This report reviews progress with a results-based financing (RBF) program in Mozambique aimed at strengthening the supply chain, specifically the performance of the Central Medical Store. Introduced in 2013 by USAID, the performance-based government-to-government grant conditions payment of quarterly tranches of funds to the Central Medical Store, (Central de Medicamentos e Artigos Medico [CMAM]), on results related to planning, distribution, and warehouse management.
Supply chains are the foundation of any health system. For health supply chains to work—for the right goods to be received and delivered in the right quantities, in good condition, to the right place, at the right time, for the right cost—countless actors working in different locations with different responsibilities need to be motivated to do their part. They must be held accountable for doing so. These actors—from central-level planners and procurement specialists, to regional warehouse and transportation teams, to local storekeepers and service providers—depend on each other for imely and accurate information and a reliable supply of goods. One break in the chain, one delay, can have repercussions throughout the system, ultimately determining if families can access life-saving medicines and commodities.
The Central Medical Store—Central de Medicamentos e Artigos Medicos (CMAM)—manages Mozambique’s public health supply chain—their mandate is to manage the procurement, importation, central-level warehousing, and distribution to provinces for the medicines and commodities used by the public health system. For many years, CMAM has received assistance from multiple donor partners, for both commodities and operational investments. While the capacity of CMAM has been strengthened, measureable results have been limited because good quality data on performance is not available; and a sense that, despite investments, CMAM’s performance may not be improving as expected.
In this context, in January 2013, USAID entered into a year-long, government-to-government grant arrangement, a Fixed Amount Reimbursement Agreement (FARA or FAR agreement). The FARA links payment of quarterly tranches of funds to specific performance results at CMAM, which are related to the functional areas of planning, distribution, and warehouse management. The aim of this results-based agreement is to spur innovation and efficiency, and improve supply chain performance—improving the effectiveness of these investments, and strengthening the autonomy of CMAM to manage funds.