The health systems in most low- and middle-income countries face two major obstacles: insufficient domestic funding and inefficient use of available resources. While the problem of inadequate domestic funding has been partially mitigated by foreign aid, these rules are changing rapidly: when countries move from low to middle income status, they are seen as able to fund their health systems. Some donors have started to pull out of such middle-income countries. While completing foreign aid is a positive milestone for any country, this transition, if poorly managed, can reverse health gains. The suspicion is that this is happening in many countries.
To better understand whether a country is likely to be able to survive such a transition from aid, we analyzed how “dependent” a country near the transition, Kenya – classified as a low-middle-income country since 2014 – uses two concepts: Donor dependence and donor concentration.
- Donor dependence measures the extent to which a country could absorb the shock of a decline or exit in donor funding. With the domestic government being the main party responsible for closing the funding gaps left by donors, we will only focus on external and domestic government resources. We consider the ratio of external resources to domestic public resources above 0.25 (ie 1: 4) as “dependent”. In other words, we argue that it would be difficult for a government to fill a gap of 25 cents or more for every dollar it currently spends.
- ON concentrated donor environment creates weak points. With very few stakeholders channeling the bulk of the funding into a pool of external resources, any change in the level or behavior of a single donor’s funding can have a major impact on the external resources available to a particular sector or subsector. Donor concentration also weakens a country’s ability to negotiate better terms for aid received. We use the following threshold for donor concentration: When less than 20 percent of donors make up more than 50 percent of Official Development Aid (ODA). Further details on our methodological approach and our data sources can be found in our working paper.
What we found
Kenya faces both donor dependency and the concentration of donors in its health system.
- Kenya has significant, albeit declining, donor dependency in its health sector. From 2001 to 2016, donor spending was at least 50 percent higher than domestic health spending. In some years (e.g. 2005-2006 and 2009-2010) donors were spending twice what the Kenyan government had spent on health.
- Kenya is seriously dependent on donors in several important subsectors of its health system. External funding accounts for more than half of all funding for vaccination, tuberculosis (TB) and HIV, with donors paying 3.3, 2.8 and 1, respectively, for every dollar the Kenyan government spends on vaccination, TB and HIV To spend 7 additional dollars.
- Kenya has a concentrated donor landscape. In 2017, four donors accounted for nearly 90 percent of total health ODA: the United States (62 percent), the Global Fund to Fight AIDS, Tuberculosis and Malaria (18 percent), the United Kingdom (5 percent), and Gavi (Jan. ) Percent).
- Each of the top five recipient subsectors for health ODA is facing a concentration of donors. In 2017, one donor made up 84 percent of all ODA to fight sexually transmitted diseases – including HIV / AIDS (US), two donors made 99 percent of ODA to malaria (the Global Fund to Fight AIDS, Tuberculosis and Malaria), and the United States), two donors accounted for 86 percent of primary care ODA (Gavi – The Vaccine Alliance and International Development Association), and three donors accounted for 85 percent of health policy and administration ODA (Japan, Denmark, and Germany). and three donors accounted for 85 percent of ODA for reproductive health (Germany, UK and US).
- Kenya’s HIV program is particularly donor-dependent and focused. Most of Kenyan health ODA is aimed at combating sexually transmitted diseases, including HIV / AIDS, a pattern that has persisted for nearly two decades. The Kenyan HIV program is characterized by a high, albeit declining, donor dependency: As of 2017, for every dollar spent by the national government, donors contributed 2.2 times this amount to HIV prevention and control in Kenya. Of all funding sources, the US President’s Emergency Plan for AIDS Relief (PEPFAR) is the primary financier in Kenya’s HIV fight. It has provided over 50 percent of total HIV / AIDS funding and over 80 percent of all external HIV / AIDS funding each year since 2012.
What we could do
Our findings suggest several measures that can be taken to better assess Kenya’s current reliance on external funding and to make arrangements for aid withdrawal.
- Proactively prepare for the transition, even if the transition is not an immediate reality. Kenya should accelerate plans to identify and manage health care vulnerabilities through a domestically formulated transition readiness plan. Developing this plan is not trivial and likely requires resources, some of which some claim could be better deployed elsewhere. However, if long-term sustainable funding from domestic resources is an objective worth pursuing, developing a transition plan is a necessary next step.
- Increase domestic resources for health. While funding alone will not solve all transition-related issues, ensuring adequate funding for all health programs is critical to making significant progress towards universal health insurance (UHC). The biggest hurdle to be overcome will be how best to increase domestic health care spending, given the exacerbated economic challenges posed by the COVID-19 pandemic and, most importantly, the increasing burden of servicing external debt (the current debt ratio is at about 0.7). Can stakeholders have the political will to maintain and increase health budgets while other sectors face potential budget cuts?
- Fix health system inefficiencies. Full replacement of donor funding may not be required if donor programs have created inefficiencies. The World Health Organization (WHO) estimates that improving the efficiency of health systems could save 20 to 40 percent of current health expenditure. Identifying and correcting areas of inefficiency will help Kenya as it addresses the transition in both the short and long term. Improving efficiency requires a willingness to (a) place more emphasis on improving the competencies and skills of health care workers than on the number of health care workers, (b) change programs that are not working optimally, practices / programs that no longer work or permanently require stopping permanently closer integration of donor-funded health programs into country health systems; and (c) closer integration of donor-supported programs into the health system to avoid duplication and reduce administrative costs. These decisions are not easy to make. Therefore, policy makers interested in efficiency improvements need to align several priorities beyond efficiency improvements, e.g. B. Job losses, donor coordination and the policy of organizational change. These issues need to be addressed in order to make progress in improving efficiency.
- Improve the tracking and reporting of external health aid dependency. Existing donor dependency and donor concentration measures are not comprehensive and often preclude important considerations such as capital investments. Therefore, it is difficult to assess the true level of donor dependence and concentration. In addition, it is difficult to track progress as there is often a need to collect high quality data that may be difficult to obtain without the necessary budgetary constraints. Therefore, in addition to the formal implementation of global financial tracking methods (e.g. the WHO Health Accounts System), dedicated resources should be allocated to ensure that measurement and tracking are institutionalized.
- Identify clear ways to maintain effective coverage. Donors should evaluate and adjust their transition planning and approaches to ensure that they are helping countries achieve the overall goal of transitioning from assistance: maintaining effective service coverage while achieving the UHC. In some cases, the long-term goals of maintaining effective coverage on the one hand and ensuring a successful transition on the other can lead to conflicting policy regulations. Both donors and local stakeholders should be open to exploring different options within a surveillance framework that encourages learning and adaptation.
The views expressed in this article are those of the authors only. They do not necessarily represent the views of the World Bank and its affiliates, or those of the executive directors of the World Bank or the governments they represent.