including the backlog of incomplete or delayed projects and projects with serious cost overruns. Establishment of the Structure of PSIP Management 69. The planned establishment of the PSIP Development Committee is sensible, both politically and technically. Even so, the Guidance Document can be more specific about committee ownership/leadership, adequate levels of staffing and resources, and the formalization of complementary processes. 70. International lessons and practices indicate that MoFTI is inherently the most appropriate body to assume the leadership role in this committee. That leadership must be stipulated clearly in the Guidance Document. The document should also clearly state where the PSIP is to be housed and the level of staffing and budget required for the committee to function adequately. 71. The supporting processes that will ensure that the PSIP becomes an effective tool for linking planning, policy, and budgeting need to be formalized. In particular, a system to screen or appraise projects must be prepared. The methodologies that will be applied to different projects with different scales and levels of technical complexity must be clearly indicated.
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Box 3: Elements of public investment management in South Africa
South Africa has detailed guidelines for the information that is to be included in the budgets submitted for proposed public investment projects. The budget framework is defined in concrete terms by the 12 targets in the national budget, but individual project proposals must meet strict requirements. Cost estimates must be accompanied by an explanatory narrative that includes the statutory authority for spending programs, identified outcomes, discussion of performance against output targets, proposed savings measures, and alternative or complementary sources of funding. Performance information contained in the proposal submissions will be analyzed to assess, among other things such as feasibility and operational risks, whether value for money has been realized over time in respect to previous budget allocations. For infrastructure and capital projects, the National Treasury has issued Capital Planning Guidelines. The guidelines aim to ensure a more rigorous evaluation of project lifecycle costs, benefits, and risks; to improve the prospects that projects are implemented on time and within budget; and to ensure that capital spending yields the intended outcomes and service delivery improvements. Based on these requirements, projects are evaluated on an ongoing basis against rigorous evaluation criteria throughout the year. Departments are required to prepare User Asset Management Plans, in alignment with the provisions of the Government Immovable Asset Management Act. Infrastructure planning and management have been improved substantially by the Construction Industry Development Board. The board has created a toolkit that guides industry performance as well as best practice schemes on procurement, contracting strategies, standards for enterprise management and construction management, as well as skill development. Source: Authors Governance of the PSIP 72. Proper establishment and management of the PSIP will enable it to become an effective strategic planning tool for achieving development objectives. Lessons learned from failed PSIPs in the developing world, however, indicate that a PSIP can do more harm than good if scarce government resources are wasted on developing an overambitious investment program that is basically a compilation of projects raised by ministries, departments, and agencies. Box 4 describes good governance practices for PSIPs.
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Box 4: Good practices for structuring and governing public sector investment programs
Numerous countries adopted PSIPs in the late 1980s but after a decade abandoned them on a massive scale. The main problem with those programs was misaligned incentives for the national ministries, departments, and agencies, which sought to incorporate as many as project proposals as possible without any regard for their financial cost implications or social and economic benefits. Those early PSIPs typically were prepared without proper communication among stakeholders, including central financial and planning agencies, line ministries, target communities, and the public at large. The result was a chronic lack of funding and the complete disintegration of the links between annual budgeting and the PSIP. Allen and Tomasi (2001) list good practices for structuring a PSIP.a A PSIP should cover a period of three to four years and attempt to estimate the annual capital cost and recurrent cost implications. It should be prepared annually on a rolling basis. The first year of the PSIP includes only projects financed in the budget, while the following years provide an indicative list of projects and their estimated costs. The PSIP should cover investment projects financed from all public sources, including domestic financing, external financing (grants and loans), and public-private partnerships (PPPs). Good governance of a PSIP starts with its preparation. The PSIP must be prepared through a broadly consultative process, and each line ministry must prepare a costed sector strategy to form the foundation of its PSIP proposals. The quality of a PSIP depends on the due application of sufficiently rigorous pre-screening and appraisal procedures for proposed public investment projects. As lessons from earlier PSIPs indicate, it is vital to establish protocols for aligning national expenditure and investment priorities. In Botswana, for example, the Ministry of Finance and Development Planning determines the resource availability and recurrent and development expenditure ceilings. The development expenditure ceilings are based on the Medium-Term Expenditure Framework (MTEF) and are used to set the limit on annual capital expenditures (this practice enables Botswana to guarantee alignment between the PSIP and MTEF). The PSIP is also legally binding: Once approved by the Parliament, it is illegal to implement any public investment project not included in the program. Source: Authors. See also: Allen, R., and D. Tomasi. 2001. Managing Public Expenditure: A Reference Book for Transition Countries. Paris: Organization for Economic Co-operation and Development (OECD).
1.20. Proposed Public Investment Management Reforms in the Short and Medium Term
73. The Action Plan that MoFTI is drafting is comprehensive, and its reform components are well articulated. To ensure its successful implementation, however, it should build on consensus with the Cabinet of Ministers and be well-communicated among the ministries, departments, and agencies. Additional short- and medium-term policy recommendations to supplement finalization of the Action Plan are described here. Box 5 briefly outlines the immediate and short-term actions and activities that MoFTI will undertake to ensure that the required capacity is acquired before those policy measures are implemented.
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Short Term (within a year) 74. In finalizing the Action Plan, MoFTI should consider the following steps:
• Consult with the Cabinet, line ministries, and other stakeholders (including the private sector) to complete the draft PSIP Guidance Document. The consultation should aim to attain consensus about the PSIP process and management structure.
• Also related to the PSIP Guidance Document, reach an agreement and clarify with the Cabinet and line ministries the format for project proposals that will be submitted for approval. Once the template for project proposals is developed, it will be applied uniformly across ministries, departments, and agencies. Proposals that do not conform to the template will be returned by MoFTI.
• Develop an additional set of simplified, transparent guidelines on project appraisal. The uniform template for project submission has direct implications for the approach and methodology adopted for project appraisal. Various appraisal methodologies have been developed; their successful application will depend on the capacity of line ministries in charge of appraisal, the size of the projects involved, and their technical complexity.
• Establish a threshold for projects submitted for appraisal and review by the Development Committee to ensure that they are rigorously appraised and reviewed. Given that Seychelles appears inclined to continue decentralized appraisals, in which line ministries are responsible for the preparation, pre-screening, and appraisal of project proposals, it is vital for the Development Committee to be able to conduct or organize an independent appraisal process for large projects. MoFTI is considering that projects at and above a threshold of SR 25 million should be subject to independent review. While the full blown cost benefit analysis or cost effective analysis takes time to train and build capacity, in the immediate term, it is critical to prepare a simplified template for project submission and transparent set of criteria for reviewing the quality of project proposal design, reality of its projected costs and benefits; risk identification and mitigation measures, consideration of different options of different scale and timing, as well as the execution capacity of the line ministries.
• Plan for the creation of a dedicated monitoring function at MoFTI. • Initiate a staffing and training needs analysis and prepare a budget for this human
resource development implementation plan. Given the core reform activities being planned for 2013 and early 2014, the initial training could emphasize the training of trainers and training of core members of line ministries in the preparation of project proposals and project design, and of MoFTI personnel in appraisal and monitoring.
Medium Term (two to five years) 75. Further reforms should cover the following items:
• Develop a complete, integrated set of guidelines or manual covering all stages of PIM: project proposal submission, pre-screening, appraisal, financing, design, project management, monitoring, and evaluation.
• Consolidate the legal foundation for project monitoring. In particular, the Budget Circular should add reporting on monitoring as a budgeting requirement that line ministries must follow, and it must establish a mechanism for periodic, on-site, joint monitoring by MoFTI, NTB, and line ministries. Rigorous monitoring would put pressure on line
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ministry to deliver value for money. It would also facilitate broader consultation among different stakeholders that is expected to help detect implementation problems or the need for modifying the project design due to changes in projected costs and benefits and environment where projects are being constructed. The rigor of monitoring can also be differentiated using some threshold (same threshold of proposed SR25 million for project appraisal would be a pragmatic consideration for the threshold for extensive monitoring). Over time, the monitoring function should be enshrined in the PFM law—ensuring that satisfactory periodic monitoring reports serve as a condition for releasing funds to complete projects.
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Box 5: Seychelles Public Investment Management: Policy Action Brief
This brief serves as a companion to the Policy Note on Strengthening Public Investment Management. Its purpose is to establish the three core policy decisions/actions for MoFTI’s fiscal year 2013 work plan by linking the policy interventions articulated in the two most critical documents: The Draft Guidance Document for the Development of Public Investment Proposal Submissions (the PSIP Guidance Document) and the PIM Reform Action Plan. The three core policy actions are to: (i) undertake wide consultation before formal issuance of the Guidance Document; (ii) undertake a study tour for senior management and professional staff on PIM; and (iii) build capacity in project appraisal.
Wide consultation before formal issuance of the Guidance Document. The draft Guidance Document clearly establishes the institutional setting and core PIM procedures. It determines the formation of the most critical institution—the Development Committee—which will manage the appraisal and selection of project proposals. As the backbone of all of the PIM reforms, enactment of the Guidance Document is the single most critical lock-in reform action, because it can trigger subsequent reforms. For that reason, it is vital to refine the draft through consultation with a wide group of stakeholders (including the Cabinet of Ministers, ministries, departments, and agencies), revise it as necessary, and enact it.
Study tour for senior management and professional staff on PIM. PIM reforms are massive in scope and therefore should be planned over several years. They are costly and sometimes highly political. In parallel with the process of reviewing and consulting on the draft Guidance Document (discussed previously), it is necessary to understand the whole value chain for PIM from a practical perspective to ensure rigorous implementation. As such, it is important to undertake a study tour in a country (such as the United Kingdom) that has an advanced PIM framework. The tour should be initiated by MoFTI and include senior management as well as key technical staff intended to work on PIM from various government institutions, in particular the Cabinet, MoFTI, and key ministries, departments, and agencies. The two objectives of the study tour should be to: (i) facilitate political buy-in by building awareness among policy makers and (ii) enable professional staff to establish the essential technical knowledge and first-hand learning on all factors (political, institutional, and technical) related to the PIM process. For the management and technical staff at MOFTI, the study tour also serves as a prelude to refining the Action Plan, facilitating the staffing, and engaging the technical assistance to support implementation of the Action Plan.
Capacity building in project appraisal. The core function vested in MoFTI is to ensure allocative and technical efficiency in public expenditures. As such, MoFTI should engage effectively and efficiently with ministries, departments, and agencies in project appraisal, the result of which is intended to guide decision on project financing. To institute the project appraisal function and independent review of project appraisal at MoFTI, commensurate appraisal techniques must be developed and staff must be trained to use them.
As the first step, MoFTI could organize a small core group of senior management and technical staff working on PIM to participate in a good appraisal training program (for example, at Duke University; see http://dcid.sanford.duke.edu/exed/parm). The key purpose of this executive training is to provide an opportunity for the management group to learn the essentials of project appraisal.
Follow up. To ensure that this training remains effective over the long term, on their return the participants should: (i) participate in the development of training materials and appraisal techniques and (ii) train more government staff,-including personnel in sector ministries. Reimbursable technical assistance from the World Bank can be used to develop the training materials and a detailed plan for effective appraisal.
Source: Authors
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Adapting the Health Sector to Emerging Challenges Chapter 2.
Executive Summary Seychelles is the top performer in Africa for health, nutrition, and population outcomes. A review of outcomes in 176 countries found that Seychelles was the top performer in sub-Saharan Africa and ranked 56th globally. Seychelles has already achieved most of the Millennium Development Goals (MDGs), especially for education, health, and poverty eradication. Gross enrollment in primary and secondary education is close to 100 percent. Education is fully subsidized up to the secondary level and partially subsidized at the tertiary level. The state provides free primary and universal access to healthcare, and its health indicators are very good, comparing favorably with those in other small island states and even some counties within the Organization for Economic Co-operation and Development (OECD) countries: infant mortality at 9.8 per 1,000 live births in 2011, a maternal mortality rate of zero in many recent years, all children fully immunized, 99 percent of deliveries assisted by skilled health workers, and life expectancy at birth of 73 years. Despite these impressive results, two remaining concerns are the rate of teenage pregnancy and male life expectancy. The disease burden has shifted to non-communicable diseases, injuries, and mental health problems. Non-communicable diseases, in particular, have been the main causes of death in recent years. Cardiovascular diseases, cancers, and respiratory diseases account for about 60 percent of all deaths. The shifting age structure of the population toward a majority of older individuals increases the pressure on the health system of illness related to old age. Coverage of some important services is low. Contraceptive use remains low, at less than 50 percent. The use of modern contraceptive methods among women ages 15–49 declined from over 60 percent in 1996 to 36 percent in 2009, and 32 percent of all first pregnancies occur among women ages 15–19. Many women still opt for illegal abortions (legal medical abortions can be obtained for very specific reasons following a review by a medical board). Rates of HIV-AIDS, although low, continue to rise. Not surprisingly, given the nation’s significant health infrastructure and options to “shop around,” the use of health services is high. Seychelles has a large number of health facilities and hospital beds per person. Over the years, a robust network of health facilities focused on primary care and achieving universal coverage of services has emerged. The country has 20 operational government health facilities: 1 tertiary hospital (Seychelles Hospital), 3 cottage hospitals, 1 rehabilitative hospital, 1 psychiatric hospital, and 14 health centers. The average individual visits a health facility six times per year and is seen by a doctor for four of the six visits. Outpatient visits vary greatly across health centers. Some centers are crowded and patients sometimes complain about longer waiting times, whereas some centers report having fewer than 10 visits per day. Findings from a patient exit survey suggest that users perceive that the services are of high quality and access to services is high. The vast majority of patients, 86 percent, take less than 30 minutes to get to their health facility of choice, mostly via public transportation or walking. Most
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come for consultations and pharmacy services. Just over 20 percent of patients were prescribed sick leave during their visit. Less than one-fifth of respondents reported taking more than 10 days of sick leave in 2012, although the rate is often assumed to be higher. Nearly 67 percent of patients waited a very reasonable time (30 minutes or less) to be seen by a health worker. Patients’ survey responses indicate that they find health workers’ responsiveness to be very good overall, their providers to be competent, and conditions within health facilities to be good. Findings from a provider survey and an analysis of human resources in the health sector point to robust staffing despite challenges in recruitment and retention. The number of doctors, nurses, and midwives in relation to the population (7 per thousand individuals) far exceeds the benchmark associated with good basic maternal and child health outcomes (2.3 per thousand individuals). Even so, medical doctors, particularly specialists (in demand owing to the disease burden and aging population), are less numerous than other health workers. Seychelles has no medical school or post-graduate opportunities, so physicians or specialists either train or are recruited from abroad. The time required to fill a specific health worker vacancy in Seychelles is very long, possibly reflecting the difficulty of recruiting doctors or doctors with particular specializations. Attrition in the public health sector is low (5 percent per year) but may be on the rise. Among health workers, 20 percent say that they plan to work in the private sector, largely motivated by higher earnings; 26 percent plan to switch to work outside the health sector within five years, drawn by higher perceived earnings. Five percent plan to leave the country annually to obtain specialized training. While currently low, the number of retired health workers will double in one decade and triple in two. Expenditure analysis shows high returns on healthcare investments and the potential for increased fiscal pressure from the sector in coming years. Health spending accounts for only 3.3 percent of gross domestic product (GDP) and produces outcomes comparable to some OECD countries. In 2009, the government accounted for 87 percent of health expenditure; the private sector, 7 percent (which includes household out-of-pocket payments); and international partners, 6 percent. The constitution grants all citizens access to primary care services free of charge in all public health facilities, yet in practice all services in those facilities are provided free of charge, as well as most tertiary treatment overseas. Recurrent expenditure in the health sector has almost doubled in the last five years, rising from SR 194 million in 2006 to SR 374 million in 2011. Health expenditure will continue to rise, partly because of increased demand for expensive tertiary care as the population ages. An important consideration is that Seychelles has low economies of scale, particularly for capital investment, so the unit cost of service provision will remain high. The two main drivers of cost increases in the health sector are (i) salaries and wages and (ii) medicines and medical supplies. Hospital support services account for the largest share of health expenditure, whereas public health and preventive services account for only 7 percent. Building on this success, health policy must focus on five interrelated actions in the coming five years to benefit from gains in efficiency and cost savings, adapt to the changing disease burden, and modernize the health system. First, an intelligent, integrated, and customized information system is needed to help manage the health sector, monitor development, and lay the informational foundation for policy development. Second, a package of services that prioritizes cost-effective services that match the changing disease burden and needs of an aging population
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must be developed. Third, Seychelles must build incentives on the supply and demand side in the health sector to reorient curative care toward secondary prevention for the emerging non-communicable disease profile (cardiovascular diseases, cancers, and respiratory diseases). The fourth action is to build and strengthen the public health agenda to develop and implement a broad-based, multi-sectoral approach to primary prevention to tackle growing risk factors such as overeating, alcohol use, tobacco use, and so on. Finally, monitoring and projection systems must be strengthened to help manage the inevitable growth in public and private spending on health (and reduce losses arising from inefficiencies, inadequate quality, and attrition in human resources in the health sector). Among African nations, Seychelles has led the way in maternal and child health outcomes and can now demonstrate similar leadership in tackling the non-communicable disease agenda. The non-communicable disease agenda is already large in most African countries, but unlike the Seychelles, they are still struggling with the basic maternal and child health agenda. Seychelles is poised to build on the success of its health sector and leadership capacity to point the way for other countries as it addresses the non-communicable disease agenda.
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2.1. Introduction
76. The Republic of Seychelles is a small, service-based, middle-income island state situated in the Indian Ocean. The country comprises 115 tropical islands spread over 45,166 hectares in the Indian Ocean. It has an exclusive economic zone of almost 1.4 million square kilometers in one of the world’s major tuna fishing grounds. The population was 89,770 in 2011 (50.7 percent female, 49.3 percent male); 76 percent is settled in the main Mahé Island, 8 percent in Praslin Island, and 4 percent in La Digue and outer islands. With gross national income (GNI) per capita of US$ 11,070 (2011), Seychelles is classified as a high-middle-income country. The labor force stands at 52,182 (57.4 percent). Tourism accounts for 25 percent of GDP, 25 percent of employment, and 70 percent of foreign exchange earnings. Tuna fishing, processing, and ancillary activities represented more than 8 percent of GDP in 2011, about 7 percent of jobs, and around 35 percent of exported goods. The artisanal fisheries sector is small—together with the agricultural sector, its share of GDP is less than 3 percent—but it has great socioeconomic significance.14 77. Seychelles is the top performer in sub-Saharan Africa for health, nutrition, and population outcomes and ranks 56th of 176 countries surveyed globally. Four dimensions of health, nutrition, and population outcomes are considered to construct the Health, Nutrition, and Population index (HNPi) for all countries of the world: (i) height for age—stunting; (ii) life expectancy at birth; (iii) total fertility rate (TFR); and (iv) maternal mortality rate. Seychelles in 2011 is where China was in 2008 in life expectancy at birth, whereas the large majority of African countries are where China was in the mid-1960s (Figure 8). Seychelles has one of the lowest fertility rates in Africa, close to the replacement rate. When fertility trends are compared in Africa and Brazil since 1960, Seychelles emerges as a high performer. For some African countries, TFR is 6 or higher—similar to Brazil in 1960 (Figure 9). Figure 8: Life expectancy at birth in Seychelles, other African countries (2011), and China
(1960–2011)
Source: World Bank, Africa Region Health, Nutrition, and Population Strategy (forthcoming).
14 National Bureau of Statistics, “Seychelles in Figures,” 2012.
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Figure 9: Total fertility rate in Seychelles, other African countries (2011), and Brazil (1960–2011)
Source: World Bank, Africa Region Health, Nutrition, and Population Strategy (forthcoming).
78. Seychelles has already achieved most of the MDGs, especially for education, health, and poverty eradication. Gross enrollment in primary and secondary education is close to 100 percent. Education is fully subsidized up to the secondary level and partially subsidized at the tertiary level. The state provides free primary and universal access to healthcare, with very good indicators of health outcomes—infant mortality at 9.8 per thousand live births in 2011, maternal mortality of zero in most recent years, all children fully immunized, 99 percent of deliveries assisted by skilled health workers, and life expectancy at birth of 73 years—all of which compare favorably with other small island states, similar economies, and some OECD countries (Table 3).
Table 3: Health indicators: Seychelles and selected countries, 2010
Indicator Cyprus Estonia Fiji Latvia Lithuania Maldives Mauritius Seychelles Population, total 1,103,685 1,340,161 860,559 2,239,008 3,286,820 325,694 1,280,924 89,770 GNI per capita, Atlas method (current US$)
28,570 14,150 3,610 11,850 11,620 5,490 7,950 10,390
Total health expenditure per capita (current US$)
2,012 898 155 762 782 409 465 368
Health expenditure, total (% of GDP)
7.4 6.3 4.2 6.7 7.0 6.2 6.2 3.3
Life expectancy at birth, total (years)
79 75 69 73 73 77 73 73
Maternal mortality ratio, per 100,000 live births
10 2 26 34 8 60 60 0
Under-5 mortality rate, per 1,000 live births
3 4 17 9 6 12 15 10
Source: World Development Indicators. 79. Over the years, Seychelles has developed a robust network of health facilities focusing on primary care and has achieved universal coverage of services. Seychelles has 14 health centers (12 in Mahé , 1 in Praslin, and 1 in Silhouette Islands); 3 cottage hospitals (one each in Mahé, Praslin, and La Digue); and a tertiary hospital (1), rehabilitative hospital (1), and psychiatric hospital (1), all located in Mahé. Services are accessible and close to the community.
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Facility-based services are complemented by a school health program and home visits. Seychelles also has 14 private clinics operated by general practitioners, 5 dental clinics, and 2 pharmacies. The public health services employ about 1,500 health workers, of whom 125 are doctors (including consultants), about 500 are nurses/midwives, 18 are dentists (including a consultant), and 5 are pharmacists.
80. Despite Seychelles’ remarkable achievements, the health sector still presents a number of challenges. Coverage of some important services is low. For example, contraceptive use remains low, at less than 50 percent. The use of modern contraceptive methods among women ages 15–49 declined from over 60 percent in 1996 to 36 percent in 2009,15 and 32 percent of all first pregnancies occur among women ages 15–19. Many women still opt for illegal abortions (legal medical abortions can be obtained for very specific reasons following a review by a medical board). Rates of HIV-AIDS, although low, continue to rise. The burden of disease in Seychelles has shifted to non-communicable diseases, injuries, and mental health problems. Non-communicable diseases in particular have been the main causes of death in recent years. As the age structure of the population shifts from younger to older individuals, pressure on the health system to treat illnesses related to old age is rising. The growing demand for costly tertiary healthcare has increased health expenditure, which is financed mainly by the government through general tax revenues. Recurrent expenditure in the health sector almost doubled in the last five years, rising from SR 194 million in 2006 to SR 374 million in 2011. 81. Life expectancy at birth is much worse for males than females. Globally, Seychelles ranked 9th from the bottom for male life expectancy at birth in 2011, with a difference of 29 positions between males and females (female life expectancy at birth is 65th globally, whereas for males it is 94th). Table 4 presents data on the bottom 15 countries, most of which are from Eastern Europe Table 4.
Table 4: Male and female life expectancy at birth: Bottom 15 countries Country LEF
2011 Rank LEF
LEM 2011 Rank LEM
Rank M–F
Poland 81.1 35 72.6 56 21 Kazakhstan 73.79 105 64.23 127 22 Colombia 77.405 64 70.058 91 27 Hungary 78.7 48 71.2 75 27 Romania 78.2 51 71 78 27 Bulgaria 77.8 56 70.7 84 28 Seychelles 77.4 65 69.7 94 29 Cape Verde 77.727 58 70.288 88 30 El Salvador 76.79 77 67.331 107 30 Ukraine 75.88 83 65.98 113 30 Russian Federation 75.1 94 63.2 132 38 Estonia 81.3 32 71.2 74 42 Belarus 76.9 75 64.7 122 47 Latvia 78.8 47 68.6 98 51 Lithuania 79.3 45 68.1 100 55
Note: LEF = life expectancy (females); LEM = life expectancy (males).
15 These numbers are based on service statistics in public health facilities. Numbers could be higher, depending on the size of contraceptive use through private practitioners and dispensaries.
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82. This policy note provides a comprehensive review and evidence-based analysis of the current performance of the health sector in Seychelles; based on that information, it proposes a policy framework for the health system to adapt to the emerging needs of a growing economy and increased demand from the population. Specifically, Seychelles needs to improve the efficiency of public spending on health and manage the expected growth in health sector spending. In addition to the standard expenditure/budget analysis, the public expenditure review (PER) commissioned two data collection efforts: a patient exit survey and health worker survey. The next section describes the key features of the health system and its challenges. Section 3 then reviews findings from the patient exit survey and new heath worker census, and Section 4 outlines a proposed policy framework that could be implemented in the short to medium term. Detailed findings from the health worker survey are presented in Annex 2. 2. Key Features of the Health Sector 83. The aspects of the health sector described here include trends in mortality, the disease burden, and the age structure of the population, as well as patterns of health services utilization. An analysis of public expenditure in the health sector follows, and the overview concludes with a brief assessment of the reforms introduced since 2009.
2.2. Mortality and disease burden
84. The burden of disease in Seychelles has shifted to non-communicable diseases, injuries, and mental health problems. Non-communicable diseases, in particular, have been the main causes of death in recent years and reflect changing lifestyles and diet—the major risk factors being obesity, tobacco use, alcohol abuse, and lack of physical activity. No structural change was found in the causes of death for the full population in Seychelles between 2003 and 2011. The three main causes—cardiovascular diseases, cancers, and respiratory diseases—account for about 60 percent of all deaths. The next three causes—external causes (accidents), infectious and parasitic diseases, and diseases of the digestive system (in about equal order of importance depending on years)—together account for another 20 percent Figure 10.
Figure 10: Causes of death as a percentage of all deaths
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2003 2004 2005 2006 2007 2008 2009 2010 2011
Cardio-vascular Cancers Respiratory system
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85. A comparison of age-standardized mortality rates16 between Seychelles and other countries, using a five-year average, reveals comparable performance. Seychelles is doing slightly better than Latvia, Lithuania, and Estonia, all of which have higher per capita incomes, and about the same as Mauritius Figure 11. Seychelles has a disease burden similar to that of higher-income countries, with cardiovascular diseases and cancers being the main causes of death. The cancer mortality rate is twice as large as in Mauritius but comparable to that of countries with higher income levels. Figure 11: Age-standardized mortality rates by cause of death (5-year averages, countries
sorted by per capita income)
86. Seychelles is set apart from the comparators by its mortality rate for respiratory diseases, which is highest in the group and the third highest cause of mortality in the country. Infectious and parasitic diseases, although not accounting for a large share of deaths, kill relatively more individuals in the Seychelles than in all other comparator countries except Fiji. Yet Seychelles performs as well or better than high-income countries in the category of endocrine, nutritional, and metabolic diseases, and external deaths do not appear to be a concern when looking at the five-year average. 87. Cancers considered amenable to treatment constitute about one-third of cancer deaths in the Seychelles Figure 12. To assess the extent to which primary prevention and early detection could reduce cancer mortality, the share of cancer deaths caused by a primary site (colorectal, breast, cervical, lungs, bronchus, trachea) of cancer, for which early detection and prevention is proven effective, was calculated. 16 Age-standardized rates allow fairer comparisons between groups with different age distributions. For example, a country having a higher percentage of elderly people may have a higher rate of death than a country with a younger population, merely because the elderly are more likely to die. Age adjustment can make the different groups more comparable. Death rates were adjusted for this analysis using a WHO standard population distribution. The age-adjusted rates are the rates that would have existed if the population under study had the same age distribution as the "standard" population. In other words, they are summary measures adjusted for differences in age distribution.
0 200 400 600 800 1000 1200
FijiMonteneg…Mauritius
SeychellesLithuania
LatviaEstonia
PortugalReunion*
CyprusIreland
Diseases of the circulatory system
Endocrine,nutritional and metabolic diseases
Neoplasms
Symptoms,signs and abnormal clinicalfindingsCertain Infectious and parasitic diseases
Diseases of the respiratory system
External causes of morbidity and mortality
Diseases of the genitourirany system
Diseases of the digestive system
Related to Childbirth/Pregnancy/malformationsDiseases of the nervous system
Diseases of the skin and muskoskeletal
Diseases of the Blood
36
Figure 12: Share of "amenable" cancer types among all cancer deaths
88. Overall, cardiovascular diseases and cancers remain the first and second most important causes of death for people under 65, explaining 40 percent of premature deaths. A breakdown by gender reveals that among males under 65, external causes account for a larger proportion of deaths than cancers, but otherwise males and females exhibit no other major differences in causes of premature death. Respiratory diseases, which were found to be important in Seychelles relative to comparator countries, caused the same proportion of premature deaths among the male and female populations in Seychelles. Figure 13: Male and female premature mortality rates by cause of death, average 2005–11
Source: World Bank Staff calculations. Data on population and cause of death from the Ministry of Health.
89. In summary, Seychelles has gone through the epidemiological transition (that is, the disease burden has shifted to non-communicable diseases, and Seychelles’ disease burden is similar to that of high-income countries). Cardiovascular diseases, cancers, and respiratory diseases account for about 60 percent of all deaths. Amenable cancers constitute one-third of cancer deaths, which implies that primary prevention and early detection could play a greater role in reducing the cancer mortality.
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Diseases of the circulatory systemNeoplasmsExternal causes of morbidity and mortalityDiseases of the digestive systemDiseases of the respiratory systemCertain Infectious and parasitic diseases
37
2.3. Demographic transition
90. The population is aging. A clear shift in the age structure of the population is evident from the population and housing censuses of 1994, 2002, and 2010 (depicted in Figure 14). Although Seychelles has one of the lowest fertility rates of countries south of the Sahara (Figure 2), trends in the TFR are irregular. TFR was at a replacement rate of 2.1 percent in 2006, increased to 2.4 in 2009, declined to 2.2 in 2010, and increased to 2.4 in 2011. No clear explanation has emerged for this cyclical pattern. A breakdown by age group shows that 22.3 percent of the population is under 15 years and that the working-age population is 57.7 percent of the population. The median age is 34 years.
Figure 14: Seychelles population pyramids from the 1994, 2002, and 2010 censuses
91. Teen pregnancy is a major problem, and HIV/AIDS is also concentrated in key subpopulations and on the rise. As discussed, teens account for one-third of first pregnancies, and for reasons that have not been researched or otherwise documented, many women still opt for illegal abortions Figure 15. It is important to investigate this trend closely, with the involvement of other sectors and the community. HIV-AIDS affects less than 1 percent of the general population, but preliminary results from the Respondent-Driven Survey indicate that its prevalence is much higher in key subpopulations, including men having sex with men (MSM) and injectable drug users (IDUs). Among the MSM subpopulation, HIV prevalence may be as high as 14 percent; it is about 4 percent among IDUs.17 Trends in newly detected cases (incidence of HIV among the total number of people tested at one time) indicate that Seychelles may be unable to achieve its MDG targets for 2015, although it is difficult to be more conclusive, given the limited data.18
17 The National Strategic Framework 2012–2016 for HIV and AIDS and STIs of the Republic of Seychelles. 18 Ministry of Foreign Affairs, Seychelles MDGs status report, August 2010.
-5000 -3000 -1000 1000 3000 5000
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Females Males
38
Figure 15: Abortions by age group of mother, 2007–11
Source: Epidemiology and Statistics Section, Division of Health Surveillance and Response.
2.4. Service utilization
92. Given its geographical size19 and the high concentration of the population in Mahé,20 Seychelles has a large number of health facilities and hospital beds, compared to global norms and standards. The country has 20 operational government health facilities: 1 tertiary hospital (Seychelles Hospital), 3 cottage hospitals, 1 rehabilitative hospital, 1 psychiatric hospital, and 14 health centers. These facilities are located near each other (Annex 1). Seychelles had more than 315 hospital beds (in 2011), of which 200 were in the Seychelles Hospital, where the bed occupancy rate was about 60 percent. Bed occupancy rates are very low in the cottage hospitals in Praslin and La Digue, but they have comparatively few beds (8 beds in La Digue and 28 in Praslin). These hospitals reduced the number of beds in 2009, following recommendations from the first PER (see Figure 9 below). Given that these are the only hospitals on those islands, there is no more scope to reduce the numbers of beds. 93. The use of health services in Seychelles is very high. On average, the population visits health facilities six times a year, and in most cases (four of the six visits) is seen by a doctor (see Figure 10 below). This number is very high by any standard and contrasts sharply with an average of one visit every four years in many African countries. The high frequency of visits to health facilities offers a golden opportunity for Seychelles to advance the primary prevention and early detection of non-communicable diseases—its new health challenge.
19 The main island (Mahé) is 27 kilometers long and 11 kilometers wide. 20 The main island is home to 76 percent of the population; Praslin has 8 percent and La Digue and outer islands have 4 percent (National Bureau of Statistics, Population and Housing Census 2010).
10-14 15-19 20-24 25-29 30-34 35-39 40-44 45-492007 5 69 92 108 86 54 30 22008 6 81 79 77 93 68 44 52009 6 90 83 102 73 74 36 72010 6 122 103 102 110 87 21 52011 15 133 103 106 102 89 27 4
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umbe
r of a
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ions
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Figure 16: Number of hospital beds, 2002–11
Figure 17: Trends in outpatient visits, 2001–11
Source: Epidemiology and Statistics Section, Division of Health Surveillance and Response, Public Health Department.
94. Most outpatient visits occur at health centers—English River and Anse Royale—as they should. Numbers of outpatient visits vary greatly across health centers. Some centers are crowded, and patients complain about waiting times, whereas others have fewer than 10 visits per day (see Figure 18 below). 95. . To manage health service delivery and medical referrals, the government delineated 16 health zones,21 and each individual is mapped to a particular center in a particular zone for primary healthcare. The system is not enforced, however, and patients shop around, sometimes visiting the center closest to their office or sometimes visiting multiple centers in search of a second opinion. Seychelles has scope to improve this system and realize the cost savings from efficiency gains in several ways. It can revisit and reinforce the system of referrals from satellite health centers to regional centers, shift tasks (ensure that basic services at the lower level are provided by nurses, for example), and define the package of services provided at the different
21 The health zones do not overlap with the administrative districts (25).
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Victoria Hospital North East Point Hospital Mental HomeBaie Ste Anne Hospital *Anse Royale Hospital Logan Hospital, La DigueSilhouette Clinic Hospice
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types of service delivery points. Anecdotal evidence suggests some misuse of prescription medicines and excessive dispensation of prescriptions by practitioners.
Figure 18: Numbers of outpatient visits, by type of facility and health worker, 2011
Source: Epidemiology and Statistics Section, Division of Health Surveillance and Response, Public Health Department.
2.5. Health expenditure analysis
96. General tax revenue is the main source of financing for public health expenditure in Seychelles, where the constitution grants all citizens access to primary care services in all public health facilities free of charge.22 In practice, all services in public facilities are provided free of charge, as well as tertiary overseas treatment. The first National Health Accounts, produced by the government with support from the World Bank and World Health Organization (WHO), found that in 2009, Seychelles spent SR 353 million on healthcare—equivalent to 3.3 percent of GDP and SR 4,048 or US$ 297 per capita. The total health expenditure as a percentage of GDP is lower than in other island economies and small OCED countries (Table 3).23 97. Of the total health expenditure in 2009, the government financed 87 percent, the private sector financed 7 percent (which includes household out-of-pocket payments), and international partners provided 6 percent. Because Seychelles has a tax-based health system in which services are provided mainly through the public sector, the Ministry of Health managed 90 percent of health spending in 2009. The Seychelles Hospital received the largest share of this funding (SR 129 million, or 36 percent of health spending), followed by the Government Health
22 “The state recognizes the right of every citizen to protection of health and to the enjoyment of the highest attainable standards of physical and mental health and with a view to ensuring the effective exercise of this right, the state undertakes: a) To take steps to provide for free primary healthcare in state institutions for all its citizens; b) To take appropriate measures to prevent, treat and control epidemic, endemic and other diseases; c) To take steps to reduce infant mortality and promote the healthy development of the child; d) To promote individual responsibility in health matters; e) To allow, subject to such supervision and conditions as are necessary in a democratic society, for the establishment of private medical services. Article 29, Constitution of the Republic of Seychelles, p.33-34, 1994.” 23 Ministry of Health, Seychelles first National Health Accounts, June 2011. 23 Ministry of Health, Seychelles first National Health Accounts, June 2011.
0
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Administration (SR 49 million, 14 percent) and Public Health Centers (SR 48 million, 14 percent). The Rest of the World (that is, the providers of overseas treatment) accounted for SR 20 million or 7 percent of health spending. The fact that Seychelles has lower out-of-pocket per capita expenditure on health whilst having high performance in health outcomes and utilization allude to a well performing financial protection. The success is mainly due to the effective public spending, the extensive public infrastructure, and the limited private sector options.
98. In terms of functions, inpatient care received the lion’s share of health spending (43 percent), followed by outpatient care (25 percent). Private dental care, private pharmaceutical services, and prevention and public health each accounted for 3 percent of spending (Figure 19). The out-of-pocket expenditure of SR 18 million went to pharmaceuticals and appliances (37 percent), overseas treatment (31 percent), private doctors (25 percent), and dental care (7 percent).
Table 3: Health expenditure indicators, Seychelles and selected countries, 2009
Indicator Barbados Fiji Luxembourg Maldives Mauritius Seychelles
Population (000s) 276 883 497 315 1,275 87 Total health expenditure (THE) as % GDP 6.8 3.6 8 8 5.7 3.3 Government expenditure on health as % of general government expenditure 10.8 9.3 14 13.8 8.3 8.6 Government health expenditure as % of total health expenditure 64.3 73.6 74 64.9 36.9 87 THE per capita (US$) 1,042 130 8,183 331 383 297 GDP per capita (US$) 14,116 3.254 106,631 6,363 7,589 9,637 Out-of-pocket expenditure per capita (US$) 300 21 982 76 214 16
Source: WHO NHA data 2009, WEO 2009, Seychelles NHA data 2009.
Figure 19: Health expenditure by function, 2009
Inpatient, 44%
Outpatient, 25%
Dental care (private), 3%
Pharmaceuticals (private), 3%
Prevention and public health, 3%
Health administration,
14%
Capital formation, 8%
42
99. Public health expenditure is rising. Public health expenditure remained flat over the last six years in real terms (Figure 19), but in nominal terms it increased substantially. It will continue to rise for several reasons. The high burden of non-communicable diseases will increase demand for expensive tertiary care treatment, including overseas treatment. An aging population (Figure 7) will require more health care. Being a small island state, Seychelles has low economies of scale, particularly for capital investment, and the unit cost of service provision will remain high.
Figure 20: Total public health expenditure (nominal and real, 2005–11)
100. The main cost driver in the health sector is salaries and wages, followed by medicines and medical supplies. More than half of the health expenditure goes to wages and salaries; another 25 percent goes to medicines, supplies, and vaccines (Figure 21). Unlike expenditures on medicines and supplies, which remained more or less flat between 2009 and 2011, wages and salaries have climbed substantially. Cost drivers should be monitored carefully over time.
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Figure 21: Changes in the components of public health expenditure, 2009–11
101. Overseas treatment accounted for a small share of the health expenditure (5 percent) in 2011 but nevertheless doubled between 2009 and 2011 (Figure 21). The most common overseas treatment destination in recent years has been India, followed by Mauritius and Reunion. The Overseas Treatment Board grants permission for overseas treatment. The economic crisis of 2007 and 2008 drove government payments for overseas treatment to their lowest level (SR 4 million), a substantial drop from the peak of SR 8 million in 2006. They have more than rebounded in the years since the crisis, exceeding SR 16 million in 2011 (half of it for medical treatment, over one-third for airfare, and the remainder for accommodation, escort allowance, and other expenses). In US dollar terms, however, the cost of overseas treatment has declined slightly compared to the years before the economic crisis. Anecdotal evidence suggests that the process of granting overseas treatment is not entirely structured or transparent. It will be important to assess the performance of overseas treatment arrangements and devise alternative mechanisms for handling the refund requests of self-referred individuals.
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102. Like overseas treatment, the expenditure on electricity is still a relatively small component of public health expenditure (7 percent), but it too increased dramatically in recent years (Figure 21). The electricity expenditure exceeds overseas treatment expenditure. The sharp rise in electricity expenditure, among other factors, is partly due to the state-of-the art diagnostic and imaging center, which opened in 2011. Going forward, a deeper analysis of patterns of electricity consumption and the causes of rising expenditures will be needed to inform and identify policy choices on alternative energy sources. In contrast, the expenditure on outsourced services (catering, cleaning, laundry, security, and maintenance) has been flat, remaining at about 10 percent of the public health expenditure over the last three years. 103. Consistently since 2009, slightly more than 50 percent of the health expenditure has been incurred for hospital support services, close to 25 percent for corporate services, about 15 percent for community healthcare, and only 7 percent for public health services (Figure 22). The hospital support services include all expenditures for Seychelles Hospital, North East Point Hospital, and pharmaceutical services. Corporate services cover the administrative and overhead costs, including the Ministry of Health. Community healthcare caters for all the health centers and the three cottage hospitals.
Figure 22: Distribution of public health expenditure, 2011
Wages and Salaries
54%
Medicines, supplies
and vaccines
24%
Outsourced services
10%
Electricity 7%
Overseas Treatment
5%
45
Figure 23: Changes in shares of public health expenditure by function, 2009–11
2.6. Assessment of reforms introduced since 2009
104. The first PER conducted in Seychelles in 2009 had a chapter on the health sector. The chapter examined issues of financial sustainability, efficiency in the allocation of funds, and productivity in the delivery of care. Short-term and medium-term measures were proposed to improve performance in the health sector. It was recommended that the government begin by implementing a series of efficiency-enhancing, cost-reducing measures. Proposed areas of efficiency gains and cost containment included reducing the number of beds in some hospitals, phasing out some health centers, downgrading some hospitals to health centers, imposing a cap on overseas treatment, and scaling down capital projects. 105. Following those recommendations, the government introduced a number of changes in the health sector. The major reform elements were organizational restructuring, downsizing, and outsourcing. 106. Organizational restructuring has involved several actions The Health Service Agency was merged with the Ministry of Health, and its functions became part of the ministry’s core functions. Preparations are underway to institute the Public Health Commission, an independent and autonomous public health administration and regulation authority mandated to regulate health services and monitor disease surveillance. The authorities also formed a task force dedicated to reviewing and formalizing the organizational structure of the health sector, from the health centers through the Ministry of Health. 107. With respect to downsizing, an early voluntary departure scheme and outsourcing of ancillary services made it possible to reduce staff numbers from 1,828 in 2008 to 1,472 in 2011. Some top managers at the Ministry of Health indicated that the early departure scheme had the negative effect of inducing some of the more experienced staff to leave. This perception was not reflected in the results of the health worker survey, however.
108. The outsourcing of ancillary services involved cooperatives or groups of former staff members as well as the private sector. Outsourced services included cleaning, catering, laundry, security, and maintenance. For example, cleaning was outsourced to the Cleaners’
0
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Cooperative (150 former staff members), whereas catering, laundry and security services are outsourced to the private sector.
109. An important message is that outsourcing has not contained costs and in fact has reduced the quality of services. For example, the Cleaners’ Cooperative bills the Ministry of Finance for salaries and administrative costs of SR 135 per person, and the Ministry of Health provides all cleaning materials, including uniforms. In other words, the current arrangement merely relocates costs from emoluments to goods and services in the chart of accounts. Catering services in all health facilities were outsourced to Skychef at what seems to be a high average cost (SR 1.5 million per month). A private provider was contracted to perform laundry services; the contract permits the provider to charge per kilogram of linen and contains no provisions for quality assurance. Maintenance services (carpentry and air conditioner maintenance) were outsourced to about seven former technicians. Like the Cleaners’ Cooperative, the technicians bill the Ministry of Finance for their salaries (and occasionally for overtime) and similarly relocate emolument costs to goods and services. The contract for technicians should be revised to stipulate that they invoice based on actual services rendered to the Ministry of Health. Cleaning of the grounds and high dusting are also outsourced on a case-by-case basis. The lack of expertise in the Ministry of Health to draw up contracts and manage and supervise their implementation has limited the success of outsourcing reforms. Some outsourced services had no valid contract for some time. 110. To date, evidence is lacking that these measures resulted in cost saving, efficiency gains, or better quality in the health sector. The government’s recurrent expenditure in the health sector has risen by more than 50 percent (in nominal terms) since the reforms were introduced. The number of public servants in the Ministry of Health decreased, for example, but the wage and salary expenditure increased. The increase in recurrent expenditure may be linked to how contracts are formulated for outsourced services and/or to compensation packages for personnel who elected to take voluntary retirement. Outsourced services represent less than 10 percent of the recurrent expenditure but nevertheless offer scope for improving efficiency, reducing costs, and improving the quality of services through closer attention to contract development and execution. Findings from Surveys of Patients and Health Workers 111. As discussed, the standard expenditure/budget analysis was complemented by surveys of patients and health workers. The following sections summarize the findings; for detailed results and discussion, Annex 2.
2.7. Findings from the patient exit survey
112. Choosing a health facility: Among patients visiting a public provider, 61 percent chose the public facility because it was located close to where they lived, and 58 percent chose it because they were mapped to that facility. Of those who visited a private facility, 65 percent did so because they believed it provided better services, and 61 percent did so because waiting times were shorter.
47
113. Accessing a health facility: The vast majority (86 percent of patients) report being able to arrive at their chosen health facility in less than 30 minutes, generally on foot or via public transportation. Of these 86 percent, 45 percent took less than 15 minutes to get to the health facility.
114. Visiting a health facility: Most patients come for consultations and pharmacy services (39 percent for consultations and 31 percent for pharmacy services). Only 10 percent of patients arrived with injuries on the day of service. Although only 30 percent of patients specifically came for pharmacy services, a little more than 60 percent walked away with medicines prescribed during their visit. Just over 20 percent of patients were prescribed sick leave during their visit. The number of sick days that patients reported taking in 2012 was not as high as sometimes assumed. When asked about days of sick leave taken in 2012, nearly 42 percent of the patients reported not having taken any days, compared to 40 percent who reported having taken between 1 and 10 days. Less than one-fifth of respondents reported taking more than 10 days of sick leave in 2012. 115. Access to, and availability of, health workers: Nearly 67 percent of patients waited 30 minutes or less to be seen by a health worker, usually a doctor. Almost one-third see a health worker in less than 10 minutes. 116. Patient satisfaction with services delivered: Patients are highly satisfied with the services delivered by health workers and facilities (Annex 2). For example, nearly 74 percent of respondents found the overall quality of services received to be satisfactory. The answers also indicate that health workers’ responsiveness is generally very good, that patients feel their providers are competent, and that conditions within health facilities are good. The only exceptions were that patients felt that health workers treated rich people differently than poor people and that it was not always convenient to travel to the health facility from the workplace. The perception of travel time would appear to be relative, given that most patients reported needing less than 30 minutes to reach a health facility by bus or on foot.
2.8. Findings from the health worker survey
117. Numbers of health workers in relation to benchmarks: The actual number of health workers in relation to the general population is far above the benchmark associated with indicators of good basic health outcomes. A density of 2.3 doctors, nurses, and midwives per thousand individuals, for example, is globally associated with an 80 percent birth attendance rate. The health worker to population density in the Seychelles, 7.0 per thousand individuals, far exceeds this benchmark, as seen in Seychelles’ good basic health indicators (the statistics cited previously on skilled birth attendance, infant mortality, and maternal mortality). The discussion on health worker stock in the Seychelles revolves less around the need for more workers than around the need for more skills or mixes of skills at particular facilities to cope with the rising incidence of non-communicable diseases. The vast majority of health workers (61 percent) and specialists (74 percent) are based at Seychelles Hospital, whereas the greatest demand for an increase in specialized health workers comes from cottage hospitals. 118. Sector transfer and attrition: Within five years, 20 percent of health workers plan to work in the private health sector, largely enticed by higher earnings. Facility managers’ report
48
relatively low turnover among health workers in the previous year (5 percent), with departing staff largely replenished by new hires. More than one-quarter (26 percent) of health workers plan to switch to work outside the health sector within five years, closely correlated with perceptions of better pay in such jobs. The workforce is relatively young—more than 80 percent of health workers are below 50, and 62 percent are below 40—but the number of retired health workers will double in 10 years and triple in 20. Although staff attrition through retirement and the associated costs of pensions and benefits will not be of much concern in the next 10–15 years or so, all forecasting, planning, and future budgeting should take these issues into account. 119. Working conditions: Most health workers believe that they have competent managers, although fewer believe that their managers motivate them. Health workers are not overwhelmed by administrative tasks; doctors spent 71 percent of their time directly caring for patients, nurses and midwives spent 65 percent, and dentists spent 87 percent. Working hours and patient loads appear very reasonable (Figure 24 and Figure 25), and a large number of health workers are available, yet they work more than 24 hours of overtime each month (6.1 hours per week on average). Medical doctors report the most overtime hours (over 15 hours per week, or 60 hours per month), most of it paid. 120. Health workers’ ability to perform: Facility managers regard the competence of their staff as good but not excellent; in the facilities surveyed, all types of health workers received an overall competence rating of 4 out of 5 from their managers. Although most health workers benefit from in-service training, not all feel that they are adequately trained to carry out their jobs effectively, including one-third of doctors and half of nurses, midwives, dentists, and allied health workers. The average staff member reported attending 4.4 in-service training events in the past three years. Nurses attend more training than doctors, but doctors are more likely to attend international in-service training. The government sponsors and pays for most in-service training. At the time of the survey, only 22 percent of health workers felt that they had sufficient equipment and supplies to deliver quality services. Nurses and midwives in particular felt that insufficient equipment and supplies were a barrier to performing services adequately (only 16 percent claimed that supplies and equipment were adequate).
Figure 24: Average number of hours worked per day by health workers
8.5 7.7
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Figure 25: Patient load per day by type of health worker: Mean and median numbers
121. Health workers’ willingness to perform: Health workers rate themselves as moderately to highly motivated in their jobs and driven largely by non-financial, intangible rewards, despite the fact that average satisfaction with overall compensation is low (between "Somewhat Satisfied" and "Not Satisfied"). When asked which factors motivated health workers most in their day-to-day job, health workers generally listed intangible sources of motivation such as being appreciated by patients, good relations with colleagues, or feelings of doing something meaningful. Unexplained absenteeism was low (3 percent for doctors and virtually nil for other types of health workers). Despite their availability, low patient load, and high levels of motivation, health workers spent very little time with each patient. Half of patients reported spending less than 10 minutes with a health worker, and one-third spent less than 5 minutes. 122. The bottom line in the Seychelles is that health workers are sufficient in terms of numbers but not skills—more specialization is needed. The distribution of health workers could be optimized based on workloads. Performance could be further adjusted through additional research to achieve even better health outcomes with the human resources already available. Proposed Policy Framework 123. As described previously, Seychelles has been highly successful in addressing the health needs of the population. That success has contributed greatly to a major epidemiological transition and a clear demographic shift. Success presents new challenges, however, as the health system and services are asked to respond to emerging disease patterns and the needs of an aging population. This note proposes a policy framework for meeting the new challenges by modernizing and strengthening the healthcare system and rationalizing the approach to healthcare. The modernization process would build on Seychelles’ success and ensure continued vigilance with respect to public health needs. 124. The information reviewed here—the public expenditure analysis, emerging disease patterns, data on utilization of services, and patient and health worker surveys—does not point to the need for major changes or drastic reforms. Rather, it points to the need for close attention to two overarching objectives in support of modernization: improving the efficiency of public spending on health and managing the expected growth in health sector spending.
37 30
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Patients/day Mean Patients/day Median
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125. The absence of any need for structural reforms in the health system does not imply that the modernization agenda will be simple or easy; in fact, it has proven to be a challenge in a number of upper-middle-income countries. Five interrelated actions are needed in the coming five years to help modernize the country’s health sector:
(i) Implement an intelligent, integrated, and customized information system to help manage the health sector, monitor development, and lay the informational foundation for policy development.
(ii) Develop a service delivery package that prioritizes cost-effective services that fit the changing disease burden and aging of the population.
(iii) Build supply- and demand-side incentives in the health sector to reorient curative care toward secondary prevention for the emerging non-communicable disease profile.
(iv) Build and strengthen the public health agenda to develop and implement a broad-based, multi-sectoral approach to primary prevention to tackle the growing risk factors.
(v) Strengthen the fiscal monitoring and projection systems to help manage the inevitable growth in public and private health spending.
126. Note that although each modernization action described here is worth doing on its own, the five actions are linked and thus more likely to produce positive results if implemented as a package. Their potential synergy argues for a planned process of design and implementation that maximizes the positive impact of each action while ensuring that each is consistent with (and benefits from) its links to the other actions. To ensure that the intended results are being achieved and to manage unintended consequences as they inevitably develop, it is always advisable that changes—even if they are primarily in support of modernization—are monitored and evaluated along the implementation timeline.
2.9. Designing and implementing a modern information system
127. Modern health systems require an informational base that permits effective decision making at all levels, from policy to facility, provider, and patient. The stage of development achieved by the Seychelles and the nature of the non-communicable disease burden puts considerable pressure on policy makers in the health sector and heightens their need for timely, useful data. The emerging new epidemiological profile of the population magnifies the need for continuity of care (for non-communicable diseases), which in turn can be enhanced through more effective information systems. Putting together an integrated set of systems to deliver such information is neither easy nor cheap. Fortunately for the Seychelles, a number of countries have developed such information systems. In addition to learning from their success, it will be important to learn from countries that have had a lesser degree of success in modernizing their health information systems. 128. A number of information systems serve the Seychellois health sector, including a laboratory information system, a pharmacy information system, a central store system, a radiology information system (not yet covering the outer islands), a surveillance system, a geographic information system, a medical record system, a GPS for vehicle tracking, a statistical information system, a school surveillance system, and a human resources system. Aside from their lack of integration, some of these systems are not up to global standards, and some require
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updating. Seychelles lacks a legal framework to govern the confidentiality and lawful use of data maintained by such systems. 129. A critical first step is to design the system by combining global expertise with local knowledge. A repeated mistake in other countries has been to purchase systems off the shelf that were not sufficiently tailored to local conditions and national needs. Another repeated failure has been to design systems that serve decision makers only and not the entities that provide the information. An intelligent, integrated design will likely need to incorporate information required for efficiency considerations, such as electronic medical records capable of tracking important issues like the consistency of treatments for an individual, early screening, and adherence to appropriate drug prescription protocols, as well as systems that track cost drivers, such as human resource systems, inventories (drug supplies), and equipment status and maintenance. Designing, developing, and implementing such a system and identifying and training staff to use the system are relatively quick investments that will pave the way to a more modern health sector.
2.10. Developing a package of benefits and services
130. Another step toward modernization is to define a package of services that reflects the evolving disease burden and risk factors as well as the global best practice for the most cost-effective services. This step, developing a package to be funded and delivered, addresses the two overarching objectives identified earlier—improving the efficiency of public spending and managing growth in costs. Although the package of services will mainly reflect supply-side issues (such as training, equipment, medicines, and supplies), it is important to note that it must also address the demand-side factors of care-seeking and compliance. Other important demand-side factors related to lifestyles will be addressed through the public health agenda. 131. Some uncertainty prevails over the health benefits and services to which citizens are entitled under the law. Under the constitution, the population is entitled to primary care free of charge, but what is covered under the rubric of primary care is not defined. Developing and ensuring the delivery of a defined package of health services and interventions would clarify entitlements. It would also ensure that only the most effective services aligned with the emerging burden of disease in the country are provided. 132. It is important to realize that Seychelles requires not only a package of services aligned with its near-term needs but a process that allows the government, over time, to adapt this package of services and benefits as the disease burden evolves. This process should also take into account technologies that will be available in the near future. The process of defining and adapting a package of services should be technical in nature but is sometimes hijacked by special interests or political motives. For that reason, a thoughtful process that gives appropriate weight to technical issues is important. Clearly defining the package of services is also crucial because the management of inputs—training staff, purchasing equipment and medicines—is influenced directly by the choice of services to deliver. 133. Throughout the world, countries like Seychelles, which have moved along the epidemiological and demographic transitions, point to a number of important lessons in this respect:
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• Match priority interventions with the burden of disease and use global evidence on cost effectiveness.
• Give the highest priority to secondary prevention focused on risk factors that are amenable to treatment—especially in the case of non-communicable diseases.
• Build on the design of the package of services by developing norms and standards at each level of care—that is, the health center, cottage hospital, and tertiary hospital.
• Engage the community (sensitization campaigns are a helpful approach).
2.11. Develop an incentive-compatible health system
134. Another important step in the modernization of the health sector, especially as the incidence of non-communicable diseases rises, is to ensure that the system has appropriate incentives (carrots and sticks) for providers of care as well as the population at large. For providers, a well-functioning system focuses on secondary prevention of risk factors that are amenable to intervention. As seen in the analysis of the disease burden, about 60 percent of deaths are related to three risk factors that are amenable to interventions. An optimally functioning system would create the right incentives, financial and otherwise, to maximize the likelihood that providers and facilities screen early for risk factors that can be treated with cost-effective medicines and changes in patient behavior. 135. Many countries have moved in this direction and use combinations of financial and non-financial incentives as well as behavioral science to change systems. The Seychelles can learn from such measures. For example, some European and Central Asian countries facing risks similar to those in Seychelles have started to reward healthcare providers for early screening that leads to early treatment (secondary prevention). Information systems and provider payment mechanisms are designed to achieve this important function. The Seychelles can adapt such approaches to ensure that the incentives in the health system are aligned appropriately to the package of services. 136. A major advantage of the current system is the extensive contact between the population and healthcare providers. Individuals in most African countries have very limited contact with the public healthcare system. Given that the global literature indicates that healthcare providers are extremely important for educating the public about healthy behaviors and ensuring compliance with treatment, the extensive contact between providers and the public in the Seychelles can be used to change behaviors at the household level, both in terms of compliance and primary prevention.
2.12. Develop a new, broad-based public health agenda
137. Aside from reorienting incentives to encourage secondary prevention, Seychelles must reorient its public health approach to achieve a challenging multi-sectoral agenda for primary prevention. Many countries that have undergone the epidemiological transformation have been slow to adapt the public health agenda to the population’s changing needs. At issue here is the need to address such behaviors as the overconsumption of unhealthy food, alcohol, and sugary drinks; smoking; dangerous driving; and other actions that increase health risks.
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138. Recent global experience highlights important considerations in designing policies to achieve a modern public health agenda. Prices and financial incentives are effective policy tools, but their scope is limited. They work best when combined with other policy instruments. The most obvious policy tool for influencing prices is targeted taxes. Tobacco taxation, for example, is highly effective in changing tobacco use, especially among youths and the poor, but it is even more effective when paired with other tools like labeling, advertising bans, and bans on smoking at public places, restaurants, bars, and workplaces. Another important point is that the drivers of behavior, and consequently the tools for changing behavior, are specific to a given culture and must reflect a deep understanding of local factors. Primary prevention strategies that work in one country may not work in another, making it vital to understand cultural drivers and monitor the impact of policies. Finally, a growing body of evidence supports the value of incorporating behavioral science (behavioral economics) in policy design to overcome some of the limitations of the standard economic model and standard public health models of behavior, which rely mainly on information and prices. 139. The development of the new public health authority presents an excellent entry point for Seychelles to modernize the public health agenda and focus on primary prevention for critical risk factors that are increasingly important among the population. Important targets for this new public health agenda include standard drivers of mortality and morbidity arising from non-communicable diseases, as well as country-specific issues like the recent increase in teenage pregnancy and the related rise in neonatal mortality. In many countries, informed reproductive choices among teens are driven by basic education and access to contraception. It is vital to gain a deeper understanding of the specific drivers at work in Seychelles to develop appropriate public health policies. For example, there is a clear disconnect between the marriage law and the age at which individuals can obtain contraceptives.
2.13. Managing Cost Drivers
140. Due in large part to the improvements in economic development and the evolving disease burden, the health sector will come under increasing financial pressure. Here again the global experience is relevant. The evidence is now overwhelming that spending on health (public and private) increases faster than economic growth, but a country has the ability to manage how this growth in spending takes shape. The PER summarized in this note clarifies which elements of public spending on health require close attention. Owing to the country’s geographic characteristics, which limit economies of scale, the service delivery model for health in Seychelles relies strongly on human resources for health (HRH) and on equipment and supplies (including pharmaceuticals). The expenditure review does not recommend cutting either of these large cost drivers, but it does recommend giving close attention to managing growth in spending and intervening to prevent leakage and encourage efficiency. 141. Human resources for health will require significant attention, particularly with respect to high levels of spending on specialized training and the loss of this investment when trained workers leave the sector. Specialized skills will remain in demand, as discussed. Some of the spending on overseas training, as well as the temporary procurement of skilled personnel from abroad, could be channeled toward innovative electronic education systems to train current personnel in specializations required in Seychelles. In-country training and twinning possibilities may have the added benefit of preventing health workers from leaving the country in
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search of opportunities for specialization, which has been a key driver of attrition. Potential losses of public sector expenditure from attrition (retirement, moving to private practice, or taking jobs outside the health sector) should also be monitored, addressed, and reflected early in budgeting. Suitable financial and non-financial incentives to reduce attrition should be identified using tested economic tools, including discrete choice experiments. One simple intervention may be to provide better information to health workers about their overall compensation in relation to compensation for other workers. Once their whole benefit package is considered and costed (as opposed to only baseline salaries), they may have a better basis for comparison. 142. Health workers’ performance and the quality of service delivery should be strengthened. Health workers who do not perform represent a critical loss of public resources, and tightening the quality of services delivered will benefit all. As a first step, additional analytical work, beyond self-reporting, will be necessary to determine the extent to which health workers are competent to carry out needed services and are willing to perform them adequately. Tools such as direct patient observations and clinical vignettes can provide data on skills and knowledge, and capacity and training institution assessments can provide information on the quality of training. Productivity can be measured using such tools as data envelopment analysis (a linear programming technique) and/or stochastic frontier analysis (a statistical method similar to regression analysis, but more complex). Further unannounced visits and snap surveys can provide a better picture of absenteeism and tardiness. Many other studies could be conducted to obtain sound evidence on health workers’ performance and identify relevant solutions. 143. Aside from expenditures on human resources, spending on medicines requires scrutiny. The information presented here suggests that some medications are being used excessively or inappropriately. An important step is to adopt measures to ensure that only cost-effective medications are included in the service delivery package and that providers are prescribing appropriately. This area of expenditure is another example of how efficacy and cost containment objectives are aligned. 144. A few other drivers of health costs merit attention in the medium term. As discussed, evidence indicates that expensive contracts were not replaced by more efficient ones when outsourcing ancillary services. The costs of energy and overseas treatment are a relatively small but rapidly growing component of overall costs; increasing overseas treatment in particular could drastically increase public expenditure on health. One option to consider is to build stronger partnerships with selected private providers overseas to ensure better prices and leverage the recent investment in a large diagnostic and imaging center next to the Seychelles Hospital.
145. Overall, the PER found no large spike in spending, especially in real terms, but there is little doubt that the cost pressures will grow in this sector. First steps include tracking costs with good information systems, carrying out additional analysis for evidence-based decisions, devising cost-effective solutions to prevent leakages and inefficiencies, ensuring that the package of services emphasizes cost-effective services, making incentives compatible with appropriate care, and focusing public attention and expenditure on primary and secondary prevention for emerging risk factors.
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Improving Quality Education and Addressing Chapter 3.Inequality
Executive Summary School enrolment in Seychelles has been universal at both the primary and secondary levels for the last decades. A wide network of schools and a policy of free and compulsory education lasting 13 years (until the second-to-last grade of secondary education) have supported continuous increases in enrolment. All children (boys and girls) had universal access to education at the pre-primary, primary, and secondary levels by the 1990s, and the recent creation of additional post-secondary institutions has boosted enrolment at this level. Up to secondary education, Seychelles boasts levels of enrolment comparable to those in most middle-income and even high-income countries.
Even as enrolment advances, Seychelles faces issues related to the quality of education, including the limited number of graduates who complete the full cycle of secondary education and the low quality of learning outcomes. For example, in 2012, only one-third of P6 pupils scored a grade of C or better on the National Examinations. The results of the International General Certificate of Secondary Education (IGCSE) examinations are also quite poor, particularly in mathematics and science. Learning achievements lag in Seychelles compared to other middle-income countries. For example, in the last two evaluations administered by the Southern and Eastern Africa Consortium for Monitoring Educational Quality (SACMEQ), students in Seychelles scored below their peers in Kenya, Mauritius, and Tanzania in mathematics. Cross-regional comparisons of outcomes for the Programme for International Student Assessment (PISA+) suggest that Seychelles might also be scoring lower than Malaysia, Costa Rica, and Chile. Low learning achievements, combined with the failure of students to enter the last grade of secondary school, leave large sections of the population with insufficient mastery of basic skills.24 In addition, inequality remains substantial: Learning achievements at P6 are unequally distributed, and large differences in attendance rates after S4 are associated with differences in individual characteristics. Differences in learning achievement at P6 are closely associated with differences in individual characteristics such as gender and household wealth. For example, data from the latest SACMEQ assessment show that test scores differ significantly along gender lines (girls generally outperform boys), geographical lines (scores are lower in West District), level of parents’ education (mother’s education has a significant impact), and household wealth (reading and math scores differ significantly by wealth quintile). Attendance rates drop significantly among certain populations after S4, when compulsory education ends. For example, at age 17, 82 percent of students from the wealthiest households are still attending school, compared to only 53 percent of students from the poorest households.
24 In the context of an upper-middle-income economy like Seychelles, basic skills go beyond literacy and numeracy and include competencies required to navigate a more advanced labor market efficiently. Transversal skills such as problem solving, critical thinking, teamwork, and communication skills are deemed particularly important.
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The Ministry of Education is developing a Medium Term Strategy (MTS) to support the continuous development of the education system through a number of measures, including measures to address concerns about quality and inequality in education. The MTS lays out the government's priorities within the education sector, the ministry's goals for the education system, and the main actions required over the short and medium term to meet those goals. It also provides a framework for decisions about the allocation of national resources and external assistance to education, with an emphasis on efficiency, accountability, and value for money. The MTS reflects new developments in education, especially at the tertiary level, and ongoing reforms in the public sector as they apply to the Ministry of Education. An overview of recent trends in public spending on education indicates that spending has decreased over time, falling to levels below those in most comparable countries. Declining public funding for the education sector between 2004 and 2011 reflects the diminishing priority given to education within total public expenditure. Compared to other upper-middle and high-income countries, Seychelles allocates a relatively lower share of its national resources to education, especially in terms of the share of government spending on education. For example, Singapore spends 21 percent of its budget on education, and Seychelles spends 10 percent. Even relative to enrolment, public expenditure on education per pupil appears to be relatively low at the primary and secondary levels, and lower than in most upper-middle and high-income countries.
The allocation of spending by level of education does not seem entirely aligned with the enrolment profile in Seychelles. In 2011, more than one-third of the education budget went to post-secondary education, one-quarter went to primary and pre-primary education, and less than 15 percent went to secondary schooling. Other middle- or high-income countries with comparable levels of enrolment at the tertiary level tend to spend a higher share of their budgets on primary and secondary education and a lower share on tertiary education. The high priority assigned to post-secondary education in Seychelles reflects the substantial investment involved in establishing the new University of Seychelles, which has left little room to expand expenditure on primary and secondary education. Salaries are the main driver of education expenditure, whereas other categories of expenditure, such as learning materials, appear underfunded. Salary costs account for more than 90 percent of overall education spending. This share is higher than in comparable countries, partly because Seychelles maintains lower pupil-teacher ratios at the primary and secondary levels than most comparable countries. The returns on this high overall investment in teachers are limited by high attrition rates (vacancies are 30 percent on average). Allocating such a large share of the budget to salaries prevents spending on other items such as learning materials. Learning materials are not only underfunded in the budget, but the budget assigned to this expenditure is generally under-executed, presenting a serious threat to the quality of education.
Given that students in medium-sized schools and smaller schools demonstrate similar learning achievements, increasing the size of smaller schools might help to improve spending efficiency, but it may not be practicable. The number of pupils per school is a principal driver of
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unit costs; small schools are more costly. It may be worthwhile to consider steps to expand the smallest schools and reduce the size of the largest schools to achieve a more uniform size across schools. For various reasons, including the need to maintain a reasonable commuting distances for pupils, it may prove impractical to implement this step for all schools. Education spending does not seem to target the most disadvantaged pupils to help improve their educational outcomes. Public spending can be an important tool to address inequality in education outcomes, by targeting both supply and demand. In Seychelles, policies and strategies aiming at decreasing inequality in learning achievement should focus on two priorities. The first is to ensure that public resources, including qualified teachers, are distributed in a manner that promotes better learning outcomes for the most vulnerable. The second is to unlock any potential financial constraints facing the neediest families. The analysis shows that the distribution of public spending on education is not linked to the socioeconomic level of municipalities. In other words, schools with the lowest exam results do not receive significantly more resources. While the Dedicated Fund is a positive step for addressing inequality in learning achievements, its impact is limited by its small size, relatively broad eligibility criteria, and the absence of a monitoring and evaluation strategy to document and improve its impact. Extending compulsory education to S5 could reduce inequality at a reasonable cost for Seychelles. The number of pupils transitioning from S4 to S5 (the last grade of secondary school) is consistently lower than in previous grades, and most pupils who fail to go on to S5 come from the poorest backgrounds. Their reasons for leaving school need to be better understood, but making S5 compulsory might mitigate inequality in learning outcomes to some extent, as the poorest pupils stand to benefit the most from an additional year of schooling. Completing secondary school would also give these individuals greater access to post-secondary education and other training options. In 2011, one year of secondary education cost Rs 16,000 per student on average, indicating that the additional cost of retaining all S4 students in S5 would be about Rs 2.0–2.5 million per year (about 0.5 percent of the overall education budget). Despite these advantages, the impact of this measure could still be limited, considering that inequality in learning achievements is already substantial as early as P6 and is most probably accentuated in the later grades.
Further analysis is required to inform future policies and strategies, including a better understanding of the nonfinancial determinants of learning achievements. At the school level, the drivers of learning achievement include nonfinancial factors (such as the availability and quality of learning materials, relevance of the curriculum, and teachers' performance and accountability). At the individual level, the relationship between socioeconomic factors, gender, and learning achievements are important but not sufficiently understood to formulate relevant, adequate policy options. The analytical base for understanding the financial and nonfinancial determinants of education outcomes remains very thin for various reasons, including the lack of comprehensive and recent micro-data. This expenditure review is only a first step toward developing a better understanding of how financial factors contribute to the attainment of key strategic objectives, such as reduced inequality and improved learning achievements for all pupils. Better data and more detailed analyses could provide the comprehensive evidence needed to develop targeted policies to support the ministry’s and Seychelles’ strategic objectives for education.
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3.1. Introduction
146. The need to provide all citizens with an education of good quality was a high priority of the Government of Seychelles following independence in 1976. Beginning in 1978, the government enacted a series of reforms to provide equal access to education at all levels for all children. It created primary schools in every district, the National Youth Service, and the Seychelles Polytechnic and other post-secondary institutions. The government also provided scholarships for more Seychellois students to pursue university studies abroad. Free compulsory education beginning at age 5 for children in grades 1–9 was established in 1981. Curricular and institutional reforms undertaken in 1991 extended secondary education to five years in regional schools (of which four years were compulsory), with provisions for academic and vocational programs of study. In 1998, further reforms were undertaken to improve the provision of education by strengthening school leadership, implementing quality control mechanisms, and fostering closer integration between post-secondary institutions and related sectors of employment (key examples are the Seychelles Tourism Academy and the National Institute of Education). To better meet the needs of a changing economy, a wider range of choices for post-secondary education was developed to include vocational and technical training, polytechnics, and the national university (created in 2010).
147. The education sector continuously adapts to Seychelles’ changing needs. The Seychelles Strategy 2017, adopted in 2007, outlines the priority areas for Seychelles to “promote vocational, managerial and service skills, to meet the human resources requirements of the economy as envisaged by the ten year plan.” In 2008, the National Education and Training Strategy Committee developed an action plan listing priorities, recommendations, and targets in five critical areas to “transform” the education and training system: (i) providing for the diversity of educational needs and national development priorities; (ii) guaranteeing quality education; (iii) improving the quality of teachers; (iv) improving the governance of educational institutions; and (iv) creating responsible and empowered students.25 An Education Reform Oversight Committee, chaired by the Minister of Education, was set up in 2009 to direct and monitor the reform process set out in the Education Reform Action Plan, 2009–2010. It was noted that the action plan was too ambitious to be implemented in two years, and a number of the planned activities are still in process. 148. This policy note supports the development of the Ministry of Education’s Medium Term Strategy (MTS) 2013–2017 by summarizing the results of an analysis of public spending in the education system. This analysis is particularly timely because it supports the kind of evidence-based policy making that the authorities regard as essential for developing the MTS. The MTS, which will update the strategies and targets for the national education system, emphasizes improvements in the quality of student achievement and increased efforts to promote efficiency, accountability, and value for money. Within this context, the present analysis seeks to clarify the links between education financing and education outcomes in order to understand how education expenditure might support greater equality in learning achievements. Because nonfinancial factors also have an impact on learning outcomes, the Ministry of Education is
25 These priorities and recommendations were based on an assessment of the education sector presented in J. Nolan (2008), “The Seychelles Education and Training System: Does It Have the Capacity to Provide the Human Resources to Achieve the Objectives of Seychelles Strategy 2017?”
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encouraged to undertake an analysis that will expand and refine current knowledge of the determinants of education outcomes in Seychelles. 149. Preparation of this Policy Note benefited from significant input and close consultation on the part of the Ministry of Education, and the analytical work was integral to the ministry’s efforts to build capacity in this area. Although the ministry collects a wealth of education statistics on a regular basis, they are not systematically analyzed to examine the determinants of education outcomes, their distribution, and the impact of public spending on outcomes. A sound analysis of policy levers is integral to well-informed decisions on the best means of strengthening links between public spending and education outcomes. In the context of the preparation of the MTS, the development of this Note has been a collaborative effort led by the Ministry and supported by the Bank. A Steering Committee was formed to guide the development of the analysis and provide regular feedback on the findings and potential areas to be explored further. The Committee was kept relatively small so as to maximize interactions between members and between the Committee and the Ministry of Education/World Bank team. Its members included (i), a representative of the Ministry of Education, (ii) a representative of the Ministry of Finance, (iii) a representative of civil society, (iv) a representative of private sector employers, and (v) a representative of private education. 150. For this expenditure review, BOOST was used to link expenditure data from the Treasury to data on education outcomes collected by the Ministry of Education, creating a platform for robust analysis in the education sector. The analysis described here took advantage of the BOOST data tool, which presents data on public expenditures in an accessible, flexible format for analyzing the quality and efficiency of public service delivery. The ministry can use this information to analyze spending during the past year and propose new allocations for the year to come as part of the national budgeting process. Even more important, however, BOOST makes it possible to analyze relationships between public expenditure and outcomes of importance for public policy, such as whether education expenditure is allocated in ways that support greater equality in learning achievements. The BOOST data were supplemented with other data to permit international comparisons. 151. The remainder of this Note is organized as follows. Section 2 provides descriptive statistics on access to education and the quality of education in Seychelles, mainly at the primary and secondary levels, and Section 3 looks at inequalities in learning achievements in relation to variables such as gender and socioeconomic status. Section 4 reviews trends in public expenditure on education and its composition, and Section 5 looks at the targeting of public spending on education. Section 6 summarizes the findings and provides recommendations for discussion. Access to and Quality of Education
3.2. Access to Education
152. Seychelles’ wide network of schools provides free compulsory education for 13 years, from crèche or pre-primary until the second-to-last grade of secondary school (S4). The education system offers six years of primary schooling (P1–P6), five years of secondary schooling (S1–S5), and various post-secondary programs—general (A-levels),
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vocational, and technical. The wide network of schools makes access to education easy for most citizens. Figure 26 indicates the number of institutions (public and private) and years covered at each stage of education, from primary through tertiary.
Figure 26: Structure of the education system
Source: MTS 2013.
Note: Vocational and technical schools are all post-secondary institutions. The nine public institutions at the post-secondary level include seven operated by the Ministry of Education, one operated by the Tourism Board, and one other operated by the Ministry
of Internal Affairs.
153. Seychelles achieved universal access to education in the 1990s at the pre-primary, primary, and secondary levels. This achievement took place as the school-age population was declining,26 which relieved pressure on education infrastructure to meet the needs of pupils. Recent increases in total enrolment have been driven by the development of post-secondary institutions. In 2013, 3,000 children attended preschool, 9,000 pupils attended primary schools, 7,100 attended secondary school, and almost 2,000 pursued post-secondary studies (Figure 27). Seychelles boasts levels of enrolment up to the secondary level that is comparable to those in most middle-income and even some high-income countries (Figure 28).
26 From 1990 to 2011, the school-age population declined from 26,900 to 23,700. The decline was particularly marked after 2003, falling by -1 percent per year on average.
•1 public TERTIARY UNIVERSITY
•7 public and 3 private, including vocational schools POST-SECONDARY INSTITUTIONS
•2 years (S6–S7) in single institution •5 years (S1–S5) In regional schools •10 public and 3 private
SECONDARY EDUCATION
•6 years (P1–P6) •24 public and 5 private PRIMARY EDUCATION
•32 public and 3 private EARLY CHILDHOOD (CRECHE)
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Figure 27: Total enrolments, 2008–13
Source: EMIS 2013.
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Figure 28: Gross enrolment ratio in selected middle- and high-income countries, 2008–11
Source: UNESCO Institute for Statistics, online database.
Note: Small island countries labeled in pink; Seychelles labeled in red. 154. Enrolments in private schools remain relatively low, especially at the pre-primary and primary levels. Although increasing, the share of students enrolled in private schools was below 10 percent at the pre-primary and primary levels. The high share of public provision is particularly notable at the pre-primary level, where private providers are usually numerous as per international comparisons. Students enrolled in private schools represent a larger share of the total at the secondary level (around 12 percent on average) and post-secondary level (around 15 percent) (Figure 29), a common trend across countries.
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Figure 29: Share of private enrolment in total enrolment at the crèche, primary, secondary, and post-secondary levels, 2011–13
Source: EMIS 2013.
3.3. Quality of Education
155. Having increased access to education, Seychelles still faces major challenges in the education sector, including poor learning outcomes and limited completion of secondary school. For example, in 2012, only one-third of P6 pupils scored a grade of C or better in the National Examinations (Figure 30). Results of the IGCSE examinations are also quite poor, particularly in science. In 2012, the percentage of students who took the IGCSE (S5) exams and scored higher than a C (A*, A, or B) was only 5.3 percent in Mathematics, 19.3 percent in Coordinated Science, and nil in Combined Science. Transition rates to S5 have been consistently lower than transitions in earlier grades, averaging 88 percent over 2009–11—only slightly higher than in 2002–03 (85 percent). Figure 30: Percentage of P6 pupils scoring C or above on National Examinations, 2010–12
Source: CCATS Database 2013 and MTS 2013.
156. Seychelles lags behind other middle-income countries in terms of learning achievements. As a member of the Southern and Eastern Africa Consortium for Monitoring Educational Quality (SACMEQ), Seychelles participated in two rounds (2000 and 2007) of large-scale, cross-national research studies on the quality of education conducted in 15 countries
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of Southern and Eastern Africa. In both evaluations, Seychelles scored among the best two performers overall, just after Mauritius. Achievements in reading were among the highest in the region, both in 2000 and 2007, although a slight decrease was noted over the time period. Achievements in mathematics were less impressive (Table 5); in 2007, Seychelles was comparable to Mauritius in reading scores but lower than Mauritius, Kenya, and Tanzania in mathematics. Seychelles did not participate in PISA+, which compares learning achievement for more than 30 middle- and high-income countries, but some comparisons can be made using Mauritius as a benchmark. Caution must be used in interpreting the data, but the comparison indicates that Seychelles would score lower than Malaysia, Costa Rica, and Chile, all of which outperformed Mauritius in PISA+. These low learning achievements, when combined with the dropout rate prior to the last grade of secondary school, imply that a large segment of the population is leaving school without having acquired a full complement of basic skills (defined in this context as literacy, numeracy, and competencies required by a more advanced labor market, such as problem solving, critical thinking, teamwork, and communication skills).
Table 5: SACMEQ II and III results, Mauritius and Seychelles
Pupil reading score Pupil mathematics score
2000 2007 2000 2007
Mauritius 536 574 585 623
Seychelles 582 575 554 550
All SACMEQ countries 500 512 500 510
Source: SACMEQ 2000, 2007.
3.4. Equality Analysis
157. While access up to S4 is universal, attendance rates become unequal beyond that level. Census data for 2010 show that 97 percent of children ages 6–14 attend school, with very little difference in attendance rates between income groups (less than 3 percentage points). Marked inequalities in attendance emerge at higher levels of education, however. Differences in attendance rates increase among 17- and 18-year-olds, when compulsory education ends. While 82 percent of 17-year-olds from the wealthiest households continue to attend school, only
Figure 31: Attendance rate by age and quintile, 2010
Source: Census data, 2010.
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53 percent of 17-year-olds from the poorest households continue to attend. Apparently the decision to remain in school after S4 is greatly influenced by a student’s environment, including the family’s income.
158. Additional evidence shows that differences in learning achievement are associated closely with individual factors such as gender and location. Data from the latest SACMEQ assessment show that girls perform generally better than boys, with a substantial difference in mean scores in reading (63 points) and a lesser difference (31 points) in mathematics (Table 6). Differences in learning achievement are also notable across districts, with West District scoring lower in reading and mathematics (550.2 and 539.1, respectively) than Central, North, and South Districts, which scored higher than 580 in reading and 550 in mathematics.27 159. Parents’ education and wealth are strongly associated with learning achievements. SACMEQ data reveal disparities among learning achievements in relation to the parents’ level of education. Children whose mothers attended university scored significantly higher than pupils whose mothers never attended school. The difference in mean score is as high as 182 points in reading and 144 in mathematics, which is extremely high. Father’s education seems to be a similarly strong determinant of learning achievements. Unsurprisingly, the relationship between household income and learning scores is also large. 160. Another important factor that is linked to learning achievements is the capacity of children to attend extra lessons (for a fee) outside school hours. According to the SACMEQ data, about one-third of pupils took extra private lessons. The impact of additional lessons on learning achievement seems to be positive overall, since the difference in scores between pupils taking extra lessons and pupils not taking extra lessons is as high as 50 points in reading and 45 points in mathematics (Table 7). Although these differences may be driven by factors aside from extra lessons (such as individual characteristics of pupils that are not reflected in Error! Reference source not found.), these results seem to indicate that pupils who can attend extra lessons acquire an advantage. The data also show that pupils in the Center Region whose mothers completed either secondary or post-secondary education were more likely to enroll in private lessons. The implication is that children from less affluent families have difficulty accessing extra lessons, and their learning achievement suffers as a result.
27 Hungi, N. (2011), “Accounting for Variations in the Quality of Primary School Education,” SACMEQ Working Paper No. 7 (SACMEQ, Paris).
Table 6: Learning achievement, by gender and district (SACMEQ 2007
data)
Mean Reading Mathematics Gender
Boy 544.3 535.2 Girl 607.2 566.7
District Center 581.0 557.3 East 574.9 548.0 Islands 565.1 543.7 North 585.2 554.1 South 584.8 551.5 West 550.2 539.1 Total 575.0 550.7
Source: SACMEQ 2007. Note: Students’ final reading and mathematics scores were
transformed to have a mean of 500 and a standard deviation of 100.
66
161. These findings are largely confirmed by a multivariate analysis of the determinants of learning achievement, which finds that parents’ education, household wealth, and teachers’ characteristics have the greatest significance. In particular, the multivariate analysis shows that the top three determinants of learning achievements are: (i) parents’ education—particularly father’s education for boys and mother’s education for girls; (ii) household wealth; and (iii) teachers’ characteristics, including academic qualifications and absenteeism (the latter having a negative effect on learning scores). Interestingly, teachers’ training does not seem to have a positive effect on learning achievement. This result could indicate that current teacher training policies are relatively inefficient, but more analysis would be necessary to draw a more definitive conclusion. See Annex 3 for the detailed results of the econometric analysis.
Figure 32: Learning achievements by level of mother’s education (left) and wealth quintile
(right), 2007
Source: SACMEQ, 2007. Note: The left-hand figure shows that P6 students whose mothers never attended school scored on average 462.5 in reading and 463.1 in mathematics, whereas P6 pupils whose mothers had a university degree scored 645 in reading and 607 in mathematics on average. The right-hand figure indicates that P6 students from households in the lowest wealth quintile scored on average
527.6 in reading and 511.4 in mathematics, compared to P6 students from households in the highest wealth quintile, who scored 628 in reading and 539 in mathematics.
462.5 463.1
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540.3
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Reading Mathematics
No school Completed all primaryCompleted all secondary University
527.6 511.4 572.4
547.8 594.9 570.5
628.5 593.6
Reading Mathematics
Q1 Q2 Q3 Q4
Table 7: Learning achievement and extra private lessons
Reading score
Mathematics score
Take an extra-lesson?
No 558.2 537.8 Yes 616.3 582.0 Total 575.1 550.7
Total observations 1,480 1,479 Source: SACMEQ 2007.
67
Figure 33: Share of pupils attending extra lessons by region (left) and by level of father’s education (right), 2007
Source: SACMEQ, 2007.
Trends and Composition of Education Expenditure 162. The priority given to education within total public expenditure has decreased over time, translating into an overall decrease in public spending on education since 2004. Whereas public spending on education amounted to about 6.3 percent of GDP in 2004, it was just 3.8 percent in 2011. Similarly, competing demands on the national budget have led to a continuous decrease in the share of the total budget allocated to education, from 13.3 percent in 2004 to 10.2 percent in 2011 (with some variation over the years). In 2011, total public expenditure on education amounted to Rs 476 million, down from Rs 546 million in 2004 (2011 constant prices).
Figure 34: Public expenditure on education, 2004–11 (in 2011 constant prices)
Source: BOOST database.
Note: In 2011, the education sector was under the Ministry of Education, Employment, and Human Resources; the amounts above include only the ministry’s education functions.
40.3
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163. Compared to other upper-middle and high-income countries, Seychelles allocates a relatively low share of its national resources to education. Over 2008–11, Seychelles allocated a little less than 4 percent of GDP to education, whereas countries such as Malaysia, Costa Rica, Tunisia, and Finland allocated at least 5 percent of GDP to education. As a share of total expenditure, expenditure on education in Seychelles lags that of many comparator countries (Figure 35). In Singapore, where the share of public spending on education is equivalent to only 3 percent of GDP, the education sector receives one of the highest shares of overall public spending—21 percent on average over 2008–11. In Seychelles, it was about 10 percent. Figure 35: Public expenditure on education as a percentage of GDP and as a percentage of
total government expenditure, selected countries, 2008–11 average
Source: UNESCO Institute for Statistics, online database.
164. The higher unit costs in crèches reflect the more intense supervision needed at that level. The level of resources allocated by a country to its education system, including the distribution across levels of education, depends on the number of pupils enrolled at each level.
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When spending per pupil (unit cost) in 2011 was calculated for each level of education in Seychelles, not surprisingly, unit costs are highest at the crèche level, where the pupil-teacher ratios are higher (unit costs were Rs 17,500 at crèche level, Rs 13,250 at primary level, and Rs 15,700 at secondary level). When crèches are located on the same premises as primary schools (as they are 80 percent of the time), costs are reduced owing to economies of scale.
Figure 36: Public expenditure per pupil at each level of the education system, 2011
Source: BOOST database.
165. Even relative to enrolment, public expenditure on education appears to be relatively low at the primary and secondary levels. To avoid misleading comparisons because of differences in prices across countries, spending per pupil (unit cost) is often expressed as a percentage of GDP. Spending per pupil as percentage of GDP in Seychelles appears to be lower than in most upper-middle and high-income countries. For instance, the unit cost in primary education was below 10 percent of GDP per capita in Seychelles in 2011, lower than in Singapore (11 percent) and Finland (19.5 percent), for instance. The unit cost in secondary education was about 10 percent of GDP per capita in Seychelles in 2011, again lower than in Singapore (16.7 percent) and Finland (34.1 percent).
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15,689
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Unit
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, Rs
70
Figure 37: Public expenditure per pupil as a percentage of GDP per capita in primary and secondary education, 2008–11 average
Source: UNESCO Institute for Statistics, online database.
166. Post-secondary education absorbs one-third of the spending on education, more than in most comparable countries with similar levels of enrolment. In 2011, less than half of the budget for education was allocated to primary and secondary schooling, including 20 percent to primary education, 15 percent to secondary, and another 10 percent to primary and secondary together (in the case of multi-grade schools). Another 36 percent went to post-secondary institutions, including 20 percent to the University of Seychelles. This distribution differs from that of most other middle- or high-income countries with similar levels of enrolment.28 For example, Chile, Mauritius, and South Africa allocate less than 20 percent of their education budget to tertiary education. The high share devoted to post-secondary education in Seychelles is not entirely aligned with enrolment, which remains concentrated at the primary and secondary levels, but it partly reflects the investment and capital expenditure necessary to launch the University of Seychelles.
28 In Seychelles, only one-third of a cohort accesses post-secondary institutions, a level much lower than in other upper-middle-income countries.
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Figure 38: Distribution of public recurrent spending on education by level (spending allocated by level), Seychelles (right) and comparable countries (left)
Source: BOOST database and UNESCO Institute for Statistics, online database.
167. Most public spending on education goes to compensate employees, including teachers, while spending on goods and services (especially learning materials) remain small, with potential consequences for the quality of education. Altogether 786 teachers work in the public system, of whom 707 are female and 79 are male; an additional 236 teacher assistants (232 female, 3 male) are assigned to early childhood education, for a grand total of 1,022 instructional staff, most of whom (88 percent) are women (MTS 2013). Employee compensation accounts for 92 percent of recurrent spending in primary and secondary education, while goods and services receive about 6 percent. The share dedicated to compensation is relatively high compared to that in comparable countries (Figure 39) and leaves little room for investment in other items, such as goods and learning materials, which have a crucial influence on education quality and learning achievements. 168. The share of teaching staff on the payroll has increased over the last decade, especially after the Ministry of Education outsourced some technical activities. In addition to the teaching staff and assistants, other personnel (with expertise in pedagogy, management, and technical areas) are required for the schools and Ministry of Education to function. Most of these specialists have a direct impact on the quality of education and learning achievements. In particular, pedagogy staff can provide support to teachers and pupils, ease the learning process, and contribute to improving the overall performance of teachers and pupils. Similarly, management staff makes an important contribution to performance by ensuring that the system and schools operate efficiently. Technical personnel directly support the quality of school infrastructure through the essential services they provide to the system. Since 2004, spending on teachers’ salaries in relation to salaries of other categories of staff has increased significantly (Figure 40). In 2004, teachers absorbed just above 60 percent of spending on salaries; in 20011, they were responsible for 87 percent. This shift mostly reflects the ministry’s efforts to focus on its key competencies and outsource other services (for example, services related to school maintenance) and automatically increased the share of the budget allocated to teachers’ salaries. No evidence is available yet on whether the outsourcing policy implemented in 2009 has increased either performance or quality. The Ministry of Education is advised to undertake such an analysis to answer that question.
31.1%
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39.8%
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Mauritius
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[CATEGORY
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Figure 39: Share of teachers’ salaries in total expenditure in primary and secondary
Source: BOOST database and UNESCO Institute for Statistics, online database.
Figure 40: Distribution of staff salary costs by area of specialization, primary (left) and
secondary (right) schools, 2004–11
Source: BOOST database and UNESCO Institute for Statistics, online database.
169. Pupil-teacher ratios (PTRs) at the primary and secondary levels in Seychelles are lower than in many upper-middle and high-income countries and help to explain why salary costs are such a strong driver of spending at the primary and secondary levels in Seychelles. International comparisons of PTRs can be misleading, as the kinds of institutions that constitute national education systems differ greatly. Countries with specialized programs, such as programs for Special Needs Education, tend to have lower PTRs, as do countries with large vocational programs at the secondary level. Despite their limitations, however, international comparisons can give an idea of where Seychelles stands in terms of number of teachers relative to enrolment. Data from 2008 to 2011 indicate that PTRs in Seychelles are in the lower range at both the primary and secondary levels (Figure 41).
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Figure 41: Pupil-teacher ratios in selected countries and Seychelles, 2008–11
Source: UNESCO Institute for Statistics, online database.
170. An important finding is that PTRs vary widely across primary schools in Seychelles, resulting in significant differences in unit costs. Even when Silhouette Island is excluded from the analysis, some primary schools had as many as 13.7 pupils per teacher, while others had as few as 8.4 (Figure 42). Similar variations are noted in secondary education, where PTRs range from 10.4:1 to 12.9:1.
Figure 42: Pupil-teacher ratio in primary schools, 2011
Source: BOOST database.
171. High turnover rates, especially among the most qualified teachers, greatly diminish the returns on Seychelles’ significant investment in teachers and contribute to low efficiency in the education system. Although high turnover is not a new issue, it seems to have worsened in recent years. In primary education, qualified teachers, notably holders of Diploma Part Two, are resigning at an alarming rate—more than 30 resigned in 2012 (Figure 43). A similar pattern is seen in secondary education, where teacher shortages are acute, especially in mathematics and the sciences. In July 2013, each school had an average of three vacancies and three resignations. In addition to low retention, the difficulties of recruiting new teachers, mainly in specialized areas of mathematics and science, contribute to persistent shortages. Those who
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leave mention the workload, working conditions, and stress as their primary reasons for leaving (exit interviews, Schools Division, 2013).
Figure 43: Teacher attrition in primary and secondary schools
Source: MTS and Schools Division 2013.
172. The education budget is generally fully executed, but some categories, including goods, are largely under-executed. The execution rate for the overall education budget was 108 percent in 2011. Execution varied by category, with significant overspending on office expenses, maintenance, and repairs (Figure 44). On the other hand, the budget was not fully executed for activities related to materials and supplies, social benefits, and to a lesser extent compensation of employees. Overall, various adjustments take place within and between categories, with a reported fluidity in the ability of the ministry to readjust the budget according to its needs. Underspending on learning material, in a context where a significant shortage of textbooks exists, could have a direct impact on learning achievements, and a detailed examination of bottlenecks in executing the full budget allocated to this category is warranted.
Figure 44: Budget execution rate by category, recurrent spending, 2011
Source: BOOST database.
Distribution of Public Spending for Education 173. Spending per student differs substantially across primary schools. For example, unit cost varies from Rs 12,300 in Mont Fleuri to Rs 20,500 in La Misère. The much higher unit cost in Silhouette (Rs 66,500 in 2011) reflects its unique situation and small school population. The differences in unit cost at the primary school level are mainly accounted for by variations in PTR, which was 6.8:1 in La Misère compared to 12.2:1 in Mont Fleuri. Larger schools, as such,
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appear to be less costly. The unit cost for smaller schools (less than 250 pupils) is, on average, twice as much as for larger schools (more than 250 pupils). Unit costs appear to plateau around 700 pupils, suggesting that the cost-efficient school size is somewhere between 250 and 700 pupils.29 174. The relationship between school size and learning outcomes is weak at the primary level. Considering that larger schools have lower unit costs, it may be possible to achieve some efficiency gains, without compromising learning outcomes, by expanding smaller schools. School size and student performance (measured by the average score of students taking the national examination at the end of primary school) do not seem to be strongly linked. As shown in Figure 46, medium-sized schools with a student body of 250–700 have learning achievements similar to those of small schools. Larger schools (more than 700 pupils) seem to perform less well, although it is difficult to generalize, given that Seychelles has only two such schools.
Figure 45: School size and unit cost for primary and secondary schools
Source: BOOST database.
Figure 46: School size and exam results, 2009–11 average
Source: BOOST database.
175. At the secondary level, allocation per student is more homogenous. The difference in expenditure per pupil is minimal, primarily because secondary schools are more uniform in size and PTR. The effect of concentration around fewer but bigger schools has a direct impact on unit costs and the efficiency of the system.
29 The small number of schools calls for caution when analyzing these relationships.
R² = 0.897
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176. Inequality in education outcomes can be addressed partly by improving the targeting of public spending, giving attention to supply as well as demand factors. As documented in Section 3, substantial inequality in learning achievements exists in Seychelles, despite universal access to education through S4. Given the findings discussed previously—on unit costs, school size, and performance—policies and strategies to improve the targeting of public spending on education could help to diminish unequal learning achievements. Such policies could focus on two areas: (i) distributing public resources, including qualified teachers, to promote better learning outcomes for the most vulnerable and (ii) unlocking any potential financial constraints facing the neediest families,. 177. On the supply side, public spending on education does not seem to target underperforming schools. Average scores on the national examination given at the end of primary school vary significantly across schools. For example, while on average at least 60 percent of P6 students passed the national exam in Takamaka and Plaisance over 2009–11, only 45 percent of their peers in Baie Saint Anne and Anse Etoile passed. Inequality in learning achievements does not seem to be compensated by higher allocations to schools that perform less well, however, given the weak link between exam results and public funding for primary education shown in Figure 47.
Figure 47: Unit costs in primary education and average district household income
Source: BOOST database and Population and Housing Census, 2010.
178. Beyond overall funding to schools, the distribution of inputs varies by school and does not seem to be targeted to reducing learning achievements. Shortages of learning materials occur at the both the primary and secondary levels, but the supply of English, French, Creole, and mathematics textbooks is highly inadequate in primary schools. The MTS noted that sufficient textbooks were available for crèche but that the number of toys, educational games, and manipulative objects (the learning materials that are most important for this age group) was largely insufficient, which could seriously impede pupils’ cognitive development. It is important to note that textbook shortages are most acute in schools with the lowest learning achievements. For instance, in the West Region, where average reading scores are the lowest, about 15 percent
77
of pupils have to share textbooks with two or more other pupils, whereas only 5 percent have to do so in schools in the North Region, where average reading scores are highest.
Figure 48: Reading scores and percentages of pupils sharing textbooks with two or more other children, by region
Source: SACMEQ, 2007.
179. On the demand side, some financial support is reaching needy students, but its impact in unclear. The Dedicated Fund, created in 2010, is the main source of financial support to ensure equal access to a good education. Its impact may be limited, however, by its small size and relatively broad targeting criteria. The Dedicated Fund (Rs 2.3 million, representing about 0.5 percent of the recurrent expenditure on education) provides free meals, school materials, uniforms, transportation, and other items to disadvantaged students. By itself, the Dedicated Fund may be insufficient to address the various constraints on schooling faced by parents and children and to substantially strengthen underperforming schools and students. Comprehensive data are not collected on the individual students supported through the fund, but school-level data show that it is substantially underused in the schools with the most vulnerable student populations. It may be necessary to redefine the eligibility criteria and procedures for accessing the fund to ensure that it is used as equitably as possible in the schools. The lack of clear objectives, along with limited monitoring and evaluation of the fund’s impact on reducing inequities in education, may also limit the fund’s effectiveness by hampering regular adjustments that would ensure effectiveness. Summary of Findings and Recommendations 180. The analysis reveals that the priority given to education within total public expenditure has decreased over time, resulting in an actual reduction of public funding to the sector in 2011 compared to 2004. A comparison with other upper-middle and high-income countries indicates that Seychelles allocates a relatively lower share of its national resources to education, especially in terms of the share of government spending allocated to education. Even relative to enrolment, public expenditure on education appears to be relatively low at both the primary and secondary levels—lower than in most upper-middle and high-income countries.
550.2
565.1
574.9 581
584.8 585.2
West Islands East Center South North
Reading score
15.3
4
16.2
11.7
6.8 5.2
West Islands East Center South North
Percentage of pupils sharing books with 2 or more children
78
181. In 2011, more than one-third of the budget for education was allocated to post-secondary, one quarter to primary and pre-primary, and less than 15 percent to secondary education. This distribution significantly differs from that of other middle- or high-income countries with comparable levels of enrolment at the tertiary level, which tend to spend a greater share of their budget on primary and secondary education and allocate a smaller share to tertiary education. The high priority placed on post-secondary education in Seychelles partly reflects the substantial investment required to develop the new university. 182. Salary costs are the main driver of expenditure in the sector, while other categories, such as learning materials, appear underfunded. Salaries account for more than 90 percent of overall spending on education, a higher share than in comparable countries. The low PTRs at the primary and secondary levels are the main reason that salaries absorb such a large share of the budget. Indeed, PTRs are lower than in many upper-middle and high-income countries. The return on Seychelles’ high overall investment in teachers is limited by their high attrition rates, however. The large share of the budget allocated to salaries also comes at the detriment of other categories of expenditure. Learning materials in particular are not only underfunded, but the budget allocated to this expenditure is actually under-executed, seriously undermining the quality of education. Overall, the high share of spending allocated to teachers’ salaries seems at odds with the stagnation in quality and learning achievements. 183. Increasing school size might be an effective way to improve the efficiency of public spending, but the feasibility and impact of such a measure need to be carefully assessed. Staff to pupil ratios at the large and medium-sized schools seem to decrease their overall unit cost, suggesting that it might be worthwhile to create schools of similar size by expanding the smallest and reducing the largest. This approach could prove infeasible for various reasons, including the need to maintain reasonable commuting distances for pupils. Even more important, the prospective impact of such a measure on the quality of education is not yet clear, although preliminary analysis suggests that learning achievements are similar at medium-sized and smaller schools. The possibility of making school size more uniform across Seychelles should be explored further, after a careful analysis of the potential costs and benefits. 184. Education spending does not seem to target the most disadvantaged pupils. Public spending can be an important tool to address unequal education outcomes by targeting factors related to supply as well as demand. In the case of Seychelles, policies and strategies aiming at decreasing inequality in learning achievement should focus on (i) ensuring that public resources, including qualified teachers, are distributed in a manner that promotes better learning outcomes for the most vulnerable and (ii) unlocking any potential financial constraints facing the neediest families. The analysis shows that presently the schools with the lowest performance in terms of exam results do not receive significantly more resources. While the Dedicated Fund is a positive initiative to address inequality in learning achievements, its impact appears to be limited by its small size, relatively broad eligibility criteria, and lack of a monitoring and evaluation strategy to understand and increase its impact. 185. Extending compulsory education to the S5 level might help to reduce inequality at a reasonable cost to the Ministry of Education. Transition rates have been consistently lower from S4 to S5 than between earlier grades. The pupils who drop out after S4 come
79
disproportionally from the poorest backgrounds. While the determinants of these dropout rates need to be better understood, making S5 compulsory might help to reduce inequalities in learning outcomes, given that the poorest pupils stand to benefit most from an added year of schooling. The added year would also give these pupils more opportunities to access post-secondary education and training. On average a year of secondary education cost Rs 16,000 per student in 2011, indicating that Seychelles would need to spend an additional Rs 2.0–2.5 million per year—about 0.5 percent of the education budget—to retain all S4 students in S5. The impact of such a measure may be limited, however, given that inequality in learning achievements is already substantial by P6 and probably only accentuated in later grades. 186. Further analysis is required to inform future policies and strategies, including analysis to gain a deeper understanding of the nonfinancial determinants of learning achievements. This review is only a first step toward obtaining better knowledge of how financial factors contribute to the attainment of key strategic objectives such as reduced inequality and improved learning achievements for all pupils. For various reasons, including the lack of comprehensive and recent micro-data, the analytical base remains thin, especially in regard to the financial and nonfinancial determinants of learning achievements. In particular, more analysis is needed to understand the drivers of education outcomes. At the school level, these drivers include nonfinancial factors such as the availability and quality of learning materials, the relevance of the curriculum, and teachers' performance and accountability. At the individual level, a more precise understanding of the relationships between socioeconomic factors, gender, and learning achievements is essential for formulating relevant policy options that are adequate to meet Seychelles’ strategic goals in education. Table 8 summarizes the main findings and related recommendations
80
Table 8: Summary of key findings and recommendations from the public expenditure analysis
Summary of key findings Recommendations
Broad picture: Access and quality
Education is compulsory for 13 years, as in most upper-middle and high-income countries.
Primary and secondary enrolments are universal, and the high public provision of pre-primary schooling is remarkable, given that in comparable countries this service is provided mostly by private operators.
Seychelles lags behind comparable countries in learning achievements. Exam results at the primary level are low, especially in in mathematics and science.
Improving learning achievements is a key objective of the MTS and should become a priority for the government.
Teacher turnover (mainly among highly qualified teachers) is high. Preliminary analysis suggests that teachers’ level of training has only a weak impact on learning achievements, however.
After further analysis, a revised comprehensive teaching management policy may be introduced to address issues of turnover and teacher quality.
Inequality in learning achievements is visible starting from P6:
(i) Girls perform better than boys, showing significantly higher mean scores for reading (and to some extent for mathematics).
(ii) Parents’ education is strongly and positively associated with learning outcomes.
(iii) Wealth level influences learning outcomes by making it possible for families to afford additional private tuition, providing students in the Centre Region with access to better-performing schools.
Introduce further measures to support the improvement of learning achievements in schools with weak performance. Such measures could possibly include a greater overall focus on inputs that support good learning outcomes, such as better teacher quality, wider access to learning materials, and so on. They may also include better targeting of resources to the neediest schools and students.
Marked inequality in attendance exists in classes after S4. Expanding compulsory education to S5 might be considered, but it will have an impact only if inequality in the learning achievements already observed at P6 are tackled.
Public expenditure on education as a tool to address current challenges
Compared to other upper-middle and high-income countries, in Seychelles public expenditure on education as a percentage of GDP and a percentage of total government expenditure is relatively low.
Based on the government’s priorities for public spending, consider increasing the share of the public budget allocated to education—with a view to increasing spending on the quality of education.
Unlike comparator countries, Seychelles allocates a relatively higher share of its total spending on education to post-secondary education.
After a more detailed analysis of the impact of spending at post-secondary level, consider introducing cost-sharing arrangements at this level so that public spending can be reallocated to lower levels.
A very high share of expenditure goes to salaries (about 90%), mainly explained by the high PTR—higher than in
High PTRs on average, and in some schools in particular, are explained by Seychelles’ need to make education available even in
81
Summary of key findings Recommendations
many upper middle-income and high-income countries. Yet the priority given to teachers’ salaries in the budget does not seem to have a significant impact on learning achievements.
remote environments. The government should aim to increase the share of public education spending that goes to non-salary items, particularly learning materials, which will also contribute to improving learning achievements.
While the total budget allocated to education is fully spent, budget allocated to activities that improve quality is underspent.
The Ministry of Education should analyze potential bottlenecks in the execution of spending on learning materials, including in terms of procurement.
At the primary level, unit costs are lower for larger schools, whereas the relationship between school size and learning outcomes is weak.
It may be possible to achieve some efficiency gains by creating schools of more uniform size to benefit from economies of scale without compromising learning outcomes. Further analysis is required to assess the feasibility of such measures in light of Seychelles’ geography.
In view of the present inequality in learning achievements, the impact of the Dedicated Fund may be limited by its small size, relatively broad targeting, and the lack of a monitoring and evaluation strategy to understand and improve its impact. The Dedicated Fund is substantially underused in the schools attended by the most vulnerable populations.
The Ministry of Education should work closely with the Ministry of Social Affairs to introduce the following changes to the Dedicated Fund:
• Undertake a detailed assessment of utilization by individual schools.
• In light of the results, possibly redefine eligibility criteria, and strengthen recipients’ access to other social services.
• Most importantly, improve the monitoring and evaluation mechanisms by ensuring that data on the use of the Dedicated Fund are reported systematically in an easy-to-use format and that the impact of the fund is measured, especially in relation to education outputs and outcomes (such as absenteeism rates, test scores, and other variables).
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Annex 1: Health Facilities in Mahé (main island), Praslin, and La Digue
SeychellesMap of Health Facilities
by district and type of provider
Government Health Centers and Cottage Hospitals
Seychelles Hospital
Private Physicians and Dental Clinics
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Annex 2: Findings from a Patient Exit Survey and Health Worker Survey
In addition to the standard expenditure/budget analysis, the PER commissioned two data collection efforts: a patient exit survey and health worker survey. Results from the two surveys are presented here.
3.5. Findings of the Patient Exit Survey The patient exit survey was designed to gather information on patients’ choice of health facility and ease of access to healthcare facilities and health workers. The survey also elicited information on key variables related to patients’ satisfaction with the services provided.
Choosing and visiting a health facility Patients choose public sector providers primarily because they are convenient and because they are their assigned public provider; they choose private providers when they perceive that superior services are provided (Figure A2.1). Respondents visiting public providers said that the facility was close to their home (61 percent) or they were mapped to that facility (58 percent). Respondents who visited a private facility said that it provided better services (65 percent) or shorter waiting times (61 percent).
Figure A2.1: Reasons for choosing public and a private facility
The vast majority, 86 percent of patients, take less than 30 minutes to get to their health facility of choice, with public transportation or walking being the most popular modes of transportation (Figure A2.2). Of that 86 percent, 45 percent took less than 15 minutes to reach the health facility. Only 14 percent of patients claimed they took longer than 30 minutes to get to their health facility, most likely reflecting inter-island travel to a specific health facility. The most common modes of transportation are bus, walking, or private car, respectively.
4
13
17
17
58
61
0 20 40 60
I was referred to thisfacility by a private…
I needtreatment/services…
It provides good healthservices
It offers free servicescompared to other…
I am mapped/zoned tothis facility
It is closest to where Ilive
Reasons for choosing public facility
1
4
14
25
31
32
61
65
0 20 40 60
It is open longer hours
It is closest to where I live
It is cleaner and better…
To get a second opinion
I feel more comfortable…
To be able to see the…
Wait times are shorter
It provides better services
Reasons for choosing private facility
84
Figure A2.2: Travel time and mode of transport to reach a health facility
Note: DK/CS = Don’t know/can’t say.
Most patients come for consultations (39 percent) and pharmacy services (31 percent). Only 10 percent of patients arrived with injuries on the day of service (Figure A2.3)
Figure A2.3: Purpose of visit to a health facility
Although only 30 percent of patients specifically came for pharmacy services, slightly more than 60 percent left with medicines prescribed as a result of their visit. The average number of medicines given or prescribed was 2.31. Almost all respondents who had been
45 41
8 4
1 1 0
15
30
45
< 15mins
15-30mins
31-60mins
1-2hours
> 2hours
DK/CS
Perc
ent o
f res
pond
ents
Travel time
0 1 1 2 2 3
23 28
40
0 15 30 45
DK/CSOther
AmbulanceBicycle
TaxiOffice Car
Private CarWalk
Bus
Mode of transport
0 0
1 2 2 2
3 3
4 4 5
5 11
16 31
39
0 9 18 27 36 45
Maternity CareSurgery
ANC or post-natal careImaging
LabChild ImmunizationDisease Treatment
FPOther
Dental WorkPhysio
Routine health check-…Injury
Follow-up consultationPharmacy
Consultation
Percent of respondents
85
prescribed medicines (95 percent) said that a health worker had thoroughly explained how the medicine should be administered.
Sick leave was prescribed to 22 percent of patients as a result of their visit, compared to 69 percent who did not receive sick leave and 8 percent who refused to answer. Of those who obtained sick leave on this visit, 53 percent had received 2 days of leave, 24 percent received 1 day, and 14 percent received 3 days. Less than 5 percent of the respondents received more than 3 days. Of those who received sick leave, roughly one-quarter felt that they ought to have received more, but only 13 percent of that group said that they would visit another provider to get additional leave.
The self-reported number of sick days taken by patients in 2012 is not as high as sometimes assumed. Nearly 42 percent of patients reported having taken no sick leave in 2012, compared to 40 percent who reported taking 1–10 days. Less than one-fifth reported taking more than 10 days of sick leave in 2012.
Access to, and availability of, health workers The time it takes for patients to see a health workers is very reasonable, and the majority of patients are seen by doctors (Figure A2.4). Nearly 67 percent of patients waited 30 minutes or less to be seen by a health worker. Almost one-third saw a health worker in less than 10 minutes. Most saw doctors (56.2 percent), followed by nurses (26.6 percent) and pharmacists (8.2 percent). The remainder was attended by other types of health worker.
Figure A2.4: Time spent waiting to see a health worker
Note: DK/CS = Don’t know/can’t say.
Patient satisfaction with services delivered Patients are highly satisfied with the services delivered by health workers and facilities. Respondents were asked a series of questions regarding their satisfaction with different aspects of their visit, including their perceptions of the quality of services received. On the whole, their responses were very positive (Figure A2.5). For example, nearly 74 percent of respondents said that the overall quality of services was satisfactory. They also generally felt that health workers’ responsiveness was very good, that their providers were competent, and conditions within health facilities were good. The only exceptions concerned the notion that health workers
31 37
10 12 8
1 1 0
10
20
30
40
< 10 mins 10-30mins
30 - 60mins
1-2 hours2-4 hours > 4hours
DK/CS
Perc
ent o
f res
pond
ents
86
treated rich people differently than poor people and that it was inconvenient to reach the health facility from the workplace. The latter perception is somewhat relative, given that most patients said they needed fewer than 30 minutes to reach a health facility, even on foot or by bus.
Figure A2.5: Patients’ satisfaction with key service delivery variables
Note: NA/DK/CS = Not applicable, don’t know, can’t say.
87.1
58.6
77.9
78.7
80.9
69.7
72.1
85.0
25.6
78.4
81.1
74.1
72.7
76.1
71.9
81.3
71.6
5.8
10.6
15.2
18.1
11.2
10.2
14.1
8.3
14.1
12.4
9.2
17.5
20.1
18.1
19.3
8.3
18.9
5.6
9.7
5.6
2.4
4.9
6.3
12.9
5.6
53.5
7.2
8.5
7.3
5.5
4.3
6.3
9.5
5.8
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
It is convenient to travel from your house to thehealth facility.
It is convenient to travel from your place of work tothe health facility.
The health facility is clean.
The health staff are courteous and respectful.
The health workers did a good job of explaining yourcondition.
It is easy to get medicines that health workersprescribe.
The amount of time spent waiting to be seen by ahealth worker was reasonable.
You had enough privacy during the visit.
The health workers in this facility act differentlytoward rich people than toward poor people.
The health worker spent a sufficient amount of timewith you.
The hours the facility is open are adequate to meetyour needs.
The overall quality of services provided wassatisfactory.
The health workers in this facility are extremelythorough and careful.
The health workers in this facility are very friendlyand approachable.
You trust the skills and abilities of the healthworkers in this facility.
There is no language barrier when communicatingwith health workers in this facility.
You trust the health worker’s decisions about medical treatments in this facility.
Agree Neither Agree nor Disagree Disagree NA/DK/CS
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3.6. Findings from the Health Worker Survey
The health worker survey had multiple goals. The survey instrument was designed to elicit data on ratios of health workers to the general population to serve as a benchmark for international comparisons. The survey also sought to identify the causes of staff turnover and attrition, to gain workers’ perspectives on conditions in the workplace and managers’ perspectives on the capacity of the individuals they supervised, and to learn what motivated health workers’ performance.
Benchmarking number of health workers The number of health workers in relation to the population is far higher than the international benchmark associated with indicators of good basic health outcomes. Globally, there is a strong correlation between such indicators as skilled attendance at births and mortality rates, and the number of health workers available in the general population. A density of 2.3 doctors, nurses, and midwives per thousand individuals, for example, is globally associated with an 80 percent birth attendance rate. The number of health workers per thousand individuals in Seychelles, at 7.0, is far above this benchmark and reflected in the country’s very good basic health indicators (99 percent skilled birth attendance, infant mortality at 9.8 per thousand live births, and no maternal mortality reported in many recent years) (Table A2.1). For this reason, the discussion on health worker stock in Seychelles revolves less around a need for more workers than around a need for more skills, or a better mix of skills, at particular facilities to cope with challenges such as the rising incidence of non-communicable diseases.
Table A2.1: Number of health workers in relation to the general population, Seychelles Type of health worker Number of HRH HRH/1,000 persons WHO benchmark Doctors/consultants 125 1.4 0.55 Nurses/midwives 490 5.6 1.73 Doctors, nurses, and midwives 615 7.0 2.28
The vast majority of health workers (61 percent, including 74 percent of specialized physicians) are located in Seychelles Hospital, whereas the largest demand for specific types of health workers comes from cottage hospitals (Table A2.2). Health centers, the first line of service provision, have 23 percent of the health workforce; the vast majority of dentists (83 percent) are also located in these facilities. Cottage hospital managers reported a desire to increase their full-time equivalent staff by 43 percent (particularly with specific allied health workers). Health center managers desired an increase of 38 percent (particularly dentists and allied health workers), and managers in Seychelles Hospital desired a 14 percent increase (particularly in specialists).
It takes a very long time to fill a specific health worker vacancy in the Seychelles, possibly reflecting the difficulty of recruiting doctors or workers with particular specializations. Seychelles Hospital can take up to 30 months to fill a particular vacancy, largely reflecting the fact that medical doctors and specialist staff have to be recruited from abroad (they are not produced in Seychelles) (Figure A2.6). Possibly because fewer specialized workers are needed at the primary (health center) and secondary (cottage hospital) levels, facility managers’ report
88
needing less time to fill vacancies (10.7 months in health centers and 4 months in cottage hospitals).
Table A2.2: Distribution of personnel by type and facility (percentage)
Health center Cottage hospital
Seychelles Hospital Other Total
Doctor 24 7 64 5 100 Generalist 31 8 58 3 100 Specialist 13 4 74 9 100
Dentist 83 0 17 0 100 Nurse and midwife 22 8 58 11 100
Both 34 9 55 2 100 Nurse 15 8 60 17 100 Midwife 33 0 67 0 100
Allied health 19 6 65 4 100 Total 23 7 61 9 100
Figure A2.6: Manager survey: Time needed to fill a health worker vacancy (months)
Sector transfer and attrition Within five years, 20 percent of health workers plan to work in the private health sector, largely motivated by higher earnings (Figure A2.7). Most plan to move within the next two years. This response may largely reflect increasing growth and employment opportunities in the private health sector (see the discussion in the main text). The most common reason for moving to the private sector is the perceived higher earnings.
Attrition, as reported by facility managers, was relatively low (5 percent) and largely replenished by new hires. On average, 1 percent of health workers retired and 4 percent of HRH resigned or left the health service (Table A2.3). The loss was replenished with 4 percent of new hires. Secondments, training, and medical leave are temporary and thus not counted as attrition.
In the coming years, health workers plan to leave the country at an annual rate of about 5 percent; these departures are driven primarily by the lack of opportunity for specialized education. Over the next four years, Seychelles should expect a little less than 10 percent of
11
4
30
24
17
0Primary Secondary Tertiary Others Total
89
doctors and about 5 percent of nurses/midwives to leave the country each year (Table A2.4). Within four years, then, Seychelles will lose close to 40 percent of doctors currently employed and close to 25 percent of nurses and midwives—about one-fifth of all health workers. Among types of health workers, doctors are much more likely to leave (many returning to their country of origin), and allied health workers are much less likely to go. The top reasons for leaving were the lack of further educational opportunities (67 percent) followed by low pay (15 percent).
Figure A2.7: Percentage of health workers planning to move to the private sector in the next five years
Table A2.3: Staff turnover (% of all staff) in past fiscal year and reasons for leaving (reported by facility managers)
All facilities Health center
Cottage hospital
Seychelles Hospital Other
Joined facility 4 3 15 3 6 Left facility 7 6 8 7 6
Retired 1 0 0 0 1 Dismissed 0 0 0 0 0 Suspended 0 0 0 0 0 Resigned/left service 4 2 7 4 4 Seconded 1 2 0 1 1 Training 1 3 0 1 0 Medical leave 1 1 0 0 1
Change in staff -3 -3 7 -4 0 Note: Numbers were adjusted for about 4% of health workers transferring from one facility into another.
Table A2.4: Percentage of HRH planning to migrate/leave Seychelles within 1–4 years
Type of health worker
Plan to migrate/leave Seychelles?
When?
Within 1 year Within 2 years Within 3 years Within 4 years
Doctor 38 13 9 7 9
Dentist 25 0 25 0 0
Nurse/midwife 24 5 3 6 9
Allied health 9 3 1 2 3
Total 22 5 4 5 8
21%
0%
24%
13%
21%
0%
7%
14%
21%
28%
Doctor Dentist Nurse/Midwife Allied Health Total
90
A relatively large number of health workers (26 percent) plan to switch to work outside the health sector within five years, closely correlated with perceptions of better pay in other jobs, including jobs in tourism, IT, public schools (teacher), tutoring, and engineering (Table A2.5). Doctors believe they are paid less than people in tourism, IT, and engineering but more than teachers. Nurses and allied health workers believe they are paid less than all of those groups (surprisingly, including primary school teachers). Interestingly, even though allied health workers are actually paid more than nurses, their perception of being paid less is more intense.
Table A2.5: Health workers’ perceptions of how their own salaries compare with the salaries of individuals with similar levels of education and experience who work in other professions (estimate)
Total Doctor Dentist Nurse/
midwife Allied health Tourism industry -0.4 -0.8 -0.5 -0.4 -0.5 IT industry -0.4 -0.6 -1.0 -0.4 -0.5 Public teacher (primary) -0.3 0.3 0.3 -0.4 -0.4 Public teacher (secondary) -0.3 0.2 -0.7 -0.3 -0.5 Tutor (HTI) -0.4 -0.2 -0.3 -0.4 -0.6 Engineer -0.4 -0.7 -0.4 -0.3 -0.5 Fraction seeing themselves working in one of those jobs within 5 years 26% 11% 17% 32% 18% Note: 1 = better; -1 = worse; 0 = same. Negative averages indicate that people who think they are paid less outnumber people
who think they are paid more. The number of retired health workers will double in 10 years and triple in 20. The workforce is relatively young; more than 80 percent of health workers are below the age of 50, and 62 percent are below the age of 40 (Table A2.6). Staff retirement and the associated costs linked to pensions and benefits will not be much of a concern in the next 10–15 years or so, but any planning and budgeting should take this eventuality into account.
Table A2.6: Age distribution: Percentage in each category (years of age) Type of health worker 20–30 31–40 41–50 51–60 60+ Doctor 22 29 34 10 5 Dentist 33 33 17 17 0 Nurse/midwife 32 35 19 14 0 Allied health 23 30 34 12 1 Total 29 33 24 13 1
Working conditions Most health workers believe that they have competent managers, although fewer believe their managers are able to motivate them (Table A2.7). Doctors and dentists are more convinced of their managers/supervisors’ competence/motivational abilities than nurses and allied health workers. The groups that appear to be the most unhappy with their supervisors are nurses, midwives, and allied health workers. In the Seychelles, very few facility managers
91
(nurse coordinators) have training in management (most have only technical training in nursing or midwifery).
Table A2.7: Perceptions among health workers of manager/supervisor competence and capacity to motivate staff (%)
Type of health worker Is your manager competent? Does your manager motivate you? Doctor 89 80 Dentist 100 80 Nurse/midwife 76 64 Allied health 73 65 Total 77 66
Health workers are not overwhelmed by administrative tasks and spend most of their time on direct patient care. Doctors, nurses/midwives, and dentists spent most of their time on patient care (71 percent, 65 percent, and 87 percent of their time, respectively) rather than on administrative tasks (Table A2.8). Administrative tasks “only” consume about one-quarter of working hours. Other categories of tasks are less important, except for allied health workers, who spend significant time on "other" activities (mostly related to their technical expertise, such as laboratory work).
Table A2.8: Average hours per week spent on different tasks Doctor Dentist Nurse/midwife Allied health Total Direct patient care 38.8 32.1 27.0 12.1 25.2 Administration 13.9 4.5 10.5 9.7 10.6 Community/social mobilization 0.2 0.0 1.1 2.2 1.2 Training 0.2 0.0 2.1 2.5 1.9 Ancillary tasks 0.0 0.0 0.4 0.0 0.3 Absence 0.1 0.2 0.4 0.4 0.4 Other 0.9 0.0 0.2 10.8 2.6 Total 54.8 36.8 41.7 37.7 42.3 Health workers are not overworked, reporting very reasonable working hours and patient loads. Nurses work the longest shifts, averaging over 10 hours on weekdays (Figure A2.8). Nurses and doctors tend to work in long shifts every day. Allied health workers and dentists are less likely to work on weekends. Doctors, followed by nurses and specialists, see the largest number of patients per day (Figure A2.9). These numbers are not as high as in many other countries, including many western economies.
92
Figure A2.8: Average number of hours worked per day
Figure A2.9: Daily patient load by type of health worker (mean and median)
Despite their reasonable work hours and patient loads, as well as the large number of health workers available, on average health workers in the Seychelles report working more than 24 hours of overtime each month (Table A2.9). On average, they report working 6.1 hours of overtime per week. Medical doctors work the most overtime (more than 15 hours per week, or 60 hours per month), most of which is paid.
Table A2.9: Average number of overtime (paid, unpaid) reported to be worked each week (hours)
Type of health worker Hours of overtime per week Paid for overtime? Doctor 15.7 77% Dentist 0.0 33% Nurse/midwife 5.9 85% Allied health 1.9 36% Total 6.1 76%
Health workers’ ability to perform their jobs Facility managers seem to think that they have good but not excellent staff in terms of competence (Table A2.10). All health workers in the facilities surveyed received an overall competence rating of 4 out of 5 from their managers. Little variation is apparent, except for
8.5 7.7 10.5
8.7 9.8
6.1
0.0
7.8
2.7
6.3 5.8
0
6.9
2.4
5.7
0369
12
Doctor Dentist Nurse/ Midwife Allied Health Total
Weekday Hours Saturday Hours Sunday Hours
37 30
18
31
40
25 19
25
0
10
20
30
40
50
Doctors Specialists Dentists Nurses/Midwives
Patients/day Mean Patients/day Median
93
doctors at the cottage hospital level and all staff at “other” facilities, who are rated lower. An assessment of actual competence, through direct observations of health workers and/or vignettes, will be an important research prerogative in the future to examine these perceptions.
Table A2.10: Managers’ ratings of staff on competence (1–5 scale)
Type of health worker All facilities Health center Cottage hospital Seychelles Hospital Other
Doctors 3.7 3.7 2.0 4.0 -- Nurses 4.0 4.0 4.0 4.1 3.0 Midwives 3.8 4.3 4.0 3.7 3.0 Allied health 3.6 3.3 5.0 3.6 3.0
Note: 1 = lowest competency, 5 = highest. Although most health workers benefit from in-service training, not all feel they are adequately trained to carry out their jobs effectively, including one-third of doctors and one-half of nurses, midwives, dentists, and allied health workers. The average staff member has been to 4.4 in-service training events in the past three years. Nurses attend more than doctors, but doctors are more likely to attend international in-service training. Most in-service training is sponsored and paid for by the government. Training sessions tend to cover a variety of topics, including communicable diseases (34 percent), non-communicable diseases (22 percent), and maternal and child health (27 percent). A much smaller proportion of health workers received training in accident and emergency care (11 percent). Doctors less commonly expressed a desire for more training. The type of training that is most requested is additional training in emergency care. Only 37 percent of health workers believe that training opportunities are allocated fairly.
At the time of the survey, only 22 percent of health workers felt that they had sufficient equipment and supplies to deliver quality services (Figure A2.10). Nearly all health workers agreed that supplies and equipment were lacking. Only 16 percent of nurses and midwives said that supplies and equipment were adequate.
Figure A2.10: Health workers who state that equipment and supplies are sufficient to carry out quality services
Health workers’ level of motivation to perform their jobs Health workers rate themselves as moderately to highly motivated in their jobs and driven largely by non-financial, intangible sources of motivation (Table A2.11). On average, all types of health workers in all types of facilities regard themselves as “moderately” to “highly”
32%
40%
16%
32%
22%
0%
9%
18%
27%
36%
45%
Doctor Dentist Nurse/Midwife Allied Health Total
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motivated. They report high motivation despite reporting only average satisfaction with overall compensation (between “somewhat satisfied” and “not satisfied”). Satisfaction with compensation is worst for nurses and midwives.
Table A2.11: Health workers’ self-reported levels of motivation (1–6 scale)
Type of health worker Health center Cottage hospital
Seychelles Hospital Others Total
Doctor 4.6 5.0 4.4 4.7 4.5 Dentist 4.0
5.0
4.2
Nurse/midwife 4.6 4.4 4.3 4.5 4.4 Allied health 4.5 4.7 4.7 5.2 4.7 Total 4.5 4.6 4.4 4.6 4.5
Note: 1 = extremely demotivated, 2 = not motivated, 3 = slightly motivated, 4 = moderately motivated, 5 = highly motivated, and 6 = extremely motivated.
These results appear to confirm that the health workforce is driven by factors other than financial gain. The vast majority of health workers (93 percent of nurses and midwives, 83 percent of dentists, 81 percent of doctors, and 83 percent of allied health workers) entered the health profession based on the “ability to help people” (Table A2.12). Only 5 percent of doctors, 4 percent of nurses and midwives, and 4 percent of allied health workers entered the profession to “make good money.” When asked which factors motivated them the most in their day-to-day jobs, health workers largely listed intangibles (position being appreciated by patients, good relationship with colleagues, feeling of doing something meaningful, and so on).
Table A2.12: Health workers’ ranking of factors that currently motivate them (average) (1–5 scale)
Variable Total Doctors Dentists Nurses/
midwives Allied health
My position being appreciated by patients in the health facility 4.2 3.9 4.0 4.3 4.2 Good relationships with colleagues at work 4.2 4.1 4.2 4.3 4.0 Feeling of accomplishing meaningful and important things in my work 4.2 3.9 4.8 4.2 4.2 Salary paid on time 4.1 3.8 4.3 4.2 4.2 Having a stable job 4.1 3.6 4.4 4.1 4.3 Being considered an important member of the team 4.1 3.9 4.3 4.1 4.0 Being respected as a person at work 4.1 3.7 4.5 4.1 4.1 Having autonomy in my work 4.1 3.7 4.0 4.1 4.1 Opportunities to use my skills 4.0 3.8 3.8 4.0 4.1 Clearly planned objectives and tasks for my job 4.0 3.6 3.3 4.0 4.1 Support and guidance from my direct supervisor 3.9 3.8 4.2 3.9 3.9 Supervisor being available when I need support 3.9 3.8 4.5 3.8 4.1 Management recognizing and acknowledging my work 3.8 3.5 4.3 3.8 4.0 Participation in decisions about changes that affect my working activity/team/department 3.8 3.5 3.7 3.8 3.8 Clear communication from superiors regarding messages from the government 3.8 3.5 4.2 3.8 3.9 Opportunities to use creativity to enhance my work 3.8 3.6 3.5 3.8 3.9
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Regular debriefing and feedback sessions with my supervisor 3.8 3.5 3.8 3.8 3.9 Opportunities for training and career development 3.6 3.4 3.2 3.7 3.6 Enough equipment and drugs to work with 3.6 3.4 4.2 3.6 3.7 Being treated fairly by management 3.6 3.4 4.0 3.6 3.7 Good salaries and other financial incentives 3.3 3.2 3.5 3.2 3.4 Note: 1 = this factor hardly motivates; 2 = motivates slightly; 3 = motivates moderately; 4 = motivates well; and 5 = motivates highly.
At the time of the survey, unexplained absenteeism was low among health workers (3 percent for doctors and almost nil for other health workers) (Table A2.13). Of those physicians who were absent at the time of the survey (visits were announced, however, which could have skewed real numbers), the main reason for absence was official leave (7 percent). Only 3 percent were meant to be on duty but not present at the time of the survey and believed to be “working elsewhere.” Given the very small private sector in the Seychelles, dual practice and moonlighting opportunities are still very underdeveloped, but they could grow as demand for private care expands. Only 5 percent of doctors said they engaged in supplementary income-generating activity (mainly work in the private sector, teaching, or commercial work) and 8 percent of nurses and midwives (private sector, teaching, and petty trade).
Table A2.13: Manager survey: Reported absenteeism at time of survey
Type of health worker Meant to be on duty but not present at time of
visit (%) Doctors 10% Dentists 0% Nurses/midwives 1% Allied health 3%
Despite their availability, low patient load, and high levels of motivation, health workers spend very little time with each patient. Half of patients surveyed reported spending under 10 minutes with a health worker, and one-third said they spent under 5 (Figure A2.11). This response is surprising, given the fairly low workload and number of overtime hours clocked, indicating that more research is required. The short interaction times may be partly explained by the fact that a large number of patients who visit health facilities seek pharmacy services and sick leave (even if listed as “seeking consultations”).
96
Figure A2.11: Time spent with the main health worker (patient survey)
Note: DK/CK = Don’t know/can’t know.
Conclusions Health workers are generally very motivated, driven by intrinsic factors more than remuneration. Working conditions are perceived to be good, and patient’s satisfaction with health workers’ responsiveness, facility conditions, and quality of service is high. The bottom line in the Seychelles is that numbers are sufficient but skills are not. More specialist skills are needed. Perhaps the distribution of health workers could be optimized based on workloads. To achieve even better health outcomes with the human resources available, research should examine health workers’ distribution (identifying an optimal health worker and skill mix pattern in each facility) and performance (assessing actual health workers’ competencies and productivity, and identifying opportunities to shift tasks and upgrade specific competencies of the health workforce through innovative training solutions).
30
49
15
3 1 1 0
20
40
60
< 5 minutes 5-10 mins 10-30 mins 30-60 mins > 1 hour DK/CK
Perc
ent o
f res
pond
ents
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Annex 3: Results of the Econometric Analysis of the Determinants of Learning
Achievement
An econometric analysis was done to assess the significance and importance of variables identified in the descriptive data on variation in pupils’ test scores (specifically, in their reading and mathematics achievement by the end of P6). Linear regressions were used to determine which factors—such as particular household characteristics (mother’s and father’s level of education, household wealth index), pupils’ characteristics (sex), teachers’ characteristics (levels of academic education and training, absenteeism, pupil-teacher ratios)—are correlated to pupils’ test scores. Results of the econometric analysis (Tables A1.1 and A1.2) confirmed most of the findings from the descriptive statistics. In particular:
• Girls outperformed boys in reading and mathematics. • Parents’ education has a positive effect on children’s test scores. Father’s education has
more of an impact on a boy’s performance, whereas mother’s education has a greater influence on a girl’s score.
• Teachers with a first degree have a positive, significant effect on pupils’ test scores, especially on reading scores, whereas teachers with more than three years or less than two years of training have a negative effect (both in reading and mathematics).
• Reading achievements are influenced positively by household wealth quartile (based on the pupil’s socioeconomic status score).
• Teacher absenteeism tends to reduce pupils’ reading scores.
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Table A1.1: Linear regressions on pupils’ reading scores, disaggregated by gender Reading
Total Boys Girls Dependent variable: pupil’s score Girl 53.098*** (6.13) Mother’s education (Base: No school) Completed some primary -4.925 (41.11) -46.095 (56.49) 96.976 (62.89) Completed all primary/training after primary 5.236 (38.05) -48.692 (51.84) 105.427* (58.17) Completed some secondary 4.767 (37.89) -50.678 (51.81) 106.600* (58.02) Completed all secondary 11.399 (37.29) -54.981 (51.36) 123.839** (56.81) Training after secondary 37.206 (37.53) -33.181 (51.41) 154.869*** (57.24) University 52.910 (38.49) 0.044 (53.06) 152.318*** (58.27) Father’s education (Base: No school) Completed some primary 81.508** (37.04) 67.380 (49.53) 104.103* (59.81) Completed all primary/training after primary 59.976* (36.39) 58.510 (48.64) 69.585 (58.48) Completed some secondary 71.102** (36.24) 98.968** (48.62) 47.592 (58.29) Completed all secondary 72.321** (35.71) 82.977* (48.04) 70.815 (57.55) Training after secondary 78.568** (36.08) 110.481** (48.43) 58.223 (57.95) University 109.551*** (36.48) 121.489** (49.35) 107.645* (58.19) Pupil-teacher ratio -1.263*** (0.40) -1.130* (0.61) -1.267** (0.52) Teacher’s academic education (Base: Senior secondary) A-Level 6.074 (7.70) 4.202 (11.22) 5.957 (10.67) First degree 42.060*** (15.41) 56.654** (22.71) 21.631 (20.56) Teacher’s training (Base: 3 years of training) Two years or less -48.717*** (10.92) -34.404** (16.99) -60.901*** (13.86) More than three years -50.291*** (9.87) -46.958*** (15.93) -49.972*** (12.18) Pupil can borrow a book -2.406 (7.55) 1.603 (11.46) -14.483 (10.03) Wealth index (Pupil’s SES) (Base: Quartile 1) Quartile 2 29.838*** (8.48) 33.734*** (12.89) 20.380* (11.08) Quartile 3 45.985*** (10.61) 44.510*** (16.68) 45.916*** (13.28) Quartile 4 61.928*** (9.74) 79.088*** (15.55) 41.931*** (12.09) Teacher’s absenteeism (Base: 1–2 days) No absence -64.423*** (20.08) -77.133** (31.17) -53.550** (25.94) 3–5 days -82.838*** (11.60) -92.433*** (18.01) -67.894*** (14.74) 6–9 days -55.566*** (10.45) -51.992*** (16.45) -55.997*** (13.18) 10–15 days -30.944*** (11.44) -25.664 (18.09) -33.852** (14.38) More than 16 days -60.325*** (12.11) -65.923*** (18.39) -55.830*** (15.83) District Yes, but not shown Constant 551.973*** (49.58) 586.597*** (64.62) 513.863*** (85.50) R2 0.27 0.26 0.25 Observations 1,231 618 613
Note: SES = socioeconomic status.
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Table A1.2: Linear regressions on pupils’ mathematics scores, disaggregated by gender Mathematics
Total Boys Girls Dependent variable: pupil’ score Girl 24.512*** (5.07) Mother’s education (Base: No school) Completed some primary 9.530 (33.80) -36.238 (44.89) 107.362** (54.26) Completed all primary/training after primary 17.228 (31.37) -31.325 (41.34) 100.721** (50.45) Completed some secondary 24.384 (31.24) -11.836 (41.30) 93.466* (50.24) Completed all secondary 16.046 (30.73) -31.896 (40.99) 103.509** (49.22) Training after secondary 44.128 (30.93) -4.002 (40.99) 132.613*** (49.69) University 55.636* (31.71) 18.320 (42.29) 131.500*** (50.39) Father’s education (Base: No school) Completed some primary 61.213** (30.42) 67.380 (49.53) 83.845 (51.47) Completed all primary/training after primary 36.265 (29.90) 58.510 (48.64) 55.998 (50.23) Completed some secondary 41.532 (29.82) 98.968** (48.62) 57.648 (50.03) Completed all secondary 48.550* (29.33) 82.977* (48.04) 60.961 (49.42) Training after secondary 49.084* (29.65) 110.481** (48.43) 50.623 (49.83) University 82.115*** (29.94) 121.489** (49.35) 101.121** (50.05) Pupil-teacher ratio -0.206 (0.29) -1.130* (0.61) -0.522 (0.39) Teacher’s academic education (Base: Primary) Senior secondary 3.183 (12.59) -25.202 (18.75) 21.917 (16.87) A-Level 5.070 (13.72) -18.019 (20.21) 19.303 (18.67) First degree 12.214 (19.43) -26.814 (28.18) 50.075* (26.55) Teacher’s training (Base: 3 years of training) Less or two years 37.681*** (13.97) 55.181*** (20.65) 23.359 (18.93) More than three years 26.474*** (8.41) 20.063 (12.33) 30.688*** (11.59) Pupil can borrow a book 0.890 (6.91) -4.499 (10.13) 4.712 (9.44) Wealth index (Pupil’s SES) (Base: Quartile 1) Quartile 2 23.941*** (6.98) 22.579** (10.35) 19.341** (9.45) Quartile 3 42.928*** (8.72) 27.032** (13.32) 50.080*** (11.39) Quartile 4 55.004*** (7.98) 64.804*** (12.38) 41.311*** (10.32) Teacher’s absenteeism (Base: 1–2 days) No absence -22.558 (14.28) 5.079 (21.56) -53.701*** (18.96) 3–5 days -52.048*** (11.30) -69.029*** (17.32) -39.459*** (14.72) 6–9 days -59.526*** (13.15) -60.494*** (19.89) -62.301*** (17.36) 10–15 days -64.886*** (10.86) -60.739*** (16.45) -73.578*** (14.37) More than 16 days -65.173*** (13.73) -71.394*** (20.56) -62.059*** (18.41) District Yes, but not shown Constant 465.418*** (42.22) 538.180*** (55.45) 386.899*** (73.46) R2 0.23 0.24 0.25 Observations 1,230 617 613
Note: SES = socioeconomic status.
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Annex 4: Estimation of Household Wealth Index
Household wealth is measured by a composite standard-of-living indicator, or score, based on data on household assets and the characteristics of the dwelling. This indicator, which provides a less cyclical measure of a household’s standard of living than its income or per capita consumption, is developed from a principal component analysis summarizing the information contained in 10 variables: ownership or non-ownership of a car or truck, computer, mobile phone, television set, washing machine, and refrigerator; house owner; number of rooms in the dwelling; type of toilet facilities (septic tank and sewerage system); and type of wall (stone wall). The scores associated with the different variables in the first principal component are presented below (Table A2.1). The first principal component accounts for 28 percent of the total inertia of the cloud of points. It is significantly correlated with the majority of the variables concerned (positively correlated with assets owned and the dwelling standard indicators) and thus can be interpreted as an indicator of household standard of living or wealth.
Table A2.1: Scores associated with variables in the first principal component Assets owned Car or truck (1: yes, 0: no) 0.26 Television set (1: yes, 0: no) 0.37 Computer (1: yes, 0: no) 0.29 Mobile phone (1: yes, 0: no) 0.34 Refrigerator (1: yes, 0: no) 0.40 Washing machine (1: yes, 0: no) 0.38 Dwelling characteristics Number of rooms 0.31 Flush toilet/septic tank or sewerage system (1: yes, 0: no) 0.31 Wall stone (1: yes, 0: no) 0.30 House owner (1: yes, 0: no) 0.10 % of total inertia explained by the first principal component 0.28
