While the current global economic crisis threatens most African economies, it is important to stress some achievements that have been made in recent times. For the first time in thirty years, and until the current global crisis, African countries had been recording economic growth rates of around 5 to 6% per annum - on par with the rest of the world – and policy improvements have brought greater stability to many countries.  These positive trends in economic growth and stability are good news for efforts to reduce poverty and improve health in Africa.   

However, Africa South of the Sahara still faces a grim scenario with respect to the health of its people.  The region – which is home to 12 percent of the world’s population – accounts for 22 percent of the total global disease burden and more than 68 percent of the people living with HIV/AIDS.  The region’s poor health status is mirrored by crises in health financing and human resources for health.  With only 2 percent of the global health workforce and only 1 percent of the world’s health expenditures Sub-Saharan African countries are ill-equipped to adequately address their health problems.  Low per capita income, limited capacity for domestic revenue mobilization, and pervasive health system bottlenecks complicate governments’ ability to respond effectively to the health challenges in their countries.  Even with substantial external assistance, large gaps remain between what resources are available and what are needed.  

The African Union’s Heads of State and Government met at Abuja in 2001 and recommended the allocation by member states of 15% of national budgets to health; and again in 2006 where they issued a Call for Universal Access to health services. The purpose of this paper is to review the context and progress towards achieving international health financing goals and targets subscribed to by African governments, discuss the constraints to achieving the goals and targets and examine emerging new and innovative financing mechanisms designed to expand health care access equitably and efficiently to populations, especially the most vulnerable members.   

Progress toward financing targets is slow  

Governments in Africa are constrained in their capacity to finance health, as evidenced by the low levels of public sector health spending in most African countries.  On average, total health expenditures in sub-Saharan Africa (excluding South Africa) were $23 per capita in 2005.  Governments spent $10.19 per capita on health in 2005, or 44% of this total.  Private households spent $10.47 per capita or 45% of the total.  The remaining 11% came from other private sources (primarily employers and private insurance arrangements).  External resources for health, which flow through both the public and private sectors, accounted for approximately 17% of the total. 

Without question, more resources for health are needed in Sub-Saharan Africa.  Targets for health and poverty reduction established both by African leaders themselves as well as by the international community have re-focused attention on the commitment of country governments to financing health, as well as on the urgent need to provide a package of essential health services.  However, progress to meet these goals is slow, and large resource gaps remain.   

Not many countries have made progress towards achieving the African leaders’ commitment to allocating 15 percent of total government spending to the health sector (the “Abuja target”). However, perhaps more importantly, a previous analysis for the AU cautioned that, while this target may be helpful for tracking the efforts of Governments in the region to contribute their share towards health financing, the target itself might also be misleading if viewed as a true reflection of public commitment to finance a reasonable package of health services for the population. Per capita health spending was suggested as perhaps offering a better, though not flawless, approach to gauging this. 

The World Health Organization’s Commission on Macroeconomics and Health (CMH), estimated that a basic package of health services costs US$34 per capita (the so-called “CMH target”).  However, current per capita spending on health is lower in sub-Saharan Africa than in any other region at $23, and would need to increase by 68 percent to provide the CMH package.  Only four countries in the region are currently spending $34 per capita on health. 

To reach the Millennium Development Goals (MDGs), it is estimated that the proportion of government spending on health would need to increase nearly six-fold and that more than 12 percent of GDP would have to be spent on health, which is unrealistic.    

Furthermore, even if all countries were able to meet the Abuja target today (15 percent of government financing going to health), 23 countries still would not reach the $34 spending level.  While financing targets may not be relevant across all countries in the region, it is undeniable that resource levels are low and that more money is needed.  Moreover, a projection analysis shows that even under optimistic assumptions about economic growth, population growth, and tax revenue collection, and assuming that all countries meet the Abuja target, most countries in Sub-Saharan Africa will not meet the CMH target even by 2020.   

Challenges of public sector financing cannot be ignored  

In addition to providing an indication of commitment to a population’s health and well-being, public sector financing for health can address equity issues through subsidizing health services for the poor and providing financial protection, and public financing is often the most efficient way to finance health services that qualify as public goods.  However, there are significant challenges to public sector health financing in Africa, including limited fiscal space, low domestic resource mobilization capacity, and constrained economic growth.  These challenges constrain African governments from significantly increasing the level of resources allocated to health. 

New and innovative sources and approaches offer promise for improving efficiency & equity  

While more money is needed, more money alone is not enough to overcome Sub-Saharan Africa’s health challenges.  How money is spent is just as important as how much.  First, strengthening health systems in Sub-Saharan Africa through improving leadership and government effectiveness, increasing absorptive capacity, and fortifying the health workforce can help existing and additional resources go farther.    

Second, as donors will continue to play a major role in health financing in Africa for the foreseeable future, greater emphasis is needed on ensuring external assistance helps to build the overall health system rather than funneling aid into ‘silos’ for specific diseases and interventions.  Donor resources for the health sector have reached unprecedented levels and continue to rise.  However, there are still problems with the efficiency, effectiveness, and quality of service delivery and health outcomes in many countries are poor. New, innovative international financing mechanisms, which are designed to address some of the problems with the global health aid architecture, have the potential to bring more flexible resources for health.  All of these approaches need further implementation, monitoring, and evaluation.   

Culled from Health Financing in Africa: Challenges and Opportunities for Expanding Access to Quality Healthcare by the 4th Session of the African Union Conference of Ministers of Health, Addis Ababa Ethiopia, May 2009