Africa: IMF, World Bank policies stiffling health reforms in Africa

IMF, World Bank policies stiffling health reforms in
Africa
By Kenneth Kwama
Regional ministers converging on Kampala for a health
finance conference were last week told that stringent
aid requirements by the International Monetary Fund
(IMF) and the World Bank have made healthcare
expensive and inaccessible to poor people in Africa.
The Fair and Sustainable Health Financing (FSHF)
summit, aimed at making funds available to ensure
people have access to high quality public healthcare,
was also told that the Millennium Development Goals
(MDGs), are desperately off-track, especially in
sub-Saharan Africa.
“Unless there is an accelerated push towards achieving
the MDGs, generation upon generation will be consigned
to a life of poverty, disease and early death,” says
British charity Save the Children-UK in a policy
document titled Time for Change, which was presented
at the summit.
It estimates that an additional $18 billion per year
is needed to achieve the health MDGs.
The charity, in concert with the World Health
Organisation (WHO), has been lobbying for the
abolition of user fees in health financing, arguing
the system has made healthcare expensive and
inaccessible to the poor.
“Charging of user fees has excluded the poor from
health services and because of this, children have had
to bear most of the brunt. That is why we are lobbying
governments to stop using cost-recovery mechanisms for
health services,” says Neil Turner, a programme
director with Save the Children-UK.
The IMF has been playing an indirect role in keeping
the fees in place through advice to governments and
attaching economic conditionalities to its borrowing.
In their past policy papers, the Bretton Woods
institutions have argued that the fees are meant to
promote cost recovery measures “because resources in
the recurrent sector budgets are too small to deliver
services.”
For this reason, conference backers also sought ways
to support African countries to undertake health-
financing reforms, which they argued should be put in
place if the continent is to realize any of the
health-MDGs.
For example, despite having the biggest percentage of
HIV/Aids sufferers and bearing the biggest percentage
of the world’s sick, Africa accounts for only one
percent of world drug sales.
“It only goes to show the huge number of poor people
who cannot afford to pay for healthcare,” said a
participant from Sudan.
Consequently, international investment in health
projects-like an Aids vaccine is quite low. Only about
$10 million to $25million is spent annually in
developing a vaccine.
“We hope support to build health financing capacity in
countries will be institutionalised to enable them
implement, monitor and evaluate reforms to protect
poor people from catastrophic health expenditures,”
says Regina Keith, senior policy advisor and health
researcher at Save the Children-UK.
Dr Dick Johnson, an economist with the WHO, says that
the alternative ways used by countries to collect
revenue to fund healthcare include tax revenue,
earmarked taxes, social health insurance, private
health insurance, user fees and donor funds.
But the health systems of most African countries
depend largely on household’s direct out-of-pocket
payments, which he says are not sustainable since most
people cannot afford to pay.
For this reason, the WHO has been advocating health
insurance schemes, but evidence from elsewhere shows
that social health insurance or commercial health
insurance schemes alone cannot significantly
contribute to increased access to healthcare,
especially in rural and remote areas due to low
household’s income.
The World Bank is the decisive voice financing health
in Africa. As such, the continent’s health delivery
systems are caught up in conditionalities, while
organisations like the WHO are increasingly being
reduced to drumbeaters.
To illustrate the pivotal role of the World Bank in
health financing, participants were shown one of its
documents, titled Financing Health Services in
Developing countries published in 1987 at the height
of the Structural Adjustment Programmes (SAPs) in most
of sub-Saharan Africa, which recommended that
developing countries should increase amounts paid by
patients.
Uganda’s minister for health, Jim Muhwezi says the
recommendation led to the disruption of rural primary
healthcare systems in most countries and stagnation of
state budgetary allocations on health.
“We were providing free healthcare to our people
before the SAPs, but this was disrupted with the
introduction of user fees in our health units under
World Bank advice through the ‘Agenda for Reform’ in
1987,” he says.
Uganda abandoned the recommendation after nine years
of experimenting, following an outcry from the
population.
“The abolition of user fees in 2001 led to a rapid
increase in utilization of our health service,
especially by the poor. Our challenge as a government
has been how to raise the required resources to meet
the demand for the scope, volume and quality of
services,” says Muhwezi.
About two decades later, the SAPs euphoria has waned.
As researchers and activists arrived in Kampala last
week, they were not whispering SAPs. They were back to
confronting the evils it has meted on the continennt.
On average, African countries, including Kenya and
Uganda spend six percent of their Gross Domestic
Product on health. But the total health expenditure
per capita in Africa is the lowest in the world-almost
15 times lower than the global average and a far cry
from the amount spent in the US and Europe.
Research by the British charity shows low health
spending could negatively impact on the continent’s
growth because a country’s health system has big
influence on economic growth.
“The economic value of lost life years in 1999 due to
Aids was estimated to be 12 percent of the gross
national product of sub-Saharan Africa while average
economic growth in malaria-free zones is at least one
percent higher than in malaria endemic areas,” says
Regina.
The research also reveals that there is a
corresponding annual economic growth of at least 0.3
to 0.4 percent for every 10 percent increase in life
expectancy at birth.
The IMF and World Bank SAPS have been blamed for the
decimation of healthcare facilities and slow economic
growth. Over the past two decades, the consequences of
SAPS on the health sector in Africa have been severe.
This is why the WHO is seeking to initiate affordable
healthcare financing.
But it remains to be seen whether the World Bank and
the IMF, which have in the past superseded the WHO as
the key players in the formulation of health policies,
will relent and let it carry out with the reforms.