Meagre budget allocation driving ailing health sector to its deathbed

Meagre budget allocation driving ailing health sector to its deathbed

Besides politics, negative ethnicity and persistent strikes by workers in the health sector, there are more pertinent issues crippling the key sector in the country. At the heart of Kenya’s sickly healthcare system, is the government’s lopsided distribution of tax revenue to the various ministries and departments.

Out of the more than Sh1.3 trillion Kenya Revenue Authority (KRA) is scheduled collect in tax this financial year, the government will spend Sh64 billion only on health sector. The additional Sh68 billion of the Sh130 billion budgetary estimate to health will be sourced from donors.

The sorry state of how the government funds its health sector is laid bare in a World Bank report published earlier in the year. The report shows how the sector survives—merely by grace of God and donors’ goodwill.

According to the report titled Laying the Foundation for a Robust Health Care System in Kenya, the sector is largely financed by the private sector. The private sector, which owns and operates 45 per cent of the 7,000 health care facilities in the country, contributes 42 per cent of the entire health financing.

Ranking second are donors, who finance 31 per cent of the government’s health budget, with funds collected from taxpayers only accounting for 24 per cent. The lopsided financing explains why in the last two years, the health sector has staggered from one crisis to another.

From perpetual health workers strikes, to lack of essential drugs and breakdown of cancer and dialysis machines in referral hospitals, the crisis tells a story of a health sector that is tottering towards total failure. This begs the question: Where does the government rank health in its funding priorities?

National Treasury Cabinet secretary Henry Rotich at a past function. Photo/FILE
National Treasury Cabinet secretary Henry Rotich at a past function. Photo/FILE

“Obviously, there are fundamental questions that arise when transport and infrastructure take inordinately bigger budgets compared to crucial service sectors such as health,” says International Budget Partnership country manager Jason Lakin. Not even Parliament has attempted to nudge the Executive to better funding of the sector.

“A casual look at this year’s budget will show that the figures that Treasury submitted as the vote to health were not interrogated by Parliament. And as you know, once Parliament does not see the mismatch between the allocation to health and the needs, then that is a case closed,” says Lakin.

Most documents seen by the People Daily point to a sector that has been abandoned. For example, before devolution was rolled out, the Health ministry used to transfer a paltry Sh27,500 to dispensaries from the Health Sector Support Fund (HSSF).

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The cash, which was released every three months, was meant for buying drugs and other essential medical equipment for the facilities. Health centres received Sh112, 500 and then District Health Management Teams—now County Health Management Teams— between Sh131, 500 and Sh157,500. HSSF facility is still operational, but the National government now sends the funds to County government for disbursement to health facilities.

In its report, the World Bank notes that Kenya’s spending on health, as a percentage of government budget, is the lowest in East Africa, trailing countries such as Tanzania, Uganda, and Ethiopia.

“EAC countries are spending a larger share of their budgets on health. In Rwanda, health expenditure takes 22.6 per cent of the budget, Tanzania 14 per cent and Uganda 10.4 per cent. Outside the region, Ghana allocates 13 per cent of the budget to the sector, South Africa 12 per cent and Botswana 10 per cent,” the World Bank report reads in parts.

What should worry ordinary Kenyans is that save for year 2010, government spending on health has actually been dropping yearly. The highest spending by government was in 2010, when it allocated Sh7.20 in every Sh100 to health.

Then the drop started the following year at Sh6.10 the following year, Sh5.9 in 2012 and Sh5.7 in 2014. Unlike in the previous years, the government is spending Sh6.50 out of every Sh100 on health this current financial year.

Abuja Declaration Although it is an improvement, it is still far below the agreements by African governments on how much states should spend on healthcare. In 2001, Kenya was among African governments that signed the Abuja Declaration and committed to dedicate 15 per cent of their budgets to healthcare.

Henry rotich 3
Henry rotich 3

Essentially, if the Kenya was to go by the dictates of Declaration, it would be spending Sh15 out of every Sh100 collected on the sector. Ranking African countries performance on the Abuja Declaration, the World Health Organisation (WHO) put Kenya among the countries that had made least or no progress in health funding.

It was ranked in the same level with Ethiopia, Benin, Mauritania and Central African Republican. Ranking was done in 2011 when the government was spending Sh6.10 out every Sh100 on health.

Low level of funding to the sector is even absurd when computed as a percentage of the country’s total productivity—Gross Domestic Product (GDP)—as it stands at 0.8 per cent.

The recommended standard as percentage allocation of health is five per cent of a country’s GDP. So poor is the funding to the sector that the Health ministry is grappling with debts owed to suppliers. In this year’s budgeting process, the ministry shifted the blame on accumulation of debts running into billions of shillings to devolution.

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A look at the National government’s health sector working group report—a document used by ministries to prepare budgets—shows that the Health ministry accrued pending bills worth Sh2 billion by end of the last financial year. The ministry, in a note, says the bills were a result of transfer of the services to the counties.

“The pending bills can be attributed to the transfer of functions to the county government and related projects for example Mama Lucy Hospital, Othaya Hospital and the Nanyuki Hospital and other related expenses.

The development pending bills are mostly on the purchase of medical equipment, construction and rehabilitation of buildings while the recurrent pending bills are mostly on ongoing service contracts, purchase of reagents and non-pharmaceutical for the free maternity programme,” says the ministry in the report.

However, it is clear from the tabulation of the bills that the debts were accrued by health institutions under the National government, including ministry headquarters, Kenyatta National Hospital, Moi Teaching and Referral Hospital, Kenya Medical Research Institute and Kenya Medical Training College.

County governments, who have been accused of not being prepared to take over health function, are now paying a heavy price for the low prioritisation of the sector by the National government.

While governors were aggressive in pushing the government to release the health function, the has become a nightmare as medics down tools in over half of the counties. In most cases, the counties have found themselves spending a third of all the revenue allocated by the National Treasury on health, with the bulk salaries payment.

County budgets reveal the tough balancing acts that the devolved units go through to finance their operations. Out of the Sh282 billion allocated to counties by the Commission on Revenue Allocation in the current financial year, health services take up 30.3 per cent, making it the biggest single cost in county government expenditure.

Nairobi, for example, will spend 43 per cent, equivalent to Sh6 billion, out of its equitable share of Sh13.7 billion revenue on health, while Kisumu is spending 42 per cent or Sh2.7 billion on the same out of an allocation of Sh5 billion. Kiambu, on the other hand, will spend for 32 per cent of the entire county budget on health. To be continued tomorrow…

Post source : Gitahi Ngunyi @gitahi_ngunyi

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