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Financing Health Findings from a Ghana field study

Financing Health Findings from a Ghana field study. Denis Drechsler Economist OECD Development Centre. Development Finance Architecture Paris  3 July 2006. Context. Scaled-up aid, especially to health (MDGs 4-6) Aid effectiveness agenda

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Financing Health Findings from a Ghana field study

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  1. Financing HealthFindings from a Ghana field study Denis Drechsler Economist OECD Development Centre Development Finance Architecture Paris3 July 2006

  2. Context • Scaled-up aid, especially to health (MDGs 4-6) • Aid effectiveness agenda • New sources of finance (e.g. remittances, private investment) • New actors (e.g. global funds, foundations) • New financing mechanisms (e.g. shift to budget support)

  3. 1 Resource Tracking at the Country Level 2 Assessment of Financing Channels for Health (a) Official Development Assistance (b) Foreign Direct Investment and Commercial Loans (c) Other Private Flows (especially remittances) Towards a Health Financing System? 3

  4. ODA by far the single most important inflow to Ghana… Source: Own illustration; based on World Development Indicators (2006).

  5. …but less significant than other private transfers combined. Source: Own illustration; based on Bank of Ghana (2006) and World Development Indicators.

  6. 1 Resource Tracking at the Country Level 2 Assessment of Financing Channels for Health (a) Official Development Assistance (b) Foreign Direct Investment and Commercial Loans (c) Other Private Flows (especially remittances) Towards a Health Financing System? 3

  7. Official Development Assistance Source: Own illustration; based on OECD (2006).

  8. Bilaterals: UK, USA, NL, Austria, Spain, Japan, Denmark Multilaterals: IDA, AfDF, UNFPA, UNICEF, UNAIDS Global Funds: GFATM, (GAVI) ODA: Where do the Funds Come From? 17 major donors operating in the health sector of Ghana With various interests and strategies • Budget Support: UK, IDA • Sector Support: Netherlands, Denmark, EU • Project Support: USA, Japan, UNFPA, UNICEF Source: Own illustration; based on OECD (2006).

  9. Foreign Direct Investment and Commercial Bank Loans • FDI is low: 132 million USD in 2005 • Mainly in mining and manufacturing sectors, not in health • Commercial bank loans have some significance, especially for the health sector • Loans do not cover recurrent costs, but are used for investments in health infrastructure • Between 2002 and 2005, loans constituted around 10-15% of health sector budget

  10. Remittances • Significant source of household income, especially considering informal channels and in-country transfers • Studies indicate that flows are anti-cyclical and can reduce income volatility (e.g. Quartey, Blankson 2004) • Partly used to cover health care expenditure, but difficult to have exact breakdown (USAID, 2005) • Estimations range from $82m (World Bank) to $1,250m (Bank of Ghana).

  11. Other Private Sources • Foundations: e.g. Gates (through other NGOs), Rockefeller (sexual and reproductive health), Carter (Guinea Worm Initiative)… • Pharmaceutical Industry: e.g. Pfizer (Diflucan Program, Trachoma Initiative), GlaxoSmithKline (African Malaria Partnership)… • NGOs (more than 400): e.g. ChristianAid, Plan Ghana, CARE (mostly funded by bi- and multilaterals)… • Private Donations: e.g. to the MoH (estimated at 1.6 mio. USD in 2005); to Christian health facilities (estimated at 130 ths. USD in 2005)…

  12. 1 Resource Tracking at the Country Level 2 Assessment of Financing Channels for Health (a) Official Development Assistance (b) Foreign Direct Investment (c) Other Private Flows (especially remittances) Towards a Health Financing System? 3

  13. 3 main sources of health financing… Government of Ghana Private Households Bi- and multilaterals 44% Ministry of Finance 27.2% 13.6% Ministry of Health HEALTH SECTOR Source: Own illustration.

  14. …using diverse channels… Government of Ghana Private Households Bi- and multilaterals Budget Support Fin. Credits (15%) 44% HPIC (0.2%) Ministry of Finance (59.2%) Internally genera-ted funds (13.6%) Health Fund (14.9%) & MoH Programme Support (12.3%) Ministry of Health HEALTH SECTOR Other private expenditure Project Support Source: Own illustration.

  15. …and new actors emerging Government of Ghana Private Households Bi- and multilaterals Budget Support Fin. Credits (15%) 44% HPIC (0.2%) Ministry of Finance (59.2%) Internally genera-ted funds (13.6%) Health Fund (14.9%) & MoH Programme Support (12.3%) Ministry of Health Pharma Industry Foundations NGOs (e.g. CHAG) Global Funds HEALTH SECTOR Other private expenditure Project Support Source: Own illustration.

  16. How do Global Programmes fit in? • Significant new sources of development finance to address crucial problems • GFATM: $30m approved for Rounds 1,2,4 • GAVI: $36m disbursed (2000 – 2005) • EFA-FTI: $8m in 2005; $11m in 2006; $11m in 2007 • But there are also risks involved • Distortion of priorities (e.g. from Malaria to HIV/AIDS; from land degradation to climate change) • Duplication or even weakening of existing co-ordination mechanisms (e.g. CCM of GFATM; ICC of GAVI)

  17. How do Global Programmes fit in? • Added value depends on: • A priori alignment with country priorities and strategies (e.g. EFA-FTI) • Consideration for existing co-ordination mechanisms (both cross-sectoral and government-donor) • Effective harmonisation amongst donors (e.g. mosquito bed nets) • It does not depend on: • Institutional presence at country level • “Branding” at country level

  18. General Co-ordination and Alignment • “Development partner coordination in Ghana is strong” (WB Country Brief, 2005) • Multitude of meetings and co-ordination mechanisms(e.g. bi-annual health summit, Consultative Group meeting, monthly (sometimes weekly) informal meetings among donors, various result matrices…) • However, donor activities are not streamlined(e.g. shift to budget support, sharing of information) • … and co-ordination not inclusive (e.g. omission of important actors) • Co-ordination among ministries and national agencies remains weak (e.g. MoF – MoH; GAC - MoH)

  19. Conclusions / Outlook • Pursue harmonisation and alignment • Include all relevant actors in policy dialogue (CCM praised for inclusion of civil society) • Improve country-level information (financial and sector-specific data collection systems) • Improve the means of measuring and integrating private sources • Strengthen country capacity to monitor and oversee sector programmes

  20. Thank you for your attention!

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