Resource allocation and health financing

African finance ministers accused of failing to fund health sector
Olupot M: AllAfrica.com: 28 September 2010

The deputy speaker of Uganda’s Parliament, Rebecca Kadaga, has accused finance ministers in Africa of being insensitive by failing to prioritise the health sector during allocation of funds. She accused finance ministers of being unaware of the realities of everyday health care. She recommended that the ministers should be invited to conferences like the regional meeting of the Southern and Eastern Africa Parliamentary Alliance of Committees on Health near Kampala, where she was speaking. Kadaga said Uganda had registered progress in various sectors of development, including education, women’s empowerment and HIV and AIDS, but women and infant health had lagged behind. She attributed this to the country’s ‘weak health system, as well as inadequate human resources for health, especially reproductive health’. The reproductive health and family planning services, Kadaga said, remain mainly urban-based yet most women live in rural areas. Kadaga also decried the high population growth rate in Africa, saying it was a major challenge to the Governments' efforts to reduce poverty.

African health development and financing parliamentary policy and budget action plan
Network of African Parliamentarians for Health Development and Financing: 9 September 2009

This report details a meeting by the Network of African Parliamentarians for Health Development and Financing held in Addis Ababa, Ethiopia, 7–9 September 2009, which met to deliberate on: accelerating African domestic health financing; implementing health priorities in an integrated manner; strengthening collaboration; preparations for the July 2010 African Union Summit; and coordinating global and African resource mobilisation. They determined that, without delay, further meetings should take place at three levels in the 53 African Union member states: at pan-African Parliament level; at each Regional Economic Community Parliament; and at country level. These joint working meetings should consist of chairs and secretaries/rapporteurs of the Parliamentary Committees of: health; finance/budget; women/gender; social development and Millennium Development Goals (MDGs) and others, including children and youth; water resources; environment and sanitation; education; food and agriculture; labour and human resources; planning and economic development. They will assess the state of health-based and related MDGs at each level. These committees should form health and social development financing clusters in parliaments to facilitate coordination and accelerated action on health and development financing.

African leaders affirm pledge of 15% of national budgets to health
IRIN News: 28 July 2010

At the end of their meeting on 27 July 2010 in Kampala, Uganda, members of the African Union (AU) reaffirmed that they would strive to spend 15% of their national budgets on health, but health experts like Chikezie Anyanwu, Africa Advocacy Advisor to Save the Children, which works to promote children's rights, were unsure of how effectively the money would be spent. According to him, countries could spend more than 15% and still show no real reduction in the deaths of children younger than five, or among women during or after childbirth, as specified in the Millennium Development Goals (MDGs) set by the United Nations. Rwanda, Liberia and Tanzania are the only three African countries devoting more than 15% of their national spending on health, said Anyanwu, citing a 2010 World Health Organization (WHO) report, based on data from 2007. But they have made insufficient progress in meeting MDGs 4 and 5, which aim to reduce maternal and child mortality. In South Africa, one of the most developed and richest countries in the continent, the infant mortality rate has escalated and the country will probably not achieve the MDG target by the deadline of 2015.

Africa’s leaders must fulfill pledge to children
Save the Children, 6 December 2007

Save the Children called on African leaders to fulfil their promises made in Abuja in 2001 to spend at least 15% of their annual budgets on health. In the briefing ‘Not another one, not another day’ they look at how African governments, despite commitments in 2001 and 2005, still aren’t spending enough on health. It also shows that the EU is failing to support the development of health systems in Africa, with most member states still falling short of their commitment to spend 0.7% of their gross national income on aid. It includes a list of recommendations to get the AU and EU back on track to meet the Millennium Development Goals.

Aid and government fiscal behaviour: What does the evidence say?
Morrissey O: WIDER Working Paper 2012/01, January 2012

External funders are concerned about how their aid is used, especially how it affects fiscal behaviour by recipient governments. This study reviews the recent evidence on the effects of aid on government spending and tax effort in recipient countries, concluding with a discussion of when (general) budget support is a fiscally efficient aid modality. Severe data limitations restrict inferences on the relationship between aid and spending, especially as the government is not aware of all the aid available to finance the provision of public goods. Three generalisations are permitted by the evidence: aid finances government spending; the extent to which aid is fungible (can be substituted with other resources) is over-stated and even where it is fungible this does not appear to make the aid less effective; and there is no systematic effect of aid on tax effort. Beyond these conclusions the fiscal effects of aid are country specific.

Aid and growth: Have we come full circle?
Arndt C, Jones S and Tarp F: World Institute for Development Economics Research (WIDER), 2009

Recent literature has been pessimistic about the ability of foreign aid to foster economic growth. This paper attempts to provide a balanced assessment of the recent aid-growth literature. It also delves into framing the aid-growth debate in terms of potential outcomes, drawing on the programme evaluation literature. Following its analysis, the paper concludes that aid has a positive and statistically significant causal effect on growth over the long run with point estimates at levels suggested by growth theory. The methodological advances highlight the serious challenges that must be surmounted in order to derive robust causal conclusions from observational data. The authors argue that the bleak pessimism of recent aid-growth literature is unjustified and the associated policy implications drawn from the literature is inappropriate and unhelpful.

Aid and growth: Have we come full circle?
Channing A, Jones S and Tarp F: UNU-WIDER Working Paper 2009/05, October 2009

In this paper, the authors state that the micro-macro paradox has been revived. Despite broadly positive evaluations at the micro and meso-levels, they note that recent literature has turned decidedly pessimistic with respect to the ability of foreign aid to foster economic growth. Policy implications, such as the complete cessation of aid to Africa, are being drawn on the basis of fragile evidence. This paper first assesses the aid-growth literature with a focus on recent contributions. The aid-growth literature is then framed, for the first time, in terms of the Rubin Causal Model, applied at the macroeconomic level. Its results show that aid has a positive and statistically significant causal effect on growth over the long run with point estimates at levels suggested by growth theory. It concludes that aid remains an important tool for enhancing the development prospects of poor nations.

Aid and infrastructure financing: Emerging challenges with a focus on Africa
Addison T and Anand PB: UNU-WIDER, June 2012

The central argument of this working paper is that, given the magnitude of the investment in infrastructure that is required, especially in Africa, the role of external funding (foreign aid) in the future should be distinctly different to what it is now. While external funding will be required to continue to fill the ‘savings gap’ in some small countries and land-locked countries, in most other countries it can play a very different role in facilitating the creation of institutional mechanisms that help mobilise more funding from other sources. These include domestic revenues (which already fund a large proportion of infrastructure), investments by China and the other BRIC countries, sovereign wealth funds and infrastructure funds. There are already examples of external funding playing such a leveraging role. What is needed is to take this to a new and higher level, the authors argue. The study provides an overview of evidence on infrastructure needs and also possible magnitudes of flows from different sources for investment in infrastructure.

Aid and its implications for governance
Soko KB: Pambazuka News, 3 July 2014

Malawi is one of the most aid dependent countries in the world. When one considers the work that is done by international NGOs, however, or by them through local surrogates, it is argued that there is no aspect of life in Malawi that has escaped external funding. With July 6, 2014 a day 50 years to the day when Malawi became an independent state the author argues that it’s important to accentuate the discussion on aid in Malawi and its implications for Malawi. the author argues that a heavy reliance on external funding means that foreigners, not the citizens, are in charge of the country’s governance.

Aid coordination on the ground: Are joint country assistance strategies the answer? Aid harmonisation: are joint country assistance programmes the way forward?
Linn JF: Wolfensohn Center For Development Working Paper 10, July 2009

In response to the problem of aid fragmentation, joint country assistance strategies have emerged as a preferred method to coordinate and harmonise aid. This paper determines that, to date, donor teams and recipient governments have come together in at least twelve countries to prepare joint strategies. A number of lessons were learnt and conclusions drawn. Lack of communication between stakeholders was identified, especially regarding strategy processes. Poverty reduction strategy processes should ideally be separated from the joint country strategy process to reduce government workload. An inclusive, thorough and effectively managed process has a greater chance to create the trust, cooperative spirit and follow-through during the implementation phase than one that stresses the production of a quality report without adequate venting of differing views and interests. In countries where government lacks capacity or will, the donor community may wish to identify one agency as the presumptive leader among donors for aid coordination on the ground.

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