After a decade of high growth, a new narrative of optimism has taken hold about Africa and its economic prospects. Despite this, there is a broad
consensus that progress in human development has been limited given the volume of wealth created. There is growing concern that the high levels of
income inequality in sub-Saharan Africa are holding back progress. This report investigates the issue of income inequality in eight sub-Saharan African countries (Ghana, Kenya, Malawi, Nigeria, Sierra Leone, South Africa, Zambia and Zimbabwe). While there is growing public recognition that inequality is the issue for our time - both globally and in sub-Saharan Africa – there is little definitive analysis of income inequality trends on the continent. This report seeks to contribute in this area, looking at whether income inequality is, in fact, rising and in what context this is occurring. In particular, this report seeks to locate an analysis of tax systems in sub-Saharan Africa in the context of these economic inequalities, given the primary importance of national tax systems in redistributing wealth. A central contention of this report is that rising income inequality is going hand in hand with – and is ultimately caused by – the current growth model, illicit financial flows and the the inability of governments to tax the proceeds of growth, because a large part of sub-Saharan Africa’s income and wealth has escaped offshore. This report also finds many shortcomings in direct taxation in the countries studied. The personal income tax (PIT) systems lack equity as the bulk of the burden is on employees. The self-employed rarely pay tax. The visible lack of equity erodes citizens’ trust in the system. While the report notes some signs of progress, such as some mineral taxation reforms, there is also a clear gap between rhetoric and reality. There is national and international consensus that it is urgent to address issues such as tax incentives, extractives taxation, the taxation of HNWI, tax evasion and illicit financial flows. However, countries are struggling to introduce new direct taxes and to enforce tax compliance against companies and elites. Support to make such transformational changes is reported to be inadequate.
Resource allocation and health financing
After a decade of high growth, a new narrative of optimism has taken hold about Africa and its economic prospects. Despite this, there is a broad
The last decade has seen widespread retreat from user fees with the intention to reduce financial constraints to users in accessing health care and in particular improving access to reproductive, maternal and newborn health services. This has had important benefits in reducing financial barriers to access in a number of settings. If the policies work as intended, service utilization rates increase. However this increases workloads for health staff and at the same time, the loss of user fee revenues can imply that health workers lose bonuses or allowances, or that it becomes more difficult to ensure uninterrupted supplies of health care inputs. This research aimed to assess how policies reducing demand-side barriers to access to health care have affected service delivery with a particular focus on human resources for health. The authors undertook case studies in five countries (Ghana, Nepal, Sierra Leone, Zambia and Zimbabwe). In each the authors reviewed financing and HRH policies, considered the impact financing policy change had made on health service utilization rates, analysed the distribution of health staff and their actual and potential workloads, and compared remuneration terms in the public sectors. The authors question a number of common assumptions about the financing and human resource inter-relationships. The impact of fee removal on utilization levels is mostly not sustained or supported by all the evidence. Shortages of human resources for health at the national level are not universal; maldistribution within countries is the greater problem. Low salaries are not universal; most of the countries pay health workers well by national benchmarks. The interconnectedness between user fee policy and HRH situations proves difficult to assess. Many policies have been changing over the relevant period, some clearly and others possibly in response to problems identified associated with financing policy change. Other relevant variables have also changed. However, as is now well-recognised in the user fee literature, co-ordination of health financing and human resource policies is essential. This appears less well recognised in the human resources literature. This coordination involves considering user charges, resource availability at health facility level, health worker pay, terms and conditions, and recruitment in tandem. All these policies need to be effectively monitored in their processes as well as outcomes, but sufficient data are not collected for this purpose.
There is a need to increase government expenditure on health and other social services in many countries in order to achieve universal health coverage (UHC) and promote inclusive social and economic development. Individual governments have an obligation to allocate the maximum available resources from domestic sources, and not simply rely on international assistance, in order to achieve the progressive realization of fundamental human rights. Ultimately, this requires adequate levels of government expenditure on a range of social services. While government expenditure as a percentage of GDP is on average higher in ‘advanced economies’ than in other countries, there is no strong correlation between levels of government spending and economic development across individual countries (i.e., the size of a country’s GDP does not ‘predetermine’ or dictate government spending levels).Government revenue generation is the strongest determinant of government expenditure levels within individual countries; hence, emphasis should be on increasing government revenue. The report outlines progressive options for achieving this.
Public financing is the path to universal health coverage (UHC). UHC is rapidly becoming the overarching goal for national health systems and two recent events mark a new consensus that public financing is the way to get there. The Lancet Commission on Investing in Health2 focused on public financing mechanisms (including aid) in reaching UHC and explicitly rejected the 1993 World Development Report's emphasis on private health financing, including user fees. Similarly all 11 countries that presented at the Global Conference on UHC (Dec 6, 2013, Tokyo, Japan) hosted by the World Bank and Government of Japan, highlighted their use of public financing to increase service coverage and improve financial protection. None had used private voluntary financing to any significant extent. What is the basis for this consensus? UHC is fundamentally about rights and equity. It requires that the healthy and wealthy subsidise health services for the sick and poor. This cannot happen through private market-based systems of user fees and private insurance, including voluntary community-based schemes.Across the world, countries are instead realising that the only way to secure the cross-subsidies needed for UHC is through compulsory contributions into redistributive risk pools. In particular, tax financing is proving essential to close coverage gaps for households in the informal sector. Since only the state can mandate progressive payments and ensure that benefits are allocated according to need, only public financing systems can achieve the combination of universality, equity, and financial protection needed for UHC. Many of the governments that have learnt these lessons are now the ones leading the charge for UHC to be included in the post-2015 agenda. As noted by the World Bank President, one of these countries, Thailand, achieved UHC by rejecting the advice of the World Bank in the 1993 World Development Report to not rely on public financing. These countries represent the new consensus on health financing: universal coverage can only be accomplished through public financing systems in which the state plays a leading part in raising revenues, pooling funds, and purchasing services.
This paper provides an analysis of trends in health and HIV/AIDS budgeting and spending, as well as trends in some related spending areas that are important for effective HIV and AIDS management in South Africa. The 2013/14 national and provincial budget statements indicated that there is still strong public commitment to fund HIV and AIDS within the health sector demonstrated by increasing health HIV and AIDS allocations within a shrinking health budget in real terms.
In 1995, Tanzania introduced the voluntary Community Health Fund (CHF) with the aim of ensuring universal health coverage by increasing financial investment in the health sector. The uptake of the CHF is low, with an enrolment of only 6% compared to the national target of 75%. Mandatory models of community health financing have been suggested to increase enrolment and financial capacity. This study explores communities’ views on the introduction of a mandatory model, the Compulsory Community Health Fund (CCHF) in the Liwale district of Tanzania. A cross-sectional study which involved 387 participants in a structured face to face survey and 33 in qualitative interviews (26 in focus group discussions (FGD) and 7 in in-depth interviews (IDI). Structured survey data were analyzed using SPSS version 16 to produce descriptive statistics. Qualitative data were analyzed using content analysis. 387 people completed a survey (58% males), mean age 38 years. Most participants (347, 89.7%) were poor subsistence farmers and 229 (59.2%) had never subscribed to any form of health insurance scheme. The idea of a CCHF was accepted by 221 (57%) survey participants. Reasons for accepting the CCHF included: reduced out of pocket expenditure, improved quality of health care and the removal of stigma for those who receive waivers at health care delivery points. The major reason for not accepting the CCHF was the poor quality of health care services currently offered. Participants suggested that enrolment to the CCHF be done after harvesting when the population were more likely to have disposable income, and that the quality care of care and benefits package be improved.
The Tanzanian Budget Explorer is an initiative to make information about the way the Treasury allocates taxpayers money more accessible: transparent, easy to understand and exciting to follow. Public access to information about how the government spends money in Tanzania is beginning to improve. When available in reports or budget books, however, this information often is too bulky and complex to grasp. It can be a time consuming job to understand, and many people simply don’t have time to invest in doing it. This is an initiative to make information about the way the Treasury allocates taxpayers money more accessible: transparent, easy to understand and exciting to follow.
Around one billion people receive conditional cash transfers today, which have been praised as the magic bullet for poverty eradication. Such programmes are being implemented in Latin America and Africa. But they raise numerous ethical questions Bodies of evidence have shown that Conditional Cash Transfers (CCTs), as a form of social protection, can reduce inequality and poverty. Conditional Cash Transfers are payments made to poor households on the condition that they comply with a set of requirements and invest in their children’s human capital. CCT programmes have led to an uptake in health services, health outcomes and nutritional status of children as well as school enrolment and attendance. This reflexive note discusses development ethics by using Conditional Cash Transfers as a case study. It questions whether CCT prioritise human dignity by giving an overview of the methodology and underlying principles of CCT programmes in alleviating poverty and then analysing them in the light of ethics.
This paper provides an analysis of trends in health and HIV/AIDS budgeting and spending, as well as trends in some related spending areas that are important for effective HIV and AIDS management in South Africa. The endless fight against HIV and AIDS would not have been possible without financial investment and rigorous research in the HIV and AIDS field. The recent procurement and distribution of the triple combination therapy for AIDS in South Africa depicts the commitment by government to intensify the fight against the pandemic and to enhance good adherence among those taking AIDS treatment.
The Budget and Expenditure Monitoring Forum (BEMF) in South Africa hosted a two-day workshop before the Minister of Finance Pravin Gordhan tabled the 2013 Medium Term Budget Policy Statement in Parliament. Under the theme “Reflections on the Medium Term Budget Policy Statement : How Do We Know If There is Enough Money to Provide For Delivery of Services?” numerous civil society organisations and representatives from organised labour, Parliament, the Auditor General’s office and academia came together to develop a deeper understanding of Government’s future medium term spending plans for 2014 – 2016. The workshop was opened by a presentation on what the National Development Plan (NDP) envisions for public service delivery and the implications of the NDP goals for the allocation of resources. An overview of South Africa’s macro-economic policy was provided illustrating the political choices made by Government to raise money for the delivery of services while promoting economic growth and curbing public debt. The workshop then turned to an assessment of the adequacy of the Education and Health budgets and analysis of the Social Development budgets for funding of Children’s Act services. The workshop also provided participants with an opportunity to be updated on the role of the Parliamentary Budget Office and the critical role that Parliament can and should be playing in exercising oversight of the Executive’s budget policy proposals. On the last day of the workshop participants were given an opportunity to hear about various budget and expenditure monitoring methodologies ranging from social audits to citizen journalism. A 2014 steering committee was established to guide the activities of the forum into 2014.The presentations given at the meeting are provided in the website.