A Comparative Analysis of the Financing of HIV/AIDS Programmes in Botswana, Lesotho, Mozambique, South Africa, Swaziland and Zimbabwe OCTOBER 2003 Prepared for the Social Aspects of HIV/AIDS and Health Research Programme of the Human Sciences Research Council by Dr H. Gayle Martin Funded by the WK Kellogg Foundation Free download from www.hsrc p ublishers.ac.za Contents Executive Summary vii Acknowledgements xi Abbreviations xii Introduction 1 Methodology 3 Definition of HIV/AIDS Expenditures 3 Data Collection 4 Limitations and Challenges 5 Botswana 7 Level of Expenditure 7 Functional Classification of HIV/AIDS Expenditures 11 Sources of Financing 11 Financing Mechanisms 11 Lesotho 15 Level of Expenditure 15 Sources of Financing 18 Financing Mechanisms 18 Mozambique 21 Level of Expenditure 21 Functional Classification of HIV/AIDS Expenditures 25 Sources of Financing 25 Financing Mechanisms 26 South Africa 27 Level of Expenditure 27 Sources of Financing 28 Financing Mechanisms 29 Swaziland 33 Level of Expenditure 33 Functional Classification of HIV/AIDS Expenditures 37 Sources of Financing 37 Financing Mechanisms 38 Zimbabwe 41 Level of Expenditure 41 Sources of Financing 42 Financing Mechanisms 42 Free download from www.hsrc p ublishers.ac.za Comparative Analysis 43 Health Expenditure 43 Government Expenditure on HIV/AIDS 45 Expenditure on HIV/AIDS by External Sources 47 Total Expenditure on HIV/AIDS 49 Conclusion 51 Special Resource Mobilisation Strategies 51 Do Increased Resources mean Increased Inefficiency? 51 Sustainability 51 Appendices 53 Appendix A: Selected Indicators by Country 53 Appendix B: HIV/AIDS Indicators by Country 57 Appendix C: Terms of Reference 58 Bibliography 59 Free download from www.hsrc p ublishers.ac.za Tables Table 1: Total and Public Health Expenditure in Botswana (1990–2000) 8 Table 2: Core Expenditure on HIV/AIDS Programs in Botswana (1999/01–2002/03, in current US$) 9 Table 3: Sources of Funding for HIV/AIDS programmes in Botswana (2000) 10 Table 4: Expenditure on HIV/AIDS in Botswana (2001/02) 10 Table 5: Functional Classification of Government of Botswana HIV/AIDS Expenditure (2002/03) by Financing Mechanism 13 Table 6: Global Fund Award to Botswana 13 Table 7: Total and Public Health Expenditure in Lesotho (1990–2000) 15 Table 8: Government of Lesotho funding for HIV/AIDS, Tuberculosis and Malaria in (2001/02) 16 Table 9: Expenditure on HIV/AIDS in Lesotho (2001/02) 16 Table 10: External Sources of Funding for HIV/AIDS programmes in Lesotho (2000) 17 Table 11: Global Fund Award to Lesotho 19 Table 12: Total and Public Health Expenditure in Mozambique (1990–2000) 21 Table 13: Government of Mozambique funding for HIV/AIDS, Tuberculosis and Malaria (2001) 22 Table 14: External Sources of Funding for HIV/AIDS programmes in Mozambique (2000) 23 Table 15: Expenditure on HIV/AIDS in Mozambique (2001) 25 Table 16: Sources of Government Revenue in Mozambique (1999–2000) 26 Table 17: Global Fund Award to Mozambique 26 Table 18: Public Health Expenditure in South Africa (constant US$, 1999/00) 27 Table 19: Expenditure on HIV/AIDS in South Africa (2001/02) 28 Table 20: Breakdown of Conditional Grant for National Integrated Plan Funds by Department and Function in South Africa (in current US$) 30 Table 21: Summary of the Goals and Objectives of HIV/AIDS Control in the Departments of Health, Social Development and Education in South Africa 31 Table 22: Global Fund Award to South Africa 32 Table 23: Total and Public Health Expenditure in Swaziland (1990–2000) 33 Table 24: Government of Swaziland funding for HIV/AIDS, Tuberculosis and Malaria (2001/02) 34 Table 25: Government of Swaziland Non-Health Sector Funding to Government Institutions for HIV/AIDS-related Interventions (2001/02) 34 Table 26: Swaziland NGOs involved in AIDS Interventions by Funding Status (2001/02) 35 Table 27: External Sources of Funding for HIV/AIDS for Swaziland (2001) 36 Table 28: Expenditure on HIV/AIDS in Swaziland (2001/02) 37 Table 29: Functional Classification of Ministry of Health and Social Welfare HIV/AIDS Expenditures in Swaziland (2001/02) 38 Table 30: Global Fund Award to Swaziland 39 Table 31: Total and Public Health Expenditure in Zimbabwe (1990–2000) 41 Table 32: Global Fund Award to Zimbabwe 42 Table 33: Summary of Expenditure on HIV/AIDS by Country (2000/01, US$) 46 Table 34: Summary of Expenditure on HIV/AIDS by Country (2000/01, International $) 47 v ©HSRC 2003 Free download from www.hsrc p ublishers.ac.za Figures Figure 1: Total health expenditure (US$) per capita) in the six countries vii Figure 2: Health expenditure in the six countries as a percentage of government expenditure (2001/02) viii Figure 3: Total HIV/AIDS expenditure (US$ millions) ix Figure 4: Total HIV/AIDS expenditure (US$) ix Figure 5: Change in Life Expectancy in Botswana (1970–2000) 7 Figure 6: Financial Flows for HIV/AIDS Expenditure in Botswana 12 Figure 7: Financial Flows for HIV/AIDS Expenditure in Lesotho 19 Figure 8: Sources of Health Financing in Mozambique (1997) 22 Figure 9: The Flow of Resources for HIV/AIDS to the Provincial Level in South Africa 29 Figure 10: Total Health Expenditure (A) as a Percentage of GDP and (B) Per Capita (US$) for 1990–2000 By Country 44 Figure 11: Health Expenditure as a percentage of government expenditure by Country 45 Figure 12: Government expenditure on HIV/AIDS per capita and per PLWHA (2001) 47 Figure 13: Expenditure on HIV/AIDS as a percentage of GDP (2001) 48 Figure 14: Expenditure on HIV/AIDS (2001/02, current US$) 48 Figure 15: Share of Government and External Sources of HIV/AIDS Financing 49 Figure 16: Infant Mortality Rate per 1,000 live births (1970–2000) 53 Figure 17: Maternal Mortality Ratio per million live births (1994–2000) 53 Figure 18: Life Expectancy (1970–2000) 54 Figure 19: Population Growth (1970–2000) 54 Figure 20: Gross National Product (per capita, current US$) 55 Figure 21: Economic Growth (per capita) 55 Figure 22: Human Development Index (1975–2001) 56 Figure 23: HIV Infection rates for Adults and Children 57 Figure 24: People Living with HIV/AIDS 57 vi ©HSRC 2003 Free download from www.hsrc p ublishers.ac.za Executive Summary In April 2001 in Abuja, African leaders committed to take all necessary measures to mobilise the required resources for HIV/AIDS. The pledge was made to allocate at least 15 per cent of government expenditure to the improvement of the health sector. This commitment was endorsed by world leaders at the Special Session of the United Nations General Assembly on HIV/AIDS in June 2001. At this Special Session, developed countries committed to assist African leaders in their efforts to realise the funding targets set in the Abuja Declaration. Botswana, Lesotho, Mozambique, South Africa, Swaziland and Zimbabwe comprise 12 per cent of the population in the sub-Saharan African region and account for 33 per cent of the total HIV/AIDS burden in the region. Among these six countries, four have adult HIV infection rates of above 30 per cent and all but one have rates above 20 per cent. Mozambique has the lowest adult HIV prevalence – 12 per cent. Because of the relatively large population sizes in South Africa and Zimbabwe, these two countries account for eighty per cent of the infected adults in these six countries. It is within the context of this HIV/AIDS burden that this comparative analysis aims to assess the readiness and ability of the countries to respond to the HIV/AIDS epidemic. The key issues that are addressed in this analysis are: • Is the allocation to health, as a per cent of total government expenditure, sufficient? • Is enough allocated to deal with HIV/AIDS, given the magnitude of the problem? Data limitations made it nearly impossible to evaluate HIV/AIDS expenditure allocation – in terms of economic classification (capital and recurrent) or functional classification (prevention, care and support, and treatment). The allocation of HIV/AIDS funds by activity is therefore, generally, not addressed in the report. Another data limitation was the paucity of information on household (and business) expenditure on HIV/AIDS. Estimates from Latin American and Caribbean countries found that average annual expenditure by people living with HIV/AIDS (PLWHA) was US$1,000, while an assessment in Rwanda reported US$25 per PLWHA. Even at the latter level, it is clear that significant amounts of household resources are devoted to HIV/AIDS, resulting in a combination of transient and permanent impacts on household welfare. One particular outcome is an increase in the number of households falling below the poverty line. While not addressed in this report, this household-level outcome has several secondary consequences that also need to be considered – for example, increasing the demand for government assistance in the form of poverty alleviation. vii ©HSRC 2003 US$ 300 250 200 150 100 50 0 Botswana Lesotho Mozambique South Swaziland Zimbabwe Africa $191 $255 $56 $43 $28 $9 Figure 1: Total health expenditure (US$) per capita in the six countries Free download from www.hsrc p ublishers.ac.za The financing of HIV/AIDS programmes Among the six countries, total health expenditure ranges from a high of US$255 per capita in South Africa to a low of US$9 per capita in Mozambique. During the 1990s total health expenditure increased in all these countries except for South Africa. The largest increase was in Botswana where total health expenditure increased by 115 per cent between 1990 and 2000. Estimates of the minimum level of spending on essential or basic health services range from a low of US$12 (in the World Development Report 1993) to US$34 (by the Macroeconomic Commission on Health in 2001). Four of the six countries have expenditures in excess of these levels, although two countries, Lesotho and Mozambique, have per capita expenditures of well below US$34, and in the case of Mozambique, below US$12. Is the allocation to health, as a per cent of total government expenditure, sufficient? Except for South Africa and Zimbabwe, none of the countries fulfilled their commitment made in Abuja in April 2001 to allocate 15 per cent of government expenditure to health. Botswana comes closest among the remaining countries, spending ten per cent of government expenditure on health. The other countries spend about half of the 15 per cent target. It should however be noted that this data is for the years 2001 and 2002. When viewed against the background of increasing allocations to the health sector over time, it is likely that Botswana and Swaziland will meet the target. However, the constrained macroeconomic environment in Mozambique and Lesotho suggests less optimism for reaching the targeted 15 per cent. Aggregate government expenditure on HIV/AIDS in these southern African countries is nearly US$70 million annually. There is great variation in the level of expenditure on HIV/AIDS by individual countries. Government expenditure on HIV/AIDS ranges from a high of US$33 million in South Africa to a low of US$0.8 million in Lesotho. Per capita expenditure on HIV/AIDS shows similar variation – on the high end is Botswana with US$30 per capita, which is almost 30 times the level of expenditure in the other countries. All the other countries fall below US$1.50 per capita. The median per capita HIV/AIDS expenditure for the six countries is US$1. If one considers only the HIV infected population, then Botswana spends $51 per PLWHA. The HIV/AIDS expenditure in Botswana is also the highest when measured as a percentage of GDP – the government of Botswana spends one per cent of GDP on HIV/AIDS. External sources – bilateral donors, multilateral donors (including the UN agencies), business and NGOs – account for a total of US$180 million expenditure on HIV/AIDS in these six countries. This translates into a per capita expenditure of US$2 and expenditure of US$19 per PLWHA. The highest level of donor assistance, in absolute terms, is in Botswana where US$96 million was spent in 2001. This is equal to US$60 per capita and US$291 per PLWHA. With the exception of South Africa, expenditures on HIV/AIDS in viii ©HSRC 2003 20 15 10 5 0 Percentage Botswana Lesotho Mozambique South Swaziland Zimbabwe Africa 10.4 15.4 7.4 15.8 7.4 8.8 Figure 2: Health expenditure in the six countries as a percentage of government expenditure (2001/02) Free download from www.hsrc p ublishers.ac.za Executive summary these countries are financed mainly by external sources. In Mozambique, Lesotho and Swaziland more than eighty per cent of total HIV/AIDS spending is funded by external sources. The allocations from the Global Fund to Fight AIDS, Tuberculosis and Malaria to these countries will add an additional US$479 million over the total period of the allocations, and US$192 over the first two years of each award. Total spending in these countries (government- and donor-financed but excluding household out-of-pocket spending and the Global Fund allocations) amounts to approximately US$250 million for the year 2001, or to US$3 per capita and US$27 per PLWHA. In the literature, the reported HIV/AIDS spending per capita (excluding out-of-pocket spending) for sub-Saharan Africa is US$0.3 per capita and US$8 per PLWHA. Regardless of the measure, total expenditure on HIV/AIDS in these six countries is higher than the regional average. Specifically, per capita HIV/AIDS expenditure is ten times higher and expenditure per PLWHA is more than three times higher than in the sub-Saharan Africa region. This is consistent with the higher burden of HIV/AIDS in Botswana, Lesotho, Mozambique, South Africa, Swaziland and Zimbabwe. These countries account for a third of PLWHA in sub- Saharan Africa compared to a tenth of the region’s population. The high level of financing in Botswana, from domestic and external sources, makes this country somewhat of an outlier. Botswana spends US$71 per capita and US$343 per PLWHA. However, despite this relatively high level of financing, the total spending on HIV/AIDS is substantially lower than the average HIV/AIDS expenditure in countries of the Latin American and Caribbean region. Is enough allocated to deal with HIV/AIDS given the magnitude of the problem? In the literature it has been estimated that sub-Saharan Africa requires US$4.6 billion annually for prevention, care and support, and treatment (including anti-retroviral therapy). Given that these six countries account for a third of the HIV/AIDS burden in the region, it can be argued that a third of this estimate are the required annual resources for HIV/AIDS interventions. This figure exceeds the current total HIV/AIDS expenditure that is at one quarter of US$1 billion. ix ©HSRC 2003 Figure 3: Total HIV/AIDS expenditure (US$ millions) Total: $249 million Government $69,28% External $180,72% Per capita Per PLWHA 30 25 20 15 10 5 0 $1 $8 $2 $19 External Government Figure 4: Total per capita HIV/AIDS expenditure (US$) Free download from www.hsrc p ublishers.ac.za The financing of HIV/AIDS programmes The gravity of the HIV/AIDS situation in these six countries calls for prioritisation, protection and targeting of HIV/AIDS spending. What is the appropriate institutional funding mechanism for responding to this call? A detailed assessment of the experiences of, for example, Zimbabwe (with the earmarking of three per cent wage tax for HIV/AIDS expenditures), Lesotho (with the allocation of two per cent of all sectoral budgets to HIV/AIDS) and South Africa (with the introduction of a conditional grant for HIV/AIDS), is required in order to make specific recommendations. However, preliminary evidence suggests that the experiences of Zimbabwe and South Africa have generally been positive, although Lesotho has had less success. Some of these experiences are shared in the report. A further important resource mobilisation strategy is the Global Fund. It will be important to share lessons and experiences before and after countries embark on the Global Fund process. The seriousness of the HIV/AIDS situation does not allow for each country to replicate the learning curves. It is, furthermore, important that the increased allocations which the various international resource mobilisation initiatives aim to effect, are not accompanied by increased inefficiency in budget management and budget execution. This would be a tragic outcome given the unprecedented level of commitment and focus on resource mobilisation for HIV/AIDS. Extensive planning and consultation processes have preceded the Global Fund allocations. HIV/AIDS has stressed the capacity of the health sectors in the six countries. The ability to absorb the vastly increased resources will be a critical determinant of whether the increased resources will be translated into increased outputs and, ultimately, into improved outcomes. Importantly, as the experience in Botswana has demonstrated, human resource capacity constraints may severely limit the response to HIV/AIDS in spite of high level of financial resources. The Abuja Declaration showed developing countries’ commitment to making their own resources available to meet the enormous challenge posed by HIV/AIDS. It is important that the gains made by the commitment in Abuja are not reversed by the nearly US$500 million Global Fund allocations made to these six countries. This will be an important issue to monitor – specifically, to what extent does the Global Fund crowd-out government expenditure, displacing rather than adding to the resources for health and HIV/AIDS. x ©HSRC 2003 Free download from www.hsrc p ublishers.ac.za This report is the product of contributions from various research teams. I would like to acknowledge them and their contributions to making this monograph possible. The data collection was completed because of the joint efforts of research teams in Botswana, Lesotho, Mozambique, South Africa, Swaziland and Zimbabwe. The team leaders were: •Professor Sheila Tlou – Botswana •Dr Ron Cadribo – Lesotho •Mr Joel Gudo – Mozambique •Efua Dorkenoo – South Africa • Rudolph Maziya – Swaziland •Brian Chandiwana – Zimbabwe The Departments of Treasury/Finance and the Departments of Health in the six countries played an important role in the provision of information, without which this report would not have been possible. We sincerely appreciate their collaboration. The role of Dr Gayle Martin in analysing the data, synthesizing information, often augmenting this with insights gleaned from other sources, and then writing it all up, is much appreciated. The editorial and production work of HSRC Publishers will not go unnoticed. They worked under extreme time pressure and managed to get the report completed within the given time frame. Finally, the financial contribution of the WK Kellogg Foundation, and the support of Bishop Malusi Mpumlwana and Mrs Vuyo Mahlati, who offered constant encouragement and support throughout the project, is highly valued. The Social Aspects of HIV/AIDS and Health Research Programme of the Human Sciences Research Council takes responsibility for the content of this report because it was responsible for conceiving the idea and ensuring that it was successfully carried out and completed. Dr Olive Shisana Executive Director, Social Aspects of HIV/AIDS and Health Research Programme, Human Sciences Research Council Acknowledgements xi ©HSRC 2003 Free download from www.hsrc p ublishers.ac.za [...]... interventions are financed: • the HIV/AIDS allocation as part of the budgetary allocations to the Department of Health and other sectoral departments • the HIV/AIDS allocation as part of the Equitable Share grant to provincial governments • the conditional grant for the National Integrated Programme (NIP) These mechanisms are demonstrated in Figure 9 and are discussed separately Some effort has been made to... 2003 The financing of HIV/AIDS programmes Most of the National Integrated Programme funds are made available to the three Departments at the provincial level and split between the programmes via the national department(s) At the provincial level the main focus of these funds is to: • roll out of a focused life-skills programme in primary and secondary schools • improve access to voluntary counselling and... Office of the First Lady is also an important channel for government HIV/AIDS funding In the last two financial years, 2001/02 and 2002/03, the office was allocated approximately US$0.1million and US$0.2million, respectively Although the mandate of the office is not HIV/AIDS per se but ameliorating the plight of both disadvantaged women and children, the current priority of the office is HIV/AIDS The office... National vertical allocation and NIP allocation Provincial equitable share Provincial HIV/AIDS unit (Education, Health and Social Welfare departments) HIV/AIDS Allocation in the Departmental Budgets The other sources of funds for the provincial and local government HIV/AIDS units include the vertical allocations from the national departments’ budgets – especially in the health, education and social development... share (52 per cent) of the total health budget There was an increase in external finance to the health sector over the period 1997–2001 External finance takes the form of grants or loans These are provided and managed through different financial mechanisms Sector loans are managed by the sector, and are usually provided by the multilateral agencies and by the development banks There has been an overall... to identify the different sources of funds for HIV/AIDS interventions that are available to the Ministry of Finance/National Treasury These sources have been dis-aggregated as far as the data would allow The purpose of the study was, however, not to scrutinise the allocation criteria but to quantify the allocation for health and HIV/AIDS Free download from www.hsrcpublishers.ac.za None of the countries... sectors The most significant source is the budgetary allocation to the National AIDS Chief Directorate by the National Department of Health In 2001/02 this added to US$16.1 million, and includes allocations for HIV/AIDS research made to the South Africa AIDS Vaccine Initiative and for PMTCT research The bulk of the National Department of Health expenditure on HIV/AIDS has been for: male and female condoms,... that make up the National Integrated Programme demonstrate clearly that three programme areas are prioritised: IEC, VCT and HBC Although these activities are funded primarily through the National Integrated Programme, allocations from the equitable share allocation, mentioned previously, may complement HIV/AIDSrelated activities Table 21: Summary of the goals and objectives of HIV/AIDS control in the. .. give an indication of the functional classification of expenditures under each financing mechanism Figure 9: The flow of resources for HIV/AIDS to the provincial level in South Africa National Treasury Vertical allocation to national departments Top slice NIP allocation Free download from www.hsrcpublishers.ac.za National department(s) HIV/AIDS Directorate (Education, Health and Social Welfare) National... HIV/AIDS expenditures This is followed by a comparative analysis of the financial dimension of HIV/AIDS programs and interventions across the six countries The report concludes with some of the critical issues and implications of the findings of the comparative analysis For reference, selected health and economic indicators for the six countries are presented in Appendix A In Appendix B the HIV/AIDS . A Comparative Analysis of the Financing of HIV/AIDS Programmes in Botswana, Lesotho, Mozambique, South Africa, Swaziland and Zimbabwe OCTOBER. www.hsrc p ublishers.ac.za The financing of HIV/AIDS programmes The gravity of the HIV/AIDS situation in these six countries calls for prioritisation, protection and targeting