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Finance for Development; Implication to Health Sector

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From Ghana’s Finance for Sustainable Development Goals Meeting in March this year to Addis coming up in July for the United Nations Finance for Development Conference and the launch of the Sustainable Development Goals (SDGs) and Post 2015 Health Agenda during the United Nations General Assembly in September this year and many other meetings and declarations, one needs to pause and ask “what is the implication to health sector”?

Let us go back to history and make references to some of the meetings and conferences that we are building our new financial strategies upon. During the March 2015 Ghana Finance Meeting of which yours sincerely was in attendance the Monterrey, Mexico (March 2002) International Conference for Finance for Development was referred to in forging ahead to propose new set of recommendations for financing for development. The Monterrey consensus among others highlighted ‘Confronting the challenges of financing for development: a global response’ and observed the following;

  1. The need to address the challenges of financing for development around the world, particularly in developing countries.
  1. Mobilizing and increasing the effective use of financial resources and achieving the national and international economic conditions needed to fulfil internationally agreed development goals, including those contained in the Millennium Declaration, to eliminate poverty, improve social conditions and raise living standards, and protect our environment, will be our first step to ensuring that the twenty-first century becomes the century of development for all.

Another conference worth making reference which focused on health was the Tunis Meeting; Declaration on Value for Money, Sustainability and Accountability in the Health Sector. It was a joint declaration by the Ministers of Finance and Ministers of Health of Africa July 5, 2012. The meeting recalled that the Country Framework for Enhanced Engagement and Action between Ministries of Finance and Health and their Partners is an important tool to enhance country dialogue towards enhanced health strategies and plans for greater value for money, sustainability and accountability in the health sector and also recalled the need to build on the 2001 Abuja declaration, 2010 Heads of States Summit in Kampala, 2011 4th Joint Annual Meeting of the AU Conference of Ministers of Economy and Finance and the ECA Conference of African Ministers of Finance, Planning and Economic Development in Addis Ababa, and the 2011 61st WHO Regional Committee for Africa in Yamoussoukro.

It recommended the following;

  1. Intensify dialogue and collaboration between our respective ministries and with technical and financial partners.
  2. Take concrete measures in our respective countries in order to enhance value for money, sustainability and accountability in the health sector for reaching the objective of universal health coverage and to accelerate progress towards the Health Millennium Development Goals and other internationally agreed development targets by 2015 and beyond.
  3. Improve efficiency in health systems, including equitable access to skilled health workers and the introduction of measures such as results based financing and incentives to enhance transparency and performance and reduce wastage;
  4. Solidify sustainable health financing systems that build on and coordinate the diversity of sources of finance including institutional health financing and better coordination and predictability of external resources to ensure that all have access to good quality essential health services.
  5. Strengthen accountability mechanisms that align all relevant partners, build on the growing citizens’ voice and ensure the highest possible level of results for the money spent.
  6. Increase domestic resources for health through enhanced revenue collection and allocation, re-prioritization where relevant and innovative financing, giving priority to immunizations, non-communicable diseases, AIDS, Tuberculosis and malaria, as well as reproductive, maternal and child health in national budgets.

All the previous conferences and the ones happening this year on finance for development have lay emphasis on deepening domestic resources mobilization  for heath through enhance internal revenue generation . This is because as many African countries are moving from low income countries to lower middle income countries, they will be graduating from getting international support free of charge. They will be required to finance payment of some commodities without subsidy.

Take for example Ghana and Nigeria which of recent have rebased their Gross Domestic Product (GDP) to a level that qualifies them to join the prestigious club of ‘Lower Middle Income Countries (LMICs) ’. Nigeria in 2014 was quoted to have a GDP of $510 billion thereby becoming the biggest economy in Africa ahead of South Africa which has occupy the 1st position for a long time. In Ghana and Nigeria the political class are celebrating this progress as their economic status in the eyes of the international community has change as they can now comfortably share a drink with the G20 clubs. Nigeria that has over the years being enjoying support from GAVI (Global Alliance for Vaccine ) to finance its Routine Immunisation Programme which was reported to contribute significantly to reduction of under-five mortality rate. From 2015 by virtue of its ‘LMIC’ status, the country has commence graduation process from GAVI support. GAVI graduation is calculated at 15% increase in Nigeria co-financing in 2015, and linear increase in co-financing obligation between 2015 and 2020.  In 2020, the full market price occurs, and Nigeria pays the full cost of device and average freight for new vaccines.

What all these means is that the health sector need to galvanize action in a way that domestic finances are efficiently mobilized and allocated  to finance critical aspect of health care delivery.

1st published in Daily Trust Newspaper of 31st March 2015 by Dr Aminu Magashi Publisher Health Reporters (healthweekly@yahoo.com)  

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