Crime and punishment – but who loses out?

Revelations of corruption earlier this year led to the Dutch Ministry and the SIDA (Sweden) freezing their funding to the Zambian Ministry of Health (MoH)  - see my previous blogs.  The Global Fund and GAVI (whose funds are said to be part of those misappropriated) soon followed suit, with other donors threatening to withhold or delay release of funding. 

Attempts to agree a resumption of funding have involved tricky conditionalities. For example, requiring the recovery and repatriation of stolen funds to Sweden and Netherlands.  Doing this would mean pre-judging the ongoing court process and thus puts the government in a difficult situation.  This stalemate has meant significantly reduced donor funding to MoH and a 25% reduction in funding between the 2009 and the 2010 health budgets. 

What are the implications of this shortfall in funding?

The first clear outcome of this is that the country is moving away from the Abuja target of 15% of the national budget going to health, since the government has simply no other sources to replace lost funding.  Zambia’s dependence on donor funding means the donors call the shots, and the Zambian government has limited room to respond. Can IHP+ principles and commitments be fulfilled in such a way?  Our first annual report will be looking at such issues and we’d like to hear your views, so please sign up to leave a comment.

The second outcome arises from the effects of reduced funding to health in the 2010 budget. Spending on personnel is slightly above 2009 approved and authorized estimates, while allocations to consumables (including medicines), infrastructure and interventions have been severely curtailed.

Potential impacts include shortages of medicines, fewer health interventions and reduced maintenance and creation of physical infrastructure.  Most severely hit has been the (2008, 4-year) plan to increase training capacity for human resources.  Allocations to training institutions have been savagely cut, while other institutions have reduced intakes. What health workers we have, may spend more time doing less due to the lack of resources to do so, meaning a severely depleted capacity to respond to and contain global epidemics.

Wider threats to the IHP+ process: who judges in a partnership?

This is a worrisome picture and tensions in the Zambian partnership are increasing, with some government officials describing the IHP+ as “a partnership that hurts people”.  The knee-jerk response of the donor community has divided opinions, with others urging for resumption of funding.  Furthermore, 2011 will bring the national elections.  This is likely to become an election issue, bringing new dangers including the politicisation of the issues or conversely, their neglect, since they are so difficult to untangle. 

Beyond this, there is a need to consider issues of adjudication.  At the height of the crisis, a governance committee was formed to try to arrange the resumption of donor funding.  It was agreed that, if the government complied with 80% of donor-set conditions, funding would be resumed.  Despite government work to achieve 80% compliance, country representatives replied that their HQs demanded 100% compliance and reported that their HQs wanted misappropriated funds to be recovered and returned before resumption of funding.  These new demands were a setback to the government’s enthusiasm for a quick resolution.  Somehow, apart from appearing punitive in nature, for many that response has called into question donor intentions and sincerity.

The question needs to be asked: does the IHP+ partnership come with sanctions?  If so, these need to be made explicit and possibly agreed to rather than coming ad hoc.  Otherwise we will never obtain the goal of ‘long term predictability of funding commitments for health’.

Latest Update --

Last week I attended a Health Financing Technical working group meeting. It emerged that some funding (from CIDA) is with the MoH but cannot be used until after the corruption allegation enquiry is complete.  However, these funds were formally approved for release and use by the MoH at a SAG meeting in March 2009 (well before the scandal).  When the scandal broke in May, authority to use was withdrawn, leading many to ask the question: "when funds are authorized for release and use, is this authorisation not binding to all parties?”  Others argue that, once transferred, the MoH owns the funds and should therefore have the discretion to use the funds for agreed programmes and account for them in due course. 

In the discussion that followed, one participant reported reading an MoU being drafted in one of our neighbouring countries.  He reported seeing a clause stating: "if 5% or more of funds are misappropriated, the country will have to refund all the money to the donors".   Despite the promises, accountability in the IHP+ still seems to be a one-way street. 

Thabale Nugulube is the IHP+Results Country Representative for Zambia