The author observes that there are problems with the way in which discussions concerning South Africa’s new national health insurance (NHI) are being conducted behind closed doors. A top-down management approach is seen to be not working, excluding consultation with stakeholders, especially civil society. The challenges government and civil society now face on the issue are related to leadership and accountability (visible leadership at the highest possible level and one single voice and proposal from government), positioning and values (to what extent should principles of solidarity be applied in the design of the new system), the process followed in developing the provisions (extensive and in-depth consultation and a clearly defined process with milestones and deadlines), as well as delivery (especially in administration and management to ensure sustainable benefits).
Resource allocation and health financing
The global fight against malaria has been continually challenged by poor access to affordable, effective medicine. Growing resistance to chloroquine, the traditional treatment, has worsened the situation. Artemisinins, the successor therapy to chloroquine, are at least ten times more costly than the older drug. In developing countries, most malaria medicines are purchased in the private sector, where traditional aid mechanisms do not reach. So a new aid approach was needed. The Affordable Medicines Facility-malaria (AMFm) will efficiently supply publicly subsidised drugs to meet public- and private-sector demand in malaria-endemic countries. If artemisinins are priced more competitively, resistance to them will be delayed.
Koos Richelle, who heads the EuropeAid Cooperation Office, the principal aid agency of the European Commission, said that, while rich nations were not about to pull the plug on donations, they were more actively monitoring whether the funds were producing desired results. The 27-nation European Union remains committed to aid, he promised, although he warned that recipients would be treated as ‘partners’, obliged to provide key improvements in terms of achieving targets set under the Millennium Development Goals. Before the crisis, rich nations simply gave away funds without making clear what results they wanted, he said. But as western countries experience financial problems, the attitude has shifted and they now demand ‘tangible results’ from development partners. ‘I see modern development cooperation not as a continuum of post-colonial hang-ups, or charity, but more as a contract. If you don't deliver, like in a normal contract, we are not supposed to pay. That is a more businesslike approach to development cooperation.’
The Department for International Development’s (DFID) new White Paper presents a shift in the way the United Kingdom (UK) delivers development aid, refocusing resources onto fragile countries and for the first time treating security and justice as a basic service alongside health, education, water and sanitation. Fifty percent of new bilateral funding will be committed to fragile countries. Key announcements include a renewed commitment to 0.7% of the UK Gross National Income (GNI) for international development (totalling £9bn per year by 2013), measures to reduce maternal mortality rates to save the lives of six million mothers and babies by 2015 and doubling of funding to £1bn for African infrastructure, including transport, energy and trade in the region. Regarding growth and trade, DFID proposes a quadrupling of funding to promote fair and ethical trade and a new International Growth Centre to offer world-class economic expertise and practical advice to poor countries.
The notable increases in funding from various donors for health over the past several years have made examining the effectiveness of aid all the more important. This study examines the extent to which donor funding for health substitutes for – rather than complements – health financing by recipient governments. It found evidence of a strong substitution effect. In fact, the proportionate decrease in government spending associated with an increase in donor funding is largest in low-income countries. The results suggest that aid needs to be structured in a way that better aligns donors’ and recipient governments’ incentives, using innovative approaches such as performance-based aid financing.
According to the European Commission’s annual report, overall spending in 2008 was 937 million euros (about US$1.302 billion) across 60 countries. Of that, about three-quarters went to the top 25 recipient non-profit agencies and an aviation contractor. United Nations (UN) agencies took 46% of the overall spend, while 44% went to non-governmental organisations (NGOs). NGOs from the UK, France and Germany account for over half of NGO funding. More than half was spent in Africa. The top five countries and territories receiving the most funding, including food aid, were (in millions of euros) Sudan (161.3), Occupied Palestinian Territories (75.1), Democratic Republic of Congo (53.9), Ethiopia (48.5) and Kenya (36.7). The top five organisational recipients were (in millions of euros) the UN World Food Programme (228), the International Committee of the Red Cross (78.9), the UN Refugee Agency (53.5), the UN Relief and Works Agency (38) and the UN Children’s Fund, UNICEF (32.6).
Years after graduating from dependence on the International Monetary Fund (IMF), many African countries are having to call upon the fund for assistance to cope with a global economic crisis that is not their fault. African economies are struggling against collapsing demand for their products, volatile commodity prices and falling foreign investment. Among countries seeking IMF aid are Kenya and Tanzania – two of Africa's biggest economic reformers. The IMF on Friday approved a total of US$545 million in emergency funding for the pair of East African countries. Meanwhile, Ghana and Mozambique are in talks with the fund to secure financing support. Other countries that have sought fresh help from the IMF in recent months include Ivory Coast, Ethiopia, Sao Tome and Principe and Zambia.
To compound the apparent inadequacy of the G8, the meeting in Italy got off to an inauspicious start. The Italian hosts were not only under fire for not preparing a constructive agenda, preferring the US to take the lead, but were threatened with expulsion from the G8 for unabashedly reneging on aid pledges to double aid to Africa made at the Gleneagles summit in 2005. According to ActionAid, Italy is US$1.037bn behind in aid arrears, France is further in arrears with US$1.249bn, Germany US$497m, the United States US$263m, Canada US$186m and Japan US$138m. Only Britain is on course to hit its target. This lack of spending is having a devastating effect on Africa’s ability to reach its Millennium Development Goals’ (MDGs) targets. As the new UN MDGs 2009 report states ‘for many developing countries, lower levels of aid would not only impede further progress, but could reverse some of the gains already made.’ Indeed, the proportion of undernourished per population is rising again in sub-Saharan Africa after concrete advances had been made.
An inability to access adequate funding is crippling efforts by community-based organisations (CBOs) to help some of Malawi's most vulnerable children. For example, Monkey Bay, 125km east of the capital, Lilongwe, has some of the highest poverty and HIV-prevalence rates in the country, according to the government's National Statistics Office. Yet a recent report by the Regional Network for Equity in Health in East and Southern Africa (EQUINET), ‘Promoting and protecting health of orphans and vulnerable children in Monkey Bay, Malawi’, said many community-based organisations (CBOs) in the area could not access government funding to support interventions targeted at orphaned and vulnerable children. Donald Makwakwa, programme officer for the Malawi Network of AIDS Service Organisations (MANASO), which provides technical support to CBOs, explained that many grassroots bodies could access technical assistance, but faced periodic funding shortages due to late allotments by the National Aids Council.
The South African government has proposed a national health insurance (NHI) system, but it will face three key challenges as it seeks to re-build trust in the health system. First, discussions so far about NHI have been highly technical and held behind closed doors, will little civil contribution except for interest groups. Second, many public health workers are tired of frequent workplace changes and may view having to adapt to NHI systems as simply making their work more difficult, especially when employees note that their employees often fail to deliver on promises made: ‘I don’t trust them,’ said one nurse. Third, implementing an NHI remains a complex exercise and cannot be achieved with just legislation. The steps of policy implementation must be laid out so that initial actions build the basis for success in subsequent actions. For NHI to succeed, we must strengthen the public health system by increased investment, despite the current global economic downturn.