In the coming year, approximately 1.3 trillion shillings, close to US $780 million, will be spent on the health sector in Uganda. The official budget weighs in at about Ush 630 billion (including both domestic and external funding), and off-budget support is approximately Ush 700 billion. Yet, awash in cash, the health sector is drowning.
Infant mortality stands at 76 per 1000, and under-five mortality is even worse – 137 out of every 1000 children will die before their fifth birthday, according to the 2006 Uganda Demographic and Health Survey (UDHS). Life expectancy at birth is 49 years for men and 51 years for women. The Ministry of Health (MoH) reports that there is only 1 health worker for every 1236 people. Even this figure distorts reality as an estimated 70% of doctors and 40% of nurses serve only 12% of the population, according to the MoH’s Master Plan for Accelerating Performance in the Health Sector. And it gets even worse – absenteeism in health facilities has been estimated to be as high as 47% on average, according to recent studies.
Though it is difficult to capture off-budget expenditures, it is likely that the health sector will receive more money than any other sector this year – surpassing even the budget for works, which will receive approximately 1.1 trillion shillings in 2008/09. Where is all this money coming from? More importantly, where is it going?
According to the June 2008 budget speech and the Medium Term Expenditure Framework (MTEF), the Ministry of Finance has allocated approximately Ush 375 billion from the domestic budget this year to health, split fairly evenly between the Ministry of Health and District Primary Health Care, with a smattering of funding toward Mulago Hospital Complex and District Referral Hospitals. On-budget, donors will contribute Ush 253 billion, 250 billion of which will go directly to the Ministry of health. Off-budget, the U.S. President’s Emergency Fund for AIDS Relief (PEPFAR) alone will this year contribute US$283 million for HIV/AIDS screening, prevention and treatment. Additionally, another Ush 300 billion will be spent on the health sector off-budget by donors such as USAID, DFID, and the governments of Italy, Ireland, Norway, and Sweden, among others. Altogether – domestic and external, on and off-budget – the health sector is thus set to receive over 1 trillion shillings.
Despite this flood of money, even the president has begun to feel the pain of the ailing health sector – and not just because he is forced to fly his daughter abroad on a private jet to deliver her baby. In April 2008 he wrote a letter in frustration to Minister of Health, Stephen Malinga, titled, “Alleged Gross Mismanagement of the Health Sector.” He lamented, “Whenever I travel up-country, I am accosted with complaints of lack of drugs and absenteeism of health workers in health units.” If it is gross mismanagement and not lack of funding that is resulting in a decrepit health sector, where is all the money going?
There are two major issues at play – allocation of resources and management of those resources. It is not an exaggeration to describe the global community’s interest in HIV/AIDS as an obsession, and this obsession has serious implications for the allocation of money in countries like Uganda, where HIV/AIDS has at times reached epidemic levels. Looking at a breakdown of the budget, US$ 283 million (around Ush 467 billion) from PEPFAR will go toward HIV/AIDS, US$139 million (around Ush 230 billion) from the Global Fund will go toward HIV/AIDS, TB and malaria and Ush 60 billion will go toward the purchase of Anti-retroviral drugs (ARVs) and malaria treatment from the Uganda based pharmaceutical plant Quality Chemicals. Additionally, in their most recent grant proposal from the Global Fund, the MoH estimated that “other AIDS development partners” (not including Global Fund) would contribute between US$22 million and $27 million this year, or approximately between Ush 36 billion and Ush 45 billion. While the aforementioned funds include money earmarked for malaria and TB, the majority will go to HIV/AIDS. Altogether, the sum of funding dedicated to HIV/AIDS, malaria and TB is at least Ush 790 billion, according to sources from the MoH, Ministry of Finance, the Global Fund, and the U.S. government.
The MoH, in its Round 7 proposal to the Global Fund stated that the “overall disease specific needs costing including essential disease specific health systems needs” for HIV/AIDS in 2008 would be Ush 309 billion and in 2009 Ush 329 billion. Even if only half of the Ush 790 calculated above went toward HIV/AIDS programs (an extremely conservative estimate given donor priorities), this should still be enough money to cover the MoH’s self-reported needs for HIV/AIDS. Even if this admittedly back-of-the-envelope calculation was incorrect, the same Global Fund grant proposal specifically states: “Based on the national strategic plan [NSP] prioritized goals and objectives, a resource needs model was applied to estimate the resources needed to meet the coverage costs of the plan. The estimate of the overall HIV/AIDS national response needs costing indicated a requirement of US$ 263 million for the first year of the NSP [2007/8] increasing to US$ 362 million in the financial year 2011/12.” According to this assessment, PEPFAR alone will cover the entire HIV/AIDS national response this year.
Nevertheless, of the Ush 98 billion in additional allocation to the health sector from the Ministry of Finance this year, Ush 60 billion will go toward HIV/AIDS and malaria drugs, the vast majority of which will go toward ARVs. Why? MoH officials say that there remains a large funding gap, in spite of donor contribution, and that an estimated 200,000 people are approved for ARVs but are not as yet receiving treatment. Additionally, in 2005, as an “investment incentive” the government of Uganda signed a memorandum of understanding with Quality Chemicals committing to purchase US$40 million worth of HIV/AIDS and malaria drugs per year. Thus, other sector priorities notwithstanding, US$40 million will be pumped into primarily into funding ARVs. While the idea of the plant was to enable Uganda to become self-sufficient and independent, donors such as the Global Fund and PEPFAR are not buying their drugs from Quality Chemicals – the plant has not yet met the required standards.
However well meaning, donor priorities have hijacked the health sector, pumping it full of money earmarked for specific health issues that do not always align with domestic health priorities. This dependence on donor funding is neither sustainable nor beneficial to Uganda. Already the country has run into serious issues with the Global Fund that has resulted in the suspension of grants. Most recently, the Inspector General for the Global Fund, on a visit to Uganda, warned that if progress had not been made on the recovery of money and prosecution of individuals named in the 2006 Ogoola Report, Uganda’s grant would again be suspended.
Donor funding for Uganda’s health sector on the whole has been “volatile and unpredictable” according to the World Bank’s Uganda Public Expenditure Review (PER) 2008, presented to the budget division of the Ministry of Finance on July 7. It was also noted that “funds are not always aligned with domestic priorities,” and donor commitments were almost always higher than the disbursement of funds. Given the challenges associated with relying upon donor funds, Uganda should strive to become independent of external funding and donor-set priorities.
The PER made several recommendations for Uganda’s health sector. Despite the seemingly staggering budget that the sector will receive this year, the PER concluded that Uganda should increase health spending. It specifically noted that “rapid population growth, increasing unit costs and unsustainably high donor funding create risks,” and that “efficiency gains are clearly possible.”
Many of these efficiency gains can be made in the area of human resources, which was a major area of concern that Malinga noted in his May 2008 letter to the President. Addressing human resource deficiencies and inefficiencies has been a sector priority for some time, but budget allocations have not reflected this prioritization, largely because Uganda has not been setting the agenda for the health sector – donors have. There is much information available on Uganda’s health sector and there has been considerable analysis examining health sector reform.
In April 2008, the Ministry of Health released its Master Plan for Accelerating Performance in the Health Sector, which highlights “areas of strategic concern that require immediate attention,” including Human Resources, Infrastructure, Essential Medicines and Health Supplies, and Operational Budget. Given this strategic plan, it would seem unwise to allow the donor community, however well intentioned, to dictate Uganda’s health budget allocations or distort its priorities. Pumping the sector full of money allocated by donor priorities has led it to burst, with wasted resources leaking out on all sides. The health sector is being trampled in the stampede of donor goodwill and while the Ministry lines its pockets, the greater population of Uganda is suffering.