By Juliet Nabyonga Orem (WHO, Uganda office and lecturer at Makerere University School of Public Health)
The importance of government funding for health services has been emphasized for a number of reasons. Government health funding is typically more predictable and flexible than donor funding. It is also a demonstration of government’s commitment to invest in its citizens’ health. The underinvestment in health against a backdrop of slow progress towards the MDGs has been a concern for African governments since the beginning of this century. Commitments were made in Abuja in 2001 and in several health financing panels for Ministers of Health and Ministers of Finance in Kampala (July 2010), Addis Ababa (March 2011) and Yamoussoukro (September 2011), all in an effort to explore ways of increasing government investment in health. In a recent paper, we analyzed National Health Account data compiled by WHO for the 46 countries in the WHO African Region, to understand the health financing changes that have occurred in these countries over a period of 10 years (2000 to 2009).
We noted significant variation in the level of government investment in health with some countries registering improvements and others showing a decrease. Some figures can give you an idea of the trends in the first decade of this millennium: for example, between 2000 and 2009, the number of WHO African region countries spending less than 5% of their GDP on health decreased from 24 to 17. Government spending on health as a percentage of total health expenditure (THE) increased in 31 countries but decreased in 13 countries; the number of countries allocating at least 15% of the national budget to health increased from 2 to 4. In 2000, general government expenditure as a percentage of THE was less than 30% in 9 countries and over 60% in 9 (other) countries. In 2009, general government expenditure on health made up less than 30% of THE in 7 countries, and over 60% in 12 countries. In 2000, over 50% of the total expenditure on health in 16 countries was from government sources, whereas in 2009 this was true for 22 countries. Average per capita government expenditure on health grew from US$ 15 to US$ 41. The number of countries achieving the Commission for Macroeconomics and Health recommendation of spending at least US$34 per person per year increased from 11 to 29. So there was a positive trend, generally, but there is significant variation. Read our paper to find out more.
As for countries displaying more government funding for health compared to a decade earlier, several factors can explain why these governments increased their funding. Here we speculate on a few possible reasons (this is not meant to be an exhaustive list). The commitment made by the heads of state in Abuja in 2001 could partly explain the increases in some of the countries. This commitment has been reiterated in several meetings of the African Union, Conferences of Ministers of Health and Ministers of Finance, sessions of the WHO Regional committee for Africa, and several High-Level Health financing panels (Kampala, July 2010; Addis Ababa, March 2011; Yamoussoukro, Sept 2012). These could have served as constant reminders to governments to increase their investment in health. Having said this, the Abuja commitment has also often been criticized for the appropriateness of the set percentage. Some have pointed out that even if this commitment were to be met, per capita investment in health would still be low while others have stated that these sorts of commitments (including similar ones for other sectors) are not feasible in the overall budgeting framework of a country. The Minister of Finance of Sierra Leone, in one of the panel discussions in Yamoussoukro (September 2011), even presented a scenario where government commitments in terms of percentage allocation to the different sectors exceeded 100%.
There is a category of countries with a significant increase in general government expenditure as a percentage of THE which could be partly explained by a renewed (government) vision on health. Here we note for example Ghana, Ethiopia, Uganda and Rwanda. These are countries where a clear and coherent vision was articulated, donor support harmonized and aligned to sector plans, delivery mechanisms streamlined and agreed between governments and partners and monitoring of sector performance strengthened and made more inclusive. Articulation of a clear and coherent strategy could have portrayed the health sector as better organized through a clear strategy and thus have led to an increase in investment by the government. In some countries, sector-wide approaches were put in place including the development of a memorandum of understanding whereby each party commits to fulfilling agreed actions. Increased government investment in health could have taken place in these countries in an effort to meet their commitment as laid down in these guiding documents.
Different political priorities could explain the stagnation or even a decrease of government funding for health as witnessed in some of the countries. If we focus on countries showing a decrease in government health expenditure as a percentage of total government expenditure, some of these countries show an increase in contribution of external sources (international health aid). Sierra Leone, Eritrea, Kenya, Namibia and Swaziland are some of the countries belonging to this category. The extent to which a displacement (or crowding-out) effect is behind this pattern, where increases in external sources result into reduced investments from government resources, could not be fully answered with the available evidence. In a recent Lancet viewpoint, Ooms et al (2010) gave some of the possible explanations for this phenomenon and argued that explicit (and context-specific) policy choices are often behind crowding-out effects (for example a tendency of governments to compensate for exceptional international generosity to the health sector by reallocating government funding to other sectors, governments smoothing aid by spreading it across several years, ….). Other explanations for a decrease in government funding for health are conceivable, for example following an overall decrease in government expenditure, but this was also not assessed in the study.
The future of domestic resources as a significant source of financing will depend on: 1) the ability of African countries to generate local revenue (prospects here are looking good given IMF projections that many African countries will realize a positive economic growth rate in the coming years) 2) Strengthening of administrative systems of tax collection. 3) Political will to invest in health – also in this respect, the future doesn’t look bad if we look at recommendations made in some of the recent panel discussions (like in Yamoussoukro (September 2011), where Ministers of Health and Ministers of Finance agreed that donor funds should only be used as a catalyst and governments should play an increasing role in financing health services.
In sum: we are more likely to see increased domestic spending on health by African governments given economic growth projections and renewed commitment. Let’s hope we will be proven right in the coming years.