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Public financing for health in Africa: 15% of an elephant is not 15% of a chicken

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Public financing for health in Africa: 15% of an elephant is not 15% of a chicken

Dr. Nkechi Olalere and Ms. Agnes Gatome-Munyua on the African Union's 2001 Abuja Declaration on funding national health budgets.
From Africa Renewal: 
13 October 2020
Health workers in the DRC put on gloves on before checking patients at the hospital.
World Bank/Vincent Tremeau
Health workers in the DRC put on gloves on before checking patients at the hospital.

When African Union member states met in Abuja, Nigeria, in April 2001, they committed to allocating 15% of their government budgets to health. Why? Because more resources were required to address the pressing health challenges of the day, including HIV and AIDS, Malaria and Tuberculosis.

This commitment is referred to as the ‘Abuja Declaration’ and African governments reference this declaration in health sector goals and policy documents.

The Abuja Declaration became a rallying call to mobilize more resources from government coffers for the health sector.

Did it work?

Yes and No. Even though many African countries have marginally increased health spending overall, only a handful of countries – not as many as the fingers on one hand – have met this target in any given year. In 2018, only two countries met the target.

The big question here is not “who has reached the target?” because African countries’ ability to meet the target has varied over time, and, as a wise person once said, “15% of an elephant is not the same as 15% of a chicken”. 

Rather, the questions should be “has there been a difference?”, “has it resulted in real progress in health indicators?” and ultimately “are people healthier and more prosperous?” The responses to these are more nuanced.

Achieving improved health is a costly endeavor and many African countries have limited fiscal space. Currently African countries spend $8 to $129 per capita on health, compared to high income countries that spend above $4,000. This is due to several factors but most significant among them is a low GDP and low tax collection efficiency among African countries, compounded by low budget allocations to the health sector due to competing priorities.

Even though Africa has had better economic growth in the recent past as compared to other regions, when African countries become richer, government spending on health does not automatically increase. Between 2001 and 2015, for example, government spending on health, as a proportion of its overall spending, decreased in 21 African countries. This is likely to worsen with the COVID-19 pandemic.

Development assistance for health has crowded out government resources and created donor dependence – which is complicating the transition of countries with declining donor funding and inadequate plans to offset this shift in resources.

Low budget execution and wastefulness further diminishes available resources for health. Low government spending hurts citizens the most and results in high out-of-pocket spending and an inequitable health system that only guarantees access to those who are able to pay.

There have been challenges, that we must confront now. The reality is, reaching spending targets is less important than ensuring health systems are adequately resourced and resources are used optimally. Increased prioritization of the health sector and increased health spending are the most feasible approaches to increasing resources for health.

What do we need to do?

Move on from spending targets to asking: “What level of resourcing achieves improvements in population health and universal health coverage (UHC)? “Are the funds being used optimally to advance population health?”; and “Are there opportunities to improve efficiency and reduce leakages?”

Health ministries should advocate for adequate resourcing, with strong and clear arguments to invest in health as a productive sector that builds human capital, reduces poverty and inequity, safeguards health security from pandemics, improves workforce productivity and provides employment.

We should reduce spending on ineffective or inequitable public programmes, such as fuel subsidies that disproportionally benefit the well-off, can be repurposed to increase government revenue, and possibly, increase allocations for health and social sectors.

There are opportunities to develop advocacy partnerships with other social sectors to prioritize food security, water, sanitation, and education, that impact the population’s well-being and improve human development indicators. This requires, amongst other things, an understanding of the political economy and alignment of key stakeholders around these common objectives.

We should demonstrate effective use of health resources. As we rally for more resources, “getting more health for our money”, becomes a priority. Many times, we hear criticism of the health sector’s absorptive capacity – how well health resources are spent and what results can be shown for it.

Although more spending on health is generally associated with better health outcomes, in Africa, health results vary considerably – at the same level of spending – due to major system inefficiencies. Evidence suggests that there is significant room to improve health spending and, in some cases, progress towards UHC is possible within current spending levels.

Strategies to make better use of existing resources include improving the timeliness and flow of health resources; reducing health budget underspending; incentivizing health worker productivity and efficiency; and proactively managing the procurement of medical commodities and supplies.

Best practices

No one has all the answers, but there are best practices from the continent to learn from. Algeria, Botswana, Lesotho, Kenya, Morocco, Senegal and South Africa have increased fiscal space by improving tax collection capacity.

Gabon, Ghana and Nigeria have earmarked allocations to the health sector from government revenue.

Tanzania and Uganda have implemented reforms to improve resource flows to health facilities and have also improved resource use.

Ethiopia and Rwanda have achieved high levels of population coverage through social protection systems that guarantee access to healthcare services.

So, are spending targets still relevant today?

Yes, but we need more than a target. Spending targets are a simple way to raise an advocacy agenda for more resources. When governments are making hard decisions on how to use their resources – especially now with the huge economic shocks created by COVID-19 – we require advocacy to maintain spending and use funds optimally.

We are responding to an unprecedented health crisis and we need more resources. But current investments should be used wisely with the long-term vision of building a more resilient health system that can withstand subsequent shocks.

This way we can emerge from the pandemic stronger and better positioned to deal with present population health needs and the next emerging crisis.

Dr. Nkechi Olalere is the Executive Director of Strategic Purchasing Africa Resource Center (SPARC) that empowers countries with knowledge and practical tools to make access to affordable and quality health care a reality for all.  She previously worked with the Clinton Health Access Initiative in East and West Africa and has over 16 years’ experience in health financing implementation.

Ms. Agnes Gatome-Munyua is a Senior Program Officer at Results for Development. She is a health financing professional with 14 years of progressive work experience leading healthcare costing, ability and willingness to pay research, policy analysis, and market research for health insurance at country and regional level.

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