The EC approach to health support and the relation with the public financing gap

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The EC approach to health support and
therelation with the public financing gap

• Juan Garay
• Health team -DG Dev B3

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The facts MDG progress
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Greatest challenge in sub-Saharan Africa

• MDG 4 5 million deaths under 5
• MDG 5 250,000 maternal deaths
• MDG 6
• 2,5 million deaths from AIDS?
• 1 million deaths from malaria
• 300,000 deaths from TB
• MDG 1 20 children malnourished
• MDG 7 50 of rural lack access to WS
•  non-MDG  health priorities
• 15 of burden of disease by mental health
  disorders
• Growing burden of chronic diseases and trauma

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The causes risks of ill health in the ACP region

• Main risk factors
• Nutrition 25 AR
• Sexual behaviour 10
• Water and sanitation 6
• in-door air-pollution 4
• lifestyle factors 8
• New evidence
• Social inquities (CSDH)
• Environmental and climate change threats (IPCC)

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The wide response

• Prevention multisectrorial

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The need minimum thresholds for public
financing

• Public financing for basic health services is
  essential to aim at universal and equitable
  coverage and especially pro-poor fair financing.
• There are specific preventive and treatment
  interventions which can reduce the burden of
  disease and prevent premature deaths (while
  socio-economic conditions take their time to
  reduce risks)
• CMH comprehensive package of essential services
  (including HIV/AIDS) costs 24-32 pc and year in
  low-income countries
• (similar BHCP costing analysis in several ACP
  countries)

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Gap and potential gap

• Global Public financing gap under CMH threshold
  
• 70 countries, with a total gap 42,2 b
• If countries were to allocate 15 of their
  government's budgets to health (Abuja target)
• additional public funding form domestic sources
  would be 25,6 b
• only 50 countries -35 ACP (34 in Africa)-, would
  still face a gap of 13,4 b (10 b for ACP)

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Abuja space, but qualified?
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FIRST ACTION PLAN (2008-2010)FOR THE
IMPLEMENTATION OF THE AFRICA-EU STRATEGIC
PARTNERSHIP

• identify joint actions to strengthen district
  and national health systems, including
  participatory and action-led health management
  information systems, the elimination of fees for
  basic health care, strengthening preventive
  health care systems and health education, and
  stronger involvement of civil society partners

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The response of health systems in ACP countries
financing capacities
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The response

• Sufficient?
• Fragmented?
• Equitable?
• Alligned?
• Predictable?

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DAC data on healtjh ODA vs.  potential
financing gap 
3.5 b for Heath general / basic (2.8) vs gt 8
b for HIV/AIDS?
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Health needs/ODA/gap vs AIDS needs/ODA/gap
54 b by 2010
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Levels of health ODA
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Health system fragmented

• gt 100 global initiatives
• Advocacies by problems, isolated funding gap
  analysis (consolidated gt 30 b!), vertical
  approaches, duplication and opportunity cost
• The case of a safe delivery basic service
• Vs. divided into?
• MDG 4 reducing neonatal death
• MDG 5 SRHRs reducing maternal deaths
• MDG 6
• AIDS PMTCT
• Malaria AN PrTx
• Tb BCG

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MozambiqueTotal budget for the health sector
2008

• The health sector funding is heavily dependant
  on external funding.
• The state budget is estimated at 27 and
  external funds accounts for 73 of the health
  sector funds (2008). The total amount of funds
  for the health sector is estimated to be 512.1
  millions US ( 2008).

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Funding Modalities
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Mozambique
Paris? Which Paris?
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Reduce fragmentation

• Initiatives for SWAP revival ?
• High Level Forum on Health MDGs (HLF)
• G8 communiqué on scaling up for health in Africa,
  
• International Health Partnership (IHP)
• Global Campaign on Health MDGs
• Catalytic Initiative to Save a Million Lives,
• "scaling up for better health" (by the so-called
  "H8" The Gates Foundation, GAVI Alliance,
  Global Fund to Fight AIDS, Tuberculosis and
  Malaria, UNAIDS, UN Population Fund, UNICEF,
  World Health Organization and the World Bank).
• Results Based Financing in the World Bank
• GAVI health systems window,
• GFATM modalities for health systems support
• Count down 2015
• all these initiatives aim at better coordination
  of development assistance and increased
  investment in health systems strengthening to
  accelerate the achievement of the health MDGs.
• the principles of Alma-Ata (community
  participation and development of basic health
  care delivery integrated with disease control)
  and of Sector Wide Approaches together with
  equitable, adequate and predictable levels of
  global ODA for health - are gradually being
  recognized as cornerstones to any health
  development.

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EC Budget support and health

• Advantages / Impact
• Reduces fragmentattion/fungibility and increases
  ownership
• Has induced (through incentive tranches)
  increased national budget allocation to health
• Disadvantages/failures
• In some cases
• Not increased allocations (esp. If high
  inflation)
• Not increased net allocations (low execution
  rates)
• Requires adequate level () and dialogue
• In 10 African countries, the level required of
  GBS, at 15 health allocation, to meet CMH, would
  be 4 times the national fiscal revenues
  exceptional acse for health vs. Celings on
  social/public spending?

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Equitable ODA for health?
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Addressing aid orphans Division of labour

• May 2007 Code of Conduct on Division of Labour in
  Development Policy , includes cross-sector
  complementarity
• It includes addressing the orphans gap.
• EC vs MS added value in health?

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Progress on DoL

• In donor darling countries  like Burkina Faso,
  Ghana, Kenya, Mali, Mozambique, Senegal, Vietnam
  
• coordination is fairly good,
• but the principles of the Code are not yet being
  applied.
• too many donors by sector (In Mali, more than 26
  donors are active in rural development), more
  than three sectors of concentration per donor and
  very limited use of implementation instruments
  (e.g. delegated cooperation, co-financing, silent
  partnerships).
• In orphan countries  such as
  Congo-Brazzaville, Madagascar, RCA and Togo the
  picture is more uneven.
• Dialogue among donors is often less coordinated.
• Incentives for DoL are limited
• i.e. few donors, many needs, and the principles
  are sometimes not applicable (e.g. no country
  leadership).
• good practices are observed in some countries
  such as in Chad and Niger in particular in
  post-conflict countries where coordination is
  deemed necessary such as in Côte dIvoire, Togo,
  and Lebanon.
• In Vietnam, the EC will concentrate 80 of its
  aid for 2007-2010 in two sectors of concentration
  (general budget support and capacity building in
  the health sector). The remaining 20 will be
  dedicated to non-focal sectors (trade and
  governance).

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Assessment of Community added value

• The European Consensus has refined the definition
  of the Communitys comparative advantages in a
  two-step approach.
• at institutional level, the Commission will aim
  to provide added value through the following
  elements
• its global presence (lead in many fragile
  states?)
• policy coherence promotion of development best
  practices
• facilitation of coordination and harmonisation
• delivery in areas where size and critical mass
• promotion of democracy, human rights, good
  governance and respect for international law,
• with special attention paid to transparency and
  anti-corruption and the facilitation of dialogue
  with local economic and social interest partners.
• EDF support is usually concentrated in four
  sectors, except in fragile, post-crisis
  countries. The main ones are
• general budget support (gt40 of countries, around
  30 of volume),
• infrastructure, including water/energy (gt60 of
  countries, around 30 of volume),
• governance, including peace/security (gt60 of
  countries, around 15 of volume),
• rural development and agriculture (gt30 of
  countries, around 8 of volume).
• Social sectors receive relatively modest direct
  support (8 to specific health and education in
  10 EDF)
• Potential EC added value in health ? (ongoing
  evaluations?)
• On-budget support and links to health
  dialogue/inputs/results?
• Health in fragile states/LRRD?
• Links to health of infrastrcutures, social
  governance, rural development?

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More predictable aid

• On average, aid flows are at least six times more
  volatile than fiscal revenues. The relative
  volatility of aid is highest for the most
  aid-dependent countries.
• The MDG Contract offers long-term predictability
  in return for greater commitment to results by
  partners.

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MDG-C Objectives

• Objective to improve the effectiveness of
  budget support in accelerating progress towards
  the MDGs by increasing its long term
  predictability and focussing on results
• it is a budget support instrument. Other
  instruments will be needed where budget support
  is not appropriate
• Alsoto catalyse improvements in delivery of
  budget support from other budget support
  providers, while remaining within existing
  harmonisation frameworks
• MDG
• Strong focus on the MDGs, notably health and
  education
• Contract
• mutual responsibilities more predictability for
  enhanced focus on (and financial commitment to)
  MDGs
• with hard financial engagements set out in signed
  financial agreements

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Key features

• Overview core features, common to all
• Six year time frame (cf 3 yrs at present)
• At least 80 of total commitment to be
  disbursed, subject to no breach in eligibility/
  criteria or fundamental/essential elements (cf
  average 65 fixed at present)
• Fixed annual disbursements, subject to adjustment
  at mid-contract review (cf. annual FT and VT)
• Annual monitoring, and reinforced dialogue (cf
  partial VT or delayed FT)
• Safety valve (10) to respond to eligibility
  concerns (as opposed to breaches)
• Targeted at strong performers
• Main areas for country flexibility
• Phasing of the 80 fixed component
• Mechanism for translating assessments of
  performance into financing decision for second
  half
• Choice of indicators (focus on outcomes and PFM)

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Eligibility

• Proposed criteria
• GBS already programmed in EDF10 CSP and compliant
  with standard GBS eligibility criteria
• Positive track record of GBS implementation
• Medium term framework for assessing performance
  with active donor coordination mechanisms
• Expected countries
• Benin, Burkina Faso, Ghana, Madagascar, Mali,
  Mozambique, Rwanda, Tanzania, Uganda, and Zambia
  (10)
• 60 of all EDF 10 GBS, 16 of EDF 10
• Eligibility to be formally assessed and confirmed
  during design

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EC opportunities

• Level EU  conveeining  gt EC as donor
• Fragmentation On-budget SWAP
• Equity Division of labour process
• Alignment PRBS dialogue
• Predictability MDGc